estborough-based Northeast Optical Network Inc. said it reached deals worth more than $250 million with two big utilities, Consolidated Edison of New York and Peco Energy of Philadelphia, to use their fiber-optic networks to expand its telecommunications network around the Northeast.
As part of the deal, ConEd will take a 10.75 percent stake in NEON, and Peco will own 9.25 percent. The deals are subject to regulatory approval and are expected to close this spring.
Big electric utilities, including Boston Edison, have found a lucrative market offering capacity on the fiber-optic systems they have developed for internal utility management use to telecom companies. Boston Edison, a unit of NStar, has formed a joint venture with RCN Communications to offer telephone, cable television, and Internet access service in Eastern Massachusetts.
NEON operates as a reseller of fiber-optic communications capacity to several companies, including CTC Communications of Waltham, which provides local phone and Internet access in New England and New York.
With the ConEd and Peco deals, NEON will have access to a region that includes 30 million people, nearly 1 million businesses, and 19 million telephone lines.
''These strategic agreements establish NEON in a preeminent position as a `carriers' carrier' in the Northeastern and Mid-Atlantic United States,'' NEON chairman Vincent Bisceglia said.
Financial terms of the deal were not disclosed, but the combined ownership stakes represent a value of about $250 million. Terms include:
Transfer by ConEd to NEON of 4,220 miles of fiber-optic cable in metropolitan New York and the building of a ''point of presence'' in Manhattan where telephone companies can link to the NEON network.
Conveyance by Peco subsidiary Exelon to NEON 4,750 miles of fiber cable from New York through Philadelphia and Baltimore to Washington, providing connections to 40 carrier sites in metropolitan Philadelphia and one connection each in Baltimore and Washington.
Unspecified contribution by ConEd to marketing and operating expenses in New York.
Before the deal, NEON owned 1,000 route-miles of fiber cable between Portland, Maine, and New York. The agreements will expand that reach to 1,400 route-miles.
ConEd has been in the process of developing a fiber-optic network that is to reach about 1,000 New York buildings by the end of 2003. ConEd and Peco will begin marketing their fiber connections under the NEON brand.
