MetaSwitch eNews - October 2006

Demographic studies over the next 20 years show a steady migration of baby boomers to either urban areas with abundant shopping, entertainment and convenience options or rural areas that offer the space, quiet and affordability that suburban and urban areas no longer can. These retiring baby boomers will put pressure on rural areas, which lack the infrastructure and the economic base to respond to an influx of new residents - and that's precisely what this case study intends to address.

An influx of retiring baby boomers can be some of the toughest kind of growth that a rural community can experience. This is because many rural communities do not offer abundant spending opportunities for the boomers' disposable incomes, and the retirees that come into the community are also not working or in a position to become a strong tax base.

At the same time, the younger, working population in these communities doesn't change much. There are only so many jobs. Many of the jobs are at lower wage and education levels. The end result is an intriguing community dichotomy that has young and middle aged working population staying the same or even declining, while non-working retirees come in to grow the overall population base.

The big questions for telcos considering offering new services like VoIP to these rural areas are, how do you create loyal customers and a strong profit base in rural communities where the elderly and retired population is growing, and the young and middle aged wage earners are diminishing? And is it possible to profitably deliver a package of advanced services that will appeal to this demographic?

The Business Case for Rural VoIP

With its headquarters in Roseburg, Oregon, ComSpan was an emerging CLEC (competitive local exchange carrier) that wanted to grow its service area in the rural communities of southern Oregon outside of their headquarters. One of these communities was Bandon, a seaside town just on the other side of the California border, with many residents who had already returned and relocated from populous areas with advanced telecommunications offerings.

ComSpan determined that Bandon was a market where it made good business sense to provide fibre to each residence for the pilot implementation of broadband services.

In making the decision to expand into a rural community like Bandon with state of the art telecommunications services, ComSpan had to solve several key issues:

"Comspan wanted to grow its business, and there were a number of reasons that convinced them that Bandon was the most well-suited community in their service area for VoIP," said Chris McLorg, Vice President and General Manager of the CommNet Group for LTS, a construction and management services firm for telecommunications and utility companies that builds infrastructure and partners with CLECs to bring broadband - including fibre to the home - to rural markets. "First, they believed that the Bandon market was underserved by incumbent service providers. Bandon also was a very interesting community that would likely make a strong entry point for VoIP. Situated on the Pacific coast, Bandon is 90 minutes from Roseburg. It is a mix of populations that are growing and not growing because of the many people who are moving there for retirement and lifestyle reasons. Economically, the town doesn't have a particularly strong infrastructure, but the retirees are bringing in disposable income."

Planning for the Rural Deployment of VoIP

With a business history of five years, ComSpan had carefully studied the proposed Bandon project for two years. A switchover to new service offerings had to be carefully and economically managed - and a by-product of the process had to be a repeatable service deployment model that could be executed again and again in other rural communities besides Bandon. The overall project approach was to use Bandon as a pilot, and to refine both implementation and service bundling from experiences gained from the Bandon deployment. The end product could then continue to be rolled out to other southern Oregon communities.

From a market standpoint, ComSpan opted to offer a 'triple play' of IP-based voice, video and data services over fibre into residences and businesses in Bandon. However, once the business decision was made to go forward, the telco also recognized that it did not have the in-house technology expertise to revise its internal infrastructure for these new VoIP offerings, or to deploy the services it had targeted for Bandon.

The telco chose to partner with LTS, which specialized in infrastructure buildouts and VoIP deployments for telcos. LTS personnel would manage and assume leading roles in the triple play project at the same time that ComSpan personnel worked alongside them and acquired valuable training and knowledge that would support the telco's new infrastructure over the long term.

LTS was so impressed by ComSpan's business plan that they took an equity stake in the business, establishing a joint venture called ComSpan Bandon Networks. This ensured a close partnership between the two companies, and a shared stake in the success of the project.

ComSpan and LTS assessed the overall project over a period of several months, conducting careful market research and technical feasibility studies. They reconfirmed Bandon as a good target market for broadband and triple play, and took additional time to fully lay out the project.

"The major planning emphasis was on the commercial side of the services," said Chris McLorg, who managed the project for LTS and ComSpan. "We spent a lot of time discussing how the people in Bandon would interact with the new technology, and what would be the best ways to present services and pricing to them."

Triple Play Implementation

The first step of implementation was reconfiguring ComSpan's telecommunications infrastructure for VoIP-based service offerings, as ComSpan had built its business to date on a legacy circuit-switched platform, the Nortel DMS-500 In doing the reconfiguration, the ComSpan-LTS team wanted to maintain as many existing assets as possible, while reconfiguring essential components for VoIP.

The major decision was finding a new switch that was capable of running not only VoIP and broadband, but the traditional TDM Class 4 and Class 5 services that ComSpan already offered. A number of possible solutions were available and were carefully evaluated. In the end, the ComSpan-LTS team selected a MetaSwitch VP2510 switch.

The MetaSwitch VP2510 had a field-proven softswitch architecture that gave ComSpan plenty of flexibility, scalability and carrier-class reliability. It offered investment protection with a platform that could carry the telco well into the future because of its use of open protocols and interfaces. Just as importantly, the VP2510 switch was able to interoperate with ComSpan's existing legacy equipment.

"The MetaSwitch VP2510 switch did everything we needed," said LTS's Chris McLorg. "We wanted a solid switch in a package that made sense, with all the features for residential and business customers - exactly what the MetaSwitch provided."

The planning of the softswitch was very technical in nature, and was started at a very early stage by MetaSwitch, according to Mark Brenig-Jones, MetaSwitch Field Engineer responsible for the deployment. "Even before the system was sold, we drew up a tentative network configuration for ComSpan and LTS to review," said Brenig-Jones. "Once the contract was signed, we dedicated a support engineer and refined our network configuration... The process of refinement was ongoing until we exactly met ComSpan's operational requirements, such as network level redundancy."

MetaSwitch personnel physically installed the new switch, which had a very small footprint and could fit in a 19 inch rack space. The switch also had power consumption conservation features - consuming the equivalent of a half dozen light bulbs! This resulted in significant cost savings from power, backup battery maintenance, and a reduction in air conditioning costs. With the new switch in place, ComSpan could now add VoIP services to its product repertoire, and use fibre to deliver voice over IP to customer home and business premises. The new switch could also continue to support POTS (plain old telephone service) and traditional long distance services. "The switch offers a desktop assistant where a subscriber can see incoming calls, and also initiate calls from a regular home phone," said Brenig-Jones. "This combination offers the maximum to ComSpan's subscriber base, which can continue to use or even to transform existing equipment without having to make major investments."

With the new switch in place and the infrastructure revised, ComSpan's next step was offering VoIP and video services to Bandon.

Triple play VoIP delivered over fibre was the offering, and the services were competitively priced to encourage growing the subscriber base. But in addition to price, it was also important to offer services that would attract customers. ComSpan put together packages that included a rich set of calling features, as well as high-speed Internet, more than 100 channels of TV, and video on demand services. The ComSpan-LTS team spent considerable time reaching out to Bandon community leaders to aid in promoting the new services to residents and businesses.

Since rural community dynamics usually revolve around key community leaders and organizations that are willing to endorse a new service, informally "spreading the word" among constituents about ComSpan's new Triple Play service was an invaluable strategy in Bandon. ComSpan and LTS understood that ongoing community support and participation were vital to the success of the Triple Play project - and to the development of a stable and loyal customer base.

Very quickly, the City of Bandon involved itself in a telecommunications committee with ComSpan and LTS. A combination of civic leaders, city personnel and local business owners all helped to promote the idea of new telecommunications services to the general public. A ComSpan-Bandon-LTS executive steering committee was also formed, and it was this committee that pulled all of the pieces together for the Bandon broadband project.

"We began our Triple Play deployment by starting with alpha customers in the community with whom we had a dialog," said Chris McLorg. "In this way, we were able to test the service, which had already been tested by us internally. From there, we could adapt the service to local needs and promote it through word of mouth. This approach works really well in rural communities. We are still in process with this pilot testing today, and it is going very well. Because we did the advance testing and debugging ourselves, our pilot group is not having to do it, and this facilitates promotion of the service."

The preparations culminated in a whole-day community launch event on June 21, 2006. This included a "Lighting up Bandon" ceremony with local officials, open house tour of the company's facilities, and a wine and cheese reception for members of the local business community. As a result of these outreach efforts, ComSpan signed up more than 30% of Bandon's residents to triple-play services within a few weeks of the launch.

End-to-end, ComSpan's conversion to a VoIP-supportive infrastructure and its offering of Triple Play to Bandon took six months. It involved some changes at the central office, but a majority of the focus was on the external community, where a great deal of thought was given to how to package the new service offerings, present them to Bandon and interact with the community.

"We strategized a great deal on the community receptivity and adoption rate of the new technology," said Chris McLorg. "We actually parallel-installed equipment on the inside and the outside of the plant. We are now in a connection phase where we are turning on homes for the service. This service activation, which started with an alpha test of the first few customers, has now expanded into the general population. The alpha test approach works well in a rural community, where key torch bearers among the community can spread the word about how great the service is."

Project Review

Every party involved in the ComSpan Triple Play project talked about the smooth communications that enabled people to do the jobs that needed to be done with minimal disruption. "Communications were strong between MetaSwitch, LTS and ComSpan," noted Mark Brenig-Jones of MetaSwitch. "ComSpan needed training on the new equipment, and we provided the training onsite. We answered questions on the new switch, and we also supported LTS on the project based on the level of technical detail required, and on the area of the project."

All sides also clearly understood their roles. LTS provided overall project management. ComSpan personnel assisted in implementation, with a final goal of assuming responsibility for the new infrastructure and the support of VoIP services to the customer base once the project was completed. MetaSwitch provided training for the new switch, assigned an experienced installer who rackmounted several physical boxes and performed the required IP configuration, and provided ongoing, dedicated resources for rapid problem resolution. "In our support structure, you get a dedicated support manager," said Brenig-Jones. "We also continue the support beyond implementation, so are available to answer any questions which arise as ComSpan continues to grow its deployment."

The only major complication encountered in the VoIP Triple Play implementation concerned ordering the links for the trunks needed to the outside world - or the PSTN. "Getting all of the work done in time was a very big issue that we worked with when the trunk delay happened," said Brenig-Jones. "It was to our advantage that we did a lot of pre-configuration work ahead of time for the network. This saved us time when we needed it."

Keys to Success

ComSpan is not alone in its outreach efforts to rural communities, and in its understanding that it must first upgrade its own technology and service offerings before it can pursue these markets. Indeed, many small telcos are in similar situations.

There were several key factors that made ComSpan's first venture into VoIP and Triple Play so successful:

Conclusion

In the future, ComSpan plans to build out the Triple Play VoIP services model that it created in Bandon to other rural communities in southern Oregon. From there, it will look for new VoIP features to add to its service offerings that will be value-added for customers.

"At the end of the day, you have to keep your focus on the business, and how you can grow it," said Chris McLorg. "We think we have found an excellent, cost effective, reliable and repeatable means of growing VoIP in rural services areas that will allow ComSpan to easily expand its business into new growth areas."

Mary E. Shacklett is President of Transworld Data. Prior to this, Mary was VP of Product Planning and Software Development for Summit Information System. She can be reached at .

METASWITCH eNEWS - OCTOBER 2006