CENTURYTEL RETHINKS VIDEO OPTIONS

CenturyTel, which many observers expected to become the next major carrier to prove the viability of video over copper, is reigning back its efforts, according to several vendors.

The company had said it was testing a VDSL system in Wisconsin and hinted at a significant rollout of video service earlier this year. However, those plans changed because the cost structure of such a deployment was too high, among other factors.

In CenturyTel's second-quarter earnings call, CEO Glen Post said the company had no plans to date for a major investment in a “triple play” platform of voice, data and video. At the same time, Post said the company was studying numerous other options—including the possibility of reselling a satellite-based service the way SBC Communications and Qwest Communications do with EchoStar.

“What's interesting about the SBC deal is [that EchoStar] is allowing, for the first time, a telco to brand and bill the customer,” Post said during the earnings call. “That's a big step for a [direct broadcast satellite] company.”

Representatives of several technology vendors who requested anonymity said that they responded to a significant RFP from CenturyTel, but claimed proposals were more costly than the carrier anticipated because the RFP specified an ATM-based network that would take advantage of CenturyTel's existing ATM core infrastructure. Additionally, CenturyTel wanted immediate availability of video-on-demand service, the sources said. Most telcos that have deployed triple-play services have based their transmission on IP, which is significantly less expensive, and are looking to move slower into video-on-demand.

“Video-on-demand jumps the cost of the network exponentially because you have to provide three times the bandwidth in there,” said one vendor source. “You also can't overprovision the way you would in an IP environment.”

Still, CenturyTel isn't completely shelving the idea of triple play. It has created a triple-play council within the company to explore all the technical alternatives and cost options, according to a company spokeswoman.

Another vendor source who responded to the RFP said even though the effort has slowed, video is still among CenturyTel's top three priorities.

Read the related article, BellSouth takes baby steps into entertainment market.