News summary for 8/29/07

Wed, 08/29/2007 - 9:43am
CED staff

Comcast continues to deny BTN a cable channel
By Traci Patterson

Comcast Corp. released its current Big Ten game schedule - with major match-ups on ABC, ESPN, ESPN2 and Versus - sending another strong signal to the Big Ten Network (BTN), which insists that it should be an expanded basic cable channel in the eight Big Ten states.

“The company’s first priority is to protect our customers and to make the Big Ten Network available in the fairest way to all our customers,” reads a prepared statement from Comcast. “From the beginning, we have said we would like to carry the network and will make it available immediately as part of our Sports Entertainment Package. We simply cannot allow Fox and the Big Ten to burden all of our customers - the vast majority of whom have no interest in Big Ten sports - with a $13 Big Ten tax.”

BTN, on its Web site, says that the Big Ten universities and their teams are a huge part of their respective states, and that this warrants the widespread distribution of the network within that footprint. But BTN also has broad appeal nationally, the network says, and will air 350-400 live events, as well as more than 600 hours of original programming - including academic and artistic content, and on-campus activities.

“It is true that not everyone will watch every program on the network, just as not everyone watches every expanded basic channel they receive, but the cable industry has decided that ‘bundling’ channels is the best way to offer consumers the widest-possible variety at the best price,” BTN’s Web site states. “In Big Ten Country, Big Ten Network should be one of those channels.”

Putting Fans First, a new coalition of sports fans and consumers uniting against the growing costs of sports programming, sides with Comcast.

The coalition’s Web site says: “Having sold its best games to ABC and ESPN, the Big Ten now wants to charge all of us - fans and consumers alike - hundreds of millions of dollars a year for games that are either ‘fifth tier,’ according to sports columnists, or that we used to be able to see for free. In fact, BTN would be the second-most-expensive national network!”
This fall, Comcast will provide about 100 NFL games and more than 150 college football games to its subscribers. Also, Comcast customers in Michigan, Illinois and Indiana with digital cable have access to Notre Dame on-Demand, and subscribers in Pennsylvania can watch Penn State on-Demand.

On Thursday, BTN will launch on AT&T’s U-verse service, and U-verse subscribers will have access to the network with the U100 programming package (or anything above), which starts at $44 per month.

Charter files registration statement for exchange offer with SEC
By Mike Robuck

Charter Communications announced today that it has filed a registration statement with the Securities and Exchange Commission related to a proposed exchange offer of up to $309 million of its convertible senior notes.

Charter, the third-largest cable operator in the United States, said the exchange offer is to extend its debt maturities. The convertible senior 5.875 percent notes have a principal amount outstanding of $413 million, which are due in 2009.

Charter Communications Holding Co. is offering up to $595 million principal amount of new 7 percent convertible senior notes due 2027 in exchange for up to $309 million aggregate principal amount of its existing convertible notes. The exchange offer is valid for existing convertible notes tendered for exchange before Sept. 26. 

Harmonic supports HD 1080p encoding at 24 fps
By Traci Patterson

Harmonic Inc. has announced support for HD 1080p encoding at 24 frames per second (fps) on its MPEG-4 AVC (H.264) encoder, the DiviCom Electra 7000.

Seven of the 10 largest satellite operators worldwide currently utilize Harmonic's compression systems, and the majority of these customers have selected the Electra 7000 to power their HD H.264 services.

Harmonic will showcase its H.264 compression technology for 1080p at 60 or 50 fps at IBC2007.

Additionally, Manthan Broadband Services, a cable provider in India, has implemented a video headend solution from Harmonic for its new digital cable TV service in Kolkata. The operator has more than 800,000 subscribers.

The systems deployed include DiviCom Ion multi-channel MPEG-2 encoders, the Broadcast Network Gateway (BNG) edgeQAM for QAM modulation and scrambling, and NMX Digital Service Manager for end-to-end monitoring and control of the video service.

“With the bandwidth-efficient Harmonic encoders, we are able to deliver 15 services in a single QAM and achieve this goal without impacting the video quality,” said Gurmeet Singh, director of Manthan.

EarthLink cuts 900 jobs
By Mike Robuck

On Tuesday EarthLink said it was cutting 900 jobs, roughly half of its workforce, in an effort to save between $25 million and $35 million this year.

EarthLink said it will close offices in Orlando, Fla.; Knoxville, Tenn.; Harrisburg, Pa.; and San Francisco. The company also said it would “substantially reduce its presence” in the Atlanta and Pasadena, Calif. offices.

EarthLink expects to record facility exit and restructuring costs of $60 million to $70 million associated with the plan, including $30 million to $35 million for certain employee-related costs, and $10 million to $15 million for lease termination costs. EarthLink expects that these facility exit and restructuring costs will be recognized primarily in the third and fourth quarters of fiscal year 2007.

"While we see this as an important first step in unlocking the underlying value that we believe is in our company, we are only eight weeks into the process of repositioning EarthLink for the future. These changes get our cost structure in line, but there is much more to do," said Rolla P. Huff, EarthLink’s president and CEO, in a prepared statement. "We expect to announce additional steps as we continue our work over the coming weeks and months."

EarthLink also modified its previously issued revenue, adjusted EBITDA and net loss guidance for the third quarter and full year 2007. For the third quarter of this year, EarthLink now projects revenue of $290 to $300 million.

The company said it expected a full-year loss of $79 million to $109 million, excluding restructuring charges. EarthLink revised its sales of $1.19 billion to $1.21 billion, down from its previous forecast of $1.23 billion to $1.24 billion.

EarthLink also offered a warning for 2008, saying it “expects industry-wide gross subscriber additions to decelerate in 2008.”

While EarthLink enjoyed early success as a dial-up ISP, it has struggled as customers have migrated to broadband, even though EarthLink resells some cable operators’ broadband services. The company has also explored municipal Wi-Fi deployments as a means to boost its bottom line, but yesterday’s announcement didn’t provide any details on how the layoffs could affect the company’s Wi-Fi plans.

EarthLink also announced that effective Aug. 27, Joe Wetzel joined EarthLink as its new chief operating officer.

IPTV gains momentum abroad
The New York Times Media Group

Several European phone companies this week plan to announce major expansions of Internet protocol television, or IPTV, led by Deutsche Telekom, which is spending € 3 billion and so far has wired 15 million German households, or roughly 4 in 10, for broadband TV.

The moves will put Europe, which some analysts say already leads the globe in Internet TV, further ahead of the United States and Asia in this field. But despite the flurry of interest in digital video, skeptics say that it is not clear that IPTV has a future as a stand-alone business for telephone companies.

With IPTV, subscribers pay a monthly fee of € 30 to € 60, or $41 to $82, to receive digitized broadcasts sent via the phone companies' networks to their television sets and personal computers. These are part of so-called triple-play TV packages that also typically include flat-rate Internet surfing and domestic, fixed-line voice calls. The TV lineup usually comprises a standard set of 50 broadcast channels plus 60 or more premium channels, some not available elsewhere.

''IPTV's decisive advantage is its ability to link programming with interactive services,'' said Timotheus Hottges, a Deutsche Telekom board member with responsibility for IPTV. ''Consumer viewing habits as a result are going to fundamentally change.''

Companies like Deutsche Telekom, Telecom and Vodafone are using the Internationale Funkausstellung, the largest consumer electronics convention in Europe, which opens Friday, to present their IPTV expansions. More than 200,000 people are expected to attend the show, which lasts five days.

''Europe is now the most aggressive market for IPTV,'' said Steve Rago, an analyst for iSuppli, a research firm in Scottsdale, Arizona, that covers the electronics industry. ''Even countries like Lithuania and Slovakia are introducing IPTV.''

About half of the IPTV consumers in Western Europe are in France, according to the consulting firm International Data Corp., which says there are 2.3 million paid subscribers to IPTV in Europe, less than 5 percent of households. By 2011, IDC expects the service to reach about 10 percent of households.

iSuppli estimates that phone operators will spend $9 billion globally this year - $3 billion in Europe - building video-ready VDSL and ADSL2+ broadband networks. VDSL sends data at up to 50 megabits per second and ADSL2+ at 16 megabits. The phone operators, faced with dwindling voice traffic, are looking to IPTV to fill the gap.

''I can't think of a single country in Europe where operators are not introducing IPTV,'' said Tiann Schutte, vice president for multimedia at the French company Alcatel-Lucent, a maker of IPTV components. ''The marketplace is expected to grow aggressively over the next decade.''

Some experts, however, question whether telephone companies will eventually reap the same payoff as equipment makers from IPTV, which faces a challenge luring TV viewers from established terrestrial, cable and satellite broadcasters. The technology, launched in Europe in 2001 by the Italian company FastWeb, began appearing widely in 2004.

In France, four operators - France Telecom, Free, Neuf Cegetel and Telecom Italia's Alice - and two resellers, Darty, a French retailer, and Tele2 of Sweden, are competing for IPTV business. Bouygues Telecom, a unit of Bouygues, is also planning IPTV service. France became the IPTV leader in Europe because the country lacked dominant satellite and cable broadcasters, said Jill Finger Gibson, IDC's research director in London.

Jean-Christophe Dessange, leader of European IPTV development at Cisco, which sells IPTV equipment, said French broadcasters and operators agreed early on a way to split revenue, with telecom operators owning the set-top boxes made by Cisco, Thomson, Philips, Motorola, Alcatel-Lucent and others, and generating revenue from premium channels.

French broadcaster Canal+, however, controls the billing of IPTV customers and derives revenue from its standard package of about 50 channels. Most French triple-play packages of TV, Internet and voice calling begin at € 30.

''The French were successful because the broadcasters and operators didn't each demand too big a share of the pie,'' Dessange said. ''They realized they both had a self-interest in making IPTV work, namely to help them each retain customers and possibly add new ones.''

In Germany, where terrestrial digital and cable broadcasts are available in most households, only 40,000 people currently subscribe to IPTV, according to GFU, organizer of the IFA convention. The technology also faces potential political hurdles.

The European Commission is suing the German government, which still owns 31 percent of Deutsche Telekom, for barring competitors from Deutsche Telekom's new VDSL broadband network.

In Britain, the satellite broadcaster BSkyB and the cable monopoly Virgin Media dominate the pay TV market. BT's IPTV service, BT Vision, began operations in December.

''It's still very much an open question whether IPTV will catch on,'' said James Crawshaw, an analyst in London at Heavy Reading, a research firm tracking IPTV. ''Operators were very enthusiastic a couple years ago. Then they started to question what the return was. None have been able to create a standalone business from IPTV.'' Crawshaw and other analysts said French operators were not generating significant, if any, profit from IPTV but are using the technology to retain or attract new Internet and phone customers.

But many hope to. Arcor, a unit of Vodafone that is Germany's second-largest fixed-line network, spent € 278 million in the fiscal year that ended March 31 on improvements, mostly to upgrade its broadband to ADSL2+. The company plans to launch Arcor TV in Germany's 12 largest cities this fall and expand to 250 cities by the middle of 2008. The triple-play service will include 50 free-to-air and 60 pay TV channels.

Bernd Wirnitzer, Arcor's IPTV director, said the skepticism surrounding IPTV's commercial potential, like the initial euphoria that accompanied its start a few years ago, was exaggerated.

“The technology will allow us to combine voice, Internet and TV in ways that aren't possible when you buy them from separate providers,” Wirnitzer said. ''And customers will also have the benefit of paying just a single bill instead of three.''

To be successful, phone operators will have to give consumers a reason to change long-held viewing habits, said Carsten Rossenhovel, managing director of the European Advanced Networking Test Center, a company in Berlin that tests IPTV components for operators and equipment makers.

''From a technical standpoint, these systems are ready to go,'' Rossenhovel said. ''The real challenge for service providers will be to convince consumers to switch to IPTV.''

C-Com wins wireless contract in Colorado
Rocky Mountain News

C-Com Affinity Telecom has been tapped to develop a vast wireless broadband network for 10 metro-area municipalities.

Colorado Wireless Communities chose C-Com, which has no wireless experience, over six other bidders, including MetroFi, which has developed networks in California and Portland, Ore. The project is to cover Arvada, Boulder, Broomfield, Golden, Lakewood, Louisville, Northglenn, Superior, Thornton and Wheat Ridge.

Clark Johnson, an assistant Arvada city manager, said the Colorado Wireless Communities board unanimously decided Monday to sign a letter of intent with C-Com. He said the parties have 120 days to negotiate a contract, and it's likely to take another 18 months to build the network.

"We're really excited that we found a vendor we want to work with, and it's exciting, too, that it's a local company," Johnson said. He described C-Com as presenting a "strong, aggressive plan" that went beyond Internet services.

C-Com, which provides telephone and Internet services to more than 3,000 residential and business customers, has been rated among the cheapest long-distance providers in Colorado.

CEO Fred Chernow said C-Com plans to overcome its lack of wireless experience by working with BelAir Networks, a Toronto equipment maker that has helped build wireless networks in London and Minneapolis. Chernow indicated a network of 137 square miles would cost between $10 million and $15 million.

Chernow said C-Com's assessment was that Internet services weren't enough to make the project financially viable, but that the project would work if C-Com also sold local telephone services.

C-Com plans to offer high-speed Internet services (1.5 megabits a second) for as low as $14.99 a month. Local telephone service would cost $13 a month and include features such as caller ID. If so, the offerings would provide stiff competition for Qwest Communications and Comcast, whose rates are higher.

Thomson’s NexGuard integrated into new apps
By Traci Patterson

Thomson has integrated NexGuard, its anti-piracy product line, into more devices and services in the digital workflow. The NexGuard forensic watermarking solution can now be incorporated into transcoder applications, catcher devices and VOD servers to secure the delivery of content.

The new integration has already been licensed by Agnostic, Anystream, Digital Rapids, Inlet Technologies, ROOT6 Technology, Telestream, SeaChange and Thomson Grass Valley.

This incorporation introduces a piracy deterrent for content rights owners by ensuring the traceability of individual copies, the company said. Post-production houses, content owners and distributors, as well as cable MSO and IPTV operators, can identify the original source of content posted on online video sharing sites.

The full suite of NexGuard solutions will be demonstrated at IBC2007.

Verizon Wireless pumps up college pigskin lineup
By CED Staff

Verizon Wireless and MediaFLO USA are teaming up to offer over 100 live college football games on mobile phone screens this season.

The games, available to Verizon’s V Cast Mobile TV subscribers, are scheduled to air on CBS Mobile, ESPN Mobile TV, Fox Sports Mobile and NBC 2Go. Programmers will choose which games to cover based on team performances the previous week.
ESPN Mobile TV will air more than 75 live match-ups, as well as up to 20 bowl games.

Notre Dame fans can catch seven Fighting Irish games on NBC 2Go and two on ESPN Mobile TV, while highlights of the 2007 season on CBS Mobile will include up to 15 Southeastern Conference games, the Sun Bowl and Gator Bowl, and up to 38 additional college football games covered through CSTV on CBS Mobile. Fox Sports Mobile is the destination of choice for mobile Big 12 fans.

Broadband Briefs for 8/29/07

* Cinea integrates with STMicroelectronics
By CED Staff

Cinea, a subsidiary of Dolby Laboratories, announced today that STMicroelectronics has integrated Cinea’s Running Marks solution into its STi7109 System-on-Chip (SoC) HDTV decoder platform. The integrated solution is available to all set-top box vendors, conditional access vendors, and cable, telco, and satellite system operators.

“Session-based watermarking is increasingly important to our customers and a highly valuable addition to the capabilities of ST’s industry-leading STi7109 single-chip HDTV decoder,” said Stefano Groppetti, general manager of the Cable and IP Business Unit, Home Video Division, STMicroelectronics, in a statement. “The Running Marks approach of adding watermarks to the compressed video stream is a unique feature that we believe will be of significant interest to our customers.”

On Tuesday, Cinea announced that NDS Group, a majority-owned subsidiary of News Corporation, had licensed the company’s forensic watermarking technology for use with its product line of conditional access and digital rights management solutions for video-on-demand (VOD) and live broadcast.

* Two Norwegian startups testing IPTV DRM
By Traci Patterson

Secustream Technologies and SnapTV, two Norwegian startups, have been deploying Secustream’s SecuShow digital rights management (DRM) technology in an IPTV streaming environment at trial locations in Norway. The companies will unveil the initial results at IBC2007.

The SecuShow technology secures streaming media by using a variety of media keys, security servers and mobile guards that are cryptographically independent, allowing for "second-by-second" protection.


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