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AT&T decision over MobiTV means Modeo will go it alone

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Modeo, the subsidiary of Crown Castle that is building out its own DVB-H mobile TV network in the US, has decided to go it alone, and launch the service anyway with, or most likely without, the endorsement of a major US cellular operator. It will now launch the service in October.

As Cingular Wireless has put the finishing touches to its plans for acombination of TV delivered over wired and wireless broadband internet lines, the writing was on the wall for Modeo and it had to take a key decision about its future. Sources close to Modeo said the company has now made a firm choice to go it alone.

Faultline has been told that the powers in mobile TV, in particular Cingular, working through the mobile DTV Alliance, were behind the idea of Modeo giving up on its spectrum in the 1.6 GHz range, and instead either merging its efforts with Aloha partners and its HiWire joint venture with SMS Americom, or buying the much preferred Hi- Wire 700 MHz spectrum.

That’s the spectrum that DVB-H was made for, that and even lower down at 220 MHz. The lower the number of cycles per second, the further radio propagates and the more stable the signal is, allowing it to go through walls and trees, and over water, without the signal fragmenting.

The upshot is that a US network build of Modeo spectrum was always going to cost the company more than one in 700 MHz, in the process ceding a cost advantage to both Qualcomm’s MediaFLO and to Aloha’s proposed network. Few believe that Aloha or its partner satellite player SMS Americom, have the stomach to actually build out a DVB-H service, but they certainly have the right spectrum.

This would allow tuners from other parts of the world to be used in the US phones and drive up the economies of scale for handset makers. As it is there will need to be some unique components for handsets that attach to the Modeo network.

The Modeo decision to go it alone must have been triggered by the decision by Cingular to not carry its service, but instead to rely on its own mobile TV service announced this week by its parent AT&T. That will likely use wired broadband to carry the service to PCs and HSDPA services to carry it to mobile devices, using unicast video or video on demand. We doubt that Cingular will have the backhaul in place to deliver TV everywhere in its mobile network, but given that the company owns the old AT&T backhaul network, it is really just a matter of re-provisioning backhaul as part of its HSDPA build out. It will be inefficient, but it will work.

Modeo is known to have been biding its time, and only building out the New York area, to go with its long standing Pittsburgh trial, waiting for one or other of the cellular networks to support it. No doubt it has also talked with T-Mobile and Alltel, neither strong enough in the US to guarantee success, but both potential allies in bringing a service like this to market.

Now Modeo must do two things. It most begin to tie up phone resellers and get them to take its phones anyway, and sell them to users of ALL the mobile services including Cingular and rival Verizon. It is known to have a relationship with Taiwanese ODM HTC for DVB-H phones using a software client from Panthera Technologies, on handsets using Windows Mobile.

It must also accelerate the process whereby non-handsets are brought to market that can view DVB-H signals, in anything from a specialized portable video player or portable TV, which are expected to hit the market shortly for under $100, and laptops and PDAs. Intel and Dell are known to be interested in making offerings in this market, and Modeo should also approach all the major handheld manufacturers of MP3 players and even the Apple iPod, the Sony PSP and the Nintendo DS, just in case one wants to add DVB-H video to their mix.

In the end, the amount of support that a cellular operator can bring in terms of device subsidy and marketing is invaluable, but the Crown Castle CFO told us last year that if it had to, the company would forge ahead on its own. Now it must hope it can turn the head of a cellular operation by its performance in the marketplace . AT&T’s announcement was of a new service called AT&T Broad-band TV which it will deliver using the MobiTV software client on phones.

On a PC the service is browser-based and will be accessible over any broadband connection and expands upon an earlier agreement that enables AT&T to offer MobiTV to customers who use AT&T Wi-Fi hot spots.

The service will have 20 channels of live and made-for-broadband TV content including national news, sports, entertainment and full lengthmusic videos and is yet another TV service from AT&T to go with its Homezone hybrid satellite/broadband TV, and its full IPTV U-Verse system.

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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