Corrections or additions?

This article by Kathleen McGinn Spring was

prepared for the March 19, 2003 edition of U.S. 1 Newspaper. All

rights reserved.

For RCN, Patriot to the Rescue

Patriot Media and Communications has ridden to the

rescue,

promising long-suffering central New Jersey cable subscribers vastly

improved service. The newly-formed cable company beat out AT&T

Broadband

and Cablevision for the 80,000-subscriber New Jersey property owned

by RCN, paying $245 million, or $3,100 per subscriber.

RCN, intent on empire building among the skyscrapers of the country’s

biggest cities, never invested the money necessary to upgrade the

cable system it inherited from C-TEC. So while towns all around them

enjoyed digital, began sampling VOD, and were able to connect to the

Internet via speedy, always-on cable modems, most of RCN’s customers

in places like Princeton, Montgomery, and Rocky Hill had to

settle for first-generation cable.

Patriot, with headquarters in Greenwich, Connecticut, has pledged

to change that. The company is headed up by Steve Simmons, who sold

his 350,000-subscriber Simmons Communications almost a decade ago.

Backed by Boston-based venture capital partner Spectrum Equity

Investors,

Simmons has pledged to invest some $44 million to modernize RCN’s

New Jersey network, which extends from Princeton up through Hunterdon

and Somerset, and includes Hillsborough, Rocky Hill, and Franklin

Township.

Simmons has recruited Jim Holanda to head up the effort and has named

him president of Patriot Media and Communications. Holanda is familiar

with challenges. In his last position, as vice president of Charter

Cable’s Central region, based in St. Louis and covering Illinois,

Indiana, Missouri, and Kentucky, he was charged with consolidating

270,00 former AT&T Broadband subscribers with 240,000 Charter

Communications

subscribers. Holanda had joined Charter in 1998, shortly after

Microsoft

co-founded Paul Allen purchased the company.

"I was around to build Charter from $2 million to $7 million,"

says Holanda, who got his start in the industry as an installer. He

left to head up Patriot, he says, because "we’re building from

scratch, truly getting in on the ground floor. In this day and age

another opportunity to do that won’t come along."

Holanda earned a bachelor’s degree in political science and philosophy

from

Ohio State (Class of 1987), and promptly packed up his car and headed

for California. Soon realizing that he needed a job, any job, he

joined

a friend who was working as an installer for Comcast. In less than

10 years, he was director of business operations for California. He

then moved to east, to New Jersey, to take a job as director of

business operations here.

In signing to head up Patriot, Holanda is building both a cable

infrastructure

and an organization. "We inherited field people," he says,

"but RCN handled customer service, dispatch, IT, marketing, and

accounting nationally." There is no local office for those

functions.

"We’re hiring 70 people to fulfill those functions, and to get

services up and running," he says. Under RCN’s system, "it

was hard to get problems resolved," he ays. RCN’s field reps

were operating out of four locations. Patriot is consolidating, and

has leased a 28,000-foot space in Somerset, in which it will house

all of its departments.

Along with a central staff to serve customers, Patriot is promising

to bring those customers parity with area residents living in towns

served by Comcast or Cablevision. RCN had upgraded about 20 percent of

its system, and Patriot has pledged to finish the job.

"Within 12 months," says Holanda, "we’ll have digital

cable, expanded channels, and 2-way Internet." Video on Demand (VOD)

and HDTV are on the way, and scheduled to appear in about nine to

fifteen months. "The region is hungry for these

advanced services," he says. "They’ve been telling RCN. They’ve

been telling us. They want what their neighbors have."

This is good news for Patriot. The premium services significantly

inflate cable bills. Add Internet and digital cable, and order a few

pay-per-view movies a month, and a subscriber’s tab can shoot up to

well over

$120 a month. Residents in Patriot’s newly-acquired territory are

well able to pay. Household income in the

towns it serves is among the highest in the nation. This demographic

was a "significant factor" in Patriot’s decision to bid for

the territory, says Holanda.

VOD is important to Patriot’s strategy. "I had it in St. Louis

for the last two years," says Holanda. "Just about half (of

Charter’s customers) had digital with VOD. It’s just a gigantic

convenience.

Such a new way of entertainment."

VOD gives cable an edged over satellite, says Holanda. "Satellite

can’t stream video," he says. "They’re wireless." No

streaming

means no library of television shows and movies. Satellite does use

one-way video, offering the ability for a viewer to, say, click on

a baseball player and see his stats or click on a car commercial and

get specs and dealer information. "It’s limited in what it can

do," says Holanda. "You can’t ask it questions."

Satellite systems with personal recorder features, such as Tivo, don’t

worry

him either. "Space is limited," he points out. "It’s only

20 or 40 hours. In St. Louis, we had over 400 hours of content. If

people want more, we just keep adding services."

Not taking any chances, though, cable is prepared to include personal

video recorders in its systems. "Tivo is a good product," says

Holanda.

Charter, his former company, is testing prototypes. "I have one

in my family room," he says. "Paul Allen has one."

Patriot customers may one day be able to order up Tivo along with

their cable, too, but not yet. "We have so much other stuff to

do," says Holanda. "VOD and HDTV are first."

Holanda will be waiting for the new services right along with

Patriot’s

other customers. He has sold his home in St. Louis, and his wife,

Mandy, has found a new home in Montgomery. She and the couple’s young

daughters will be joining him in New Jersey soon. "Living in the

system is important to me," says Holanda, who will have to go

back to the video store to rent movies — at least for a year or

so.


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