RCN is looking to wideband to keep up with its competitors, which include Comcast, Time Warner, and Verizon. RCN is a scrappy overbuilder, and is often the third triple play option in many Northeast markets including Boston, Philadelphia, and New York. Its competitors have announced the move to DOCSIS 3.0, or in Verizon’s case, utilize FTTH. Speaking from a bandwidth perspective, RCN CEO Peter Aquino is quoted in a Light Reading article as saying, “We'll go as high as anyone else." RCN's move to wideband is being facilitated by reclamation of analog spectrum, as they shift to an all digital cable platform. That reclamation will take some time and RCN says that DOCSIS 3.0 and the 50 Mbps speeds it will bring won’t happen until late 2009. Given that Comcast, Time Warner, and Verizon are moving considerably faster to that bogey, will RCN’s plan be too little, too late? Or is the broadband escalation strategy being pursued by all of these players overkill?

RCN, a Herndon, Virginia based triple play provider, announced a dramatic increase in its video on demand portfolio, “almost doubling” its content library. RCN is also upgrading its VOD technology platform to allow new VOD choices, including HD VOD, an intuitive on-demand portal and “virtual on-demand.” The upgraded platform will be available to RCN’s digital customers in Boston, Chicago, New York, Penn. and D.C. by June.

RCN is following the lead of other multi-channel video operators who see VOD as a competitive necessity, and in some cases, an advantage. VOD is an “Achilles heel” for DBS providers, because their satellite technology prevents a two way interactive session, which is required for VOD. Cable and IPTV providers are leveraging VOD for this advantage and increasingly putting emphasis on high definition VOD as a counter to satellite’s linear channel HD advantage.

RCN, a Virginia based CLEC, announced the launch of VoIP services, branded as Starpower Internet Phone Service. RCN will be using a hosted VoIP platform offered by deltathree for the service. They plan to target customers both inside and outside of their existing footprint. The service will start at $24.95/month for unlimited local and long distance calling. They will also offer an annual plan, with discounts off of the monthly plan pricing.

There is some encouraging news for Verizon FiOS, relative to competing against cable and DBS. OneTRAK, a Colorado based market research firm, has released a study highlighting market penetration of FiOS in several Massachusetts markets. They conclude that approximately 60% of FiOS video customers are coming from cable (Comcast and RCN in this case), with the remaining 40% coming from DBS. Verizon gained a total of 11,982 video subscribers from these markets. In the markets where Verizon had marketed FiOS TV for the longest period of time – between six and 10 months – Comcast’s lost anywhere from 7.8% to 13.6% of its customer base. Verizon FiOS had a larger impact on RCN, a Herndon, VA based cable overbuilder, who lost 14.5% of their subscriber base on average. While these results are based on a limited market study, they suggest that FiOS can reduce cable penetration by over 10% in certain markets and have a significant impact on DBS as well.

Several implications can be drawn from this study. For example, it appears that Verizon achieved an overall penetration of 4.5% across all of these communities in less than one year’s time, with a high of 9% penetration in one community. It’s probably safe to assume that Verizon will be able to achieve double digit penetration in many markets within two years. Secondly, much of Verizon’s growth in these markets appears to be coming at the expense of RCN. This suggests that the ‘weakest’ competitor may be vulnerable when faced with ‘national’ competitors who deploy advanced services like FTTH. Lastly, Verizon has to be encouraged by these early results. The key word is early. Time will tell if they can sustain this type of growth in the face of assured competitive responses. For now, they have some 'ammunition' to support their controversial and expensive strategy of deploying FTTH.

View OneTRACK’s video blog about these results by clicking on the video image above.

RCN , a mid-atlantic based triple play competitor, CEO Peter Aquino says his company is built on taking away market share from both Verizon and Comcast. RCN is a feisty triple play CLEC, having emerged from chapter 11 bankruptcy in 2004. Their latest competitive offering includes trialing a quad play in Boston with a wireless component.

Read Aquino’s interview at the Boston Globe website.

Also, see this Light Reading post about RCN expansion plans.