If you're a consumer living in a small town or in rural America, get ready for a big surprise. If you live in rural Wisconsin, the Dakotas, Georgia, South Carolina, upstate New York, Alaska, Texas, Nevada, or pretty much any other rural state, your phone company is about to provide a range of services that no other provider will be able to, if it isn't already. If you live in the big city, eat your heart out!

Quest for Ultimate Service Provider

Steve Hawley | Advanced Media Strategies


by Steve Hawley

Steve Hawley is a consulting analyst and principal of Advanced Media Strategies. He can be reached via his Web site, http://www.tvstrategies.com

If you're a consumer living in a small town or in rural America, get ready for a big surprise. If you live in rural Wisconsin, the Dakotas, Georgia, South Carolina, upstate New York, Alaska, Texas, Nevada, or pretty much any other rural state, your phone company is about to provide a range of services that no other provider will be able to, if it isn't already.

If you live in the big city, eat your heart out!


When's the last time you threw down your TV remote control in disgust and said "I'm going to get rid of this crummy service," only to realize that you had no alternatives? Once upon a time, this was the situation for any telephone subscriber, but, as we all know, the break-up of the old Bell System made possible a whole range of new and different telecommunications service providers.

First came the big long distance carriers such as Sprint and MCI (now Worldcom). More recently, the CLECs (Competitive Local Exchange Carriers), offering bundled telephone and Internet services to local subscribers. The newest form of competition comes in the form of TV, wherein the cable and satellite network operators have successfully introduced broadband data services and, this year, voice telephone service.

In May, 2002, Federal courts concluded that local telephone carriers must continue to keep their networks open and available for competing service providers to use. Now, it's just a matter of "what percentage?" Ironically, the cable TV industry recently took a step in the other direction, when the Feds allowed cable operators to keep their networks private. Both of these decisions are in the process of being appealed, so stay tuned. Meanwhile, there will soon be a decision about the pending merger of the DISH Network (EchoStar) and DirecTV (Hughes). One thing is for certain: the competitive landscape among the different types of network operators will change and change again.

But all of this begs a bigger question: what is the definition of "competition," in this changing world of telecommunications? For that matter, what is the definition of "telecommunications" anymore? Especially now that the "T" in NCTA, the National Cable and Telecommunications Association, one of cable's big trade associations, no longer stands for "Television."

One view of competition in this changing industry is that we have cable television multi-service operators (MSOs), telephone carriers, and satellite network operators. That makes three. Some say "Because these three vie for the same subscribers in most major markets, we have competition." Others say "Yes, but each of these types of carriers is increasingly likely to be a monopoly." Especially if the DISH/DirecTV merger goes through.

Another view is that each type of network must allow for multiple providers that can offer services over a particular network; which has been the case for Telcos. It's easy to say this, but I don't think it's quite that simple. After all, it takes financial resources, not to mention a sound business plan, to launch, say, a new constellation of satellites that could effectively compete with those which are up there already - or even to buy and manage existing satellite communications networks that have already failed commercially.

Earlier, I said "major markets." In most urban and many suburban areas, the cable operator is likely to be digital, the Telco offers DSL, and there is available satellite service. So, yes, there are choices, albeit just three. As one moves away from urban centers, the mix definitely changes. First it gets worse: if a subscriber happens to be in an area where there is no digital cable, and the phone company is still running analog lines, then no carrier would be available that can meet that subscriber's modern broadband needs. Or, if the telephone company has upgraded to digital, it's likely to be low-speed broadband (how's that for an oxymoron), at 128 or 256kbps. Why bother? Living in an outlying area myself, about four miles from the nearest Telco central office, I happen to be in this situation personally, and I have not bothered to "upgrade" from my 56kbps analog dial-up data service. For TV, I have satellite. So much for having all my services from one provider on one bill.

Being in such an "outlying area," even if my satellite carrier, my ISP and my Telco all were to offer bundles that include phone service, broadband data, and TV, I still don't "qualify" for the broadband part. No, it's not because I'm a deadbeat; "qualify" is the term they use for whether or not the service provider can provision my home for the advertised service. That's why you see all the fine print and disclaimers on ads for these kinds of bundles. Makes me feel like a second-class citizen, a broadband "have-not."

But let's move even farther away from the big city. Over the pass and across the prairie. Suddenly things begin to improve for the telecommunications services consumer. Even though I'm an analyst and consultant who works with telephone companies (and therefore, supposedly jaded about these things), I am amazed at the level of service a subscriber can get in an increasing number of small towns.

Of the hundreds (thousands!) of local telephone companies in smaller towns and rural communities, many have not only recognized that there's a new opportunity to deliver additional revenue-generating services by offering TV and broadband; they're taking action. Some are even banding together into groups - starting multi-town partnerships and even separate jointly-held corporations - in order to spread out the costs of a regional "head-end," the facilities that receive TV programming and ready it for distribution over their own networks. The end result? A single provider can offer more services than ever before, with the personal service that we city people only see on TV reruns.

Here is the list of the services that many rural telephone companies are preparing to offer, right now:

  • Local telephone service
  • "Equal access" long distance service
  • Paging
  • PCS
  • Wireless/cellular telephone service
  • Dial-up Internet service
  • Broadband data service via DSL
  • Web services, such as Web design, hosting, and data storage
  • Digital TV service, with 100 channels of TV programming that includes all the premium and specialty programming you find on cable and satellite
  • Interactive TV services, such as video-on-demand and an on-screen program guide.

In fact, some suppliers offer technology platforms that enable Caller-ID and emergency notifications (such as tornado warnings) to appear right on the subscriber's TV screen. Those who live in big cities can only dream of being able to get such a variety and range of services from their service provider. From my phone company? From my cable or satellite TV service provider? No way!

Why would this be happening in small rural towns, and not with the big mega-carriers that have so much of our money? Because unlike the Qwests, the SBCs, the Verizons and the BellSouths, the smaller Telcos are far more entrepreneurial. Further, the smaller Telcos are not burdened by the inertial of having to migrate millions of subscribers into new networks, whether they leverage existing copper wiring, start anew with optical fiber, or do optical up to the "last miles" and copper to the doorstep.

To me, this is pretty close to having the ultimate service provider. One that is sophisticated enough to have a vision and entrepreneurial enough to execute on it. One that can be the single and complete provider of all the services in its domain. One that is small enough not to have to fight uphill against its own entrenched bureaucracy. One that has access to rural economic assistance from the Federal government, so it can execute more quickly.

In conclusion, if you're a consumer living in a small town or in rural America, get ready for a big surprise. If you live in rural Wisconsin, the Dakotas, Georgia, South Carolina, upstate New York, Alaska, Texas, Nevada, or pretty much any other rural state, your phone company is about to provide a range of services that no other provider will be able to, if it isn't already.

If you're an installer or telephone engineering professional, and you've decided to leave your life in the big city for something simpler, you're in luck; it's likely that you'll have challenging work with the Leading Edge Telephone Cooperative, once you move to Smallville.

If you live in the big city, eat your heart out!


Comments (0)

This post does not have any comments. Be the first to leave a comment below.


Post A Comment

You must be logged in before you can post a comment. Login now.

Featured Product

Aperion Audio - Award Winning Home Audio for less

Aperion Audio - Award Winning Home Audio for less

Aperion is a group of dedicated audio enthusiasts committed to helping you create the sound experience of your life, at a price that won't break the bank. We make award-winning speakers that look as good as they sound and sell them online so you get unbeatable quality for the price. You always get a 60-day in-home audition with FREE SHIPPING. If you don't like your speakers for any reason, send them back and we'll pay the shipping. Really. You get unlimited free support for your entire system and we back up our products with generous 5-and-10-year warranties. Since we've been around for over fifteen years, you're covered.