IPTV: Still a Few Kinks to Work Out

Think Equity Partners released a note this week about the dearth of HD IPTV set-top boxes and how the lack thereof is hurting Tut Systems’ bottom line. Think Equity cited problems with middleware and operating system integration as the primary reasons for the scarcity of HD set-top boxes. Also on the set-top box food chain, Harmonic’s David Price, VP of product marketing and communications, said IPTV set-top box manufacturers have been working on spinning next generation silicon. Price said there has been a STB shortage for IPTV, but “it’s a very temporary phenomenon.” “There are some great boxes coming out from Amino, Kraetel, ADB and others, but they’ve been waiting for this next generation silicon, and that has been holding them back a bit,” he said. “The next generation silicon is what’s called ‘system on a chip’ from SD Micro, Broadcom, Conexant and Sigma Design. “Sigma Design actually looks like it will be the first to market with it, but these are the chips that will enable the set-top boxes to come down in price to match the cheap prices that we see for the MPEG-2 set-top boxes for satellite.” Think Equity and Price remain bullish about IPTV’s future prospects because of the projected number of worldwide subscribers. Here in the United States, Verizon and AT&T have made the most IPTV noise of late, but it has been the smaller operators—in the 25,000 to 50,000 subscriber range—that have been the early adopters of IPTV, as well as Canadian operators three or four years ago. Sprint Nextel JV with Cable Starting to Heat Up In case you missed it, sister publication CableFAX reported yesterday that Sprint Nextel CEO Gary Forsee confirmed that the cable joint venture (JV) is testing wireless in seven markets with friendlies. The service will launch later this year in Raleigh, NC (Time Warner Cable); Portland, OR (Comcast); Boston (Comcast); Austin, TX (Time Warner); two Cox markets and one Bright House market. “We’ve spent a little more time than I probably would’ve thought or any of my colleagues would’ve thought a year ago in getting the product right,” Forsee said at a Goldman Sachs conference Wednesday, referring primarily to back office issues. In the cable markets trialing mobile, customers get a home page for their cable operator when they turn on their EV-DO Sprint device, Forsee said. “We’ve established joint messaging across the two platforms, joint emails, common voicemail, home and on-the-go calling plans,” he said. “So we’ve done something that’s different for customers than other experiences that may be in place today. This is Phase 1.” Comcast’s Steve Burke suggested that cable’s interest in the recent FCC advanced wireless auction could portend offering video, voice and data wirelessly in the future. “When the dust settles, I think we’ll be more clear about our plans,” he said. Cable’s JV with Sprint spent about $2.4 billion on 137 licenses. What’s done with the spectrum remains to be seen, said Forsee, who suggested that Sprint could use it to fill some holes in its coverage or that cable companies could decide to do something independently with it. Tom Rutledge of Cablevision, which is not part of the Sprint JV, questioned consumer interest in getting mobile phone service from cable operators. “Whether people are willing to change out their cellular service to be connected to a quadruple play or not, I’m not sure,” he said. While CVC isn’t part of the consortium, Rutledge said he expects the MSO’s invitation to participate in the future won’t expire. Road Runner Turns 10 They grow up so fast, at least the ones that are still around. Time Warner Cable’s Road Runner broadband service turned 10 this month. According to the press release, Carl Rossetti, Jim Chiddix, Mario Vecchi and Tim Evard met for dinner in Evergreen, CO, on Jan. 25, 1995, which is early caveman in Internet years, to first discuss the service. “The end result of that meeting was outlined on one piece of paper, a sketched out plan for what has now become Road Runner, Time Warner’s Cable’s award-winning high-speed Internet service,” the release said. “On a daily basis, over 5.4 million households now benefit from the planning that began that night.” Time Warner Cable’s Road Runner Service officially launched on Sept. 10, 1996, in Akron, OH. The company had initially tested the service in 1995 in Elmira, NY, and after the formal launch, rolled out the service to its customers nationwide over the next two years. Mike Robuck

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