Cable TV Franchises Threatened: Stumbling Blocks for IPTV

When it comes to forecasting the future of any emerging new media technology (and any product really), it's easy to see the final product but NOT the problems that will pop up along the way. Microsoft is a good example as has been Apple in the past. They know what the product will end up looking like, but they don't allow for unexpected bumps along the road.

IPTV has the potential to revolutionize the television business. The word revolution implies taking the current system in use and replacing it with something completely new. I have been telling my students and have been desperately trying to tell my faculty colleagues that this year's freshmen ("first year") class of 2011 will graduate into a media world that, judging by phenomena such as MySpace and YouTube, might very well not be predictable.

I'm not an engineer, but as an expert on emerging new media, I can see IPTV as the protocol about which consumers don't know or need to know any more than I do about how it works. All they want to know is what channels are available and, though subtle, they will want to watch the best quality video available. Old research has demonstrated that given a choice between a very clean broadcast signal and one that has interference or is otherwise degraded, most audience members will choose the clear signal. This is despite the fact that the clear channel is not the audience member's first choice.

The following is information I retrieved some time ago but for which I cannot find the reference. If anyone recognizes it, please let me know. This is very inightful information:

IPTV has the potential to basically make any source of video on earth available to those with access to the origination point. AT&T faces a problem that might not have been considered as it has already been rolling out its IPTV service peculiarly called "U-verse TV" in various cities in the U.S. Cities have franchise contracts with cable providers that often include a "tax" on the cable service paid to the city and public access, educational, and even municipal channels.

AT&T spokeswoman Jenny Parker said the telco proceeded with the rollout in Milwaukee because “we are in good-faith negotiations with the city of Milwaukee and [are] making some progress.”

AT&T notified the city 30 days ago of its launch plans, Parker said, and it made a “binding commitment” to the main issues the municipal government cares about -- revenue sharing and support for public, education and government (PEG) channels. “The commitments will remain in effect while any legal issues are resolved either through a settlement with the city or the courts,” she said.

Time Warner Cable is the incumbent cable provider in both Milwaukee and Racine.

Elsewhere in the telco’s traditional 13-state service footprint, AT&T next plans to roll out U-verse TV in parts of the Dallas-Fort Worth metro area in early March and then Kansas City later in the month. That would bring U-verse to 15 markets by the end of the first quarter -- a milestone the telco had hoped to hit by the end of 2006.

AT&T initially deployed U-verse TV in June in San Antonio, where the company is based. It announced service availability in parts of Houston in November and then in nine other markets in late December.

The company suspended marketing activities behind U-verse TV in October as it ironed out some glitches with the IPTV software provided by Microsoft. Starting in mid-February, the telco resumed direct-marketing efforts, including employing door-to-door sales representatives in neighborhoods where U-verse TV service is available, the company said.

AT&T said it now has about 7,000 U-verse TV subscribers. It reported having 3,000 as of Dec. 31, 2006, which was unchanged from the previous quarter.

This is potentially a major roadblock. As of this writing, I don't know where the arguments stand but will be looking for those who do.