NEW COMPETITORS STILL DRAWN TO U.S. BUSINESS TELECOM FIELD

For a market about to be dominated by two mega-carriers, the U.S. business telecom field continues to attract competitors. Among the new players are cable overbuilder RCN and virtual network operator Vanco, both of which have made known their new or renewed efforts to attract American enterprise customers.

RCN, which emerged from bankruptcy in 2004, is now aggressively reaching out to business customers in the 20,000 buildings in seven markets that its fiber-optic network passes, said Timothy Dunne, chief technology officer. RCN's Business Solutions Group already has a $30 million run rate, but that's a small percentage of the company's overall $560 million in annual revenues.

“We have dual Sonet rings in every market that offer a great opportunity for businesses, both small and large,” Dunne said. “It's a hidden asset within the company that is now coming out.”

RCN operates a total of 130 video franchises in its market areas, which include the metropolitan areas of Boston, Chicago, Los Angeles, San Francisco and Washington, along with New York/New Jersey and eastern Pennsylvania.

The company has joined the Stealth peering fabric and can provide trunk-side links to the public network for voice-over-IP services, as well as Web hosting and video connectivity. And although RCN will selectively sell dark fiber and carrier services, its biggest push will be to add corporate customers to its network, Dunne said.

“The strength we provide is the density of our footprint — we can be very competitive on pricing and carry most of the traffic on-net,” he said. RCN will creatively share costs with customers for adding new buildings to its fiber ring and is also experimenting with wireless access in licensed and unlicensed bands.

On that fiber backbone, the company will provide metro area services from DS-3 through OC-N, Ethernet from 10 Mb/s to 10 Gb/s and wavelength services.

“We will be offering traditional TDM voice as well — we have Class 5 switches in every market,” Dunne said.

The commercial push is part of a larger strategy to make RCN more profitable, both by controlling costs and implementing operational efficiencies and by expanding within its existing markets to boost revenues, he added.

Vanco has been a global virtual network operator since 1988, working with about 20 carriers worldwide to create virtual networks for global customers that reach into remote areas as well as major metros, said David Perez, U.S. vice president. Vanco operates nine network management centers globally and is in 230 countries, with a strong Asia-Pacific presence. Last May, the company acquired the assets of Chicago-based Universal Access for $13 million in a bankruptcy auction and is leveraging that investment to expand its reach into the U.S.

Universal Access was an independent company that used its database of major fiber-optic routes and deployments in the U.S. to design business networks more quickly and efficiently. It also developed a Web-based portal, the Universal Solutions Exchange, for network design and analysis. The company bought and sold telecom facilities and managed them for corporate customers.

“We inherited there a very strong relationship with all of the RBOCs in the U.S. market from Universal Access,” Perez said. “We can deliver fiber routes across the U.S. in a very cost-effective way. We can provide domestic connections across the country, but the more global a customer is, the more our model takes hold.”

RCN HISTORY

1997: Spun off from C-Tec

1999: Increases stake in Megacable from 40% to 49%

1999: Launched service bundle in Boston

1999: Acquires Chicago-based cable overbuilder 21st Century Telecom Group

2002: Launches HDTV service

2003: Launches Mach 5 (5 Mb/s) cable modem

2003: Launches DVR service

2004: Emerges from Chapter 11 reorganization, acquires remaining piece of Starpower in Washington, D.C., market

2004: Launches Mach 10 (10 Mb/s) cable modem