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PETER D. AQUINO, PRESIDENT AND CHIEF EXECUTIVE,RCN CORP. | ON THE HOT SEAT

Cable upstart remains undaunted by big firms

(Jonathan Wiggs/ Globe Staff)

Peter D. Aquino took charge of telecom upstart RCN Corp. shortly after the cable, Internet, and phone provider emerged from Chapter 11 bankruptcy in 2004. Aquino spoke with Globe reporter Carolyn Y. Johnson about RCN's recent marketing strategy and its competition with phone giant Verizon Communications Inc. and Comcast Corp.

Q The company recently began offering an international calling plan targeted at Hispanic customers. Is that part of the company's strategy today?

A I believe the diversity in our tier-one markets -- [Washington] D.C., Philadelphia, New York, Boston, and Chicago -- requires us to have products for all ethnic groups that make up our customer base. [The new phone and television packages are] an example where we used an a la carte philosophy so that our Hispanic customers could choose the packages they want. It's more economical for them, and it's actually what they want to buy.

We're actually launching what we call an international marketplace, so through video-on-demand you can pick a variety of countries of origin and select the content.

Q In Massachusetts, you now face two big competitors, Comcast and Verizon. How can you compete?

A We've always competed with Verizon and Comcast -- matter of fact, when the company was started, they were already there. We entered as a competitor to both of them. We competed with the best of telephone, which Verizon offered, and we competed with whatever the video product was at the time. And the way RCN came in was basically: Take share from both of them, day one. That's how we built our company.

Q Last summer, you introduced a quadruple play in Boston -- adding wireless to TV, phone, and Internet. What has adoption been like?

A It's still a trial for us. The quadruple play is yet to be determined as a necessary product for any cable company. We're all testing it. We're still contemplating expansion strategy on that. We like Boston when it comes to trialing products. It's a great demographic, we have a lot of diversity here, and we've been here from the very beginning when we started the company.

Q Every cable customer has seen their cable prices rise year after year while phone prices have leveled off. Why is that?

A Programming costs go up every year; I think all cable companies suffer the wrath of programming costs going up every year.

In the case of RCN, we actually bundle our products and push through a value proposition that tends to be better than the competition. It's not on price only; usually it's on product as well. We have high-speed data up to 20 megabits. In terms of TV, we have a real advantage over Comcast today because we're all digital.

Q What are your plans for expansion in Massachusetts?

A Towns like Milton and Dorchester are in our target set right now. So we're probably going to be launching new services in those areas right away. We're very excited about our expansion opportunities in Boston.

Q There have been reports that the company is up for sale, and in March you sold your San Francisco assets. What is the future of the company?

A We want to be very strong from D.C. to Boston. We've been working on our residential business, as well as our commercial business, in that footprint. I consider RCN a Northeast regional broadband company, with Chicago being a very close sister market.

Q Right now Verizon is pushing to get state approval for cable franchises. Where does RCN stand on this?

A We're very supportive of municipalities having the rights to continue to issue local franchises. For the most part, Verizon has enough licenses to do what they've got to do even today.

We didn't have statewide licenses, and today we have 130 franchises, and we have over 5 million licensed homes [nationwide] -- and that's RCN. So we as a small strategic company have more licenses than we'll ever need. So Verizon's approach, I think, has just been a waste of political time.

Q Do you think DVRs have been good or bad for cable companies?

A I think DVRs are great. Once you've had it, you never go back. We find the demand for HD DVRs in our company is going through the roof, and you can understand why. Everyone's buying new TVs, and they want to see either a ball game or a concert or all these new shows being broadcast in HD. They want to see the clarity, and be able to save it if they miss it.

Q What's the biggest TV you own?

A Let's see -- we have a 36-inch HD TV, and we enjoy certain programs like "Lost." It's kind of a family thing. We all get the popcorn ready for that and we use our DVR to record it when we miss it. The TV is really a family-oriented setting where we get together.

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