Comcast + Panasonic = tru2way ?

Comcast: Cable to Standardize Technology

Facing pressure from regulators, the cable TV industry plans to make good on a promise to standardize its technology and open the door to televisions and other gadgets that don't need cable boxes to receive video-on-demand programs and other interactive services.

An industry initiative, to be renamed "tru2way" after a decade in the works, is expected to allow electronics manufacturers to make TVs and other gear that will work regardless of cable provider. By making devices compatible, the standard also could encourage the development of new services and features that rely on two-way communication over the cable network.

Comcast Corp., the nation's largest cable provider, will roll out the platform in all its markets by the end of 2008, Chief Executive Brian Roberts said in an interview with The Associated Press ahead of a speech Tuesday at the International Consumer Electronics Show.

Time Warner Cable Inc. is even closer to completion, Comcast executives said. A spokesman for No. 3 provider Cox Communications Inc. said the company will have "widespread deployment" this year.

"Our business model has changed completely, from a closed, proprietary model to an open architecture that will work across cable companies — not just across Comcast," Roberts said. "That was a Herculean job to accomplish."

Craig Moffett, senior analyst at Sanford Bernstein, said the industry is sending a hands-off signal to the Federal Communications Commission. Last summer, FCC officials said they would soon take on the issue of two-way compatibility between consumer electronics and cable systems.

"They don't have a lot of friends at the FCC right now. The cable industry has every reason to be nervous," Moffett said. "I suspect a lot of this is trying to beat the FCC to the punch."

CableLabs, the cable industry's research and development arm, which Roberts leads, was to announce Monday that its OpenCable platform, which began development in 1997, will now be branded as "tru2way."

Cable providers and device manufacturers have long disagreed over the technical specifications for two-way communication among their devices. There are TVs and set-top boxes in the market that can receive digital programming, but they can't talk back to the network, which would allow advanced interactive services. That leaves consumers with having to rent a box from the cable company.

And even with the new standards some discord remains.

Though the cable industry has inked separate deals with electronics companies, including Panasonic, Samsung and LG, consumer electronics giant Sony isn't on board.

The FCC — where Chairman Kevin Martin supports a more open and competitive environment — is also considering a different standard put forward by a group of consumer electronics companies.

CableLabs said it has inked licensing agreements with Intel Corp. and Broadcom Corp. to develop chips to run the software. And Microsoft Corp. is expected to integrate the standard into future versions of its Windows operating system for personal computers.

Comcast foresees "tru2way" branding on TVs, set-top boxes, PCs and other devices to signal their compatibility with cable systems.

On Monday, Panasonic and Comcast plan to unveil a slew of products that will be compatible with "tru2way," including a plasma high-definition television, high-definition digital video recorders and a portable DVR.

"You'll see a number of new 'tru2way' devices, and this is just the beginning," Roberts said. "This is Day One."

The Panasonic Viera Plasma HDTV with "tru2way" will go on sale this year. Panasonic's portable DVD player and recorder, called "AnyPlay," lifts off a docking station and allows consumers to watch the programs they've recorded anywhere they like, on its 8.5-inch LCD screen. It is to go on sale in early 2009.

Other products are expected to reach retail stores as early as the end of 2008. The timeframe gives cable leverage over the competing standard proposed by consumer electronics makers, whose devices might not make it to retail until 2009 at the earliest.

Moffett said cable operators are telling the FCC that the industry can work with consumer electronics makers on two-way cable-compatible products.

"That could tip the scales in their favor," Moffett said.

Cable's consumer electronics makeover

Historically, cable has been left out of the gadget circus. But at this year's CES, Comcast's Brian Roberts is trying to boost the business's presence.

NEW YORK (Fortune) -- Comcast CEO Brian Roberts says he remembers walking around the Consumer Electronics Show five years ago with Time Warner Cable CEO Glenn Britt. He recalls seeing a big presence from his rivals in the satellite-television business. His own industry, by contrast, was nowhere to be found.

"So we met with the board of [industry research arm] CableLabs and decided to go to Japan and Korea to visit the CEOs of the major [consumer electronics] companies," Roberts told me in a conversation over the weekend. "And we asked them, 'What do we need to do to work better with your industry'?"

This week, at CES 2008 in Las Vegas, Roberts is unveiling some of the fruits of those discussions - and, in so doing, he hopes to generate some much-needed positive buzz for the cable industry. In a joint announcement Monday with electronics maker Panasonic (MC), Roberts presented a cable-ready plasma television set (i.e., no set-top box) and a portable Digital Video Recorder that lets consumers take their stored cable programs with them on the go.

Both products are powered by technology called "tru2way," which cable companies are adopting; Roberts describes it as an open platform that will allow developers and electronics companies to write applications that can be widely deployed across the entire footprint of cable companies supporting tru2way. The biggest consumer benefit of tru2way is that it can be built into television sets, eliminating the need for discreet set-top boxes - an aesthetic benefit to consumers trying to avoid clutter as they upgrade to sleek flat-panel sets.

Roberts, who also will give his first-ever CES keynote address on Tuesday (and will reveal a few more new products at that time), says of his CES appearance: "I think it is a way for us to tell our employees and our customers how excited we are about what is happening at Comcast."

He says his speech Tuesday won't be aimed at investors, but it wouldn't hurt to get Wall Street excited about the sector. Cable stocks performed miserably in 2007: Comcast (CMCSA) shares, trading at about $17, were down about 40% last year. Shares of Time Warner Cable (TWC), which is controlled by FORTUNE and CNN/Money parent Time Warner (TWX, Fortune 500), were also down 40%. Investors are concerned about fresh competition from telephone companies such as Verizon (VZ, Fortune 500) and AT&T (T, Fortune 500) now offering video services, and stepped-up pressure from DirecTV and Echostar, which boast broad high-definition lineups.

And indeed, the satellite industry has done a good job of partnering with the consumer electronics industry. In recent years, DirecTV, for example, has worked with some electronics makers and retailers to encourage consumers to switch to satellite from cable when buying a new plasma television. TV makers had found some consumers returning their sets complaining of poor picture quality; the buyers didn't realize they needed a new cable box in order to get channels in high-definition.

The cable industry's new open platform should solve some of those problems. Now a cable operator can remotely upgrade a customer's channel line-up, say, or deliver new applications, without the customer needing to acquire a new in-home device.

Roberts says he hopes 2008 marks the start of an important partnership with the likes of Panasonic, LG, Samsung and others. "Our presence at CES is a chance to tell CE companies and software applications developers that we are here, we are open and we need your innovation to help us win," he says.

Roberts, 48, talks a lot about winning these days. The competitive playing field, which once seemed stacked in cable's favor (it was first with broadband Internet access and first with the "triple play" of voice, video and data), now looks remarkably level. To beat back phone and satellite insurgents, the historically insular cable industry is going to need help. "We have to innovate, have an open architecture and interoperate between cable companies, and our customer service has got to continue to reach new levels of excellence," Roberts says. "We also have to have the most content, which we clearly do. Put together, we have a winning strategy."

Comcast customers, employees, and certainly its investors, hope he's right.
Fortune Magazine

IPTV

First, quite simply, it is what people want and increasingly expect.

People are more informed and less deferential and more differential than ever before. They want, and demand, as much choice and control as possible over most aspects of their lives
People want control their own time and want to watch TV when it suits them.

IPTV operates on a different premise than traditional satellite or cable television in that only selected programming and on-demand content are delivered to the consumer. With Satellite and cable, all channels are being pushed all the time to the consumer's home rather than a per-selection basis. IPTV's ability to provide two-way communication (you request a program from the TV guide and the program is delivered to you) offers true interactivity for the customer with the environment. HDTV, movies, past TV shows, and all other content can be distributed on demand and service providers can tailor the requested content and advertising based on customer preference.

IPTV also offers such potential as on-demand video gaming and because it is using your broadband connection, it can interact with other Internet services such as Voice over IP (VoIP). Consumers may have caller ID displayed on their television. The potential is truly unlimited.

The broadband network has clear benefits over the older cable TV network.
With advancements in DSL throughput and video compression and most importantly, the ability to offer video services over existing DSL infrastructures IPTV takes the edge over traditional cable providers, delivering both broadcast-quality video and video on demand.

ADSL differs from other DSL technologies in that it provides an asymmetric distribution of bandwidth for one of the two routes within the interactive architecture. ADSL broadband is crucial to IPTV services since it allows interactivity, but is perhaps the preferred IPTV delivery technology because it allows the service provider more bandwidth for the delivery than it does for the user to interact. Initially, most analysts believe IPTV services will remain mostly a delivered medium with interactivity at a minimum. Video on Demand (VoD) and p2p delivery services would not require as much bandwidth as the download of content from the service provider's head end would. A more interactive architecture whereby the user sends as much data to the service provider as it receives would require a different DSL technology with equal bandwidth for both routes. Currently ADSL is popular in Europe and Asia.

The delivery of Internet protocol TV (IPTV) using DSL is an emerging and exciting technology that offers new business opportunities to service providers. ADSL2+ and VDSL2 data rates make it possible to easily integrate voice, video and data services over a single telephone line, commonly denominated triple-play services. With all these technological developments, it is now practical and economical to simultaneously provide multiple standard and high-definition television channels (SDTV and HDTV) to the residential user.
The term IPTV usually includes a broad range of programs or TV channels provided by one or multiple service providers. Additionally, it might include some specialized programming like concerts, special events and movies, provided only when requested by the user; i.e., video on demand (VoD).
Like every other evolving technology, there are multiple approaches for the delivery of IPTV across the core network and its transmission to the customer premises over an ADSL2+ connection. In general, video service providers first perform the coding and compression of the video signal typically using MPEG-2, MPEG-4 or WM9/VC-1 (it is at this stage that a trade-off between quality and required bandwidth occurs). Then, the video content is ready to be distributed by streaming IP packets using the user-datagram protocol (UDP), which is the preferred method of IP packet delivery when offering video due to its low latency. Once at its final destination, the subscriber’s house, the video stream is decoded by a set-top box (STB) and
played on the TV.

Cable television service providers, in an effort to boost their average revenue per user (ARPU), now offer competitive, high-speed data services in addition to another home and business staple MPEG-2 based digital video and high-definition television (HDTV).
Customers find a single source for both high-speed data and digital video services very attractive. And the telcos suffer because of it.
Of course, a very few xDSL customers enjoy one of the fastest and most cost-competitive Internet access services available—from 3 to 8 Mbps—which is easily capable of delivering the MPEG-2 bandwidth requirement of 2 Mbps for broadcast-quality digital video. But the short DSL loop length limits the total available market (TAM) at these speeds.
More DSL customers can get data rates as fast as cable at 1.5 Mbps, and, while this speed makes it possible to watch Internet streaming video based on the MPEG-4 Simple Profile (MPEG-4 SP) codec in real time, 1.5 Mbps is not adequate to deliver broadcast-quality MPEG-2 video streams. With a very limited TAM, the investments telcos require to deliver video over DSL is not easily justifiable using MPEG-2. Plus, two other market phenomena add to the telcos’ challenges and catalyze the need for new services that boost ARPU and grow market share.

ADSL2 is a technology that provides higher downstream rates of up to 12 Mbit/s for spans of less than 2.5 kilometers (8000 feet). ADSL2+, boosts these rates to up to 25 Mbit/s for spans of less than 1.5 kilometers (5000 feet).

Quality of IPTV

On any ADSL-based deployment, the quality of the consumer’s video is not just a function of the
network bandwidth (ADSL2+/ADSL) or the data stream, as there are a number of parameters that contribute to the customers’ perception of good vs.bad quality. As the video stream arrives to the settopbox and ultimately the television, it has gone through various protocol layers (e.g., physical ADSL layer, ATM layer, IP layer, transport layer,etc.). It is the interaction between these layers and the effect of external influences that affect the quality of the video perceived by the consumer; this is often referred to as quality of experience (QoE). Some of the parameters that influence the customer’s QoE include image pixelization and tiling, picture blurring and edge distortion, as well as audio dropouts and channel-change latency
(also known as zap time).

Packet Loss
Loss of IP packets may occur for multiple reasons — bandwidth limitations, network congestion, failed links, and transmission errors. Packet loss usually presents a bursty behavior, commonly related to periods of network congestion. Depending on the type of transport protocol used for the video streaming, a packet loss will have different impact on the quality of the perceived video. When UDP is used, the lost packets will directly affect the image, as the information cannot be recovered and the image will simply be corrupt or unavailable. When using TCP, a packet loss will generate a retransmission, which can produce a buffer underflow and, consequently, a possible frozen image.

Data rates for the downstream and upstream must be high enough to support IPTV. Even with MPEG-2 or MPEG-4 video compression, a speed of at least 3 Mb/s per channel is required in the downstream direction — and much more if HDTV is contemplated.

The new H.264/MPEG-4 AVC video coding standard enables telcos and ISPs to deliver high-quality video and television over digital subscriber lines (DSL), creating new revenue-generating opportunities.

Similar to MPEG-2, H.264/AVC requires encoding and decoding technology to prepare the video signal for transmission and then read it at the customer’s receiver (STB and TV/monitor, or PC). In fact, H.264/AVC can use transport technologies compatible with MPEG-2, simplifying an upgrade from MPEG-2 to H.264/AVC to help protect the investment in MPEG-2 some companies have already made, while enabling transport over TCP/IP and wireless. A significant difference, however, is that H.264/AVC does not require the expensive, often proprietary encoding and decoding hardware that MPEG-2 depends on, making it faster and easier to deploy H.264/AVC solutions using standards-based processing systems, servers, and STBs. This also allows service providers to deliver content to devices for which MPEG-2 cannot be used, such as PDA and digital cell phones. H.264/AVC is ideal for, but not limited to, Video Services over DSL; it increases the ground of applications based on a common video format.

H.264/AVC cuts in half the bandwidth required to deliver fullscreen DVD-quality digital video to consumers, and it reduces standard television quality digital transmission bandwidth requirements to 700 Kbps—both well within the capabilities of a 1.5 Mbps DSL loop. Using new H.264/AVC delivery platforms and standard PCs or STBs, telcos can offer exciting IP video services—video-on-demand (VOD), local, national, and premium television programming, gaming, music, and, even interactive television—to their home and business customers using their existing copper infrastructure.



IPTV advertising
With the promise of advanced capabilities offered by IPTV advertising, an important question becomes whether it can compete with the already-established online video ad industry. According to an industry report from research firm Understanding & Solutions Ltd., Internet TV advertising could achieve revenues of up to $10 billion worldwide by 2011, which equates to 18 percent of the total Internet advertising market for that year, which is forecast at $57 billion.
Despite the challenges, as new IPTV services continue to emerge, it’s only a matter of time before operators discover how to exploit the capabilities of interactive advertising on a wider scale, the same way as it has been done online.