RCN (company)

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RCN Corp

Type	Public
Founded	1993
Headquarters	Herndon, VA
Key people	Peter Aquino, President and CEO
Industry	Telecommunications
Revenue	$565 Million
Employees	2,180
Website	RCN.com

RCN Corporation, (NASDAQ: RCNI), founded in 1993 and based in Herndon, Virginia, is the first American facilities-based competitive 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., Chicago, San Francisco and Los Angeles metropolitan markets.

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

[edit] 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.

[edit] 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 sold its 49% of the Mexican cable company Megacable on March 23, 2006 for $300M to pay down debt. On March 20, 2006 RCN bought [1] 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 [2] for $45 million [3]

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. [4]