The National Cable Television Cooperative held its winter educational conference in Albuquerque a week ago, with DBS competition, VoIP and all-digital at the top of the busy agenda. A programming and technology buying cooperative that represents more than 1,000 independent cable operators and more than 14 million U.S.-based subscribers, the NCTC draws members and vendor partners together at the start of the year to take assess the opportunities and challenges of the smaller cable operator. Between the kickoff presentation by Bruce Leichtman on the growth of DBS (which outnumbers cable by 42 percent to 37 percent in rural America) and the competitive overview by CableLabs EVP and COO Chris Lammers, the 375 attendees got a good earful of strategy. Other key topics for the operator-heavy crowd included a year-end review of VoIP launches, all-digital offerings from Comcast Media Center and Motorola, and options for transporting headend suites of programming services. Some 40 vendors were also on hand with table-top demos in the technology showcase—or in the case of PPC, a truck parked outside the Hyatt Regency—with solutions geared toward the particular demands of NCTC members. High on the agenda of many members has been the game-changing potential of VoIP. "We’re inclined to call ourselves a cable company. But we’re really not at all, not anymore," said Jim Gleason, president and chief operating officer at New Wave Communications, who presented in Albuquerque and also spoke with Communications Technology contributor Sarah Mote for an article that appeared in NCTC’s Technology Edge newsletter. Since its VoIP launch in January 2005, New Wave has begun to see itself from a different perspective. "We’re an Internet company. We’re a telephone company. And yes, we still do cable, too. Cable is our core business, but I don’t know that it’s always going to be the dominant core business." In the money The key feature that’s driving the paradigm shift? VoIP is consistently in the money, delivering healthy margins to cable operators because of its fixed cost. "That’s one of the nicest rewards," said Robert Gessner, president of Massillon Cable TV and another board member who both presented at the conference and spoke to CT. Like New Wave, Massillon formally launched VoIP services in January 2005 and has seen a steady increase of interest from existing cable customers. "As telephony becomes more competitive and there are more players out there, the margins may very well shrink, but because of declining price, not rising costs." In the meantime, these companies are using VoIP to retain current customers and draw new ones to cable and data services. "The marketing is dead simple," added Gessner. "All you have to really do is crack open a window in your office, say you have phone service, and you have two weeks worth of work. It’s instant. And it’s very nice steady business. There’s such a pent-up demand for it." SIP platform Since launching telephony in 13 headends that cover approximately 40 percent of its homes passed, Northland Cable Television has unleashed a varied and comprehensive marketing effort: radio, direct mail, bill inserts, door tags, telemarketing, cross-channel promotions, and even some door to door. That work has gained them 1 percent penetration in total homes available. "We’re pretty much on the mark," said Jack Dyste, senior vice president of technical services, "and we’re almost exclusively selling triple play." Northland began by collaborating with Net2Phone. While New Wave and Massillon opted for PacketCable models, Northland chose a SIP platform for their VoIP services, for its adaptability to small markets, affordability, and services, like virtual telephone numbers and portability of MTAs. "The launch for smaller systems from a capital standpoint becomes one of incremental costs rather than upfront costs at the headend," said Dyste, who was the third panelist on the "One Year Later" panel in Albuquerque. In fact, the only major equipment investment Northland made was for MTAs, which ran about $85 per unit. Of course, there were other investments, in time and resources. "We had a lot of systems to integrate," said Dyste. "There was no billing integration done for us. We had to integrate customer support at various levels, so we had escalation procedures going from either our office or our 24-hour telephone support facility, integrating that up to our partner’s [IBBS’s] NOC, and from there, if necessary, on up to Net2Phone. That integration had to occur, our billing had to occur, and of course provisioning and training." – Jonathan Tombes and Sarah Mote

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