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SureWest Picks Allied Telesyn Gear

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News Analysis
Light Reading

SureWest Communications (Nasdaq: SURW), an independent telecom provider in Northern California, has picked Allied Telesyn Inc. to supply fiber-to-the-home (FTTH) gear.

Financials weren't disclosed. But SureWest has ordered 5,000 residential broadband gateways, plus 5,000 media converters from Allied Telesyn to complete its launch of triple-play (voice/data/video) services to -- you got it -- 5,000 California residents. The rollout will go live within the next thirty days.

The news highlights how the quest to offer triple-play services has come to the forefront of the access services market.

SureWest typifies the kind of provider Allied Telesyn's after: It's independent and aggressively seeking to compete with incumbent LECs for access dollars. It drew industry attention this year by marketing video along with data and voice, over both fiber and copper (see Rural Telcos: The Steady Hand).

Allied Telesyn won a deal to supply DSLAM gear to Livingston Telephone Co., a rural CLEC in Texas, in July 2003 (see Livingston Chooses Allied Telesyn). It's also won a couple of regional deals in Alaska and Wisconsin.

"Video is the driving force," says Allied Telesyn's VP of business development Mark Marinkovich. The supplier, a subsidiary of Japan's Allied Telesis K.K., has optimized both its IP-based DSLAM gear (see Allied Telesyn Debuts DSLAM Drama) and its fiber access equipment for video services as well as data and voice. The goal is to capitalize on triple-play opportunities for both copper and fiber.

Besides independent rural providers, Allied Telesyn also sees triple-play opportunity among public utility companies that are rolling out their own wholesale fiber networks. An example is the Zipp Network built by the Grant County Public Utility District in the state of Washington.

"Independents are more aggressive than RBOCs," says Marinkovich. The Bells are trying to achieve triple-play through a mixed bundle of DSL-based voice and data and third-party satellite video. Some have feelers for FTTH rollouts, but industry sources have questioned their seriousness (see SBC Ratchets Up PON Politics).

As the independent push for triple-play heats up, so is competition among vendors in both the DSLAM and FTTH camps. In fact, the recent deal between Allied Telesyn and Livingston points to that competition. Livingston's using gear from Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Advanced Fibre Communications Inc. (AFC) (Nasdaq: AFCI), and Riverstone Networks Inc., as well as Allied Telesyn.

SureWest had picked Occam Networks Inc. (OTC: OCCM.OB) for DSL triple-play services earlier this year (see SureWest Picks Occam for VoDSL ). Allied Telesyn execs say they'll keep trying to pursuade SureWest to use their DSLAMs.

SureWest isn't budging yet. "These are two completely different pieces. We plan to keep Occam," says Bill DeMuth, SureWest's CTO.

— Mary Jander, Senior Editor, Light Reading

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