By Hiawatha Bray, Globe Staff
The next big thing in television could be a technology borrowed from the Internet. IPTV (the 'IP' stands for Internet protocol) will let users choose from a vast variety of video entertainment, available on demand through a simple piece of wire. Telephone wire, to be exact, because phone companies -- not cable TV firms -- are leading the way.
SBC Communications Inc., which offers phone service in 13 US states, is spending $5 billion to build the first IPTV network in the United States, set for launch late this year or in early 2006. Verizon Communications Inc., which is spending $3 billion to bring TV service to its customers, will use IPTV to deliver on-demand movies.
Cable companies could adopt IPTV technology as well. But for telephone companies the technology offers the first chance to sell TV services. It's also an opportunity for Microsoft Corp., which is providing much of the underlying technology, to become as powerful in entertainment technology as it is in software. IPTV could shake up the cable industry in the same way that voice-over-Internet phone systems have roiled SBC's own voice telephone business
Already, about a million people use IPTV systems, mostly in Hong Kong and Italy. Last month, British Telecom said it would work with Microsoft to deploy IPTV in Britain. On this side of the Atlantic, SBC spokesman Michael Coe said his company expects to make IPTV available to 18 million homes over the next three years.