Even in a town with a population that would not begin to fill the stands at Churchill Downs, Mountain Telephone's Allen Gillum wants his customers to know there's nothing you can do in metropolitan America that you can't do in eastern Kentucky.

Outside the Mountain Rural Telephone Cooperative headquarters in West Liberty, Ky., two scarecrows communicate using a couple of tin cans and a piece of string. A sign, wedged between the pumpkins and the cornhusks, reads “the original MRTC party line.” This being a small town in the bluegrass capital of rural America, you might assume this depiction of the state of telecommunications here to be accurate. You would be wrong.

Mountain Telephone prides itself on being able to offer its customers technology comparable in quality and speed to that found in any major city. This is something Allen Gillum, general manager, concentrates on with every product-line addition and network upgrade his company undertakes — and it has recently undertaken a whopper. Gillum and his board have moved forward with plans to invest up to $15 million on a complete transition to next-generation technology, including IPTV.

Why the scarecrows? The last weekend in September is a big one for the folks in West Liberty, and the scarecrows are all part of the fun. Not only are they celebrating that party-line phones are no longer in use, they also are celebrating their annual Sorghum Festival, an event that draws people from across the country, causing this rural town's population to swell from 3000 to more than 10,000 for one weekend.

It's what they are famous for according to the sign that graces the entrance into the small, history-laden town. Three Civil War battles have left their mark on West Liberty, a town not actually west of the city of Liberty, Ky. And it's hard not to get drawn into the history and excitement as life, at times as unhurried and deliberate as the sorghum being churned out by the mule-powered mill, picks up its pace.

A quickened pace is something those inside Mountain Telephone headquarters are becoming more familiar with all the time. Their goal is to completely transition their network in just one year.

Mountain Telephone is a member-owned telecommunications cooperative in the heart of Bluegrass Country. The company's telephone service spans four eastern Kentucky counties: Morgan County (where the West Liberty headquarters is located), Elliott County, Wolfe County and Menifee County. These four counties are supported by 17,000 access lines at a rate of approximately five-and-a-half per route mile, making this telephone company especially rural. The four counties combine to make Mountain Telephone's local calling area the largest of any telephone company in the state.

Also, Mountain is firmly planted in the wireless business, which it has been in for 18 years in partnership with four other telephone companies in eastern Kentucky, each owning 20% of wireless provider Appalachian Wireless. Through this relationship, Mountain reaches 18 counties in Kentucky and two in Virginia. The company operates over a CDMA network with roaming partnerships in place with Alltel, Sprint Nextel and Verizon. AT&T, the other cell phone provider in eastern Kentucky, has one cell site to Appalachian's two.

Appalachian Wireless also was on board with the first auction of 700 MHz spectrum five years ago. The company now owns enough 700 MHz to cover the eastern half of the state of Kentucky. It most certainly plans to be in on the next round of purchases, Gillum said.

He believes that within the next decade, Mountain Telephone's wireless service will become more important as the company phases out landline phones as it knows them today. In fact, he doesn't think the concept of POTS will still exist — all telephone business will be done over voice-over-IP (VoIP) phones.

“If I could go buy a VoIP phone for under $50 and have it work off of that same power and over the same line, it'll be very easy to put VoIP in for everyone,” Gillum said. “I don't understand why [the equipment vendors] can't see that opportunity and develop that product.”

His desire to keep up with the latest technology is driven by his steadfast philosophy of providing his customers with telecommunications services as good as they would have in any metropolitan area. This promise to adapt to the wants and needs of those in its service area is driving the company's current network transformation, which includes the replacement of all its legacy switching, transport, and access equipment. By the end of next year, Gillum hopes to provide additional IP-based services ranging from VoIP to IPTV. After all, this is not just where Gillum works, it is the place he's called home since the day he was born.

Gillum was born and raised in Elliott County. He came to Mountain Telephone after owning and operating a two-way radio business in Prestonburg, Ky., for 20 years. He prides himself on being a jack-of-all-trades, and he'll quickly admit, “I ain't the best at anything, but I know quite a bit about everything.” His background and experience prior to Mountain, however, make him more than qualified for the job.

Gillum says he began working on his family's farm at the age of three. From working with animals, tractors and other farm machinery to dealing with people on a regular basis, there's nothing Gillum feels he hasn't done. He says it helps to come from a family of self-employed, active parents. (His father also served on the Mountain Telephone board of directors for 28 years.)

“I didn't know what a résumé was, growing up on a farm, but if I had known what one was, I could've put you together a résumé when I was 18 years old that had 14 years of good work experience on it,” Gillum said.

Building on his non-résumé, Gillum went to work as a shift electrician for Union Carbide. “I learned what it means to start a process and have someone look over your shoulder asking, ‘How long is that going to take?’ So I don't have any problems working under pressure. I don't care how many telephones outages there are or how many newspapers reporters there may be; it's not going to fluster me.”

After serving six years on the board of directors, Gillum was elected general manager of Mountain Telephone. He took the job not because it paid well — he could have made more if he continued to own and operate his two-way radio business — but because he had a deep-seated desire to see it thrive. After all, he grew up talking about Mountain Telephone around the dinner table with his family.

Now, after six more years as general manager, Gillum is ready to take his company's offerings, employees and customers to the next level. He sees an increased demand for IP services, including video-on-demand (VOD), VoIP and television programming that is of a better quality than the satellite service residents currently receive. In fact, Gillum estimated that three-quarters of his 13,000 customers do not even have access to cable TV service, and he doesn't believe that cable will ever build out its plant to reach these people.

He is quick to emphasize that the current transformation is not driven by him alone. Mountain Telephone, an active member of the National Rural Telecommunications Cooperative, is truly a company built and owned by its people in a city where everyone knows everyone else's name. Many customers prefer to drive in from miles away, even from other counties, to pay their bills directly at the drive-through window or to come inside and catch up on the gossip with the girls at the front desk.

“I love the concept of a co-op. I love the concept of people owning and organizing and providing service for themselves,” Gillum said. “My philosophy is to select good people that know what to do and how to do it and when to do it and leave them alone.”

He acknowledged that unemployment runs high in his part of the state, but said all people need is an opportunity. “If we'll spend a little money in educating them, the local people can do the work, and we can provide the jobs,” he said.

The network transformation also can help on the job front. Gillum said the investment the company is making will provide what the community needs for the next decade and allow folks to be competitive nationwide and worldwide.

“It used to be that to do business, you had to have shipping and needed to be by a railroad or a waterway. Now you have UPS, so there is no competitive advantage to one's geography anymore,” Gillum said. “Anything that doesn't need a railroad or a waterway can be done in Elliott County.”

Mountain Telephone prides itself on doing much of its work in-house. Letting go of Mountain's internal control over operations support systems/business support systems (OSS/BSS) took almost 30 years. The company had been writing its own OSS/BSS programs for as long as he can remember. Just three years ago, Mountain made the decision to join forces with software vendor NISC, a company Gillum liked because its rural values seemed right in line with his own.

“Probably the determining factor was my confidence that NISC had somewhere in the neighborhood of 400 to 500 rural electric co-ops and rural telephone co-ops as members and owners,” Gillum said. “I felt like it was going to be here forever.”

Mountain's new softswitch-based network, designed in conjunction with Cisco Systems and MetaSwitch this summer, will allow it to deliver a wide range of VoIP, legacy TDM and next-generation services while upgrading its core network. This new IP network will be used to provide high-speed data, multicast video, VOD, metro Ethernet and other future services.

The decision to replace Mountain's own legacy network infrastructure rather than upgrade it was purely economical, Gillum said. The cost of upgrading older equipment, especially considering the amount of bandwidth needed to offer high-speed Internet, was rapidly growing beyond the capacity of Mountain's old transport facilities, and the total cost became too great not to just start from the ground up.

Mountain's legacy network architecture is built around four separate Nortel Networks DMS switches — one in each county that routes to a tandem switch for long-distance transport. The ability to deploy a triple play of offerings — including voice, data and video — was an important motivator in Mountain's decision to replace its infrastructure.

“An old network is really hard to manage; it's hard to get things done,” said Chris Carabello, director of marketing for MetaSwitch. “And from a strategic business standpoint, it is important to stay one step ahead of the competition and be able to offer new services. Mountain feels an obligation to its community to provide these services, and with MetaSwitch, they'll have the ability to deploy them to small business customers and consumers.”

Mountain's ultimate goal with MetaSwitch is to “future-proof” its network with 10 gigabits of capacity. MetaSwitch has partnered with Cisco to develop a SIMPLE solution, which stands for Secure IP Migration Platform for the Local Exchange. Mountain is now in the process of deploying Cisco's 7609 series of routers throughout its entire network to increase the bandwidth necessary to deploy IPTV. The overarching purpose of the new solution, Carabello said, is to increase redundancy, simplify operations and streamline delivery of future services, including IPTV.

“Particularly with rural telcos, who are [widely] geographically deployed, architecture is really important,” Carabello said. “If they don't have to invest in a fully integrated softswitch at each site, it is a more cost-effective solution.

Mountain projects its initial rollout of IPTV in the first half of 2008 with the help of Fujitsu Network Communications' Flashwave optical network products and Netsmart management solution, which it announced in early September. The new system will operate over Mountain's existing fiber infrastructure.

The Fujitsu Flashwave 4500 multiservice provisioning platform offers full compatibility with Mountain's existing voice and data network and will allow it to upgrade to next-generation Ethernet and video services for consumers across the region — not 100% of customers, Gillum said, but close to 60% at the onset.

Like a Kentucky highway where a thick morning fog blankets the turns and packs of wild turkeys force drivers to proceed with caution, the road to IPTV won't be a smooth one for Mountain Telephone. It hasn't been for anyone else.

“I would never say that any type of next-generation deployment will be smooth. There are always challenges,” said Bernie Arnason, managing partner for Pivot Media.

It is all the rage right now talking about moving into this all-IP world, Arnason said, but this is not plug-and-play. There are technical challenges as with any new technology deployment: There are bugs; there's trial and error; there are trouble-shooting and quality issues to be worked through. He also expressed concern that the business case for deploying IPTV, exacerbated by rural conditions, might prove to be another hurdle for Mountain.

“The business case, to be honest, still isn't great,” Arnason said. “Most carriers would agree they are getting into IPTV not because IPTV represents a fabulous business opportunity. It's more a recognition of the future, and that in order to be competitive today and well into the future, it is almost becoming a requirement that you provide triple play.”

Gillum recognizes the challenge, but he is confident that Mountain Telephone is positioned to improve its business case for IPTV. “If you had zero plant in place and you just wanted to build an IPTV network from scratch, I don't think it would happen. That's why cable TV has never come out here. The economics are not there if that is the only revenue stream you get from it,” he said. “[But] we now have the electronic equipment to work with, and it's now affordable.”

Although it has perhaps become affordable, Gillum is a firm believer that without the regulatory environment in place, a next-generation upgrade in Eastern Kentucky — or anywhere in rural America for that matter — simply won't happen. If Universal Service Fund money didn't exist, neither would any kind of telephone service in rural America, he said.

“Clearly we wouldn't have what we have if it were not for the regulatory scenario that has existed for 75 years,” Gillum said. “There is no way that in rural America the people could afford to pay for the networks that you could pay for in metropolitan America. It can't happen. Hasn't happened in the last 75 years, and it won't in the next 75.”

Considering that there are more than 1200 telephone companies in the U.S. alone, Gillum said, it is no surprise that Mountain has to receive most of its revenue from outside its membership. He quotes the typical rural telephone company as getting somewhere between 50% and 80% of its revenues from outside of the members they serve.

“It becomes a question philosophically if it is in the best interest of our nation to do what the Telecom Act of 1934 said, and that is to provide similar service at similar prices to every citizen,” Gillum said. “As long as you hold to that basic concept, you're going to have subsidy in rural America. Can't happen without it.”

Monetary issues aside, Arnason said that Mountain Telephone also faces a cultural shift. As the company moves into next-generation IP, so too will the staff, taking the company's proverbial culture with it. Even Gillum agrees that changing the company's culture as well as the surrounding community will prove to be the biggest challenge. He is less worried about competition from satellite providers and the local cable company, Time Warner.

“The first thing that will make it better is that it will be a much higher quality product and a far more reliable product,” Gillum said. “We'll provide better service than cable has ever provided in the areas that we serve. We'll offer interactive service like video-on-demand; we'll offer a larger array of video services than our customers have ever had available to them in the past.”

One area where opportunity has always abounded thanks to Mountain Telephone is in the eastern Kentucky school system. Gillum is justifiably proud of Mountain Telephone's involvement in hooking the local schools up with their own Internet and telephone service. An investment from the company allows every school in the area to be connected on gigabit Ethernet today. That's more bandwidth than a lot of the homes and businesses in many rural areas ever receive.

For Gillum, the next generation of Mountain's legacy framework overhaul is coming right in time for the next generation of Mountain Telephone's cultural legacy in eastern Kentucky. With its employees, residents and vendors firmly in place, the company is looking toward the future. With more than 75 employees, their current facility is largely overcrowded, even for a group that enjoys each other's company. Gillum hopes to start construction on a new facility right next door that will accommodate his employees, their families and community residents who want to come in to see where it all happens.

“My vision, my hope — it remains to be seen how much it'll cost and if our board will go along with it — is to end up with a real nice, modern training facility that will accommodate 150 people,” he said.

Gillum hopes to arrange the facility to accommodate each different group of workers in a way that optimizes their work space. And with 10 employees having babies within months of each other this year, he also has hopes for a child-care facility. The building would not lose its welcoming and friendly Southern appeal, however. In fact, Gillum would like to welcome his customers to come see the IPTV products firsthand. He even envisions an on-site television studio where local residents broadcast local coverage.

Something big is happening in the hills of West Liberty, and it's not just the Sorghum Festival.