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Today's report from the staff of Broadband
Week
• DSL Provider Turmoil Continues
• ISP Channel folds
• Covad Offers A Lifeline
• Broadband Briefs
DSL Provider Turmoil Continues 'Tis not the season to be jolly if you're involved in various aspects of the DSL service provider business. And the latest round of corporate news seems to indicate the current shakeout will continue even longer than - if you can believe it - the presidential election.
Pioneering DSL equipment maker Paradyne Networks Inc.
today announced a top management shakeup and a corporate reorganization will impact fourth quarter and 2001 financial results. Out as CEO is Andrew May, who resigned Friday after holding the post for four years. May, who remains as an advisor and board member, was replaced by president and chief operating officer Sean Belanger. While Largo, Fla.-based Paradyne long has been a market leader in such DSL central office equipment as DSL access multiplexers, the company suffered a surprised third quarter net loss due to dwindling orders from its network service provider customers. Amid its own expectations that these customers no longer will make significant equipment purchases, Paradyne is shifting its organization from a centralized, horizontal structure to individual teams targeting specific initiatives in DSL, service management and technology products. The company also is realigning sales and marketing resources and expanding its international offices.
Paradyne's not alone in the turmoil. Late last week service provider Flashcom
confirmed plans to slash its job rolls by almost 30 percent, mainly among its sales and installer workforce, due to its inability to raise more funding.
And the other shoe dropped at Northpoint Communications, which on Friday sued Baby Bell
Verizon Communciations for up to $1 billion in damages for breaking its deal to merge the companies' DSL businesses - a deal seen as a possible savior for Northpoint.
Liz Fetter, Northpoint's president and CEO, says her company plans to pursue the action to completion to ensure that it gets the full compensation it would have gotten under the merger. Can you say, "let's talk settlement?"
ISP Channel folds
DSL isn't the only sector that's shaking more than the mistletoe headband on the mailroom guy at your office party.
SoftNet Systems Inc. is closing its ISP Channel subsidiary that offered turnkey cable modem systems to independent cable system operators. The termination set to occur for most cable systems on New Year's Eve follows SoftNet's earlier announcement that it would significantly shrink ISP Channel's operations due to business difficulties stemming from the consolidation of the cable industry. Simply put: mergers and acquisitions have left fewer operators as potential customers for ISP Channel.
Competition hasn't helped either. Besides fewer potential customers, ISP Channel faces deep-pocketed companies aimed at the same marketplace, such as the Paul Allen-backed
High Speed Access Corp. Although HSA has seen its stock price hammered over the past year because of concerns about the sector's business potential, the Littleton, Colo.-based company is seeking success by diversifying beyond its original cable-oriented model. "We are increasing our focus on the small and medium-sized businesses in our markets, using both cable modem and DSL connectivity,
and we have enlisted additional resources like Web hosting, Web design and systems integration capabilities," a spokesperson says. "These components have become increasingly important in achieving scale and expanding our revenue stream in the future."
Covad Offers A Lifeline
Troubled DLEC Covad Communications
has launched a program aimed at DSL customers whose ISPs may be failing or otherwise are having problems providing adequate support.
The company knows a thing or two about failing ISPs: it's latest earnings suffered a multimillion-dollar revenue shortfall due to problems in collecting bills from those very companies. Hence Covad's Safety Net program. The setup essentially helps Covad end-users move as seamlessly as possible to a new ISP or to Covad's own ISP, Covad.net, if they believe they're not getting proper support for their high-speed connectivity.
Interested customers access the program at the Covad Web site. The company said it already has begun the automated process of moving 2,000 business and consumer customers to new ISPs.
Broadband Briefs:
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Is the end near for the $183 billion Time Warner merger with America Online? A variety of news reports say, "yes." Reportedly the Federal Trade Commission at its Thursday session is set to approve the deal, in return for concessions that cover such factors as open access by competing ISPs to Time Warner's high-speed cable networks.
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Is the end near for the $183 billion Time Warner merger with America Online? A variety of news reports say, "yes." Reportedly the Federal Trade Commission at its Thursday session is set to approve the deal, in return for concessions that cover such factors as open access by competing ISPs to Time Warner's high-speed cable networks.
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Analysts expect the Federal Communications Commission to raise in the neighborhood of $15 billion at the re-auction beginning tomorrow of Personal Communications Services spectrum reclaimed from bankrupt license holders.
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Software-on-demand provider Into Networks is branching out with a deal to provide its streaming software solution to Intertainer.tv, a broadband entertainment network serving DSL and cable modem users.
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Agere Systems Inc., the newly renamed microelectronics unit of Lucent Technologies, today filed an IPO aiming to raise up to $100 million from the spinoff of 20 percent of itself from Lucent.
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Winfire today launched its DSL services, including its FreeDSL, in New York, Columbus and Dayton, Ohio, Detroit and St. Louis. The launches bring Winfire's market total to 30.
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Yipes Communications says it will launch its managed optical IP network in Santa Clara, Calif., before year's end, meeting its goal of launching 20 markets this year for the gigabit data service.
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