IP on TV – The Channel Challenge
Screens
Meanwhile technology moved on. TVs are shifting away from cathode ray tubes to liquid crystal display and plasma screens which are more compatible with computer and video content. Windows Media Centre, in particular, opens up a direct line to the TV screen.
Now Telecom is engaged in small-scale trials of Microsoft's IPTV platform to test its ability to deliver video to the TV across its DSL lines and its fibre optic network. It is also committed to delivering DVD-quality video over fibre optic cable to 500 homes in the Manukau suburb of Flatbush, still under construction. It's already rolling out cable and roadside cabinets for the $10 million Flatbush trial which will help decide how to approach rolling out fibre to customer premises.
The timing of any commercial offerings will depend on next generation supercharged subscriber line technology (ADSL2+) and Telecom's "triple play" Next Generation Network, now being rolled out by Alcatel. All new DSL cards installed will be ADSL2+ compatible by the end of this year, allowing speeds of up to 15Mbit/sec for users within 1km of the cabinet.
But Telecom remains cautious. Ralph Brayham, head of the new media business development group, has been playing with a highspeed Jetstream connection and a set-top box in an attempt to learn from what Microsoft, TiVo and DirectTV are doing overseas. "It's fantastic but it's not ready for prime time. The number of users is still relatively small and it's still too expensive for most Kiwi households."
So what will change that? Mass production of highly capable PCs at extremely cheap prices. You still need a 200Gb hard drive, high-end video and TV capture cards, lots of RAM, a remote control and a copy of Microsoft Media Centre or something similar, plus a digital TV or plasma projector. "You can't use a $1000 PC, you still need the Porsche or Mercedes Benz of the PC industry and you can't use your 15-year old Sony 21 inch TV."
Mr Brayham has just moved across into a special projects role at Telecom where he's hoping to help take "some cool stuff to market," but wouldn't be drawn on specifics.
Internet for the TV
Internet service provider ICONZ intended to enter the digital video-on-demand business but was forced to back off by Telecom's Internet access charges. "If the market had opted for unbundling the local loop ICONZ would probably be delivering a service by now," says ICONZ research and development manager John Russell. The recent Commerce Commission decision requiring Telecom to deliver 2Mbit/sec streams to ISPs is a step in the right direction but "it's still absurdly expensive and hard to get a great deal of data to a customer's home," he says.
The incumbent carriers don't want anyone else to play until they've worked out how to win the game. While ISPs and customers push for faster, cheaper Internet connections without the data cap, they're typically told there's already more than enough bandwidth for web browsing.
"As long as it stays that way web browsing is all we'll get. No one's going to develop interesting, new and innovative content when they can't push it out to the customers or let the customers interact with it at a reasonable speed," says Mr Russell.
While the free-to-air broadcasters are keen to make themselves available through as many outlets as possible, their own delivery platforms are at risk; and they may end up becoming content providers for Sky or Telecom unless they move quickly. Sky has shown only token interest in creating local shows in the past 15 years, preferring to operate as a digital distribution channel for other parties.
