Out of Control Policy Blog

More Reasons For Faster Franchise Reform

One of the points I make in the two reports on franchise reform that Reason will release Thursday is that telephone company entry into video is more than just "me too" competition for cable. Phone companies are rolling out video using new platforms, such as Internet Protocol Television (IPTV), which blurs the line between what's been traditionally considered "broadcast" TV and Internet video. We're really looking at a new generation of home video service. The coming year will see if state legislatures glom onto this and hekp speed these new services to constituents.

Microsoft Chairman Bill Gates drove that point home Sunday at the Winter Consumer Electronics Show currently underway in Las Vegas, discussing the a series of content agreements Microsoft has signed with a number of content providers. Video is fast becoming an Internet application. Here's some sampling of the coverage:

From The Hollywood Reporter:

In addition, Microsoft said that it has signed Lionsgate to its roster of programming contributors to Xbox 360 Live Marketplace, joining Paramount and Warner Bros. Bach hailed the addition of a library of video content to Xbox Live that either can be streamed or downloaded, noting that 100 million downloads of games, TV episodes and movies have been generated over the past 13 months; he did not offer a separate account of how video alone has fared since Microsoft signed content partners including ABC, Comedy Central and the CW as of Nov. 22.

Xbox 360 also will provide an IPTV service that can deliver video programming, essentially functioning as a set-top box. Although that doesn't put Microsoft in the video distribution business, it opens up the possibility that the company could partner with AT&T to offer a mix of voice, video, data and wireless. Microsoft already provides software for AT&T's IP-based rollout, raising the specter that the telco's current U.S. service, U-Verse, could eventually be bundled with Xbox 360.

From Daily IP:

Nevertheless, Microsoft's overall IPTV strategy is very real. As [Jeff] Heynen [directing analyst for broadband and IPTV at Infonetics Research] explained, "Their presence among the world's largest operators continues to grow, despite the technical hiccups. In addition, their presence inside subscribers' homes via PCs, Xbox, Zune, and so forth also continues to grow. This confluence makes them a real force in this space. With Google pressuring them in the Web services arena, they are looking to the service providers as a major growth market for them, be it through IPTV middleware, mobile content, and enterprise VoIP and applications."

Finally, from Telephony:

Having spent a virtual day at CES Sunday, courtesy of multiple Webcasts, I think what Verizon announced with its second generation of FiOS TV and what Microsoft added to its IPTV platform with the integration of Xbox 360 and Xbox Live elevates IPTV above the ordinary video fray. In Verizon's case, enabling consumers to not only view Web video on their TV set but to search for it from the comfort of the living room is a significant step forward. Microsoft is clearly targeting the younger generation with the ability to track buddies, initiate and receive voice or text chats via the TV set.

These are capabilities that are coming this year to IPTV consumers--capabilities cable doesn't have yet.


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