Providing an update on Project Lightspeed, SBC Communications Inc. announced the SBC companies have recently concluded a technical field trial of IP-based services, which successfully demonstrated that the technology works in a real-world environment.

During the two-month trial, which concluded last month, SBC companies successfully delivered Internet Protocol (IP)-based TV programming, video-on-demand (VOD), high-speed Internet access and other features to employee households in San Antonio. This was the second of two employee field trials.

"The conclusion of our field trials and successful delivery of these new IP-based entertainment services was a significant program milestone," said Andy Geisse, chief information officer, SBC Services, Inc. "IP is the next big thing. We're going to change the face of television with an IP-based platform that enables integration, personalization and a high-quality entertainment experience."

Addressing a group of industry analysts hosted by IBM in New York today, Geisse confirmed that the next phase of Project Lightspeed - a controlled market entry - is set to begin around the end of 2005/early 2006 in neighborhoods in San Antonio, Texas with a limited number of subscribers. SBC companies expect to scale the offerings beginning in mid-2006 - adding features and functionality and entering more markets across the companies' 13-state operating region.

The technical field trial tested IPTV and high-speed Internet access at approximately 40 SBC employee homes. The trial evaluated the installation process, platform capability, and network equipment and customer-premise equipment performance.

Using VDSL in conjunction with gigabit Ethernet technology, bandwidth of 20-25 megabits per second bandwidth was achieved, sufficient to provide four streams of high-quality video (including one high-definition stream) per line, high-speed Internet access and, in the future, consumer VoIP service.

"We've taken our plans to deploy this new, IP-based technology from concept to reality in one year," said Geisse. "While there is still work to be done, I'm encouraged by our fast progress and confident in our ability to scale this market-changing entertainment technology."

The SBC companies are evaluating the results of the field trial and evolving its offering, systems and equipment. Ongoing lab testing will be conducted in part at a systems integration lab jointly created with Alcatel and housed at an Alcatel facility in Plano, Texas. The lab tests the end-to-end functionality of the IP-based platform. SBC companies will use a similar approach to prepare for the scaled launch.

About Project Lightspeed

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. SBC companies expect to reach approximately 18 million households by the first half of 2008 as part of initial deployment, using fiber-to-the-node (FTTN) and fiber-to-the-premises technologies. Using FTTN, the companies plan to bring fiber to within 3,000 feet on average of customers' homes.

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 and more content.

SBC is using the Microsoft(R) TV Internet Protocol Television (IPTV) Edition software platform and working with Alcatel to provide access, routing, and aggregation infrastructure equipment and video system integration services.

SBC companies are working with Scientific-Atlanta to provide IP video network equipment that would enable SBC to acquire, process, encode, and distribute digital media content to subscribers.

The company is working with Amdocs for billing, customer relationship management (CRM), ordering and payment mediation products, and Amdocs consulting and systems integration services.

SBC companies will use next-generation Internet Protocol TV (IPTV) set-top boxes from Scientific-Atlanta and Motorola for the scaled launch.

IBM servers will be used in SBC IP video offices. These servers - including acquisition, distribution, notification, video-on-demand and other servers - will encrypt video, add digital rights management, allow for fast channel change and other features that will allow delivery of a high-quality, IP-based video service to customers. Additionally, SBC companies are working with IBM to develop a service delivery platform (SDP) that will be used to collect and aggregate transactions from the billing, customer relationship management (CRM), ordering and billing systems. SBC plans to use Leapstone software, which provides subscription and content management capabilities, channel mapping information, and product package information within the SDP.