RCN Battles Giants With All-Digital Push

RCN is entering the next phase of its quest to lure customers, a push to offer more digital TV channels than giants Comcast and Verizon.

"We can leapfrog both of them," said Peter D. Aquino, chief executive of the provider of cable TV, Internet and phone service. "They're not as locally focused. They can be beat."

The Herndon company has been trying to be an alternative to the big phone and cable companies for the past decade. It was the first company to offer customers bundles of voice, video and high-speed Internet service, but then competitors started rolling out similar packages on a large scale. Now it is one of the first cable companies to go all digital. But it still has just 50,000 customers in the Washington area, numbers that pale next to the region's dominant telecom players, Comcast and Verizon, which are also working to expand offerings.

Starting today, RCN will be passing out new digital cable boxes to D.C. customers. The effort is part of its "analog crush" process, through which it is getting rid of analog signals and moving to all-digital channels to give customers more channels. RCN, formerly known by the brand name Starpower, has already made the transition in Falls Church and Montgomery County.

Comcast, with 1.1 million customers in the region, is also moving to all-digital programming in some markets, though those have not been announced. The company, which offers Internet service in addition to phone and cable, last year spent $300 million to build 2,000 new miles of fiber optic lines in the Washington area.

Other, bigger rivals are also unveiling new services and expanding their networks.

Verizon rolled out its own fiber optic network to provide TV, Internet and phone service, under the Fios brand, throughout much of the Washington area. It recently announced a franchise agreement to extend services into the District.

Cox Communications, which serves 264,000 households in Fairfax County and Fredericksburg, is upgrading its network to offer faster Internet speeds and more high-definition cable channels, according to company spokeswoman Gwen Sparks.

The bigger companies say they're not worried about RCN's moves.

"Competition isn't new to us -- we compete for customers every day," said Jaye Linnen, Comcast spokeswoman for the Washington region. "We enhance our products at every turn so consumers choose us."

RCN plans to keep growing.

At the height of the tech boom of the late 1990s, it spent about $3 billion to build a massive fiber optic network and acquired several other Internet and cable companies to expand its reach. But RCN nearly crumbled under the weight of its investments and went into bankruptcy protection in 2004.

The company emerged from bankruptcy protection with less debt, and its early investments left 2,000 miles of unused fiber optic lines running from Arlington to Herndon, and from Gaithersburg to College Park. Aquino said he is thinking about moving into Arlington County and looking to acquire other companies with fiber optic assets.

"Depending on the economy, we'll judge whether we want to spend the capital right now," he said. "We need the credit markets to be in shape to do that."