Small Telco Eyes Cable Over DSL

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A small independent telephone company in Hart County, Ga.,
believes that it has found the telco-TV solution that will reignite the industry's
pursuit of the cable business.

Hart Telephone Co. said last week that it was preparing to
use a new xDSL (digital-subscriber-line) system to deliver 80 channels of cable
programming over the portion of its telephone network that serves some 10,000 voice
customers in Hartwell and other parts of Hart County, located about 90 miles northeast of
Atlanta.

"This is what we in the telephone industry have been
waiting for," said Lee Barton, president and CEO of Hart.

The technology in question, supplied by Norwalk, Conn.-
based mPhase Technologies Inc., offers a means of delivering digitized TV signals, along
with high-speed data and standard voice service, over existing lines. The purported cost:
$1,500 or less per customer, including the digital set-top and xDSL-line modems.

Hart, which operates a 330-megahertz cable system that it
purchased from Buford Cable TV three years ago in areas outside of Hartwell, intends to
use the mPhase system to take on franchised operator Comcast Corp. in Hartwell, where the
telco has 3,300 telephone customers, Barton said.

The company plans to use an early version of the mPhase
system, supporting 16 TV channels and 1-megabit-per-second data access, in a 100-home
trial this fall, and to roll out the anticipated 80-channel version commercially next
spring.

Barton said that colleagues who he has spoken to at other
independent telcos are enthusiastic about the possibilities offered by the mPhase
technology.

"There are a lot of companies like ours that have
found it too expensive or impossible to buy local cable systems, but that want to get into
the business," he said.

DTC Communications, an independent telephone company in
DeKalb County, Tenn., has also been testing the mPhase system, with outstanding results,
according to Wayne Gassaway, general manager of DTC.

"Our goal is to demonstrate that a local telephone
company can provide quality video and increased data capacity at a competitive price
structure, for both business and residential applications," he said.

A publicly held company created out of defense-contracting
firm Microphase Corp., mPhase uses the industry-standard modulation technique known as
"CAP" (carrierless amplitude phase) to deliver a payload of about 7 mbps
downstream and several-hundred kilobits per second in the return path.

What distinguishes the mPhase technology is a proprietary
"headend-distribution platform" and a "framer" chip that segments
bandwidth for the three service categories, rather than any special DSL techniques, mPhase
president and CEO Ronald Durando said.

The technology was developed in conjunction with the
Georgia Institute of Technology's Research Institute and Microphase, which is a
leading supplier of the duplex filters that are used in cable-television amplifiers.

TV channels are delivered one channel at a time, in MPEG-2
format, over the twisted pair to the set-top from the mPhase channel-access module at the
headend, at access speeds that match the channel-changing experience of cable subscribers,
Durando said.

The system, delivering the MPEG channel at 4 mbps to 5
mbps, can serve only one set-top per line at this point -- a drawback, Barton
acknowledged, but one that he believes can be addressed with further advances in the lab.

The system can deliver services over any lines that meet
industry DSL specs for a distance of up to 12,000 feet, which, in Hart's case, means
that all customers in Hartwell would have access to the service, Barton said. But some
home wiring might have to be upgraded in order to ensure quality reception, he added.

While Barton praised the technology as a low-cost
alternative to other means of getting into cable, he disputed Durando's claim that
the system is "absolutely" cheaper than upgrading old cable plant to comparable
capacity levels.

"That's something that we're still looking
at," he said.

Hart's approach to expanding the channel capacity of
its existing cable service outside of Hartwell will depend in part on whether mPhase can
come up with a way to support the delivery of services over twisted-pair copper lines from
remote terminals located some distance from the central office, Barton said.

"Their commitment to us is that as soon as
they've completed work on [the 80-channel system], their next step will be to find an
economical way to extend the service to remote terminals," he added.

Durando said mPhase expects to have a solution that will
allow telcos to "piggyback" the TV system onto the digital-loop-carrier system
that links remote terminals to central offices by next year.

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