Broadband Week Direct

Today's report from Web Editor Susan Rush

• Florida Judge Overturns Access Ruling
• Western Multiplex And Adaptive To Merge
• Cisco Acquires Active Voice
• Broadband Briefs

Florida Judge Overturns Access Ruling

AT&T Corp. wins again. For the third consecutive time, a federal judge has invalidated a local judge's ruling mandating cable TV companies, like AT&T, to open up their cable lines to rival ISPs.

Judge Donald Middlebrooks of the U.S. District Court in Miami said in his ruling that the 1999 Broward County ordinance violates the First Amendment. It both "penalizes expression and forces cable operators to alter their content to conform to an agenda they do not set," Middlebrooks said in his decision.

"This ruling is the third in a row since last summer invalidating 'forced-access' ordinances adopted by local franchise authorities. There should no longer be any doubt about the invalidity of such ordinances," says Mark Rosenblum, AT&T vice president for law. In June, AT&T won an appeal in Portland, Ore., to overturn a judge's decision that would force the company to open its cable lines there.

"These local cases are losing a little bit of their bite," says Brice David, a Strategis Group analyst. AT&T has said publicly that it is committed to open access and will open up its lines voluntarily. Earlier this month, AT&T Broadband kicked off its AT&T Broadband Choice trial in Boulder, Colo. Eight ISPs are participating in the trial that will give 500 AT&T customers a choice of which ISP to use for high-speed cable Internet service. The ISPs will share customer care processes, connect to AT&T Broadband's network and develop interfaces with AT&T to provide customer service.

Open access has also been a hot topic at the federal level, with the Federal Trade Commission pushing for open access concessions from America Online and Time Warner before approving their $137 billion merger. David does not believe this local decision will not have a major effect on the merger. "These companies want to minimize the time it takes to win approval from the government, they don't want [their deal] to become a legal issue," he explains.

Related Stories:
AOL-TW: Access Remains An Issue At FTC, BroadbandWeek Direct, 10/16/00
AT&T Wins Appeal, Multichannel News, 6/26/00

Western Multiplex And Adaptive Merge

Investors are not responding favorably to Western Multiplex and Adaptive Broadband's decision to merge. Western Multiplex's stock price sank 25 percent, while Adaptive fell nearly 5 percent during morning trading.

The timing of the announcement may be, at least in part, to blame for the cool reception -- the NASDAQ in early trading was down 133 points and the S&P 500 was down 33 points. "When the market is negative overall, it has a tendency to view mergers with some skepticism," explains James McIlree, equity analyst at Tucker Anthony Capital Markets. There is some concern that Adaptive Broadband will not reach its quarterly numbers in December, and investors see risk being transferred to Western Multiplex's financials, says McIlree. "In the short-term the merger may seem risky, but I believe that in the long-term the deal will be a good one," he continues.

Western Multiplex will pay $645 million in stock for the broadband fixed wireless company. Adaptive Broadband shareholders will receive 1.345 Western Multiplex shares for each Adaptive Broadband share. The company will become a wholly owned subsidiary of Western Multiplex. The deal has been approved by both companies' boards, is expected to close during the first quarter of next year.

Related Stories:
Adaptive Broadband Corp. Reports $24.24M In Revenue, BroadbandWeek Direct, 10/24/00
Direct Line-Of-Sight, Wireless Week, 6/5/00

Cisco Acquires Active Voice

Cisco Systems adds another company to its acquisition roster. The networking giant will acquire Active Voice for $296 million in stock. The acquisition of the IP-based unified message software provider supports Cisco's plan to deliver a unified communications network to its business customers, according to Cisco.

Under the terms of the stock deal, Cisco will gain control of Active Voice's Unity operation and its circuit switched PBX voicemail solutions. Once the deal is complete, which is it expected to close during Q2 of Cisco's fiscal year 2001, Cisco plans to sell the PBX portion of the business to a group of Active Voice former employees for $30 million in stock.

Last month, Cisco acquired CAISsoft, a wholly owned subsidiary of CAIS Internet Inc., and in August, made a move to buy PixStream Inc. in an effort to accelerate its strategy to build and deploy broadband networks that provide access to bundled voice, video and data services. Cisco also purchased Komodo Technology Inc. and picked up a piece of Liberate Technologies in late July.

Related Stories:
Cisco Acquires CAIS Software, BroadbandWeek Direct, 10/20/00
Cisco Picks Up PixStream, Multichannel News, 8/31/00

Broadband Briefs:

Spike Broadband Systems Inc. secures $47 million in financing for its fixed wireless broadband solutions. CDP Sofinov of Canada led the investment charge.
Everest Broadband Networks snags a deal to supply high-speed Internet and other broadband services to guest and meeting rooms in Meyer Jabara Hotels.
NETGEAR Inc. unveils its PE102 Phoneline-to-Ethernet bridge, which enables users to extend broadband Internet access to any room in the home using existing phone jacks.
i3 micro technology tabs National Semiconductor Corp.'s Geode single-chip processor to be used in its next-generation set-top box. i3 will also use National's MacPHYTER Ethernet Controller and several analog components.
Malibu Networks receives $30 million in second round financing. The funds will be used to conduct field trials of Malibu's wireless broadband IP system and ramp up company operations.
HarmonyCom Inc. teams with MaxBill to deliver billing, customer care and provisioning solutions to broadband service providers.
Metromedia Fiber Network Inc. inks a deal with Cogent Communications to supply Internet infrastructure, co-location and transit services to the ISP. The deal is an extension of an existing contract in which Metromedia already leases dark fiber to Cogent.
EPIK Communications Inc. expands its fiber optic network to reach from Miami to Atlanta. The company lit an additional 1,100 miles of its network to accomplish this goal.