General

Microsoft IPTV: First the PC, Now the TV

Microsoft, which already has its nose in just about every aspect of computing and the Internet, may also be the supplier of choice in future for broadband service providers looking to get into the pay TV business.

by Gerry Blackwell [November 12, 2004]

Microsoft's IPTV product, an end-to-end solution for service providers, will allow telephone companies and ISPs—or anybody operating a broadband IP network—to offer pay TV services competitive with current satellite and cable offerings, showing the same channels, but with additional IP-based services and features.

From the consumer perspective, an IPTV service will work the same way as cable or satellite services—this is not TV on your PC. Subscribers will attach a set-top box to their TV and use a handheld wireless remote to select channels and adjust volume. The signals, however, will be carried over a two-way broadband IP network.

"IPTV will allow [service providers] to be very competitive," says Ed Graczyk, director of marketing for Microsoft TV. "But they'll also be able to offer a richer experience for consumers—with instant channel changing, for example, and multimedia program guides. We call it better TV."

Because the Microsoft technology handles channel changing in software on the network rather than using a partly mechanical tuner in the set-top box, an IPTV service will allow consumers to flip between two channels in milliseconds, where it usually takes one to two seconds now. They will also be able to display multiple thumbnail-size full-motion picture-in-picture windows overlaid on the main TV picture—or a program guide that displays live streaming video for each channel showing on the screen.

The other big benefit of the Microsoft IP-based technology is that it allows service providers to more easily and inexpensively integrate pay TV with VoIP and high-speed data services over the same infrastructure to create the kind of "triple-play" offering that many feel will be a key to future success.

Microsoft has announced five customer-partners that are testing the IPTV technology. Most are still at the laboratory testing stage but one in Switzerland is about to launch a market trial. Microsoft also has similar, though unannounced, agreements with "several other Tier 1 telephone companies" around the world, Graczyk says.

The announced customers are:

• Bluewin AG in Switzerland, a subsidiary of former PTT Swisscom, and the country's largest broadband services provider. Swisscom/Bluewin announced recently that it was moving in to a commercial trial of TV over ADSL, with 600 paying customers eventually. It expects to offer commercial service in 2005.
  
  
• Bell Canada is the former monopoly telephone company in the country's two largest provinces and part of Canada's largest communications conglomerate—which already operates a satellite TV service. Bell is "well along" in lab testing of IPTV, Graczyk says.
  
  
• Reliance Infocomm Ltd., a wired and wireless voice and data services provider in India, is part of the $16.8-billion-per-annum Reliance Group, India's largest business enterprise. SBC and Reliance are also both currently doing lab tests.
  
  
• SBC Communications Inc., the RBOC based in San Antonio, Tex., offers wired and wireless telephone, high-speed DSL-based Internet access, and satellite TV service in 13 states.
  
  
• Telecom Italia, the former PTT (national government postal and telecommunications agency) is part of a larger group involved in fixed-line and mobile telecommunications, Internet and media and information technology and services.

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