Technology makes digital deployment affordable for small cablecos

A growing number of small cable operators are looking at deploying digital cable sooner than anyone expected thanks to a satellite-based technology solution that would save them thousands of dollars in capital costs. It's a technology that could also ensure the future for Canada's small cable industry, which faces intense competition from new and well-financed digital competitors such as satellite TV and wireless cable. Many industry observers believe that digital cable may be the only way for small cablecos to survive in an increasingly competitive broadcast distribution market. When looking to launch digital quickly and economically, national access control is becoming the solution for smaller cablecos worldwide. General Instrument Corporation's (GI) national access control system eliminates much of the costs associated with a standalone cable headend by using a satellite-based addressable system. Using its national access control centre in Denver, GI has made digital cable deployment more affordable for more than 80 cablecos, most of them in the US. Although the technology solution itself is not new, it's arrival in Canada is new. This fall, Westman Communications Group of Brandon MB became the first Canadian cableco to use GI's national access control, and other companies such as Mountain Cablevision Ltd and Southmount Cable Limited of Hamilton ON are next in line. The Canadian Cable Systems Alliance (CCSA), which represents small- and medium-sized cablecos across the country, recently signed an agreement to extend the technology solution to its members. "By going with the General Instrument authorization centre in Denver, we've saved the cost of having to have the DAC (digital access control) located in our headend," explains Westman president/CEO David Baxter. "In addition to saving the roughly $150,000 associated with that headend equipment, there's also savings in manpower because we would have also had to have another person manage the functionality of that if we had it here in our headend. There is some loss in local control but compared to the cost savings, we thought it was worthwhile for a system of our size." Westman, a co-operative owned by its roughly 28,500 customers throughout western Manitoba, has 12,700 cable subscribers in Brandon, of which 1,100 are digital. A swap of analog for digital set-top boxes was completed last month. Digital cable will soon be extended to Minnedosa, Neepawa and Carberry upon completion of a fibre connection to those small communities. As the first Canadian company to use GI's national access control solution, Westman has been fielding questions from other Canadian cablecos that are considering using the technology. "Quite a few (cablecos) are talking about going this route," Baxter told CCR. "We've been getting some phone calls -- some inquiries about what our experience has been." Westman has had to face more competition than perhaps any other Canadian cableco operating in a small market. In 1996, Brandon was the first city in Canada to have competition in the broadcast distribution market, with the launch of wireless cableco SkyCable Inc. "We wanted to be launching digital on the earlier side to make sure we retain our customer base as best we can," Baxter says. "That's why we entered into the arrangement with General Instrument as the first in Canada. We don't want to be on the bleeding edge ... don't want to be too far back in launching new services because if we don't, our competitors will." Purchasing headend equipment represents a significant cost in the deployment of digital cable, but set-top boxes are the single greatest capital cost, which is why cablecos are loathe to give boxes to customers without charging them a monthly rental fee.

Technology makes digital deployment affordable for small cablecos

Broadcast | December 22, 1999

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