Broadband Week Direct - Daily News 10/4/00

Today's report from Web Editor Susan Rush

• AOL Battles The Mouse
• Broadband Redefines The 'Net
• Blair Witch - Screaming & Streaming
• Sony Broadband Spins Off Digital Media Unit
• HK Seeks Hybrid 3G Auction
• Broadband Briefs

AOL Battles The Mouse

The Walt Disney Co. seems to be leading the charge to foil, or at least curb, America Online and Time Warner's merger plans. Disney, along with many other competitors and consumer advocate groups, has been urging federal regulators to review the deal closely, and include conditions on broadband access and content discrimination. These groups aren't the only ones ready for a fight; AOL and TW have gone on the offensive, slinging some arrows of their own.

"A handful of competitors - most conspicuously the Walt Disney Co. - have argued that AOL-Time Warner will harm competition by discriminating against nonaffiliated program providers...these contentions lack a grounding in fact," the pair said in a recent letter to the Federal Communications Commission. Both the FCC and the Federal Trade Commission are reviewing the deal and will most likely issue a ruling later this month.

As the debate heats up here in the States, merger news from across the Atlantic could be good for AOL and Time Warner. The European Union is reportedly nearing approval of the union in light of the latest concession offer by TW and EMI. EMI's offer to put its Virgin Records label on the sale block will most likely alleviate the EU's antitrust concerns. Although "there is no decision yet on either deal," according to an EU spokesperson, the commission did confirm the TW-EMI deal would be reviewed at a session of merger specialists from the EU's 15 member states on Thursday.

Broadband Redefines The 'Net

More surfing, more streaming, more buying: broadband subscribers, compared to their dial-up brethren, are doing more on the Web, according to a broadband-usage survey conducted by Excite@Home. The broadband service provider surveyed almost 6,000 of its subscribers and found that those with broadband connections spend 55 percent more time online and visit more sites than those with dial-up service. The study also found that broadband customers who shop online spend an average 91 percent more than narrowband users. Streaming video attracts 58 percent of the broadband users while only 30 percent of dial-up users watch online.

"Broadband is fueling the development of new applications that consumers are taking advantage of - something that is not possible with dial-up connections," says Byron Smith, executive vice president, consumer broadband services and chief marketing officer for Excite@Home.

Blair Witch - Screaming & Streaming

Theater audience screams from Book of Shadows: Blair Witch 2 will remain silent until the movie opens on October 27, but for those of you in need of a horror flick fix the Blair Witch WebFest will be streaming to a computer near you by mid-month. StreamSearch.com, with the help of Artisan Entertainment, has developed an online streaming media channel to promote the upcoming release of the film. The Blair Witch 2 Channel will debut on October 15 and offer fans feature film clips and trailers, contests, multimedia e-mail, links to interactive sites and events, as well as additional horror and sci-fi content.

StreamSearch hopes to drive traffic to the site through its affiliate partners, including broadband ISPs and high-traffic portals, such as Go.com and About.com.

Sony Broadband Spins Off Digital Media Unit

PlayStation2 is not the only technology on Sony Corp.'s mind. The entertainment giant wants to focus on various emerging digital technologies. The answer: 550 Digital Media Ventures (www.550dmv.com). The digital media unit spins into existence as a subsidiary of Sony Broadband Entertainment "to create, incubate, operate, invest in and acquire digital media companies," according to a company spokesperson. Fred Ehrlich will serve as president and CEO of the new unit, while maintaining his post as president, new technology and business development at Sony Music Entertainment.

550 Digital Media Ventures' business will be conducted mainly in the United States. The company will focus on investing in digital technology, including broadband services, wireless, personal broadcasting, digital asset management and professional Internet Services.

HK Seeks Hybrid 3G Auction

Hong Kong is entering the high-speed mobile phone fray, and the country is now looking for some good cold cash. Amidst pressure and criticism from politicians and local press, the government is moving away from its original plan to grant third-generation mobile phone licenses based on operators' promises to provide customers with low-cost services, and will now collect at least some cash. Officials are proposing a hybrid-type of auction, where licenses will be granted based on a cash offering as well as promised service rollouts and network investments. Third-generation licenses are a hot commodity, and critics claimed the government was giving away its public resources. In August, Germany's 3G auction raked in $46 billion and last spring, England's auction brought in $34 billion.

Four licenses will be up for grabs early next year. Existing local mobile operators will most likely make up the majority of the bidder list, including Hong Kong Telecom, Hutchinson Whampoa and Smartone.

Broadband Briefs:

Cisco Systems invests $100 million in its new optical-networking plant. The Salem, N.H-based plant will manufacture gear for fiber-optic networks.
OpenTV surpasses the 10 million mark with the worldwide deployment of its interactive television set-top boxes. The company is on pace to ship more than 1 million in the United States alone this year.
Vectris Communications launches DSL service in 11 Illinois cities. Vectris now offers its business-grade service in 134 U.S. cities across nine states.
Digital Island teams with Excalibur Technologies Corp. to deliver streaming media services to customers, including a system to archive, search and repurpose streaming content.
BigNet, Inc. tabs Efficient Networks, Inc. as its broadband solutions provider.
Integrated circuit provider Broadcom acquires Element 14. The addition of the low-power DSL chipset developer enables Broadcom to add a full range of DSL services to its local, metropolitan and wide area network capabilities.
Symantec inks a deal with broadband service provider Flashcom to offer its Norton Internet Security system services to Flashcom DSL customers. Subscribers will receive a 30-day trialware version of the security system, with the full version available for purchase online at www.flashcom.com.