LIGHTPATH, CABLEVISION TARGET VERIZON'S NEW YORK CITY TURF

Cablevision Systems and its Lightpath subsidiary are teaming to target Verizon's operations in the New York City metropolitan area, capitalizing on Lightpath's all-optical network and Cablevision's high-speed Optimum brand.

Lightpath, a competitive access player for 17 years, spent the last year transforming its network from a Sonet-based TDM fiber-optic network to an all-Ethernet network that will gradually become an all-optical Ethernet network, as Sonet-based services are phased out. In 80% of the buildings Lightpath is in, it is the only fiber connection.

Lightpath recently launched a Metropolitan Continuity service, which uses a fiber route built by Lightpath that crosses the Hudson River 60 miles north of Manhattan, giving the provider a fully redundant fiber ring that is not dependent on one of the tunnels into the city.

In June, Cablevision and Lightpath will make an even more significant move, with a tighter integration of the business CLEC into Cablevision's Optimum brand that recognizes a blurring of the lines between business and residential high-speed data services. The combination will pair Cablevision's cable modem and voice-over-IP (VoIP) services with Lightpath's Ethernet offerings.

Verizon executives should be nervous, said Current Analysis analyst Brian Washburn.

“It should be keeping Verizon executives in New York City awake at night,” he said. “It gets to be pretty scary in terms of what they are capable of doing.”

Tying Lightpath more tightly into Optimum will enable Cablevision to market services to small and medium-sized business and to offer larger businesses options such as supporting work-at-home throughout the region while receiving a single bill. Lightpath already has well-established relationships with business customers, particularly in the medical, government and financial communities.

“The Optimum brand is known for really high-speed residential services,” Washburn said. “They can do some interesting things, such as fractional T-1, and they can get around the whole leased line issue and go heavy into the small to medium-business market, especially because Cablevision has VoIP.”

Lightpath stopped selling TDM to new customers in January and pared its 3000 different tariffed and special access services down to 30 products, or five discrete offerings at six different speeds, said Kevin Curran, senior vice president of marketing for Lightpath, which will add another 125 buildings to its fiber network this year.

“Our new strategy is trying to get us away from me-too services,” Curran said. “We have services that no one else can replicate.”

The Metropolitan Continuity service is based in part on an asset Lightpath believes no other carrier can duplicate — its fiber link across the Long Island sound to Westchester County, along a utility company right-of-way. For environmental reasons, carriers are not being allowed to bury cable in that sound, Curran said. The Lightpath network crosses the Hudson River 60 miles north of Manhattan, instead of relying exclusively on right-of-way through one of the tunnels that cross into the island.

The purpose of the service is to guarantee business continuity in the greater New York City area without having to route traffic through the heart of downtown. In the post-9/11 era, businesses are looking for more distributed facilities and ones that don't have a major point of vulnerability.

“What makes this whole thing work is that we've gotten tremendous recognition in customer satisfaction,” said Brian Fabiano, senior vice president of network services for the New York metro area. “We're able to do it because of the way that network was constructed — we own every piece of it, we control costs and the customer experience.”

Lightpath facts

Founded:	1988
Owned by:	Cablevision Systems
Serves:	New York areas of Long Island, Nassau County, Suffolk County, New York City; Fairfield County, Conn.; and northern New Jersey
Network:	127,000 fiber miles, 2500 route miles, 1700 buildings on net
Technology:	All-optical network
Services:	Wholesale and retail, Metro Ethernet, E-LAN, E-Line
Source Company reports