DIGITAL COMPRESSION HOLY WAR BREWING

The telecom technical community is in the midst of a campaign as contentious and — for its ranks, at least — as important as the 2004 presidential election. Telecom is choosing a next-generation video compression format that will give telephone companies a long-term video delivery method.

The two leading candidates engender as much love, admiration and enmity as the two politicians running for president, and their platforms are as clearly delineated.

MPEG-4, or as the technically oriented prefer, the H.264 video codec, is the successor to the successful, albeit long-in-the-tooth MPEG-2 format that created widespread video transmission in the early 1990s. MPEG-4 is from the old broadcast school; even its name, Moving Picture Experts Group, proclaims its heritage.

Its opponent, Windows Media 9 (wmd9), is new-school, built from media and computers and the love of IP as a video transport method that has enveloped the world since MPEG emerged as a compromise format to combat an unholy alliance of vendors and cable operators seeking to control the digital compression space. It's appropriately proffered by Microsoft, although that company has taken pains to make emphasize the format is standardized and interoperable.

Both formats have the necessary elements to lead the industry forward into video-on-demand (VOD) and HDTV. Both are sequentially more complex than MPEG-2.

“Ultimately, one or the other wins,” said Ernie Carey, vice president of networks for SBC, which is working with Microsoft but not married to wmd9. “Until there's a clear winner, there might be some solutions out there that try to do both, but the economics tend to work against that in the long run.”

Carey compares the MPEG-4/wmd9 struggle to the VHS/Beta debacle. The similarities are frightening. Videophiles today still argue that Beta was superior but lost the market because its maker, Sony, was stingy with its technology and licensing.

wmd9 is considered by many to be the better format, but its maker, Microsoft, is a company with a record of self-interest.

“In terms of Windows taking over the world…we've taken an approach that's been very open to make sure that companies feel comfortable using the technology,” said Jordi Ribas, Microsoft's director of Windows Media codecs. “The fact that it's called Windows Media is very misleading because you can actually license the codec and use it in Linux, in MAC.”

wmd9 has been submitted to standards bodies and can be licensed through the MPEG-LA (licensing authority), but old antipathies die hard, and Microsoft's reputation causes pause.

The alternative is MPEG-4, a traditional standards-developed video codec that is more complex and is evolving more slowly because it is a collaborative effort. Even with the complexities that arise when standards bodies members start piling in personal preferences, MPEG-4 has more definition to some industry players than wmd9.

“Windows Media is whatever Microsoft wants it to mean at this moment. It's not intrinsically meaningful like an open standard like H.264; it's more a political brand name,” said Peter Monta, chief scientist at RGB Networks, a video technology provider whose products are aimed at helping the cable TV industry do more with existing video compression technologies.

While RGB stays neutral in the compression debate, Monta made it clear he is not a Microsoft fan: “If you're a telco, would you want to cede control to Microsoft for an important part of your business?”

About 20 telcos worldwide are using wmd9, said Ribas, because the less complex codec makes it cheaper to build chips and therefore cheaper to build components such as set-top decoders. Also, he emphasized, unlike H.264, which is a stand-alone video compression technology, wmd9 is a piece of a wider video platform that revolves around the home computer.

“We are providing the technology so that the PC remains one of the components of the home ecosystem,” Ribas said. “Our big business here is to try to grow the PC business.”

In the Microsoft world, video is a piece of IP data.

“Windows Media 9 is definitely pervasive in the PC world; H.264 is designed for the broadcast world,” said Randy Zimler, senior member of the technical staff for BellSouth Science and Technology.

Zimler predicted a shootout between the two technologies with possibly both being used for a time but one emerging as the winner. Microsoft, he said, has an early lead because its format is in the hands of millions of PC-using consumers, and “it appears that there's a lot of activity with Windows Media 9 from a content perspective and a lot of adoption in the industry.

“Not that 264 is not a player,” he added, “but it appears that the 264 evolution of making its way into the studios and into the broadcast environment might be just a little bit behind the curve in terms of timing.”

Timing is becoming everything. Standard-definition TV — even VOD — can be handled by today's telephone networks and won't even dent deep-fiber networks. But high definition, coupled with VOD and all the other content, will demand a change. It all depends on when there's HDTV demand.

“The deployments that we're doing today are starting out with MPEG-2 with road maps to move over to advanced codecs because the video business learning curve for the telcos is high,” said Channing Lai, director of IP video product marketing for digital video systems vendor SeaChange International.

Lai gives a slight early nod to wmd9 because it found its way into the consumer consciousness through PC applications.

“But I think there's a lot of hope in the industry that H.264 is going to gain momentum,” he said. “It's perceived as a more open standard; there are a lot of customers as well as countries that don't want to be beholden to Microsoft.”

It's Microsoft versus open standards bodies. PC versus TV. Evil empire versus democracy to some.

“If people are making decisions on such wishy-washy criteria as whether MPEG or Windows Media sounds better, I weep for the industry. They had better make the decision on proper technical merits,” said RGB's Monta.

That's tough to do.

“Windows Media 9 is not too dissimilar from MPEG-4 H.264,” said Zimler. “Are they both emerging as a coalescing standard? That's the question that the industry and the business world is trying to address right now.”

While SBC might seem to be in the biggest time crunch of all the telcos after Chairman/CEO Ed Whitacre electrified this year's SuperComm with predictions of deep-fiber and video services, there's still time to work out the details, said Carey.

“We're going as fast as we can go, but if it's in the market in the summer of ‘05 or the fall of ‘05, I don't think… that two or three months (from Whitacre's announced rollout timetable) is going to make or break you,” said Carey.

Besides, he said, it's still all academic.

“You can't get codecs hardware in silicon high-definition codecs today,” he said. “They're probably first quarter of next year until we can really get them.”

That will give both players a chance to make friends among telecom industry players who are looking long term.

“Telephone companies tend to deploy things that are maintainable over long time periods, and they'd like to make sure that they're upgradable,” said Chuck Van Dusen, chief technical officer of Tut Systems, a digital video and content processing equipment vendor that will add both H.264 and wmd9 to its products and let the end users make the ultimate decisions.

mPhase Technologies is adopting the same policy.

“Our system is quite independent of the codec,” said Phil Thompson, executive vice president of product management. “We're planning on supporting both standards in our set-top box.”

In the short term, the relative expense of having and working with two codecs can be borne because this is a new generation of technology. Long-term economics demand that the voters — the telecom technology community — decide on one or the other.

One common denominator will help the decision.

“High-definition TV is going to drive what the customer is going to demand,” Zimler said. “The industry needs to adopt a method by which we can compete. Does that mean rolling out with a new emerging broadcast codec or does that mean putting our arms back around MPEG-2? From a BellSouth perspective, we're going to open up our toolbox and look at all the components: Windows Media 9, MPEG-4, standard definition and high definition.”

And then, like the rest of the telecommunications industry, it will elect a winner.