While expressing reservations about the economic model, BellSouth Corp. is testing an Internet-protocol based system for delivering multichannel-video services and might make a service-launch decision by spring of 2006.
The Atlanta-based independent regional phone company — which already resells DirecTV satellite-TV service and operates cable systems in 14 Southeastern markets with 40,000 customers — is currently testing “IPTV” [Internet-protocol television] in employee homes.
It’s an extension of laboratory trials, involving Microsoft Corp.’s IPTV platform, the telco said in January. The next step, before year’s end, will be a customer trial in 200 to 300 homes, spokesman Brent Fowler said.
“BellSouth has not committed to the public deployment of IPTV, only the technical trial,” Fowler said in an e-mail. He said BellSouth is examining the quality and customer reaction to the service and “equally important, we want to better understand the business case supporting IPTV” and the potential shareholder return on investment.
In a Nov. 1 USA Today story on BellSouth, CEO Duane Ackerman was described as not being convinced IPTV could be deployed economically.
Among the top two regional phone firms, Verizon Communications Inc. is deploying video over fiber lines running to the home, while SBC Communications Inc. is planning to roll out IP-based video service.
BellSouth claims about 460,000 of its customers have obtained DirecTV as part of a marketing arrangement between the two companies. It has also joined in comments at the Federal Communications Commission by telcos seeking changes to current rules governing video franchises around the country.
An executive at a programming service working with BellSouth said satellite-transport provider SES Americom Inc. also is involved in the initiative. Last week, SES Americom said it signed an agreement with the National Rural Telecommunications Cooperative to offer a new IPTV service, called IP-Prime, to about 1,000 rural and independent phone companies in the cooperative. A full NRTC launch of the service is timed to occur in the second quarter of 2006.
SES Americom spokesman Paul Sims did not respond to a question about working with BellSouth by deadline last week. Fowler said in an e-mail: “We are in discussions regarding content acquisition for BellSouth’s IPTV technical trial. While we haven’t made any announcements to date, we are looking at SES Americom and an announcement could be forthcoming. Again, BellSouth has not committed to the public deployment of IPTV, only the technical trial.”