CES Trend #4: Will the quadruple-play finally cinch the 'last mile?'

What could eventually resolve the value proposition for mainstream consumers to accept an incoming ultra-high-bandwidth pipeline into their homes is the ability of high-definition, on-demand video. But that will require a level of cooperation that competitors thus far have been unable to muster.

"Convergence," used by CE manufacturers to promise solutions the way some political candidates promise "change," has once again become the big problem. The conventional logic is that converging the various communications services -- landline phone, wireless phone, broadband Internet, and HD video -- is the only way to make them both appealing to the consumer from a cost standpoint, and cost-effective to implement from the producers' and manufacturers' vantage point.

But implementing this convergence is turning out to be more difficult than building a trans-continental railroad. Squeezing all these services into one pipeline, or at least into the appearance of a single pipeline, is a matter of getting all the various components and the companies with interest in those components, on board simultaneously. Each of these companies has a stake in the outcome of convergence, and any one of them can and will lay claim to the "gateway" of future communications. They include:

1. Set-top box manufacturers whose products contain the technology that decodes and protects what you see on your digital TV
2. Embedded processor manufacturers whose systems-on-a-chip (SoC) used in STBs contain the intellectual property used to determine what formats your digital video is compressed and protected by, and which are now taking the added step of incorporating voice-over-IP communications protocols that could change the way you answer your phone
3. Display manufacturers whose digital interfaces determine which components -- including STBs, DV-Rs, and disc consoles -- can connect together in your home
4. PC manufacturers whose support for those digital interfaces may influence which displays you buy, and whose STBs they may support
5. Software producers, some of which (can you guess which one?) are making a play to have your PC substitute for the STB -- a play which could then influence which service provider you subscribe to
6. VoIP providers who could get shut out of the mix unless they find a way for STB manufacturers to support them
7. Telecommunications companies that have already made the biggest investments in both the wireless and broadband pipelines, and are looking to recoup that huge investment by selling services over those pipelines through long-term contracts
8. Internet infrastructure companies whose routers provide the backbone for making digital services happen, and whose protocols determine the physical makeup of service providers' networks -- and, in turn, how much they must invest in them
9. Cable TV providers that have also invested billions in broadband, and who have closer ties to the content providers upon whom the entire value proposition for high-definition rests
10. Content providers including movie studios and TV networks, that have actually made technological investments with hopes of not only reaping profits from the distribution of content, but from the IP that governs the way in which it's distributed
11. Licensing authorities that hold the rights to package together the intellectual property necessary to make all this work, and whose choice of packaging determines the structure of the formats that are, in turn, used by STBs, consoles, and PCs.

It is a mess. The whole convergence value proposition depends on making all these pieces fit together. And no one has the solution yet.

Next: How did we get here?