Cisco inks key rural IPTV deal

Cisco Systems is vying to become a one-stop shop for rural telcos planning to offer IPTV.

The vendor announced a partnership this week with SES Americom, the satellite video provider that will supply rural telcos with prepackaged video content through a unique deal with the National Rural Telephone Cooperative. Cisco will act as a chief infrastructure supplier and integrator for customers of that offering.

Last year, four rural telcos began beta-testing IP Prime, the so-called “headend in the sky” video transport service offered through the NRTC that leverages the combined purchasing power of its members. That service is expected to be available this summer to the NRTC's 1200 members, which collectively serve about 30 million homes.

Cisco has been shoring up its position in the IPTV space with a string of acquisitions including Scientific-Atlanta (for set-top boxes) and Arroyo Systems (for video-on-demand). It also added a video-caching appliance to its 7600 family of routers for trials this quarter and has invested in Akimbo Systems, a VOD content provider. In recent months, Cisco has also voiced an interest in becoming a more intimate strategic partner to carriers, convincing them to standardize their networks on Cisco architecture. Though it's a tougher sell to top-tier carriers, small rural telcos may be more open to that full embrace — especially those that feel a foray into new IPTV services puts them in over their heads.

Cisco is hoping for as large a role as possible in rural deployments of IP-Prime IPTV, from system integration to set-top boxes and much of what's in between. Cisco will supply encoding, encapsulation, third-party middleware, scrambling and descrambling, satellite receivers, conditional access and more. (A notable exception is wireline access gear, which Cisco doesn't sell.)

Cisco says it's willing to use other vendors' gear in some cases if individual customers want it. And it will offer two choices of middleware providers: NDS and Siemens. Although VOD is not yet a part of the IP-Prime offering, Cisco expressed an interest in adding its own VOD offerings to the mix in time.

Though the precise structure of the Cisco/NRTC/SES relationship is a bit slippery, SES appears poised to take the front line in managing rural telco customers, bringing Cisco in as a partner that specializes in infrastructure.

“It's kind of a convoluted three-way relationship,” said Jon Russo, SES Americom's senior vice president of marketing and product management.

It's unclear how easily rural telcos could get IP-Prime without Cisco. “Cisco's going to be part of the equation somewhere along the line,” Russo said. He called Cisco SES's “first” partner for end-to-end IPTV, adding that SES may add another such partner in the future, if customers demand it.

In the meantime, Cisco promises not to make telcos feel locked in to a single vendor. As Pankaj Gupta, Cisco's senior marketing manager for IPTV and consumer services put it, “It's all about choices.”