Winner: The Battle For Broadband

He Likes to Watch: Gerhard Mueller, venture chief for broadband providers at Swisscom AG, watches tv for a dwelling, after which makes it higher. The Swiss telephone firm’s Internet Protocol tv service will probably be rolled out in mid-2005.
Photo: Arsene Saheurs

Switzerland is known for its neutrality. It sat out each world wars. It’s a refuge for worldwide finance. It was nearly the house of the United Nations. The total nation, it generally appears, is devoted to smoothing ruffled feathers and averting battle.

And but, if all goes nicely, someday in 2005 Switzerland would be the entrance line in one of many cardinal enterprise wars of the twenty first century—a battle royal for telecommunications supremacy between cable and phone firms.

In the unfamiliar function of the upstart is 152-year-old Swisscom AG, the Bern-based Swiss telephone firm. Like all the opposite privatized European nationwide carriers, it hasn’t needed to face any competitors for a lot of its historical past, nevertheless it’s able to now. Armed with servers, purposes, and home equipment made by a number of the largest {hardware} and software program retailers on the planet—Microsoft, Hewlett-Packard, and Thomson—it’s marching out to satisfy the enemy on the unfriendliest doable turf: the supply of tv programming.

In the meantime, its foremost adversary—the nation’s largest cable supplier, Cablecom GmbH, in Zurich—has additionally been sending squadrons deep behind enemy strains, loaded with a number of the newest in telecom know-how: an Internet-based telephony service.

The two firms already go head-to-head as rival suppliers of high-speed Internet entry. Now both sides is striving to finish a package deal of choices often called the “triple play”: voice, knowledge, and video—that’s, telephony, the Internet, and tv. The triple play can triple per-customer income, bringing in as a lot as US $150 per 30 days from some households. And it reduces “churn,” the infinite migration of consumers from one service supplier to a different, and with it the big expense of changing departing accounts with new ones. When the mud settles a few years from now, it is going to be straightforward to inform the winner. The victor would be the firm with extra clients—and the larger share of annual income from the three Swiss client providers, every value a few billion {dollars}.

The identical fundamental battle will probably be waged in nations massive and small across the globe. Indeed, the important thing weapon on which the Battle of Switzerland will flip, a software program platform referred to as Internet Protocol tv, or IPTV, is already being evaluated in analysis labs in India, Canada, the United States, and Italy.

But solely in in any other case placid Switzerland has IPTV been put into dwelling rooms as nicely. Swisscom’s trial is essentially the most critical take a look at anyplace of a telephone firm’s potential to ship video and win clients from cable. In different phrases, solely within the land of civility are clients being informed to decide on between a cable supplier and a phone service for what’s the most revenue-intensive mode of communications we’ve got: tv. Hanging within the stability is the longer term course of the telecommunications trade, and that of a giant chunk of the leisure world as nicely.

For Microsoft Corp., the Redmond, Wash., firm behind IPTV, getting a foothold within the manufacturing and distribution of digital audio and video is important to escaping the confines of the non-public laptop software program world it dominates. There are different methods of delivering video throughout the Internet than IPTV, and there’s at the least one different equally adept encoding scheme, MPEG-4, however solely Microsoft has written a single software program suite that has every little thing a telephone firm must get into the tv sport.

A enterprise warfare, like an actual warfare, is gained within the trenches, one skirmish at a time. And whereas the boardroom generals transfer cash and personnel round like chess items, it’s usually the lieutenants who maintain the keys to victory and defeat. One such officer is Gerhard Mueller, venture chief for broadband providers at Bluewin, a Zurich-based model of Swisscom’s that’s the nation’s largest Internet service supplier.

In mid-September, after I visited Bluewin’s workplaces in an up-and-coming business district west of Zurich’s modern downtown, Mueller wasn’t pondering the long-term way forward for telecommunications. He was worrying concerning the subsequent stage within the trial. At the start of the month, Bluewin had given the IPTV software program and {hardware} to 80 households—60 firm workers and 20 further “pleasant” subscribers. Mueller and his colleagues had a few weeks earlier than a key milestone. On 1 October they might determine whether or not to go forward with plans to roll out the tv service, 17 days later, to a further 600 or so households.

Mueller’s instant downside was whether or not to maneuver the newest model of Microsoft’s set-top-box software program, nonetheless in growth, onto the IPTV community. In the lab, the brand new model crashed quite a bit much less usually than the earlier one, which Microsoft had despatched Bluewin in August. But have been there any hidden bugs he hadn’t discovered? Not transferring the software program to the manufacturing community would possibly go away him with out sufficient knowledge for the massive rollout resolution on 1 October, in flip jeopardizing the schedule of the trial as an entire.

The 18 October start-up date for Bluewin’s wider market trial of some 600 households had been publicly introduced; individuals had already signed up, ready to offer the telephone firm actual Swiss francs for an actual tv service. Any delay would have been an infinite embarrassment. But so would rolling out a flawed service. That’s a lesson that didn’t have to be discovered firsthand.

Three months earlier, in June, on the warfare’s different foremost entrance, Bluewin’s principal competitor, Cablecom, made its voice-over-IP phone service out there to the general public at massive, after 16 months of affected person testing. A profitable service would full Cablecom’s triple-play providing, vastly threatening one among Swisscom’s basic companies, residential telephone service. By largely bypassing the common telephone community, Cablecom might lure Swisscom’s clients away with decrease costs.

Cablecom signed up 1000’s of consumers inside days, however complaints have been quite a few, compounded by lengthy delays in customer-service queues. It took the corporate solely a month to type out its issues, however the dent within the service’s popularity remains to be seen to the image-conscious Swiss.

The Bluewin tv engineers are decided to do higher. They hope, in reality, to enhance on the tv expertise—with a greater program information, for instance. And their chosen set-top field can do some issues that the majority others can’t, most notably storing applications for later viewing.

Those added options are necessary, as a result of Bluewin’s trial TV providing gained’t be pretty much as good as Cablecom’s tv service in another methods. It gained’t have as many channels, for one factor. Nor can viewers watch totally different exhibits on two televisions in the identical family.

Television has all the time been the issue little one in telephone firms’ makes an attempt to supply the triple play. They and their cable rivals are nicely positioned for the primary two components, telephony and broadband Internet. But the meat of the triple play, data-rich video programming, can’t move via the telephone firms’ slender copper capillaries. Here, after all, the cable firm networks excel. Their largely optical-fiber networks can feed huge quantities of video via last-mile coaxial cable to a whole lot of tens of millions of households all over the world.

And till just lately, that’s all they did. But within the late Nineties, with the Internet gold rush on, cable firms spent billions of {dollars} to show their programs into digital networks. Each neighborhood grew to become, primarily, a high-capacity local-area community. The a whole lot of tv channels which can be a cable system’s raison d’être use most of that knowledge capability. But what’s left over remains to be as quick as or sooner than most telephone firms’ digital subscriber line (DSL) providers.

So Swisscom’s pitch to shoppers is as audacious as Hannibal’s crossing of the Alps. Spurred by some superb capabilities of Microsoft’s multimedia software program, Swisscom proposes to supply a video service in some methods higher than cable, regardless of having to squeeze it via these slender copper pipes.

On 18 September, Mueller and his colleagues determined to maneuver the newer model of Microsoft’s set-top-box software program out of the testing lab and onto the machines utilized by the 80 households making an attempt the service. Sure sufficient, the customers discovered their set-top containers crashing much less, though nonetheless usually sufficient to be annoying.

A daily set-top field doesn’t crash in any respect, after all, as a result of it’s a lot easier than those used within the IPTV service, that are actually full-featured computer systems. The IPTV set-top containers run Windows CE, a model of Microsoft’s ubiquitous working system designed for client electronics units. In addition, they play tv exhibits and different media recordsdata and run Microsoft’s personal program information software program. They work together with media servers arrange by Bluewin throughout a complicated knowledge community. The set-top containers are as totally different from their cable tv cousins as a PC is from a dumb terminal of days passed by.

The IPTV service is constructed on high of Bluewin’s DSL system, which, in flip, operates via the identical bodily community as Swisscom’s phone system. In a DSL system, packets of information move out and in of a house laptop to a telephone system system not more than 5000 meters away, referred to as a DSLAM (digital subscriber line entry multiplexer). The DSLAM aggregates knowledge packets from plenty of customers earlier than shuttling them into the telephone firm’s spine community, and from there via two separate 10-gigabit-per-second interconnection factors in Zurich to the Internet as an entire. It additionally divides up the varied indicators coming from a family. Regular phone service goes out to the general public phone system, whereas video and DSL knowledge exit to the Internet [see diagram, “I Want My IPTV”].

In the IPTV system, tv programming is first collected in a particular knowledge heart. Swisscom’s is positioned at a facility in Olten, 50 kilometers west of Zurich, owned by Swiss Broadcasting Corp., Switzerland’s nationwide tv and radio firm. Servers there take tv programming from many sources—dwell broadcasts and cable exhibits, French motion pictures, a German model of the United States’ Cartoon Network, channels licensed from Italy, and extra. They then encode it and ship it out to off-the-shelf servers operating Microsoft’s IPTV software program at a Bluewin knowledge heart in Zurich. Those servers are in fixed communication with customers’ living-room set-top containers, by way of the DSLAM.

To perceive the magic of Microsoft’s IPTV —the best way it replicates and even enhances the cable tv expertise, over a pair of skinny copper wires—let’s first keep in mind how atypical broadcast tv works. An analog tv set incorporates a tuner designed to obtain a 6-megahertz-wide chunk of bandwidth for every channel of programming.

For cable providers these days, at the least 550 MHz of video programming gushes via an optical-fiber community into each subscriber’s set-top field. Starting from services just like the one in Olten, broadcast indicators, video from on-demand servers, and programming from different sources all move via a neighborhood midpoint just like the DSLAM. Then they’re handed on to a coaxial cable operating out to the house. The 550 MHz is sufficient spectrum for as much as 91 channels of programming. A set-top field, with its personal tuner, sits on the finish of the radio-wave fireplace hose; the viewer makes use of it merely to choose. One 6-MHz channel is tuned in; the opposite 544 MHz are ignored.

Digital applied sciences change the image solely in its particulars. Using the Moving Picture Experts Group’s MPEG-2, the tv trade’s decade-old however nonetheless dominant digital encoding customary, greater than 10 instances as a lot content material will be pushed via the pipe—over 800 channels of programming. Again, the viewer picks one channel and the set-top field disregards the remaining. When the viewer flips the channel, the tuner merely modifications to a special frequency band. Any a kind of MPEG-2 channels might be transmitted in actual time—“streamed,” in trade parlance—at a number of megabits per second. Such a knowledge price is inside the vary of a broadband knowledge service.

So a telephone firm like Swisscom can provide a cablelike tv service throughout a DSL community. There are some important challenges, however the IPTV service has cracked them. The first is to compress video higher than MPEG-2 does. An MPEG-2 stream would wish a velocity of 5 to six megabits per second. Some variations of DSL are able to that and extra, however Swisscom’s, close to the low finish of the continuum with a obtain knowledge price of about 2 Mb/s, isn’t one among them. Microsoft’s video-encoding software program, Windows Media 9, is about 3 times as environment friendly as MPEG-2, bringing the video stream nicely inside Swisscom’s vary.

Then there’s the single-channel downside. When one channel of digitally encoded and compressed video programming is flowing via a telephone wire, all the opposite channels are usually not—in contrast to cable TV, the place all of the channels move to the family directly. For a low-data-rate model of cable tv akin to IPTV, a channel change is one thing of a disaster.

That, then, is the only most superb factor IPTV does: when the channel-surfer at dwelling begins clicking away, the set-top field relays that reality to the info heart, kilometers away. The server there stops sending the previous channel choice and sends the brand new one. And it does all that in lower than 200 milliseconds, so quick that the consumer has no concept that the programming wasn’t there within the set-top field all alongside, ready for its probability to leap onto the display screen.

Transmitting knowledge throughout an Internet-like community in a fifth of a second isn’t a giant deal—even e-mail will be despatched and obtained that rapidly, generally. Doing it with cumbersome video knowledge, although, and doing it reliably sufficient to create a tv expertise that may be watched for hours on finish, is one thing that took a few of Microsoft’s high software program engineers a few years to develop.

Even the magicians at Microsoft can do solely a lot, although. There’s a small delay between when a broadcaster sends out a present and when it’s displayed in the lounge. That delay, brought on by the necessity to compress the digital sign earlier than it goes out, must be stored to a minimal for dwell programming, akin to a sports activities occasion, nevertheless it’s unavoidable, says Ed Graczyk, advertising and marketing director of Microsoft’s TV division.

Whenever media is streamed, a further delay, referred to as buffering, is launched to cover transmission glitches. When the info move between server and vacation spot is halted, the native media-playing system attracts from the buffer. If knowledge begin flowing once more earlier than the buffer runs dry, there’s no interruption so far as the viewer is anxious. The system pumps out knowledge once more, sooner than it’s performed, constructing the buffer again up. For saved content material, akin to on-demand motion pictures, the bigger the buffer, the higher. But for a dwell present, the buffer must be as small as doable, as a result of individuals like to look at in actual time.

For IPTV, each out there channel needs to be buffered, since there’s no strategy to know upfront what channel somebody will swap to. “It’s not simply buffering the neighboring channels,” Graczyk says. “What if the viewer hits 1-1 on the distant management?” He gained’t say something extra about how Microsoft maintains so many buffers regardless of the restricted bandwidth of Swisscom’s DSL service. “It’s lots of patent-pending stuff,” he says. “At conferences, our rivals come over and ask, ‘Exactly how do you do this?’ ”

Watching TV in Bluewin’s Offices is in reality just about the identical as again dwelling in New Jersey, besides, after all, that the applications are in German, and my front room doesn’t have an attractive ninth-floor view of the Zugerberg and Rigi mountains.

Mueller directs my eyes again to the tv set and eagerly factors out some refined variations. “Click on the information, the menu button,” he says. “We can have picture-in-picture, even two of them, if we wish.” I dutifully press the suitable button on the distant. The channel we have been watching remains to be broadcast, however it’s ghosted within the background, letting the information replenish the entire display screen on high of it. About a half-dozen channels are listed within the display screen’s higher half [see illustration, “A New Set-Top Box”]. Below that, the highlighted choice is described in additional element, together with a big thumbnail video exhibiting what’s on that channel proper now, one thing that the information for my dwelling cable service doesn’t do.

A New Set-Top Box: Swisscom’s IPTV service makes use of a set-top field (above), made by Thomson SA. Sitting atop the field is a mixture DSL and Wi-Fi router, made by Netopia Inc. To their left is a tough drive capable of document 150 hours of programming.
Photo: Arsene Saheurs

“On a daily set, picture-in-picture wants two tuners,” Mueller explains. “Two pictures-in-picture would wish three. But right here, it’s all software program. No costly tuners.” The three footage he’s speaking about are the present channel (ghosted), this system information, and the thumbnail of one other channel. And it’s fairly exceptional. No must learn a number of phrases of textual content to know what’s on the opposite channels, as a result of with the thumbnail you’ll be able to see it. Picture-in-picture isn’t totally different from having two laptop applications in your display screen directly—the very thought for which Microsoft named its flagship software program “Windows.” But seeing it with streaming video as a substitute of a static spreadsheet, on a tv display screen as a substitute of a pc show, is riveting at first.

Software-based picture-in-picture additionally makes it simpler to indicate soccer-obsessed sports activities followers thumbnails of the a number of digicam angles they’ll select amongst. And the Bluewin program information (a spreadsheet, actually) will be organized horizontally or vertically, with the channel names throughout the highest and the time-of-day axis on the aspect, or vice versa.

Software wants {hardware}, after all. The set-top field is made by Thomson SA, of Boulogne, France, the patron electronics big that 17 years in the past purchased RCA, a venerable U.S. client electronics label. Known because the Thomson IP1001 in Europe and the RCA IP1000 in North America, its television-playing software program relies on Windows Media 9, the identical encoding know-how present in Microsoft’s laptop desktop program Windows Media Player. The set-top field incorporates a 933-MHz Pentium III, with 64 megabytes of random-access reminiscence and 64 MB of read-only reminiscence, of which the Microsoft media software program takes about 10 MB.

In reality, the set-top field is known as a digital media participant, hidden beneath a cloak of cable-TV-like respectability. Also often called multimedia dwelling facilities or digital hubs, such home equipment have been, a number of years in the past, speculated to be the subsequent large factor in dwelling leisure [see “Digital Hubbub,” IEEE Spectrum, July 2002]. Media gamers can document, archive, and play again video and music; set up digital picture albums; and distribute digital media across the dwelling—all issues that the Thomson set-top containers can do, too.

Indeed, the set-top field comes with an exterior disk drive, used to document tv applications for later viewing. That functionality was made well-known by TiVo, however set-top-box producers have excessive hopes it’ll quickly be a ubiquitous premium function of cable providers. It’s not but provided by Cablecom, the big Swiss cable TV supplier, although, once more giving IPTV a much-needed leg up on the competitors. You don’t want a technician to arrange the IPTV service. Inside two cardboard cartons are the set-top field, an exterior arduous drive, a networking router, and every little thing else required, all the way down to an influence strip and the cables to attach all of it. The 80-gigabyte arduous disk can retailer 150 hours of tv programming.

The set-top field connects to an atypical tv in customary methods, utilizing a coaxial cable or an S-video cable, with its more and more familiar-looking pink, white, yellow, and black plugs. At the opposite finish, an Ethernet port and cable join it to a wi-fi router, which Bluewin additionally included within the package deal it shipped to every family within the trial.

The system’s connection to the skin world is the telephone line, naturally, plugged proper into the router, which is made by Netopia Inc., of Emeryville, Calif. The router can even function a wired hub, or a wi-fi one for an IEEE 802.11 dwelling knowledge community.

If you additionally order Bluewin’s broadband Internet service, that too flows via the telephone line into the router. The velocity of the whole connection is about 2.4 Mb/s, of which 1.8 Mb/s is required for video. The the rest goes to a DSL-like broadband connection.

For video service, the connection runs again to servers in Bluewin’s Zurich knowledge heart. There, computer systems run Microsoft’s multimedia server purposes, all aside from one key element, a video encoder, which is positioned on the Swiss Broadcasting facility in Olten.

For Bluewin, the video encoder has been a headache, one among a number of that make up an inventory of potential “showstoppers” that Mueller has drawn up and taped to his wall [see sidebar, “What Could Go Wrong”].

One of the gadgets on the showstopper checklist was stability, referring primarily to the behavior the set-top containers have had of crashing. In one respect, crashing is simply an annoyance; all a consumer has to do is flip the set-top field off and again on—rebooting it, primarily. We do this on a regular basis with private computer systems, however we anticipate atypical client electronics devices to be extra dependable. Because the containers’ stability has improved, Bluewin now considers that unlikely to cease the present.

Most worrying of all was the video encoder. The encoder harmonizes the heterogeneous mass of content material—that German-language Cartoon Network, and all the remaining—pouring into the top finish of the IPTV community in a hodgepodge of codecs. Swiss Broadcasting Corp. pre-encodes its programming, nevertheless it nonetheless needs to be was a knowledge stream in Microsoft’s Windows Media knowledge format that may move via different servers within the Bluewin community after which out to households. That’s the encoder’s job.

As the system was designed, video encoding could be performed by a devoted server provided by Tandberg, previously in Sweden, now primarily based in Southampton, England. Microsoft has its personal all-software encoder, however since encoding is finished in actual time and is computation-heavy, it’s greatest performed by particular {hardware}. Tandberg, which began working with Microsoft on digital encoding again in 2002—even earlier than the IPTV software program was written—takes Microsoft’s software program and primarily rewrites it so it’s suitable with different video-processing software program Tandberg has written and with customized digital sign processors and field-programmable gate arrays the corporate has designed for the duty.

Tandberg’s customized {hardware} and software program represent an encoding server with 10 to twenty instances as a lot processing energy as an atypical PC. Tandberg and Microsoft anticipate the {hardware} encoder to indicate a dwell soccer match with just a few seconds of delay—most of it the small quantity of buffering wanted for IPTV’s channel-changing magic.

But in Bluewin’s lab, the Thomson set-top containers aren’t correctly decoding the streams of information created by the Tandberg encoder. Until they do, Bluewin has to make use of Microsoft’s slower pure-software encoder on the server finish, operating on a generic Windows laptop outfitted with audio/video seize playing cards. Without the {hardware} encoder, in the event you hearken to the sport on the radio whereas watching it on TV, you’ll hear “Goal!” about 16 seconds earlier than you see the ball hit the web.

“In the tip, it’s all a giant software program venture,” a considerably weary Mueller says. But it’ll dwell or die as a alternative for the tv service that Cablecom and different cable suppliers have had 20 years to good.

Television à la Swisscom could also be a bit cheaper than Cablecom’s. The nationwide phone system that Swisscom inherited when it was privatized was, for essentially the most half, constructed and paid for way back, so IPTV has little of the infrastructure expense {that a} new cable system would have. And Bluewin and Microsoft say they’ll offer a greater tv expertise, with IPTV’s cleverly written program-guide software program and built-in private video recorder.

Bluewin can’t totally escape the issues of a start-up and the restrictions of copper wiring. In the trial, Bluewin is delivering primarily German-language content material, thus serving about two-thirds of the nation. The French- and Italian-speaking cantons must wait till the business launch.

Fortunately, a lot of the tv content material that Bluewin must compete with cable comes from a single supply, Swiss Broadcasting, at charges regulated by the federal government. In many nations, buying dozens of tv channels is a posh and nearly insurmountably costly enterprise downside. It’s the principle cause no U.S. telephone firm has run a buyer trial of a triple-play service—not even Verizon Communication Inc.’s much-publicized showcase all-optical-fiber community in Keller, Texas, even supposing fiber is the best medium for delivering video content material.

As it’s, Bluewin will provide 30 channels, about half as many as Cablecom, with fewer optionally available packages. “The trial will inform us how necessary that is,” says Michael Zumsteg, Bluewin’s head of broadband providers. “With the proper 12 channels,” his market analysis has proven, “we are able to have 80 % of what individuals watch. With 18 channels, 90 %.”

Bluewin additionally wish to provide a second IPTV stream into the family, in order that two TVs can present totally different applications. Cable suppliers can do this, as a result of all it takes is a splitter that divides the sign already flowing via the cable. But for IPTV, it will take twice the bandwidth, and Swisscom’s present DSL community isn’t as much as it.

The TV trade as an entire is being dragged, kicking and screaming, into the subsequent technology of digital programming: high-definition tv. And HDTV, with its vastly larger decision, wants massively larger knowledge charges. No quantity of encoding magic can compress these bigger digital video flows into Bluewin’s 1.8-Mb/s knowledge stream. Fortunately, DSL speeds are rising. Already, many DSL customers in Korea and Japan are seeing speeds of 20 to 30 Mb/s. Faster charges, 100 Mb/s and extra, are on the R&D horizon.

Nor will phone firms be without end restricted to the velocity of copper wires. Companies like Verizon and BT have began aggressive fiber-to-the-home applications. SBC, too, is upgrading its copper community and in mid-November introduced a 10-year, $400 million cope with Microsoft to supply IPTV within the areas it upgrades.

For Swisscom, although, the necessity for IPTV is instant. As the once-sleeping big awakens from its monopolistic slumbers, it should staunch the trickle of long-standing clients leaving for Cablecom’s voice-over-IP telephony service. On 18 November, Swisscom started its full 600-household trial of IPTV, a month later than it had initially deliberate.

The effectivity of sending a single invoice for voice, video, and knowledge makes the triple play compelling for patrons and firms alike. Swisscom wish to provide it right this moment. The IPTV trial is scheduled to wrap up someday this month. Before the tip of 2005, Swisscom will open the service to its tens of millions of consumers, and to its former clients, too. The battle royal has begun. Cable and phone firms all over the world are watching.

To Probe Further

Specific details about Swisscom AG’s IPTV venture is at Bluewin’s website, You can obtain a PowerPoint presentation concerning the firm’s triple-play providing of tv providers, telephony, and broadband entry from

Microsoft Corp. describes the complete vary of its television-related software program at

Cablecom GmbH, the big Swiss cable tv supplier, is at

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