Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, December 26, 1993 TAG: 9312220256
SECTION: BUSINESS PAGE: F1 EDITION: METRO
SOURCE: Greg Edwards Staff Writer
DATELINE: LENGTH: Long
Botetourt Communications Inc., parent of the Roanoke & Botetourt Telephone Co. in Daleville, expects to launch a "wireless cable" television system in mid-1994, said company President J. Allen Layman.
Wireless cable is a microwave version of cable television. From a transmitter atop Tinker Mountain, Allen's company plans to beam television signals to small microwave antennas at subscribers' homes and businesses.
The wireless system will offer 20 to 26 of the most popular cable TV channels in the Roanoke Valley at rates 20 percent lower than what cable television systems are charging, Layman said. Because microwave
signals can travel only by line of sight, some valley residents whose view of Tinker Mountain is blocked by hills, trees or buildings will not be able to receive the new system's signal. Nevertheless, Layman said, he feels
that his company's wireless cable will be able to fill a profitable niche in the Roanoke Valley cable television market. He believes that large institutional users of cable television such as hotels and hospitals will be interested in wireless cable.
"We like to say that we're on the bleeding edge of the new technology," Layman joked.
Layman said he recognizes the need to get in early, if not first, when a new technology brings change to the communications business. But sometimes, he said, being first carries risks.
For instance, in 1981, Roanoke & Botetourt beat the big boys, C&P Telephone and Cox Cable, to become the first to string fiber-optic cable in the Roanoke Valley. The glass-fiber cable is capable of carrying thousands of times more signals than conventional copper wires and has since become the communications industry's standard of high technology.
But after Roanoke & Botetourt installed fiber, a new generation of fiber cable came along, making that first cable obsolete. Still, Botetourt
Communication's aggressiveness appears to have paid off. In 1992, the company made a profit of $2.9 million on total sales of roughly $8 million, Layman said. Forty-three percent of that income came from the company's unregulated businesses.
Telephone service, which is regulated by the State Corporation Commission, remains the company's core business. The Roanoke & Botetourt Telephone Co. is one of 21 telephone companies in Virginia and the oldest still operating under its original charter.
Based on the low number of complaints the state receives about the company, Roanoke & Botetourt provides good telephone service, said Alan Wickham, a manager in the SCC's communications division. "As part of a small telephone company group, they are one of the more progressive," he added.
\ Despite its name, the phone company operates exclusively in Botetourt County, serving 7,800 residential and business customers in most areas of the county except Blue Ridge, Buchanan and Iron Gate.
The company was organized in December 1900 by a group of Botetourt County farmers who wanted the convenience of calling Roanoke. It was incorporated under an act of the Virginia General Assembly in May 1903.
Layman's father, Ira, has served continuously on the board since 1943 and is its chairman. The Layman family, which has been known longer for its Botetourt County orchard business, owns roughly 70 percent of the communications company's stock.
The telephone company is fully computerized and offers the same "intelligent" phone services - such as call waiting and caller identification - as the much larger C&P Telephone.
After getting an exemption from a federal law that prohibits telephone companies from operating cable television systems, management created Botetourt Communications in 1981 as a holding company for the telephone company and a cable television system it planned for Botetourt County.
Because interest rates at the time were higher than 20 percent, the cable television idea was abandoned. But since then, other subsidiary companies have been brought under Botetourt Communications' umbrella.
Through Virginia Metrotel Inc., an alliance with the Shenandoah Telephone Co. and the Clifton Forge-Waynesboro Telephone Co., Botetourt Communications has expanded beyond its geographic boundaries, offering commercial long-distance service in Richmond.
Layman said the move into Richmond resulted in threats from C&P - which has 2.7 million telephone customers in Virginia - to enter the local telephone service market in Botetourt County.
Competition among communications companies is here to stay and has become an accepted fact, replied Don Reid, C&P's manager in Roanoke. As far as C&P's offering phone service in areas of the state it doesn't now serve, "all options are open and are being reviewed," he said.
Botetourt Communications through its R&B Network subsidiary also has begun competing with C&P in the Roanoke Valley, for long-distance access business.
The company provides the fiber-optic phone link between the new Retired Persons Services Inc., which this fall opened a mail-order pharmacy on Thirlane Road, and MCI Communications Corp.'s Roanoke terminal in the Signet Bank building downtown. And half the long-distance, fiber-optic access lines for BellSouth Communication Systems in the Roanoke Centre for Industry and Technology are supplied by Roanoke & Botetourt.
Also interconnected with Sprint Corp.'s terminal in Vinton and AT&T's in the C&P building in downtown Roanoke, R&B - at last count - was carrying 85,000 long-distance circuits in and out of Roanoke, Layman said.
At its main switching office in Troutville, the company has installed computerized equipment that can transfer billions of bits of information per second, enough to move 32,000 simultaneous phone conversations across two pairs of optical fiber.
Roanoke & Botetourt also rents a portion of the building to its cellular phone partner, Contel Cellular and handles the land-line portion of the cellular business.
The Troutville office is connected by fiber cable with the telephone company's other exchanges in Eagle Rock, Oriskany, Cloverdale and Fincastle. As it has strung cable, the company has dropped off secondary fiber lines that will be used for communications services the company will offer to county residents in the future.
A Centrex system that's recently been installed in the Troutville building will allow the company's business customers to do away with their own switchboards. All the switching will be done by a computer at the phone company.
The company plans to locate the satellite dishes for its wireless cable television business next to the Troutville building. They will be connected to the microwave transmitter by a fiber-optic line that already runs to the top of Tinker Mountain.
Layman said he has preliminary approval from the Federal Communications Commission to operate a 20-channel wireless system. The company has been negotiating with a New River Valley doctor who holds the rights for six other channels, he said.
The number of channels that can be offered over the microwave frequencies is limited by federal regulation to 33, but new digital compression technology promises to expand that number into the hundreds in the near future.
Whatever the system's size, three of the frequencies will be reserved for pay channels such as HBO.
Gretchen Shine, manager of Cox Cable in Roanoke, said she had anticipated competition next year from wireless cable, but she was not familiar with Roanoke & Botetourt's plans. Cox will be watching the competition and its pricing, Shine said.
Layman readily admits he is seeking a niche of the cable television market with the wireless system and has no delusions about running Cox out of the market. "Cox has 52,000 customers in Roanoke; we're not going to hurt them," he said.
Because of the ongoing deregulation of the communications business and advancing technology, Layman sees business becoming more competitive in the years ahead.
For example, he expects Congress to clear the way for competition in local telephone markets as early as next year. Even the power companies may be stringing fiber lines into the home to manage the energy used by electric appliances - lines that could be used for communications as well, he said.
Rep. Rick Boucher, D-Abingdon, has been a proponent in Congress of more competition within the communications industry.
Small entrepreneurs such as Roanoke & Botetourt will be the beneficiaries of the changes that are to come, Boucher predicted.
Communications is a crazy business, and you can't just sit back and wait for others to act, Layman said.
"Our feeling is the best defense is an offense," he said. "You've got to be aggressive."
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