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Charter Adds Fiber to Its Upgrade Diet

Charter Communications Inc. said it would bolster its ambitious upgrade plans by purchasing fiber by the spool from Corning Inc.

Specifically, Charter's initial order is for 150,000 fiber kilometers of Corning's "MetroCor" fiber, a new product designed to extend the overall path lengths between network nodes, said MSO vice president of engineering Larry Schutz. MetroCor will also be the centerpiece of a dense wave-division multiplexing (DWDM) platform that will link Charter's regional networks and improve service performance to the operator's 6.3 million subscribers.

Under the current plans, Charter will begin MetroCor deployments this quarter and complete them before the end of the year. Charter will weave Corning's fiber into 20 percent to 25 percent of the MSO's interconnects, Schutz said.

Corning's advanced fiber is significant and less costly than traditional methods because "it gives us the capability to transport signals for interconnects and to transport signals over long distances without the impact of dispersion," Schutz said.

Adding more fiber to the mix is the latest step in Charter's upgrade commitment. Though many telecom companies have pared capital spending, Charter has accelerated its plans, and expects to complete 135,000 miles of plant upgrades in three years instead of four.

By the end of 2002, 95 percent of Charter's customers will be served by plant at 550 megahertz or higher, and 93 percent will be served by systems with more than 750 MHz of capacity. The company upgraded 40,000 miles of plant in 2000 and has another 36,000 miles budgeted for this year, Schutz said.

During that upgrade, Charter will continue to collapse and consolidate its headends, ending with less than 700 compared to the original 1,400. The efficiency won't stop there. Eventually, about 84 percent of Charter's subs will be served by roughly 84 headends, with nodes serving 385 homes on average.

Those numbers will offer efficiencies required for emerging services such as video-on-demand and voice-over-Internet protocol. Though much of Charter's new service efforts this year will center on high-speed data and digital video, the MSO expects to have VOD rolled out in 10 markets by year-end. On the VoIP front, Charter has a trial running in Wisconsin and another ramping up in St. Louis.

The Charter deals comes at a financially tricky time for Corning, which has shown some interest in buying Lucent Technologies' fiber division. Last Monday, Corning said customer-spending slowdowns had caused it to cut its 2001 pro forma earnings estimates to between $1.20 and $1.30 per share from $1.40 to $1.43. At the same time, Corning said it is "moving aggressively" on more stringent cost-control plans, including more work-force reductions.

Though Charter is the first MSO to deploy Corning's MetroCor product, "it won't be the last," said company product line manager Matthew Estep.

"We're getting high interest in this product," he said.