A week after detailing its video-over-fiber plans, SBC Communications Inc. signed a $40 million, 10-year deal with Microsoft Corp. to provide Internet-protocol TV software for its “Project Lightspeed.”
“It’s a huge deal,” said Microsoft TV director of marketing Ed Graczyk. “It’s the biggest Microsoft TV deal and the biggest IPTV deal.”
After years of struggling to gain access to TV homes, Microsoft recently scored another breakthrough, with top U.S. MSO Comcast Corp. set to deploy the Microsoft TV Foundation platform across cable systems in Washington state.
LOTS OF FEATURES
The IPTV interactive guide Microsoft will furnish SBC stands to provide more features than its TV Foundation product, said SBC IP division vice president of product and strategy Jeff Weber. It also places Microsoft’s Video Code 1 (VC1) — formerly known as Windows Media 9 — in the running with MPEG-4 (Moving Pictures Expert Group) as the encoding format for SBC’s switched IPTV video architecture.
SBC will use VC1 as its encoding format when it begins IPTV field trials early next year.
The Baby Bell said its Lightspeed fiber-to-the-node architecture will deliver 20 to 25 Megabits of bandwidth to each home.
Using the advanced codecs, SBC will be able to get one HDTV signal in 10 Mb of spectrum and three standard-definition channels in 6 Mb, leaving another 6 Mb for high-speed Internet service and several hundred Kilobits for voice-over-IP telephony.
A typical cable HDTV signal presently uses more than 19.4 Mb of bandwidth, while a standard-definition channel soaks up 3.5 Mb.
Some bandwidth grooming and rate shaping can reduce those numbers, but on paper, SBC believes it can deliver one HDTV and four standard signals in 16 Megabits, while cable needs nearly twice that much bandwidth for the same offerings.
The Microsoft software also will allow SBC to deliver new applications. Users would be able to use their SBC cell phone (SBC co-owns Cingular Wireless with BellSouth Corp.) to program their digital video recorder, for instance.
The switched-video nature of the architecture would allow subscribers to assign their own program lineup, so ESPN could be on channel 1 and ESPN2 on channel 2, for example, Weber and Graczyk said.
The Microsoft software would also afford multiple camera angles for sporting events; digital music and photo file sharing; caller ID on the TV screen; and the ability to change channels in 150 milliseconds, Graczyk said. Subscribers using picture-in-picture will be able to see live video of other channels.
“The vision is that we’re going to do next-generation TV and not TV as we know it,” Weber said, in discussing both the IPTV guide and the applications SBC will undertake.
He said applications will run off network servers, rather than in the set-top, lowering the cost of the box.
SBC also said it will be able to add future applications without having to upgrade or download software to the set-top.
The telco is about to enter new territory — it’s the first major wireline provider to choose an encoding format other than MPEG-2.
“We haven’t decided to be solely VC1,” said SBC vice president of network IP Ernie Carey, who said the company will start trials with the VC1 encoding scheme. “We continue to look at VC1 and MPEG-4, and we’ll probably support both codecs,” he said.
Those codecs will have to be integrated with other parts of the network. SBC is talking to several vendors about providing headend equipment, with the names of Harmonic Inc. and Tandberg Television most frequently mentioned.
Alcatel is supplying all the gear from the video central office to the home, including hub facilities and the video switches that SBC will deploy.
Carey said requests for proposals to provide the IP set-top went out late last week and information on the remote gateway will be released to vendors Nov. 29.
He hopes to have vendors for both chosen by February.
A digital subscriber line modem doesn’t appear to be part of the set-top architecture. Weber said SBC has no plans to enable Internet surfing via the TV.
But SBC did extend its DSL deal with Yahoo! Inc. last week. That arrangement covers co-branded services for SBC’s high-speed subscribers.
Who pays for VC1 or MPEG-4 encoding and decoding hasn’t been worked out yet, Weber said. It’s one part of a discussion with programmers that has several layers.
It’s possible SBC will install satellite dishes at two planned national super headends, and convert the MPEG-2 signals received there to advanced formats for distribution via SBC’s fiber network to its central offices throughout the U.S.
The Hollywood studios are already familiar with VC1, said Gracyk: That’s the format used for CinemaNow and MovieLink Internet downloads.
“We are getting them comfortable with the security and the [digital rights management], which is a big piece on the puzzle,” he said.
One advantage for VC1 is that its licensing is not usage-based — something that’s dogged the marketplace progress of MPEG-4.