Recently, full-page advertisements have appeared in upscale Manhattan rags like the Village Voice and the New York Observer, showing a picture of jubilant Germans celebrating on the shattered Berlin Wall. A catchy revolutionary slogan accompanies the image: "Sooner or later, all tyrannies crumble."
These ads are part of an underdog campaign launched by RCN Corporation, a small Princeton, New Jersey-based company that’s pumping its beleaguered fist in the face of telecommunications giant Bell Atlantic. Armed with its own network of coaxial cable, RCN is a bundled provider that offers packages of phone, cable, and high-speed Internet service for roughly US$40 per month. David McCourt, the tough-talking president and CEO of RCN, hopes his company's low prices will enable it to take a bite out of Bell Atlantic's market share in the lucrative Boston-to-Washington residential market – with a little help from the Federal Communications Commission.
On August 15, the behemoths Nynex and Bell Atlantic merged and a new telecom giant was created. The $25.6 billion merger, the largest in US history, transformed Bell Atlantic into the country's second-largest telephone service provider, after AT&T. But to keep the 13-state Northeast market open to competitors, the FCC required the new company to allow its rivals to rent service capacity at a reasonable price.
RCN is not the first small residential phone provider to take on such enormous competition. In Texas, TeleServe Inc. has been selling bundled services in competition with local giants Southwestern Bell and GTE for years. But several obstacles stand in RCN's way. The most obvious is that the little company has only 60,000 subscribers. To justify the cost of stringing its own coax wires to the front door, RCN must also find buildings with a critical mass of new customers. McCourt himself is considered a wild card – although he has a shrewd reputation, he's seldom spent more than a few years on any one venture before moving on to the next.
RCN's biggest headache awaits: The FCC conditions attached to Bell Atlantic's merger expire in four years. But having established his reputation building private telecommunications networks both in the US and the UK, McCourt seems unintimidated by the long-shot odds. "We're encroaching on people who've been in business a long time," he concedes. "But we have nowhere to go but up." It may be wishful thinking, but in the meantime, vive la revolution.
