Adelphia Gets More Aggressive

Adelphia Communications Corp. has set its sights far beyond
the rolling hills of northern Pennsylvania, embarking on what one analyst recently called
the most aggressive digital rollout in the industry.

"We are looking at a very aggressive digital-box
rollout, much beyond the one we were talking about three or four months ago," said
Dan Liberatore, vice president of engineering at the Coudersport, Pa.-based MSO.

While Liberatore couldn't quote exact numbers, earlier this
month, Goldman, Sachs & Co. cable analysts reported that Adelphia was targeting
750,000 to 800,000 digital set-tops in the field by year-end, with 1 million deployed
boxes a possibility.

Digital TV is only the beginning, however, for Adelphia's
advanced-services plans.

The MSO's announced purchase this month of $6 million worth
of Arris Interactive LLC's "Cornerstone" cable-modem-termination-system units
for systems in New York, Vermont, Pennsylvania, Ohio and Virginia indicates larger
deployment of data and digital-TV services throughout its systems.

Next month, according to Liberatore, the company will begin
a telephony trial in conjunction with its competitive-local-exchange-carrier subsidiary,
Adelphia Business Solutions Inc., using bleeding-edge Internet-protocol technology.

While Liberatore declined to give the location of the
trial, the synergies between Adelphia's cable and telephony businesses could create a fat
revenue stream from combined data, digital-TV and local and long-distance telephony

Adelphia started a shopping expedition 15 months ago, and
several months later, it came home with Verto Communications Inc., Century Communications
Corp., FrontierVision Partners L.P. and Harron Communications Corp.

Together with other system swaps, the resulting activity
more than doubled Adelphia's subscriber base to approximately 5.5 million subscribers,
propelling the MSO into the top tier of large U.S. operators.

Adelphia now has eight major regional districts, including
a wide Great Lakes presence from Cleveland east through western Pennsylvania and Buffalo,
N.Y., and large systems in New England, Virginia, Florida, Greater Los Angeles and

As the dust begins to settle on those acquisitions,
Adelphia is busily upgrading its networks, and the new additions have not stalled an
already-aggressive digital-services-upgrade strategy.

In terms of data-ready, two-way plant, Liberatore said,
"We hope to be, year-end, somewhere around 4.5 million to 5 million homes passed. By
the end of 2001, we should be 95 percent done" with two-way, 750-megahertz or 860-MHz
plant across the company's systems, he added.

Traditional vendors in the industry may even have trouble
keeping up. Adelphia is now deploying both Scientific-Atlanta Inc. and Motorola Broadband
Communications Sector digital set-tops, saying it needs to do business with both vendors
to make sure there are enough boxes to meet demand.

"We're also talking very earnestly with other
vendors," Liberatore said. Without naming names, he added, Adelphia is exploring
Digital Video Broadcasting systems from established players.

Still unresolved for Adelphia are interactive applications
that might reside on the new set-tops. Liberatore noted that the company is evaluating
enhanced TV, video-on-demand and other services, including e-mail to the set-top. "As
an engineer, I guess I think the more, the merrier," he said.

Adelphia has some experience in the advanced-services area.
It has conducted a VOD trial in Lansdale, Pa., using Diva Systems Corp.'s proprietary
server-client hardware, as well as an e-mail-to-the-set-top trial in suburban Buffalo
using S-A's "Explorer 2000" and PowerTV Inc.'s "SofaMail" application.

In Buffalo, the small technical trial involved about 50
customers. "We wanted to see if we could use it in conjunction with our other
products," Liberatore said, and whether customers could use their existing e-mail
addresses in the trial.

Whether or not Adelphia offers that in addition to its own
branded "PowerLink" online service is undetermined. But, Liberatore added,
"Now we know it's a viable option as a product."

As for VOD, Liberatore said, Adelphia has a team that's
evaluating VOD-server-based products for both the S-A and Motorola platforms. Again,
without getting specific, he said, "We'll probably do something a lot more serious
with [VOD] this year."

Adelphia's new data rollouts will "almost
universally" be Data Over Cable Service Interface Specification 1.0-based, according
to Liberatore.

Citing a few proprietary Terayon Communication Systems Inc.
modem deployments on the West Coast, Liberatore said Adelphia will rely on multiple
vendors for its CMTS units, including Nortel Networks, Cisco Systems Inc., Arris and
"newer players," and it will turn to Motorola Inc., Nortel, Thomson Consumer
Electronics and others for cable modems.

While Liberatore conceded that Adelphia's flurry of
acquisitions may have set it back a bit in its overall network upgrades, that hasn't
stopped him from pursuing a robust architecture that he said has proven itself over the

"Our architecture is not a homes-passed-driven
architecture," he said. "We've been building for some years now a node plus one
amplifier for the most part in our upgrades." That scheme loosely averages about 180
homes passed per node density and, in terms of reliability, it "certainly has proven
out in our numbers over the years."

What sets Adelphia apart are the broad telecommunications
services it can offer through its CLEC subsidiary.

In January, Adelphia Business significantly expanded its
reach by forging long-haul agreements with Level 3 Communications Inc., Williams
Communications and Allegheny Communications Connect Inc., giving it access to 8,000 miles
of fiber in markets across the country.

These agreements, Liberatore agreed, complement Adelphia's
planned forays into telephony over cable. "We're working very close with them on this
[voice-over-IP] project," he said.

Next month's telephony technical trial will soon be
followed by an operations trial, marketing trial and full deployment by year-end, he

Without identifying vendor partners, Liberatore said, the
telephony trials will take advantage of existing "Class 5E" switches. "We
just have to select a gateway to sit in front of those switches that converts IP to TDM
[time-division multiplex] input."

This configuration, he added, should solve the majority of
problems associated with cable IP telephony, including offering a full suite of custom
local-area-signaling service (CLASS) features.

"From our perspective," Liberatore said,
"we're trying to manage the HFC [hybrid fiber-coaxial] portion," selecting the
network-interface unit that sits on the side of a customer's home and CMTS. "Once we
get to the headend, we'll use traditional means of transport -- WAN [wide-area network]
and LAN [local-area network] -- to get to the 5E switch and gateway."

More clues about the company's progress will come with its
fourth-quarter-1999 financial report later this month. Goldman, Sachs estimated 1.5
percent subscriber growth, 196,000 additional digital subscribers and 40,000 new data
customers for the quarter.