SBC Inks IP Television Deal With Microsoft

Nov 17, 2004  •  Post A Comment

Less than a week after providing deployment details of its plan to launch a pay-television service to compete with cable, telephone operator SBC Communications on Wednesday agreed to pay Microsoft $400 million over 10 years for Internet-based software that will enable programming over SBC’s phone-line-based network.

The deal formalizes a trial SBC launched in June to vet Microsoft’s Internet protocol television software. Field trials are expected to begin in mid-2005, with a commercial launch expected in late 2005.

The deal with Microsoft comes on the heels of SBC’s announcement last week that it will spend more than $4 billion to build a fiber network that will deliver video, voice and data services to residential customers, starting at the end of the year. By 2007, SBC hopes to have its fiber service available to 18 million households-about half its footprint.

SBC said the advantages to Microsoft’s IPTV software are that it enables any Internet protocol-enabled device to access content, including TVs, home computers, personal digital assistants and cell phones. The software also has digital rights management features that protect content from being passed around illegally.

The deal marks the second recent pact Microsoft has struck with a content distributor as the software giant seeks a prominent role in the distribution of content. Earlier this week, Microsoft’s software began appearing in digital video recorder set-top boxes being distributed to around 1 million Comcast cable subscribers in Washington state.