Business case in point: Allendale's sub-$100 video-driven package

Telecommunications Americas, May, 2005 by Sean Buckley

While it's unlikely that independent operator Allendale Communications pops to mind when thinking of IP video, the Michigan-based operator, founded in 1910, beat all the RBOCs to the punch in this burgeoning and increasingly high-profile market. The smothering buzz surrounding this service of late validates the saying that everything old is new again (for some providers).

Because of its nimble nature, Allendale has been able to stay ahead of the curve when it comes to technology and services. Currently, the operator provides a mix of everything from local and long-distance voice to 2-Mbps DSL service. To counteract the competitive threat from the local cable company--Charter Communications--Allendale realized the only thing it was missing was a video play.

When Allendale made the move to deliver video, it had many options to consider but decided IP was the best path. "We have been looking at video for about five years as a way to increase revenues, increase our offerings to new customers and retain our customers," said Mike Osborne, general manager. "Originally, we were looking at a coax deployment. With the evolution of IP video, we asked ourselves how we were going to roll this out: Do we go with ATM or really look to the future and go totally IP? After making our IP decision, we could not be happier because it's the network of the future."

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In the Mix

Incorporated as part of a triple play package promotion that includes local, long-distance and DSL on one bill for less than $100 a month ($86.93 to be exact), Allendale's digital TV service features 130 digital broadcast TV channels, 40 channels of digital free music plus pay-per-view movies and sports. Allendale plans to add video on demand, on-screen caller ID and e-mail alerts to the bundle. As often happens with IOCs, Allendale is gaining momentum via word of mouth within its own service territories and also outside when out-of-area-customers ask about the service.

Multi-Component Network

For any carrier, deploying IP TV requires integrating multiple components to deliver a common end-user service experience. To carry out its multiplay mission, Allendale Communications has enlisted the help of various vendors, including White Rock Networks (SONET transport), Pannaway Technologies (BLC), Tut Systems (digital head end) and Thomson (IP set-top-box).

At the heart of the video network deployment is Tut Systems' Astria content processor digital head end, which processes and delivers a combined 170 IP multicast video and audio to an IP-over-SONET network provided by White Rock Networks. In addition to serving as its head end provider, Tut is supplying Allendale with its middleware solution, iView TV, to provide the interactive program guide, back-office billing interface and subscriber management system.

In the last mile, Allendale examined a laundry list of broadband loop carrier vendors, including AFC, Occam, Pannaway and TelStrat, but in the end decided to go with Pannaway's SCN (service convergence network) series.

Leveraging an Ethernet/IP-based architecture, the SCN includes the personal branch gateway for the premises, broadband access switch, broadband aggregation router and broadband access manager to provision and manage services. Allendale is delivering video services with the Pannaway solution via ADSL2 connections on its copper network. Allendale is currently seeing up to 24 Mbps to each home and its loop lengths are mostly less than 6,000 feet.

Although Pannaway's solution worked well in internal trials, the real proof was when Allendale took the video service to off-campus college apartment units for Grant Valley State University students. Allendale was already delivering DSL service to three main housing units, so selling a DSL and video bundle was an opportunity ripe for the taking. Working through summer to rewire the buildings before students arrived in August, Allendale did 300 installations in one week.

Launch Fuels Demand

Upon launching the service, Allendale was met with overwhelming demand. "When we began talking to the building owners, bandwidth was an issue. We asked how many TVs they normally got, and they said one, possibly two, TVs per apartment," Osborne explained. "As the students were coming in, we could not keep up with the orders. Not only that, we got into a surprising situation where some units had three, four and five TVs. So now we're looking at bandwidth issues. To our surprise, we were able to accommodate four TV streams and four DSL lines in each apartment. The Pannaway equipment stood up to the test, and that was one of the reasons we chose Pannaway over the competition."

Of course, no matter how good the last-mile network plumbing is, how the service is connected to the home can be the sticky issue. Now that Allendale is moving on to deliver digital video service to the rest of its residential footprint, the major challenge likely will be dealing with the installed wiring. In tandem with the Thomson IP-900 set-top box, Allendale is using Coaxsys' TVNet adapter. This adapter can be connected to any set-top box or gaming device with an RJ-45 Ethernet interface and to any existing coax receptacle on the other side.