THINK GLOBAL WATCH LOCAL

Rod Collingwood knows what small towns look like. Not the kind idolized by TV commentators around election season, or the kind that serve as photographic evidence of a lost era in American history, but really, really small towns. As the headend manager for TCT West, Collingwood has towns, to use the term loosely, that are not much more than a cluster of a few dozen homes in northwestern Wyoming.

TCT West, which operates as a subsidiary of Tri-County Telephone and was formed in 1994 with the acquisition of five former U S West exchanges, serves some of the smallest towns in the country. It also is among the most aggressive when it comes to rolling out video service over copper plant. In some cases, the company competes with incumbent cable operator Bresnan, which bought some former AT&T Broadband systems, but more often it competes with satellite providers that can offer hundreds of channels. And it's winning customers from both, not necessarily by shoving more channels down its copper infrastructure, but by offering up unique local content that the others can't — or won't — provide.

“Local content is a selling point, but it's an even bigger method of reducing churn and getting people to reconnect,” Collingwood said. “When the competitive offers start coming in, people realize they don't get the local stuff, like city council meetings.”

Indeed, like many independents that rely on their local presence to appeal to traditional voice customers, a number that have started supplying video are emphasizing their ability to offer local fare like high school football games and city government meeting. TCT West, though, goes beyond simply providing PEG (Public, Educational and Government) channels required by franchise agreements.

TCT uses Motorola NextLevel's access platform, Tut Systems' M2-VMX and M2-AMX video/audio demultiplexers and M2-T310 encoders as its digital headend, along with Tut's single-channel encoder for local content, to offer up to 106 channels of broadcast channels plus nine pay-per-views. The telco also is in the process of overhauling its 500-plus mile fiber ring to run gigabit Ethernet as a video source for surrounding independents.

TCT also is starting to experiment with ADSL Plus line cards that would offer greater speeds to subscribers on short loops, and is looking at ADSL 2 Plus platforms. It's all part of an effort to stay ahead of the curve, Collingwood said.

“You have to keep pushing out,” he said. “Take CLASS features: There are still a lot of places where features like voice mail are unheard of. To us that's old stuff.”

But in an area where “local” news comes from Billings, Mont., it's the truly local content where TCT pushes boundaries. Beyond simply providing still video of events like city council meetings, TCT does post-production work for tape-delayed broadcasts that come as close to convergence TV as any large big city telco has tried.

If a council meeting goes behind closed-doors, for example, minutes will appear later as a PowerPoint presentation.

“If they're doing a presentation to the town council and there's paperwork that you can't catch on video, we'll add that in on replay, too,” Collingwood said.

TCT, which deployed its initial system in 2000 and was one of Tut's first customers, also is expanding into its parent company's territory by deploying 40 video-ready DSLAMs from Net-to-Net Technologies. In one of those events that so often occur in telecom, the TCT West properties that were bought from U S West went through an extensive upgrade and ended up leapfrogging the capabilities of the existing Tri-County properties. As a co-op, Tri-County's owners weren't thrilled to have the new kid grabbing the best technology. “When it was first deployed, the Tri-County people didn't have all the same services that the TCT West customers had,” Collingwood said. “That caused some friction.”

Under the current plan, though, Tri-County customers will be getting their video service, albeit over an IP access platform (NextLevel's platform incorporates ATM). In fact, the small telco is becoming a conglomeration of access platforms with some DSLAMs from Allied Telesyn as well. With Net to Net, the company is looking at the newest version of its mini-DSLAM. “It's a typical Net-to-Net customer,” said Matt Byrd, vice president of marketing for Net to Net. “They like it because it's a small form factor and it can be either plain-Jane DSL or migrate to a full-service video.”

TCT West and parent Tri-County aren't the only operators using local content in unique ways. FTTH Communications, a Roseville, Minn.-based residential carrier owned by residential community developer Contractor Property Developers, is looking at the possibility of providing local content on an on-demand basis.

“The value of the local content is on the video-on-demand side,” said John Schultz, general manager of FTTH. “I'll sit and watch the city council meeting, but I just want to watch the 15 minutes that are important to me. Our plan on the local content side is to load that up to a server and have it there.”

Though the company serves a very small community, like TCT West, it's looking at ways to provide local content in a way that is interesting to TV viewers. That means going beyond the boring talking heads that make up PEG channels.

“Just providing four channels of local content is not very enticing,” Schultz said. “We're going to take what we get and edit it down.”

Though still on the drawing board, offering local content via VOD would be a continuation of FTTH's tradition. Since March, it has been working in partnership with local high schools, using their video production facilities and having students do most of the film and editing work. FTTH then uses its headend facilities to play back the final product, which can range from local football games to school plays.

The company, which has signed up 400 customers since launching video, is using Tut's headends, Optical Solutions' access platform, Kasenna's VOD servers and ViewNow software to offer more than 100 channels of broadcast and a half dozen pay-per-views. FTTH has partnered with Minnesota-based telco Onvoy for transport as part of an effort to offer video services to other carriers on a wholesale basis.

Though other carriers will be able to use the head-end resources of FTTH, it will be up to them to inject their own unique local content. And mixing in local flavor with dozens of HBO channels and a full complement of traditional cable fare works well with even larger independents. D&E, one of the largest telcos to publicly commit to a significant rollout of the terrestrial video, plans to use PEG channels and is looking at different ways to incorporate local programming into its lineup.

“We've always been very involved in the local community,” said Steve Sandler, vice president of marketing for D&E. “We don't have [the PEG channels] in place today but we realize that that would be something that would be attractive. In Central Pennsylvania that plays very strong. A lot of local businesses make it a point to try to work with other local businesses whenever possible.”

More to the point, however, Collingwood notes that with access lines still falling for many, the time to develop a strong video business is now.

“If you offer broadband at all, in a sense you're cutting your own neck with second lines,” he said. “So you really can't just sit back and do nothing.”