1. Center for Information and Communication Technologies IPTV Market Development and Regulator Aspects ITS 2006 Conference Presentation Beijing, 14 June 2006 Halldor Matthias Sigurdsson (halldor@cict.dtu.dk)halldor@cict.dtu.dk

2. Center for Information and Communication Technologies Auxiliary Systems Media Servers IP Network Motivation Set-top Box  Moving from several dedicated networks (silos) to converged multipurpose networks  IP networks have different technical characteristics than old Broadcast networks (e.g. two-way interactive)  The resulting IPTV services are extensions to TV but also a competitor  New distribution methods affect market situation and TV value-chain  Regulation affects all of the above

3. Center for Information and Communication Technologies Auxiliary Systems Media Servers IP Network IPTV Systems Set-top Box  IPTV Systems – Coding – Media Servers – Auxiliary Systems – Standardisation IPTV Systems time Bandwidth required per streaming application Compression techniques per user 20Mbps 5Mbps 2Mbps 1992199620002004 1Mbps MPEG2 MPEG4 Bandwidth Based on: Désiré KARYABWITE, Victoria Falls presentation, http://www.itu.int/ITU-D/e-strategy/ http://www.itu.int/ITU-D/e-strategy/

4. Center for Information and Communication Technologies Auxiliary Systems Media Servers IP Network Transmission Set-top Box Transmission Infrastructures  Transmission Infrastructures – Broadband Development – Types of infrastructures – Managed Platforms vs. Internet

5. Center for Information and Communication Technologies Auxiliary Systems Media Servers IP Network Representation Decoding and Representation  User Interaction – Interactivity – Content Selection – Broadband Adoption – Increased digital content at homes

6. Center for Information and Communication Technologies Auxiliary Systems Media Servers IP Network Standardisation Set-top Box  Elements of IPTV, such as coding, are standardised  [Fleury, 2005] reports a lack of holistic IPTV standardisation framework  [Tadayoni and Sigurdsson, 2005] Empirical study indicates that operators see IPTV standardisation as a barrier  Standardisation bodies such as IETF and ITU-T are working on IPTV standardisation  Most current implementations are based on proprietary solutions Framework for IPTV

7. Center for Information and Communication Technologies Interactivity Transmission Interactivity UnidirectionalBidirectional Content Interactivity Linear Customised Broadcast TV VoD Multiplayer Games Development Path of IPTV

8. Center for Information and Communication Technologies Network Convergence  Network Convergence – Nordic Europe is depicted – Different strategies for different networks – Result is infrastructure competition FTTH DSL Cable Wireless Single Play -2000 Dual Play 2000-2004 Triple Play 2005- TV Internet Telephone TV Internet Telephone TV Internet Telephone TV Internet Telephone Based on Henrik Clausen, IDC Telecom Conference 2006

9. Center for Information and Communication Technologies Residential Broadband Internet Aggregation Networks First/Last Mile Customer Local Exchange Headquarters

10. Center for Information and Communication Technologies Internet Managed IPTV Auxiliary Systems Media Servers IPTV Service Content Producer Content Aggregator Service Provider Network Access Provider Customer  Managed IPTV accommodates for all members of the value chain  Control of network resources ensures quality and integrity

11. Center for Information and Communication Technologies Internet IPTV Internet Auxiliary Systems Media Servers IPTV Service Provider Content Producer Content Aggregator Service Provider Network Access Provider Customer  Internet IPTV simplifies and individualises the value chain  Networks Access Providers has to get all revenue from transmission

12. Center for Information and Communication Technologies Managed vs. Internet  Empirical Study Suggests – Efficiency and marketing drives commercial IPTV towards managed networks – Alternative sources/content may be over Internet – Networks Access Providers can use service differentiation to discriminate Internet Auxiliary Systems Media Servers IPTV Service Provider

13. Center for Information and Communication Technologies Case-Studies  Empirical Study – Taxonomy for IPTV implementations – Value-Chain colour indicates dominance – Different business cases TV2 Sputnik Interactivity / Linearity Integration VoD Broad- casting Public Internet Managed IP Networks Optimal Stream NESA

14. Center for Information and Communication Technologies Regulation  Legal Framework – EU Level TVWF Driective from 1989 Review of TVWF –National Level Must Carry Access Regulation TVTelephoneInternet Silo Based Terminal Backbone Access Type of Service Next Generation Terminal Backbone Access Type of Service Representation Transmission Service Level  Different characteristics call for different regulation  Unchanged TV regulation may inhibit IPTV deployment  Evidence of “regulatory holidays”

15. Center for Information and Communication Technologies IPTV Market Development and Regulatory Aspects Page 15 Summary  IPTV Technology –Network and Service Convergence –Variety in implementation –Lack of Standardisation –Interactivity / Non-linearity  IPTV Market –Changes in Business Model / Value-Chain –Taxonomy / Case Studies  IPTV Regulation –TVWF Directive –Silo Based Regulation / NGN –Regulatory holidays

16. Center for Information and Communication Technologies IPTV Market Development and Regulatory Aspects Page 16 Conclusion  IPTV is a materialisation of convergence  IPTV offers both substitute and radically new services to Broadcast TV  New and Interactive services and characteristics of IPTV result in new business models and value-chain  New technology and market calls for new regulation

17. Center for Information and Communication Technologies IPTV Market Development and Regulatory Aspects Page 17 Questions ? For questions or comments Please feel free to contact halldor@cict.dtu.dk Biography Halldor Matthias Sigurdsson (halldor@cict.dtu.dk) is currently working on his Ph.D. project at the Center for Information and Communication Technologies (CICT) within the Danish Technical University (DTU). He holds a M.Sc., Civ.Ing degree in technology management from DTU and a B.Sc. degree in mechanical and industrial engineering from the University of Iceland. He has worked as a researcher within Microsoft Research Asia in China and for Iceland Telecom R&D in Iceland, and has been a guest researcher at the University of Cambridge and the University of Oslo. His main fields of interest are techno-economic studies related to the development of residential access networks and services, cost simulation models, as well as telecommunications policy and regulation.halldor@cict.dtu.dk