Thanks to more efficient manufacturing, cutthroat retail competition, and predatory market-share grabs by a few manufacturers, HDTVs are now readily affordable. But the one thing that hasn't changed is the refrain heard from many people when they get their new sets home: "Hey, where's all the high-definition programming?"
Thankfully, that situation is going to change for the better in the fall — and this time, the content and service providers really mean it. Not only are content providers ready to offer significantly more programs in high-def, but service providers — cable, satellite, and the telephone companies (telcos) — are working to make sure their respective networks have the capacity to handle all that HD content, which requires three to four times the bandwidth of standard-def fare.
With 50 new HD channels expected to launch by the end of the year, the content guys are living up to their part of the bargain. Meanwhile, the telcos are building high-capacity fiber-optic networks, and the satellite companies are launching new satellites and acquiring more space on existing ones at regular intervals. That makes cable, with the oldest infrastructure, the dark horse in the equation.
While many cable companies are saddled with old copper networks that don't have the capacity, the reliability, or even the sex appeal of newer fiber-optic ones, that doesn't mean the cable guys are willing to concede the growing business in trafficking HD content. They've been working feverishly to employ bandwidth-reducing strategies and technologies that will let their systems handle the impending HD crunch. And apparently, heightened competition can be a powerful motivator: You don't think it's a coincidence that Cablevision operates in regions where both Verizon and AT&T have rolled out broadband HD services, do you?
Cable: We're Not Dead Yet
For years, cable has been the service its customers love to hate, regularly trailing, well, almost everyone in customer-satisfaction studies. But for many people, it's been the only way to get TV service. While satellite has made steady inroads, cable is still, by far, the largest supplier of TV content. With the launch of telco TV, though, cable might be feeling the heat for the first time.
Cable has enjoyed several advantages over its competition, ranging from no up-front costs to its ability to aggressively market discounted "triple-play" deals that combine TV, Internet access, and digital phone service on a single monthly bill. And cable is also more locally attuned, offering community-interest programming such as local news, weather, and high-school sports. Where DirecTV provides local HD broadcasts in about 75 markets, cable carries local HD broadcasts in 206 of the 210 U.S. media markets. And, until the recent launch of telco TV, cable companies had an exclusive on offering video on demand (VOD), where movies or special-event programs can be ordered whenever you want to watch them.
Still, cable companies have been concerned whether their copper-based networks can handle the growing amounts of high-bandwidth content that customers demand. Many cable systems are at or near their bandwidth capacity, which limits their ability to add new HD channels or services, such as HD movies on demand. Limited capacity can also affect picture quality, as some operators — despite carriage agreements that stipulate minimum bandwidth requirements — reduce the quality of some HD programs as a way to conserve bandwidth for additional channels.
But cable's future isn't as dire as it might seem. Many companies have been replacing older copper networks with higher-capacity hybrid fiber coaxial (HFC) networks that typically use fiber from head-end distribution centers to local residential nodes and then existing coaxial runs into the home. These HFC networks can be further optimized by employing "spectrum overlays" that take advantage of unused or underused higher frequencies, above 1 gigahertz (GHz), on existing coax cables to create more bandwidth.
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"What's Up, DOCSIS?" |
| Beginning next year, in an effort to compete with high-speed fiber-optic Internet services, cable will roll out a modem technol- ogy, called DOCSIS 3.0, that will enable downstream data speeds of up to 160 megabits per second (Mbps). The technology uses "channel bonding," which combines several 6-MHz channels into a single, larger "virtual" channel. Comcast plans to be the first major cable supplier to offer DOCSIS 3.0 gear. Although the initial target is high-speed Internet access, the faster speeds could allow cable companies to migrate to IP-based video services. DOCSIS 3.0 is expected to let cable companies compete with Verizon, which is moving its FiOS service to new optical hardware that allows downstream speeds of up to 400 Mbps. |
Cable's biggest potential savior might be "switched digital video" (SDV). Currently, the cable company sends all the programming a customer has ordered to his or her set-top box. But SDV works like VOD, sending only the program that's being watched, instantaneously substituting a different single stream when the channel is changed. This allows bandwidth to be allocated dynamically where needed.
Cox recently said it will use several of these new tools to bump the number of HD channels it plans for this year from the 30 it originally envisioned to 50. Time Warner will have SDV available in at least half of its markets by year's end, and Cablevision has already rolled it out in New York-area systems. As we went to press, Comcast had begun testing SDV in Cherry Hill (New Jersey) and Denver. The efforts appear to be working. Cablevision recently added 15 HD channels from its once-independent Voom service, for a total of 39 HD channels. And Time Warner and Comcast, at last count, had 26 and 23 HD channels, respectively, just a few shy of their telco competitors and ahead of DirecTV.
Telco TV's All-Fiber Diet
Thanks to the allure of fiber-optic networks, telco TV has been generating a lot of buzz, luring customers with the promise of unlimited HD content and super-fast Internet access. Still, the fiber juggernaut has moved slowly, mainly because the telcos have to get franchise licenses town by town, much the way cable did when it first became available. But a growing number of states are authorizing statewide franchising agreements (moves being fought, not surprisingly, by the cable companies), which should greatly speed up licensing. Verizon's FiOS service now has about a half-million customers, while AT&T's U-verse has about 40,000. (Both companies also resell satellite-TV services in a number of markets, so the actual number of video users is much higher.)
At last count, FiOS TV was offering 28 HD channels while U-verse had 26. Both services use fiber-optic networks, but there are some key differences. Verizon's is a "fiber-to-the-home" (FTTH) network, meaning that fiber cables are run all the way to a customer's house. U-verse is largely a "fiber to the node" (FTTN) service, where programming is delivered via fiber from the head end to neighborhood nodes — usually within 3,000 feet of customers' homes — and then is sent the rest of the way using existing copper wiring. (But AT&T is running fiber all the way to the home in some new-construction neighborhoods.) Although FTTN is less expensive than FTTH, the latter provides four times more bandwidth, with unshared data streams up to 100 megabits per second (Mbps).
There are other major differences. Whereas FiOS TV uses traditional modulated RF-style video (QAM) for linear broadcast channels and Internet Protocol (IP) for interactive services such as VOD and pay-per-view, U-verse is a fully IPTV-based system. And whereas Verizon uses MPEG-2 boxes for video, U-verse sends linear content in MPEG-4 (H.264) and interactive services like VOD in the MPEG-4 and VC1 (Windows Media 9) formats.
Neither company currently offers HD VOD, but Verizon plans to launch that service this fall. And because it's delivered via IP, it won't have to share bandwidth with the linear TV channels. That's one reason why Verizon can offer 50-Mbps Internet download speeds, while AT&T can spare only 6 Mbps, reserving the rest of its capacity for its IPTV service. And U-verse can send only one HD signal at a time, meaning you can't record one HD show while watching another.
Despite fiber's inherently greater capacity, Verizon is already planning a beefier network — as is AT&T for the new neighborhoods where it's using FTTH. Both companies currently employ passive optical networks (PONs) that allow multiple homes to share fiber. Rather than running individual fibers for each user, in a PON, splitters are placed at junctions within the fiber loop that let a single optical fiber serve multiple users — typically, 32. Although both companies use broadband PONs (BPONs), which are capable of 622-Mbps downstream data rates, there's now a technology called GPON (gigabit passive optical network) that can boost downstream speeds to 2.4 gigabits per second (Gbps).
Verizon plans to go to GPON later this fall; AT&T's timetable is less clear. But Verizon is thinking about moving within the next 3 to 5 years to an even more robust technology called wavelength-division multiplexing (WDM), which gives each customer his or her own 1-Gbps wavelength into the home. And by that time, the company might have a purely IPTV network.
Although it gets far less press than AT&T and Verizon, Qwest Communications has also been rolling out an FTTN network. But it appears to be waiting to see how AT&T's IPTV service fares before making a stronger commitment. Qwest's main video service is DirecTV, but it also offers a video DSL service called ChoiceTV to about a half-million homes in Arizona and Colorado.
It's too early to tell whether telco TV will succeed, but the early results have been promising. Telcos can offer compelling "quad" bundles, which add cellphone service to the mix, and both AT&T and Verizon have some unique services. AT&T's DVRs, for example, can record as many as four programs — including one in HD — simultaneously, and they can be programmed remotely over the Internet or by cellphone. A Verizon DVR lets you put your TV and computer on the same network so you can watch PC content on your TV. It also lets you build local news, weather, and sports alerts that scroll across your screen.
Satellite: New Birds in Flight
Unlike cable TV, which was saddled with analog systems it had to bring into the digital world, satellite TV was digital from the get-go, enabling first DirecTV and then EchoStar's Dish Network to set the standard for picture quality and sound — and to take the early lead in offering HD programs and movies to its subscribers.
But limited capacity has, until recently, kept DirecTV — once the leader in HD content — from adding new HD channels, despite continued claims that it would offer 100 HD channels by the end of this year. With the launch of its D10 satellite this summer, though, DirecTV appears to be well on its way to making good on that promise — assuming that all the new HD feeds promised by content suppliers materialize. DirecTV plans to launch a second bird in 2008, which should help it hit its goal of offering 150 national HD channels — and 1,500 local ones — next year.
As part of its HD expansion this fall, DirecTV is rolling out 11 HBO and Cinemax channels that had been available only in standard-def, plus four Discovery HD channels. (Two more yet-unnamed Discovery HD channels will be launched later in the year.) It also plans to carry three new Starz HD movie channels, along with A&E HD and The History Channel HD. In addition to its popular NFL Sunday Ticket HD package, DirecTV will offer all Major League Baseball games produced in HD starting in 2008.
EchoStar, which bought Voom's satellite when the all-HD service went under (its 15 niche HD programs are still available on Dish and Cablevision, among others), hasn't had the same bandwidth constraints. In fact, despite DirecTV's bold predictions about HD leadership, Dish Network has offered more HD content than any other provider for most of the year. Like DirecTV, Dish has been adding HD channels aggressively, and the roster is likely to grow even broader as the company launches two new satellites in 2008.
Both DirecTV and Dish Network are finding ways to compete with cable's ability to offer bundles and VOD services. Both, for example, have deals with EarthLink and various telcos to offer bundles of TV and phone services in various markets, and both have partnered with a company called WildBlue to offer satellite-delivered broadband, mostly in rural areas. This summer, DirecTV and Dish signed deals with Clearwire to offer that company's WiMax-based high-speed Internet access to their customers (with Clearwire selling satellite-TV services to its customers).
Dish has been offering a quasi-VOD service for some time. Basically, subscribers can pick from a selection of movies that are downloaded via broadband to the Dish DVR's hard drive. DirecTV will do a full rollout of its VOD offerings this fall, although the bulk won't be HD. Blockbuster movies, for example, will be "pushed" to the DVR hard drive each month for immediate viewing, while subscribers can use their set-top box to browse catalog titles, which are then delivered via broadband connections.
With more content coming, and with cable, satellite, and the telcos tweaking their systems to handle the extra bandwidth it requires, HDTV owners might soon have to find something else to complain about — like the quality of the shows themselves. For example, is a sitcom starring the Geico cavemen really necessary, HD or not?
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