To date, the “I” in Internet Protocol Television has been about the protocol. If the 2010 TelcoTV Conference is an indication, IPTV may have caught up with the rapid pace of change associated with the Internet. Based on the demonstrations on the TelcoTV tradeshow floor, 2010 may be the year that IPTV finally goes from a “me-too” offering to one where innovation becomes its trademark.
Open Approaches = Faster Innovation & More Efficient
From voice-activated remote controls to high definition user interfaces on four-year old set-top boxes, innovation blanketed the tradeshow floor. What made this different from shows past were that many of these innovations are ready for prime time. Middleware finally seems to be finding its mark as a facilitator of innovation in the creation of cross-platform applications.
Both Innovative Systems and Nokia Siemens Networks have structured their latest middleware releases around the open source Qt client and SQL-lite database. Innovative Systems demonstrated their second release of their IPTV offering, which features a whole-home DVR, based on the Amino A540. The mesh nature allows expansion of the number of recorded inputs by simply adding more PVRs. Another innovation is the voice activated remote via an Android application. The most impressive thing about this development was how it evolved from concept to reality in a matter of days.
Nokia Siemens Networks demonstrated the power of an open platform through its relationship with 3rd-party application developer, L4 Media. L4 Media is a division of L4 Mobile, an experienced developer of applications for mobile devices. L4 Media is allowing IPTV providers to create operator-branded application stores for widgets. L4 Media’s experience on the mobile side could be critical, as applications increasingly will need to work across networks and devices.
Brook Longdon of NSN emphasized the importance of having a device centric middleware in order to unify services and content over any network to any device. The NSN middleware in conjunction with its client optimizes the content and metadata delivery for maximum use of the capabilities of a specific device. NSN has eliminated the 3rd-party software development kit from the device, allowing them to optimize the client for the device.
To demonstrate the power of this approach, NSN showed a snappy, high definition user interface on a four-year old set-top box whose manufacturer said it would not support a high definition interface. Longdon explained that this approach allows operators to extend the life of set-tops they have already deployed.
The Blending of OTT and Managed Services
One of the interesting trends at the show was the blending of over the top with managed linear and VOD services. Verismo Networks, which is a long-time producer of set-tops for accessing over-the-top content, demonstrated an extension of their back-end to include a cloud-based middleware solution, allowing operators to offer video by simply purchasing set-tops. Endavo Media and Communication’s approach to middleware is cloud-based with a twist, as they demonstrated it both as a stand-alone service and as a complement to Conklin-Intracom’s middleware offering.
Minvera Networks’ announcement of their xTVFusion offering provides a path for its existing 200+ customers to add OTT to their current offerings, while enabling new models for operators who are looking to get into the business. Interestingly, Channel Master, a leader in terrestrial television antennas, announced a set-top box that will work with the Minerva middleware. With this sort of partnership, it is not too far-fetched to think that an operator-based hybrid broadcast-OTT video offering might be a future development.
Content to the Edge
As operators embrace OTT video as a stand-alone broadband product or complement to its existing IPTV offering, moving content to the edge and reducing the load on the mid-mile will be increasingly important. At TelcoTV, BTI Systems demonstrated a product to reduce mid-mile bandwidth needs.
The network aware Widecast device sits next to a DSLAM or deeper in the network, caches 8 Terabytes of Internet content and serves it locally. Gary Southwell, BTI Systems’ CTO indicated that content is served on average 7x faster and the consumer has a higher quality experience. The result is that the average response time is seven-times (7x) faster than without cache for OTT content. Widecast claims that one customer saw a reduction in churn of 1 to 2%.
BTI provides analytics that allow an operator to view parameters, such as the type of traffic, the originating web sites and the demand as a function of time and geography. This information is valuable for understanding network expansion needs, as well as enhancing revenues through targeted advertising. BTI is working on VOD integration, so these devices could provide even great value. Southwell suggested that the payback for the Widecast product is typically between 3 to 27 months.
Some of the Clouds are Dark
Lingering over the many positive developments on the TelcoTV 2010 tradeshow floor was the dark cloud of uncertainty in the regulatory and financial environment. A key take-away from the Wednesday morning panel led by Carol Wilson and featuring representatives from NECA, OPASTCO and NTCA was that 2011 would be a year of, “organized chaos”, meaning that the outlook for the future is not expected to clear anytime soon. As a result, the panelists expect continued delay in the further definition and the implementation of the FCC's National Broadband Plan.
The shift in the political climate, cemented by the recent elections, as well as the slippage in Notice of Proposed Rule Makings (NPRMs) were reasons cited why the industry should expect more of the same next year. Catherine Moyer, OPASTCO Chair and Director of Legal and Regulatory Affairs for Pioneer Communications, speculated that we might see an FCC that has two Democrats and two Republicans next year. This is a plausible outcome, given that the term of FCC Commissioner Copps will soon expire and that the politics of Washington might result in an open position.
Slippage in implementation of the FCC’s National Broadband Plan may not be a bad thing for rural entities as it buys them time to plead their case that the National Broadband Plan, as written, creates unintended consequences. For instance, according to a report in the Eastern Iowa Business blog, Iowa’s Office of Consumer Advocate, announced last week that the NBP, if implemented as written, would make it, “highly like Iowa customers’ total telecommunications bills will increase.” Advocates for rural regions, have also argued that the 4 Mb/s downstream and 1 Mb/s upstream inadvertently creates a digital divide between urban and rural areas.
One of the negative implications of the uncertainty in the regulatory market is the bleed over affect in financing of new deployments and technologies, particularly for rural deployments of broadband. Moyer, who is also on the board of directors of CoBank, a cooperative banking institution that serves the needs of rural America, indicated that the lack of clarity on the implementation and transition of support mechanisms away from voice and towards rural broadband means that financial institutions are not certain that operators will be able to pay back their loans.
Based on conversations at the show with management of various telcos from around the country, this tightening financial picture is manifesting as cutbacks, lay-offs and consolidation in various forms. Moyer suggested that the FCC could improve regulatory certainty by focusing on the blocking and tackling elements of the National Broadband Plan, such as ruling on inter-carrier compensation, phantom traffic and carrier contribution reform.
Maybe 2011 Will Be TelcoTV’s Year
With the refinement of the various platforms seen at TelcoTV 2010, it appears that the pace of innovation in the IPTV space will start to match that of its cousin the Internet. The efficiencies gained through open source approaches may mitigate some of the uncertainty in the capital markets and 2011 may be the year when IPTV, in its various forms, starts to live up to its promise.