NAB said 6 more TV stations have begun broadcasting digital signals, raising industry DTV total to 172 stations in 60 markets. List of new DTV stations includes: (1) WALA-DT, Mobile, Ala., Fox affiliate owned by Emmis Communications. (2) KTXA-DT, Dallas, UPN affiliate owned by Viacom. (3) WVIA-DT, Scranton, Pa., PBS station licensed to Northeastern Pa. Educational TV Assn. (4) KXAN-DT, Austin, NBC affiliate owned by Lin TV. (5) WNBC-DT, N.Y.C., NBC owned station. (6) KDNL-DT, St. Louis, ABC affiliate owned by Sinclair Bcst. Group.
Bills introduced in Neb. and Wyo. would make wireless carriers eligible for state universal service support. Neb. bill (LB-389) would give Neb. PSC limited jurisdiction over wireless phone carriers for universal service purposes. It would authorize PSC to require that wireless carriers contribute to state universal service fund and adopt rules under which wireless carriers could receive subsidies from state fund for local service to high-cost areas. Wyo. measure (HB-52) would make flat-rate wireless local service eligible for state universal service support. Bill would authorize Wyo. PSC to determine amount of money available for wireless universal service subsidies and adopt disbursement rules for payments to wireless carriers. Present law in both states denies commissions any authority over wireless services. Another new Neb. bill relating to universal service (LB-89) would annually earmark 1% of money in state universal service fund to subsidize broadband telecom services for county and municipal govt. agencies, starting in 2002.
Excite@Home said it met its year-end subscriber target, closing 2000 with 2.95 million high-speed data customers worldwide, up from 2.31 million at close of 3rd quarter. Company said it grew more than 25% in 4th quarter, thanks partly to introduction of its QuickStart Kit self-installation in RadioShack stores in several major Comcast markets. Excite@Home said it plans to expand its retail presence by hundreds of stores this year, extending its QuickStart Kit program to AT&T and Cox territories as well. Separately, Excite@Home said it had withdrawn from its earlier deal to buy online games company Pogo.com for undisclosed price. Company, which didn’t give reason for pulling out of agreement, said it will retain its 10% stake in Pogo and continue to offer Pogo’s online games to subscribers.
FCC is holding first meeting of World Radio Conference (WRC) Advisory Committee Jan. 30, 10 a.m.-noon in Commission meeting room. International Bureau’s Planning & Negotiations Div. will take lead on FCC’s WRC efforts, with Julie Garcia directing preparations and serving as designated federal official to advisory panel. Brian Fontes, Cingular Wireless vp-federal regulation, and Jennifer Warren, Lockheed Martin senior dir.- telecom trade and regulatory affairs, are chmn. and vice-chmn. of committee. FCC said particular emphasis at next WRC in June 2003 will be on International Mobile Telecommunications-2000, terrestrial wireless interactive multimedia services, sharing in 40 GHz with aeronautical mobile-satellite services. FCC also expects focus on public protection and disaster relief, broadcasting-satellite interregional sharing, amateur and amateur satellite services, high frequency broadcasting, regulatory procedures for satellite networks. “Our priority during this WRC cycle is to successfully complete the domestic preparatory process in a time frame that allows the U.S. to be a leader at regional and international meetings,” International Bureau Chief Donald Abelson said. FCC also has created new Web site: http://fcc.gov/wrc-03.
Adelphia Communications said it plans to offer about $485 million in class A common stock and $400 million in convertible subordinated notes to investors, following successful offering by Charter Communications late last week. Separately, Adelphia said it began rolling out Wink Communications’ interactive TV service in upstate N.Y., offering service as free feature for digital cable subscribers in Buffalo area. MSO said it plans to introduce in another 2 undisclosed markets by early Feb.
In response to FCC’s latest video competition report (CD Jan 9 p5), NCTA said report confirms “irrefutable trend of the last five years” that DBS has emerged as cable’s biggest video rival and “is rapidly becoming a significant competitor in data as well.” NCTA argued that report, which indicated that cable’s dominance of pay TV market is slipping because of DBS inroads, also shows why no new regulation of cable industry is needed. “Competition from satellite, wireline overbuilders and wireless operators is benefitting consumers,” group said. “It has made cable rise to the challenge by providing digital tiers, video-on- demand and data and phone services. This competition is reason enough to reject government micro-management of these communications markets.”
Level 3 plans to build western link to previously announced pan-Asian undersea cable system it’s constructing with Flag Telecom to connect Hong Kong and Japan. Total cost of system is $900 million, with Hong Kong-Japan segment expected to be in service by June. New western segment will include connections to Korea and Taiwan and is expected to begin operating in early 2002. Taiwan segment is to start late this year. “Our partnership with Flag enables us to mitigate the cost of this expansion, as well as our initial cost of building the Hong Kong-to-Japan segment,” Level 3 Asia CEO Steven Liddel said. Companies said that Asian undersea cable system would connect to N. America and Europe through Level 3’s ownership in Japan-U.S. cable and company’s own transatlantic cable. Level 3 is overseeing construction of eastern link of pan-Asia system and Flag has purview over western link and management of entire system when it’s completed. Each company will own 3 fiber pairs in new system, which will have capacity of 320 Gbps. Carriers said upgrades could provide maximum capacity of 2.5 terabits per sec (tbps) on eastern link and 3.8 tbps on western segment.
Financially-troubled CLEC ICG disclosed Tues. it’s trimming workforce by 500 by Jan. 31 as part of reorganization. “This process is a key component of implementing our refined business plan and equal to the progress we have made in reducing overall expenses and improving network performance,” said ICG CEO Randall Curran. ICG went through series of CEOs last fall, amid reports of missed revenue forecasts, downturn in stock prices and shareholder lawsuits. ICG received approval from U.S. Bankruptcy Court, Wilmington, Del., of its agreement with Chase Manhattan Bank to receive $200 million of new debtor-in-possession financing. Company said that as of Dec. 31, it had more than $200 million in cash.
AT&T shares closed at $22.50, up 12.15% after news that it’s stock was upgraded to strong buy by Morgan Stanley from neutral in report issued Tues. Morgan Stanley, saying it saw better times ahead for AT&T, established 12-month target price of $35 for company, saying stock now was worth $35-$40 per share after falling 66% in 2000, with AT&T Wireless continuing to show strong growth. AT&T cable prospects also were seen as positive. Morgan Stanley remained cautious on long distance business, figuring valuation at zero at current stock price despite generating estimated $15 billion in earnings before interest, taxes, depreciation and amortization (EBITDA) this year, citing company’s debt load of $60 billion. Brokerage said break-up of company would act as performance catalyst over next several months. It also said plan to distribute rest of AT&T Wireless to shareholders plus aggressive asset disposal program should prove beneficial. While acknowledging AT&T’s “challenging” credit position, Morgan Stanley identified its steps to improve situation such as raising nearly $10 billion from NTT DoCoMo, completing $25 billion debt facility, cutting dividend 83%. It said outlook for 4th quarter foresaw AT&T Wireless “looking good,” adding 850,000 subscribers and generating $2.596 billion in revenue, up 38.2% from a year ago. Beyond 4th quarter, broadband IPO outlook still was seen as problem, with regulatory hurdles to overcome and improvement needed in operating and financial metrics. Cable revenue was expected to grow 9-9.5% on pro forma basis in quarter and 10.5-11% in year, including Comcast swap. By end of year, Morgan Stanley said it expected AT&T Broadband digital penetration of 18.5%, largest digital footprint in U.S., with 1.15 million high-speed data subscribers, 550,000-570,000 residential telephony customers and almost 10% penetration, with revenue of $70 million anticipated. AT&T Broadband capital expenditure this year is expected to be robust. AT&T is to release 4th quarter earnings in week of Jan. 29.
PASADENA “The audience has spoken and they've demonstrated that they have a huge appetite for this type of nonscripted programming” and Fox TV Network plans to capitalize on reality shows “within the boundaries of appropriateness.” That was message delivered here by Fox Entertainment Chmn. Sandy Grushow and Pres. Gail Berman to TV critics -- who were highly critical of Fox program Temptation Island, which airs tonight. One critic questioned network about “the ethics and perhaps the morality of bringing in people and trying to pry couples apart.”