Apparently, at today's bandwidth prices, it isn't currently viable for an ISP to enable IPTV..
http://www.theregister.co.uk/2007/04...of_prime_time/
The problem is that, in the case of the Internet, what technology is capable of is trailling what people want from it. To a large extent, this has always been the case, and it probably always will be (A lot of people would want a 1:1 connection for £34 for instance, this clearly isn't viable).
The problem, in this case, is the amount of bandwidth used by IPTV (I include all Internet video in this). According to the article I link to above, Youtube (by far the most common form of internet video) uses around 200K per second.
Most people are happy to watch a short video on Youtube, but would start to get a little upset if they had to watch an entire programme at that quality.
Increase the quality to that of Standard Def Television, and the bitrate (using a variant of MPEG4) and the bandwidth increases to around 700Kbps. This is still managable on the average BB connection, but if you get a couple of thousand people watching programmes at this bitrate in one area, the ISP may start to feel the strain.
Now, we come to HDTV. Now, there are several resolutions for HDTV. Most of the lower end sets are capable of only the lower resolutions, but (again, according to the article), the bandwidth for those is around 2.5Mbps. Get a couple of thousand viewers watching those streams in an area, and any ISP *will* feel the strain.
The real problem is still coming. The mid-range and high end HDTV sets are increasingly capable of full resolution HDTV (1080p). If IPTV takes off, joe soap, who knows little or nothing about bandwidth, and how the Internet works, will want to watch at least some of his or her programmes in 1080p. The bandwidth for this is over 10Mbps. Get a couple of thousand people in an area needing to stream data at a reliable speed of 10Mbps, and most ISPs would have trouble.
The problems occur because the internet wasn't designed for broadcasting. It was designed for Unicasting (a program connects to a server, requests data and the server sends data to that program). Unicasting is incredibly inefficient for broadcast data (such as TV shows) as it requires that complete copies of each show be sent individually to each user. Conventional broadcasting is different. One copy of each programme is sent out. That programme is then recieved by everyone who wants to watch it. The difference being that the programme occupies the same amount of bandwidth whether one person watches it or 1,000,000.
The report I link to appears to suggest that IPTV will never happen, purely because it will never be viable for the ISPs. This may be true. One way to reduce the total bandwidth load on the ISP's links is to use Multicasting. This is a technique where the ISP's routers and switches recieve one copy of the data, and actually handle the distribution to the users themselves. In fact, I believe that Virgin's Cable TV network head ends use a technique similar to this. For an ISP to use it, however, they may need to spend a lot of money on router and switch upgrades. So, not many ISPs have implemented it, and I personally don't know of any that are planning to.
However, when I first started using the Internet (12 years ago), it was on a 14.4Kbps modem. I never thought that 12 years later, I would be using a connection that was over 1,000 times faster, so you can never be too sure.