[November 22, 2004] Cross Telephone -- Triple Play Case Study Cross Telephone Reaches Beyond the Competition With Triple Play of Services Cross Telephone Company 704 3rd Avenue Warner, Oklahoma Service area: 13 Central Offices (COs) including the Lake Eufaula and Lake Tenkiller areas Subscriber base: 9,000 subscribers / 10,200 access lines Exchanges: 11 exchanges / 52 Broadband Loop Carrier (BLC) remotes Revenue impact: Pannaway’s end-to-end IP solution enables Cross to deliver new advanced services, increasing the average subscriber rate from $45 per month for local telephony (excluding toll calls) to approximately $105 per month to include Voice over Internet Protocol (VoIP) telephone, digital TV, and high-speed Internet access. Operational Impact: • Single ADSL2+ solution extends Cross’s network capabilities for management , delivery and provisioning of digital services over longer reaches from all 13 COs ,without requiring forklift upgrades to the existing ATM-based network or further infrastructure investments. • Service delivery offers more throughput and can accommodate three plus set top boxes (STBs) without sacrificing Quality of Service (QoS), significantly impacting customer satisfaction and retention rates. • Being able to diagnose the network from a centralized location reduces time required to isolate loop failures and wire inside the premise; if a truck roll is required, field service and field personnel can isolate house wire or STB issues directly from the interface, without being required to enter the home. Objective Cross Telephone had been experiencing an increase in subscriber access terminations in conjunction with a decrease in qualified reimbursements from the federal Universal Service high cost fund (USF). With 1,500 miles of fiber already feeding its 13 Central Offices (COs) and 52 Digital Loop Concentrators (DLC), Cross wished to leverage the existing ATM-based network to cost-effectively deliver next-generation voice and data broadband services. The company also needed to satisfy subscriber demand for the latest digital cable services such as High Definition TV (HDTV) and Video on Demand (VoD), without being required to drop significant amounts of CAT 5 cables to customers’ homes. Deploying a true Triple Play of digital services would not only recover declining subscriber revenue, but satisfy consumer appetite for better and faster interactive communications. A solution that qualified for federal reimbursement dollars would also enable Cross to offset the cost of ongoing deployment and new market rollouts. Challenges The ILEC’s initial strategy was to replace its 52 DLCs with Broadband Loop Carriers (BLCs). However, for an efficient delivery of services, the final solution would need to work from within all of Cross’s 13 COs and 11 exchanges, which are dispersed throughout various rural and metropolitan counties in Oklahoma. With a keen interest in VoIP technology, General Manager David Wright also knew that providing Lifeline POTS support for emergency standalone functionality could not be sacrificed, and would play a critical role in the company’s vendor selection. Lack of Lifeline POTS support is a serious drawback to most IP deployments. If power in a customer’s premise is lost or even if there is a glitch with Internet access, telephone service needs to continue to operate in standalone mode. Of the emerging VoIP services offerings available at the time, Cross found none that offered Lifeline POTS. In addition, the company was faced with a variety of competitive situations within its 11 exchanges. Some markets were dominated by satellite providers while in others, traditional copper-based cable providers were considered to be the incumbent. Therefore, in order to effectively market service rollouts, the final Triple Play solution would need to be flexible enough to accommodate a gradual build-out of Cross’s existing network in pace with market needs. Especially critical to the campaign’s success would be the new solution’s ability to seamlessly and cost-effectively interoperate with Cross’s existing ATM-based access platform. With a working infrastructure already in place, a forklift overhaul of the existing network would be excessive and cost prohibitive. With some competitive solutions, this could mean an investment of between $2,500 and $3,000 per subscriber, making a forklift upgrade dependent not only on cost recovery mechanisms, but on higher take rates in remote areas. The likely reality was that Cross would never see 100 percent take rates from those remotes; therefore the challenge was to find a solution that would enhance Cross’s present service offerings with high-end services – including video – without requiring major investments in replacement gear or additional infrastructure components. Strategy The company’s requirements for a solution that would enable flexible, low-cost delivery of next-generation IP-based services were satisfied by Pannaway Technologies’ Service Convergence Network (SCN). “Pannaway’s IP solution integrated with our existing ATM equipment seamlessly. A single Gigabit uplink transported over our existing SONET/ATM-based network was all that was required for connectivity between our COs.” --David Wright, General Manager, Cross Telephone Company Because the SCN is comprised of high-end fiber-based components, Cross would be able to manage and deliver a greater array of revenue-generating services with the use of its existing copper and fiber optic cables. Having already invested millions of dollars in laying 1,500 miles of fiber cables, Cross’s cost savings would be significant. Cross saw the opportunity to leverage the existing fiber capacity to augment its existing DLCs and initiate a controlled roll-out of a new IP-based solution - rather than an ATM-based solution – for an approximate cost of $800 per subscriber, including premise equipment. The Pannaway solution would position Cross for future growth based on market trends, without requiring a complete forklift investment. Additionally, because the modem electronics are located at the premise, Cross anticipated a higher take rate in remote areas because customers would not be required to purchase any additional equipment to receive IP-based services. For Cross, the math was simple: Fewer costs to the customer would equate to higher take rates, while lower costs per port would mean a quicker ROI and less dependency on cost recovery mechanisms that may or may not be available in five years. The accelerated ROI could thus be measured in years. As a final bonus, not only would the Pannaway solution’s ability to leverage the existing infrastructure impact Cross’s bottom line, but the upgrade would qualify for cost recovery under RUS and USF loan funds. In addition, because the SCN solution dynamically re-routes emergency calls to the existing PSTN in order of priority, Cross’s VoIP subscribers would be guaranteed access to emergency 911 services even in the event of a power loss. Evaluation The initial evaluation involved a test group of existing Cross subscribers who accessed dial-tone local and long distance telephony services from the Warner, Oklahoma exchange. A Pannaway Broadband Access Switch (BAS) and Broadband Aggregation Router (BAR) were first installed in the Warner CO to enable delivery of toll-quality voice calls, broadcast-quality video, and high-speed Internet access in tandem with Cross’s legacy ATM-based equipment. Premise devices were then installed in each of the subscribers’ homes. Results were dramatic. Prior to the Pannaway implementation, Internet services were only made available at ADSL speeds. The IP-based SCN solution – which utilizes ADSL2+ technology for wirespeed performance – enabled Cross to deliver full digital voice, video and data services with a major increase in total bandwidth over the existing loop. This test proved that Cross would have the ability to provide digital services at reaches of 18,000 feet – significantly better performance than existing DLC technology could offer. This enhancement catapulted Cross into a competitive position against leading satellite providers that had historically dominated key markets. While those providers have the capacity to accommodate up to three STBs, Pannaway SCN gives Cross the ability to deliver digital services to three or more STBs in a loop, plus up to 1MB of throughput on data service – with no disruption in service. The initial evaluation provided a solid proof-of-concept for Cross to move forward with the Pannaway integration within the first exchange. However, because the original architecture called for the point of access to be installed inside the home, Cross’s ability to receive compensation from the USF high cost fund (offsetting the total cost of deployment) was impeded. Understanding the importance of equipment cost recovery, Pannaway responded by quickly providing Cross with another option that allowed for service access outside the home: the Residential Gateway NID (RGN). Offering the same flexibility and simplicity as the indoor PBG, the industrial-hardened RGN features six individual Ethernet ports with ADSL2+ performance and can sit 16 inches away from the outside NID – enough to qualify for equipment reimbursement through USF. Results Cross is managing a controlled roll-out program of bundled services that has been branded Ztv. Ztv is a group of products called bundlez which combines digital television, high-speed Internet and VoIP telephony services into a unique money saving package, providing Cross with significantly more control in the areas of billing and “single network” serviceability. Billable revenue is set to increase in accordance with customer take rates. Plus, the company’s operational costs are significantly reduced thanks to the ability to manage a single IP network comprised of interoperating gear. Also, because the Pannaway solution maximizes available bandwidth efficiencies, Cross is able to offer more powerful services at significantly lower prices – with better QoS than its competitors, and with the assurance of Lifeline POTS support. Finally, the company has already secured the bandwidth it will need to offer innovative new technologies – such as MPEG4 and High Density TV – as they emerge, while being able to offset the cost of ongoing deployment and service rollout. Cross Telephone Company is now considered to be a one-stop service provider for all communication services that its customers need, now and for the next generation of interactive communications. ### Pannaway Service Convergence Network (SCN) Deployed in the central office or remote terminal, Pannaway BAS manages the converged traffic of up to 32 premises with Lifeline support and guaranteed Quality of Service (QoS). This third generation access gear provides the intelligence and capabilities of an ADSL2+ aggregator, digital loop carrier and internetworking switch with Gigabit Ethernet capabilities, cost-effectively replacing a DSLAM, DLC, and ATM to IP gateway. The 10 Gbps Pannaway BAR offers a complete Layer 3 feature set for optimal security and efficient packet routing to efficiently manage and deliver IP-based services at wire speeds over great distances. With a small footprint in a 1 RU design (1.75” high), the BAR easily mounts in an existing Remote Terminal (RT) for maximum interoperability with other vendor equipment. With an IPv6-ready platform, it also includes embedded web management features for easy set-up and configuration. The Pannaway RGN is an intelligent premise device that provides a user interface to managed broadband communications. It replaces the telephone NID, an ADSL2+ Internet modem and premise switch/router, enabling rural telco providers to increase the downstream data rate on existing telephone lines to as much as 25 Mbps. With six Ethernet ports for connectivity to local premise data and video networks, the weather-resistant RGN provides a cost-efficient transport platform for voice, video and data services over a single broadband connection. The Triple Play Voice: By offering VoIP services with Lifeline POTS support, Cross is able to assure its primarily rural customer base that the phone will be connected in the event of an emergency – even if the power goes out. Video: A tiered digital TV offering lets Cross re-brand its services as bundlez, giving subscribers more choices and control over features. Data: Delivering broadband services at reaches of 18,000 feet with throughput in excess of 1MB positions Cross to compete head-on with providers that have inadequately serviced the market. Find Out More Contact us for complete information about how managed IP-based broadband service delivery can help you cost-effectively satisfy your customer base for the long term, profit from new revenue streams, and maximize your current infrastructure investment. Pannaway Technologies, Inc. Corporate Headquarters 215 Commerce Way Portsmouth, NH 03801 T: 603.766.5100 F: 603.766.5150 www.pannaway.com © 2004 Pannaway Technologies. All rights reserved. The Pannaway logo, Redefining Broadband Convergence, Service Convergence Network, PBG, RGN, BAS, BAR, CCM, BAM and NMX are trademarks of Pannaway Technologies. [ Back To TMCnet.com's Homepage ]