For Wisconsin telco, local status translates to video success

Being “local” has helped Wood County Telephone Company of rural Wisconsin Rapids, Wis., sign up 4000 video-over-VDSL subscribers, luring many from incumbent cable provider Charter Communications.

The telco continues to add about 160 subscribers daily, as it aims at its goal of signing on 5000 of its 21,000 total customers by the end of the year. It’s been at it since 1999, using different generations of Next Level Communications’ [NLC] VDSL gear.

“From the inception, we’ve positioned ourselves as the local company. We’ve been around 105 years [as a phone company] and we’ve positioned ourselves as such,” said Doug Wenzlaff, the company’s executive vice president and general manager.

This differentiation strategy mirrors cable’s approach to direct broadcast satellite [DBS] competition. Since Charter is working from a regional headend 30 miles away, WCT can exploit its local presence and the instability within cable as the sector consolidates.

“Before it was Charter, it was Marcus. Before that, it was other things. It’s changed hands several times,” said Wenzlaff.

And, as cable is wont to do, it’s raised prices.

“Before we started service, the local provider literally doubled their rates and had all kinds of quality service issues with the local government regulatory telecommunications committee,” said Wenzlaff.

The local government approached WCT and “we also got a petition signed by a couple hundred residents of the area asking us if we would consider providing service,” said Wenzlaff.

Most concerns have been addressed, said Lisa Washa, vice president of operations for Charter’s Eastern and North-Central Wisconsin operations. “We have completed a very extensive rebuild of that network and launched many technologies as a result,” she said, citing digital cable and high-speed data as two of them. “We also have a local office and we are very participative in the local community.”

WCT’s package also includes local community access programming and locally inserted advertising, as well as a community Web page that is going to be expanded, Wenzlaff said. WCT, he added, is hoping to deliver service to all 21,000 of its telephone customers – even the rural ones who fall outside VDSL’s 4000-foot reach -- by trialing Next Level’s new rural product.

Subscribers don’t come cheap. While cable digital boxes cost about $100, WCT is still paying $500 for a NLC unit that handles three video streams and high-speed Ethernet.

“That’s a tough comparison when you look at the price we’re paying for a box and compare it to traditional cable TV,” said Wenzlaff. On the other hand, “if [cable] wanted to have the same kind of services that we can provide out of that one box for all their TVs in the house, they would have to have three set-top boxes and a cable modem.”

While attracted to 108 digital video channels, 40 digital music channels and 1.5 megabits per second [Mb/s] of high-speed data service, subscribers are drawn toward a relatively simple item: caller ID and voice mail notification on their TVs.

“The subscribers,” Wenzlaff said, “have really latched onto that and love that feature.”

Charter, of course, isn’t giving up without a fight.

“We’re very aggressive when it comes to protecting our customers and we think we offer a product of high value and reasonable costs and a better service than the competition can,” Washa said.