Minnesota phone companies team on 'Telco TV'
A major obstacle that all regional telco providers face in their quest to offer video services over their telephone infrastructure is the cost associated with having to build and maintain their own video headend. For smaller, regional telcos that are compelled to offer video services to keep up with cable and satellite competition in their markets, headend costs are usually too much for one company to bear.
In Minnesota, another group of regional telcos has banded together to defray some of these headend costs, forming a 14-company consortium to build and maintain video headend facilities that will allow them to offer digital video services in their individual regions.
The consortium, dubbed Broadband Visions LLC, will split the cost of setting up a single digital headend facility and negotiate as a single entity for television content. Consortium members include regional providers such as Hutchinson Telephone, NU Telecom, En-Tel Communications, Halstad Telephone and Paul Bunyan Rural Telephone. As a group, those companies reach more than 200,000 homes across Minnesota.
Confronted with high headend costs associated with rolling out digital video service, other regional telco operators are forming similar groups to share the start-up costs. However, the Minnesota group is the largest to be formed so far.
All of the providers in the new Broadband Visions group have adopted a "Telco TV" platform from video gear provider Next Level Communications. Each company uses Next Level access equipment and residential gateways to deliver more than 130 channels of digital TV to their telco subscribers. Next Level has promoted similar headend consortia in Iowa and South Dakota as well.