VOLUME 19 NUMBER 2 JANUARY 12, 1998
This was the story I was trying to post, Art
TCI Ramps Up for Metro Upgrades
By LESLIE ELLIS
Tele-Communications Inc. is ramping up for heavy network
upgrades in five of its major metro properties, saying that vendor
selections for construction are nearly complete.
The five metro properties ripe for a 750 megahertz, two-way
upgrade include: Denver; Houston; Dallas; Tucson, Ariz.; and
Chicago. All five projects start in parallel and extend in phases
over the next 30 to 36 months, said Tony Werner, newly
promoted executive vice president of engineering for
Tele-Communications Inc.
In a separate but related move, TCI is also close to an
arrangement to sell its half of a design and construction joint
venture it formed with Antec Corp. last May. The 50-50
Antec/TCI company, known as Integration Technologies (IT), was
to be TCI's answer to an aggressive rebuild and upgrade plan
that kicked in late last year.
Instead, TCI in November issued five requests for proposals
(RFPs) to amplifier manufacturers and construction companies,
said Werner. A "hell week" for qualified respondents was held the
week after the Western Show last month, he said.
"We're in the final stages of negotiating those deals now,"
Werner said last week.
He declined to comment on a possible IT sale. An Antec
spokesman did not return phone calls seeking comment.
But sources close to the discussions said that a large Canadian
company will buy out TCI's 50 percent portion of IT.
One unusual aspect of TCI's metro upgrade plans: a decision to
purchase turnkey construction services from the same vendors
supplying network hardware.
"Several vendors bid on these projects -- both construction
companies and hardware companies," Werner said. "They bid on
a per-unit basis, so that includes the cost of installing optical
nodes, optical cable, materials and labor -- everything, turnkey."
TCI has said it will pursue lower bandwidth, 450 MHz and 550
MHz, upgrades in many markets, reasoning that digital
compression techniques afford a suitable amount of additional
bandwidth at a more reasonable price than a full 750 MHz
project.
But in those five key metro markets, Werner said TCI will step up
to 750 MHz, two-way hybrid fiber-coax plant segmented into
500-home nodes and using distributed feedback (DFB) lasers in
the upstream path -- a configuration now common among MSOs
but largely dismissed by TCI last year for cost reasons.
Spencer Grimes, an analyst with Salomon Smith Barney, said
that the 750 MHz metro upgrades are justifiable and expected.
"Cable modems have become perhaps a greater success than
many people initially anticipated, and when you're the
controlling partner in @Home [Network], you want to contribute
as many homes as possible," he said.
TCI has also said it will "significantly increase" the pace of its
two-way upgrades, not just for data services, but to lessen the
manpower expenses associated with in-home installations of
phone jacks for digital set-tops.
In November and December, TCI added over 250,000 passings
to its two-way-ready list.
Over the past 18 months, TCI's roller-coaster rebuild and upgrade
plan has exasperated hardware vendors who wanted the
business, but found themselves frequently hearing of a new plan.
In late 1996, TCI canceled equipment shipments, which
triggered slim times for key hardware vendors. Last April, TCI
activated a $1.7 billion, 30-month budget for fiber, bandwidth
expansion gear and return path modules. But at the time, and
until now, TCI kept its bandwidth expansion plans to 450 MHz.
Since then, TCI's aggressive plans to use 24-to-1 video
compression gear from IMedia Corp. fizzled, ending in a lawsuit
last fall. Now, TCI is using 12-to-1 compression gear made by
NextLevel Systems Inc., and will expand bandwidth to 750 MHz
in its metro markets.
As of the end of October, according to plant capacity updates
shared with financial analysts, about 42 percent of TCI's plant,
representing 9.05 million homes passed, runs at 450 MHz or
lower.
About 36 percent of its systems, or 8.9 million homes, are passed
by 550 MHz to 750 MHz plant, up from 34 percent last March.
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