Overbuilder RCN Corp. said it’s withdrawing its bid for competiti...
Overbuilder RCN Corp. said it’s withdrawing its bid for competitive cable license in Philadelphia after trying unsuccessfully for 2-1/2 years to convince City Council to approve its $250 million, 7-year buildout plan. “We gave it our best effort, but…
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2-1/2 years is an unreasonably long time to wait for approval when other towns are clamoring for our service,” RCN Senior Vp-Regulatory Affairs Scott Burnside said. It had become clear that some members of City Council “are not ready to give Philadelphians a choice of cable providers,” he said. RCN’s proposed licensing terms for competitive cable and phone services met with stiff opposition in City Council from incumbent Comcast, which said RCN’s plan for constructing and operating in selected areas (Areas 3 and 4 of city) didn’t reflect fair-play approach. Comcast claimed RCN’s proposal contrasted sharply with city’s cable franchising approach in 1986, when it wouldn’t grant franchise for one section until suitable franchises were found for all areas and city also required construction of entire service area within 2-4 years. In testimony before City Council, Comcast Regional Vp Edward Pardini said city should require RCN to build out entire city and establish specific 2-4 year timetable for build-out. Council must not permit RCN to “cherrypick its way to big profits,” he said. RCN will focus on many other communities “who have welcomed us with open arms,” CFO Timothy Stoklosa said: “We have the financing in place to pass more than 4 million homes, and we will continue to grow in our existing markets.” RCN spokeswoman denied pull-out had to do with financial pressures. “Speed to market is essential to our plans,” she said, and City Council had been putting up “over and over again,” series of issues including those dealing with company’s relationship with labor unions and its build-out plans. There are plenty of opportunities out there, she said, and RCN had $2.2 billion in liquidity. Referring to reports of scaling back of plans to build in some cities after its stock price took hit last year, she said it related only to new markets where company didn’t already have infrastructure. Company already was in 7 of 10 top markets in U.S., she said. Expressing surprise at RCN’s decision, Comcast Vp-Treas. John Alchin, said it had “everything to do with Wall St. and nothing to do with Philadelphia.”