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Local company making waves in telecom industry

New technology will slash costs for telecom start-ups.

New technology being rolled out by a Sherwood company could revolutionize the telecommunications industry, potentially leading to improved quality and cheaper rates for cable, Internet and phone service.

CSI Digital announced in June that it is rolling out its Trident wholesale product suite. CEO David Luman said it will make CSI the first company nationally to deliver all three digital services - voice, video and data - to content providers. That means companies, from already-existing telecom behemoths to start-ups, will have the ability to provide their customers with all three services, known in the industry as the triple play. While big companies could use the service to add to and improve their current array of services, Luman, who serves on Sherwood City Council, believes the new technology could be of huge benefit to telecom start-ups, which traditionally faced high-cost barriers of entry into the business.

For instance, a company trying to deliver television services directly into households previously needed about 10 racks of equipment - each six-feet high by three-feet wide - to transmit the signal, at a cost of up to $3 million. And that equipment loses value quickly due to the rapidly changing nature of the business. Now, a provider can do it with one rack of equipment or so, and at about 10 percent of the cost.

In addition, CSI works with companies to provide a package of 200 cable channels, and also has a construction branch that actually lays the physical fiber needed to carry signals, meaning it can 'provide an end-to-end solution for a company that wants to be in the content delivery business.' The new technology also offers a more compressed video signal - MP4 - that will allow already existing providers to send more information out over their existing bandwidth, and at a cheaper cost.

'The barrier to entry now is so much lower that it broadens the available number of suppliers or providers and therefore a consumer has more choices, and presumably, prices will drop because there no longer is a monoply in these type of services,' Luman said.

So what are the practical applications? A developer or homeowners association, for instance, could decide to bypass a cable company and provide cable television directly to its residents. Likewise with hotel owners and large companies. CSI already has deals negotiated, so its able to offer those groups 200 channels, and is responsible for equipment upgrades, meaning a company won't be stuck with old equipment and an expensive upgrade.

Those cost prohibitive measures are what have made the telecommunications industry so difficult to break into, and what has allowed a few large companies to maintain a vice grip over consumers. According to the Federal Communications Commission, about 90 percent of Americans live in a non-competitive cable market dominated by one provider.

'It's somewhat of a paradigm shift. It truly is a change in the way the consumer is able to receive these three components, voice, video and data services,' Luman said. 'It allows many more competitors in the market place.'

In the future, those competitors could turn out to be towns, cities and counties. Just as many towns across the country now run their own public utility for sewer and water, of their own trash collection service, towns may soon run their own cable service. Already, Luman said, his company has laid down fiber for Sherwood, which provides a wireless Internet signal over much of the downtown area.

CSI plans to roll out the new Trident system September 12, and Luman said there is strong interest from companies and developers locally, as well as those in the South and Northeast.