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Wednesday, October 24, 2007

AT&T + Satellite Buy = Huge Endorsement of BSkyB Model

Rumours are flourishing across the pond that the next course on the menu for the 800lb gorilla of world telecoms is a satellite broadcaster (Echostar, DirectTV or both)

Personally, I think this is a huge endorsement of the BSkyB model triangulating Downstream Satellite Broadcasting, a broadband path for interactive and long tail content and a fancy featured Home Gateway with a big fat local storage array.

It also is huge nail in the coffin of IPTV which apart from the being the most over-hyped technology since WAP features a single channel being served with switching within the network. Verizon, another US-based 800lb gorilla, when faced with a choice of their architectures on their FIOS network decided to broadcast all channels on a dedicated fibre wavelength. It is noticeable that when BT is faced with a choice of architectures on their FTTH experimental networks also follow the Verizon path and not the current architecture of their BT Vision service.

Which brings us to the real question: which is the better solution FTTH or the hybrid BSkyB triangulated dsat/dsl/stb solution?
  • In terms of cost, I suspect the BSkyB model wins hands down.
  • In terms of speed to deployment, I also think the BSkyB model win hands down.
  • In terms of universal service, FTTH will provide a much more consistent service, however is much more expensive on a per home basis and therefore runs the risk of price discrimination in a much more extreme hit to pocket than the current unbundling regime.
  • In terms of upstream capability, FTTH will absolutely crucify the BSkyB model. It will be interesting to see across the world how FTTH operators leverage this capability, because it not only puts the BSkyB model to shame, but also the cable model. However, everything depends on the applications...
  • In terms of UK political acceptability – anything bar a model with “BSkyB” in the title seems to be preferable these days.