Hooking Up in a High-Tech World, Part 2: TV and Phone

Just a few years ago, picking broadband services and a pay television provider consisted of going with dial-up or DSL to access the Internet, and cable or satellite to get TV access. Consumers trying to make that decision today, however, have multiple options for a whole host of broadband, telecommunication and pay TV services.

Part 1 of this two-part series explores the options available for households looking to log onto to the Internet. Part 2 examines the gamut of pay TV services and different telephone technologies.

TV Guide

When it comes to paid television service, consumers can go for traditional choices such as satellite and cable, or go down the road less traveled with cutting edge technologies such as FiOS TV, Internet Protocol TV (IPTV) and broadband TV. While all five services in general provide access to the same array of channels, JupiterResearch analyst Doug Williams said, the newer technologies may provide a greater level of interactivity.

“Generally, it is the same service and video channels for the most part,” he told TechNewsWorld. “What is different is the level of interactivity you have with the service.”

By the close of 2006 there were more than 62 million digital cable, satellite and other premium TV subscribers in the U.S., an 11 percent increase over the 56 million at the end of 2005, according to a recent IDC report. While growth in the number of cable subscribers continues to drive the market, recently launched services from AT&T and Verizon have tightened the competition between pay TV providers.

The number of digital subscribers will reach 98 million by the end of 2011, IDC expects, with digital cable subscriptions reaching just over 52 million and satellite TV subscribers reaching 34.5 million. Other, newer forms of TV delivery will follow at a distant third with just 11.26 million users.

In terms of media content, the market is still evolving, with more HD content and channels becoming available as more people purchase HD TVs and HD programming. As they continue to increase their consumption, consumer’s options will grow apace.

Both cable and satellite operators have increased the amount of HD programming they offer, InStat analyst Michelle Abrahams told MacNewsWorld. As networks launch more HD channels, satellite providers have launched new satellites to take advantage of the increase. Cable providers who send their base tier of programming in an analog format are looking at offering their services in a digital format to maximize their bandwidth and provide more HD programming.

Your TV on FiOS

As with FiOS Internet service, fiber optic cables run straight to the home and provide a high-capacity connection for FiOS TV. The quality is not necessarily better, Williams explained, but there is more of it. Both services from Verizon share bandwidth, but because their so much bandwidth there is no degradation on the Internet or TV side.

“Verizon can provide more HD programming than another provider might be able to do,” he said. “Along with your HD programming you’re able to also surf the Internet at very high speeds.”

FiOS TV, according to Verizon, offers consumers high-quality picture and sound along with instant access to a library of the latest blockbuster movies, children’s programming and sports shows. Known as “On Demand,” the service was previously only available through cable providers.

“What Verizon is banking on is that by providing [FiOS TV], they will be outfitting you for the future and insulating you from the need for change in the future,” Williams noted. “Cable is well-positioned right now to deal with that in the foreseeable future, but they are also looking at ways to increase bandwidth over the connections they already have.”

TV Over the Net

Other telecommunication companies, such as Cavalier Telephone, provide television services through technology known as IPTV. Here, digital video programming is transmitted over an Internet connection instead of over the air or so-called cable. Subscribers to this service must have either a PC or a special set-top box, as the signal is sent over the Internet.

“IPTV is similar to cable for the consumer because [they] can choose this package or that package and it usually comes in a bundle,” Abrahams noted.

AT&T launched its U-Verse IPTV service in 2006 and expects to pick up 18 million subscribers by the end of 2008. Transmitted over the company’s “fiber-rich” network using fiber-to-the-node (FTTN) and fiber-to-the-premises (FTTP) technologies, consumers can flip through up to 300 channels.

AT&T continues to work to improve its U-verse service and plans to roll out several new capabilities. Soon, subscribers will be able to access weather, sports, stock or traffic information on-screen while watching other programming using the “U-bar.” The company is also developing a whole-home DVR that enables consumers to record content on any television in their home. AT&T is also adding functionality that will enable users to search Yellowpages.com, view their digital photos on the TV and play single- or multi-player games on their TV sets through AT&T Yahoo Games.

Streaming MPEG4s

At Cavalier Telephone, the company transmits its digital TV signal over a closed, secure network specifically designed to deliver subscription-based video using a standard DSL connection through regular telephone lines. When compared to most basic and expanded services from cable, the company claims, its IPTV service’s picture comes out on top since cable providers use an analog format to transmit these services, which requires amplification to be able to reach subscribers further down the line. Cavalier Digital TV, on the other hand, converts existing video signals into a digital MPEG4 stream and sends it to subscribers’ homes, where it is then converted into a television signal.

The service, currently only available in communities throughout central Virginia, also includes video on demand (VOD); an interactive programming guide through which users can set reminders and pay bills online; access to local channels and caller ID functionality.

IPTV’s advantages include the ability to integrate television with high-speed Internet and Voice over IP (VoIP) telephone service as well as other IP-based services. Cavalier does not recommend, however, that its subscribers opt for VoIP service in combination with its Digital TV. Many VoIP service providers reserve a significant portion of DSL bandwidth for VoIP, which reduces the DSL bandwidth available for the digital TV service. Cavalier instead suggests consumers go with standard telephone service.

With cable or satellite, content is sent in a constant downstream flow to set-top boxes, and consumers, consequently, must select from whatever channels their provider is able send to their home. With IPTV, consumers have greater choice because the content stays in the network and allows users to choose the content sent to their home, the format’s advocates claim.

The main drawback is that consumers must live within 10,000 line feet of a Cavalier Central Office due to the high level of bandwidth required for a “robust TV signal,” according to the company.

Can You Hear Me Now?

Consumers now have at least three options for telephone service: a traditional telephone line, VoIP and, in some areas, FiOS service.

“There are many different ways [for consumers] to get voice services,” Abrahams explained. “Cable operators might offer a Voice Over IP service, or your telephone company. There are many different ways to do that as well.”

Voice over IP is a technology that enables the movement of voice traffic over an Internet Protocol (IP) network. The IP in VoIP is a standard for data transmission based on packet switching technology. Voice data is disassembled into a string of packets at the transmitting end. The packet components are then reassembled and decoded at the receiving device.

VoIP, once the purview of start-ups like Vonage, has gone big with telecommunication and cable providers. Verizon has VoiceWing and Comcast offers Digital Voice, while AT&T has its CallVantage service.

Public Net or Private Line

Vonage is an application that can be used with any broadband connection and forces consumers to accept the best connection they can get because it uses the public Internet. Cable- and telecom-provided VoIP, on the other had, runs on the companies’ private networks and offers a higher degree of service, Williams explained. Of course, with improved quality comes higher prices. The customer experience, he maintained, is more positive than it is with application-based, or over-the-top, VoIP providers.

“A carrier who owns that network will have the ability to prioritize packet delivery to ensure the phone services are of a very high quality,” he said.

FiOS phone service can carry up to four telephone lines to each household, however, unlike standard phones, it needs a power outlet. Although phone lines generate their own power, fiber-optic lines do not. That means FiOS subscribers will have to provide an electrical outlet to power the box the company installs on their house. In case of an emergency power outage, Verizon includes a 12-volt backup battery that will keep the phone line running for up to 12 hours.

Hooking Up in a High-Tech World, Part 1: Logging On

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