Verizon Going All-digital Video but Not IPTV, Yet

Implications: Verizon jumped into the expensive FTTPremise play earlier than other primary players, opting to put video (TV) on fiber optic cabling, whereas AT&T has chosen the less colorful FTTNode hybrid copper/fiber solution for capex reasons. Now Verizon is moving to analog video transmission, which will force non-settop box FIOS customers to begin using settop boxes, although they get these boxes at no charge.  At some future point, Verizon must be considering moving from radio frequency (rf) spectrum video transmission which the CATV MSOs use today to internet protocol (IP) tv transmission, but when?

Analysis: Upon reading the referenced article describing Verizon's early move to eliminate analog video channels ahead of the federal 2-2009 mandate, we need to scratch our heads a little and let it sink in.  Apparently, Verizon cut a deal with the FCC to halt analog transmission ahead of the mandate, in exchange for a waiver exempting it from the July '07 FCC ban on set-top boxes (stb's) with integrated security. This seems fairly straightforward; however, the implications are that the previous analog FIOS customers that did not want to pay for stb's will get free stb's.  So, what do the digital FIOS customers get to compensate them for having spent the money to buy stb's?  Anything? Nothing?  Seems kinda unfair, doesn't it?  Without any more information than the news article, we cannot determine if there is a credit for previous stb purchases by digital FIOS customers or not. 

Step away from the analog/digital discussion for awhile and consider the radio frequency transmission/IPTV transmission question that stays on the Verizon table.  IPTV in the US today is in use primarily in AT&T's Uverse FTTNode broadband rollout and few independent telcos doing FTTH greenfield builds.  AT&T is also doing FTTH greenfield builds as well with IPTV.  Verizon, however, is sometimes confused with providing IPTV for video transmission over fiber, but are in fact (there is a good explanation in Wikipedia) using radio frequency (RF) spectrum video transmission, the same methodology used by the CATV MSOs.  The FIOS stb's evidently have both RF and IPTV capability, and the Multimedia over Coax Alliance (MoCA) connections from the FIOS stb "play IPTV only from MoCA and not from video sources on the Internet.  FIOS's IPTV implementation does not follow cable television formats and conventions for two way television and instead follows the DVB standard."  quoted from Wikipedia, subject:  FIOS. 

The good news from this discovery is that when Verizon does move to IPTV, the stb will most likely not have to be changed, which would have been a nightmare of truck rolls/customer contacts.  The question still persists, though:  when will Verizon make the IPTV conversion and upsell even more revenue from the wonderful things IPTV can bring, such as targeted advertising?  Perhaps, this small discussion has helped bring some clarity around FIOS analog/digital and RF/IPTV opportunities.