Rural telcos increasingly are pulling together in an effort to launch video services more quickly and cost effectively. One key development on this front is the growth in shared video headends.
"For us that's happening all over the place -- the Dakotas, Wisconsin, Minnesota, Kentucky, Tennessee," says Next Level's Geoff Burke, director of marketing services.
Sean Blakley, senior product line manager at Advanced Fibre Communications (AFC), notes many independent operating companies are "very, very small" -- with 5,000 lines or less. "So it's just not cost-effective for them to build their own headends," he says.
VideoTele.com, a subsidiary of Tut Systems, also has seen a lot of independent telco consortiums sharing headends, adds marketing manager Jeff Schline.
But sharing a headend among different operators creates new headaches, because all the telcos that share it have to agree on the same general programming lineup as well as on some equipment, says Blakley of AFC, which delivers end-to-end video solutions using its own access and coarse WDM products and engineering resources and the equipment of partnering vendors. "Middleware sits in the headend and at the set-top box," Blakley adds. "If the headend has a certain encoder, all companies have to agree on one middleware company, or choose all different ones [and do integration]." The consortium also has to create a legal entity to handle all these decisions, he adds.
Burke says one of the big advantages of having an end-to-end system such as the one Next Level sells is the ability to do area channel mapping. It's not an easy thing to allow one city to have one set of channels and another city to have a different set to allow for variations in local fare, he says. But the management system that exists behind the Next Level platform handles that kind of thing, says Burke.
Rural telcos have been identified by video vendors as the one group of domestic telcos that are moving aggressively to deploy video services. That's in large part attributed to the fact that in this down market, rural carriers still have access to funding through low-interest loans and grants provided by the U.S. Department of Agriculture's Rural Utilities Service (RUS). In light of that, vendors are increasingly designing equipment and marketing campaigns to appeal to these small fry (see "Vendors Chase Rural Telco Business," November 2002, and "Rural Carriers Mooove Into Industry Spotlight," December 2002).
