the answer appears to be a big ‘yes’…in 2005
Thanks to the emergence of high-definition television (HDTV), the telcos could end up with a "not-me" service, rather than a "me-too" offering, if they're not careful with their technology strategies over the next year or so.
Many telcos, especially the independent ones, have already embarked on video services over their existing DSL lines. The potential problem? They're only doing standard-definition (SD), while cable and DBS move along swimmingly with HD products and programming.
Sticking with an SD-only strategy (mixed in with some video-on-demand) might be okay if the telcos are willing to go after a market that will likely grow narrower and narrower by the year as HD-capable TV sets shrink in price, but it's fair to say that they will want to market to the cream of the crop, as well.
"You make the most on those who are the $80 or $100 per month subscriber. They (the telcos) don't want to leave themselves open by not going after the top tier of customers," says Michelle Abraham, senior analyst with In-Stat MDR, a research firm owned by the same company as CED.
HDTV "is a must-have feature" for the telcos, says Ed Graczyk, director of marketing for Microsoft TV.
Though some of the major RBOCs–Verizon, SBC Communications and BellSouth, among them–are pushing ahead with fiber plans that will provide plenty of bandwidth for HD, there are still questions about whether DSL will pack enough punch for telcos that don't have the bucks to make a big upgrade and, instead, will need to rely on their legacy copper networks.
The concept of doing HD over DSL is becoming more attractive, Starr says, thanks to ramped up activity in two areas: advanced DSL platforms and more efficient codecs such as MPEG-4 Part 2 and Windows Media 9.
Although SureWest Communications plans to focus its HD efforts initially on its fiber-to-the-home network rather than its DSL platform, "I think our golden bullet is going to be a combination of greater compression and higher bandwidth," says company Chief Technology Officer Bill DeMuth.Dilating DSL
What could help DSL providers enormously is the relatively nascent ADSL2+ platform, which can support rates of up to 20 Mbps on short loops, or about 15 Mbps "to a large portion of the customers," Starr explains.
"That certainly gets you into offering at least one high-definition channel plus several SD channels simultaneously, and a generous amount of data on top of that," he adds.
Despite a flurry of ADSL2+ demos at last month's Supercomm show, Starr acknowledges that the technology is in its early stages, and that the vendors still need to iron out some interoperability issues.
Chipmaker LSI Logic is currently conducting ADSL2+ interoperability tests with a variety of central office pieces, a key effort because LSI is a CPE-only silicon maker.
But it should prove a smoother road than ADSL interoperability proved, which took about five years, says Steve Ellwood, LSI's director of DSL product marketing.
An upgrade to ADSL2+ is a no-brainer, especially for telcos that don't have the money to spend on fiber-to-the-premises (FTTP) deployments, says Michael Harris, president of Kinetic Strategies Inc., a broadband research firm.
"The incremental investment of a legacy DSL infrastructure to ADSL2+ is relatively a joke compared to fiber-to-the-prem," he says.
VDSL, meanwhile, already provides the telcos the ability–or at least the bandwidth–to offer multiple channels of HDTV. But the loop lengths it can support leave much to be desired.
Today, VDSL can deliver about 18 Mbps via a 4,000-foot loop–enough to carry two HD streams simultaneously. But the number of North American telcos that are using it remains limited.
So far, three U.S. and Canadian telcos are using gear from Motorola Broadband (VDSL is now part of its product portfolio following its acquisition last year of Next Level Communications) to support VDSL deployments: Bell Canada, Manitoba Telephone and Qwest Communications, which offers it in Phoenix, Ariz., and Highlands Ranch, Colo.
Qwest said it was confident that VDSL is well equipped to handle HD transmissions, but wasn't ready to commit to a specific service launch.
"Qwest does not currently offer HDTV programming, but we continue to work with our vendors to determine the optimal configuration and timing for deploying the service," the company said in a statement sent via e-mail.
But a developing technology called VDSL2 aims to offer speeds similar to traditional VDSL, but at loop lengths that reach 6,000 feet.
"VDSL2 is in the early stages at this point," Starr says, anticipating that a final draft of the standard will be ready for official approval by early 2005.
Still, questions linger about who will step up to support the standard. Motorola, for one, is taking a wait-and-see approach to product development.
"We don't have anything on the drawing board at this time [for VDSL2], but we're keeping our eye on it," says Floyd Wagoner, manager of product marketing for Motorola Broadband's Telecom Solutions division.
Texas Instruments, meanwhile, hopes to answer DSL's bandwidth question–sans the expensive fiber upgrade–with a proprietary technology called Uni-DSL (UDSL). The company claims it can enable operators to use their existing copper to deliver aggregate speeds as high as 100 Mbps– enough to deliver a raft of HD channels simultaneously.
TI, in the form of a new line card that's backwards compatible with ADSL, ADSL2, ADSL2+ and VDSL standards, will bake in the UDSL technology to target neighborhood cabinets (a.k.a. cross connects) located 4,000 to 6,000 feet from the customer. The chipmaker hopes to launch its first UDSL products sometime next year, with commercial rollouts following in 2006.
TI is also aiming to make UDSL a standard, and is working through the International Telecommunications Union (ITU) to make that happen, Chow says.Crazy about codecs
As part of their HD plans, the telcos are expected to complement ADSL2+ rollouts with bandwidth-efficient codecs.
"There's certainly a lot of interest from telcos on how to do HD," says In-Stat's Abraham. "But it's pretty unlikely that you'll have a lot of HD over MPEG-2."
The benefit of advanced codecs is obvious. DSL pipes can choke on HDTV rendered in MPEG-2. The introduction of MPEG-4 and Windows Media 9 can reduce the strain, and essentially widen the pipe for HD.
With advanced codecs, operators can offer an HD stream at about 9 Mbps, and between 1.5 Mbps to 2 Mbps for each standard-def stream. "There are some that think it will come in a bit lower than that," Starr says.
A platform such as Windows Media 9 offers compression rates that are three times better than MPEG-2. Microsoft's demo at Supercomm offered SD programming at 1.5 Mbps, "but we think we'll be close to 1 Mbps before we're done," predicts Chris Wimmer, senior product manager at Microsoft TV's IPTV group.Product support
Fancy codecs and new networks look great on paper, but don't amount to much until there are products to support them.
Motorola hopes to introduce in the second quarter of 2005 an IP set-top that can decode MPEG-2 and MPEG-4 HD and SD streams dynamically. "It'll do everything on the fly...all based on the channel change," Wagoner says.
Thomson’s IP1000 set-top supports
multiple codecs. A new version
will also support HD.
That said, Thomson is already developing a platform for mid-2005 that will support HD and advanced codecs, explains Keith Wehmeyer, Thomson's general manager, video IP decoders. The company's IP1000 box already supports several codecs in SD, including MPEG-2, MPEG-4 part 2, and platforms from Divx, Real Networks and Microsoft.
Amino Communications, a U.K.-based vendor that supplies IPTV set-tops to telcos such as SureWest, says it is in the midst of finalizing its HDTV strategy, but declined to provide further details.
SkyStream will add MPEG-4
support this year, but HD won’t
be added until 2005.
On the software front, companies like Microsoft TV and Myrio Corp. also have HDTV in sight.
Microsoft, which has already partnered up with large telcos such as SBC Communications and Bell Canada, recently demonstrated an HD feed in Windows Media 9 format being delivered via an ADSL2+ modem at about 6 Mbps.
At Myrio, HD "is definitely on the roadmap," says Ryan Petty, vice president of product management for the IP set-top software and application developer.
Myrio completed a customer conference in May, and HD "was a hot topic," he says. "The customers are definitely asking about it."
Once new boxes and new silicon become available, Myrio hopes to come to market with software that takes advantage of the additional screen real estate offered by HD-capable sets and to produce graphics at rates higher than the traditional 640 x 840 window.
"It's possible that those things could line up in the first half of 2005," Petty says.Timing is everything
Although the telcos won't have HD capabilities until next year, few in the sector seemed too concerned that the window of opportunity will close before they're technically ready to jump in.
"Adoption of HD in the market is about four to five percent," Motorola's Wagoner says. The telcos "are pleased about [the prospects] of marketing HD services, but there's no high expectation that it would lead to tens and tens and tens of thousands of subscribers."
But that will change as HD set costs come down and HD content ramps up.
"Maybe this Christmas is the one when everyone goes out and buys an HD [set] and they call their service provider," Wagoner says. "But we think our timing is pretty good."