Star Tv Schedule

Byline: [ BY VINCE VITTORE ]

The Sacramento headquarters of SureWest Broadband, housed in a converted airplane hangar where military jet engines used to undergo tests at the now shuttered McClellan Air Force Base, look nothing like one might expect the offices of a typical small-town telco to look. In fact, the building would get lost among the dozens of massive, warehouse-like structures surrounding it, save for the giant SureWest sign and multicolored glass panes that adorn the front of the building.

But the inside of the facility, though unconventional, provides an appropriate setting for the central development hive of SureWest Communications' triple-play strategy.

As part of the newly rechristened McClellan Park, which itself sits as something of an island in a sea of suburban office parks, the building houses both a headend for the carrier's video services and a central office for its fiber-to-the-home network.

The area it serves can hardly be considered rural, yet it is looked upon as a model by the rural local exchange carrier community.

SureWest Broadband representatives are quick to point out that they know they're driving a Ferrari. If the company itself built this place, it would be closer to what most rural carriers call home: a serviceable building heavy on the brick and low on the architectural totem pole. It certainly wouldn't have the post-industrial look, with sky-high ceilings, an oversized network operations center and a hip conference room complete with automatic sliding panels that would impress even the most jaded visitors.

"We also got some really good people with the deal," said Bill DeMuth, chief technology officer for SureWest and the person many in the access vendor community point to as a driving force behind the carriers' triple-play deployment.

SureWest has always been a bit of an anomaly, and to understand its unique position in the industry requires knowing how it got there.

In the free-spending era of the late 1990s and the early part of this decade, WinFirst dumped what several industry analysts estimated to be nearly $1 billion into a fiber-to-the-premises (FTTP) network before declaring Chapter 11 in March 2002 (as one SureWest executive put it, WinFirst "spent like a dotcom.") A few months after the filing, SureWest appeared in bankruptcy court as the only bidder for WinFirst's assets and scooped up the whole thing for $12 million.

The FTTP network SureWest acquired, while long on technology and advanced facilities, was somewhat short on customers. Though WinFirst didn't report customer numbers, at the end of 2002 SureWest Broadband, the unit the FTTP group was folded into, reported having slightly more than 5000 video customers and a network that passed about 42,000 homes. Today, that FTTP network has been extended to 57,000 homes and has just fewer than 11,000 video subscribers. But perhaps the more important strategic move came when the company decided to leverage those WinFirst assets across as much of the company's ILEC base as it could feasibly reach.

That part of the network, which is significantly smaller, with around 600 customers receiving IP-based video service over copper, provides a sneak peak at what larger carriers around the globe want to achieve - a triple play of voice, high-speed data and video all on a passive optical network (PON).

"We've had people from all over the world in to look at this," DeMuth said. Indeed, carrier representatives from as far afield as Korea and Poland have toured the company's facilities to try and figure out its formula. What also makes SureWest so unique is that the company's InfiniteAccess service is the first true fiber triple play in the U.S.

"SBC has the closest thing to a triple play, but they're farming it out," said Thomas Villa, general manager of residential services for SureWest Broadband. "They do a portfolio offering, but it really isn't their own. The customer knows that. It's a one-shot relationship for us. We're finding a whole lot of embedded demand that's just waiting for a choice."

But while SureWest had the good fortune of getting a major head start, delivering the service took a little more than just picking up the keys to the McClellan facility.

To make the acquisition pay off, SureWest had to find a way to blend its newly acquired network into existing incumbent copper facilities. "Our biggest challenge was understanding our outside plant," DeMuth said.

On the FTTP system, that was made a little easier because of the network's age. In 2000, WinFirst signed a five-year, $1 billion deal with Lucent and Avaya for network equipment. While that contract was never completely filled, much of the "legacy" fiber network is composed of Lucent's PON gear with Avaya's remote terminals, though the company also uses Allied Telesyn's gateway at users' homes.

Additionally, the company is expanding the fiber portion of the network using Cisco Systems' subscriber access equipment. In fact, one of the primary motivators for going with a PON architecture was the vendor selection at the time, DeMuth said. The remote terminals are Avaya, and everything that is fiber now is Cisco.

"We realized early on that IP was where we want to be," DeMuth said. "We felt we could mix and match vendors a lot better than we could with the available PON solutions." However, the company is also aggressively exploring active Ethernet architectures.

"Some of the active stuff is where we want to go," DeMuth said. "From everything we've seen, we can do a lot more with that technology. It really simplifies the network."

In the copper network, SureWest signed a deal with Occam Networks to use its BLC 6000 platform in one of the most hotly contested access request for proposals in recent years.

"We believe it's one of the more aggressive video deployments going on right now," said Russ Sharer, vice president of sales and marketing for Occam. "The IOCs are moving pretty aggressively and pretty rapidly now. There are enough success stories out there now that the bigger [U.S. carriers] are taking notice."

Though operated as a single entity - in fact, all network operations will soon move from Roseville about 10 miles away to the McClellan facility - the differences in the two access networks are still somewhat stark. Customers on the FTTP network are actually getting a 100 Mb/s connection, which includes a 10 Mb/s synchronous stream for data access, multiple video streams and voice over IP. Those with twisted pair connections are still on the high end with upwards of 12 Mb/s to each home but not at the bleeding edge. The company also is charging differently, with FTTP customers paying $49.95 for data service while those on DSL pay $44 for a 1 Mb/s data connection.

Using ADSL where S=1/2, the company is comfortably able to deliver two video streams over copper up to 6000 feet away from a DSLAM. Moving beyond that 6000-foot market, though, likely will require moving to ADSL2+, which not only increases range but will allow SureWest to look at services like HDTV over copper plant. Occam announced two 48-port ADSL2+ blades for its broadband loop carriers in August, and SureWest currently is experimenting with the technology, getting mixed results, said Scott Barber, vice president of network operations for telephone at SureWest

"We're struggling with the modem right now, but the objective is to get 12 to 15 Mb/s out to 12,000 feet," he said.

One thing that could help is improved compression. With the company's current DSL plant, each video stream takes up 3.5 Mb/s. With 12 Mb/s to work with under ideal conditions, the largest number of streams the telco could send over copper is three, according to DeMuth.

"Ideally we want to get to higher compression," DeMuth said, noting that the company also is looking at technologies such as copper bonding that would increase capacity.

"We're looking at creating a matrix of technologies," added Greg Chamberlain, director of network engineering for SureWest Broadband. "On the ADSL2 Plus side, we're going to do some distance testing, but we don't see the [Occam] 6208s going away anytime soon."

Even working with a distance limitation of 6000 feet, SureWest is able to address a little less than half of its ILEC base of 146,000 or ILEC access lines. Just putting in the technology was one thing. Convincing customer to sign up for a video service offered either by an incumbent telco or even as the slick new fiber play is another issue.

Like many independents, SureWest stresses its hometown connections but takes the idea of targeted marketing almost to extremes. Because it can't serve absolutely everyone - and because Sacramento proper is served by SBC - mass marketing via broadcast advertising is wasteful.

"We rely on an area-intensive, surgical type of marketing," Villa said. "If we can get in the door, our close ratio is very high. There's almost this predictable level of penetration."

It doesn't get any more surgical than door-to-door, which is one of the most effective ways to get people to sign up for services. Equipped with laptops that connect directly to the order entry system, sales reps can give prospective customers a visual comparison of different service providers' plans and schedule an installation on the spot. The ability to compare plans and emphasize the variety of packages that appeal to various local communities of interest is one of SureWest's most effective tools, Villa said.

"We're trying to leverage every way we can to send a message to the community that we're different from a national provider," he said.

SureWest also is finding that those who are willing to give telco video a try fall into a variety of categories but tend to have some common demographic characteristics. While each location is different, early adopters tend to have relatively higher incomes, have families and have technology already in the house, Villa said. The demand for services also seems to be higher in suburban areas, though the company has stringent franchise requirements for building out its network in a demographically even way, DeMuth said.

"There's nothing we do differently yet in terms of marketing to different areas," he added. "It's a lot of door knocking."

In most of the territories it serves, SureWest competes with Comcast, which has rolled out a double-play package of video and cable modem access. The company also has started to move into the fast growing Elk Grove, Calif., market where it is butting heads with another independent, Rochester Telephone (Citizens), which is quietly exploring video but has yet to reveal its plans. However, according to Villa, DISH network and the marketing boost it's getting from its SBC relationship is the bigger concern right now.

One of the ways SureWest is combating the marketing budget that a company like SBC can muster is by putting together a channel lineup that makes more sense to potential subscribers. Much of the time over the summer has been spent grooming the company's 390-channel lineup.

"It's all about content," said Villa. "We don't want to be 390 channels of opportunity."

Instead of simply dumping more channels on customers, the company is trying to mine niches out of the population. Among the more promising is programming aimed at the growing Hispanic population around Sacramento.

SureWest's CLEC arm also is using video to mine the niche of small businesses that fall into its territory. By combining a small number of appropriate channels such as CNN, the major broadcast outlets and The Weather Channel, SureWest thinks it has a package that would appeal to places like auto repair shops and dental offices, where customers have a designated waiting room.

"We're scrubbing all of the addresses right now to find out how many businesses are in the footprint," said Barber said. "The CLEC will continue selling big pipes to big businesses, but this is something that might appeal to some customers they're not reaching."

The company also is looking at a number of ways to exploit its current video-on-demand (VOD) service. That platform, which uses content from TVN Entertainment, Kasenna video servers and Irdeto Access' conditional access system, currently is delivering a menu of movies and VCR-like controls including pausing, rewinding and fast forwarding. Perhaps because the company is aggressively marketing VOD or maybe because it's working with atypical customers, roughly 30% of SureWest video customers are using VOD, a statistic that is at least twice as high as most traditional cable operators report.

At the same time, SureWest is planning for the day when VOD means more than just the latest Hollywood releases.

"I know we're also looking at content that is more Web-based," DeMuth said. "There's a lot of content out there for things like self-help and even things for home improvement."

Ultimately, of course, the objective is to bundle up enough services that customers simply have no incentive to switch providers. And clearly, tacking on additional services leads to higher revenue per user.

"It's all about a dollar here and a dollar there," DeMuth said.

COPYRIGHT 2004 PRIMEDIA Business Magazines & Media Inc. All rights reserved.
COPYRIGHT 2004 Gale Group

Learn How To Tighten Your Belly Fat Fast - Sponsored Link
Ad - Read My Shocking Story How I Lost My Stomach Fat Without Dieting! :)