Broadband Week Direct - Daily News 9/8/00

Today's report from Web Editor Susan Rush

• European Regulators Probe AOL, Time Warner
• Lucent Streams Entertainment To Cell Phones
• Chip Maker Reports Q1 Earnings
• Games, Next-Gen Wireless' Pot Of Gold?
• Broadband Briefs
• Next Week in Broadband

European Regulators Probe AOL, Time Warner

When two giants come together, the ground usually shakes. This is definitely the case for the proposed merger of America Online and Time Warner -- regulators on both sides of the Atlantic are looking for some reassurances before granting antitrust clearance.

During closed-door hearings with the European Union, AOL and Time Warner defended their plans to merge. According to a Commission spokesperson, AOL has offered some concessions for the planned merger in an attempt to win approval, but neither the spokesperson nor AOL would elaborate. European Union, which is set to rule on the merger on October 24, is concerned that the new company would be the dominant provider in five different market categories, and may stamp out its competitors, especially in broadband areas such as Internet access over cable systems.

Despite concerns, AOL and Time Warner remain confident. "Our conversation with regulatory agencies are proceeding well and have been constructive. We are confident that we will successfully address all of the issues raised in our review. We are on track to close in the fall," says Scott Miller, a spokesperson for Time Warner.

The duo has announced plans to open up its cable pipeline, but reports are circulating that they will restrict access to set-top boxes, but according to an AOL spokesperson, these reports are not accurate. "The MOU never contemplated the issue of set-top boxes," she said. Access to cable lines for AOL-Time Warner rivals is at the heart of regulators' concerns.

Lucent Streams Entertainment To Cell Phones

Wireless device users are way beyond using their cell phones just for phone calls, they want entertainment, and they want speed. Lucent Technologies Microelectronics Group is feeding on this insatiable appetite for more bells and whistles by streaming video to high-speed mobile devices. The communications equipment giant is teaming with wireless video start-up PacketVideo to develop this next-generation device.

"Entertainment, such as viewing movie previews, are emerging as exciting potential applications for wireless terminals," says Denis Regimbal, spokesperson for Lucent's Microelectronics Group. Under the agreement, the two companies will embed PacketVideo's wireless media software on Lucent's General Packet Radio Service (GPRS) and Universal Mobile Telecommunications Services (UMTS)/Enhanced Data for Global Evolution chipset solutions, including the StarCore* SC100 next-generation digital signal processor (DSP)-based platform. GPRS, EDGE and UMTS are packet-based third-generation wireless standards that enable "always on" connections at faster transmission speeds than current second-generation wireless devices.

PacketVideo's goal is to make its streaming-video software an integral part of wireless phones. The company recently signed deals with Intel and Texas Instruments to build its system into their chips.

AT&T Broadband Crosses 300,000 Mark

Although AT&T Broadband has not crossed the finish line by signing up its 300,000th telephony subscriber, the company says it is one step closer to its brass ring of 500,000 to 650,000 subscribers by year-end.

According to AT&T Broadband President Dan Somers, 40,000 new subscribers were added in August - more than entire fourth quarter of 1999 - at a rate of 1,800 new subscribers a day. If the company can maintain this pace, it should reach its goal and end 2000 with 507,000 receiving telephone service over digital broadband cable systems.

Chip Maker Reports Q1 Earnings

Strong chip sales tripled National Semiconductor's net income growth in the first quarter of fiscal 2001. The company reported net income of $149.4 million, or 76 cents a share, compared to $47.1 million, or 25 cents a share, during the same period a year ago. The company is benefiting from the high-demand for chips. The Semiconductor Industry Association forecasts the semiconductor market will grow by 31 percent to $195 billion in sales this year alone, and increase to $312 billion by 2003.

With the company's core markets of wireless, Internet and analog communication devices growing 34 percent during the quarter, the chip developer is making the move to high-speed wireless with partner Proxim. The duo plans to develop wireless home networking products based on the HomeRF protocol. Last week's FCC ruling to increase wireless home networking bandwidth to 10 megabits per second, makes the development effort possible.

Broadband Briefs:

Harmonic Data Systems partners with broadband service company Access1 to deliver coverage of the 2000 Olympic Games to PC users via satellite.
Philips Electronics reaches a licensing agreement with Microsoft to include Microsoft enhanced TV software in its 2001 set-top boxes. Details of the deal were not disclosed.
Kirby Pickle resigns Teligent presidency to head PF.Net, a fiber optic telecommunications firm.
Level 3 Communications installs Ring 1 of its 4,750-mile fiber optic network in Europe. The ring, which consists of 1,900 miles of fiber, will connect Level 3's data centers in London, Amsterdam, Frankfurt, Paris and Brussels.
DreamWorks Pictures and RealNetworks launch a streaming media Web site to promote Cameron Crowe's latest film, Almost Famous. The site will stream interviews with Crowe and the film's stars as well as provide clips, behind-the-scene footage and songs from fictitious band Stillwater.
STMicroelectronics teams with Nera to develop chipsets and software for turnkey interactive broadband systems for satellite digital set-top boxes.
AbleTV.net produces the interactive "Able Kids Club Story Hour." The show will feature captioned streaming video to aid disabled children.

Next Week in Broadband

Speeches:

Sept. 11: Deborah Lathen, Chief of the FCC's Cable Services Bureau, CSB will participate on a panel, "Impact of Regulations on Cable Broadband," at the Florida Cable Telecommunications Association, Naples, Florida, 2:30 p.m.

Sept. 8: Deborah Lathen, Chief, Cable Services Bureau (CSB) will participate on the Schwab Washington Research Group Panel, "Federal Regulatory Issues," the Four Seasons Hotel, Washington, DC, 9:45 am.

IPOs:

Withdrawn: Broadview Networks Holdings, www.broadviewnet.com

Conferences:

Sept. 12-14: CLECexpo Fall 2000. Adams Mark Hotel, Denver, Colo.; www.clecexpo.com

Sept. 12-14: ICe San Jose 2000. San Jose Convention Center, San Jose, Calif.; www.iceexpo.com

Upcoming Events:

Sept. 24-26: NetWorld+Interop 2000 Atlanta. Georgia World Congress Center, Atlanta, Georgia; www.key3media.com/interop/atlanta2000

Sept. 27-28: Private Equity Investing In Broadband & Wireless. Westin Copley Place, Boston, Mass.; www.ibforum.com