Staff Writer, CNET News.com
BellSouth on Wednesday said it has begun trialing Microsoft's Internet television software for possible use in the phone giant's future video service.
The local phone giant said it will initially test Microsoft's Internet Protocol Television (IPTV) software in set-top boxes in the lab, and then target some homes for field trials. The company is trying to figure out ways to deliver video programming similar to cable TV through broadband Internet lines.
While only a test, the trials add another influential telecom firm as a potential client for Microsoft. SBC Communications agreed in November to pay Microsoft $400 million to use IPTV edition to power its Internet-based TV service, due late this year. IPTV will provide a channel guide, digital video recording and other features in SBC's video set-top boxes.
SBC on Wednesday introduced its upcoming IP video service as "U-verse," which will be sold with high-definition video, high-speed Internet access and voice calling.
Microsoft is trying to strike deals with cable and phone companies to ensure its software plays a significant role in the next generation of television set-top boxes. The local phone giants in particular are looking at Microsoft to help break cable's dominance in the living room by providing more features that mix the Internet with TV programming.
Local telecom giants are spending billions of dollars upgrading their antiquated copper networks with faster fiber lines. SBC will spend $4 billion running fiber from their data offices to neighborhood "nodes," Verizon Communications is trying to stretch fiber lines directly into homes, and BellSouth is trying to expand the number of neighborhoods receiving fiber.