Part III: The wireless backhaul opportunity, ADSL and IPTV expansion

FierceTelecom: Although SureWest sold off its wireless business, all of that fiber rollout could be used for wireless backhaul. Do you see that opportunity growing?
Demuth: Yes, it's a definite opportunity. We currently have more than a couple hundred sites already under contract and we have plans for future sites. Having that fiber deep not only in business, but also in our residential neighborhoods has provided us the ability to quickly meet those wireless carriers' needs. Since there are multiple carriers at those sites, the nice thing is it opens up the opportunity to provide backhaul to a number of wireless carriers. I always like to tell people that we may be out of the retail wireless business, but we're still very much in the wireless [wholesale] business because we provide backhaul in a variety of means not only to the cell ties, but also to their switching facilities. As their capacity and networks needs continue to grow, Sure West will be an important player in that element of the wireless business.

SureWest broadband business growthFierceTelecom: Of course, in the process of rolling out FTTH, SureWest has not abandoned its copper plant and has been just as aggressive in rolling out higher speed ADSL2+-based services. Do you foresee the company adopting other advanced technologies such as VDSL2, vectoring to squeeze more out of the copper plant?
Demuth: While we don't have any current plans for VDSL2, we continue to look at that and other solutions and definitely want to continue to leverage that copper plant. This last year we enabled 25,000 more homes to provide our triple play, including IPTV service to. As long as we continue to see advancements in those copper technologies, we'll continue to take advantage of them. Also, we'll continue to take advantage of things like compression technologies and processing that allows us to get more content down those pipes we'll take advantage of it. We first rolled out our IPTV offering in January 2004 which was MPEG-2 based that took us almost 20 Mbps to HDTV. We have cut that more than half with MPEG-4. Those kinds of capabilities will help us leverage that copper.

FierceTelecom: Another leap of faith SW made was to go with IPTV. Talk about the challenges and rewards of that?
Demuth: As far as the integration piece of it, I think integration can still be a challenging proposition. The good news is a lot of vendors have stepped up and tried to take some of that burden off the service providers. Some have been more successful than others. Also, as the number of IPTV applications continues to increase, there's going to be a need for some level of integration, but it's good to see a lot of standards coming into play.

I remember back in the 2002-03 timeframe, the proven technology back then was still RF over coax. We knew we wanted to provide the services over our fiber and take advantage of the copper plant we talked about. We really felt that an IP-based solution was the best solution. We wanted to leapfrog those current capabilities and provide our customers with some truly innovative services and help us drive down deployment costs. One of these challenges was that IPTV probably spent too much time as a me-too type service with cable and satellite, and some of that had to do with the complexities of integration. I see us moving by that and I am glad to see some of the newer applications and capabilities. I think we got past core fundamental ‘how do you put it together to now what are the neat, innovative applications we thought about years ago, but have not been able to deploy.

Part III: The wireless backhaul opportunity, ADSL and IPTV expansion