TELCOTV HIGHLIGHTS NEED FOR PARTNERSHIP

If telcos are to make the push into the video market economically feasible, it will take an unprecedented amount of cooperation among industry players, according to several carrier and vendor executives at last week's TelcoTV show in Las Vegas.

What's more, with pressure on access lines expected to increase as number portability is implemented, telcos may not have much choice but to begin deploying video as a way to stem that revenue drain. Indeed, carriers that already have deployed video systems say they haven't been hugely profitable, but have been effective in holding on to customers. The key is keeping costs down on big-ticket items, such as headends.

“A lot of independents like to act on their own, but in this day and age, you really should be looking at partnering on things like the headend,” said Doug Eidahl, CEO of James Valley Communications, a 4000-line telco in Groton, S.D.

James Valley and its sister CLEC, Northern Valley Telecom, have teamed up with several other South Dakota telcos to jointly deploy a headend, Eidahl said.

Vendors also are rushing into the market. Broadstream Communications came out of stealth mode at the show, announcing an IP TV transport network that will send 120 channels of broadcast content to telcos. The Seattle-based company plans to launch in the first quarter of next year and has teamed up with Skystream to supplement its channel lineup with on-demand content.

Initially, Broadstream is targeting carriers with customer bases that are too small to justify the cost of a headend. The company also is in discussion with larger carriers, including RBOCs, said Anthony Bontrager, president and CEO of Broadstream.

“The vast majority of the [independent] market falls into our target,” Bontrager said.