A consortium led by Adelphia Business Solutions Inc. beat
out telecommunications giants AT&T Corp. and Bell Atlantic Corp. to cop a statewide
telecommunications contract in Pennsylvania that executives estimate will generate $228
million in revenue over five years.
The contract calls for connecting Pennsylvania government
buildings and state-affiliated universities. Adelphia executives said the company would
install 80,000 telephone lines and 2,500 data nodes to provide service throughout the
The telecommunications unit of Coudersport, Pa.-based
Adelphia Communications Corp. topped the competition, in part, because it's locally based.
It also already has substantial clusters established in four zones in the state.
"We wouldn't have been a contender if we hadn't had
the density of facilities that we have," Adelphia Business Solutions CEO Jim Rigas
said during a conference call with reporters.
Adelphia has major service clusters in
Philadelphia/Allentown; Wilkes-Barre; Harrisburg and Pittsburgh/Erie. Interconnection
within the clusters is already in process.
The state contract "is a nice affirmation of our
approach to the project," added Bob Guth, regional vice president, mid-Atlantic
region. By becoming an "anchor tenant" for the Adelphia network, the state
showed its dedication to competition and its confidence in facilities-based networking, he
For its part, the state selected Adelphia because it
offered an "impressive technological design, the most competitively priced service
and the most comprehensive solution overall," according to secretary of
administration Thomas Paese.
Adelphia will wire state government buildings and 14 state
university campuses, the latter located in semi-rural locations.
The company anticipates piggybacking other business onto
the state backbone, such as the University of Pittsburgh, 3,300 local governments and
thousands of K-12 educational campuses. The state university component will allow the
company to enter Tier 3 markets, localities that would have otherwise been deemed to
sparsely populated to justify adding to a state network.
Because the state contract pays for their inclusion, any
business Adelphia can glean from surrounding business and residences will be
"gravy" above that generated by the state contract, they added.
Adelphia and its partners will provide Centrex, local-line
and long-distance telephony and voice mail to the government sites. The project will
require $80 to $100 million in incremental capital spending for 2000-2001, with $25
million to $30 million of that in fiber optic costs. Executives estimated an impact in its
bottom line in 2002 with positive cash flow by year three of the contract.
The win is the second big municipal contract secured by an
MSO competitive-local-exchange carrier in recent weeks. Cablevision Systems Corp.'s
Lightpath subsidiary outbid 13 rivals, including Bell Atlantic, to rewire much of
Westchester County, N.Y. Lightpath will build high-bandwidth networks linking more than
500 buildings with integrated voice, video and data services.