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News summary for 11/06/07

Tue, 11/06/2007 - 8:26am
CED staff

AT&T to spend more to pass fewer people with U-verse
By Brian Santo

AT&T said it will have to upgrade its network in the areas that were formerly controlled by BellSouth before it can even begin to start running fiber close enough to subscribers for them to get U-verse services.

The result will be that AT&T expects to spend as much as a half a billion dollars more on U-verse than most recently reported, to reach 1 million fewer homes passed than it had planned to have by the end of 2008.

The admissions were included in the company’s most recent 10-Q. Using figures in millions, the company wrote, “We expect spending to be between $4,500 to $5,000 on our U-verse services for network-related deployment costs and capital expenditures from January 2007 through the end of 2008, and we will be shifting some of that capital to start-up costs to expand into the initial markets in the Southeast region. Since these start-up activities are in preparation for, but do not immediately result in, passing living units, there is a corresponding change in living units we expect to pass by the end of 2008 to approximately 17 million.”

The most recent spending estimate was $4.5 billion to $5 billion (that range was an increase from original projections), and the most recent homes-passed target was 18 million by the end of 2008.

AT&T’s 10-Q concluded by saying, “Additional customer activation capital expenditures are not included in this capital spending forecast. We expect that the business opportunities made available, specifically in the data/broadband area, will allow us to expand our products and services.”

OpenTV proving digital TV solution in India
By Traci Patterson

OpenTV Corp. has been selected by India’s Sun Direct TV to provide the end-to-end solution and deployment management for the operator’s digital TV services.

OpenTV will also provide Sun Direct TV with a new electronic program guide (EPG), an interactive cricket and multi-angle interactive news.

Sun Direct TV will introduce a new digital Direct-to-Home (DTH) pay-TV network in India utilizing the latest MPEG-4-based technology to increase broadcast capacity. The launch will be supported by Irdeto's conditional access solution.

According to a report issued in April by Media Partners Asia, India is set to become the top pay-TV market in the Asia Pacific region by 2015, with pay-TV penetration forecast to grow from 61 percent of TV homes in 2006 to 84 percent in 2011, and up to 90 percent by 2015. DTH homes are estimated to reach 38 million by 2015, up from 2.6 million in 2006.

CableLabs hosts interoperability event for OpenCable Platform 
By Mike Robuck

CableLabs said a total of 15 vendors participated in an interoperability event it hosted in its Louisville, Colo. facility last month for OpenCable Platform and enhanced TV (eTV) applications.

The interop events provide vendors with an informal, laboratory setting to test their latest products within CableLabs’ headends and testing environment in order to determine compliance with CableLabs’ specifications and the ability of their products to interoperate with other devices in an end-to-end OpenCable system. CableLabs doesn’t charge companies to participate in the interop events. Phil Bender, project director of business relations, OpenCable, organized last month’s event.

“We gained valuable insight from the participants,” Bender said in a statement. “With the growth of interactive services on the cable TV platform, the community of OpenCable application developers could benefit by participating in future events.”

CableLabs is planning its next OpenCable interop for the spring of 2008. The RFI will be posted on the corporate Web site and may be reached at the following link:  http://www.opencable.com/news/.

The OpenCable Platform, which was previously known as OCAP, was originally part of the broader OpenCable initiative, which CableLabs launched in 1997 to promote the deployment of interactive services over cable.

OCAP consists of a stack of middleware software that resides between applications and the operating system within a consumer electronics device such as a set-top box or OCAP-compliant TV set. Java-based OpenCable devices can have new information or applications ported to them because of their two-way capabilities, with ETV being an early forerunner of applications for legacy set-top boxes. 

The OpenCable Platform, once it’s widely deployed, will support blended services such as caller ID on TVs, polling and voting, as well as point-and-click e-commerce and information services.

“The OpenCable platform provides industry hardware and software vendors the opportunity to develop innovative, new capabilities that can be broadly deployed across all MSOs’ plants,” said Paul Woidke, Comcast Spotlight’s vice president, in a statement. “Advertisers will gain the opportunity to reach an audience that is interested in their products while providing consumers useful, relevant and helpful advertising messages.”

Cable operators are in various stages of OpenCable deployments. Time Warner Cable has deployed 150,000 OpenCable Platform compliant set-top boxes to date, while Comcast expects to have OCAP-enabled systems in 80 percent of its footprint by next year. Cox has said it expects to have five OCAP trials underway by the end of the year and a national footprint next year.

HTC Touch now available to Rogers Wireless’ subs
By Traci Patterson

Rogers Wireless and HTC Corp. have introduced the HTC Touch - a mobile phone that is similar to the iPhone, with touch-screen navigation - to Rogers Wireless Subscribers.

In October, Sprint announced the availability of the HTC Touch to its subscribers, offering over-the-air music downloads, live TV and other capabilities.

The phone is powered by Microsoft Windows Mobile 6 and offers features such as messaging, listening to music and Web browsing, and users have one-touch access to e-mail, calendar appointments and contacts.

The 2.8-inch LCD touch screen with TouchFLO technology allows users to use either their fingers or a stylus to move between functions. A five-way navigation key enables users to navigate and open applications.

The phone contains a 2 megapixel camera, with video capture, and wirelessly connects via GSM/EDGE/Wi-Fi.

It is available for $199.99 with a three-year contract at Rogers Wireless retail locations, or at the carrier’s Web site.

Time Warner Cable taps Marcus as CFO 
By Mike Robuck

Time Warner Cable announced today that Robert D. Marcus has been appointed as the company’s new chief financial officer effective Jan. 1.

In his new role as CFO, Marcus will retain the title of senior executive vice president and continue to direct Time Warner Cable’s mergers and acquisitions, programming, human resources and business affair departments. As CFO, he will also be responsible for all of the company’s financial functions, including accounting, financial planning and analysis, tax, treasury and investor relations.

“Rob (Marcus) is a seasoned executive and proven leader with a broad and deep understanding of our business,” said Glenn Britt, president and CEO of Time Warner Cable. “Widely recognized as a talented dealmaker, Rob’s contributions to Time Warner Cable have been more far reaching. I am extremely pleased Rob will take on the pivotal CFO role at Time Warner Cable.”

John K. Martin, who served as Time Warner Cable’s CFO since 2005, will become CFO for Time Warner at the beginning of the year. Martin succeeds Wayne H. Pace, who will retire from Time Warner at the end of this year.

Thomson streams uncompressed movie on 10 Gig Ethernet 
By Brian Santo

Thomson said it has demonstrated the ability to stream, in real time, an uncompressed digital 4K movie over a 10 Gbps optical fibre IP network operated by LambdaNet Communications Deutschland AG.

Transport and playback in real-time took place at Thomson’s Corporate Research Center in Hannover. The film was sent on a 2,000 kilometer (about 1,250 miles) loop.

Thomson said that in anticipation of the needs of the digital content production industry, it has been conducting research for almost two years on high-speed real-time data transfer technology to enable efficient management of production-quality digital content over long distances.

Time Warner’s new CEO may move quickly on weak spots
Copyright 2007 Gannett Company, Inc.
David Lieberman, USA Today

NEW YORK - Time Warner is one of the USA's most powerful media companies, with some of the industry's most highly prized assets. Still, with its share price mired, many analysts expect to see big changes - including possible asset sales - after Jeffrey Bewkes becomes CEO in January. Here's what he faces at the company's major units:

Cable systems. Bewkes will be pressured to divest much, and possibly all, of the 84% stake in Time Warner Cable, which serves more than 13.5 million customers in 33 states.

That would have been unthinkable a few years ago: [Time Warner current CEO Richard] Parsons has long believed cable could come to dominate the digital media and grow through sales of phone and high-speed Internet subscriptions, and TV services including video-on-demand and DVRs.

But investors have cooled on cable as growth in broadband subscriptions slowed and competition from satellite and phone companies, especially Verizon, intensified. Phone companies alone might poach 10% of Time Warner's basic cable subscribers by the end of 2010, Goldman Sachs estimates.

The fear is that to remain competitive cable operators will have to put a lid on rate increases, while spending heavily on equipment needed to keep pace with rivals that plan to offer more than 100 HDTV channels as the USA switches from analog to digital TV.

The value of shares in Time Warner Cable has fallen 33% since it went public in January. The stock closed Monday at $27.35, up 24 cents.

The parent company also felt that chill wind.

Time Warner "tends to trade like a cable stock even though it's less than 40% of the company's assets," says Bernstein Research analyst Michael Nathanson. "They're being whipsawed back and forth by cable, and there's another side of the company that pretty much gets ignored."

Online. Bewkes would please a lot of investors if he could stop the bleeding at AOL.

After watching AOL's online service steadily lose its dial-up subscribers, Time Warner hoped to turn the unit around with ad sales at AOL's public web site. But increasing ad sales have yet to outweigh revenue losses on the subscription side.

In addition, "The profitability (from ad sales) will be substantially lower," Pali Research analyst Richard Greenfield wrote last month.

Publishing. When Time merged with Warner in 1989, executives swore that magazine publishing would be the soul of the company.

Will Bewkes change that?

"Publishing could be up for a sale in whole or part," says Global Crown Capital analyst Martin Pyykkonen.

Bear Stearns estimated in May that Time Warner could get up to $8.9 billion for the publishing unit.

The thinking is that print magazines - including Time, People, Sports Illustrated, Fortune and Real Simple - no longer fit with a company largely in the business of transmitting video and sound.

"They control a quarter of the U.S. magazine industry - but it's not one of the major units of Time Warner because of the size of the company," says Barrington Research Associates analyst James Goss.

Magazines also may find it hard to grow as readers turn to the Internet for information. Merchant bank Veronis Suhler Stevenson estimates that total circulation of consumer magazines will fall to 1.4 issues per adult in 2011 from nearly 1.6 now.

Filmed entertainment. This unit doesn't need immediate attention. It continues to rake in cash from blockbusters, including the Harry Potter films and recent hits including 300, and has films coming, such as the much-awaited movie based on HBO's Sex and the City. Sales of TV reruns, including ER, also have been strong.

But Bewkes can't afford to ignore it completely.

Now that its successful Lord of the Rings movie trilogy is complete, and the end of the Potter series can be seen, "What would be helpful would be the development of a new, strong franchise," says UBS analyst Michael Morris. "We haven't seen something with that level of cachet to emerge."

The company's historically strong TV production business also could use a jolt. ABC, CBS, Fox and NBC are filling more time with their own shows, making Warner Bros. more dependent on the CW network, its joint venture with CBS.

Cable networks. Here, too, Bewkes doesn't have to answer alarm bells. His portfolio of channels - including HBO, TNT, TBS, CNN, Cartoon Network and CourtTV (soon to be truTV) - have been solid performers with viewers and advertisers.

But they may need more care and feeding than before as competition intensifies. More than 160 channels, as well as video-on-demand and Internet services, now vie for viewers' time, and that could put pressure on networks to boost spending for programming and promotion.

Broadband Briefs for 11/06/07

* Router distributes HD from any player to up to 6 displays
By Brian Santo

RTcom USA Inc. is shipping a product that makes it possible, the company claims, to transmit high definition video signals from up to six sources, including consumer audio-visual products and computers, to as many as six displays at the highest resolution. RTcom’s Digital Extender DVI matrix router is compliant with HDCP (High-bandwidth Digital Content Protection).

The Digital Extender can take video signals from computers and home audio-visual products - such as HD-DVD players, TiVo systems, satellite set-top boxes, and Blu-ray disc players - and send the signals to up to six displays.

* DivX names Kevin Hell CEO
By CED staff

DivX has decided to let acting CEO Kevin Hell keep the job. Hell said the company will focus on three key market opportunities: growing its licensing business, launching its new DivX Connected platform, and expanding its content solutions.

Prior to being named acting CEO last July 2007, Hell held a number of management positions within DivX. Prior to joining DivX five years ago, Hell had worked for Palm Solutions Group, and at Gateway.

* Vyyo names Graham VP of sales 
By Mike Robuck

Cable industry veteran Christopher Graham has been named vice president of sales by Vyyo.

Graham, whose career in cable spans two decades, will be responsible for all of Vyyo’s sales efforts to Comcast, which includes Vyyo’s spectrum overlay platform and T1 over HFC product. Prio to Vyyo, Graham was vice president, sales, broadband service providers for Ditech Networks.

* Whaleback introduces OS X version of Softphone
By Traci Patterson

Whaleback Systems has introduced an OS X version of its Executive IP Softphone that runs on Apple Macintosh computers and allows Small and Medium Businesses (SMBs) to benefit from greater mobility.

The multimedia application integrates IP telephony onto PCs, and SMBs that rely on Mac platforms or support both Windows and Apple computers can make and receive calls and access voicemail and other telephony services from wherever they have a broadband connection.

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