IPTV Projects on All Things SUPERCOMM

THE TRANSFORMATIVE IMPACT OF IPTV ON the telephone industry was evident everywhere at this year’s SUPERCOMM, but so, too, were a cluster of issues that promise to make the transition to the new entertainment platform a longer pull than many players had anticipated.

With SBC Communications Inc. playing the role of industry bellwether, its officials’ tacit acknowledgements that SBC is unlikely to meet its oft-stated fourth-quarter commercial launch target served as the most prominent indication that the road to IPTV is not going to be a cakewalk. “If [the starting date] is Jan. 15 or March 15, it doesn’t really matter as long as we’re delivering on our goals,” says Jeff Weber, SBC vice president for product and strategy. “And we’re confident we have the right product and the right strategy to do that.”

Indeed, it was the longer-term picture that was the focus of the buoyant outpouring of vendor support for IPTV at SUPERCOMM. Telcos around the world are hunting for solutions, with recent IPTV service announcements from Nippon Telephone and Telegraph Corp. in Japan and T-Online France, a subsidiary of Deutsche Telekom, fueling the momentum.

News that Swisscom is delaying rollout of what had been the anticipated first commercial launch of Microsoft Corp.’s IPTV platform made clear there was plenty of opportunity for other suppliers, notwithstanding the software giant’s lead in contracts with the likes of SBC, Bell Canada and, for testing purposes, BellSouth. Microsoft also has won Verizon Communications Inc. as a customer for the electronic programming guide to be used in Verizon’s FiOS TV service, which is not IPTV, and the two companies are partnering on development of future applications that will operate in IPTV mode.

But there are plenty of major telcos around the world that have yet to commit to an IPTV platform, and there’s a reasonable chance those who have might switch, which means there will be plenty of business for the big players just entering the space. These include Lucent Technologies, leveraging a new partnership with middleware supplier Orca Interactive Ltd.; SeaChange International, which added set-top middleware purchased from Minerva Networks Inc. to its IP-centric software stack; and Siemens, which has purchased middleware supplier Myrio Corp.

The rumor mill is in overdrive on the topic of what the problems might be with Microsoft’s software, with some reports suggesting the company was stalled at an unacceptably low ratio of end users to servers as it sought to scale the technology for commercial deployments. Other sources say the scaling problem had more to do with synchronizing the many software elements in the platform, including digital rights management (DRM), set-top middleware, back-office administration and overall system operations control of on-demand and broadcast resources.

Ed Graczyk, director of marketing and communications at Microsoft TV, scoffs at reports that there is a server-to-user ratio problem, noting servers in use for IPTV have been scaled easily for widespread use in many other markets. But whatever the problems, no one should be surprised that things aren’t ready for prime time, Graczyk says. “Our software is not done,” he notes. “We’re on track with our schedule to deliver the completed code to our customers when we said we would, which is the end of 2005. We feel very good about where we are in the development process.”

Adding to the challenges, Microsoft also is confronted with the telephone industry’s reluctance to embrace its Windows Media 9 video compression technology, now in the advanced stages of adoption as the VC-1 standard at the Society of Motion Picture and Television Engineers. Even SBC let it be known it will use the MPEG-4 Part 10 compression, known as H.264 or Advanced Video Coding, which means Microsoft will have to make adjustments in its software before SBC can move forward.

“Microsoft’s encoding and encryption processes are tightly integrated, which means if someone wants to use MPEG-4 encoding, Microsoft has to decouple the encryption from the encoding until they rework the code,” says a senior engineer at a supplier of content security systems who had just returned from a visit to SBC’s IPTV testing facilities. “At this point, there’s no real-time encryption available on the Microsoft platform if it’s used with MPEG-4.” Both compression encoding and encryption must be performed in real time to accommodate live broadcast TV requirements.

Other areas of software adjustment were put into play as well by the telcos’ choice of MPEG-4. Microsoft officials have stressed that while the MSTV platform was designed to work with MPEG-4, there were major advantages to using VC-1 having to do with the way the software was designed to support transfer of content from the TV domain to other devices. Tight coupling of the decoding process with digital rights management is part of the “Plays-for-Sure” program Microsoft has developed with dozens of set-top and other device manufacturers over the past couple of years.

While asserting the MSTV unit is “agnostic” on the question of compression, Graczyk acknowledges there would be issues with portability. “At the corporate level, people believe there are a lot of advantages to VC-1, in particular when you talk about connected devices,” he says. “For example, there’s no MPEG-4 decoder in the PC.”

Microsoft has begun working with MPEG-4 encoders, including units supplied by SkyStream Networks Inc., as it proceeds with the integration process. “Their middleware is geared around VC-1 implementation, so it will take some work,” says SkyStream CEO Jim Olson.

Transcending Microsoft’s problems in terms of the timeline to IPTV rollout was the larger question of how soon set-tops employing single-chip solutions for decoding and other key operations will be available for commercial deployments. “It’s one of the things that causes me to stay up at night,” acknowledges SBC’s Jeff Weber.

At SUPERCOMM, encoder and set-top suppliers alike appeared to be in agreement that the relatively low-cost set-tops telcos are looking for won’t be available until sometime next year. “We’ve said all along this wasn’t going to happen this year,” says Keith Wehmeyer, general manager for Thomson’s IP video business. “Late first quarter to mid-2006 is when we’ll see those boxes available.”

Roy Kirsopp, CEO of set-top manufacturer Amino Communications, concurs.

“There are issues [with MPEG-4 decoders],” he says, citing the performance of his own company’s new H.264 set-top on view at its SUPERCOMM booth as exhibit A. “You can see patches and blockages showing up in the video, which is totally unacceptable. It’s going to take time to get it to work effectively.”

In part, the problems have to do with the fact the technology is so new, which means vendors still are working through differences in how they interpret the complex specifications underlying H.264. But there’s a much larger issue that could spell trouble for SBC and other telcos that are counting on being able to deliver a combination of standard- and high-definition IPTV streams over DSL links to the home.

The problem, in a nutshell, is the telcos are looking for a bit rate for IPTV that is too low at this stage of MPEG-4 development for the quality levels that content suppliers expect for digital TV. As was the case with MPEG-2, the encoding techniques will improve over time, resulting in higher compression ratios. But, for now, the encoders are still a long way from hitting the widely publicized 2:1 ratio touted for MPEG-4 over MPEG-2.

“Our people have provided a 40 percent improvement over MPEG-2 at launch,” says Wehmeyer, in reference to the MPEG-4 encoders produced by Thomson’s Grass Valley unit. “They have a road map for improving that, but that’s what we start with.”

People also often underestimate what the true benchmarks for MPEG-2 video streams are and consequently what the resulting MPEG-4 rates will be, owing to confusion over the differences between the telco TV and cable network environments. “Telephone guys don’t have the experience with video that cable guys do,” says Anthony Ley, CEO of Harmonic Inc., one of the leading suppliers of next-generation video encoders. “They look at the average bit rates cable operators are getting for services over MPEG-2, and they calculate that MPEG-4 should have no problem doing 1.5mbps.”

That analysis ignores the fact that cable takes advantage of variable bit rate (VBR) encoding whereas the telcos have to go with constant bit rate (CBR) encoding because of the way their networks work, Ley says. In a cable network, where several digital video streams are carried over a single 6MHz RF channel, a process known as statistical multiplexing used in combination with VBR operates across that complete 6MHz spectrum to pack bits into whatever spaces are available as the bit rates of each stream fluctuate in tandem with the level of pictorial change from one frame to the next.

High-action content such as sports, where the picture changes rapidly, requires more bits than a talking head program where most of the pixel information remains static from frame to frame. But if the sports action suddenly stops and the talking head suddenly leaps up, VBR will shift the bit rates of the streams to accommodate the changes.

Stat muxing takes advantage of this by making sure the space opening up in the one stream is consumed by the spike in bits on the other stream. These techniques ensure that when all the bandwidth is used within the 6MHz channel, the bit rates of the streams average out to about 2mbps to 3mbps per stream, depending on types of content within the channel, even though the bit rates of the individual streams might range anywhere from 1mbps to 7mbps.

In the case of telcos that are using switched video in the FTTN, DSL-to-the-home scenario, each stream operates on a dedicated basis to the end user with no channel sharing involved. Hence, all streams operate at a constant bit rate, meaning the compression rate can be reduced only to the level that meets the quality requirements of the highest bit rate stream. “CBR leaves you at the mercy of the highest bit rate,” Ley notes.

Others agree with this analysis. “A lot of the problem lies in the fact the telcos were told by encoding people that they could achieve certain levels of compression that right now are beyond the capabilities of the technology,” says an engineering executive at a leading set-top manufacturer, speaking on background. “So when the decoders are set to decode at those bit rates, the signals break up and quality is lost.”