Tech Triple Play

COLORADO SPRINGS GAZETTE--February 27, 2006

The nation’s telecommunications giants are rushing to add services in Colorado Springs and all across the country, trying to be the first to offer consumers one-stop shopping for Internet, telephone and television services.

Joining the nation’s powerhouse telecoms in the Pikes Peak region are smaller, locally based companies that may get the job done first.

 The push to be the first with all three services is bottom-line driven. Why settle for providing just Internet or telephone or TV when you could get all a consumers’ technology business? If another provider gets there first, the single-service provider could lose the account.

And, “There are economies of scale by offering all of your products on the same network,” said Corey Smith, chief technology officer for Springs-based PorchLight Communications LLC, a small company that offers all three. “That allows us to price our services lower than our competitors who are using multiple networks to deliver their services.”

Still, the big telecoms have yet to bring the three technologies into a home or business locally, despite spending millions in the Springs and billions nationwide to upgrade their networks to deliver telephone, cabletelevision and Internet service to every home and business.

Elsewhere, some of them are making progress. Verizon Communications Inc. and AT&T Inc. have started selling television services to some of their phone customers, and Comcast Corp., the nation’s largest cable-television provider, is offering telephone services to its cable-television customers in Denver and several other cities. That may get them closer to the goal, but they still have a way to go.

THE BIG GUNS
Locally, Adelphia Communications Corp. and Qwest Communications International Corp. remain the dominant telecommunications players. Both offer two of the three services and are testing ways to add the third service so they can offer their own triple-play deals.
Adelphia serves 102,000 homes in El Paso County with cable television, and provides highspeed Internet access on the same line to nearly half of them. Adelphia tested Internet telephone service locally last year, but delayed offering it to customers until after the local system is sold later this year to Comcast.

Qwest provides telephone service to virtually every home in El Paso County and has rapidly expanded its digital service line (DSL) highspeed Internet access during the past few years, so it now is available to nearly 80 percent of Qwest customers statewide.

To offer television services, Qwest began reselling DirectTV satellite television service last year and offers it as part of a package that includes telephone service and high-speed Internet access. The company also is selling television services in Douglas County, delivered through its telephone lines, but hasn’t announced any plans to offer that service in El Paso County.

SIZE MATTERS
Sometimes smaller is better. Two tiny Springs telecommunications firms, Falcon Broadband Inc. and PorchLight, began offering packages of telephone, cable and Internet services locally in parts of the city late last year.

“It’s all about the size of the pipe into the home and what you can do with it. Every provider wants to have that so they can deliver more services,” said Randy DeYoung, president of Falcon Broadband. “If you deliver it through one network, you can keep the cost down.”

Falcon Broadband offers a package of local telephone service, high-speed Internet access and 52 television channels for $76.85 a month in the Falcon area. PorchLight offers a package of local telephone service, high-speed Internet access and 146 television channels for $74.89 a month in northwest Colorado Springs.

Although both have ambitious expansion plans, they now serve a tiny fraction of the Colorado Springs market: Falcon Broadband has signed up about 500 customers in the Falcon area for all three services, and PorchLight has signed up just a handful of customers for its three services in a northwest Colorado Springs condominium project.
Falcon Broadband officials expect their triple-play offer to double the company’s base of 6,000 customers by year’s end, especially as the company expands into new housing developments east and northeast of Colorado Springs.

PorchLight has signed contracts to provide its package of three services to 10 local housing developments and two more in North Carolina that eventually will include 5,000 homes. The company is in talks with investment bankers to raise $10 million to reach another 20,000 homes.

Falcon Broadband and PorchLight have been successful where the big players have lagged because both companies target new developments, building fiber-optic lines to individual homes as they are being built.

“It is a medium that can deliver all of the services today and those that will be available in the future,” said PorchLight President Robert Athey. “It also allows each customer to design their own services.”

TECH AND TURF
As with any new technology, though, there are problems to be ironed out — maybe in court.

Adelphia asked a federal judge in November to order Falcon Broadband to comply with federal laws that require cable providers get a franchise from voters, like Adelphia had to do, before offering TV services in any cities they serve.

Adelphia alleged in its suit that Falcon had agreed to provide such services to the Gold Hill Mesa development in southwest Colorado Springs.

Falcon Broadband denied that it plans to serve the development and last month asked the judge to dismiss the suit. Falcon Broadband also said that should it want to provide TV in the city, that service would come not through cable lines, but via the Internet, which is unregulated. The suit is pending.

Falcon made its first move to serve the city in December, asking the city to sign an agreement allowing it to provide television service in the city through a type of system it has received a license from federal regulators to operate in El Paso or Pueblo counties.
The agreement is similar to Adelphia’s franchise, but doesn’t include requirements that it serve the entire city, DeYoung said. City officials told DeYoung they will not approve or deny the agreement until Adelphia’s suit is resolved, he said.

PorchLight, which sends satellite television services to customers’ homes through its fiberoptic lines, plans to offer Internet television (IPTV) by midyear. Adelphia is testing such a system but doesn’t have firm plans for when it would be offered to customers.

 

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