Cablevision Systems

Cablevision Systems doesn't have to worry about making coveted last-mile connections to its customers.

Cablevision Systems doesnt have to worry about making coveted last-mile connections to its customers. It already has coaxial cable running into 4 million households in the greater New York metropolitan area.

Now Cablevision is finding ways to profit from those connections, building a communications business that reaches far beyond its roots of pay-television. By the end of 2000 it had recruited 240,000 customers for its Optimum Online cable modem service, and its Lightpath subsidiary had begun offering voice and broadband data service for businesses.

But thats just the beginning. This year, Cablevision will roll out OptimumTV digital cable service, which replaces its current analog offering and opens the door to interactive TV. And during the next two years, Cablevision will deploy voice-over-Internet Protocol telephony in a flat-rate, unlimited domestic calling plan for its residential customers.

Like everyone elses infrastructure, Cablevisions is a work in progress. Although the basic structure is in place, the company is busy upgrading to fiber and adding 750-megahertz cable head-ends to support the interactivity that CEO James Dolan envisions.

Pat Falese, senior vice president of product management and sales, says Cablevision will spend the next two years building a suite of interactive services that will include games and Internet shopping, as well as video-on-demand with VCR-like functions. The company also plans a set of gateway services, which will use its set-top box as a command center for such household functions as electricity meter monitors and home security controls.

Falese blames the industrys interactive services flops on technical limitations and marketing mistakes. "We will be very deliberate about introducing services as rollout advances," he says.