IPTV Via Satellite Said ‘Critical’ for Rural America
IPTV is “critical to rural telecom” in the National Rural Telcom Coop’s (NRTC) eyes, said Harry Thibideau NRTC mgr.-Satellite Industry Relations. Speaking Wed. at the Satellite Application Technology Conference (SATCON) in N.Y., Thibideau expanded on a Sept. NRTC announcement it’s teaming with SES Americom in an IPTV venture targeted at rural telcos. If it succeeds, the IPTV move could create more competition for cable companies and for DBS operators like DirecTV.
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“This is a transitional effort by the NRTC to move into an entirely new area that we believe is critical to rural telecom,” Thibideau said. Called “IP-Prime,” the all-MPEG-4 venture sets up SES Americom to enable triple- play for smaller telcos via IPTV aggregation and delivery by satellite. Last week Northern Sky Research estimated the “niche market for satellite-delivered IPTV services” at $436.7 million through 2010, pegging the market at 10 million-plus households. Other satellite firms will launch competing services, the report said.
When Universal Service Fund funds are lost because rural customers “defect” from landline service, it’s a “tremendous hit” to the telco, said Thibideau: “Rural telcos need to provide the glue that’s going to stick those customers and maintain a vital connection to USF funds.” IPTV is it, he said. IPTV also could help rural telcos surpass smaller cable competitors who can’t afford to upgrade to HD and MPEG-4, said John Rose, CEO of OPASTCO, which represents 560 rural phone firms. “Our guys have been very successful at getting customers because cable systems there haven’t been as up to date,” said Rose, adding that at least 120 OPASTCO rural telcos now provide video over DSL.
But programming content rights for IPTV aren’t easy to get, panelists agreed. Talks with video providers for IPTV retransmission rights are ongoing, they said. A satellite platform “generates a comfort level” among programmers because they're accustomed to it, but content rights are still tough, said Broadstream CEO Anthony Bontrager. Broadstream is the first provider of an IP- based headend to have secured content agreements with over 220 channels, said Bontrager. And it took 3 years to do that, he said.
IPTV content delivery is changing for Fixed Satellite Service (FSS) operators too, satellite panelists said. In the old FSS model, satellite operators carried mainstream content on analog or MPEG-2 linear channels for broadcast networks, DTH operators and cable MSOs, all targeted at your living room TV, said analyst Jimmy Schaeffler of Carmel Group. But the old FSS model is morphing into one of transmitting niche content with video on demand applications in MPEG-4 or WiMAX format, Schaeffler said. And the last mile soon will include telcos, ISPs and wireless operators for end-terminals like PCs, cell phones and iPods, he said.
“You have to transition from simply being transport providers to coming down-market and providing more services, and then centralizing the solution so you can reduce the cost for cable, telco and wireless operators” said Jim Grandahl, dir.-corp. development at SES Americom, speaking about IP-Prime: “You're becoming broader service providers instead of simply a transmitter.” That makes programming access rights a new hurdle for FSS operators, Intelsat’s John Romm pres.-Media & Entertainment Business Unit said: “For the first time for satellite providers or transmission providers with hybrid service offerings, you have to get rights where you haven’t before.”