CE’s Use of IP-Delivered Video Seen By Pay-TV as Better AllVid Approach

Using IP-delivered streams of video, instead of gateway adapters, for pay-TV companies to let CE devices access their programming may be a better way for the FCC to proceed on AllVid, said a consensus of pay-TV executives we canvassed. Analysts weren’t so sure.

Telco-TV providers already use IP to deliver at least a good chunk of their programming to subscribers, said the analysts and executives. They said cable operators are farther behind in the still-nascent transition to IP video delivery, though they're making early efforts to test and examine it. The new approach is being examined by the FCC for subscription-video providers to use IP instead of gateways to let DVRs, DVD players and other products get cable channels, without separating out the programming within networks (CED March 24 p4).

Allowing cable operators, DBS providers and telcos to use IP to meet any AllVid rules, instead of requiring that they use gateway devices, means there will be less hardware for the companies to provide and for consumers to deal with, executives and analysts said. They said an IP approach may also mean some cost savings over gateway devices, especially for companies that already use IP to deliver channels, program listing information and VOD to subscribers. Executives said pay-TV companies continue to think AllVid rules aren’t needed, as recent filings in docket 10-91 have said (CED April 4 p8). Giving pay-TV providers the option of using IP delivery is better than not, so it’s good the Media Bureau is looking at IP, executives said. A bureau spokeswoman declined to comment.

Among subscription-video providers, AT&T’s U-verse and Verizon’s FiOS TV services appear to be the farthest along in using IP to deliver programming to customers, analysts said. AT&T’s U-Verse IPTV-based system uses IP for all programming, said a spokesman. Verizon uses IP to deliver all VOD content to FiOS TV subscribers, and linear programming such as cable channels is sent digitally, a company executive said. Representatives of the American Cable Association, the NCTA and MPAA had no comment.

AllVid delivered by IP may not be an improvement from the gateway adapter approach envisioned by the FCC in its inquiry on the proceeding, CEA officials said. Pay-TV providers might not be required to do much more than they currently do, should they be able to write the application program interfaces (APIs) that would let devices get channels from IP, they said. That could render some CE products unable to work with certain TV systems, if the device wasn’t set up to use the API written by a particular provider, the CEA executives said.

"If there is individual control over APIs, then consumers can end up with stranded assets,” said CEA Vice President Brian Markwalter. “That’s not sufficient to meet Section 629” of the Telecom Act, on creating a market for CE devices sold at retail that work with pay-TV providers, he said. Each pay-TV company “is going to have its own API, so then we kind of have to build to everybody’s spec,” said Julie Kearney, also a vice president at CEA. “It’s called an open API, but it’s not really technically open,” she added: The association wants to ensure that at the FCC the gateway solution “remains on equal if not superior status to this kind of unknown API approach."

U-Verse could theoretically let a third-party CE device tap into all of its pay-TV programming, in a way that doesn’t disaggregate it, using the current IP system that’s in place, an AT&T spokesman said. A commission requirement to use software, instead of hardware, to meet AllVid rules could be more flexible and less costly, he said. AllVid rules aren’t needed at all, he said. Still, it’s a good thing that the regulator appears to be moving away from a hardware mandate and instead may issue a notice asking questions about giving CE devices access to pay-TV providers’ IP streams, he said. “It is a more interesting way to look at the issue” and “it better takes advantage of the abilities of IP,” the spokesman said. “Obviously, there are a lot of details that need to be worked out."

"The direction they're moving in is more consistent with the direction of where the industry is moving,” since companies such as Verizon already are using IP, an executive of that telco said of the commission. “That things are moving so quickly at this point just argues for the FCC sitting back” on AllVid, given recent technological developments, “rather than trying to help things along,” he continued. “Building this universal gateway” which the commission had initially envisioned, “I don’t think was ever going to happen,” he said. The “IP interface standard has basically won, so now it’s just a matter of trying to figure out how to make our programming available by IP,” the executive said. “It doesn’t mean everyone has to do it the same way."

Cable operators aren’t as far along as telcos in using IP, said industry officials and analysts. “Many cable operators today are exploring the idea of transitioning to IP-based video, and phone delivery, over time, because it’s a more efficient delivery service, particularly after a DOCSIS 3.0 upgrade,” said a cable lawyer. “The direction that the FCC is now headed is much more in line with where cable operators are likely headed on their own, and so its new approach on AllVid is much more preferred over mandating AllVid adapters that are designed to work with cable’s existing architecture.”

For the moment, cable operators are “mostly only considering the idea of IP-based video,” and that’s mainly at “the more leading-edge cable operators” who are doing so “cautiously,” the attorney said. Those companies are “letting the marketplace dictate the timetable, because it’s just not cheap to do,” the lawyer added. “The larger cutting-edge operators can and will take the lead, and the smaller, more conservative operators will follow years later when the costs drop, and it is more affordable."

The cable industry’s TV Everywhere broadband product is the prime example in that industry of how IP is being used to deliver video, since most operators aren’t using the protocol to deliver terrestrial programming, said analyst Sam Rosen of ABI Research. “They can do it on a pretty wide scale, but they're struggling with all of these content rights agreements,” he said of the fracas between Time Warner Cable and programmers over adding cable channels to an iPad app from that company.

Using backchannel IP signaling to deliver programming to CE devices, as Time Warner Cable appears to do for a more limited array of information to TiVo products, “would swamp the broadband system rapidly,” Rosen said. “You couldn’t fit the programming on it, unless you had a network like with U-verse with fiber pretty far out” to subscribers’ homes, “so I don’t see that approach as being immediately viable,” he said. Cable operators might need to expand out their networks to allow IP to be realistically used, which could make gateways a cheaper solution, Rosen said.

"I've seen a lot of discussion, a lot of talk about it, but not much movement” to IP delivery of programming among cable operators, said analyst Vince Vittore of the Yankee Group. “They're just at the beginning stages of this.” Operators might need to do work on transcoding and other processing before their cable channels could be transmitted by IP, Vittore said. “Just jumping to the conclusion that IP always equals cheaper” may not be correct, “but long term” that assumption does hold up, he said: “It’s still too early to really tell” whether IP delivery might be easier and cheaper for operators than using the type of gateway devices envisioned by the FCC.