SBC Closes in on Video Strategy

Advancing its plan to deliver television through fiber, SBC today awarded a $195 million contract to Scientific-Atlanta for IP video equipment.

Under the multi-year deal, Scientific-Atlanta will provide encoders,
satellite dishes and video routers, as well as design and build
video operation centers for SBC.

This is SBC’s third video-related contract in the last six months. In October,
it tapped Alcatel for a $1.7 billion network equipment and
video integration services project.

A month later, the San Antonio regional carrier signed a
10-year, $400 million contract to use Microsoft’s IP television platform.

While the major infrastructure contracts are in place, the company is still
evaluating vendors for residential gateways, Wes Warnock, an SBC spokesman,
told internetnews.com.

The IP television service will include customizable channel lineups, video-on-demand , digital video recording, interactive program guides, event
notifications and content protection features. SBC has been testing the
service since June. Field trials are slated for mid-2005, with a formal launch
expected in late 2005.

The video push is part of Project Lightspeed, a multi-billion dollar
initiative to use fiber-optic cable to deliver a “triple-play” bundle of
television, phone and high-speed Internet services to consumers in its 13-state
region.

SBC, which is looking to beat cable operators at their own game, will begin
its fiber rollout with a goal of reaching 18 million households by the
end of 2007. Other telecoms are exploring fiber to the premises (FTTP), including Verizon .

Broadband industry watchers have included FTTP among a litany of emerging
technologies that could one day replace copper-based DSL and cable modems. A small but growing number of independent carriers, housing developers and public/private partnerships have led the way in helping to develop fiber-based, last-mile broadband access.

But large carriers, wary of the costs of buying and installing miles of
fiber-optic cable, have proceeded cautiously — until recent moves by SBC
and Verizon.