SBC Communications will use Microsoft software to deliver television programming over broadband data lines. The announcement is a major endorsement for the Microsoft TV platform.

In a milestone $400m dollar ten-year deal with Microsoft, SBC will provide television services over internet protocols across a roll out of new fibre optic infrastructure.

“Our service will change the way people experience TV. Finally, customers will watch what they want, when they want – from a virtually unlimited and interactive content selection,” said Edward Whitacre, chairman and chief executive of SBC.

SBC Labs has been testing an IP-based television service built on the Microsoft TV IPTV Edition platform since June 2004. Field trials will begin in mid 2005.

“The selection of Microsoft TV recognizes Microsoft’s leadership position in the rapidly emerging IPTV industry and the benefits it will bring to customers.” said Steve Ballmer, chief executive of Microsoft.

“This is a very big endorsement,” said Moshe Lichtman, vice president of Microsoft TV. “It’s a signature of confidence in the direction Microsoft has been taking in this space.”

It is an endorsement not only of Microsoft, but of the growing importance of internet protocol television or IPTV delivery. It follows a recent announcement that Comcast will roll out Microsoft software in Washington state. Microsoft has invested at least $20bn in cable companies over the last decade, but is now focused on providing software to deliver digital television.

SBC plans to provide programming from satellite provider EchoStar, with which it already has a separate marketing agreement. Initial plans are to provide simultaneous access to two high-definition and two standard definition channels, to support multiple sets or recording one channel while watching another.

The service is planned to provide instant channel changing, customizable channel lineups, video on demand, digital video recording, multimedia interactive program guides and event notifications, including notification of telephone calls and instant messaging.

This will require significant improvements in the speed of broadband connections to the home. SBC has previously announced that it plans to spend up to $4bn over the next three years on its fibre optic infrastructure in what it terms Project Lightspeed, which will allow it to provide television services over data networks and compete with conventional cable television companies.

“Project Lightspeed provides a number of important advantages – including superior speed to market with exciting, market-changing services, and it allows us to leap-frog today’s US telephone and cable TV networks,” according to Lea Ann Champion, who is responsible for IP operations and services at SBC. “We’re serious about offering a video alternative to customers – which we’ll do through unique programming, interactivity and functionality unmatched in today’s video environment.”

Dan York recently joined SBC from iN DEMAND Networks to lead the company’s video content strategy.

SBC plans an accelerated deployment, expected to reach 18 million households by 2007, with television services launching in late 2005. Some analysts remain sceptical that all this will be achieved in the timetable set by SBC.

In new developments, reaching around a million households, FTTP or fibre to the premises will be employed.

In the majority of existing neighbourhoods, SBC plans to overbuild with FTTN or fibre to the node, which is more cost-effective, taking fibre to within a few thousand feet of the home to provide a 20-25 megabits downstream connection.

A switched video distribution system will stream only the content the customer requests instead of broadcasting all channels to everybody at once.

Based in San Antonio in Texas, SBC is a Fortune 50 company with 167,000 employees worldwide. Their strapline is “Going beyond the call”.