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Today's report from the staff of Broadband
Week
• Slowdown Transcends Broadband Sectors
• Digital TV Growth On Track?
• Shockwave Captures the Atom
• Broadband Briefs
Slowdown Transcends Broadband Sectors
It's beginning to look a lot like carnage...
The red that's beginning to pervade the broadband service and equipment industries isn't just about Christmas. While the difficulties that some players are having are well-known - among the young
DLECs, for example - there are signs that the overall slowdown affecting the corporate economy also now is starting to take a toll on various broadband sectors.
Upstart cable and DSL provider RCN Corp. is telling the media that it will have to slow its expansion into new markets to help conserve cash, amid a weak public capital market for young companies. While RCN has launched service to about 500,000 broadband customers in such major markets as New York, Chicago and Los Angeles, network buildout has been essentially halted in others such as Denver and Miami, Chairman David McCourt said in a Wall Street Journal interview.
Other signs that the macroeconomic landscape is affecting broadband crop up daily. Competitive DSL provider
Digital Broadband late Thursday announced it would lay off 85 percent of its work force because of an inability to attract enough additional financing to fund its business plan.
And broadband cable telephony infrastructure developer Antec Corp.
today joined giants such as Microsoft
Corp. in forecasting that current quarter and full-year 2001 results would fall short of expectations due to slowing spending by major customers.
"We are confident that our cable telephony business will quickly recover based on our customers' aggressive plans," says Bob
Stanzione, Antec's president and CEO. "However, in the short term, customer spending for infrastructure is less clear."
The ripple effects of slowing corporate spending continue in DSL, too. Accelerated Networks
noted that while it just won a major contract to supply its broadband network gear to Siemens Carrier Networks, another customer - CTC Communications - was canceling its earlier fourth quarter order for $3.6 million due to a change in its purchasing setup.
Digital TV Growth On Track?
Economic slowdown or not, digital television growth should continue apace. That's according to international analyst and consultant
Ovum Group, which projects that digital TV connections worldwide will grow to 350 million by 2006 from roughly 62 million next year. Revenue from so-called t-commerce - essentially online commerce conducted via an interactive digital TV setup instead of via a computer - will produce $45 billion in revenue by 2005. On top of that, Ovum forecasts, will be another $60 billion in annual revenue from other services such as pay-per-view programming; gaming; education and information.
Shockwave Captures the Atom
The consolidation wave passing through the rest of the broadband industry is picking up speed in the streaming entertainment sector too. Macromedia Inc.'s interactive software giant
shockwave.com is merging with cutting-edge Internet movie provider
AtomFilms in an attempt to create a more-rounded business that will survive the current cash-starved environment.
Shockwave has more than 30 million registered users of its Web site, which provides access to games, music and other online applications. AtomFilms has built a huge distribution network to deliver more than 1,500 short films and other content titles to more than 100 customers that include Internet sites, broadband and television services. After the deal closes, expected in early 2001, AtomFilms shareholders will own about 30 percent of the merged entity. "The combined entity has access to a better business model, which includes Web-based advertising and sponsorship and on-line and off-line syndication," the companies say.
Broadband Briefs:
- High bids topped $1.3 billion after today's seventh round of bidding in the Federal Communications Commission's re-auction of personal communications system spectrum.
- Cable Television Laboratories Inc. has concluded its first certification testing round for cable modems designed to the DOCSIS 1.1 standard that supports new services such as voice over IP.
- The California Internet Service Providers Association is expressing concern that America Online and Time Warner will actually live up to the open access promises they made to get merger approval from the federal government.
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