Some might say that a $4 billion investment into a complicated and risky technical endeavor that is potentially way too ahead of its time for the general population is a risk not worth taking. But SBC Communications’ Randall Stephenson says otherwise.
“If I bet wrong, I didn’t break the future of this business,” SBC’s COO told USA Today. “For a company of this size, $4 billion is very little money. If I bet wrong, it’s not much money for us to burn.”
The bet Stephenson is making is on IPTV (Internet Protocol TV), which SBC hopes to have 18 million homes wired up for by 2007. But skeptics say it’s too early and 2007 is a pipedream.
Verizon’s playing it a bit safer with its money as the communication giant banks on “fiber-to-the-prem” strategies, stretching fiber optic cables directly to the home.
For Stephenson and SBC, fiber-to-the-prem is Plan B, and SBC is attempting to rev up capabilities a generation ahead of time. If it doesn’t work out, SBC will have to back track.
He has the numbers on his side, at least, to predict some of the future of tech. Recent reports have shown that as broadband access proliferates, simultaneous TV and Internet use has skyrocketed. In fact, people are spending the same amount of time on the Internet as they are watching TV. Harnessing and melding the technologies would be a great move, and IPTV, if it develops at the right time, will be a slam-dunk.
IPTV has worked well in the laboratory and is gaining ground in China where 500,000 people enjoy access. But one challenge that remains for such an ambitious project are how to get IPTV up to industry reliability standards to serve the millions of customers SBC is looking to hook up.
The nuts and bolts of the operation not only include setting up support systems like customer service and billing, but also developing installation crews.
USA Today says the biggest “wildcard” is Microsoft. SBC is working with the software giant to develop an operating system to support it and “isn’t close to done.” After that it’s the standard problem of hardware and software compatibility when developing set top boxes.