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Internet TV: still fuzzy, but promising

Microsoft teams with a variety of carriers to vie for bundled home entertainment services

Several big telecommunications operators and the world's largest software maker hope to persuade couch potatoes to zap their old-fashioned notions about television and tune in to its convergence with the internet.

Internet TV, or IPTV, is arguably one of the hottest new technologies in communications. A handful of operators already offer service with largely home-grown systems, but many eyes are glued to the screen to see what Microsoft is concocting with some big-name carriers.

Using the same DSL connection that gives customers broadband internet access over phone lines, Microsoft-aligned operators such as BT Group, Telecom Italia, SBC Communications, and India's Reliance Infocomm aim to add TV for a much-cited "triple play" of bundled voice, data and video services.

Their premise is: if documents, images, music and even phone calls can be broken up into digital packages, thrust through networks and reassembled by internet protocol at the other end, why not TV?

It's a legitimate question, and one that telephone companies – painfully aware that the days of their cash-cow circuit-switched telephone business are numbered as cheap Voice over IP (VoIP) services go mass market – aim to answer, despite their failed attempts at TV service in the past.

More than a decade ago, several big carriers, such as Deutsche Telekom, tried unsuccessfully to deliver television service over analogue lines. Now, digital technology makes them more likely to succeed.

The quality of the digital stream into homes, however, is a big factor, and one that operators say will distinguish IPTV from video streamed to a PC. On the public internet, packets can be delayed or lost entirely, which is why Web video is often jerky and of low resolution. IPTV, by comparison, is engineered for end-to-end delivery of high-quality video as good as any digital cable or satellite feed.

A dedicated transmission path is one necessity. Another is a high-performance set-top box. Still another is software that unites all the pieces.

Software plays a crucial role in helping the many different systems involved communicate. That's where Microsoft hopes to make its mark. Around a dozen well-known operators are testing Microsoft TV IPTV Edition software. One competitor, German electronics giant Siemens, uses a rival TV system and has struck deals with a handful of international operators.

Carriers want to work with Microsoft, which wants to extend its home computing expertise to the emerging home entertainment market and other home networking opportunities. It helps that the software company has persuaded French telecommunications giant Alcatel, a trusted name to many carriers and one of the world's largest suppliers of DSL equipment, to abandon its own IPTV plans and work with Microsoft.

But all said, the picture Microsoft has produced so far is a bit fuzzy.

In May, for example, Swisscom, one of the first telcos in Europe to test Microsoft's software platform, delayed its launch of commercial service from late 2005 to sometime next year largely because of technical difficulties with the software.

"They aren't as far along as they thought they would be," says Pia Colombo, Swisscom communications director, of Microsoft's efforts. "Now we are going to have to wait until all the kinks are worked out."

No one said the move to IPTV would be a breeze, but some analysts question whether the technology is ripe enough to provide service to thousands of customers simultaneously.

"Microsoft's IPTV software platform works; I've seen it and I'm impressed," an analyst says. "But it's one thing to show the service using a single client and a single server at a trade show and quite another to deploy the service in a large, live network where lots can go wrong."

Microsoft remains convinced that its IPTV technology will succeed and change the way people access broadcast TV, movies, and other video content, as well as how they interact with the service.

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