SBC rediscovers video play

For a guy who just a few years ago professed to not see any correlation between telephone service and video services, SBC CEO Ed Whitacre is sounding like a born-again advocate for convergence and becoming a favorite among the telco TV crowd.

Since publicly embracing video at Supercomm this year, Whitacre has committed SBC to spending $400 million with Microsoft to deploy IP TV services. Now, he's going to be speaking at the Consumer Electronics Show in January, focusing on advanced communications and entertainment services the company will deliver next year. All of which makes good soundbites and reassures some vendors that they're not being led down a dead-end path.

But when they drill down into the few details that are coming out, many that have been dealing with telco video for years seem to think the agreement with Microsoft was more a public signal to investors that the carrier is doing something, anything, to stop the bleeding of revenue from access line losses than an actual statement of intent. One vendor executive, who of course wants a chunk of the business, went as far as calling $400 million over 10 years "a rounding error on SBC's balance sheet."

SBC's step--and Whitacre's role as a very public advocate for IP-based video--is bold, particularly for a large carrier. The industry needs to reserve judgment for at least another year. We've been down this path before and been burned. One of the first things the company did when it bought the former Ameritech properties was halt expansion of midwestern cable networks, despite promises to regulators that it wouldn't. I hammered the decision at the time and have been proven wrong: Sticking with a network that essentially was the same technology and architecture as cable would have been a disaster.

It's SBC's job now to prove that its decision to make the leap to IP-based multicasting was the smart decision. One of the dangers of putting your neck on the line is that it becomes an easy target.

E-mail me at vvittore@primediabusiness.com.