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The January 24, 2005 Issue Provided by System Dynamics Inc.
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CES 2005--SBC Goes Big for Video

SBC's Chairman Ed Whitacre must have taken some really strong medicine to get over his long-time allergy to SBC's offering video. From his keynote speech and SBCs announcments at CES, it's hard to believe that this is the company that discontinued every video deployment it ever encountered (including ones acquired through the purchases of Ameritech, SNET and Pacific Telesis).

While it is difficult to predict how a telephone company will prove successful in the very different world of video entertainment, we're taking SBC quite seriously because of the two simultaneous and apparently well-planned fronts they are attacking on.


The 2Wire/Echostar Play

SBC/Dish/2Wire Media Portal --> Click for larger picture2Wire Home Portal in SBC demonstration area --> Click for larger pictureFor customers not yet served by SBC's rebuilt fiber plant, SBC is leveraging its existing relationships to provide a service offering the best of satellite and the Internet combined in a way that looks seamless to the customer. That's where SBC's relationships with both Echostar and 2Wire come in. SBC formed a joint venture with 2Wire Inc. to deliver a home entertainment service that integrates satellite TV programming, digital video recording, video on demand, and Internet content via a new set-top box using the SBC Yahoo! user interface. This box is based on the 2Wire Media Portal, which we first wrote about in Integrating the Missing Piece: 2Wire Does Video (BBHR 4/26/2004).

Customers will be able to schedule their digital video recorder (DVR) remotely from any Web-connected computer through the SBC Yahoo! user interface. A future enhancement will allow remote access through Cingular Wireless phones.


SBC U-verse: The Fiber Story

Over the next 3 years SBC plans to spend over $4B to build a fiber to the neighborhood structure. At CES, Whitacre announced SBC U-verse as the brand for its suite of IP-based products and services set to launch in 2005, including integrated next-generation television, super high-speed Internet access and Voice over IP services. U-verse will ride on SBC's Project Lightspeed fiber initiative to deploy fiber to 18 million households across 13 states by the end of 2007.

The U-verse suite includes Unified Communications, combining wireline and wireless voice mail, e-mail and faxes into one mailbox. It will also include a consumer-based VoIP service that the company plans to unveil in the first quarter of 2005.

In his opening speech Bill Gates shared the stage with Lee Anne Champion, SBC's VP of IP Services, who highlighted IPTV as a new way to watch television. SBC's IPTV uses Microsoft TV's IPTV Edition software. The audience was especially impressed with Champion's demonstration of IPTV's instant channel changing capability--which appears instantaneous--unlike the time delays with satellite or digital cable.

Hemang Mehta demonstrates SBC's IPTV --> Click for larger pictureSBC demonstrated their new technology and services in a specially designed area set up to mimic real-world settings--including a living room, bedroom, home office, gaming station, coffee bar and golfing green. In the IPTV demo, Microsoft's Hemang Mehta demonstrated a variety of video features such as multiple, viewer-defined camera angles for events like baseball games, and the ability to show several games from various channels in multiple separate windows. The service included such basics as a program guide, Video on demand, and digital media adapter functions for showing digital pictures on your TV screen.

Although the major story of SBC's demonstration area was video services, an underlying story focused on the integration of multiple SBC voice, data, video and wireless services. SBC showed interactions of wired and wireless voice mail, home networking of PCs and TVs, caller ID on the TV screen and programming a DVR through a wireless phone from Cingular. Through their demonstrations, SBC showed that future plans to converge TV, phone, wireless, and the Internet are much more than rhetoric in a CEO's speech.

( www.sbc.com ) ( www.dishnetwork.com ) ( www.2wire.com )