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But for IPTV there is one big chance that has now slipped by. Bell-south had continually refused to commit to Microsoft and Alcatel IPTV, stating that it was trialing Microsoft, but not yet ready to go further as it ploughed its own furrow in IPTV, which is said time and again had different need from AT&T. Bellsouth had continued to hold talks with every IPTV and telecoms supplier with a view to covering any strategic possibility for IPTV and kept all their hopes open that it might decide to go with conventional IPTV suppliers after all.

Now under AT&T’s committed IPTV direction, that possibility is extinguished. Bellsouth cannot make any concerted expenditure decision during the year or so that it will take to complete the merger, and then it is certain to go forward with an extension to AT&T’s project Lightspeed.

Given that Microsoft already controls the (non-IPTV) fibre TV at Verizon with its cable based TV Foundation Edition software, that gives it a clean sweep of all the US majors, with Bellsouth coming more by default than decision.

It was IBM that raised most clearly the issue of Wall Gardens at the show, through its consulting arm that was once PWC, and Bill Scott the leader of digital media consulting. IBM put out a report on "The end of TV as we know it", a few weeks back and we covered it in detail.

The report makes some genuinely valid new points about TV. It is carefully constructed, well argued, and derived from 65 interviews with senior industry executives, Wall Street analysts, economists and technology visionaries although we’re a bit miffed that they didn’t talk to us. Additionally, it had extra research from the Economist Intelligence Unit, which carried out another 108 interviews across cable, satellite, telco, broadcast and TV networks executives from Europe, Asia and North America.

Fundamentally, it expressed the old argument about diversifying new video models such as DVR, web TV and video downloads, creating a stratification of fragmented TV services, with the existing $60bn of US TV advertising revenue being spread over more and more players.

What IBM says will initially happen is that the world will split into two types of individuals, those that remain largely passive in the living room and those that expect content anytime, anywhere through multiple channels on multiple devices. This latter grouping, driven by both the young and the gadget conscious, will demand platform ag-nostic content, mobility of media experiences, individualised pricing schemes and an end to the traditional concept of release windows.

Opposing this view was Martin Cullum, general manager for video networks at Bell Canada, who summarised the view to a shocked audience that "there is a lot of mileage yet in the walled garden business model", referring to a network where only the owner of the network can deliver services over it. He added: "The best way to stop Google coming onto your TV screen is not to put an html browser on it in the first place."

This brought howls of derision and left many of the audience shaking their heads at such a "head in the sand" attitude, and no-one was really sure whether or not to take him seriously. As an adherent to Microsoft IPTV Cullum is of course referring to the fact that currently its set top architecture uses a discreet proprietary client, with no browser.

Later Mark Gray, CEO of VoD and middleware company Kasenna, said that at the moment he had 500 TV channels with "none of what I want to watch", and he called for a single channel with "everything I want to watch" on it. "TV should be a portal through which to offer a huge variety of services, where each new service could be quickly and inexpensively added."

Gray was echoing IBM who took up the running through Scott once more, clear on how IBM sees the market developing. "It’s like going to a shop, and picking up what you fancy. It’s too much trouble to go to another shop. In Pay TV terms, going to another shop is canceling contracts and finding another supplier.

"Most TV is like that these days. If you buy Sky (or DirecTV or Dish or Comcast), you get everything from that supplier, the set top, the EPG, the channels it has bought in. It’s much the same when you buy from a cable operator or an IPTV company, but it won’t stay that way.

"Today when you buy a CD over the internet your ISP has no say in what you choose and who you buy it from. You can go to Amazon and order a CD whatever ISP you are signed up with, and that’s how we see pay TV going.

"As content becomes more and more available over the internet, the companies who will win with consumers are those that will open up a route to lots of different content providers so that TV is more like the internet. Operators should be working out how to charge content owners for a Quality of Service guaranteed route to the home”

"Once a tier 2 telco that cannot afford to build its own services begins to offer a QoS route to its customers, then everyone else will have to follow," Scott said.

And according to Scott, much of this is already beginning to happen with shorter release windows for content and stronger content protection technologies, and he said that AACS, the content protection grouping that came together to build a standard for next generation DVDs, is planning to extend the model to protect content moving in and around the home.

Privately Scott told Faultline: "The public face of many operators is to say that none of this is coming, but privately we have had a huge amount of interest since we wrote this paper on TV."

Ironically, on virtually the same day as the show and the AT&T Bellsouth merger announcement, a US senator (see separate story) has introduced the Internet Nondiscrimination Bill, which will make it illegal for a company like AT&T to offer different speeds of access to different types of content over its internet connections.

This is in response to AT&T wanting to charge Google and Amazon fees to have speedier access to their customers. AT&T would have to actually apply a brake to these services actively by building in QoS controls, just what Scott of IBM wants to happen. There is a big difference in guaranteeing speeds using QoS, and deliberately slowing traffic that won’t pay a tollcharge.

If the US had a sensible unbundling structure like most parts of Europe and some parts of the Far East, this couldn’t happen. But legal challenge killed that off two years ago in the US and increasingly it looks like European IPTV, through enlightened regulation, will end up with a more competitive IPTV world where walled gardens don’t work, while the US will use big business lobby power to produce IPTV and a triple play that’s only available through monopolistic incumbents.

Copyright © 2006, Faultline

Faultline is published by Rethink Research, a London-based publishing and consulting firm. This weekly newsletter is an assessment of the impact of the week's events in the world of digital media. Faultline is where media meets technology. Subscription details here.

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