Reuters has a great discussion about IPTV and what the near future might hold for anyone delivering IPTV services across their network.

As quoted in the article,

“In Washington, Federal Communications Commission Chairman Michael Powell said on Sept. 15 that almost every major U.S. phone company he has talked with is working to develop TVIP offering.

Consultancy Multimedia Research Group estimates there will be 15.6 million TVIP viewers by 2007, up from a few hundred thousand today.”

And as quoted from further down in the article,

“In Washington, Federal Communications Commission Chairman Michael Powell said on Sept. 15 that almost every major U.S. phone company he has talked with is working to develop TVIP offering.

Consultancy Multimedia Research Group estimates there will be 15.6 million TVIP viewers by 2007, up from a few hundred thousand today.”

So, what happens to our business models when each one of our customers starts demanding multiple 2Mbps stream of continuous bandwidth? This removes the oversubscription ratios that we have always been able to count on as for profit. As this technology rolls out we will need to be able to deliver 2Gigabits worth of connectivity for 100 users streaming IPTV and that is based on there only being one TV stream going in each household.

This is actually a two tiered problem for us because not only do our networks need to be capable of delivering huge amounts of bandwidth to the end user but also we will need to be able to profitably sustain a huge connection to the net.

This is what Verizon is releasing for press on their Fios service. Now, granted we will not be seeing this rolled out everywhere in Verizonland next year or even the year after. In fact, in many places I wonder if we will see this happening in any of our lifetimes. But the businessperson that does not keep careful track of what the competition is planning could be the employee of that very same competition in their near future.

I ran across this great article on ISP-Planet written by Dave Burstein (of DSLPrime.com) discussing the subject. Dave points out that the next generation of service from the ILEC is setting the bar at 30Mbps.

Where I see this as becoming an issue is that every single one of us depends on oversubscription as a calculation for determining profit. As Internet usage is bursty by nature we have been able to cram 100 +/- users on to a T1 pipe. However, as the more sophisticated user start to demand such services as IPTV, VoIP and videophone or video conferencing we will no longer be able to do that.

In fact, what good will an access point that can only deliver 70 Mbps be if we will only be able to service a couple of dozen users from it?

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