HomePNA Blog

U-verse TV Gains While App Puts Support at Customers’ Fingertips

By Rich Nesin, General Manager and Resident Philosopher

There I was, all set to write an award winning post about AT&T’s free Troubleshoot & Resolve app, a new (and free) on-screen TV application that gives customers access to self-support information and tools for their U-verse TV service. And then, whamo, out of the blue AT&T announced 2nd quarter results of 202,000 new U-verse TV subscribers bringing the total to 3.4 million. Even better, with 75% of those subscribers having triple- or quad-play packages, the Average Revenue Per User (ARPU) for U-verse customers is up 8.3% over last year.

Reaching for my trusty slide rule I quickly ran the numbers and found that, much to no ones’ surprise, the less money per customer that you spend on support the more profit you make - and apparently the more customers you have the more obvious it becomes. A quick look in my college Economics textbook confirmed my suspicions. More customers and higher ARPU combined with lower support costs equals higher profit. Eager to share my discovery, I phoned a friend at a major TelcoTV provider. He was less than impressed. Apparently they plan it that way.

AT&T has long been using HomePNA diagnostics. I’ve written in the past about them using the diagnostics capability to monitor the performance of customers’ home networks from their central office (you remember – all that talk about yucky stuff like TR-069). HomePNA’s diagnostic capabilities – the ability to obtain valuable performance “metrics” including user data throughput, Signal to Noise Ratio (SNR), and Packet Error Rate (PER) for every path in the network - provide the most robust information on in-home network performance and form a key part of user support tools (they log the data for every service call). And the HomePNA diagnostics come for free – they are a product of the managed network architecture.

So naturally the Troubleshoot & Resolve app uses HomePNA diagnostics and adds new network-based resources to proactively troubleshoot the home set-up, diagnosing and hopefully enabling the customer to fix any problem with the set-top boxes and other home equipment.

Two Recent Pieces on the Growth of IPTV

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

First, according to research firm Ovum , cable will continue to lead the global multi-channel TV market over the next 5 years; growing at a compound annual growth rate (CAGR) of 3% to reach 573M households by 2015. The forecast includes hefty contributions from digital terrestrial TV (DTT) and satellite which they expect to grow at average annual rates of 18% and 10% respectively reaching 211M and 419M households. Interestingly, over the same period, PTV will grow at a CAGR of 24% to reach 109M households for 8% of the total market. Not bad growth for a sector that didn’t really exist a couple years ago.

In the US (as you might expect) cable will continue to lead however it will lose about 10% of its current 60M households as “IPTV and internet-based alternatives continue to steal market share”. Jonathan Doran, author of the report, commented that “This is the continuation of a decline that’s already begun as households subscribing to cable dropped by four million between 2007 and 2010. This trend towards canceling subscriptions, or ‘cord cutting’ has arisen due to a combination of the economic downturn and the growing availability of attractive low-cost or free digital terrestrial and internet-based options”. I don’t think you call switching from a cable provider to an IPTV servioce provider “cord cutting” and since Ovum expects global pay-TV revenues to grow by nearly 40% I wonder where they are going.

Speaking of which, AT&T, the largest U.S. IPTV television provider (and HomePNA board member) recently announced that U-verse just had its best quarter of the year - citing the second consecutive quarter of year-over-year wireline consumer revenue growth - significant in view of the continued decline in traditional voice (POTS) service. U-verse TV saw a net gain of 246,000 reaching nearly 3M subscribers.

Notably the multi-service trend continued with over 75% of U-verse TV customers receiving triple- or quad-play services from AT&T (the average Revenue Per User (ARPU) for U-verse triple-play customers over $160). AT&T's has a huge footprint and U-verse can now reach over 27M residences.

3Q Results for Verizon FIOS and AT&T U-verse

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

Interesting TelcoTV results reported by market monitor FierceIPTV which recently reported on AT&T’s  and Verizon’s 3Q results.

"AT&T said revenue and profits were up in the third quarter, driven by wireless growth and the continued strength of its U-verse business…with 236,000 new U-verse subscribers” and the “first year-over-year growth in wireline consumer revenue in more than two years.” ARPU (Average Revenue per User) for U-verse customers was about $160 indicating the high percentage of U-verse customers selecting triple-play and quad-play services.

Verizon’s results - not so great as “third-quarter earnings dropped 25%, as wireless subscriber growth slowed and landline operations struggled to make a profit. The company said its FiOS TV service continued to add customers, with 204,000 net additions, bringing its total subscriber base to 3.3 million…its largest net quarterly increase in FiOS customers in more than a year.”

Gary Schultz, principal of market analyst firm MRG commented that they are expecting U-verse to pull ahead of FiOS in 2012 and stay number one worldwide in IPTV subscribers through 2014. Gary noted that Verizon still enjoys a lead due to its earlier introduction. If you recall, Verizon picked cable MSO technology for FIOS (delivered over FTTH) which gave them shorter time to market and broadband access speed bragging rights but saddled them with TV technology that was not IP based. Gary expects the gap between AT&T and Verizon to continue until Verizon can upgrade its network to a true IPTV network, which will be costly and take time.  He also notes reports of AT&T’s aggressive marketing efforts.

I’ve heard reports of aggressive marketing too and my guess is that this, combined with AT&T’s larger customer footprint, will continue to fuel the growth.

Where’s the FCC's AllVid Going?

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

When I wrote back in May about the FCC’s AllVid NOI, I claimed that it would make “them more like us”. Why, you may be wondering, is that a good thing and does he have any idea what he is talking about? Good questions. Well it so happens, I did file a comment on behalf of HomePNA (to see the comment go to the FCC’s Electronic Comment Filing System, plug in docket number 10-91 and the name of the filer - which in this case is HomePNA).  In my humble opinion, we raised pithy and thought provoking issues that need to be addressed if the FCC decides to proceed with the proposal.

If you look at the AllVid comments you might see some common themes -- like don’t mandate technology, let the market decide, technology moves quickly, and of course, if the Commission does decide to move forward with the AllVid proposal, please select …. (you get the idea).  HomePNA’s comments were mostly based on the lessons we’ve learned providing home networking equipment for telco IPTV-based television service. Quoting from the Comment, “there is a very close correspondence between the IP/home networking architecture that telcos currently deploy for IPTV and the “second configuration home gateway” architecture proposed in the Notice. The major difference between the two is the addition of the AllVid adapter” (check it out, it’s on page 19). True enough but, to be honest, the FCC’s proposal is a lot more challenging.

Think about it. When a service provider (called a Multichannel Video Programming Distributor or MVPD in the NOI) installs a home network they most likely understand the application and requirements. They may have done extensive testing of the available technologies and probably have a good idea of the other services running on the wires. They may even have selected a technology like HomePNA that supports remote management and diagnostics. In the AllVid proposal the MVPD interface (the AllVid adapter) is moved to the edge where it becomes a node on the home network– so how does the MVPD know that the home network is capable of carrying the video traffic?

Well the FCC could mandate technology but this hasn’t worked out so well in the past. It could establish basic requirements but this also has shortcomings since technology tends to moves forward. Face it, new applications are invented everyday.  And there are some really good home networking technologies available today and more on the way (and after those there will be more even faster ones). These are all pretty robust technologies, at least in demo rooms. Marketing claims aside, all home networks are subject to house construction, the condition of the wiring and connectors, the correct installation of the equipment, etc. If you don’t believe me, ask the installers. There’s a reason that service providers – IPTV, cable and DBS - do the installations themselves (and it's not because they want to). There are solutions to this and other issues.  I think they will be adopted over time and it's important that they are.

TelcoTV Picks up Some Steam

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

AT&T had a good quarter adding 209,000 new U-verse TV customers to reach a total of 2.5 million. U-verse now passes 25 million living units (that is, the number of residences that AT&T can provide U-verse service to with minimal additional effort).  The numbers don’t tell the whole story since the Average Revenue per User or ARPU for IPTV customers is up as well.

So what’s the future hold for AT&T? The Multimedia Research Group (MRG) is forecasting AT&T’s U-verse to be 3.2 million subscribers in 2010 growing to almost 9 million subscribers in 2014; surpassing Verizon FIOS as the leading U.S. telco TV service in 2012.

Well there may be another contender. Fierce Telecom reported that CenturyLink has gotten U.S. antitrust approval for its merger with Qwest (the deal still needs to be approved by the FCC and Qwest's shareholders). Merged, CenturyLinkQwest would be the third-largest U.S. wireline carrier with over 17 million access lines and 5 million broadband customers across 37 states (with lots of them getting service over VDSL and fiber).

One of the advantages of IPTV is that, unlike cable and DBS, an IPTV service provider only needs one main head-end. With CenturyLink already offering IPTV to customers, the effort required to add Qwest’s broadband customers to their TV service should, to a large degree, be incremental.

Anyway, with AT&T and CenturyLink both deploying HomePNA home networking enabled CPE equipment for their IPTV services, it’s all good news for HomePNA equipment manufacturers.

What is AllVid and is the Set-top Box Really Dead?

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

If you follow TVs and set-top boxes (and who doesn’t) you’ve probably seen articles about AllVid, the latest brainchild of the FCC. The articles often refer to an April 29 report from IMS Research “FCC Likely to Ban the Pay-TV Set-top Box in Favor of DLNA & DTCP-IP-Powered “AllVid” Devices”.  Wow, should I be worried?  Why does the FCC want to take away my set-top box? 

Well this isn’t the first time the FCC has tried to increase competition by opening up the set-top. As Stephen Froehlich, senior analyst for IMS and author of the report writes, “The FCC views the new effort as a revision to its previously-failed efforts to create an open market for set-top boxes as mandated in Section 629 of the Telecommunications Act of 1996”.

So what’s going on? The FCC announced April 21 , that it has issued a Notice of Inquiry (NOI) and a Further Notice of Proposed Rulemaking (FNPRM), as recommended in the National Broadband Plan, with the stated purpose of increasing innovation and consumer choice in the video device marketplace. Sound familiar? The FNPRM attempts to “streamline” (their words) the less than wildly successful CableCARD. This is a short term solution and not all that interesting, at least to me. The NOI is all about AllVid and a different story altogether. From a HomePNA perspective, making “them” more like “us” is a good thing.

If you are wondering what an NOI (such as AllVid) is, and why the FCC feels the need to use so many acronyms, read on. When the FCC intends to make a rule they may issue an NOI - essentially a trial balloon - to collect input from potential stakeholders. The NOI specifies a deadline which usually 60 days from publication in the public registry. An additional 30 days are usually allowed for reply comments. If the FCC decides to move forward it issues a Notice of Proposed Rulemaking (NPRM) which, according to Wikipedia, is “a public notice issued by law when one of the independent agencies of the United States government wishes to add, remove, or change a rule or regulation as part of the rulemaking process”. The NPRM may result in the FCC issuing a Report and Order (R&O). An R&O may be amended using the same process.

AllVid is seeking a new path to opening up the pay TV set-top box. According to IMS’s Froehlich, however, unlike the original CableCARD “this time instead of fighting an uphill battle, the commission is in the much better position of riding a wave that was already forming. DLNA & DTCP-IP have proven to be attractive to US pay-TV operators as a way to inexpensively roll out multi-room DVR services”. I see AllVid bringing a bunch of significant benefits to competitive home networking technologies such as HomePNA, service providers and others. What are those benefits. I would love to discuss them and get further into the AllVid proposal but my typing finger is getting tired and the hour is much too late so it will have to wait for another day.

Coexistence on Powerline – Making the Right Moves

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

You probably heard that the P1901 draft just passed a sponsor ballot. Good news! The developers deserve a lot of credit for achieving a major milestone after five years of hard work. Like the ITU, the IEEE follows a multistep approval process and the group now has to sort through and resolve a stack of comments and then on to the next ballot.

One key to the progress is a coexistence mechanism that allows different powerline home networking technologies to share the same wires. This doesn’t mean they talk to each other. The coexistence mechanism, known by the catchy moniker of Inter-System Protocol or ISP, uses Time Division Multiple Access (TDMA), a proven medium sharing technique. TDMA let’s the different technologies share the wire by creating separate non-overlapping time slots for each one.

The IEEE along with HomePlug and HD-PLC are taking the next step and jointly developing a certification program for ISP. Where does that leave G.hn which also operates over powerlines (as well as coax and phone wires)? The ITU is working on a similar standard - only it’s called G.cx (for coexistence I guess). When it’s complete, G.cx should be identical to ISP allowing G.hn to coexist on the same wires with other home networking technologies.

Does this mean they will all provide the same throughput? Nope. The technologies are significantly different and will probably perform differently on the same wires. Since they share the wire, the maximum speed of each technology will be lower than if it was the only network present so throughput may be a concern – especially for demanding real time applications such as IPTV. As they say, time will tell and the market will decide, however at least we can hope that this path will lead to products that will at least work in a mixed technology environment and that may be good enough.

Net Neutrality Undone or Unneeded

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

With all the energy devoted to IPTV, OTT and the other neat stuff that is driving innovation in home entertainment (and home networking), you, like me, probably took net neutrality for granted. Not so. The US Court of Appeals has ruled that the FCC lacks the authority to require broadband service providers to treat all Internet traffic flowing over their networks the same. Apparently Congress hasn’t passed a law giving it to them.

One possible solution, according to the free press, is that Congress will pass laws allowing the FCC to regulate broadband service providers. They go further to speculate that “in the meantime, the FCC must use the tools at its disposal - including reclassifying broadband transmission as a telecommunications service - to protect consumers from anti-competitive behavior”.

Verizon, Time Warner, AT&T, NCTA and others call that idea a "profound mistake" that will lead to years of litigation and could, according to the Progress and Freedom Foundation, “send investors running and thereby undermine all the effort the FCC has put into developing its National Broadband Plan”.  I wonder if it's too late to apply to law school.

InStat Finds Viewers Want Both OTT and Pay TV

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

And in today’s revelation  from market analyst firm InStat, “Consumers want the best of both worlds: Pay TV and Over-the-Top Video,” says Keith Nissen, In-Stat analyst. “Nearly 40% of consumer broadband household respondents want a combination of linear TV and on-demand TV, and nearly three quarters want to acquire all their video content from their pay TV service provider.

Wanting both doesn’t surprise me. How else could I watch MSNBC, FOX News and vintage Spenser for Hire episodes? I’m guessing that getting all through your pay TV service provider could - at least in theory – start to address the convenience factor. Thanks to advances in storage, access, and home networking technologies solutions exist. If only the business casees would catch up.

AT&T has a good Uverse Quarter. TELUS offers Microsoft Mediaroom

By Rich Nesin, General Manager and Resident Philosopher, HomePNA

Last Friday Fierce IPTV observed that AT&T had a good quarter Uverse-wise - 248,000 net adds for 2.1 million total subscribers - although they also noted at the same time that Verizon saw its lowest quarterly additions in years for FiOS. Living here in Comcast land you see a lot of Comcast commercials claiming they are cheaper than FIOS. Maybe it’s true. Fierce commented today that a Strategy Analytics study found that around 68% of U.S. pay TV subscribers are willing to switch providers in exchange for a 20% lower price. However, … “the study also notes that a not-modest 33% of telco TV/IPTV subscribers would switch away or back again--despite a 95% overall satisfaction rating among telco TV customers.  Wow.

So the telcos have their work cut out; not just winning new subscribers but keeping them. Speaking of which, TELUS, a leading national Telco in Canada, announced availability of new TELUS TV service, powered by Microsoft Mediaroom, in Western Canada. If you are new to Mediaroom, which has been proven in millions of installations, it's IPTV middleware that features fast channel change, whole home PVR, follow-me TV, and other goodies designed to give IPTV that edge in customer satisfaction. Like AT&T's Uverse, TELUS uses HomePNA for the in-home distribution of the IPTV streams to set-top boxes enabling TELUS to connect up to six TVs in a home, with multiple HD streams.

Well maybe one day I’ll be lucky enough to get TelcoTV – not today but someday - someday being the day that Verizon finds my house in their system. I keep telling them to ask the Verizon Wireless guys. They know where my house is; they’ve been sending me a bill for wireless service for years. I know they found me once because the NID is still attached to the back of the house.  Maybe someday ....