There was a sense of anticipation as delegates to an international two-day conference in London met to review the prospects for IPTV, or internet protocol television.

With increasing interest in broadband television, the first IPTV World Forum at Earls Court in London was dominated by suppliers eager for a slice of the action, as telcos turn to video to supplement their threatened call revenues with new broadband services.

Microsoft was conspicuous by its absence, having recently announced a partnership with Alcatel. Apparently they were “in a meeting” and unable to attend.

Myrio was represented, along with one of their investors, Siemens. According to Pieter Duijst of Myrio, a somewhat smaller competitor to Microsoft, also based in Seattle, “This market is really taking off. It’s finally really happening.”

Everyone was eager to hear news from BT, which has made little secret of its ambitions in the broadband television arena, but has yet to reveal much detail in public.

Andrew Burke of BT told delegates that broadband could not compete with broadcast economics. “It supplements broadcast. That’s a religion in BT.” At the moment, the BT network is unable to provide the equivalent to broadcast services, but is preparing to offer video on demand. BT’s solution will be to create a hybrid, combining broadcast and on-demand programming. “If you have an EPG that seamlessly pulls that together we believe that you have a proposition that is very attractive.”

There was concern expressed during the conference that telco’s lack the core competencies in content and rights negotiations. As one delegate put it, they understand finance and engineering, but not the world of media.

The chief executive officer of BT’s entertainment division acknowledged that “BT is not a media company. Knowing and understanding media is not what it does.” He stressed that it would be very much a partnership strategy.

However, he concluded that “All the elements exist to create a unique, robust and commercially viable broadband to TV proposition in the UK.” He revealed that he is already watching it most nights as part of an internal trial. “It’s working,” he said, “but making it work does not make it a good proposition.”

David Harrison, of UK communications regulator Ofcom warned that “We need to recognise that conventional linear broadcasting is not the future”. Ofcom’s head of broadcast and new media technology said that the drop in the share of viewing of BBC channels in Sky homes had profound consequences for the future funding of public service broadcasting. “It will be completely broken by 2010. We need a new model”.

He used the occasion to advance the proposed Public Service Publisher model as an opportunity for IPTV. He emphasised that this would not necessarily be a new broadcast channel. He said “the real revolution comes when we’ve got true broadband everywhere.” This would require “a radical rethink about our regulatory approach” and he said that the current non-regulated status of the internet would become increasingly challenged.

Benoit Joly of Thales said they had recently been receiving several requests for proposals a week for IPTV systems, as telcos progress beyond trials to initial rollouts. He advocated a thin-client approach, with simple, low-cost set-top boxes built on open standards.

Noel Matthews of Tandberg explained how new advanced compressions schemes were enabling the broadband video market. He suggested that the competing codecs shared a common heritage, with algorithms that were essentially similar in performance, and both were likely to co-exist in the market.

On the question of open standards, BT said that “Standards are good but suppress innovation”. Even Ofcom spoke of standards for different levels in the system and concede that in some cases the need to extract value led to proprietary standards.

Neale Foster of Espial argued that open standards such as HTML were good for user interfaces. He also suggested that there was an opportunity to learn lessons from cable and said that with a pure IP network it was possible to connect homes together and offer new forms of consumer services.

Bitband’s Ervin Leibovici recommended a pragmatic approach, suggested that operators had enough bandwidth for the customers that they are likely to address initially. Along with other presenters, he emphasised the importance of systems integration and recommended ensuring that there was no overlap in the product sets offered when using multiple suppliers.

Some Londoners can already receive IPTV. Roger Lynch, the chairman of Video Networks which provides the HomeChoice service, would not be drawn on any numbers, beyond previously announced figures of 15,000 subscribers. Pointing to the success of operators such as FastWeb in Italy, he argued that “Right now this is a new entrant game”. Expanding the service beyond London will require an investment partnership which is apparently in process, although he added that “We can make a profitable business in London on quite low penetration rates.”

Coincidentally, HomeChoice was being demonstrated next door at the Ideal Home Show, but some of the proposed applications for IPTV include services such as domestic monitoring, security and video phones that have been promised as part of the intelligent home for many years.

That was also the vision of Sean Ruzicka of Telus TV, the number two telco in Canada, who imagined a “future friendly” home with a suite of services providing information, communication and entertainment through a television based portal.

“We believe IPTV delivers tremendous opportunities,” said Rahul Chakkara of the BBC, although progress appears slow. “In good BBC fashion we’re having a lot of meetings,” he added. There was a demonstration of the much vaunted Internet Media Player, although the presentation was ironically marred by a frame rate that will hopefully not be representative of any eventual service.

Among many of the content providers, including some of the biggest media brands in the business, there was an apparent confusion of the scope of IPTV, which still seemed dominated by broadband web-based services or PCTV.

William Cooper of informitv presented the case that broadband television brings true interactivity and argued that the provision of a personal television experience requires consideration not of audiences or consumers but the needs of individual users.

While the BBC is pursuing its own peer-to-peer personal computer based approach, other operators are advocating the advantages of network personal video recorders, with shared storage at the head-end. Some see this as a potential killer application.

Video on demand is still seen by most as an essential component of a service offering. Andy Birchall of On Demand Group was fresh from the first rollout at UK cable provider NTL and the milestone FilmFlex agreement. He described this as being a “farmer’s market” for studios and content owners, open on a fair and non-discriminatory basis to all suppliers. Also notable was the use of the red button on the remote to provide one-click purchasing, extending the convention from interactive services.

“Our goal is to make television a better experience,” said Tom Rosenstein of Seachange. He outlined a number of potential applications for video on demand beyond movies, including advertising, news, music, and local programming.

Some are concerned that video on demand might prove to provide too much demand at peak times, and propose a push approach, downloading material to local storage. That is the model proposed by Skystream, and used for the Disney Moviebeam service, providing access to the latest movies, downloaded in the background over digital terrestrial television across the United States.

While others are worried whether their infrastructure will cope, delegates heard that in Hong Kong, providers such as City Telecom offer IPTV along with broadband access at speeds of up to 100Mbps, with 1Gbps available later this year, fully symmetrical. It’s like having the fastest available corporate network, linking 1.2 million households, soon destined to rise to 1.8 million.

The 64Tbps fibre backbone provides a capacity equivalent to 14 million simultaneous DVD streams. Given the population density, such infrastructure appears comparatively affordable, and users are paying the equivalent of £17 pound a month for an unmetered service a hundred times faster than the average connection in the UK.

Paul Berriman of PCCW, which offers another successful service known as Now broadband TV, suggested that any phone company contemplating video services should look at what they are good at – basically building bandwidth and billing people.

For Eran Wagner of Amdocs, there is also an opportunity to concentrate on the back office functions, the operations and business support systems that will allow operators to enhance their relationship with their subscribers. Customer self-service is also emphasised as an important application, but ultimately operators need to provide a unique service that exploits the unique features of IPTV to create a customer experience that is very different to that of cable and satellite today.

The imperative to create these new services is being driven by powerful competitive commercial pressures, but the ultimate consumer proposition remains unclear. There still appears to be a general lack of common understanding between the telcos on the one hand and the content community on the other. Nevertheless, some big bets are being placed on the outcome, and it’s clear that the experience of the next year could prove critical.

The IPTV World Forum took place at Earls Court in London, 8-9 March.