RCN Corp. said today that it was able to extend its VOD service capacity by using Harmonic’s edgeQAM.

RCN – with more than 350,000 cable subscribers in several metro markets, including Boston and Chicago – is using Harmonic’s Narrowcast Service Gateway 9116 eQAMs with privacy mode encryption, and the operator is receiving a software upgrade to existing NSG 8108 systems to add privacy mode.

With the Harmonic gear, RCN, which competes with Comcast and Verizon in some areas of its footprint, can deliver more VOD services to its subscribers.

The eQAMs perform a variety of functions at a network’s edge, including multiplexing, program routing, PCR re-stamping, scrambling, QAM modulation and RF upconversion.

“The expansion of our VOD service, which covers all of our geographical markets, is a critical component of RCN’s growth strategy,” said Rick Swiderski, VP of engineering for RCN. “In selecting our edge solution provider, it was important for RCN to choose a partner that could provide both customers and content owners with the assurance that the VOD program transmission is going to be secure and reliable, in addition to being able to successfully perform all of the required edge processing functions.”

In other RCN news, the company announced yesterday that it had closed on its acquisition of Neon Communications Group. The cash purchase price was $5.15 per share of Neon’s common stock, for a total consideration of $225 million.

RCN funded the transaction with a combination of proceeds from an additional $200 million term loan under its existing senior secured credit facility, a draw of approximately $25 million under its existing $75 million line of credit, and cash on hand.

With the acquisition of Neon’s fiber network complete, the combined RCN Business Solutions-Neon unit will become RCN Metro Optical Networks, a facilities-based provider of telecommunication services to enterprises and carrier customers in the Northeast, Mid-Atlantic and Chicago regions.