AT&T Inc. announced two new locations, the San Jose and San Francisco Bay Area, that can utilize the AT&T U-verse IPTV service.

In the Bay Area, U-verse TV services are initially available in limited areas across the San Francisco-Oakland-Fremont area, including parts of the cities of San Ramon and Danville. In the San Jose Area, U-verse will be available in limited areas across the San Jose-Sunnyvale-Santa Clara area, including parts of the cities of Cupertino and Saratoga. AT&T plans to expand to additional areas on an ongoing basis.

In yet another significant merger and acquisition story for the IPTV industry, Motorola, Inc. and Tut Systems, Inc. announced that the two companies have signed a definitive merger agreement, under which Motorola will acquire all of the outstanding shares of Tut Systems common stock for $1.15 per share in cash. The transaction has a total equity value of approximately $39 million on a fully-diluted basis.

The integration of Tut Systems with Motorola will expand Motorola's ability to help service providers deploy advanced video services over IP, ATM, or RF-based network architectures. Motorola currently has deployed 2060 digital video networks and over 50 million digital video set tops worldwide.

If there is anyone rejoicing about the new IPTV services rolling out around the U.S., it must be the attorneys. In yet another lawsuit, AT&T is being pre-emptively sued by the city of Milwaukee for not obtaining a cable franchise agreement for its U-Verse TV service.

The irony is that AT&T has not even begun offering the service yet. Yet, the city wants to stop AT&T from laying anymore fiber until they have signed a cable franchise agreement.

AT&T did agree to pay the city 5 percent of its revenue from the U-Verse TV service but AT&T spokesman Jeff Bentoff said AT&T will not obtain a cable franchise from the city because its service isn't cable operated.

"We're not a cable operator and this is not a cable service. Under the law, we're not subject to those requirements," Bentoff said.

AT&T is not the only one who feels this way: see Richmond Sues Cavalier Telephone over IPTV Service.

Read more on this story in Milwaukee Business Journal, City sues AT&T over U-Verse Service

Yesterday, the U.S. Federal Communications Commission voted in favor of new guidelines that would alter the national franchise system and streamline the process for new companies like AT&T and Verizon to enter the television business with their new IPTV service offerings.

Here are some of the more vivid headlines that amused us: Divided FCC ignores Dingell, approves new cable rules, The FCC Shafts The Locals, Local officials blast FCC vote on cable TV rules, Will FCC Martin-ize Cable?, FCC opts to unclog cable route, Cable chief: The FCC hates us, Why the New FCC Rules May Bring Lawsuits.

The Commissioners voted 3-2 on the initiative with Chairman Kevin Martin and his fellow Republican commissioners Robert McDowell and Deborah Taylor Tate voting in favor. Democrat Commissioners Michael Copps and Jonathan Adelstein voted against the new guidelines.

The new rules will force state and local governments to decide on whether to grant a new franchise within 90-days. It will also remove the requirement that new providers will need to expand service to all residents in an area.

FCC Chairman Kevin Martin also released a report stating cable prices, on average, have rose 5.2 percent in 2004. The report also shows that rates from 1995 to 2005 increased a total of 93 percent.

With all the news covering the latest acquisition of Redback Networks and the impact that has on the industry, I only thought it right that we call out some of the good reads regarding the future of the combined companies.

IPTV Drives Ericsson to Redback - Light Reading
"The main driver for Ericsson's move appears to be the anticipated impact that video traffic will have on carrier networks."

Ericsson paying steep price for Redback: analysts - Reuters
"Ericsson AB's $2.1 billion acquisition of data network equipment vendor Redback Networks is a costly one but analysts said on Wednesday it was strategically sound and should bolster the Swedish player's product offering."

Fallout From the Redback Deal: Juniper, Cisco, Tellabs - Yahoo Finance
"So far, the Street seems pleased with the offer, bidding up the prices of both the seller and the buyer. Other telecom equipment stocks are sagging, apparently on concern on the creation of a stronger competitor."

By Alexander Cameron, Managing Director, Digital TX Ltd.

The very first bandwagon that new proprietors of digital media platforms tend to jump on once they have made the quantum leap of understanding that IPTV is about entertainment, not infrastructure, is that they want movies. Lots of them. Hollywood's best. Everything they can get their hands on. Viewers will see their fantastic movies and come running in their droves to the temple of consumer indulgence they have built.

Net Insight has received an order for deliveries to Kordia, one of the region's leading providers of customized broadcast and telecommunications networks, network services and converged solutions across New Zealand and Australia. The equipment will be used for contribution services for broadcasters of Video and IP/Ethernet services within New Zealand.

The solution is based on Net Insight's Nimbra platform and will be operational in early 2007.

Sony, Panasonic and Samsung lead the wave of the leading mobile, PC and consumer electronics companies that are targeting the connected home for their next major growth opportunity, according to the latest research from Strategy Analytics. The report, "Connected Home Leaderboard: A Strategic Assessment of Leading CE, PC and Mobile Companies," assesses the key business challenges facing major technology vendors that intend to lead in the connected digital home market. By contrast, the strategies of leading PC vendors HP and Dell exhibit significant weaknesses, such as limited proprietary technology ownership and inability to penetrate emerging device segments.

Redback Networks Inc. and Ericsson have signed a definitive agreement under which Ericsson will acquire Redback for $2.1 billion or $25 dollars per Redback share.

The acquisition of Redback will play a key role in Ericsson's strategy to help telecommunications carriers lower costs and upgrade their networks for broadband, telephone, video and mobility services. Redback will retain its management team and operate as a wholly-owned subsidiary of Ericsson. Redback plans to accelerate its product development and continue to expand its operations to meet growing customer demands for next generation broadband networks.

Robert McDowell, a Republican commissioner at the Federal Communications Commission, said Monday that he would refrain from voting on the deadlocked negotiations due to previous associations. McDowell was an attorney for the Competitive Telecommunications Association, or Comptel, a trade association representing smaller carriers that are critical of the AT&T-BellSouth merger.

Had Republican McDowell chosen to vote, he would have broken the 2-2 commission stalemate.

McDowell had previously stated he would not vote but the FCC general counsel came back clearing him to vote on the deal. But McDowell said that the rationale behind the decision was insufficient to persuade him to vote. "While I expected the legal equivalent of body armor, I was handed Swiss cheese," McDowell said.

Leading broadband, analysis and video blogging site IPTV Evangelist revealed the results of the IPTV Top 50 of 2006, its list of the key players who are changing the face of IPTV and online video.

The full list of winners may be viewed at www.iptvevangelist.com/top50.

This winter KyLinTV offers subscribers all new programming for the holidays. Viewers will enjoy an amazing new collection of December Blockbusters, Christmas and New Year's Specials, and New Year's Blockbusters

Research and Markets has announced the addition of 2006-2007 Europe - Telecoms, Mobile and Broadband in Italy and Malta to their offering.

This report covers Italy and Malta, together representing one of the largest and most influential telecom markets in Europe, as well as one of the smallest yet technologically proficient. Trends and developments in telecommunications, mobile, Internet, broadband, digital TV and converging media including VoIP, VoD and IPTV developments.

Verimatrix, setting the standard in content security technologies that enhance the value of pay-TV networks, has been awarded the coveted Most Innovative Product (MIP) Award from CONNECT in the Security Technology category for VideoMark™, Verimatrix’s patent-pending forensic watermarking technology. CONNECT is a globally-recognized, non-profit organization dedicated to creating and sustaining the growth of innovative technology and life science businesses in San Diego.

The latest content-shifting products and emerging technologies in the wireless industry will connect once again at the 2007 International CES, with the latest advancements in mobile phones, PDAs, wireless notebooks, wireless distribution systems and more on display. Produced by the Consumer Electronics Association (CEA), the 2007 International CES, the world’s largest consumer technology tradeshow, returns to Las Vegas, January 8-11 to celebrate the show’s 40th anniversary.