Not your gradpa's telco: IPTV plus Internet over DSL gives rural provider a true triple play - Technologies Work

Mike Foster is in a hurry. A Twin Valley Telephone (TVT) subscriber is having problems with his satellite TV dish. Foster would just as soon sign up the subscriber for the 60 TV channels that TVT hopes to begin offering this month. As TVT's president, Foster is convinced that combining video with high-speed Internet access over DSL lines will translate into additional revenues for the rural telco that his grandparents founded 55 years ago.

For Miltonvale, Kan.-based TVT, which has slightly more than 2400 customers spread over 900 square miles, each customer is a potential source of revenue for the company's triple play of voice, data and video services. The telco's ownership of CATV systems allowed it to offer a video service to subscribers, and for about the last three years it has also been offering 128 kbps iDSL Internet access, since most customers have a second line in addition to a voice line. Although it initially used repeaters to be able to push an iDSL signal to a user almost 12 miles Out from the Go, that still wasn't good enough to reach all of the customers in rural areas. With some money provided through a USDA program for rural utility services, the telco instead began installing DIGs (digital loop carriers) and ensuring that no customer was more than three miles from a DLC.

Foster said that from the day the telco began installing DLCs, it was with the thought of also offering every subscriber even faster Internet access via ADSL. Foster also had his eye on people in rural areas that were out of the reach of TVT's CATV systems and so were receiving TV channels via satellite. But working against the satellite TV providers was that they couldn't deliver local content from cities such as Wichita and Topeka, Kan., or Lincoln, Neb., which TVT could do with its microwave connections. On the downside, TVT's CATV systems channel capacity was limited to a little more than a couple dozen channels. Rather than pour money into upgrading the cable systems, TVT has instead leveraged the DLCs and is installing ADSL equipment in the COs.

TVT will soon be offering 60 TV channels over DSL lines that will also be used to deliver 384-kbps Internet access. For its TV service, TVT has selected the IP TV solution from Minerva Networks. The Santa Clara, Calif., company makes equipment that takes the output of a traditional cable head-end and converts the video signal--which might be analog or digital--to IP. Since TV-quality IP video needs about 3 Mbps, a full-rate 8-Mbps DSL connection is sufficient for two separate video streams and a POTS line, while still leaving room for 384/768 kbps for Internet access.

Foster is pretty confident that he'll be able to serve all subscribers who are no more than three miles from a DLG with two video streams, although he thinks that some at the very tail end of a DSL connection might be able to receive only one video signal. "If we were to upgrade our existing cable TV system [to support more channels] the only customers who'd have benefited would have been the in-town customers because there's no way we could have deployed coax to everyone in the rural areas," Foster says. "iDSL was an entry-level product that we'll be phasing out completely. We knew if we could get ADSL out to every customer, we could do video and package that with Internet access and telco services.

TVT, which currently offers 27 channels over coax for $25 a month, plans to offer a basic 45-channel package for $36.95 for subscribers who want a single video stream. Those subscribers who want to be able to view two separate channels simultaneously will be charged $36.95 for two streams of IPTV. Because of the economics of being able to use the same DSL line for both IPTV and Internet access, Foster says he'll be able to triple Internet access bandwidth to 384 kbps for subscribers who sign a three-year contract while holding the price to about what they now pay for iDSL.

At this time, TVT is trying out the IPTV service with one of its own technicians, who is receiving two video streams. Foster says the picture quality is "great." But there'll need to be a lot of fine tuning of the DLCs and DSLAMs with the equipment in the headend before TVT starts to roll out the IPTV service, initially to in-town customers. Foster says that since about last month, when TVT started sending out brochures to inform customers about the video service, it's been receiving 20 to 30 calls a day from people wanting to discuss the service package they want. Beyond the basic package, TVT will be offering subscribers premium channels and pay-per-view. "They can hardly wait, and I'd be disappointed if within three years we don't have 80 percent of the market," Foster says.

Sam Masud, senior technology editor (smasud@telecommagazine.com)

COPYRIGHT 2002 Horizon House Publications, Inc.
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