Competitive Watch: An 'MSO' with a Voice Plan

Jackson Energy Authority is not a typical cable operator. Although it could be termed an MSO – municipal services operator – Jackson Energy is a municipal utility in Jackson, Tenn. that provides cable television along with electric and sewerage and water and propane gas and trash collection. Cable entertainment is delivered over an advanced – is there any other kind? – fiber-to-the-home (FTTH) network that passes 38,000 homes and connects more than 10,000 subscribers giving the utility a 38 percent penetration rate for the triple play of voice, video and data services. While Jackson Energy is the cable company, it isn’t the telephone company; it opens its network to third parties to deliver local, long distance and high-speed Internet services "and through contractual agreements we provide Internet access and anything from customer services, sales of all different kinds and support mechanisms provisioning for the high-speeds and CLECs," said Sam Turner, vice president of business analysis at Jackson Energy Authority. The Authority, with two CLEC/ISPs on board already, hopes to add more because it believes it has an attractive competitive offering. "We have a local presence and we’re the provider – not unlike BellSouth or other telecommunications providers – (and) we can provide a presence in the home whereas a lot of your ISPs/CLECs actually don’t have that presence," Turner said. "We install NID (network interface device) cards; we assist customers with routers. All of these things are unique in our service offerings." Data, sewage, water, etc. For end users, it actually looks like Jackson Energy is the phone company – and the cable company and the gas company because "on one bill you can get electric, gas, water, wastewater, your sanitation bill as well as cable, Internet and telephone," said Turner. Considering some of the garbage on television and the Internet, it might be hard for some users to distinguish what they’re paying for, but that’s immaterial. What’s material is that Jackson felt it was easy to leverage its cable system into an outsourced phone service as part of its customer satisfaction strategy. "We came in as a utility company that moved into telecommunications at the customer’s request," Turner explained. "Every year we did a survey and the customers would ask, ‘When are you going to get into the cable industry?’" The utility’s advanced fiber network opened the door for other telecommunications services. Jackson Energy now has about 650 miles of fiber, 100 miles of which is underground. It provides 256 channels of cable television, including local programming that it sees as a "marketing niche with the competition." Open access and competition By opening the network to others, the utility has helped offset the costs of building the FTTH plant. "It was no trouble. The fiber-to-the-home infrastructure that we designed to provide the cable was capable of transmitting Internet and telephone," he said. "It’s really a unique operation; I don’t think there’s anybody quite like this in the whole nation." Turner said it was easy to add telcos to the network because there is competition within the voice space and Jackson could underbid the incumbents. "The Bell networks have competitively priced themselves, so CLECs are always looking for other providers, and we provide a competitive marketplace for that," he said. "We had a CLEC that was local that wanted to be in partnership with us and started migrating their customers from the UNE-P (unbundled network element platform) world of BellSouth over to the fiber-to-the home environment of Jackson Energy Authority. The cable operation, he said, draws its customers from Charter Communications, which operates an HFC system in the community while the phone companies are pecking away at the RBOC, BellSouth. "We feel like we have a good strategy that has worked for us and has worked for 10,000-plus customers that have come on and chosen us as their telecommunications provider over a year-and-a-half period," Turner said. – Jim Barthold