Broadband Week Direct

Today's report from Web Editor Susan Rush

• HarvardNet: DSL Out, Web Hosting In
• AT&T Broadband Crosses Finish Line
• Corning Ups Fiber Capacity
• Broadband Users Like To Shop
• Motorola Cuts Earnings Estimates
• Broadband Briefs

HarvardNet: DSL Out, Web Hosting In

Market pressures force HarvardNet to get out of the DSL market, a move that leaves 280 employees jobless. Staying afloat in the DSL business is proving more difficult than most companies imagined, and HarvardNet is not the only company being hit. Last week, DSL.net Inc. announced plans to cut its workforce by 28 percent, and Covad Communications Group Inc. made a similar move, cutting its staff by 13 percent in an effort to reduce operating costs.

"The DSL business is very capital intensive and the recent dramatic downturn in the financial markets makes it difficult to continue offering DSL services," says Mark Washburn, president and CEO of HarvardNet. The reduction of its workforce by almost 50 percent and the end of its DSL business enables the company to reduce operating expenses and focus its resources on "the most promising side of our business: Web content hosting and managed services," continues Washburn.

Earlier this month, HarvardNet announced plans to expand its hosting offerings to include managed firewall services; load balancing for bandwidth and Web traffic management; and managed storage services.

Related Stories:
DSL.net Slashes Jobs, BroadbandWeek Direct, 12/1/00
Covad Cuts Staff By 13%, BroadbandWeek Direct, 11/28/00
LINK tabs HarvardNet, BroadbandWeek Direct, 11/7/00

AT&T Broadband Crosses Finish Line

GOAL! AT&T Broadband secured its 500,000th telephony subscriber, meeting its yearlong goal a few weeks ahead of schedule.

By late October the company had signed up 400,000 subscribers, and was confident it could reach 500,000 by year's end. Forty-two days and 100,000 new customers later, AT&T now has half-million customers receiving telephone service over its digital broadband cable systems. "Customers are responding well when given a high-quality, feature-rich, local-phone option," says Dan Somers, AT&T Broadband's president and chief executive.

AT&T Broadband provides television entertainment services to more than 16 million customers.

Related Stories:
Moving Out: AT&T Broadband Faces Life On Its Own, Broadband Week, 12/00
AT&T Broadband Passes The 400,000 Subscriber Mark, BroadbandWeek Direct, 10/27/00

Corning Ups Fiber Capacity

The future looks bright for fiber manufacturers. Corning Inc. looks to boost its optical fiber manufacturing by at least 25 percent a year through 2004. The company believes a $450 million investment to expand its Concord, Mass. facility will help make this dream a reality.

Corning's board has also approved advanced funding for a new manufacturing facility that will be located in a yet-to-be-determined U.S. city. The company will break ground on the new facility in the first half of next year. Construction of the Concord facility expansion is expected to begin immediately, with plans to boost capacity at the plant again in 2003 and 2004.

This year has been one of expansion for Corning. he company announced a plan to invest $750 million to expand two North Carolina plants and one Australia plant in February. That announcement was followed by a $50 million upgrade plan of its North Wales plant in September.

Corning's stock was trading at $69 a share during the early morning hours.

Related Stories:
Corning Forks Over $3.6B For Rival Pirelli, Broadband Week Direct, 9/27/00
Corning Buffs Up Fiber, BroadbandWeek Direct, 8/24/00

Broadband Users Like To Shop

High-speed connections fuel online purchases, according to an Excite@Home usage study. The broadband service provider surveyed almost 3,000 of its subscribers and found that 73 percent of those with broadband connections regularly shop online, and that 65 percent of those users had purchased products online within the past month.

Big-ticket items, such as computer equipment, electronics and software are more likely to be purchased by those with broadband connections, compared to a dial-up one -- 46 percent to 29 percent respectively. Auction sites like eBay and Amazon.com are also pulling more business from those with high-speed connections: 25 percent of broadband users participate in online auctions, compared to 15 percent of narrowband users.

"Broadband is dramatically influencing consumers' browsing and buying habits," says Byron Smith, executive vice president, consumer broadband services and chief marketing officer for Excite@Home.

Related Stories:
Broadband Shopping, Broadband Week Direct, 10/17/00
Broadband Redefines The 'Net, Broadband Week Direct, 10/4/00

Motorola Cuts Q4 Estimates

Motorola Inc. cut its fourth quarter sales estimates to $10 billion and its earnings to 15 cents a share, compared to the $10.5 billion and 27 cents a share previously forecast. The No. 2 cellular phone maker's shares were down 69 cents to $17.13 this morning, following the profit-warning announcement.

Despite the lowered earnings predictions, Robert Growney, Motorola's president and CEO, remains confident about the long-term growth potential of the broadband, Internet and wireless markets.

Broadband Briefs:

Nokia signs a contract to supply DSL broadband IP access network equipment to Philippines Long Distance Telephone Company in the Philippines.
Aerzone Corp., a SoftNet Systems Inc. subsidiary, wins a contract to offer its broadband wireless services in U.S. airports, including Dallas/Fort Worth, Denver, San Francisco and Jacksonville, Fla.
TeleCruz Technology Inc. teams with Zenith Electronics Corp. to develop interactive television sets. TeleCruz's interactive TV platform will be integrated with Zenith's multimedia TV platform to produce interactive TV sets that offer consumers e-mail, chat, Internet browsing and shopping without the need for a set-top box. The duo plans to debut the new sets at the Consumer Electronics Show in Las Vegas on January 2, 2001.
Nortel Networks passes Ciena as the European market leader in wavelength division multiplexing, according to a new study from RHK. The report also found no evidence of slowdown in the optical communications market.
Rhythms NetConnections Inc. reports third quarter revenue of $17.2 million. At the end of the quarter, the DSL provider has 47,000 DSL lines, with 35 percent of those lines being used by consumers, and 65 percent being used by businesses.
Kanematsu Computer Systems Ltd. inks an agreement to distribute RC Networks Inc.'s next-generation DSL RC8000Plus line of products in the Japanese market.
2netFX and Motorola plan to demonstrate multicast HDTV over IP streaming from 10 to 36 Mbps at the Streaming Media West show next week in California.
New Edge Networks expands its DSL service offerings in Wisconsin. The newly completed installation will enable 75 percent of homes and businesses in Green Bay and De Pere to subscribe to the service.