Watching coverage of the recent IPTV Forum in London, I was struck by the extent to which the telecoms industry is poised to make the same mistakes it made during the Internet boom, this time in the realm of TV.

To explain.

Major telcos like BT, France Telecom and others have a slight problem. Local loop unbundling has brought a number of new players into competition. Revenues from voice calls are going down as people switch to VoIP or other low-cost providers. Broadband Internet access is going up, but prices are falling. What to do?

Ah, says someone. Start pumping TV down those phone lines and all of a sudden the big telcos will have untold new pay-TV revenue streams.

Except they won’t.

Most analyst projections show that even as they invest in broadcast TV via the Internet (hence “IPTV”) revenues will flatten and start to fall as – guess what – other players like Google and Yahoo! plan to enter the fray along with with some pure-play ISPs. Not to mention falling costs among existing players like BSkyB who already have significant market share.

What’s a beleaguered telecoms executive to do, I hear you cry?

Well the impression coming out of the IPTV Forum in London this week was to become… a portal.

At this point my internal alarm bell – finely tuned by several years of boom and bust in the Internet economy – started to ring loudly.

Trying to become THE portal was, in part, what lead to so many Internet companies going the way of all flesh. Only a few survived the dotcom bust and they were the biggest with the deepest pockets. And only the deepest pockets have lead Google to even contemplate such a move in order to cement its position.

Become a portal is not for the faint hearted. Remember Telewest Broadband? Yes, they still exist, but largely as a triple play cable provider. At one point they had a whole division spending millions trying to figure out how to ‘become a broadband content portal’, when in fact it turned out that all people wanted was just fast, reliable, always-on, Internet access.

The history of what happened when people were given broadband is now largely taken for granted, but it’s worth reviewing.

People started using the Internet more. Page impressions went up because it was always on, and faster to browse the Web. People then spent longer on it, eating into the time they spend on other activities and media. Because traffic went up, the advertising market lifted. Now we a new boom for Internet advertising. The resulting revenues have meant it is possible to offer free or cheap services without subscription. Content subscription barriers have come down and new players have entered the market.

New innovation has also appeared. Flickr, the photo sharing site, exists because of broadband, but it would never have been developed inside a portal – it was just too innovative to begin with. Now it’s been sold to Yahoo! for millions of dollars.

Now, big telcos who want to be broadcasters reason that the TV experience is different. It is lean back, not lean forward. They are right.

So why have two tiny telcos – Telecom Iceland and Bell Canada – decided to go the other way and just put a nice skin onto what are essentially Internet services?

The have realized what the big guys don’t want to hear. They know people want all that TV stuff – Video on demand, time shifted viewing, two-week EPG etc etc – but they also know they want to access their Gmail account and their MSN Messenger profile on the TV too. Because why should we have to get up off the couch and wait for the Windows PC to boot up?

And in the name of all things holy, why would anyone want their TV provider to be the gateway to their highly personal interactive services? Can we imagine a time when people will log in to check their email account for instance?

To me at least, this doens’t make sense. Basically the Net got their first. If someone has a Skype account and their mum calls on Skype while 24 is on TV, they’d rather it all interfaced. Why? Because they don’t what to have to give out three different VoIP accounts to their friends and family. They just want the one, thanks. How is it all going to interface? By the telco getting the hell out of the way and just giving us access to all those innovative services they themselves could never develop, launch or dream up.

So if the portal-play for IPTV service providers doesn’t work, what is left? Well, they can be more savvy about this. As well as just giving us blisteringly fast 25 MB/s full-frame TV, they can be cleverer about the services they provide. Why not link in with security systems? Or electronic healthcare for the elderly? Or existing video game communities like World of Warcraft? It’s these extra things, not just plain TV, which make the difference.

However, I think this advice will fall on deaf ears. Too many telecoms executive want to become TV or film studio executives, and sleep with a few models looking for their first break.

So bring on the IPTV portals and let the boom and bust begin.