Is Phone Company TV Better Than Cable?

 

Telecom companies Verizon and AT&T have begun offering fiber-optic digital television services similar to those of traditional cable TV. More than 1.2 million customers have signed up for these Internet Protocol Television (IPTV) services, and each service is available to several million homes in parts of at least a dozen states. By 2010, Verizon expects its FiOS TV service to be available to 18 million households (www.fios.verizon.com/), and AT&T expects its U-verse service to be available to 30 million (http://uverse.att.com).

Should you consider abandoning cable in favor of IPTV when it comes to your area? Generally, the answer is yes if you can get FiOS and probably not if you can only get U-verse. The two differ in important ways…

Picture quality. Verizon FiOS brings high fiber-optic quality right into your home, producing picture quality far superior to that of standard cable, particularly for customers with high-definition (HDTV) televisions. AT&T U-verse brings fiber-optic quality only as close as a hub on your block, then compresses the signal to send it through copper wire to your home. That means U-verse picture quality is substantially inferior to that of FiOS and only slightly better than that of conventional cable.

HDTV. If you have more than one high-definition television in your home, FiOS can serve them all, but U-verse can supply a high-definition signal to only one TV at a time. If you are watching a high-def signal on the set in your living room, every other set can show only the same high-def program or a different program in standard definition. (AT&T is working to overcome this shortcoming.)

Internet speed. If you sign up for both TV and broadband Internet service, FiOS offers extremely fast 50-megabits-per-second (mbps) downloads. U-verse offers 1.5 mbps to 10 mbps, depending on the package you select. In comparison, most existing cable systems are capable of Internet download speeds of no more than 6 mbps to 8 mbps, though a few are starting to offer higher speeds for an additional fee.

Channel offerings. Though the available FiOS channel lineups are comparable to those of cable — including major national and local broadcast stations… most news, sports and entertainment cable networks… premium channels, such as HBO… and video on demand — there might be a few differences. Example: FiOS and U-verse offer the NFL Network and BBC America, two channels not available through some cable systems. On the other hand, certain sports packages, such as NFL Sunday Ticket, are not available through FiOS or U-verse. Also, some cable providers offer their own local news, which IPTV services don’t.

Prices. IPTV prices vary based on the package selected and the promotions offered when you sign up, but they tend to be comparable to cable rates.

Examples: Verizon FiOS TV Premier provides about 200 channels (the exact number depends on the area) for $47.99 per month. FiOS “triple play” packages, combining TV, high-speed Internet and unlimited local and long-distance phone service, cost as little as $99 per month with a one- or two-year service contract. Each set-top converter box or digital video recorder (DVR) adds $5.99 to $19.99 a month.

AT&T U-verse prices start at $69 per month for about 100 channels with Internet service or $84 per month for about 200 television channels with Internet service and a DVR. U-verse Voice Unlimited phone service costs an extra $40.

Source: Dan Rayburn, executive vice president of StreamingMedia.com, a research and news Web site covering the Internet video sector. Based in Larchmont, New York, he is author of Streaming and Digital Media: Understanding the Business and Technology (Focal). www.businessofvideo.com.

Source: Date: July 15, 2008 Publication: Bottom Line Personal