SBC Communications Inc. announced that contracts have been awarded to both Scientific-Atlanta and Motorola to deliver next-generation Internet Protocol TV (IPTV) set-top boxes that will enable customers to access TV programming, video-on-demand, interactive applications and other advanced features that are part of the U-verse family of services.

Both vendors will develop and supply IPTV set-top boxes that will help SBC companies offer consumers more TV choice and a much-needed alternative to cable companies. The contracts, awarded by SBC Services Inc., give equal market opportunity to both vendors and continue through the end of 2008. Project Lightspeed is the SBC initiative to expand its fiber-optics network deeper into neighborhoods to deliver SBC U-verse TV, voice and high-speed Internet access services.

"This is a major technology milestone for IPTV," said Lea Ann Champion, senior executive vice president, SBC IP Operations and Services. "A number of different technology components have come together to ensure the set-top boxes can efficiently support the features and functionality we plan to deliver to our customers."

The planned IPTV set-top boxes are tunerless, which allows multiple video streams to be sent to one set-top box. Additionally, because the boxes will operate next-generation compression technology - either MPEG4 or VC1- the Digital Video Recorders (DVRs) are expected to store content approximately twice as efficiently as DVRs provided by other video distributors' DVRs.

"We remain on track to give consumers more video entertainment choices through SBC U-verse TV," said Champion. "The planned set-top boxes will offer many outstanding capabilities and we can add even more features in the future by upgrading the software in the boxes remotely."

The set-top boxes will operate the new Microsoft(R) TV IPTV Edition software. SBC provided a common set of specifications to both vendors to build the set-top boxes.

"Motorola's IP set-top platform, built on our decades of experience as the global leader in digital set-top technologies, will establish SBC U-verse TV as an industry-leading IP video service," said Dan Moloney, president, Motorola Connected Home Solutions. "Our vision of seamless mobility begins with bringing high-quality, IP video into the connected home, and our role in the launch of SBC's entertainment service represents yet another step forward in making that vision a reality."

"The dynamics of interactive video systems and integrated services over an IP network will require set-tops with groundbreaking, innovative technology to deliver a wide range of advanced capabilities," said Jim McDonald, chairman, president and CEO at Scientific-Atlanta. "The combination of Scientific-Atlanta's expertise in digital set-tops and the unique insight we have acquired in helping SBC establish the infrastructure for its one-of-a-kind video network will help our IP set-tops to provide SBC U-verse TV viewers with a seamless video entertainment experience."

In March 2005, SBC awarded a contract to Scientific-Atlanta to provide IP video network equipment that would enable SBC to acquire, process, encode, and distribute digital media content to subscribers. SBC is currently testing this video network equipment as part of an SBC technical trial. Instead of using a traditional broadcast video system, in which all content is continuously sent to every customer's home, SBC companies will use a switched IP-video distribution system. In the switched IP-video network, only the content the customer requests is provided to the customer, freeing up bandwidth to be used for other applications.

The SBC U-verse suite of services allows for increased programming choices and many new services that integrate video, broadband, voice and wireless products.

"SBC U-verse TV will change the viewing experience in fundamental ways through potential features like instant channel changing, tunerless multiple pictures-in-picture and whole-home DVR capabilities," said Champion. "In the end, it is about bringing a better experience to our customers through integration and the new features that an IP-based platform enables. The platform allows for future capabilities beyond what's in the market today."

SBC is planning an initial controlled market entry in late 2005 or early 2006. The company plans to add more features and functionality, including whole-home DVR and high-definition functionality, to the SBC U-verse TV offering and enter more markets beginning in mid-2006. Both vendors continue to make progress in delivering the technology to SBC. At this time, SBC expects to use Motorola set-top boxes initially when it scales the service, with Scientific-Atlanta set-top boxes soon thereafter.