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RCN Quietly Testing FTTH Deployment

Chicago -- RCN Corp. has been conducting an unannounced fiber-to-the-home
trial for the past year-and-a-half, but it has failed so far to find an
economical deployment scheme.

At a press briefing at the National Show here, executives of the Princeton,
N.J.-based overbuilder said the company must find new revenue streams or ways to
drive down the cost if it wants to run fiber all the way to the consumer's
home.

Such a deployment would allow delivery speeds of 100 megabits per second and
virtually an infinite number of cable channels, vice president for technology
development Richard D. Rioboli said.

'It's not there yet,' he added, 'but we're probably going to keep going until
we find a fiber-to-the-home strategy we're comfortable with.'

As overbuilders constructing networks from scratch, RCN and Denver-based
Western Integrated Networks LLC have been pursuing FTTH strategies. The major
MSOs have dismissed such a scheme, arguing that extending the reach of their
fiber would be prohibitively expensive.

At present, offering cable, Internet access, local and long-distance phone
service over its existing hybrid fiber-coaxial network runs RCN about $900 per
household passed, with another $300 in capital costs for each service.

Rioboli said RCN's current infrastructure consists of 10 fibers per node,
compared with two fibers being deployed by the incumbent operator. The dark
fiber would allow the company to reduce the number of homes served per node,
while increasing speeds well beyond what residential or commercial customers
will ever need. RCN's 860-megahertz builds average 150 homes per node, with many
areas serving a top of 120 homes per node.

He declined to name which market has been hosting the trial. But it's
believed to be one of the largest markets in the nation, since RCN has staked
out positions in seven of the 10 most densely populated U.S. communities,
including Boston, New York, Philadelphia and San Francisco.

WIN officials continue to maintain that they're building an all-fiber network
in Sacramento, Calif., at a total cost of $1,000 per household reached. Plans
for its Los Angeles franchise also call for FTTH.

'I can't speak for WIN,' Rioboli said, 'but I can't see how they're making
the economics work.'