ACCESS Magazine - Second quarter 2008 - Moving into the residential broadband market complete with its bandwidth wars, price battles and marketing skirmishes, is a tough move for any established business service provider to make. The delivery of IPTV and triple play broadband service bundles holds great promise for service providers who accept the challenge, but if you are not the incumbent service provider or the first one into a given market, the need to make an impact with the right technology choice is especially acute. Rio Networks’ choice was to go with a broadband technology platform that allows it to leverage two different kinds of DSL.
The service provider in woodsy Roseburg, Ore.—woodsy being the only proper way to describe a town that calls itself the Timber Capital of the Nation—is launching itself into the residential broadband market on the back of a major DSL upgrade, with the help of vendor partners Zyxel Communications and EMBARQ Logistics™. The upgrade will allow Rio to support greater broadband access speeds for its growing residential customer base, and will grant Rio more network and operational flexibility in how it delivers broadband services.
“We knew we wanted to raise the bar for data speeds without adding significant cost for us or for our customers,” said Luke LaPresta, vice president of sales and marketing at Rio Networks. “We also wanted to give our customer more of a choice with broadband.”
While customer access speed is the driving factor behind many broadband upgrades, the upgrade Rio undertook was also about density—increasing Rio’s broadband reach to more residential customers within its existing market footprint as the company engages in competitive battle with one large telco (Qwest Communications) and two cable TV companies (Comcast Corp. and Charter Communications). “We wanted to be able to serve everybody possible and not have excuses for why we couldn’t,” LaPresta said.
Rio Networks’ tradition is in serving business customers. The company’s network covers about 5,800 customers in Roseburg, and another 32,000 in nearby Eugene, Ore. Now, with a project two years in the making, the carrier is propelling itself into the residential broadband and triple play market with an aim to extend its network coverage to 150,000 customers within that same general footprint. The sheer scale of that opportunity called for some degree of flexibility in how Rio addressed it. The company looked toward DSL technology as its solution, but wanted to be able to support different types of DSL technology on the same platform to effectively meet the speed and capacity needs of customers living a variety of distances from its network nodes.
“Our goal is to serve everyone in our footprint, but spectrum and distance limits you everywhere,” said LaPresta.
After evaluating many systems, Rio went with Zyxel’s Multi-Service Access Node (MSAN) product line, featuring the IES-5000 MSAN, capable of supporting ADSL2+ and VDSL2, in addition to POTs line cards through an ADSL2+ gateway. The multi-talented system allows the telco to use bonded ADSL2+ to reach residential customers living fairly long distances away from the gear, while deploying VDSL2 in the shorter loops. VDSL2 and ADSL2+ generally offer about the same bandwidth at a distance of roughly one mile, but VDSL2 bandwidth increases sharply in shorter loops and offers spectral improvements over other DSL technologies. Bonded ADSL2+ is especially helpful in somewhat rural markets where there is still an abundance of copper, but consumers want to access high-definition video streams just like everyone else.
With the MSAN deployment and new DSL flexibility now in place, Rio Networks also has sharpened its competitive edge against the other broadband service providers in its markets. “In terms of competitive edge, it’s like night and day,” LaPresta said. “With Qwest, $100 gets you 1.5 Mb/s bandwidth for all your triple play services. With us, $100 will get you 12 Mb/s downstream and 2 Mb/s upstream.” Those speeds are for the company’s Rio HomePlus offering. It also has a service called Rio Home that supports 1.5 Mb/s downstream.
EMBARQ Logistics came into the project as Zyxel’s partner for distribution, deployment and project management, with the goal to get the deployment done in a way that would get Rio’s market fast with an effective and reliable new offering. “We knew they want to increase the profitability of the network by offering new services, but didn’t want unforeseen costs with the network investment,” said Jeffrey Rhodes, district sales manager at EMBARQ Logistics. “For everyone on our team, from sales to project management, it was incumbent on us to ensure that need would be met.”
LaPresta said he was told by his team that EMBARQ Logistics was committed to the project and always looking to help out in any way possible. The energy and enthusiasm EMBARQ Logistics brought to the project sounds like it also may have a come as a pleasant surprise to Rio, a small telco that can’t use it size in the way that big carriers like AT&T and Verizon can to apply leverage in their vendor dealings.
“Vendor relations are funny. You want to buy something from them, but it is hard to get vendor attention sometimes when you are small—it’s hard to get a good deal and a real commitment,” LaPresta said. “But EMBARQ Logistics really wanted to help us. They were another big part of how this deployment got done.”
Despite the assertiveness of this project, the company is not necessarily in a rush to step into new geographic markets to build on its residential growth spurt. “We’re very focused on our existing footprint,” LaPresta said. “What we do next will depend on how well this deployment goes and how well received the service is.”
Going to battle against Qwest, Comcast and others is not a bet that every carrier would make, but Rio has a history as a newcomer will to make aggressive moves. The company actually started as an online bulletin board service in 1994 before launching dial-up Internet access service the following year. It became a CLEC in 1998. Rio also has an interesting ownership story, even by the standards of small, rural carriers. The firm is owned by Umpqua Indian Development Corporation, operated by the Cow Creek Band of Umpqua Tribe of Indians. Roseburg itself lies in a region called the Hundred Valleys of the Umpqua.
The Umpqua tribe has a long history with Rio. It was a part owner of the company for many years before acquiring it outright. Rio is now one of 11 non-gaming businesses the tribe owns. A seven-person tribal board helps manage the company. Tribal board members operate the company debt-free, so Rio has the flexibility to move quickly and aggressively if it see the right business opportunity. This time, that opportunity lies inside the home.
“They are very supportive owners, and because we’re debt-free, we can move fast,” LaPresta said. “It is the type of company where if you wake up in the morning with a good idea and it makes business sense, you can implement it and just run with it.”
