Rebuild's Done Months Early

Nearly a year after acquiring systems in Central New Jersey with about 80,000 subscribers, Patriot Media & Communications Inc. has completed the majority of its planned upgrades, seven months ahead of schedule.

Patriot, formed last year by former Simmons Communications president Steve Simmons and private-equity firm Spectrum Equity Investors, bought the New Jersey systems from RCN Corp. last year for about $245 million. At the time, the purchase was the highest price per subscriber ($3,600, including upgrade costs) paid for a cable system in several years.

With the upgrade of eight central New Jersey communities — Bedminster, Branchburg, Long Hill, Chatham Township, Chester Borough, Far Hills, Harding and Peapack-Gladstone — and four more to come in the next month — Bernardsville, Chester Township, Mendham Borough and Mendham Township — Patriot will have completed about 70% of its upgrades. Systems in Princeton, Hillsboro, Rocky Hill, Montgomery Township and Branchburg were completed earlier in the year.

The remaining systems will be completed by June 2004, about six months ahead of RCN's previous deadline of Dec. 31, 2004.

Simmons said the systems are being upgraded to 870-Megahertz, two-way capacity and will offer the full line of digital and high-speed data services.

The upgrades involved revamping about 2,700 miles of plant, including replacing coaxial cable and completing the fiber network. Simmons said Patriot has earmarked about $45 million for the upgrade program.

Patriot has hired about 100 new employees since it took over the properties in February, including about 60 people at its newly constructed call center in Somerset, N.J., and 10 new dispatchers at a new dispatch center, also in Somerset. Patriot has about 193 employees in total, Simmons said.

Simmons said the reaction from local government officials has been extremely favorable, adding that one local mayor — Jim Williams of Bernardsville — pledged to give up his satellite and digital subscriber line service in favor of Patriot's offerings at a ribbon-cutting ceremony in nearby Peapack-Gladstone on Dec. 12.

"That was sweet music to my ears," Simmons said.

Although RCN had offered a high-speed data service — with a telephone return path — in some markets, Simmons said that Patriot is offering full-blown cable-modem service (1.5 Megabits per second downstream and 512 Kilobits per second upstream and a high-end 3 Mbps service). So far, he said Patriot has converted about 7,000 customers to its high-speed data service since Feb. 19.

"We've been adding about 1,000 [new high-speed data customers] per month in the last few months," Simmons said.

Patriot plans on offering digital video recorders, via a Motorola Inc. set-top box, and HDTV service within the next three weeks. Because the markets Patriot operates are some of the more affluent in the country, Simmons believes the HDTV service will be a fast hit.

"We hope to sell a lot of people on our high-definition service and our DVR service," Simmons said.

Patriot also plans to launch video-on-demand and subscription VOD in the first four months of 2004, Simmons said.