Small, independent telcos are leading the charge in enabling IPTV service delivery to their customers over their larger brethren which have to deal with much broader network deployments. One only needs to look at the success of both MTS Allstream Inc. and SaskTel and the more recent IPTV network rollout from Bruce Telecom. In all cases, it has been proven that fibre doesn't need to go into the home. These examples contrast the phased rollout approach from Telus Corp., which now offers IPTV in Calgary and Edmonton and parts of Vancouver, and Bell Canada's ongoing testing. Despite the limited telco TV deployments to date, it is expected to have a measurable impact on traditional TV subscribers, particularly if digital interactivity is leveraged to its fullest. The problem is on the network side, particularly when discussing large rollouts in major centres. As a result, near term predictions of large-scale IPTV adoption are optimistic, though advances in technology have made the three-to-five year build-out of municipal systems viable.New equipment is making it possible to deliver IPTV over closed copper loops in the 4,000 to 6,000 foot range. Bruce Telecom, for example, is using Intracom Telecom's MPEG-4 IPTV solution. Hans Nilsson, CEO of Bruce Telecom, says you don't have to rip out copper - you just need to cap it at around 5,000 feet. "I'm getting 25 megabits of bandwidth to my home with copper," says Nilsson. "I can watch three TVs, one HD and two standard ." Bruce Telecom customers can also connect multiple TVs to the IPTV service. MediaFlex, a wireless master unit developed by California-headquartered Ruckus Wireless, can deliver 20 megabits of bandwidth to each TV. "A customer can install this," says Nilsson. "If there are two TVs the master will be at the DSL modem, and it can be hooked up to a slave. It takes only a minute to synch-up, and can then be put with the set-top box."This saves time on installations. Normally, adding three TVs with Cat 5 or coax would take hours of work, but with the Ruckus product only costing $100 it makes economic sense to use a wireless solution.While Bruce Telecom may have an easier time in deploying IPTV services because of its small subscriber base - the company has 15,000 telephone customers - deploying a broad IPTV network is more difficult. It requires extending fibre to the DSLAM (Digital Subscriber Line Access Multiplexer) and there has to be a narrower copper loop, which represents a significant infrastructure investment. This is why we are seeing phased roll-outs. Telus now provides IPTV in Edmonton, Calgary and, on a more limited scale, Vancouver, as a result of a partnership with Nortel Networks announced 18 months ago. Network deployment can be slow because each home requires at least eight megabits of bandwidth , and networks have to be optimized to prioritize the IPTV signal. The service doesn't include HD yet, although there are plans to deploy it by the end of 2008.Grant Hall, the leader of the video solutions marketing for Nortel, is enthusiastic about IPTV and his company's "end-to-end" solution."We are active with set-top boxes, middleware, video-on-demand, headend components, the IOC (independent operator company) market, as well as tier one and tier two companies," says Hall. In fact, Nortel seems to be pushing IPTV in all areas except for last mile broadband.For the likes of Nortel, Cisco Systems, and Conklin-Intracom, the real differentiator is in the most challenging area: software. MPEG-4 encoding is tricky, and broadcast regulations require features such as closed captioning to work reliably. In fact, this has become a make or break for many deals. Microsoft Corp.'s middleware wasn't up to snuff and this resulted in the software giant losing business with both Telus and Bruce Telecom. Microsoft is still working with Bell on its IPTV service, though no date for a public launch has been announced. Larger IPTV deployments have other issuesEven with the right software and attempts to develop tested, pre-packaged solutions, there is still a significant professional services component. It doesn't matter whether the customer is a large carrier or an IOC, the integration issues are not trivial."Professional services are about 30% of the value of any IPTV deal," says Nortel's Hall. "Our customers need to qualify the network, to engineer the solution, and for the interface of the ."Software integration and getting fibre closer to homes are two big issues. But there is also simple housecleaning - copper networks were designed for another era, making its hard to deliver the bandwidth required for IPTV. "Copper has been around since telephones were invented" says Nilsson of Bruce Telecom. "It has taken us years to clean out the bridge taps, but we are now reaching 97% of our customers on short loops."Nilsson says his company only got serious about IPTV a year ago, placing him within the small collection of telcos deploying in select markets, a trend that will continue. In fact, data from an Accenture executive survey in 2007 suggest that timelines for IPTV are being pushed out due to the amount of work required: 25% of respondents claimed that network readiness would hinder the uptake of IPTV.Gavin Mann, Accenture's digital media lead for media and entertainment in Europe and Latin America, and one of the authors of the study, thinks the role of telcos in IPTV and media delivery has been misunderstood."Telcos are considered by some to be ‘dumb networks'. They provide infrastructure, and passively let others use them. But if they do what they are best at they are really smart networks - reliable, pushing the margins, and then adding value."IPTV provides an attractive opportunity for traditional telcos - such as Telus and Bruce Telecom - that do not have a strong media play but want to "own" the customer with a single bill. In fact, the Accenture study found that television was seen as a growth area amongst media companies, while at the same time 28% saw telcos as a cross-sector macroeconomic threat.For Ian Meletios, chief executive at Conklin-Intracom, winning out over Microsoft for middleware and delivery on the first commercial deployment of MPEG-4 IPTV in Canada is proof that the IPTV market is wide open. One of the big differentiators on the software front is the ability to manage bandwidth."We have a fully integrated solution," says Meletios. "It can allocate bandwidth as appropriate to the customer. People have invested a lot of money in their HD screens and have a low tolerance for poor quality." However, high functioning middleware and compression/bandwidth management capabilities are only part of the story - any decent IPTV system has to be able to evolve with advances in technology."We saw the importance of digital interactivity," says Meletios. "We designed our system from the ground up as a data delivery platform. We have built in capabilities between various data streams, which will allow for features such as pop-up messenger windows and click-to-call."