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News summary for 1/02/08

Wed, 01/02/2008 - 9:20am
CED staff

FCC encourages the acceleration of the digital transition
By Brian Santo

The Federal Communications Commission is sticking to Feb. 17, 2009, for the digital TV transition, though Commissioner Michael Copps stated flatly that some broadcasters will not meet the deadline.

As an alternative to the expected failure, Copps suggested a phased transition that starts with test markets and then expands to additional markets in stages and over time, similar to the approach adopted by England and Germany as they transition from analog to digital. The idea would be to extend the deadline out for some regions.

That proposal remains unofficial, but some broadcast areas might become de facto test markets in a process that would represent instead an acceleration of the transition schedule.

The FCC has officially given broadcast stations the option to cease broadcasting on their analog channels well in advance of the existing deadline. At the same time, the FCC adopted stricter standards that will make it harder for broadcasters to qualify for extensions beyond February ’09.

This rule might affect cable operators who have must-carry obligations with stations transitioning to digital earlier than previously expected.

Copps’ pessimism about the transition is not new, but it has become more pronounced. In his most recent statement on the subject, he wished he could take back his vote approving the deadline, saying that the FCC had dallied for too long, and that the year remaining before the transition is now inadequate to do all that must be done.

“One year earlier would have been the charm,” Copps wrote. “Sometimes timing is everything, and here a year's earlier start might have been the difference between a seamless and a chaotic Digital TV Transition. Had we acted then, we could have established a far more measured and orderly switch-over process, and the difficult trade-offs and compressed schedules contained in this Order could have been largely avoided.  If a dissent could legitimately be based on frustration at being stuck in this situation, I would dissent today – I am that frustrated by our inaction.”

Cable has a $200 million program to educate consumers about the transition, and the broadcast industry expects to devote another $700 million.

Separately, the cable industry is believed to be preparing a lawsuit to challenge the FCC’s December decision to limit any cable operator’s share of the overall market to 30 percent. NCTA president and CEO Kyle McSlarrow all but guaranteed a suit would be filed.

Comcast, Insight complete division of partnership
By Mike Robuck

Comcast announced today that it has completed its previously announced agreement with Insight Communications to divide the companies’ existing Insight Midwest Partnership, in which each company owned a 50 percent interest.

Comcast paid the partnership approximately $1.3 billion at closing for its share of the partnership's debt.

With the completion of the transaction, Comcast owns 100 percent of the cable systems serving Illinois customers in Rockford/Dixon, Quincy/Macomb, Springfield, Peoria and Champaign/Urbana, as well as Indiana customers in Bloomington, Anderson, and Lafayette/Kokomo. As of Sept. 30, these systems passed 1.2 million homes and served approximately 696,000 basic video subscribers.

Insight now owns 100 percent of the cable systems serving Kentucky customers in Louisville, Lexington, Bowling Green and Covington, as well as customers in Evansville, Ind., and Columbus, Ohio.

As of Sept. 30, these systems passed approximately 1.3 million homes and accounted for approximately 665,800 basic video customers.

Concurrent receives NASDAQ deficiency notice
By Mike Robuck

On Friday, Concurrent Computer Corp. said it had received a notification letter from the NASDAQ Stock Market on Dec. 26 stating that the bid price of Concurrent’s publicly held shares had closed below the $1 per share minimum that is required to be included on the NASDAQ Global Market.

In accordance with NASDAQ rules, Concurrent has 180 calendar days, or until June 23, to regain compliance with the minimum bid price rule. At any time prior to that date, if the bid price of Concurrent’s publicly held shares closes at $1 or more for 10 consecutive business days, Concurrent will regain compliance.

If compliance cannot be demonstrated by June 23, NASDAQ will provide written notification that Concurrent’s securities will be delisted, but the company will be permitted to appeal NASDAQ’s determination to a Listing Qualifications Panel or apply to transfer its securities to the NASDAQ Capital Market.

“I want to reassure our shareholders, employees and customers that this notice from NASDAQ is strictly due to the stock price and we expect to avoid delisting,” said Concurrent President and CEO Gary Trimm. “In the past three quarters, we have generated cash from operations and produced a solid balance sheet, ending our first fiscal quarter with over $26 million in cash.

“In the same period, we improved margins to 53 percent and continued our cost reduction efforts. We settled two legal matters favorably and announced key wins in both our real-time business and or video on-demand business. We believe our MediaHawk 4500 system restored our place as a technology leader in VOD with key ‘Start Over’ deployments at Bright House Networks and Time Warner Cable and a major new market win with Cox in Arizona.”

Comcast moves PEG channels to digital; Dingell objects
By Brian Santo

Across the country, Comcast has been gradually reassigning channels to its digital tier, but in moving several public, education and government (PEG) channels in several Michigan markets, the company has run afoul of a powerful congressman.

House Energy and Commerce Committee chairman John Dingell (D-Mich.) helped write legislation that demands PEG channels be widely accessible and at the lowest possible cost. Channels on the digital tier require a set-top box (STB). Though Comcast is offering STBs for free to consumers for the first year, the company plans to charge a rental fee thereafter.

In a letter to Comcast dated Dec. 21, Rep. Dingell said: “Your intent to charge consumers as much as an additional $4.20 a month per television set to receive PEG channels is plainly inconsistent with congressional intent that PEG channels be made available at the lowest reasonable rate. I ask that Comcast reconsider this decision.”

Comcast has not relented, saying only that it intends to work with Rep. Dingell on the subject.

Former Time Warner exec Dressler dies
By Brian Santo

Fred Dressler, a programming executive with Time Warner Cable and its predecessor American Television & Communications, died on Dec. 24. He was 66.

At his retirement in 2006, Dressler was EVP of programming at TWC. In charge of TWC’s network carriage deals, Dressler earned a reputation as a tough negotiator. 

He was credited with developing a digital sports tier at TWC in 2003 and participated in the launch of SportsNet New York. Dressler was also a founder of E! Entertainment Television and helped develop the In Demand channel.

Dressler also served as chairman of the advisory board of Syracuse University's S.I. Newhouse School of Public Communications. He graduated from Syracuse in 1963.

Comcast heirs to get Roberts’ pay for 5 years after his death 
By Mike Robuck

Under the terms of a new agreement, the designated heirs of Comcast co-founder Ralph J. Roberts will continue to receive his compensation for five years after his death.

The new agreement, which took effect yesterday, was filed on Friday with the Securities and Exchange Commission. The agreement gives Roberts’ beneficiaries his 2007 salary for five years after his death, and also gives his designated beneficiaries his annual performance-based cash bonus that was not paid out upon his death.

Roberts can designate one or more beneficiaries, trusts or other entities to receive his compensation. Robert’s 2007 salary was not disclosed, but his 2006 salary was $1.8 million. Comcast is expected to announce Robert’s salary and benefits for last year in its proxy statement later this year.

Roberts, 87, is one of three founders of Comcast and is currently the chairman of the executive finance committee for Comcast’s board of directors. He is the father of current Comcast CEO and president Brian J. Roberts.

In the filing, Comcast also said that co-CFO and Treasurer John Alchin retired, effective Tuesday, and that Michael Angelakis is now the CFO and treasurer.

Intel’s Sodhani resigns from Clearwire board
By Traci Patterson

Clearwire Corp. said that Arvind Sodhani has resigned from the Clearwire board, effective Dec. 23, in order to avoid any conflicts of interest that might arise regarding his position at Intel Corp. Mr. Sodhani is president of Intel Capital and EVP of Intel, and he has been one of the two members of the Clearwire board that are appointed by the chipmaker.
 
“Intel continues to view WiMAX as a top strategic initiative and looks forward to continuing to support Clearwire to develop, deploy and market a mobile WiMAX service offering in the U.S. over Clearwire’s network,” Sodhani said. “My resignation is not in any way related to any disagreement with Clearwire’s management or the company’s operations policies, practices or strategic direction.”

Intel said it will appoint a new representative to the board as soon as possible. David Perlmutter, SVP of Intel, will remain on the Clearwire board of directors.

Clearwire provides wireless high-speed Internet service, and customers connect via licensed spectrum.

In November, Sprint scrapped plans to split its mobile WiMAX network build with Clearwire.

Broadband Briefs for 1/02/08

* EchoStar starts spinoff of business unit 
By Mike Robuck

EchoStar Communications Corp. completed the spinoff of its equipment business from the Dish Network on Tuesday. EchoStar, the nation’s second-largest satellite TV provider, announced that it was exploring a split in September.

For each share held as of Dec. 27, EchoStar investors received 0.2 shares of EchoStar Holding Corp., the new publicly traded company that will include the broadcast satellite receiver, antennae and commercial satellite businesses. The remaining business, focused on satellite TV, will change its name to Dish Network Corp. after the separation is completed and will continue to trade under the "DISH" symbol.

* Cox promotes 3 execs
By Traci Patterson

Cox Communications has promoted three executives: Jack Polish has been named executive director of financial reporting and compliance, Rachel Hubscher is now the director of creative services and Courtney Wood will serve as the director of acquisition marketing campaigns.

* Qwest, Katz Technology settle lawsuit
By Mike Robuck

Last week, Qwest Communications and Ronald A. Katz Technology Licensing announced the settlement of patent litigation between the parties. As part of the settlement, Qwest has agreed to pay an undisclosed sum for a nonexclusive license under a comprehensive portfolio of patents that Katz owns related to interactive voice applications.

The patents held by Ronald A. Katz Technology Licensing cover a range of interactive technologies, including automated forms of customer service, prescription refill services, securities trading, merchandising, prepaid services, telephone conferences, registration and home shopping, as well as functions involved in securing information from databases by telephone, interactive cable transactions, and various other uses of toll free and local numbers.

* RCN extends CEO’s agreement; Mooney retires from board
By Traci Patterson

RCN Corp.’s board of directors has extended President and CEO Peter Aquino’s reign with a new three-year agreement.

Additionally, James Mooney, who has served as executive chairman of RCN since 2005, will retire from RCN’s board. And Michael Katzenstein, an independent member of the board, has been named non-executive chairman of the board. Katzenstein has served as a director of RCN since 2005.

* Verizon’s FiOS TV wins votes in N.Y.
By Traci Patterson

Verizon’s FiOS TV service has been approved by 14 villages and one town in New York State.

Twelve of the 15 villages in the Great Neck/North Shore Consortium voted for the services: Great Neck Estates, Great Neck Plaza, Kensington, Lake Success, Munsey Park, North Hills, Plandome, Plandome Heights, Plandome Manor, Russell Gardens, Saddle Rock and Thomaston. And the villages of Sleepy Hollow and Briarcliff Manor, along with the town of Ossining, have approved the TV service.

* DirecTV launches Tennis Channel HD
By Traci Patterson

On Monday, DirecTV launched Tennis Channel HD. This is the first HD launch for the sports channel, but it said more are expected to follow.

* Marvell 450 Mbps Wi-Fi chip
By Brian Santo

Marvell said it has a Wi-Fi chip that operates at 450 Mbps. The 802.11n-compliant chip, called Top Dog, is a 3x3 WLAN solution with three spatial streams. Marvell expanded on the proposed Wi-Fi standard with several techniques, including Special Time Block Coding (STBC), which the company explained helps maintain higher throughput over longer distances.

The chip is backward-compatible with previous 802.11a, b, g and n versions, according to the company, which expects to begin shipping in volume next quarter.

* Vonage, AT&T settle patent dispute
By Brian Santo

Vonage and AT&T completed an agreement to settle their patent dispute. The two had forged an agreement in principle in November.

* CommScope, Andrew finalize merger consideration
By Traci Patterson

CommScope Inc. and Andrew Corp. have completed the final merger consideration for CommScope's acquisition of Andrew. The consideration for each outstanding share of Andrew common stock is $13.50 in cash and $1.50 in CommScope common stock.

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