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Telco TV: Smaller Is Quicker - Broadcasting & Cable

Telco TV: Smaller Is Quicker

Two Southern phone companies are almost ready to deliver video
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While telco giants grapple with the chal-lenges of delivering TV over telephone lines on a massive scale, two relatively tiny telcos in the deep South are already racing ahead with video delivery. Within a matter of months, the Farmers Telephone Cooperative in Kingstree, S.C., and Progressive Rural Telephone in central Georgia plan to begin offering TV to subscribers—over existing copper phone lines. Farmers has 60,000 customers; Progressive has 5,500.

Meanwhile, behemoths like Verizon and SBC don't expect to be able to send video over their expensively upgraded fiber-optic lines until the end of the year or later.

What makes the little guys so nimble? Internet Protocol television (IPTV) technology, which facilitates the otherwise impossible task of sending TV over copper phone wires. IPTV works because it is more bandwidth-efficient than traditional cable-plant technologies. It sends out only the requested channel, whereas a traditional cable system sends the entire lineup, requiring much more bandwidth.

Narrower Pipes, More Content

Farmers and Progressive will take slightly different approaches to their IPTV-powered services. The former will use MPEG-4 Advanced Video Codec (AVC) technology, a next-generation video-compression technology, while the latter will deliver MPEG-2 video signals over ADSL2+ lines.

IPTV is already being used by a number of telcos in the U.S. (SBC and BellSouth both plan on using it for their video rollout), but the use of MPEG-4 AVC makes Farmers' deployment unique. The technology, which still has some technical developments remaining to be achieved (like MPEG-4 set-top boxes), promises to transform the industry by making it possible to distribute and store digital video with at least double the efficiency of current MPEG-2 technology.

Content owners will be able to cut storage costs in half, while those distributing content will be able to send it out over narrower pipes or send out much more content.

Robin Coker, Farmers' chief marketing officer, says the company will send three video streams to member households so each can have up to three TV sets receiving IPTV signals. Not bad for a cooperative that found the idea of laying coaxial cable over its 3,000-square-mile service area prohibitively expensive. Until a few years ago, the idea of using IPTV instead of coaxial also was a non-starter, because of “last- mile” problems getting signals to homes from the nearest distribution point. The new system will be able to send video from more than two miles away, greatly simplifying the process.

Coker says the rollout is expected to be completed by late fall.

Both Farmers and Progressive say their pricing for TV content will be competitive with cable. It isn't the only cable turf the phone company is invading. “We also see ourselves transitioning the voice service to an IP-type network in the next three to five years,” says Coker. Time Warner Cable, with which Farmers will compete, declined to comment.

Farmers will use Tut Systems' Astria Content Process system and its MPEG-4 AVC codecs to send standard-definition video over digital subscription lines (DSLs) and high-definition TV content over Asymmetrical DSL.

“The chassis will do everything,” says Tut Systems VP Craig Bender. “It will ingest the satellite feeds, both analog and digital, and then stream the content to the viewer using the MPEG-4 AVC codec.”

Tut Systems is the systems integrator for Farmers' project, providing the satellite dishes, receivers and servers for Emergency Alert Systems, caller-ID technology, middleware for VOD menus and programming guides, and other gear. Bender says the cost of an IPTV system can start at $1 million and increase depending on the capabilities required.

IPTV isn't without challenges. Because it sends only one stream of content at a time, there is a slightly longer delay when a channel is changed. The set-top box has to send a request for the channel and then receive the video packets and reassemble them into a channel. How quickly that task is done relies on the set-top box and software. First-generation MPEG-4 AVC set-top boxes are still being manufactured, so it is not known how long changing a channel will take.

More Traditional Route

While Farmers deploys next-generation technologies, Progressive is going the more traditional MPEG-2 route. It will use SkyStream's Media­plex-20 headend to deliver IPTV and music content across its access lines.

Mediaplex will help the system deliver a service that includes 141 TV networks, six local channels and 35 music channels. It is expected be available in August—and the company thinks it will find customers quickly: Larry Stevenson, central office supervisor at Progressive, says the rural telco completed a survey of its existing customers and found that more than 80% of respondents were interested in replacing their current TV service with one from the local phone company.

Indeed, Adi Kishore, Yankee Group analyst, media and entertainment strategies, says that, while smaller, rural telcos have a disadvantage in terms of available capital and the ability to get the best rates for cable networks, they do have one advantage: Odds are, the local cable system, even if it's owned by a large cable operator, isn't technologically cutting-edge.

“Because the return on investment is the lowest in those markets, they tend to not have whiz-bang services,” Kishore says. “And older cable plants tend to have less satisfied customers.”

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