SBC, Microsoft in $400 million IPTV deal

One day after launching its residential voice-over-IP strategy, SBC Communications followed up today with another demonstration of its commitment to IP--a $400 million, 10-year deal to use Microsoft’s IPTV Edition software platform in its IP video offering.

"Our service will change the way people experience TV," boasted Edward Whitacre, chairman and CEO of SBC Communications, in a corporate statement. The planned service will allow high-definition TV programming to be delivered to multiple TVs in a given home, but also will allow IPTV signals to be transferred to other IP-enabled devices such as PCs and mobile devices.

The service will be based on a switched video distribution system, delivering content according to user requests and freeing up additional bandwidth for other applications. The offering also will include instant channel changing, customizable channel lineups, video on demand, digital video recording, multimedia interactive program guides, event notifications, content protection features and other functions.

"Our video on demand will come with a substantial content library," stated Whitacre. "The customer gains additional control over the content they want versus what is delivered to them. We get the flexibility of not being constrained by bandwidth."

The Microsoft deal is the latest step in SBC’s Project Lightspeed plan to deliver IP services to 18 million homes by 2007. Last week, during a conference call to provide an update on Project Lightspeed, company officials admitted they had been involved in tests with Microsoft for the last few months. These tests, conducted by SBC Labs, will progress to field trials of Microsoft IPTV in mid 2005, with commercial availability of the IP-based television platform in late 2005. Construction is expected to begin on the Project Lightspeed in early 2005.

"Project Lightspeed and the Microsoft and SBC relationship underscore what the future holds for consumers: a virtually unlimited opportunity for innovative, cross-device services and entertainment experiences enabled by the marriage of powerful broadband networks with the magic of software," said Steve Ballmer, CEO of Microsoft.