Carriers get technical help in bringing HDTV to market

In the background of the hype surrounding SBC's entry into the home entertainment market, a number of important technical advances that will push the entire telco video model forward are starting to come to fruition. Perhaps none more important than compression technology innovations announced over the last two weeks that bring carriers that much closer to getting into the high-definition video market.

At the International Consumer Electronics Show earlier this month in Las Vegas, Tandberg Television rolled out what it claims is the world's first live demonstration of an end-to-end advanced encoding solution that supports MPEG-4 part 10 (H.264/AVC). Last week, Tut Systems also said it has made significant progress in its first MPEG-4 contract and anticipates generating revenue early this year. On another front, start-up vendor Qbit said it has developed a compression technology that is at least three times as efficient as MPEG-4.

The demonstration at CES, done using Broadcom's set-top box decoder reference platform and Tandberg's EN5990 video encoder, showed that an HD stream can be compressed to around half of the 12 Mb/s to 18 Mb/s currently needed using MPEG-2.

Many in the industry believe MPEG-4, because it is an industrywide development, will become the de facto standard for telcos transmitting HDTV. The biggest issue, though, is the timing of availability on MPEG-4 set-top boxes. Also left out of the equation is the economics of making it work on a very large scale.

“We're shipping production H.264 HDN encoders now,” said Eric Cooney, president and CEO of Tandberg. “Broadcom will just be the first that we work with. Spring/early summer is when we're targeting set-tops.”

Likewise, Tut Systems said it has several deals that are pending because of set-top availability.

“We have one multimillion dollar contract and others that are waiting in the wings,” Sal D'Auria, chairman, president and CEO of Tut Systems said during a conference call with analysts to announce the acquisition of CoSine Communications. “We believe we have a very strong funnel growing for MPEG-4.”

However, the timing of those boxes may open the door for others that believe they have more efficient compression schemes.

The newest entry is Qbit, a Bethesda, Md., start-up that has introduced a technology remarkable in two ways: the degree of compression and the fact that it is lossless.

Qbit this month announced the first commercial version of its technology, called Z Image, which will transmit raster images at compression rates of 10 to 1. Coming later this year, however, is the commercial version of the technology called Q, which is content-agnostic and can deliver any data, including real-time video, in lossless form over any media, including twisted copper pair.

“It is an amazing feat to create the Qbit transform because it's lossless. But to be able to implement the Qbit form in a low-cost PC or digital signal processor so that it is something that would be economically viable is a whole different challenge, and that's what they've done,” said Gerry Kaufhold, principal analyst with In-Stat/MDR. “The potential impact on [telephone companies] is enormous. If you were to take an HDTV MPEG file, which runs at about 20 Mb/s — if you could reduce that to 2 Mb/s, now all of a sudden a standard 6 Mb/s ADSL service can deliver multiple HDTV signals into the home.”

Qbit compression also could aid cable and satellite companies in transmitting higher-quality signals to improve the picture consumers receive, he added.

“Qbit lets them relax how hard they squeeze signals, like HDTV signals, with ‘lossy’ compression techniques,” said Kaufhold. HDTV manufacturers are already meeting with broadcasters to try to “clean up” the quality of signals so that consumers get true high-definition quality, he added. “Qbit would stop the phone ringing from customers complaining that they paid good money for a good HDTV signal and didn't get it.”

But the sweet spot for Qbit's Q version is the telephone companies.

“There are lots of places Qbit can go, but for telcos, it's critical,” Kaufhold said.

Qbit was founded by Dan Kilbank, who has since enlisted such heavyweights as John Sculley as chairman and Michael Price, who formerly ran the global telecom and technology practice at Lazard Freres and is now senior managing director at Evercore Partners, as a board member.

The company spent five years developing the core algorithms and then getting them into a commercial product that can fit on a 64 kb thumb drive, said Kilbank. That means it can fit in a mobile phone or an ADSL modem.

“We are at a working product right now,” he said. “We account for every pixel, we account for every bit that makes up the file type. What comes in, in the mathematical formulism, is captured, catalogued, runs through a series of theoretical physics-inspired models and is reformulated into a new digital file. At the receiving end, the reverse process takes place. And you wind up with exactly what you started with.”

However, those in the MPEG-4 camp believe their compression can improve to the point that an HD signal can be squeezed into a 6 Mb/s space relatively soon.

“One of the things we've been able to do is while we've been waiting for set-top boxes, we haven't been waiting on developing our code,” D'Auria said. “We have built in some additional functionality in our first version.”

Added Tandberg's Cooney, “the reality is that we are in the very early days of HD. There will be several years of development with this.”

Transmission speeds for standard HDTV signal

MPEG-2 compression	20 Mb/s
MPEG-4 compression	10 Mb/s*
Windows MP-9	7.5 Mb/s
Qbit ‘Q’ compression	2 Mb/s**
*Expected to improve with further development **Unlike other compression forms, is lossless		Source: In-Stat