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News summary for 12/07/07

Fri, 12/07/2007 - 8:00am
CED Staff

House gets bill to kill 70/70 rule
By Brian Santo

A bill to remove the 70/70 provision from the 1984 Cable Act has been introduced to the House of Representatives.

Sponsored by Rep. Marsha Blackburn, and joined by Reps. Edolphus Towns and Joe Barton, the legislation would repeal the provision, which FCC Chairman Kevin Martin tried to use last week to justify exerting greater regulatory control of the cable industry.

That effort failed largely because of an argument about the validity of the numbers used to demonstrate that the cable industry has a penetration rate exceeding 70 percent of all households passed by cable. If it could be proved that cable has reached or exceeded the 70 percent penetration rate, the FCC could again invoke the clause. The proposed legislation would make the argument moot.

"Like the black-and-white television, beta-max video-recorder and the telegraph of yester-year, it is time to retire the FCC's '70/70' authority under current law," Rep. Marsha Blackburn (R-Tenn.) said in a statement.


Macrovision to buy Gemstar-TV Guide for $2.8 billion 
By Mike Robuck

Macrovision, a digital security company, said today that it has agreed to buy Gemstar-TV Guide for $2.8 billion in cash and stocks.

The deal includes Gemstar-TV Guide shareholders getting $6.35 per share, or 0.2548 of a share of common stock in a new holding company that will own both Gemstar-TV Guide and Macrovision.

Once the deal closes, which is slated to happen in the second quarter of next year, Macrovision stockholders will own a 53 percent stake in the combined company, while former Gemstar-TV Guide shareholders will own 47 percent.

The cash part of the deal will be funded by Macrovision's available cash and $800 million in debt financing, which will also include a $650 million term loan and a $150 million bridge loan that will be refinanced by bonds.

The combined companies will focus on delivering services to various devices in customers' homes.

"This is a terrific transaction for our stockholders, giving them compelling value and a chance to participate in the opportunity to join forces with Macrovision to maximize value for all of our constituencies," said Rich Battista, CEO of Gemstar-TV Guide, in a statement. "We believe that the combined entity, with its complementary technologies, customers and global presence, has the potential to redefine the consumer entertainment experience and drive significant additional stockholder value."


SureWest buys Kansas City operator; doubles in size
By Brian Santo

SureWest Communications is expanding outside its Sacramento bounds, acquiring Everest Broadband, a privately held provider of video, voice and data services in the Missouri and Kansas suburbs of Kansas City. The deal will be for $173 million in cash.

SureWest will approximately double in size with the purchase - to about 200,000 RGUs - including 95,000 data, 54,000 video and 53,000 voice RGUs.

Everest, whose services are delivered via a fiber-ring-based network, reports 2.7 RGUs per residential customer and an acceptance rate of more than 75 percent on triple-play services.

SureWest said that for the third quarter ended Sept. 30, the combination of the two companies would have generated $66.5 million in unadjusted revenue and approximately $21 million of unadjusted EBITDA.


AT&T's Tennessee franchising fight heating up 
By Mike Robuck

The state franchising battle in the state of Tennessee is starting to gear up between AT&T and the Tennessee Cable Telecommunications Association, according to published reports. 

The legislature is not scheduled to be back in session until next month, at which time it will consider whether to grant AT&T statewide video franchises instead of making the company earn each franchises on a city-by-city basis.

Cable representatives were able to fend off a statewide franchising proposal that was backed by AT&T earlier this year.

The current dustup between AT&T and the Tennessee Cable Telecommunications Association revolves around statements made recently by AT&T's Gregg Morton, who has made speeches where he said the incumbent providers were impeding advertising by AT&T and its supporting groups.

Tennessee Cable Telecommunications Association president Stacey Briggs denied AT&T's claims via a letter that was sent to the media and Morton.

Lobbying expenses incurred by AT&T and the cable television industry reached the $11 million plateau this year, according to reports filed with the Tennessee Ethics Commission by major participants.


EchoStar changing name to Dish Network Corp. 
By Mike Robuck

Earlier this week, EchoStar Communications filed a document with the Securities and Exchange Commission (SEC) in regards to changing the company's name to Dish Network Corp.

The nation's second-largest DBS provider, behind DirecTV, will brand its satellite video service Dish Network Corp. while rolling the remaining assets - which include broadcast satellite receivers, antennas and commercial satellite lines of businesses - into a subsidiary that will be called EchoStar Holding Company. Once the spin-off is completed, EchoStar Holding will be called EchoStar.

AT&T is rumored to be a suitor for EchoStar's video business. AT&T currently has reseller agreements with both EchoStar and DirecTV that are slated to end soon. AT&T has said it will choose between the two on a reseller agreement before the year is out.


Vecima adds VistaMAX Starter Kit to WiMAX platform
By Traci Patterson

Vecima Networks has launched its VistaMAX Starter Kit, the latest addition to the company's VistaMAX suite of WiMAX products.

The new launch enables operators to access the performance and capabilities of Vecima's VistaMAX product line. The company said it supports operators through the installation, configuration and evaluation of the kit.

The kit operates in the 1.9 GHz and 3.5 GHz bands and is based on the IEEE 802.16-2004 standard. It's an all-inclusive WiMAX solution and can be deployed by any operator.

Included in the basic VistaMAX Starter Kit is a one sector base station, five outdoor subscriber stations and three days of training for four people at Vecima's Saskatoon facilities.


Broadband Briefs for 12/07/07

RCN lures NFL fans at Comcast's expense
By Brian Santo

Taking advantage of the carriage spat between Comcast and the National Football League (NFL), RCN will carry all NFL Network coverage this season. Comcast carries the NFL channel but moved the channel to its digital tier, setting off a squabble about how accessible the games are on Comcast. RCN has an all-digital network, which is why it's immune from the argument; RCN means to attract football fans disaffected with Comcast to subscribe to RCN's service.

Bright House adds telecom vet as VP of business solutions
By Traci Patterson 

Bright House Networks has named Nick Lenoci as VP of business solutions. The nearly 20-year telecom veteran will be responsible for developing and leading long-term business solutions strategy and execution, developing product and pricing strategies and overseeing the development of channel marketing strategies.

Advisory firms back Arris' buy of C-Cor 
Mike Robuck

Arris and C-Cor announced yesterday that Institutional Shareholder Services (ISS) and Glass Lewis and Co. have recommended that Arris and C-Cor shareholders back Arris' proposed purchase of C-Cor. In September, Arris made an offer of $730 million to buy C-Cor.

"We are very pleased with the ISS and Glass Lewis recommendations," said Robert Stanzione, CEO of Arris, and David Woodle, CEO of C-Cor, in a prepared statement. "This represents a credible, independent validation of the strategy behind this transaction."

The deadline for C-Cor shareholders to elect to receive merger consideration of cash, shares of Arris common stock, or a combination of cash and stock as described in the joint proxy statement/prospectus, is Thursday at 5 p.m.

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