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Today's report from the staff of Broadband
Week
• FTC Approves Time-AOL Combo With Conditions
• Corning, Nortel Outlooks Are Steady
• Streaming Media West Update
• Broadband Subscriber Modem Markets Gyrate in Q3
• Broadband Briefs
FTC Approves Time-AOL Combo With Conditions Today's unanimous
Federal Trade Commission approval of the $108 billion merger of
Time Warner and America Online
may not be a big surprise. But the sweeping concessions the FTC is requiring under its merger consent decree may raise some eyebrows.
The companies long have indicated they would make concessions in the area of open access to the TW cable networks by rival Internet service providers, if that's what it would take to get their deal endorsed. Today the FTC unveiled just how far the merged company will have to go.
Besides opening its cable systems up to competing broadband ISPs, AOL Time Warner must market and offer AOL's digital subscriber line services - offered via major RBOCs - in TW's cable markets at the same pricing as in markets where TW-affiliated cable modem service is not available.
The companies also were prohibited from interfering with content that passes along the cable bandwidth contracted for by competitive ISPs; from interfering with competitive interactive TV providers' abilities to interact with signals, triggers or content that AOL Time Warner has agreed to carry; and from entering into exclusive agreements with other cable companies regarding broadband Internet access or interactive TV.
"This order is intended to ensure that this new medium, characterized by openness, diversity and freedom, will not be closed down as a result of this merger," FTC chairman Robert Pitofsky said in a statement released after the vote.
As expected, the FTC is requiring the companies to give access on the TW cable networks to at least one non-affiliated ISP before AOL can offer cable modem service in a given market. The commission took it a step further too, requiring that two more competing ISPs be added within 90 days and that AOL Time Warner negotiate in good faith with others after that.
The provisions may not be too onerous to meet: Time Warner already was heading down the open access road via a multiple ISP trial in Columbus, Ohio, and a new deal with
Earthlink for access to its cable networks. But the ramifications for other service providers may take a while to shake out. Immediately after the ruling
Qwest Communications International issued a statement calling on AT&T Broadband to grant interconnection with its cable networks in Colorado and Washington, and indicated it would ask the same of AOL Time Warner.
Corning, Nortel Outlooks Are Steady
Stock market gyrations to the contrary, major broadband network infrastructure providers are weighing in with relatively optimistic forecasts for their business in the coming year.
Corning Inc. CEO John Loose at the company's annual investor conference today reaffirmed expectations that it would hit the high end of its fourth quarter and full year earnings estimate range. Loose also reiterated Corning's guidance for 2001, stressing that all of its high-growth businesses such as optical fiber manufacturing and optical amplifier sales were booming. In the coming year Corning expects fiber volume growth of 20 percent and a doubling of revenue from
photonics.
Nortel Networks
also confirmed its earnings guidance for the current quarter and next year. Like most other major telecom gear makers, Nortel's stock has been pounded in recent months due to speculation that telecom network buildouts will slow from their torrid pace. Nortel president and CEO John Roth says the company remains confident in its earlier earnings guidance to Wall Street, with overall earnings per share from operations next year growing in the 30 percent to 35 percent range compared to overall market growth of about 20 percent.
Streaming Media West Update
Jerry Yang thinks broadband is becoming the broad view on the Internet.
Broadband Week associate editor Karen Brown reports that the founder and CEO of Yahoo! Inc. told a crowd at the Streaming Media West show Wednesday that broadband is no longer a niche audience on the Internet.
"Over the last two or three years, we can safely say that broadband is here today," Yang says. "It is here now. The consumers are getting more sophisticated, people are looking at more demand for voice over IP, people are looking at about just about every Internet application with some sort of animation, some sort of streaming, some sort of audio, some sort of video. And what's more important is that I think consumers don't think it's something that is hard to do or hard to get."
For Yahoo!, that means paying attention to an increasingly high-speed audience.
"Clearly, there are tens of millions of people that are getting on and being able to be stream enabled or broadband enabled content, and we really look at those audiences from a content and service perspective as our target audience," he says.
That audience is more demanding, Yang says. In particular, they are no longer impressed with a simple streaming media item on a Web page.
"It was pretty cool for me to put out a stream a couple of years ago," he notes. "Now, putting out a stream is not enough. We need to have a key factor, we need to have a system which we can allow to be interactive."
Broadband Subscriber Modem Markets Gyrate in Q3
Cable modems picked up the pace in the third quarter, taking advantage of DSL slowdowns stemming from such factors as the Verizon Communications strike. That's the finding of the latest study by
Cahners In-Stat Group, which is owned by the same parent as
Broadband Week.
Cahners In-Stat says ADSL modem shipments topped 1.85 million units in the third quarter, a growth rate of 35 percent over the previous three months but down from the 46 percent quarter-to-quarter growth rate in Q2.
Cable modems, on the other hand, rose 58 percent to 2.79 million units in Q3, compared with a 39 percent growth rate in Q2.
Broadband Briefs:
- High bids rose to about $835 million in today's round of the Federal Communications Commission's re-auction of wireless spectrum. That topped the previous round's high bids of about $667 million.
- T-Networks, a developer of optical network solutions for 40 gigabits per second and higher data speeds, says it has raised $29 million in its latest private financing round.
- Ciena Corp. today announced a strategy for using its MultiWave CoreDirector intelligent optical core switch as the foundation for an integrated switch using both all-optical or opto-electronic technologies.
- Broadband wireless networks developer BeamReach Networks today announced its plans for offering service providers systems operating in frequencies below 6 GHz.
- InterNAP Network Services and customer Akamai Technologies are increasing their connectivity commitments to each other, with InterNAP becoming an Akamai value-added reseller and Akamai collocating its content delivery servers at InterNAP service points.
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