Rogers, Bell Canada Square Off
Michael Lee, Rogers’ VP and GM of Interactive Services,
shows off the Triple Play package.
Convergent devices–hardware able to handle video, Internet, voice telephony, and anything else that can be packed into a single box–have been an engineer's Holy Grail for years.
However, in Canada, convergent devices are not only a reality, but are quickly shaping into the weapons of choice in the battle between Rogers Cable and Bell Canada Enterprises. They're Canada's largest MSO and ILEC, respectively, each serving millions of subscribers.
The stakes of this war are considerable: dominance of the Canadian integrated broadband market. Will it be Rogers with its cable TV, broadband cable Internet, and (some day) voice-over-IP? Or BCE with its satellite TV, DSL Internet and conventional phone service? How successfully each company deploys its convergent devices, and how deeply they cut into the other's business, will likely determine the answer to this question.First out of the gate: Bell Canada's ComboBox
Back on Feb. 5, 2001, BCE fired the first salvo in the convergent device war with the announcement of its "ComboBox" integrated set-top. "It's a home appliance that integrates our DSL service offering with our DTH service," explains Glenn Ward, Bell Canada's vice president of convergent technologies.
Triple Play’s visual program guide.
While a user watches TV, The Triple Play system notifies her that she has a voice mail message waiting.
This means that a BCE customer can, from the comfort of his easy chair, watch Bell ExpressVu's 240-plus DTH channels or surf the Web via Bell's Sympatico High Speed DSL linkup on the TV set. Moreover, if he has picture-in-picture, he can do both simultaneously.
As well, ComboBox users can send and receive e-mail on their TV sets. They can also stay connected via instant messaging, or take part in chat groups during favorite shows. These are features Ward predicts "will be tremendously popular–particularly with kids." To make doing this easy, the ComboBox comes with a full wireless QWERTY keyboard, as well as a remote.
But that's not all. Because the ComboBox is equipped with a 40 GB hard drive PVR (personal video recorder)–the same kind found in the EchoStar PRO-501, which Bell ExpressVu has just launched in Canada–viewers can record and manipulate programs as they please. In fact, they can even pause a program, leave the house, then return later and pick up exactly where they left off. (See "PVR" story on page 46.)
"I think the PVR functionality is key to selling people on the ComboBox," Ward comments. "Just introducing a box with DTH/Internet would be much less attractive."
Meanwhile, BCE has its own plans for the ComboBox's hard drive. Specifically, "the storage in the home gives us the ability to download content directly to the storage device," says Ward. "This could include the most popular movies that ExpressVu currently offers on a staggercast basis. Rather than broadcast them by DTH, we could store them or other content on the PVR instead. In this way, people can order them directly off the PVR, giving them true video-on-demand, saving them time while saving us bandwidth."
Clearly, the ComboBox is a device Ward describes as being of "extreme importance" to his company's future. It may also prove equally important for EchoStar, "who is quite interested in partnering with DSL providers in the US," Ward notes.
The schedule for ComboBox's launch: the first half of 2002.The Empire strikes back: Rogers' Triple Play
In the battle of titans, Rogers couldn't afford to let the ComboBox threat go unanswered, and it didn't. On June 19, 2001, it unveiled its "Triple Play." Functionally, the Triple Play meets the ComboBox's challenge, and adds new wrinkles. With this single unit, subscribers can get digital cable TV and broadband Internet access on their television sets. Throw in a wireless keyboard, which the Triple Play does, and they can browse or send e-mail as well.
Rogers’ Lee uses Triple Play to surf the ’Net in a living room setting.
The one glaring omission: the Triple Play doesn't have a built-in PVR. That's because this technology is still too expensive to be marketable, says Michael Lee, Rogers' VP and GM of Interactive Services. (The current ExpressVu PRO-501 PVR/receiver/antenna package, which includes a $66 programming credit, costs $466.) However, the Triple Play can be upgraded to PVR functionality, with the right equipment.
This brings to light the major difference between the Triple Play and the ComboBox: the Triple Play isn't a set-top at all. Instead, "it's a server that resides in the customer's basement, which has data, voice and video inputs," says Lee. "It extends these to other devices in the homes, including PCs, TVs, stereos and telephones."
The Triple Play server works across the existing pipes of a PC, TV and telephone. "It's all about no new wires," Lee says. These existing pipes include HPNA, wireline Ethernet, 802.11b Ethernet, and FM wireless transmission via infrared. The Triple Play also connects to coaxial, conventional telephone cable, and anything else needed to send its signals around the house.
For Rogers' subscribers, the Triple Play is more than just a set-top; it's a solution. Based entirely on Ucentric Systems technology (www.ucentric.com), it allows subscribers to centralize all of their PC, TV, telephone and Internet devices onto a single network.
Not only does this simplify provisioning today, but it promises to make expansion tomorrow far easier. The first is actually a home networking server, while the second is an integration device. Or, in the words of Rogers Cable President and CEO John Tory, the Triple Play "is convergence at its best, combining a number of existing communication and entertainment devices and allowing them to be used where the customer is, not where the device is physically located in the home."
At present, Rogers is testing about 50 Triple Play servers in Ajax and Pickering, bedroom communities east of Toronto. So far, no widespread roll-out date has been announced.How the two stack up
Triple Play versus ComboBox: which is better? It's probably a matter of perspective.
Video: Given that Canada's TV content is tightly controlled by the government, anything you can get on cable TV here is usually also available on satellite, and vice versa. Hence, as far as TV is concerned, that round is a draw.
Broadband Internet access: Because of teething pains–most of which Rogers attributes to being on the "bleeding edge" of cable Internet access–the Rogers@Home service has had some serious problems in its first few years.
Rogers is addressing these with aggressive network expansion and upgrades. However, it's fair to say that BCE's Sympatico DSL service hasn't suffered from the same degree of problems, or at least, not had them publicly aired in the Canadian media.
As a result, BCE may have an edge in the public's perception on broadband access. Hence, when it comes to both companies offering converged devices, the ComboBox may come out ahead here. Marginally.
Telephony: BCE offers it separately through Bell Canada. Rogers isn't offering it at all. Moreover, even if it does, it's unlikely that the public will care much. This is because Bell Canada's local loop service is exceptionally reliable and robust. The only way to undercut it is through price slashing, which observers suggest nobody can really afford these days.
Video-on-demand (VOD): BCE proposes to offer it through near-VOD staggercasting and using disk-based VOD. Rogers, meanwhile, intends to offer VOD directly across its network.
There are two issues to consider here. The first is whether storing a few movies on a user's hard disk is sufficient to satiate his VOD hunger. The second is whether such storage is really such a smart idea after all. Experience will answer the first question. As for the second, Rogers' Lee has his doubts.
"If movie studios are having a really tough time with piracy now, why would they shoot movies down to a hard drive that is customer premise-based, and customer controlled?" Lee asks. "For instance, right now you can type in 'TiVo hack' on Google, and you'll get a thousand sites of hard drives that are compromised at the user's premises. Given that subscribers will likely try to hack the Triple Play as well–and likely succeed–this model doesn't make a whole lot of sense."
Actually, Lee exaggerates. Typing "TiVo hack" into Google results in 580 sites, or 58 pages in all. Still, those sites feature detailed instructions–and full-color photos–on how to add extra hard disks to the TiVo, or even dub TiVo files to PCs and DVDs.
A case-in-point: the freeware program ExtractStream 0.2 claims to be able to extract TiVo-recorded programs onto a PC hard disk, where they can then be encoded to MPEG-2 for distribution on the Web.
Of course, the Ucentric Systems' (www.ucentric.com) technology that powers the Triple Play isn't the same as TiVo's. Still, the fact that both are Linux-based–the open operating system that is the darling of programming geeks–gives one pause. If one is hackable, surely the other may be as well?
Form factor: being a set-top box, the ComboBox is something consumers are accustomed to. Being a server, the Triple Play may be harder to accept. On the other hand, by hiding away in the basement, the Triple Play may ultimately prove more acceptable to users than another component cluttering up the living room.
Functionality: with ComboBox and Triple Play both offering Web browsers, e-mail, instant messaging, chat, plus remotes and wireless keyboards for access to the whole shootin' match, this particular battle appears to be a draw. The only area where the ComboBox clearly leads is by offering a PVR.
Will PVR functionality really make a difference to Canadian consumers? Or will they realize that they can already leave the house during their favorite shows, by clicking their VCRs to "Record"? Again, time will tell.The view from both sides
This brings us to one last question: how seriously do Rogers and BCE view each other's convergent weapons?
"The first version of the Triple Play is ready for market trials," Rogers' Lee retorts. "We have our own roadmap, and our own technologies. We also started work on this long before February 2001, when BCE first announced the ComboBox."
With no products in the marketplace, it's too early to say how this battle will shape up. However, what is noteworthy is how much BCE and Rogers are staking on their convergent devices. At this point of integration, the division between MSO and ILEC blurs completely. In fact, what remains are just two vertically-integrated service providers, each eager to take over the other's turf.
Lee with John Tory, Rogers Cable president and CEO.