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TECHNOLOGY

Internet-based TV starts making inroads

By Julie Clothier for CNN

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IPTV uses the same technology that delivers broadband Internet access.

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LONDON, England (CNN) -- Television delivered via Internet technology looks set to give consumers a choice in much the same way they choose their broadband connection provider.

Internet Protocol television -- or IPTV -- is where television images are broadcast using the same fiber optic technology used to bring broadband Internet connections into homes.

IPTV is a young market in Europe. France's Free Telecom and FastWeb in Italy among others offer services, while big telcos in France, Sweden and Spain are beginning to offer IPTV on a small scale.

British telecommunications giant BT, which dominates the telecommunications market in the UK, is expected to push the IPTV market along in Britain next year when it launches its own service.

But a small London-based company is already making inroads into the UK market.

Video Networks began offering its IPTV service, called HomeChoice, a year ago. It has the capacity to serve 2.4 million households in the London region.

Several companies are already using IP-based services to offer low-cost telephone calls and broadband Internet access -- but companies like Video Networks take this a step further by offering television programming as well.

While it will not reveal how many subscribers it has picked up during the past 12 months, Video Networks says it has plans to eventually have to capacity to offer the service to about half of the United Kingdom's 24 million homes.

Chairman and CEO Roger Lynch told CNN the company had built its own fiber optic network, which runs alongside BT's own phone lines. It currently has three exchange servers in the London area.

When a customer signs up to HomeChoice, their phone line at the BT telephone exchange is hooked up to Video Networks' equipment.

As part of the HomeChoice package, customers get IPTV, which includes on-demand services, an IP-based telephone line and broadband Internet access, all delivered via a set-top box in their home.

Lynch said the key to IPTV was the convergence between broadband technology and entertainment, giving consumers more choices.

"IP stands for Internet Protocol -- it doesn't actually stream television over the Internet, it streams it over a private network. It uses the same protocol and a lot of the same technology to deliver it," he said.

"Satellite will still be there, cable will still be there but from a consumer's point of view, rather than looking at the technology itself, the focus (of IPTV) is about giving them what they want, when they want it."

British companies NTL and Telewest are believed to be considering whether to launch IPTV alongside their cable services.

Chris Wynn, editor of UK-based New Media Market industry newsletter, told CNN that the number of companies offering IPTV was expected to grow in the next couple of years.

He said one advantage to IPTV was that because it operated using technology underground, there was no need for a satellite dish, which are banned by some local authorities because they are unattractive.

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