During the opening general session at the 2003 National Show, Comcast’s Brian Roberts and Microsoft’s Bill Gates talked about the emerging interest in IP (Internet Protocol)-based solutions for TV services within the cable industry. That interest is motivated by the ability to deliver existing video services to consumers more efficiently via the broadband infrastructure already in place for high-speed data and telephony services, as well as the opportunity to create compelling new products that leverage cable’s advantage as the last-mile provider of choice for bundled video and Internet services. Some cable operators view IPTV as a telecom-centric solution. While it’s true that traditional telcos are aggressively looking to video delivered over their own IP infrastructure as a way to grow ARPUs (average revenue per user) in the face of pressures on their core revenues, cable may benefit just as much from new IPTV technologies. To understand the potential benefits of IPTV, look at the way broadcast programming and services are delivered to the home. Currently, the standard delivery technology is MPEG-2. This technology has been in the market since the early ’90s and has provided a stable delivery mechanism for basic digital TV services that can be enabled on a one-way broadcast infrastructure with a limited return path including broadcast programming, interactive program guides, pay-per-view and more. The difficulty with MPEG-2 is bandwidth usage — it’s just not as efficient as today’s more modern compression technologies. At the same time, the marketplace is demanding that cable operators deploy more bandwidth-intensive products like HDTV, VOD and SVOD. And potential future services like network-based DVR or video telephony will only exacerbate the bandwidth challenge, as will any changes in the must-carry/dual-carry requirements that result in more digital channels on MSO lineups. In the very near future, cable providers will be faced with bandwidth constraints if MPEG-2 is their only solution. Advances in compression and delivery technologies could position IPTV as a solution to these bandwidth constraints. One of the technological improvements that could push IPTV forward is in the area of encoding. For example, Microsoft’s latest video codec, Windows Media Video 9 Series, delivers standard-definition and hi-def video at approximately one-third the data rate of MPEG-2, and provides high-quality audio. Even when compared to MPEG-4, Windows Media 9 performs twice as well. Using these new compression and delivery technologies would allow operators to deliver standard-def at a fraction of the bandwidth, enabling currently impractical options like dual analog and digital carriage of basic networks to compete with the all-digital claims of DBS competitors. IPTV could do more for MSOs than just free up bandwidth. It has the potential to enable them to offer next-generation TV services that take advantage of their two-way broadband infrastructures. This is really the same network MSOs built to deliver HSD services, and are starting to use to deliver IP telephony. The two-way connection could enable MSOs to take the best of what Internet technologies offer consumers today and apply it to the TV experience. This includes rich communications, personalization features and interactive services that could be tailored to individual needs. Point-to-point video services like VOD and SVOD would be obvious opportunities for IPTV, but so would targeted commercials and program recommendations based on usage. Advances in home networking technologies, including Wi-Fi and Powerline, mean that MSOs also could offer services that reach beyond the TV set, reinforcing cable’s leadership in delivering compelling bundled products. Migration to an IP-based back end could also enable MSOs to take advantage of the cost benefits of a unified network where video could run on the same IP infrastructure used for high-speed data and IP telephony. Because the IP network equipment is essentially the same hardware used throughout the world for Internet services, the equipment for IP networks is cheaper and more ubiquitous than proprietary MPEG-2 solutions. That means more powerful, lower-cost set-top boxes, and the ability to migrate to standards-based security versus conditional access technologies. Today’s installed networks are generating billions in revenues and millions of satisfied customers. IPTV has the potential to help cable get more out of those networks. Technology is being developed now that will redefine the services that MSOs deliver. And network operators are engaging technology partners to be part of those discussions. At Microsoft TV, we encourage every participant in the cable community to engage in that conversation, as we all help design and define the future of television. Lynne Elander, the former VP-video product development for Cox Communications, is now general manager of marketing for Microsoft TV.

The Daily


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