Microsoft has issued a statement saying that IPTV functionality will not be included in the fall 360 firmware update.
It has also suggested that we might not even see it this year, as was originally promised by Bill Gates at the CES show earlier in 2007. Apparently the fancy new technology will only be given to service providers by Christmas, landing the final release-ball in their court.
"Internet Protocol Television (IPTV) features will only be available from the Xbox 360 through a service provider who has deployed Xbox 360 with Microsoft Mediaroom (IPTV) services," MS told Gamespot in a statement.
"Xbox 360 with Microsoft Mediaroom (IPTV), will be available to service providers by the end of the year. Microsoft's IPTV service providers will ultimately determine the timing of Xbox 360 with Microsoft Mediaroom deployments."
Rumours that IPTV would be included in the looming firmware spiralled from a customer whose console was exposed to the new features while being serviced. Whoops. Apparently it allows on-screen chat while watching telly, recorded shows or on-demand movies.
"This was an isolated incident where these features were inadvertently exposed while the customer's console was being serviced and is unrelated to the fall update," continued the statement.
We are currently waiting to hear back from Microsoft about what exactly will be in the update and when we can expect it to be released on Live.