Multiple HDTV set owners are out of luck. SBC decided that delivering one HD feed at a time should satisfy 99 percent of its potential customers. But Verizon isn’t so upbeat about that lack of HD delivery capacity. That’s one reason they wrote off the IPTV route, and decided to offer a video service more akin to systems used by traditional cable TV companies. Verizon is laying fiber-optic cable directly to a customer’s home, not just to a central neighborhood node. By doing so, the company says it can offer much greater and more reliable capacity than an IP-based system. “There’s a risk in the IP approach,” says Shawn Strickland, vice president for Verizon’s FiOS TV initiative. “That platform is not mature.”

TELCOS have a tough battle against cable and satellite TV service providers ahead of them. How they fare will depend on their service.

Verizon will offer a hybrid approach when it launches its video service; fiber will give the system enormous capacity, but it will deliver its services the traditional way—downloading every channel to the home, with the consumer’s tuner selecting which ones to display. With the FiOS system, transmitting multiple HDTV channels is no problem, Strickland says. When they become available, “we can support 3D TV and 1080p broadcasts.”

While FiOS could include caller ID and e-mail on the television screen, the company is not likely to offer those features. “We are not so interested in providing those things, even though technically we can,” Strickland says. “PC penetration is high. They don’t need a TV to do that. We want to enhance the viewing experience without hyping it up.” Verizon will launch its video services later this year. The company has secured franchise agreements in eight different locations with another 15 soon to be signed.

The easiest way for any of these new video entrants to compete would be on price. But that’s a dangerous road to follow, because someone can always undercut you. “We do not want to compete on price,” Verizon’s Strickland says. “So that leaves a few avenues: leading edge video and audio signals.”

SBC says it also won’t play the pricing game. Service, it says, is its trump card. “We have a long heritage of taking care of our customers,” says Weber. If that’s how customers perceive the telcos, they have got a great advantage against some of the cable operators, many of whom are regarded as being about one step above Enron in their business practices.