CTC Telcom Turns Up Its CLEC Customers with VideoTele.com Home Entertainment Equipment and Open Video System Certification.

Business Editors/High-Tech Writers

LAKE OSWEGO, Ore.--(BUSINESS WIRE)--July 25, 2000

Chibardun Telephone Cooperative, Inc., the 1st IOC to deliver

Digital Video via VDSL, goes live to CLEC base with switched

digital video under OVS 

VideoTele.com (VT.c), a Tektronix company (NYSE:TEK) and the single source for service providers deploying innovative home entertainment solutions via the broadband Internet, today announced that its digital head-end equipment is helping provision the successful delivery of home video and audio entertainment services to the CLEC division of Chibardun Telephone Cooperative, Inc., in Dallas, Wisconsin. Originating as a phone company with a cable television (CATV) operation, Chibardun's CLEC operation is leveraging a VDSL-based network architecture with VT.c equipment (the M2 Series encoders and M2-AMX audio demultiplexers) for a cost-effective home entertainment offering. Collaboration with VT.c relative to a head-end implementation was prompted by Chibardun's initial need for an upgrade path for its ILEC area CATV customers; the VT.c video edge devices comprised the solution of choice. Today, Chibardun is leveraging VT.c technology to deliver enhanced video services to its CLEC operations. The complete home entertainment solution empowers Chibardun with a competitive offering that will surely be noticed by the vicinity's local cable operator.

"Backed by a wealth of knowledge in the video arena - in essence, 20 years of experience delivering video over networks - VT.c was undoubtedly our vendor of choice," said Chibardun general manager and executive vice president, Rick Vergin. "We originally put them to the test with our concerns around interfacing a full DHE (digital video head-end) with our existing cable plant. Their performance and devotion confirmed our consideration to invest in their technology for our CLEC area. ... They played an instrumental role in our celebration today, having helped deliver `bundled' services -- voice, very high-speed data connections, and full entertainment video and audio -- to our CLEC customers."

The digital video offering made possible by VT.c technology allows Chibardun to claim another victory. Having passed strict technical requirements put in place by the FCC, Chibardun was awarded Open Video System (OVS) certification, placing them in the ranks of an elite group of telephone companies certified for switched digital video. With today's announcement, Chibardun becomes the first telephone company in the nation to actively deploy switched digital video service without a cable television franchise. OVS certification allows service providers to by-pass cable television franchise policy, which requires 100 percent build-out of the community. In turn, service providers have the advantage of increasing their time to market with enhanced video services. (For additional information about OVS certification and the ways in which it offers communities the benefit of competitive service provision without the expense of franchise negotiations, please visit the FCC website at http://www.fcc.gov.)

Chibardun's familiarity with VT.c digital head-end equipment began with the placement of an order for the M2-T310 encoders in May 1999. By September 1999, the installation was complete and service had begun. The M2-T310 encodes the incoming feeds from multiple sources and, in conjunction with the VDSL transmission network, provisions an 88-channel video offering. Chibardun recently expanded its head-end suite, purchasing the M2-AMX audio demultiplexer for 45 channels of MusicChoice(TM), commercial-free audio programming. The M2-AMX demultiplexes, repackages and encapsulates entertainment audio, which is subsequently delivered over the existing copper wire infrastructure. With this offering, Chibardun's customers have the convenience of viewing 3 of these channels simultaneously for a single basic charge.

"Bundling our telephony services with enhanced video and audio entertainment is very attractive to our home customer," added Vergin. "VideoTele.com's head-end package comes in at the best value. It matched all of our expectations, and we anticipate that it will prove to be a promising investment, considering our potential CLEC subscriber base of 5000 customers."

End-users' satisfaction with the offering is noted by Nelson Real Estate, Inc., one of the first digital video subscribers in Chibardun's CLEC footprint. "We were already considering switching phone companies when we heard that Chibardun's video offering was getting great reviews around town," said Tom Konency, president of Nelson Real Estate, Inc. "Once I saw the beautiful picture quality, we were sold on the complete service offering."

Once Chibardun made the business case to purchase a digital head-end, a digital VDSL network was feasible and less expensive considering the expected penetration rates. "Its great strength is that you really only spend money when you acquire a new customer. Thus, it's a much less expensive solution for both a CLEC operation that wants to provide digital TV and an ILEC wanting to expand services to rural areas where delivery of traditional analog cable TV is not possible," explained Vergin.

"We are addressing the dire need for the telcos to remain competitive with their service offering. Our premium, cost-effective solutions are designed for the changing needs of Full Service Networks (FSNs), explaining why VT.c is the number one player selling to IOCs," said Lee Rainey, VT.c's vice president of marketing. "Chibardun was the first independent to go live with video, using our equipment. Ever since, we have experienced a constant flow of orders for our head-end suite and our packaged, full-service business analysis and implementation is gaining popularity, too."

About Chibardun Telephone

Chibardun Telephone Cooperative is an ILEC formed in 1957. It serves 6,000 access lines in Northwestern Wisconsin, as well as providing cable television, Internet access, wide area paging and cellular service. Its wholly owned CLEC subsidiary, CTC Telcom, was created in 1996. CTC Telcom presently provides competitive local telephone service to over 5,000 access lines, as well as providing competitive cable television and digital video service. CTC Telcom proudly bears the distinction of being the first company in the nation to provide switched digital video under an OVS certification. To find out more about Chibardun Telephone or CTC Telcom, visit their website at www.chibardun.net.

About VideoTele.com

VideoTele.com is the single source for service providers deploying innovative home entertainment solutions via the broadband Internet. With over 20 years of experience, VideoTele.com is a leading provider of MPEG-2 digital encoding, demultiplexing and grooming products and turn-key head-end solutions within the Full Service Network environment. Headquartered in Lake Oswego, Oregon, VideoTele.com is a subsidiary of Tektronix, Inc. Additional information on the company can be found by accessing the VideoTele.com Corporate website at: http://www.videotele.com.

Note to Editors: VideoTele.com is a trademark of VideoTele.com, Inc. Tektronix is a registered trademark of Tektronix, Inc. All other trade names referenced are the service marks, trademarks, or registered trademarks of their respective companies.