Moto Helps Telco Go Video

10/24/2004 8:00 PM Eastern

Two years ago, The South Central Rural Telephone Cooperative Corp. rolled out a video-service package over digital subscriber line to 28,000 telephone subscribers in nine south central Kentucky counties.

Earlier this month, SCRTC — a 54-year-old cooperative that operates 16 telephone exchanges — hit the 10,000 video-subscriber plateau using video DSL technology from Motorola Inc. Both the vendor and SCRTC believe it’s the first time any telco has reached that milestone.

Even more stunning: the video subscriber rolls have surpassed the co-op’s 7,000-subscriber high-speed data roster.

The growth has been charted amidst a group of competitors, including DBS providers, Comcast Corp., Mediacom Communications Corp. and a municipally owned franchise in Glasgow, Ky. Welcome to the new world of multilevel, multi-service competition.

Several years ago, the co-op began installing 16 DSL access multiplexers throughout 300 carrier sites in its service area to offer high-speed data.

“We were beginning to phase out the old carriers and we put in [gear from] Next Level [Communications Inc.],” said SCRTC director of operations Kyle Jones. “When we put in 24 broadband-distribution terminals for data, we rolled out video” almost simultaneously with high-speed data service.

The coop then installed USAMs (universal services access multiplexers) or line-card shell aggregation service modules at the point where its fiber-to-the-curb technology switches to copper plant. Some of those shells are in central office buildings, while others reside on poles or are housed on pop-up carrier sites, Jones said.

Homes must be within 10,000 feet of those sites to receive video service. VDSL homes can receive two streams of video, switched from a location closer to the origination point of the network.

The co-op installed residential gateway devices in homes that wanted video service. The RGDs included a DSL modem terminal, digital MPEG-2 (Moving Pictures Expert Group) decoders that feed back into the coaxial cable plant and an Ethernet termination for high-speed data.

SCRTC also offers a tier of off-air TV stations from Nashville, Tenn., and Louisville, Bowling Green and Lexington, Ky., as well as home shopping channels, for $26.95 a month.

The core 95-channel video package costs $34.95 a month and provides familiar basic-cable channels, plus services of particular interest to the co-op’s rural members, including the RFD Network, a rural farming channel, a radar channel and a weather channel. It also offers 32 premium channels and TV Guide Interactive.

The combined offering allows the co-op to converge services. While cable operators are beginning to explore caller ID over the TV set, Jones said SCRTC already offers that service — for free.

It’s a switched-video setup. To change channels, the conditional access is authorized, according to Floyd Wagoner, director of marketing, Motorola Telecom Access Solutions. Channels are changed at the node.

The co-op digitized satellite channels at a constant bit rate between 3.2 Megabits per second and 3.5 Mbps. Signals are sent from the headend across an OC-12 SONET (synchronous optical network) ATM (asynchronous transfer mode) backbone to the broadband distribution terminals.

The co-op guarantees two pictures at 10,000 feet, but is also able to squeeze the distance to 12,000 feet for a single channel. It’s also sold 600 additional outlets to families that want more than two TV signals at a time, “but it’s kind of pricey,” Jones said.

The average video-and-data bill is $58 a month, a price that’s helped drive penetration, according to Jones.

And the fact that SCRTC remains a cooperative — last year, it gave back more than $1 million to its members, which works out to $36 per home — also helps it in its marketing efforts, since subscribers, in effect, own their cable, data and telephone company.

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VR 20/20

The Times Center, New York, NY