Margaret Cooley introduced Paul Sigmund of RCN, a cable provider. He began by showing a slide of their head end in Manhattan. RCN is the largest provider of video, phone and data services. The market now is Boston to Washington. They have built out Boston, Manhattan, and several DC suburbs, and are working on Philadelphia, Queens, and Northern New Jersey. RCN now is working on the San Francisco to San Jose corridor. It is a very good area because of the unusually high residential density, lots of computer users, 65% vs. 40% nationally, and residential Internet use 50% higher than the national average.
The network is designed with the intent of providing high bandwidth to the home, using IP protocols Sonet. Coaxial loop length from the node is no more than 1800 feet so no one is more than 900 feet from the fiber. Service provided is 10 mbps to the node, with nodes of a few hundred homes. The final connection is coax.
Compared with Pacific Bell it provides much higher speed, with much shorter cable runs. The fiber network has a central site with a 288 fiber backbone down the bay, optical devices which run the fiber to the hubs, then to the nodes, ending with coax to the homes. RCN can't run fiber to homes because it's too expensive, about $1200 for each switch. To keep an effective speed of 1mps/home they split the node as the number of users increases. Coax box for each home costs about $200. Cable service is 110 channels, plus they provide long distance and local phone, and connections to the Internet. They have to match the incumbents services. Internet service is provided by their own ISP for access, $39.95/month with 1 mps down. Another ISP is allowed if users want to use them, but at added cost. They have their own ISP, Level 3 who they partly own (similar to @Home providing a single ISP for initial connection). Back-up power is provided to run the phones in emergencies. In Manhattan they offer 91 channels of basic plus a digital tier. High quality phone service is part of the package. Cable bandwidth is 860 Meg.
In fiber communities when they offer service they get 12% taking a service on the first day, by 90 days 17% take service, by 180 days they expect to get 25% of the users. Installation cost is $90, but it usually is waived. Charge is $31.95 for basic cable in Manhattan, with those who also add phone service getting $3 off the cable bill. Internet service is $39.95/month including the modem. In most areas cable users are the first to switch because so many people dislike the existing cable service, but in some areas near Boston Internet takes off faster. In most areas the incumbent cable company is not well liked so they sell that first. They have 850,000 total customers. Of that total there are 127,000 customers on multiple services.
Phone service rates are offered at a 5% discount to Pacific Bell, but customers will get a further discount if they take all the services. Main thing they look for in a service area is residential density. Also they look for high Internet and cable usage. Cost is $900/home to build the basic system plus $300/connection. They have entered into an agreement with South San Francisco, and are negotiating actively with 5 other cities, including San Francisco.
Upstream speed is above 100k. They do offer higher speed services at higher cost. The system is designed asymmetric intentionally for non-commercial users taking the basic service. There are problems getting high speeds upstream, such as packet collisions and interference, so they try to limit upstream speeds and use. Downstream Internet speed is far faster than on phone lines, and it is on 24 hours/day.
Fiber is brought closer to the home than in any other system. Further, the fiber network is scalable so capacity can be increased easily as demand increases. They install lots of dark fiber into each node, to allow them to split nodes and as electronic equipment costs drop. Node splits are based on current technology, but more fibers are available. They will have to lay fiber in Palo Alto even if they use the City ring. How much of the City fiber ring is used depends upon the pricing and how much they need.
Can a user pay for all fiber to the home if they want it? Yes but it will cost more than $1200.
Ken Poulton noted that many local people want fiber service to be high speed and symmetric. The video and phone services are not as important to them. The real need is for high speed data.
Paul said that he understands the theory for high speed 2-way bandwidth, but economically they need to offer all the other services. The same goes for symmetry, it's too expensive to offer high speed up when the network is set up for residential users.
It was noted that it's very difficult for an ISP to try to separate commercial from non-commercial uses from home. They should just sell the bandwidth and let the people use it for what they want, even if they have to pay more for heavy use.
Bob Moss asked if RCN believes as AT&T and others do that homes don't need, want or deserve high speed upstream access.
Paul said RCN has no convictions that people only need and want low speed upstream. The issue is economics. They are competing with telcos and cable and need to set prices competitively.
Is there any distinction between different communities and the total network? Paul said that they try to emphasize local origination and be mindful of local communities.
Mike asked can local high speed services be provided or retained if it is done now? For example he wants to get access to medical records, etc. How can we get very high speed symmetric networks in the community? Has it been brought up before and offered if the community wanted it?
Paul noted that, as part of their negotiations with municipalities, RCN has built municipal INETs connecting public facilities.
There is a real need for telecommuting to avoid all the heavy traffic. How well does the system handle latency for video conferencing?
It works much better than the present systems which run on phone lines.
What negotiations are they engaging in?
They have Open Video System approval, so they have broad authority to offer services. They have California PUC authorization for phone service. They still need municipal approval for the local runs. They have to give the same franchise payments as other service providers.
What services are provided? How many video channels?
In NY subscribers can get 91 channels of basic + 19 channels of premium + digital channels on a tier.
Can they get statistics on channel use, such as how many people watch a particular channel? It would be useful to know for example how many people watch City Council meetings on specific issues.
Paul said he doesn't know, but probably they can because they sell ads by the number of viewers. They can get addressable ads separated by each hub so ads can be tailored for particular areas.
Do you have to get the Internet service and drop the existing ISP or pay extra for them if you just want phone service?
Paul said you don't need to buy the Internet service if you want to use a phone line and keep your existing ISP. You can buy any part or all of the package.
They can do video on demand, and are experimenting with pausing and rewinding programs, but the networks are not great for the pausing/rewinding service yet. They have an engineering group headquartered in Princeton, N. J.
How many phone lines can I get before you charge extra?
They have not yet set the pricing structure for phones in the Bay area.
Ken Poulton said the RCN web site has little real information, no technical data, and mainly is press releases. They would like more data from the web site like services, pricing, and channel lineups
Paul said that for the other areas where the service is running, such as New York and Boston, the web site does list the channel lineups. They have not set the local channel lineups yet. They will have service in some area cities by the end of the year. They will prioritize towns by housing density and by aerial vs. underground systems. They prefer aerial systems because it is much cheaper to build. They do build for underground when it is required.
The meeting adjourned at 8:45 AM.
Respectfully submitted - Bob Moss
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