Friday, October 28, 2005

Bruce's Take on IPTV

From Bruce Kushnick: "As part of my post today, I had this in there about SBC's IPTV. After writing the analysis of SBC's previous mergers, I now believe that SBC's IPTV is nothing more than a way to get the AT&T merger through. I'll place bets that it won't get rolled out -- not to 18 million households by 2007, may not at all. "Here's some of the changes in the timeline so far, taken direction from the press releases /annual reports. They originally were going to spend $5.5 billion, then it went to $4B; they were going to launch late 2005, now it's by 2006-2007... and the company will argue that if they don't get their way with franchises, and a Regulatory "Light-Touch", then they won't do it. "And Verizon, can anyone explain why there are no major cities on the list of deployments?????? -- that's because they don't want to have any major snafus because the equipment for apartments supposedly doesn't work, it still can't handle basic telephony stuff, like the current alarm circuits, and if they pull out after the MCI merger, few will notice... the same way that they did their other pullouts. "As time progressed, SBC has already rewritten their plans on delivery. IPTV was to launch late 2005, and now it looks like late 2006-2007:
  • November 11, 2004 - "IP TV launch expected in late 2005"
  • October 10, 2005 - "initial controlled market entry in late 2005 or early 2006".
  • October 18, 2005 - "introducing services enabled by the IMS platform in late 2006 or early 2007."
The announced expenditures went from $5.5 billion for 2005, announced in 2004, to $4 billion for 2005, even though the company has had significant profits every quarter 2005:
  • November 11,2004 - "2005 overall capital expenditures ---$5 billion to $5.5 billion
  • August 19th 2005 - "SBC's $4 billion IPTV investment" (USA Today)
SBC is still claiming 18 million households by 2007.
  • November 11,2004 = "18 million households by 2007"
  • August 19t 2005 =."by 2007 to wire 18 million homes"
As we have pointed out, that comes to 6 million homes a year, at a cost of $222.22 per household. It appears to be vaporware. We previously wrote about this: We know this is tied to requests to get more deregulation. The pr-release below pertains to testimony in front of an U.S. House Energy & Commerce Committee hearing about the future of new technology. The headline says it all --- a 'light-touch' to regulation. "IP-Based TV Will Revolutionize Entertainment: Company Calls for "Light-Touch" Regulatory Approach to Ensure Consumers Receive New Technology Quickly," April 20, 2005.
A cautionary message should read --- 'after the AT&T merger we'll drop all of our plans, claiming changes in the market', is what we expect. These proposed networks are also designed to change all of the cable franchise laws, block municipalities from competing with the phone companies using Wifi, wireless or fiber optics, and other anti-competitive issues, such as blocking VOIP, or other services. SBC can say --- 'See, we're doing our part. Now block the others.'

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