‘Cache and carry’ and other thoughts

As I write this, the USTA Telecom 2004 conference has just concluded. Looking at it with 20/20 hindsight, the conference had two great themes. One related to technology: “everything over IP.” In fact, an IP Video conference ran alongside the USTA conference. At least a score of vendors in the conference’s trade show had a triple-play story to tell. Most of the headend, software, access network and CPE suppliers active in IPTV were showing their wares. Thankfully, the industry doesn’t further confuse matters by using VoIP as the acronym for both video- and voice-over-IP! The other great theme was competition. The opening keynote was shared by Verizon CEO Ivan Seidenberg and Comcast CEO Brian Roberts and moderated by USTA chief Walter McCormick.

My column last month was about the emergence of interactive TV applications and how interactive games are poised to provide new revenue options for telcos. To continue the theme of new applications, in light of the Telecom 2004 conference, several technology players showed another that’s on the cusp of maturity: network personal video recorder (nPVR). As I was talking with one of these suppliers, the term “cache and carry” occurred to me--the service provider caches the programs centrally on a video server and carries it to subscribers on demand. In addition to the established IPTV middleware vendors, which have been working on nPVR for some time, VOD and streaming server provider Kasenna announced it has added not only nPVR but also “live TV” capability to its product line. Now that multiple suppliers offer the technology that makes nPVR service possible, the remaining barriers are business-related: will content owners allow ‘cache and carry?’ Some networks already do; others may never. Time will tell; secure delivery will help.

Another kind of “cache and carry” is offered by Akimbo Systems. This company offers a video-on-demand service that delivers video content to the subscriber over an IP connection. Instead of having to rely upon realtime video-on-demand delivery in realtime, the Akimbo service can deliver at off-peak times and in such a way that an entire video library is cached in a CPE device. This gives service providers the option to introduce on-demand video services with less of a need to reengineer the network for the kinds of peak loads that are associated with ‘streaming’ VOD.

For Akimbo, the “caching” is not in question, but the “carry” could easily refer to whether or not retailers or service providers would want to carry an Akimbo set-top box in their inventories. Akimbo company officials say that the service will not be dependent upon an Akimbo box in the long term; that they will offer their VOD content service in partnership with other suppliers. In any case, Akimbo Systems will offer independent and specialty content not offered by other VOD content suppliers.

Certainly, it seems as if every time we look away for just a moment, new technologies change the game. Although most changes have become evolutionary, there are still some disruptive changes; but so far, they have always been to the benefit of service providers. The other dominant theme during this month of Telecom 2004 has played out at the industry level. Even though the conference’s Verizon-Comcast keynote seemed like “dogs and cats living together,” Seidenberg and Roberts did agree that broadband opens a ‘new world’ for services and that the regulatory climate is ripe for change. And almost as if the FCC had hidden microphones in the room, regulators put their blessings on broadband over power lines (BPL), then dealt incumbent telcos a winning hand by removing roadblocks to deploying new services over fiber networks without having to share. It looks final this time; the U.S. Supreme Court is not hearing any appeals to the UNE decision. These developments force us to look again at competition at a very fundamental level.

An industry colleague, Shelly Palmer, President & CEO of Palmer Advanced Media and head of the Advanced Media committee of the National Academy of Television Arts and Sciences (the New York Emmys), writes for a TV industry audience. His most recent newsletter speaks bluntly but eloquently about the threats and opportunities for everyone. Not only are telcos, public utilities, cable and satellite operators going after one another; now it’s the power companies.

Palmer goes on to say: “One thing is certain, the consumers are going to be extremely confused by the offerings. Telcos will offer quadruple threats--broadband, television, telephone and mobile. Cablers will offer the triple threats - broadband, cable and voice over IP (Internet Telephony). Power Companies will offer Double Threats - AC Power and Broadband and Public Utilities will offer WiMax. If you think mobile phone pricing is confusing, you ain't seen nothing yet!” Amen to that!

With the FCC UNE decision in October, advocates of competition within a specific mode of delivery (such as copper phone lines), where ILECs have been forced to rent their facilities to competitors by government decree at artificial prices, have lost their battle for the foreseeable future. Unless the upcoming national election changes leadership in the executive and legislative branches of our government, these advocates will have to get over it and look at the new dynamics of competition between these modes of delivery.

And this year is not over yet! Next month, there’s TelcoTV in Orlando. One thing is for sure: it’s a great time for the telecommunications industry but not a time for Luddites or the timid!

Steve Hawley is principal consulting analyst of Advanced Media Strategies. He may be reached via his Web site, www.tvstrategies.com.