RCN's 'Analog Crush'
And when RCN says all-digital, it means the removal of the entire analog lineup, and giving and renting out digital boxes to all its customers. That means it won't leave a "lifeline" analog lineup of about 30 channels, as other MSOs will.
"We have decided to take the leap and do it right," proclaimed RCN CEO Pete Aquino on Tuesday during the company's fourth quarter earnings call. (See RCN Posts Q4.) "When we say all-digital, we mean it. There will be no analog channels, period."
Comcast Corp. (Nasdaq: CMCSA, CMCSK), by contrast, plans to offer the lifeline lineup in about 20 percent of its markets by the back half of this year. (See Comcast Spreads the Love .) That strategy could speed up if the MSO is successful in its development of a $35 digital-to-analog converter device. (See Comcast Pursuing $35 Digital Dongle.)
Of course, given RCN's relative size to Comcast and other major U.S. cable operators, coupled with a special waiver for low-end Motorola Inc. (NYSE: MOT) DCT700s, it's in a much better position to make such drastic cutovers.
RCN's first such cutover started in Chicago in January, a move the operator expects to complete by April 18. (See RCN's All-Digital Challenge.)
There, RCN expects to reclaim about 430 MHz of analog spectrum and apply it to the addition of new hi-def and standard-def channels. Using three-to-one compression, Aquino believes RCN would have the capacity to add more than 200 linear HD channels.
"The 'Analog Crush' lineup is going to be really hard to match," he said, noting that the Chicagoland system is starting off with about 50 hi-def channels. RCN competes in the market with Comcast, where the MSO has already trimmed down its digital lineup considerably. RCN is also facing video competition from AT&T Inc. (NYSE: T), which launched U-verse in the Windy City in late January.
Aquino did not set a timetable for what the company might do in areas such as Boston, New York, Philadelphia, and Washington, D.C. RCN's digital penetration is at about 70 percent -- enough, the company believes, to set the table for a more massive all-digital push.
But if it's relying on a set-top waiver to fuel that strategy, time is running short. Its Federal Communications Commission (FCC) waiver expires in July. But the agency has looked favorably on operators that pledge to be all-digital by February 2009, so it's possible RCN might seek an extension. (See Verizon & Others Get Their Waivers.)
Another Docsis 3.0 hint
RCN presumably will use some freed-up spectrum to support a Docsis 3.0 rollout.
This week, RCN became just the latest MSO to drop a hint that it plans to roll out the new platform, which could boost shared speeds beyond 100 Mbit/s. (See Charter Hints at Docsis 3.0 and Mediacom Plotting Docsis 3.0 Tests .)
"We too expect to reap the benefits of [Docsis] 3.0 and still maintain our speed advantage over much of the competition, given our smaller node sizes," Aquino said.
Today, RCN's high-end "MegaModem Mach 20" tier caps the downstream at 20 Mbit/s.
— Jeff Baumgartner, Site Editor, Cable Digital News
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