Salisbury's FTTH Blog

We had a comment posted last week that asked about the video plans that were going to be offered. Actually the comment was…

What kind of plans will be available? or is it to early to ask?

The answer, unfortunately, is yes, it’s too early to say. To better answer this question, let me try to explain the challenge we face with video. The content providers (ESPN, Disney, etc) make their programs available using satellites. I don’t know the exact number of satellites used, but there’s more than 60 satellites circling the globe used for content. A content provider leases space on a satellite and uses it to broadcast it’s programming. Some of this content is free, and is called free-to-air. Most of it requires a subscription though. The programs that require subscriptions are encrypted, or scrambled, so that anyone receiving the program must be authorized to use it.

There are basically three ways to receive this programming. One is to use a company that operates what is known as a “super headed”. In this scenario, the company builds a headend where they receive the programming from the providers they want to carry, bundle it up into one channel, and then send it to their customers for distribution. This means they install satellite dishes to receive the programming, process the signals from the satellite, encode the programming so that only their customers can use it, then they send it back up to another satellite for distribution. All you need to receive their programming is a smaller satellite dish and just enough equipment to receive their one signal, and separate it into the individual channels. All the encoding and encryption is already done at the super headend.  The problem with this type of service is you only get the channels they provide and you generally have to use the equipment they choose to use. This equipment is usually some of the less expensive equipment and thus doesn’t provide a great viewing experience. But this type of service means you don’t have to invest in your own headend and thus your capital costs, the cost of purchasing and installing equipment, is lower.

The second and third way is similar in that you have to build your own headend but you get the license to use the programming differently. In both these cases, you have to install one or more satellite dishes to receive the programming; buy and install all the satellite receivers, encoders, etc; and buy and install all the digital rights management and conditional access systems. These last two items are the equipment that encrypts the programming so that only those people subscribing to your service can view it. It is a requirement of the content providers so that they can be assured of getting their money for everyone viewing their programs. The difference in these two ways is how the content is licensed.

In one method, the city would negotiate and sign a seperate contract with each provider. So the city would have to have a contract with ESPN, Disney, etc.  This is a long and hard process, especially since the city won’t have an especially large number of customers, as compared to Time Warner or AT&T. So when it comes to negotiating a price, the larger incumbents are going to get better pricing. They are going to get quicker response from them also.

So we have decided to use the third method to get our content and that is to join a co-operative. There are three co-ops and we have chosen to join the National Rural Telephone Cooperative (NRTC). This means the NRTC is negotiating contracts with the programmers on their members behalf and can bring to the table a much larger number of subscribers. The disadvantage to this is we are somewhat limited to the programming that the NRTC has available. I say somewhat limited because with this method, we can still go directly to a provider and negotiate a separate contract; it would just be more expensive than if we used the NRTC. We can do this because we are building our own headend and can install the equipment required to receive each and every channel.

Lastly, there is the problem of providing local broadcasts. These are the channels such as WBTV and WSOC. These channels are received “over the air”, meaning we will have several antennas that will receive the signal from the broadcasters, and then process them to put them into the format we need to send out with all the other channels. We have to negotiate and sign contracts with the individual broadcasters to provide these channels. These channels are not a part of the NRTC channels. We have not contacted the local providers at this time but will do so shortly.

Since we are now members of the NRTC, we know which channels they can offer and we are looking to see if there are other channels we may want to provide. We are also looking to see which local channels we want to offer.

So this has been a long discussion just to say that we still don’t know exactly which channels we plan to offer and how we will bundle them. This is something that we are currently working on, we are just waiting right now on the NRTC to finish processing our membership. Once they have finished,we will be assigned an account representative that will work with us to build our channel lineup and bundles, including local channels. Once we have this information, we will start to make it available to the public. I’ll keep you updated on this process as it goes along.

This is one of the more involved decisions we’ve had to make and it’s hard to explain it in a such short discussion. I’ll probably expand on this topic in latter posts. Again, if you have any questions about any of this, please let me know.