Telcos Ring at CES

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Las Vegas -- The 2005 Consumer Electronics Show may well go down as the telcos’ video coming-out party.

From a main address by SBC Communications Inc. chairman Ed Whitacre, to Microsoft Corp.’s news that it was testing Internet-protocol TV with BellSouth Corp., to a strong presence by Verizon Communications, with a Court TV carriage deal in hand, the telcos made their grand entrance into the video business.

“2005 will be a transformative year for consumers,” Whitacre said as he unveiled “U-verse,” SBC’s new branded moniker to cover its IP wireless and wire-line video, voice and data-services vision for consumers. “You control your universe,” he said.

The company is spending $4 billion on its “LightSpeed” fiber-to-the-node build, as well as $400 million with Microsoft to deliver IPTV services to consumers.

That FTTN technology will reach one-half of its 36 million-home subscriber base in three years, with the first homes coming online by year’s end, he said.

In the other half of SBC’s universe, the telco will continue to offer EchoStar Communications Corp.’s Dish Network direct-broadcast satellite service, but it will combine that with a new 2Wire Inc. deal, which will give consumers SBC Yahoo! digital-subscriber-line access on their TVs for content such as Movielink, music and digital photos.

Both SBC and Verizon plan to provide standard-definition, HDTV, video-on-demand and digital-video recorder capabilities, in competition with cable and even DBS providers.

But cable operators aren’t taking the new threats lying down. “There is no real difference in the platforms,” said David Pugliese, vice president of product marketing and management at Cox Communications Inc. “We can match that fairly closely. It will come down to who’s providing a better customer experience.”

Even BellSouth got into the act, announcing that it intends to test a video service in the fist half of 2005 using ADSL2+ (asymmetrical DSL) technology, similar to technology SBC plans for its video rollout.

The regional Bell operating company said it is currently testing IPTV hardware and software and will expand the trial to set-tops in select customer homes. BellSouth added that deployment plans won’t be announced until it finishes all trials.

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