Westchester County Business Journal

Looking to make a bundle

For years, the nation's largest telecom companies have promised to save businesses and residential customers money by delivering phone service, video, Internet access and data signals through a single "bundled" system.

But customers hungry for savings may have to wait years, as telecom companies begin battling each other over bundling. One sign of future battles came earlier this month, when a Bell Atlantic Corp. representative urged Pleasantville's Board of Trustees to stop AT&T Corp. from taking over cable service in the village from the cable company it is in the process of acquiring, MediaOne Group.

While telecom giants spar over "technology convergence," to use an industry buzz phrase, a startup partnership based in White Plains says it is gearing up to fulfill that promise within months, at a savings to the owners who allow that technology in their buildings - and, it is projected, to business and residential customers.

C-cation Inc. and its six partners are looking to raise $6 million from investors to test-market and deploy the company's patented technology platform: a network consisting of clusters of electronic "cells," each allowing two-way interactive communication on traditional one-way cable television lines. At the center of each cell is a "community multiple services unit" or server that can store and process signals from various service providers, for transmission to customers.

"Where a water system may consist of a reservoir with a small pipe to every house, we want to have a system of lots of mini-reservoirs all over the place," said Dr. Alexander L. Cheng, chairman and chief executive of C-cation. "We see this as a new platform to support new media.

For end users, it's going to be cheaper"

Unimaginable potential

Service providers are now thought of as companies offering telephone and cable services, as well as high-speed Internet access and data transmission. But the networks can also handle electronic signals from utilities trying to read electric meters, companies overseeing electronic security systems, distributors of video-ondemand - and providers of services as yet unimagined, C-cation says.

Since the potential for C-cation's technology to accommodate additional services is wide open, the partnership says it cannot estimate how much property owners would save through its technology. But with businesses spending $125 billion a year on telephone service alone, according to International Data Corp., Ccation is hoping to market bundled telecom service as a potential cost-cutter.

Cheng holds two US. patents. No. 5,563,883 was issued in 1996 for technology supporting two-way data communication on a multiple access system using a central controller and remote terminals. No. 5,642,155 was issued a year later for technology allowing two-way multimedia communication within cable networks by dividing them into smaller hubs that are interconnected, with the signal amplified to prevent weakening as it travels.

A veteran telecom executive, Cheng has worked for Bell Atlantic predecessor Nynex Corp. as well as for a China's Ministry of Post and Telecom and a Chinese telecom company.

Got to be big

China is the first market to be tapped by C-cation, where the partnership has formed a joint venture with Datang Telecom Technology & Industry Group. Datang Telecom is one of China's four largest telecom companies with more than 7,000 employees. Cheng will head the joint venture, which will sell C-cation's technology to Chinese users - for example, colleges interested in providing students with video-on-demand lectures.

One telecom industry consultant cautions that Ccation is swimming upstream in an industry whose most prominent comparries have grown in recent years. Behind the growth is a need to spread the projected high costs of new technologies among as many customers as possible, and a need for more capital than ever.

That quest for size explains the AT&TMediaOne merger and a wave of telecom combos in recent years, said Robert Rosenberg, president of The Insight Research Corp., a telecommunications consulting firm in Parsippany, N.J.

"Telecom isn't a mom-and-pop business. Telecom is a business that deals in very large numbers - millions of subscribers, and billions of dollars. It literally takes billions of dollars in investment to bill people in pennies. You've got to be big," Rosenberg said.

Partners see potential

Cheng and his partners say C-cation can grow to a projected 17 employees over the coming year by serving overseas markets intent on improving their telecommunications infrastructure - such as China, where its technology has been tested in Beijing Cheng said.

"For developing countries, this technology enables them to play catch-up in a more effective fashion, he said.

Cheng's partners include: Aldo V. Vitagliano, Ccation's vice president for legal affairs and a lawyer whose practice is based in Rye; Ronald C. Quigley, vice president of sales; Ronald J. Mangini, treasurer and founder-president of the Armonk-based accounting firm Mangini & Company PC.; Angelo Guglielmo, vice president of international development and a lawyer who works with Vitagliano; and Ricardo (Rico) M. Dos Anjos, chief financial officer of REI Management Group and the partnership's chief financial officer and vice president of administration.

In the next six months, the partnership expects to complete it research and development, then pick a test market to begin service.

"We'd love to have a showcase for our technology in Westchester. It would be a dream," Vitagliano said.

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