RCN Corporation

Infobox_Company
company_name = RCN Corporation
company_
company_type = Public (NASDAQ|RCNI)
company_slogan = Connect to Something More
foundation = 1993
location = flagicon|USA Herndon, VA
key_people = Peter Aquino, President and CEO
num_employees = 2,180
industry = Telecommunications
revenue = $636 Million
operating profit =
homepage = [http://www.rcn.com/ RCN.com]

RCN Corporation, (NASDAQ|RCNI), founded in 1993 and based in Herndon, Virginia, is the first American facilities-based competitive ("overbuild") provider of bundled telephone, cable television and high speed Internet service delivered over its own fiber-optic local network to consumers in the Boston, New York, Eastern Pennsylvania, Washington, D.C., and Chicago. The company has been revitalized since its emergence from Chapter 11 bankruptcy in 2004.

As of 2006, RCN claims 424,000 domestic customers and 130 cable franchises.

History

RCN was originally created in 1993 by developer David McCourt and Peter Kiewit Sons' Inc., the Omaha construction giant. Kiewit also owned MFS, a pioneering Competitive Access Provider (CAP). In a series of moves, RCN purchased C-TEC, the parent of Pennsylvania's Commonwealth Telephone (Commonwealth was spun out several years later), while MFS spun off its small residential telephone operations to RCN. MFS was later purchased by Worldcom. RCN/C-TEC became a Competitive Local Exchange Carrier (CLEC) when the Telecom Act of 1996 passed.

RCN then began its growth as a cable TV overbuilder, constructing competitive cable systems in markets that already had cable service. Most of its systems were partnerships with power companies, which provided rights-of-way on poles. RCN featured "triple play" television/internet/telephone service, though for some time its voice operations were largely resold incumbent telephone company lines. It purchased existing US East Coast ISPs Erol's Internet, UltraNet Communications, Interport and JavaNet. On the West Coast, it purchased existing ISPs DNAI and Brainstorm. In Chicago it bought into the market by acquiring overbuilder 21st Century Telecom (itself acquirer of local ISP EnterAct), and high rise focused microwave providers Wedgewood and OnePoint. The name originally stood for Residential Communications Network, though the parent entity was RCN Corp. The company used fall-of-the-Soviet themed marketing campaigns in a costly campaign during the late 1990s boom years. RCN's activities were not profitable, however, and the company lost approximately a billion dollars a year for several years. In May 2004, RCN filed a pre-packed Chapter 11 bankruptcy, and emerged as a restructured company in December 2004.

Under its new structure they sold of weaker performing systems in Los Angeles, and San Francisco, then sold its 49% share of Mexico's largest Cable TV operator, Megacable. [ [http://www.allbusiness.com/company-activities-management/company-structures/5378423-1.html] ]

Early in 2008, RCN announced its plan to end its analog transmission, and began that project in Chicago on January 15. Excluding larger buildings with group rate arrangements, the Chicago portion of the project concluded in April 2008. Dubbed the "Analog Crush" project, the success in Chicago is expected to be replicated in all markets by early 2009.

With the transition, the company is able to use the entire spectrum for digital and High Definition (HD) broadcasting reducing the need to compress signals, and offering more channels with higher quality video service. The stated goal is to surpass the 100-HD channel mark by the end of 2008. Supporting those claims would be the fact that by August 2008, the Chicago market offers 55 HD channels, with a wide offering of Video on Demand in HD as well.

Acquisitions and Sell-Offs

On January 21, 1998, RCN paid $110.5M for UltraNet in Massachusetts and Erol's in Virginia, reported The Boston Globe on January 22, 1998.

RCN [http://biz.yahoo.com/bw/060323/20060323005779.html?.v=1 sold its 49%] of the Mexican cable company Megacable on March 23, 2006 for $350M.On March 20, 2006 RCN bought [http://www.tradingmarkets.com/tm.site/news/BREAKING%20NEWS/198312] Consolidated Edison Communications Holding Co., a subsidiary of Consolidated Edison for $32 million and $7 million in working capital.

On August 18, 2006, RCN announced it was selling its San Francisco operations, representing 18,000 subscribers, to Astound Broadband [http://www.astound.net] for $45 million [http://investor.rcn.com/ReleaseDetail.cfm?ReleaseID=207795]

On September 13, 2006, Bloomberg News, citing two anonymous sources, reported that RCN hired the Blackstone Group to examine the possibility of putting the company up for sale. [http://www.thestreet.com/_yahoo/newsanalysis/mediaentertainment/10308740.html?cm_ven=YAHOO&cm_cat=FREE&cm_ite=NA]

External links

* [http://www.rcn.com/ Official website]
* [http://start.rcn.com/ RCN Community Portal]
* [http://www.dslreports.com/forum/rcn RCN Forum] at Broadband Reports
* [http://www.twst.com/ceos/ADJ611.htm THE WALL STREET TRANSCRIPT] CEO Interview: PETER AQUINO published 02/13/2006