Analysts, myself included, have been suggesting that IPTV, today thought of as the set of video services delivered to consumer homes via “wireline” access networks using IP, would someday become the subset of something bigger. That day seems to be coming fast. Let’s look at two recent developments for a status report and insights as to future direction.

First, can anyone have missed Verizon’s launch of FiOS TV in Keller, Texas? The Verizon approach is both predictable and a bit surprising. The predictable part is that the carrier will offer a huge channel line-up--hundreds of channels--bundled with other services, at competitive prices, notwithstanding the fact that some of the expected channels are still missing. But those are sure to come as the company signs additional content deals.

Verizon’s fiber-to-the-premises (FTTP) architecture uses a national “Super Headend” to receive and aggregate national programming, which it distributes to Verizon Video Hub Offices in local markets via Sonet. Local programming is added at Video Hub Offices, from which it is distributed to the third tier in the network, the Video Serving Office, where TV is combined with local voice and data services and brought to the subscriber via a passive optical network (PON).

Its fiber access approach allows Verizon to offer TV programming in analog and digital formats. The analog service level carries local, PEG (Public, Education & Government) programming plus selected “cable” channels and doesn’t require a set-top box. The digital service replicates the analog programs and adds a program guide, several tiers of “cable” and pay-TV channels, high-definition television, on-demand and pay-per-view programming. Digital subscribers can choose from several set-top box options to receive high-definition and PVR services.

Looking at the network from the subscriber’s perspective, there’s more bandwidth to the home than virtually any subscriber would need; even though Verizon is using MPEG-2 encoding (not MPEG-4 AVC or Windows Media, which require half the bandwidth or less); allowing it to implement TV with today’s lower-cost MPEG-2 gear. The potential is there to have two different multi-stream PVR-enabled set-top devices in separate rooms, to simultaneously watch one high-definition program while recording another--a total of four program streams, even if one or more of them were in high-definition.

One of my personal mantras this year has been to encourage the telcos to differentiate themselves from cable through content. So the surprising part, to me, is that Verizon is on its way toward meeting this challenge. One of Verizon’s proposed channel line-ups has more than 350 channels, of which nearly 5% are PEG. In addition, this line-up has dozens of international channels--not just American Latino programs, but networks from European and Asian countries. This is a great start.

I maintain that the telcos must go further: providing outlets for community-based programming that’s available on the Internet but turned down by the cable and satellite companies for lack of capacity or desire to carry. Not to mention being an outlet for low-power FM for local and neighborhood-level markets; the positive community relations value of offering such programming would probably offset the cost of pouring it into the network at either the Video Hub or Video Serving Office; especially since FM radio falls within the frequency band being used.

Real, honest-to-goodness deployments by the IOCs, and now the RBOCs, are extremely encouraging to be sure. But this is not a time for complacency--several industry and financial analysts have weighed in with dire predictions that telcos will fail at capturing more than a few percent TV market share from the cable competitor, resulting in a very long payback period for TV and therefore a disappointment for investors. I happen to be more optimistic, by the way. I have been told that at least one major US carrier is seeing 20% to 30% penetration in cable markets by offering bundled broadband data with voice but without TV (10 megabits, anyone?). If this degree of cannibalization is occurring without TV, the prospects for video service as part of a competitively priced bundle would seem to be much better.

Now for the “time waits for no one” department. In early September, as Verizon was getting ready to unveil FiOS TV in Texas, the annual International Broadcasting Convention (IBC) was underway in Amsterdam. All of IBC’s major themes of were of current interest to telecoms: IPTV, HDTV, advanced video codecs and TV’s next platform, mobile. I have to admit that, prior to IBC, I had heard a lot of talk about video to mobile devices but had also wondered why in the world someone would watch TV on a mobile device. But this observation was uninformed. Mobile TV is not about traditional TV with thirty-minute episodes, nor is it about watching “The Lord of the Rings” on a flip-phone.

In fact, mobile TV creates something of a perfect storm for four of TV’s current stakeholders. The major TV networks have seen at least a 20% decline in prime-time viewing. This trend, combined with PVR, VOD and other ad-skipping services has alarmed advertisers. Telecom companies have aggressively pursued new services in response to the erosion of their legacy businesses and hope to maximize their return on those investments. But mobile TV is also a boon to the most important stake-holders: the subscribers. For them, mobile TV is about immediacy and the need to stay informed. One mobile TV presenter informed an IBC audience that its greatest traffic occurred as the Michael Jackson verdict was being announced. Trite as it may sound, it proved that subscribers are driven by the desire to stay informed--and that TV news can deliver the goods whether it’s prime-time or not.

Here’s where mobile TV gets interesting to the telco. Imagine yourself as a mobile subscriber with video service. You receive a message with a news item of interest, to your mobile phone. You forward this message to five others (the telco gets revenue with each SMS message). You watch the video (telco gets revenue for each viewing). Your friends and family watch, too (telco gets revenue from viral marketing). TV programmers and advertisers can target like never before. The video content (hopefully) leverages the telco’s existing IPTV content assets, interactive platform and distribution infrastructure. The telco (hopefully) has adopted an advanced video codec so it can re-purpose the video to a small screen and distribute it at 128 kb/s.

After IBC, I no longer wonder about mobile video. In fact, neither do the Europeans: more than 80 companies, in eight European countries, are collaborating in a round of European DVB-H handheld TV trials that commenced on Sept. 15th. Nor is mobile TV limited to Europe, given Verizon’s VCast video service in some U.S .markets, the new MobiTV-based services launching from Sprint and Cingular; and the upcoming U.S. trials of mobile TV services from U.K.-based Crown Castle.

So, IPTV is here, and mobile TV offers another way to leverage the headend investment. Exciting times for everyone, as IPTV evolves into “any media, anytime, to any device, over any IP network.”

Steve Hawley is principal consulting analyst of Advanced Media Strategies. He may be reached via his Web site, www.tvstrategies.com.