More Planned Developments Hooked Up by Fiber Providers

BY ANDREA FIGLER Fiber-to-the-home providers are now squarely on the cable industry’s competitive map, according to numbers released by the Fiber-to-the-Home (FTTH) Council. In the last six months an additional 20 communities were using fiber to deliver cable, data and telephone services, according to the council. These additional fiber communities bring the total to 70. The council estimates FTTH communities will pass 315,000 homes by year-end and 1.4 million homes by 2004. “I think it’s still a very small industry, but it’s growing rapidly,” says Mike Render, principal of Render, Vanderslice & Associates, which measures these communities. “I think the technology is one to watch, and not just as a competitive threat. It’s also one to watch as a potential technology for the cable operators themselves.” Of the 20 new communities, the majority are planned developments, also known as greenfields. The others are municipal overbuilds. This growth in greenfields makes it all the more crucial for cable operators to cut deals with developers before communities are built. Adelphia Communications, for one, has become keenly aware of the growing fiber competition. Its Southern California division has negotiated exclusive contracts for about 9,000 homes in planned developments, 5,273 which are bulk buys, says John Houston, regional commercial and multi-dwelling unit sales manager for the region. These bulk buys require all homeowners to pay for their video and data connections via a homeowner’s association fee, which assures 100% penetration. But, in order to secure this bulk buy, Adelphia had to give the developers a discount. The discount, between 15% and 20%, is worth its weight, though, Houston says. If Adelphia charges its typical $28.54 rate for basic cable service in Southern California at the discount, it will get about $120,000 in revenue every month from these deals. On top of that, Adelphia gets additional revenue from any extra package ordered by one of these homeowners, says Lee Perron, Adelphia’s VP for the region.