TELECOM Digest OnLine - Sorted: SBC Voices Two Approaches to Video

SBC Voices Two Approaches to Video

Lisa Minter (
Thu, 30 Jun 2005 17:10:40 -0500

By Drew Clark

The Bell companies' entry into the video marketplace has the potential
to shake the cable, satellite and broadcasting businesses, and SBC
Communications has been aggressive on the policy questions it raises.

But SBC has been saying different things about its Internet-protocol
television (IPTV) to different audiences. As the company has suffered
policy and public-relations setbacks, it has changed its message to
suit its needs.

Company executives have offered different stances on: whether the
company will provide a la carte, or channel-by-channel, programming;
whether it must pay franchise fees to local governments; and how much
it will build out its high-speed Internet service.

The company also is defining itself as a cable provider not under
telecommunications law but under copyright law -- further tangling the
policy issues surrounding Bell entry into the video marketplace.

Some of SBC's divergent messages have been delivered at almost exactly
the same time but to different audiences. At the June SuperComm
telecommunications conference in Chicago, a company executive
dismissed the a la carte approach to a content-centered audience while
a higher-level group president promoted that model to a group of
policy officials.

On Monday, at a downstairs conference session devoted to IPTV and
heavy with officials from the movie and television industries, Vice
President Jeff Weber said SBC's technology would uniquely utilize
digital video recorders and high-definition television.

"Which is all different than saying we are going to do something crazy
like a la carte or something that is completely and totally disruptive
in the marketplace," he said. "We can't, because our content providers
won't allow it, and I'm not sure it would make sense even if they

Upstairs, at a policy session the same day, SBC Group President
Forrest Miller told a different story. "We know that consumers want
more choices in video," including different packages than are
currently available from existing cable "tiers," he said. "We believe
in a consumer-driven market."

Last year, SBC executives including CEO Ed Whitacre spoke favorably of
offering consumers more choice in their television network selections,
but they have not been as vocal on the subject this year. Companies
that provide pay television to cable and satellite, like Walt Disney's
ESPN and Time Warner's HBO, do not favor the a la carte approach.

Asked about the discrepancy, SBC spokesman Michael Balmoris said
Wednesday that pricing and features for its bundles of video
programming have yet to be determined. "Since it does use Internet
protocol, there are many more functionalities," he said, adding that
packages could encompass a la carte offerings.

It may be necessary to package programming differently in order to get
consumers to switch from cable television to Bell television. "The
first thing I would do if I were the phone company is to offer a
family-friendly tier," said Robert Clasen, CEO of the Starz cable
network. "If you have a family-friendly tier, you would have friends
in Washington."

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