Interview: SBC and 2Wire announce JV

(sponsor: Lok Technology) I was able to speak with Brian Sugar, 2Wire's vice president of marketing, about today's announcement of a joint venture with SBC Communications to launch a home entertainment service for SBC. I had a bunch of questions and will summarize his answers here:

Q. The press release talks about access from mobile devices -- but in the context of a section about programming set top boxes... so will I be able to watch content from say my cell phone?

Brian -- Technology wise - we have it, we can do it, but when we have shown this to consumers they aren't interested in it. You'll be able to remote schedule your DVR, schedule video on demand, virtually return checked out videos and such. You will be able to stream audio, see your photos.. but not TV.

Q. Other companies are jumping in to the TV and Video distribution side -- why stop at audio and photos? What is different about the consumers you expect to be selling to?

Brian -- There is a "do-it-yourself" group vs "mom" group -- all that stuff that you used to have integrate yourself, we want to wrap it up and sell it as a service. This is what we were focused on before our company was acquired by 2 Wire

Q. What company was that?

Brian -- SugarMedia, we were a 12 person software company in San Francisco that did software and backends for set top boxes

Q. So the MediaPortal product from 2Wire came from the acquisition of that company?

Brian -- Yes.

Q. OK, switching gears, let me ask about Microsoft -- IPTV is the name they use for their big Microsoft TV initiative, and SBC is a "tester" -- how does this relate?

Brian -- All 40 million homes that SBC serves can be served with satellite -- but Microsoft will only be able to address the 15-20 million homes that will have fiber. Ours is a strategy to complement the MSFT TV2 strategy and fill in the holes.

Q. So if the satellite, media portal service can do what Microsoft's IPTV can do, why bother with Microsoft? Will SBC discontinue their work with Microsoft?

Brian -- SBC wants to control both the network and the content, so the Microsoft TV IPTV play is still important. With Echostar, SBC doesn't have any influence over the content

Q. The press release today talked about a Joint Venture. What does this actually mean?

Brian -- We probably overstated that in the press release. For example, I have a card that says that I am the Chief Marketing Officer of SBC Media Solutions, but my paycheck still comes from 2Wire. And SBC doesn't own any piece of 2Wire. The point of talking about this as a JV is to communicate to the marketplace that we are operating with joint interests in mind.

Q. Lets talk about the other features in the product -- a USB port? CD/DVD Burner?

Brian -- The CD/DVD Burner will remain dormant until the SBCs of the world decide to turn it on, same with the USB ports. We are taking a conservative approach -- we don't think people (the "moms") are going to worry about watching video outside the home so we'll watch the Slings and Orbs of the world and see how they do.

Q. You have a set of other partners listed on your website -- BellSouth, BT, Telemex. Is this deal exlusive to SBC or are you pitching these others as well?

Brian -- We are currently pitching all of these partners with a satellite partner but I don't have anything to announce.

Q. With a satellite partner -- so is the magic DSL and Satellite as a pair?

Brian -- The two wires coming into the home are Satellite and DSL - with our product we can provide a completely integrated experience and easy to use interface.

Q. When will this be available to consumers?

Brian -- Mid-2005 roll out with SBC