I went to the 2006 Consumer Electronics Show with the goal of learning more about IPTV, and in particular, whether there are any services that IPTV can deliver but traditional hybrid fiber/coax cable technology cannot. What I learned is disturbing.

Jeffrey Krauss
But first, let me define IPTV. The term means different things to different people. Sometimes it means video delivery over the Internet. To me, it means the technology that SBC/AT&T is deploying to compete with cable TV. It means using Internet Protocol and IP Multicast Protocol to deliver IP packets of digital video. Those packets are delivered over a private network, not over the Internet. The private network consists of fiber-to-the-neighborhood, and then existing copper telephone wires to the home. On the copper phone wires, the video signal is carried on frequencies above those used for voice telephone service, with a technology called very-high-bit-rate digital subscriber line, or VDSL.

The copper wires are a bottleneck. With VDSL, they can deliver only 20 to 25 Mbps to the home, enough for maybe three HDTV programs using an advanced video coding algorithm.

As a result, this flavor of IPTV requires the customer to request each program individually, much the same way video-on-demand is delivered over traditional cable networks. The subscriber sends a request for a program to the video server at the headend, and that program is delivered to the subscriber. SBC/AT&T will deliver the program using IP packets, as opposed to the MPEG packets used by traditional digital cable networks, and that's why they call it IPTV.

This kind of IPTV requires the integration of a number of components and subsystems: servers, network switches, set-top boxes, fiber and fiber terminals, VDSL terminals, and middleware, plus a system integrator. A number of these vendors were at CES, and they were happy to talk to me.

One of them was demonstrating the "What's Hot" channel. Do you want to know what your neighbors are watching? Tune to the "What's Hot" channel.

Now, this demonstration did not show what each neighbor individually was watching—it aggregated their program selections so that it showed, for example, that 23 percent were watching "American Idol," 12 percent were watching "Fear Factor," 8 percent were watching "Law and Order" and 6 percent were watching a different "Law and Order." And you could see the percentages bounce around as people tuned in and away from these programs.

But it became clear to me that one big difference between traditional cable and IPTV is that the IPTV network operator—SBC/AT&T—knows what every customer is watching, and was watching, at every moment. A cable operator does not know which program the customer selects from the broadband multiplex of programming delivered on the coaxial cable. All of those programs are delivered to every home, and the customer uses the tuner in a set-top box or TV receiver to select one. But with IPTV, the customer asks the network to deliver one program at a time. The network records this information. And the network retains it forever.

You've heard the claim that Google retains a record of every online search you've ever made? I don't know if that's true or not. But I believe that SBC/AT&T will retain a record of every TV program you've ever requested.

The IPTV operator has the technical ability to analyze your personal viewing habits, and to sell that information to advertisers...or to give it to law enforcement officials.

Now, if the IPTV operator is classified as a cable operator, then Section 631 of the Communications Act protects your privacy. Section 631 prohibits cable operators from selling or commercially disclosing "personally identifiable information," but allows the selling of aggregated information. A law enforcement agency can obtain personally identifiable information, but only in response to a court order. But even then, a cable operator "shall not include records revealing cable subscriber selection of video programming." In other words, an individual customer's program selections are treated as sacrosanct, and may not be disclosed to anyone, not even to law enforcement agencies.

But Section 631 applies only to cable operators. SBC/AT&T is claiming that IPTV network technology is different from cable TV technology, and therefore it is not a cable operator. It is making that claim in California, in Connecticut, and at the FCC. If that claim is upheld, SBC/AT&T will not be subject to Section 631. Its customers will not be protected by the cable privacy laws.

That's what I found disturbing about what I learned at CES. IPTV could mean loss of privacy, depending on how it is regulated. It's really only a minor change from an aggregated "What's Hot" channel to a personalized, "What's Hot in the Krauss Household" data service. Maybe none of my neighbors care what I watch, but I bet there are some folks who would love to know. If we're lucky, all they will use it for is to sell us stuff we already want to buy. But maybe we won't be that lucky.

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