IPTV vs. Cable and Satellite

IPTV has become the digital television alternative. But can it compete with cable or satellite TV?

Internet Protocol Television (IPTV) is an up-and-coming technology with lots of promise. Ironically, it’s the smaller regional telecommunications companies that are making IPTV waves in mostly local markets, although at least one national company has big-time plans to replace your current digital service with their digital solution.

IPTV to Your TV – How it Works
Never heard of IPTV? Even if you haven’t, chances are you’ve used it, or something like it. In fact, anyone who has ever accessed their digital television service’s Video on Demand feature has some familiarity with how IPTV works. Internet Protocol Television is an alternative way of sending digital television service to either a computer, mobile phone, or a television. It is this latter solution that we will explore, as the IPTV solution is fast becoming an attractive alternative to traditional cable or digital broadcast satellite (DBS) service.

Without getting too technical, IPTV refers to a method of delivering both live TV and stored video (on-demand or pay-per-view) to the home in the same manner in which internet content is sent, and over that same network. IPTV is a form of “switched video,” or switched broadcast technology, whereby the end-user only receives the programming being requested. Where satellite and cable companies cram 100% of live programming content into end-users set-top box 100% of the time, IPTV content is delivered only when asked for. Just as typing in “www.electonichouse.com” in the browser bar brings the site’s content to your computer, so does changing the television station to Discovery HD bring the content to the IPTV-subscriber’s set-top box, and thus to the connected television.

“It’s a different manner of delivering broadcast-quality content to the subscriber,” says Haavard Sterri, Executive Director of Marketing for SureWest, a telecommunications company based in the Sacramento, California area. By broadcast quality content, Sterri refers to all the options consumers have come to expect from their digital television service provider, including your beloved HD channels. On the user end, IPTV looks and feels much like traditional cable or satellite. Turn on the TV, request a channel, and up it comes. There’s even a set-top box that connects to the TV, just like cable or satellite. But the use of Internet Protocol to deliver the digital television content enables some service providers to integrate service across platforms, bringing a convergence of the voice, data, and television services brought to the home, on the same network, all using the same language, through one company (see “Convergence” below.)

It’s telecommunication companies like SureWest that are largely responsible for the push in the growing IPTV opportunities nation-wide. To date AT&T is probably the biggest IPTV provider, with their U-verse service now available in 11 states, and a U-verse Initiative that aims to expand the service across 22 states by the end of 2008. “We’re the only national service provider, and we are 100% IPTV,” says Destiny Varghese, spokesperson for AT&T.

Better Than Cable or Satellite?
The average consumer might not care to understand what goes on behind the scenes to bring IPTV into the home, or how it is different from cable or satellite. But that end-user experience sure is important. Consumers have gotten used to comparing digital television service providers using a set of criteria, which usually includes: price, packages, bundles, HD channels (quantity AND quality), installation, and a few other comparison points. Making the same evaluation of an IPTV service is a wise step for the consumer with the option. And it is important to understand that, like competing cable or satellite companies, the offerings of each IPTV service provider will vary from market to market and company to company.

The first question to ask is: how is IPTV getting to my house? The best answer is “fiber.” Fiber is the network of the present. Forget the future, because it’s here. (If fiber isn’t in your area yet, sorry, hopefully soon.) AT&T’s U-verse Initiative involves a fiber-to-the-premises (FTTP) and fiber-to-the-node (FTTN) roll-out that should see more than 30,000,000 “living units” by the end of 2010. The exceptional bandwidth advantage that fiber boasts over copper and DBS service is one of the reasons why IPTV service providers using a fiber network can claim that their HD channels are “uncompressed” and “source-quality” HD, unlike the “HD-lite” experienced by some disgruntled cable and satellite customers. The fiber network, according to SureWest Director of Business Innovation and Development Eric Freund, allows for an IPTV service with “an infinite number of channels.” Certainly limiting the downstream transfer of digital television content to one channel at a time opens up some significant space in the fiber “pipeline.” (Note: Although Verizon FiOS TV is sent over a fiber network, it is not 100% IPTV. That is, their live television content uses the same delivery means as traditional cable, NOT switched video.)

But the number of available channels – particularly those in HD – remains a crucial comparison point, and one that will vary from company to company and market to market. Some consumers say that quality is more important than quantity, but to give some sense of where two IPTV providers are at with regards to the latter, as of the writing of this article AT&T offered 24 HD channels and SureWest 40.

Cost is another comparison point, and one that will also vary. Package specifics (number of channels, sports packages, additional services, etc.) will impact this bottom line as well. AT&T’s U-verse packages automatically bundle IPTV and data (internet) together. Packages adjust according to both channel line-ups and internet speeds – the former goes from 50 channels to 320, and the latter from 1.0 Mbps / 1.5 Mbps (upstream/downstream) speeds to 1.5 Mbps / 10 Mbps. Another way to look at it is like this: the cheapest U-verse package (which includes TV and Internet) is $69/month; the most expensive is $154/month. Most would agree these are pretty competitive rates. Add to this attraction the ability to bundle and IPTV is looking like a deal. AT&T offers – not Triple Play – Quad-Play, a bundled package that includes TV, Internet, voice, and wireless. Above any cost incentive that such a deal might bring there’s the convenient bill-paying consideration, that is, one bill from one company instead of four separate ones. The saving of trees alone should attract some niche in the market.

Also look at installation cost and equipment cost. IPTV can require a set-top box for each TV, and sometimes a gateway or router to handle all the services. With some companies installation is free, while others might tack on charges per television set, service, and even A/V equipment connection. Get these figures, as well as any monthly equipment costs, up front.

Converged Service
Remember when Voice-over Internet Protocol (VoIP) hit the scene? Many consumers were attracted to VoIP because of the ability to access and control their phone service using the internet. The convergence of the two technologies – voice and data – made such a convergence possible.

The convergence of digital television promises even more attractive features. By bundling a home’s voice, data, wireless, and digital television service, AT&T’s U-verse will bring functionality unheard of to its subscribers’ homes. “Integrated IP will allow users to remotely access their set-top box and DVR,” says Varghese. Forgot to set the DVR to record the big game? “You’ll be able to schedule DVR recordings from anywhere, using a PC or wireless phone,” adds Varghese. Additionally, the AT&T “U-bar” is a customizable information feature that brings internet-like content to the TV screen – information like updated weather, stocks, and traffic report information.

By combining switched-video technology using Internet Protocol, an updated infrastructure, and convergence of services, the telecommunications companies offering IPTV have the potential to win over consumers. Like any service being brought into the home – data, voice, tv, etc. – the end-user owes it to him/herself to weigh out the options, do the research, and marry the solution with the need for a happier, electronic house.

Some IPTV Service Providers in Your Area
Here is a list of some of the IPTV service providers and the states they serve. Check with your local telecommunications company to find out if they offer IPTV. Be sure to evaluate their service closely to determine if they can meet your needs, and ask how they provide their digital television service. Not all telco companies will use IPTV “switched video” technology, and the way they send content to your home can impact the end-user experience.

AT&T U-verse - At least 11 states served. Check website for availability in your area.

SureWest – California

Arkwest Communications - Arkansas

Ringgold Telephone Company - Georgia

Consolidated Communications - Illinois, Pennsylvania, Texas