Fading back in: Telecom providers re-examine video

Bell Atlantic's announcement last week that it would begin testing fiber to the home - and possibly video service - using Marconi Communications' equipment may be the beginning of a second revolution. Based on vendor announcements from Supercomm, telcos not only are considering FTTH, they're ready to deploy it.

In its iteration, FTTH has become a more cost-effective alternative, according to several vendors. However, it's the threat of cable and wireless operators moving into voice and broadband that is pushing telcos even faster.

"There are now three camps of players that want to own that end customer," said David Stehlin, president and CEO of OnePath, which has been providing fiber-based infrastructure for SBC Communications' limited deployments of DirecTV in the multidwelling unit market.

Among the handful of deployment announcements coming from the show, one of the most widespread was Next Level Communications' news that 14 independent local exchange carriers (LECs) have agreed to deploy its Nlevel3 platform. With customers located mostly in small towns throughout the Midwest and South, Next Level must convince one of the big players that delivering video is a requirement - a job that is becoming easier as cable modems continue taking data market share away.In fact, one way the company is marketing its very high bit-rate DSL-based system is by helping telcos analyze the business case for video. "If you look at line growth [for voice], it's not that much," said Pat Pachynski, senior vice president of marketing for Next Level. "We're a revenue opportunity."

Optical Solutions unveiled a new version of its FiberPath system designed for large carriers at Supercomm. AT&T's entry into the local loop gives LECs an economic incentive to consider FTTH and video, said Robert Lund, chief technical officer of Optical Solutions.

"AT&T spent roughly $1500 per subscriber for TCI and MediaOne combined," he said. "[Telcos] can put in fiber to the home for maybe one-third of that cost."

Next Level, paired with VideoTele.Com for digital encoding, demultiplexing and grooming equipment, is developing a packaged software application that lets telcos analyze a business case before deploying any equipment.

VT.c hawked not only its equipment, which it recently deployed in a number of telcos - including PBT Telecom in Gilbert, S.C. - but also its ability to provide a turnkey video installation for telcos unfamiliar with the cable market. Among the services in its program are content aggregation, market analysis, installation and even local marketing help.

"One of the things we've had to do with telcos is act as business consultants," said Lee Rainey, vice president of marketing for VT.c. "They don't have to bring in a lot of in-house video expertise."

One reason is that the company, along with most telco video vendors, has spent less time in explaining the technology.

Of course, not all vendors have VT.c's 20-plus years of experience in the video market, but even newcomers claim that the attitude has changed. "They're looking at this as real revenue now," said Ron Durando, president and CEO of mPhase Technologies.

mPhase, which is basing its video-over-copper solution on rate-adaptive DSL, said last week its Traverser platform has been deployed by Hart Telephone in Hartwell, Ga., for a limited test. "This is the first true video-over-DSL trial without touching an ATM network," Durando said.

mPhase also announced an alliance with Terayon Communications to provide Terayon's CherryPicker digital video management system as part of the Traverser platform. CherryPicker, which has been in trial at U S West, takes video streams that arrive at the central office/headend at variable rates and retransmits within the limitations of DSL bandwidth.