General

Rural Cooperative Does IPTV

It's not cheap and it's not easy, but if a company with less than 10,000 customers can roll out IPTV, then it's likely that you can too.

by Gerry Blackwell [August 22, 2005]

Ten years ago, Floyd, Va.-based Citizens Telephone Cooperative was the incumbent phone company in a sleepy corner of southwest Virginia. Originally founded as Citizens' Mutual in 1914, the core service the company provided had not changed very much in eighty years. However, today it's a leading-edge purveyor of digital communications services, including pay television, with a greatly expanded service and facility footprint. Citizens started offering its digital TV service in March. It will be offering VoIP services by the end of 2005. How did it get from there to here?

The evolution began in 1995 when Citizens responded to customer demand and started offering dial-up Internet service. That decision led inevitably to territorial expansion. "The original expansion started because we could not garner enough [internet] subscribers from our existing [telephone] customer base," explains Citizens CEO and general manager Gerald Gallimore. "The only option was going outside and expanding our territory. That started a process that has continued to this day."

Citizens was the incumbent phone company in three rural counties dotted by small towns such as Floyd with a population of less than 1,000. Even today the company still has only about 7,500 telephone subscribers. It also has 5,000-plus dial-up and high-speed Internet customers drawn from a much larger area of 250,000 to 350,000 households. The expanded area takes in eight counties and includes larger towns such as Christiansburg. Citizens is authorized to serve the whole state and has also begun offering some services in Roanoke, the largest city in the area.

Some high-speed customers have DSL service, small pockets have fiber to the home or cable. Still others get service wirelessly. Citizens deployed 700 Mhz wireless technology from Flarion Technologies Inc., which is about to be acquired by Qualcomm Inc.

"We're using wireless primarily in the quasi-metro areas that we're expanding into, such as Blacksburg, Christiansburg, and Montgomery," Gallimore says. Residential high-speed customers pay $39.95 for 384/128 Kbps service. Business customers pay from $49.95 for 384 Kbps to $149.95 for 3 Mbps.

Money talks and goes on TV
Developing the pay TV service—again in response to customer demand—is a relatively capital-intensive undertaking for such a small company: it will cost just over $10 million according to the current business plan. The service is being built on a somewhat unique network architecture. It's not, strictly speaking, IPTV. Citizens sends TV signals in an IP stream but over a private network rather than the public Internet. It also uses a mix of MPEG2 and Windows Media Server 9 encoding.

When it set out to build the TV system, the company had no illusions that it could do everything itself. Citizens, along with neighboring Scott County Telephone Cooperative (based in Gate City, Va.), first hired Charlotte, N.C.-based engineering firm Mid-South Consulting Engineers Inc. to develop an RFP based on their specifications. Mid-South arranged head-to-head demonstrations of encoding and other equipment and helped the two phone companies select suppliers. Citizens then hired Woodbury, Minn.-based systems integrator Dascom Systems Group, to build the television system.

The system uses components from a variety of vendors. For transport of the video stream from DSLAMs (Digital Subscriber Line Access Multiplexers) to subscribers, it uses equipment from Occam Networks, which had already been deployed to support high-speed Internet services. The analog headend, which cost about $1.8 million, is from Scientific Atlanta.

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