News

Small Op Northland Makes Big Plans for Multiple ISPs

8/11/2002 8:00 PM Eastern

Proffering the wares of multiple Internet-service providers isn't just a game for cable's big boys anymore.

Northland Cable Television, a Seattle-based MSO with about 227,000 customers in 82 rural Southeast, Southwest and Western systems, has begun offering multiple high-speed-data providers in several of its markets. And it did so even though its pockets are smaller than those of the major MSOs.

With its resource-strapped local ISPs and lower-density rural markets — the MSO typically serves communities of between 8,000 and 20,000 subscribers — Northland had to take a somewhat different technical and economic tack, according to senior vice president of technical services Jack Dyste.

The operator had no intention of becoming an ISP, so it first turned to local dial-up providers, offering them access to its cable-modem network as well as provisioning and installation services.

In exchange, the ISPs agreed to help foot the cost for the necessary fiber line between Northland's headends and their own operations centers. They also agreed to handle customer service and marketing.

"What's unique about our plan is that we provide conditional access to local ISPs," Dyste said. "These are dial-up ISPs that exist in the small communities that we serve that are providing good quality service, and we have most of the ISP markets there because in many of the markets we serve, there isn't another high-speed solution."

Not only did Dyste need the system to handle multiple ISPs, but it also needed to function in either a one-way, telco-return system or a two-way scheme. So it tapped Dutch information and communications technology provider Getronics NV to design and install the lower-cost cable-modem system, powered by Cisco Systems Inc.'s uBR7200 cable-modem termination system routers.

Getronics' intelligent routing system appeals to smaller operators because headend-installation costs are relatively low, said business development manager Gene Orr.

Northland's estimates are for a system that passes fewer than 10,000 homes, the cost for headend equipment, 150 modems and installation services is approximately $61,000.

For that expense, operators can achieve a return on their investment within 24 months for a customer base as small as 300 data users, Orr said.

Northland's economic models pare that down even further. The operator projects that a system passing 3,000 subscribers will reach positive cash flow in four years with as few as 100 ISP customers.

SMALL 'OP'-PORTUNITIES

For Amsterdam-based Getronics, the smaller cable operators present a business opportunity — particularly now that the vendor has a deal to provide cable-modem hardware and designs to the National Cable Television Cooperative. It is also a Cisco development partner.

"What we are looking at is really just to support the cable companies, because this is new for them," Orr said. "These are enhanced services, and they are basically in the video world, the content world. So this simply gives them another avenue of revenue that they may not have thought of before."

Getronics got Northland's pilot multiple ISP system up and running in Vidalia, Ga., in less than 60 days. That was enough encouragement for Northland to extend multiple-ISP access to the surrounding communities of Lyons, Higgston and Santa Claus, as well as Forrest City, N.C.

It has also completed installation and is readying to begin multiple ISP service in its Port Angeles/Sequim, Wash. market.

Thus far, Northland is the only NCTC member fielding a multiple-ISP service, according to co-op senior vice president of hardware Mark Bishop.

But word of what Northland is doing — and Dyste's economic projections — might change that.

"I think now that there will be a lot of people that try," Bishop said. "[Dyste's] business case is a good one — it's a solid argument, it offsets a lot of the cost, it puts a lot of the cost back on the participating ISPs, which lowers his cost of entry, which gets him to market faster."

For now, though, the smaller operators are focused mostly on rolling out digital cable service, Bishop acknowledged.

"It isn't that it's too inexpensive in and of itself," he said of cable-modem service. "It's that data rolled out on top of everything else that they are trying to do gets a little overwhelming."

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