Like many independent telephone companies, the Seneca, Goodman and Ozark Telephone Companies are ahead of their larger brethren when it comes to offering video service to their telephone customers.

The family-owned businesses launched their video service Oct. 15 through a separate arm, SGO Video, also owned by the Mitchells, and in the process, found some new ways both to be cost-effective and to attract new customers.

Rather than be burdened with the cost of its own head-end, SGO joined with three other independent telcos – Granby Telephone, McDonald County Telephone and Le-Ru Telephone -- in buying its video service through MBO Video, a privately held company created by Cimarron Telephone in Oklahoma. The six independent telcos jointly constructed dual fiber optic links to MBO’s network, for redundancy purposes, said Jay Mitchell, president of Seneca Telephone and vice president of SGO Video.

SGO then helped fund the fiber optic construction and acquire rights-of-way through six miles of Southwestern Bell territory by offering video service to the private landholders.

With marketing assistance from Pannaway Technologies, its ADSL access equipment provider, SGO then launched a promotional campaign that is generating as much business as the company can handle. Pannaway providing much of the marketing creative material, which also helped keep costs down, including a mailing piece that provided a bag of microwave popcorn to customers to promote the new availability of movies on demand.

“We’re saying ‘enjoy your first night at home with all-digital television on us,’” said Dale Allaire, senior director of marketing at Pannaway.

The creative approach to both building and selling video service is enabling SGO to gradually roll out service as it is able and do it cost-effectively.

“We saved a big chunk of money not buying a head-end,” Mitchell said. “We are connected by fiber to MBO’s network in Oklahoma, and we have one connection to my network and one to Le-Ru’s as a backup. Our three companies operate a fiber optic ring, and we connect to that.”

To deliver video over its copper network, Seneca turned to Pannaway after using a different vendor for its initial DSL deployment, he said.

“We had limited ADSL in the field,” Mitchell said. “We mainly had IDSL and SDSL and a little ADSL in our six COs. But we were finding it cost prohibitive to get ADSL out to our remotes.”

The three independents cover 450 square miles in three states – Oklahoma, Missouri and Arkansas – with about 8000 customers. The early DSL deployment only reached about 20% of those customers, the ones who lived within service range of a CO.

Pannaway’s ADSL2+ solution enabled the three telcos to deploy “pizza box” sized gear in existing remote terminal cabinets to reach 95% of their customers, Mitchell said.

The video service features 100 TV channels, 45 music channels, and pay-per-view channel channel, all provided in addition to video and voice, at least in the three telcos’ franchise voice area. One byproduct of traversing neighboring Bell territory is that customers there are asking for video service as well, he added.

“I’ve had people ask for the service,” Mitchell said. “I do know that if someone is within 15,000 to 16,000 feet of the drop, I will give them video and data if they want it. I can’t give them phone service, because I’m not a CLEC.”

The primary focus right now, however, is to achieve 30% video penetration among his existing customers. The company almost immediately had a back-log of 100 orders and was adding personnel both in the field and at the headquarters office to process incoming calls and video installs.

Eventually, DSL customers still on the older DSL technology and the 2200 dial-up Internet access customers will be switched over to the Pannaway system as well, said Mitchell, with his brother a third-generation phone company owner.

“We have two two-man installation crews doing about eight installs a day,” he said. “We set a target number of 30% penetration and 10% of existing DISH customers.”

Seneca offers the services a la carte, but also has three service bundles – a Double Play with voice and digital TV for $39.99 plus seven cents a minute long-distance; a Triple Play which adds basic DSL service for $62.99 and a Grand Slam which adds uncapped DSL service for $83.99.