Broadband Week Direct - Daily News 9/14/00

Today's report from Web Editor Susan Rush

• Chipmaker Predicts Q2 Earnings
• Armstrong Out, Malone In?
• Congress Streams To You
• Broadband Briefs

Chipmaker Predicts Q2 Earnings

Higher-than-expected sales should translate into higher-than-expected revenues for Virata Corp. during fiscal Q2 2001. The high-speed modem chipmaker expects to report revenues for the quarter ending October 1 of $41.5 million, a 50 percent increase over Q1 revenues of $27.7 million. Virata attributes the jump in revenue to the demand for faster Internet speeds in North America, Asia and Europe. Sales for the quarter are forecast at $37.4 million.

Virata is one of many equipment suppliers supporting an OpenDSL initiative. Like the Cable Television Laboratories' interoperability testing standard called DOCSIS, the goal of OpenDSL is to design and build interoperability standards for DSL network and premise devices and, ultimately, to conjure up a line of certified, "plug-and-play" modems for the consumer market.

In today's trading, Virata's stock rose about 11 percent to 55.88 as of 1:00 pm EST. Since the company's IPO in November, shares have climbed sevenfold.

Armstrong Out, Malone In?

Amidst pressure from the Federal Communications Commission to shed some of its cable television household share, unhappy investors and its struggle to become the dominant force in the new digital economy, the market continues to speculate that AT&T Chairman C. Michael Armstrong may be on his way out. An AT&T spokesman would not comment on the rumor. Liberty Media's John Malone, a board member and proponent of change at AT&T, may be Armstrong's successor.

Although industry analysts doubt AT&T will make such a drastic move, the report did spark AT&T stock yesterday. After being down as much as 62 cents at $30.13 in early trading yesterday, the stock rallied in the early afternoon to an intraday high of $32.75. Shares were relatively stable in today's morning trading, but they are still almost 50 percent below a 52-week high of 61. "The reasoning behind the jump in stock prices yesterday could stem from the shareholders getting impatient for better earnings and not looking at the long-term outcome of Armstrong's plan," says Mike Paxton, senior analyst for Cahners In-Stat Group, a sister company to Broadband Week. "Maybe there was a lack of communication when Armstrong rolled out his digital services plan and investors were not told how long [the plan] would take to be implemented."

Although investors are growing restless, Paxton believes Armstrong will be able to hold on to AT&T's top spot through the end of the year. During the first quarter of next year, shareholders are likely to revisit the topic if AT&T's stock has not started to rebound. Only time will tell whether Armstrong can hold on or if another powerhouse will be brought in to take hold of the company's reigns.

Congress Streams To You

Political enthusiasts want to be in the "know," and what better way to stay connected to politicians than with live Congressional Coverage? Federal Network teams with NaviSite to beef up streaming media coverage of the United States Congress. In its current capacity, FedNet only has the ability to broadcast live Congressional events to 1,000 or less viewers, but by adding NaviSite's end-to-end services to its portfolio, the content provider can stream floor debates, committee hearings and press conferences to hundreds of thousands of viewers. FedNet also makes its video and audio content available to news organizations like the New York Times and the Washington Post. The duo will also work together to develop customized streaming applications.

Broadband Briefs:

High-speed router manufacturer Ironbridge believes it is ready to run with the big boys, namely Cisco Systems. Britain's Energis and Qwest Communications International are testing the start-up's new terabit router, a high-speed networking device.
Internet Initiative Japan launches DSL service in the United States in conjunction with Rhythms NetConnections. IIJ's service will be marketed to business for a $720 set-up fee and a monthly charge of $213 to $387.
Streaming media company, ZipMed teams with Reuters Health Information to deliver live and on-demand audio and video of the latest health news. The duo has launched the Reuters Health Daily AudioCast that will be available on both companies' Web sites.
New Edge Networks will offer its DSL service to US Online's 46-state network of local ISPs. US Online's ISP partners serve more than 500,000 users in more than 2,200 cities.
Infonet Services Corp. makes its Asynchronous Transfer Mode-based broadband services available to its clients, including Ericsson and SAP.
Technology investment firm Clarity Partners names Harry Bosco as a special venture partner. The former Lucent Group President of Optical Networking, who left the company as part of a major reorganization strategy this summer, will join the firm in mid-October.
Conexant Systems plans to split into two companies by spinning off its Internet infrastructure chip company that includes its broadband-related businesses. The company is planning an IPO of 20 percent of the spin off's shares in January, followed by a tax-free distribution of the remaining shares to current shareholders six months later.