Bells See Future of 100 Mbps and IMS, But Issues Remain

“The new Internet revolution will be characterized by 100 Mbps speeds and mobility,” said Verizon Chmn. Ivan Seidenberg in a keynote. Even mobile services will offer speeds of 3 Mbps “in the next few years,” he said, calling his biggest takeaway “speed wins.” Verizon CTO Mark Wegleitner told an ATIS panel it’s a “100 Mbps world” because “that’s what it takes to service the applications of the future.”

IMS is telcos’ big chance to start coalescing cellular, broadcast and wireline services, BellSouth CTO Bill Smith said. Verizon already has an IMS request for proposals “on the street” and expects to begin moving toward IMS later this year “or more likely next,” Wegleitner said.

There’s “a lot of hype right now about IMS,” said Qwest CTO Peter Poll. Telcos “need to focus on the challenge” of integrating devices and networks for IMS, he said. Wegleitner acknowledged IMS is “still a work in progress. It’s more a journey than a destination. A lot of things still have to happen.”

One concern is network reliability when networks are combined using IMS, Smith said. He said he fears telephony’s traditional 99.999% reliability may not be good enough for the new technology, since IMS networks are “like a jetliner with only one engine,” whereas when wireline networks fail, people can fall back on wireless or other networks.

Bell officials uniformly voiced pleasure at consumers’ response to their new TV services. Verizon’s Seidenberg said uptake rates “really exceed our most aggressive forecasts. The industry has consistently underestimated how quickly the public embraces new technology,” as well as how quickly new ways to use the new bandwidth crop up. Verizon has achieved more than 20% penetration with its TV service, Wegleitner said: “We're pretty happy with that.”

AT&T plans to offer its TV service in about 20 markets this year, said Chris Rice, exec. vp-network planning and engineering. In Dec., it began offering more than 200 channels of video in San Antonio, and will expand that to more than 300 channels and 45 channels of music, he said.

BellSouth has been “pleasantly surprised” by customer reaction to its video quality, Smith said. The firm is using MPEG-4 compression due to the number of channels it squeezes into the pipe, but he said people forget that MPEG-4 also offers high quality.

AT&T’s IP-based video service will help it compete with cable by offering tunerless picture-in-picture, multiple camera angles, instantaneous channel changes and other features, said Dan York, AT&T exec. vp-programming, at a lunch sponsored by Broadcasting & Cable and Multichannel News. The fully digital architecture “gives us an advantage” because most cable remains analog, said Terry Denson, Verizon vp-FiOS content strategy and acquisition.

But Starz CEO Robert Clasen said the advantages may not be so obvious to consumers. Cable and DBS already offer “hundreds of channels,” so the difference to viewers won’t be as obvious as in the 1980s when the launch of satellite channels rapidly increased the availability of programming, he said.

A key factor is that N. Americans are “cost conscious and confused about value-added services,” said Carl Geppert, head of KMPG’s communications and media practice. KPMG recently did a major international consumer survey on new services; it found American consumers generally aren’t willing to pay more for new services, he said. Rather than upping total revenue, the new services may just be a way to get a bigger share of existing revenue, Geppert said.

Companies “need to rethink their business models quite substantially” to thrive in the converging markets, KPMG said in its report on the survey. The best way to increase revenue per user may not be charging customers more but increasing revenue from “sponsored media applications” or through e-commerce or mobile commerce, it said. “Significant adoption challenges” in a multimedia world will include room only a few players and the need for a consolidated bill for all services, it said. -- Michael Feazel

TelecomNext Notebook…

Sprint-Nextel’s wireline spinoff Embarq can’t wait to get involved in regulatory policy, its CEO Dan Hesse said Tues. at the TelecomNext show in Las Vegas. “Regulations are penalizing carriers serving rural areas,” he told the audience. “That’s why you see good carriers dumping rural areas.” Hesse, once an AT&T Wireless executive, said his survey of the smaller wireline market he’s now competing in has shown “the current regulatory structure is at best unfair.” For example, VoIP providers pay “nothing to USF” and pay far less than wireline on terminating access charges, he said. Plus, small wireline carriers are saddled with huge “taxes and surcharges” imposed by state and local govts., he said.

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Japan’s NTT is moving quickly toward next-generation networks, said CEO Noria Wada. He said the company this year will offer 3.5G wireless and start field trials and begin building transport structure for a next-generation wireline network later. By late 2007, NTT will start installing the edge nodes for the network, Wada said, and then begin full service ramp up. The Japanese market is already advanced: Wada said 44% of NTT subscribers use 3G and 91% use its iMode mobile data service.

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Siemens announced a new version of its IMS-based fixed- mobile convergence technology, at the convention. The new technology features transparent roaming and active hand-offs across fixed and mobile networks, it said, as well as personalized multimedia services.