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Today's report from Web Editor
Susan Rush
• NorthPoint's Stock Tanks
• OpenTV Launches In Northern Cal.
• Bandies Blaze Into Hollywood
• Bigwigs Captivate Audience
• The Western Show In Brief
• Broadband Briefs
NorthPoint's Stock Tanks
Verizon Communications Inc.
pulled the rug out from under its $800 million investment in NorthPoint Communications Group Inc., sending NorthPoint's stock into near oblivion - the DSL provider's share price was down to 41 cents, a 79.7 percent drop this morning alone.
In August, the two companies struck a deal to combine their DSL businesses. The proposed merger would have given birth to a "new" NorthPoint that would have not only served its customers but Verizon's as well, creating a network of more than 600,000 DSL lines.
Rumors began circulating a few weeks ago that the deal could be off after NorthPoint reduced its third-quarter revenue to $24 million - down from the $30 million reported last month - because of problems with customers who could not pay their bills. The financial instability of the company gave Verizon a way out. Verizon said that "the material adverse changes" at NorthPoint prompted Verizon to terminate the agreement as permitted under the terms of the contract.
This morning, Verizon raised its earnings for 2001 and 2002, now that NorthPoint is out of the picture. The carrier expects per-share profit of $3.13 to $3.17 in 2001, an 8 percent increase. The company was predicting that per-share profit would climb 5 to 6 percent, to $3.06 to $3.10. In 2002, per-share profit is expected to rise 12 percent to $3.49 to $3.54. Previously, Verizon predicted earnings growth of $3.41 to $3.46.
Verizon expects to meet its merger commitments for expansion through a variety of means, including its acquisition of
OnePoint Communications Corp. and its strategic relationship with
Metromedia Fiber Network Inc. The company also plans to serve its large business customers outside its current territory and will expand its network in selected locations to serve them and other new customers as well.
NorthPoint was obviously disappointed with Verizon's decision to pull out. "I am stunned to get the news after months of conversation with Verizon on the strong business opportunities available to the combined entities. Verizon was not entitled to terminate these agreements, and we are exploring all our options, including funding options and legal remedies," said Liz Fetter, NorthPoint Communications President and CEO.
Related Stories:
Verizon May Revise NorthPoint Deal, BroadbandWeek Direct, 11/22/00
NorthPoint's Stock Drops, BroadbandWeek Direct, 11/20/00
OpenTV Launches In Northern Cal.
OpenTV gets the go ahead from
USA Media Group to launch its iTV and other interactive services in USA Media Group's Northern California cable system.
The service, which will offer services to subscribers like t-commerce, on-demand news, weather, entertainment and sports, is scheduled for deployment in the first quarter of next year. The services will launch on existing Motorola digital set-tops. USA Media Group offers basic cable digital and high-speed Internet access to approximately 98,000 homes in six Western states.
Related Stories:
OpenTV And Motorola Sign Deals, BroadbandWeek Direct, 11/14/00
OpenTV Unveils Its Broadband Initiative, BroadbandWeek Direct, 10/12/00
The Latest News From The Western Show:
Bandies Blaze Into Hollywood
You've got to admire an awards show that gives itself an honor.
At the first-ever Bandies Awards recognizing the movers and shakers in the broadband content world, the hostess was computer-generated and the event was liberally sprinkled with hip, impudent skits. Staged at the ornate Mayan Theater in Los Angeles Wednesday, the awards show including a Mayan goddess hostess prone to heckling long-winded winners off stage and a segment where the show producers gave themselves the high honor as best and only broadband awards show.
In between, the show also doled out a dozen awards resembling giant aluminum bean sprouts. Chosen by a raft of television and new media notables, among those honored were OpenTV Inc., best new revenue source for its BookChannel; heavy.com, best broadband video or animation content or service; Canadian Broadcasting Corp. and Rampt, tie for best interface application; Launch, best music service; Mixed Signals Technologies, best new advertising solution; Voxxy Inc., newest new thing; Macromedia, best new content creation tool; Spiderdance, Best enhanced TV implementation; TiVo, most likely killer app; Commerce TV, best new commerce solution; and House of Blues Digital, best vertical.
The grand "best of show" honor was awarded to TiVo - though no one from the company was on hand to receive it.
Bigwigs Captivate Audience
The Western Show cable faithful packed a room to watch the dynamic that happens when some of the bigger names in the industry interact with each other and share their knowledge. USA Networks Chairman Barry Diller, Liberty Media Chairman John Malone, AT&T Broadband President Dan Somers and Insight Communications President Michael Willner traded friendly jibes, inside jokes and talked about cable issues ranging from sharing network pipes to the digital divide to Jerry Springer.
The New Yorker staff writer Ken Auletta moderated the panel, and opened with questions on government intervention in mergers.
"It is not necessarily where the government does or doesn't have the right to intervene - they're going to intervene anyway - the government's job is to make sure no combinations form that would become so powerful an entity that no one can compete with them," said Somers.
"In theory, it's fine for the government to intervene," said Malone. " In practice, there are too many cooks in the kitchen: [the] justice [department], the FCC, the FTC, the states and now Europe. They have to be careful that the reviews are not so complex that commercial transactions become impossible. The government is backward looking. The cooks are not forward looking."
Malone got audience approval when he noted in mergers, no one gets married, as the industry popularly refers to mergers. "In mergers, someone has got to eat somebody. That marriage stuff is bullshit."
The discussion then turned to what cable operators should be most concerned with at present.
Insight Communications president Michael Willner said cable operators who have awakened to the fact that they are competing for every customer is are ahead of the game. Diller concurred with that and noted that cable ops should be most concerned about getting content out there.
"There is no killer app - that is antiquated language," Diller said. "What does exist is intelligent services. In the future purchases will be made through a warm environment. Cable will be the infrastructure for this change."
"A rapid reformation of telephony monopolies are eating long distance and DSL and from a cable perspective. We are racing against that, and the satellite guys who have the benefit of ubiquity on the video side. Cable has to make company-by-company, market-by-market decisions. Cable is a better mousetrap if it can get to the customer first. If not, the marketplace will be heavily divided between two other powers," Malone said.
On the subject of interactivity, Malone said it will sneak up on the industry, just as digital television slowly but steadily collected 40 million viewers.
On the subject of pornography and programming with a violent content such as Jerry Springer, the panel gingerly danced around the fact that content of that sort is a moneymaker, but placing emphasis on dealing individually with each community in which they have franchises and knowing what that community demands in programming.
"We have to make the right choices at the local level," said Michael Willner. "We can't interfere with customer rights to see particular types of programming."
"In a digital world, you can control access to this type of programming, and should understand the attitudes of the communities you live in," said Somers.
The Western Show In Brief
Day 3: Several companies will be showcasing their products and technologies this week at the Western Show in Los Angeles.
BroadbandWeek Direct brings you the latest news and product information each day live from the show. Below is a glimpse of our daily coverage. For complete show happenings go to
www.broadbandweek.com/western/webday3.htm
Samsung Telecommunications America Inc.
showcases its new cable modems at the Western Show. The SCM-210R VoiceRanger cable modem enables both voice and data services and is capable of supporting four voice ports. The modem, which meets both CableLabs PacketCable 1.0 and DOCSIS 1.1 specifications, will begin shipping in mid-2001. The SCM-130U InfoRanger USB modem provides always-on connectivity coupled with plug-and-play capabilities. The SCM-120R InfoRanger is based on the DOCSIS 1.1 standard and supports constant bit rate services.
Interactive digital TV provider ACTV Inc.
inks a deal with Qpass. Under the terms of the agreement, Qpass' Connected Commerce Platform and eWallet transaction services will be integrated with the SpotOn iTV advertising service from ACTV subsidiary Digital ADCO, Inc. The companies will also integrate ACTV's proprietary software-based technologies that serve as the foundation of the SpotOn service with Qpass' digital commerce transactional infrastructure applications. Incorporating the two technologies will enable network operators who deploy SpotOn access to a secure commerce infrastructure to support TV-commerce transactions between integrated online merchants and their customers for the sale of content, goods and services, as well as couponing and other permission-based marketing initiatives, via current generation digital set-top boxes and advanced set-tops.
Media Station Inc.
debuts Smart Driver. The streaming software technology does not require customers to download a streaming media player to their computer hard drives and gives them the option of real-time streaming or digital delivery. That will allow customers who have slower connections the option to download material for later viewing.
Tellabs has launched a new digital service delivery solution to help cable operators rollout high-speed data services and offer next-generation services like VOIP and streaming media at a better price.
TechTV has a content agreement with Yahoo! To provide the latest headline technology news and information to Yahoo! FinanceVision. The company will also distribute content on Yahoo! Shopping Vision, launched this week.
Broadband Briefs:
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BIFS Technologies Corp.'s SWOMI high-speed wireless network will be online and operational in the resort community of Myrtle Beach, South Carolina, tomorrow. The system will be available to visitors at the Caravelle Hotel, the Caravelle Towers, the St. Johns Hotel, the St. Clements Hotel, the Sea Island Resort and the Tropical Shores.
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Intel Corp. unveils its Intel Express 8205 VPN Broadband Router. The device provides security to small office and home office (SOHO) users with "always on" broadband Internet connections.
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IMPSAT Fiber Networks, Inc. lights its broadband data transmission and private telecommunications networks in Brazil, Argentina and Chile for the provision of a broad spectrum of data and voice services.
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OnePath Networks launches an enhanced version of iPath, an integrated two-way distribution system delivering advanced high-speed data communications and digital/analog video services to multiple-dwelling unit (MDU) residential subscribers over a single coaxial cable. The new DOCSIS (Data Over Cable Service Interface Specification)-compliant platform provides high-speed data and video services without requiring a cable modem.
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