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Monday, March 11, 2002 |
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• Qwest To Hand Over Documents • DSL Market Needs Applications, Fed Support • Abortive Hostage Taking May Have Targeted Philips • WINfirst Wants To Renegotiate Seattle Contract • Core Founder Resigns, Company Cuts Jobs • Sony Calls On Caraeff For Wireless • Japan's No. 2 Telecom To Start 3G Service Next Month
Qwest Communications International has been asked informally to hand over documents to the Securities and Exchange Commission related to its revenue reporting. The Denver-based RBOC will cooperate and hand over the documents from 2000 and 2001 that deal with how it lists and accounts for sales of optical capacity assets; sales of equipment to customers Qwest bought Internet services from or contributed equity financing, particularly KMC Qwest and Calpoint; and Qwest Dex's production schedules and changes to its directories. The SEC has told Qwest the inquiry is not an indication it believes a violation off the law has occurred, according to a statement from Qwest. Similar accounting questions, particularly regarding sales revenue, have arisen in the SEC's investigation of bankrupt carrier Global Crossing. The Baby Bell is standing by its accounting practices, noting it does not expect to make any sales of optical capacity in 2002 and beyond, nor does it plan to sell equipment in 2002. Meanwhile, Qwest officials say they will likely complete the $1.5 billion in 10-year senior note offering for the company's Qwest Corp. subsidiary tomorrow. That additional financing comes as Qwest negotiates with its lender banks to restructure its $4 billion line of credit to avoid default. Troubles also continue for fellow next-generation network provider XO Communications Inc., which rejected a bondholders' restructuring plan over the weekend. The plan, which proposed that bondholders invest $600 million in return for 100 percent equity once the company completes Chapter 11 reorganization, rivals Reston, Va.-based XO's own plan. That plan calls for Forstmann Little &Co. and Telefonos de Mexico S.A de CV to invest $400 million each for 88 percent of the equity after reorganization
DSL Market Needs Applications, Fed Support
Despite a year of market punishment, the digital subscriber line market in the United States still shows promise, according to a report issued by analyst firm Ovum. The California based firm estimates that an expanding list of applications for DSL will push the market to more than 200 million lines globally 2007. But senior analyst Mark Main warns DSL providers will never grab any significant market share unless they go beyond the basic high-speed pitch. "The consumer mass market and the SME (small/medium enterprise) sector have, to-date, been poorly supplied with content and value-added network services, respectively," he said. "Consumers are now starting to show interested in on-demand and interactive content, and SMEs now need support for other networked business applications that will increase productivity and reduce costs. These are the next-generation services." The study noted the strong cable and satellite competitors that have fielded bundled offerings have proved particularly troublesome to DSL telcos. Regulators, too, should take on a greater role in encouraging the DSL market, according to the report. "Incentives are needed to drive competition and especially to encourage other operators to move into this market," Main noted "The up-front costs are high, and market entry is a risky decision to make. Left by themselves, incumbents will throttle DSL growth, not foster it."
Abortive Hostage Taking May Have Targeted Philips
A gunman with a grudge against the quality of widescreen TV held hostages in a eight-hour standoff in Amsterdam's tallest building. The man, who reportedly is dead from a self-inflicted wound, could have been targeting Phillips Electronics. Philips had had temporary headquarters in the location at Rembrandt Tower, but moved to nearby Breitner Center six months ago. "We find it terrible that an action apparently
meant against Philips, has impacted our neighbors - neighbors
with whom we shared a building until six months ago," says
Philips President and CEO Gerard Kleisterlee, in a statement.
" It is a great relief that the situation was The gunman released a four-page statement protesting the "arrogant manipulation by the vendors of widescreen television" and forced hostages to post anti-corporate messages on the windows, CNN reports.
Verizon Inc. co-CEO Ivan Seidenberg will be going it alone sooner than expected. His co-CEO, Charles Lee, will step down as of April 1, three months ahead of the schedule set during the 2000 merger of Bell Atlantic Corp. and GTE Corp. to form Verizon. Formerly the CEO of GTE, Lee said in a statement that the time was right to hand over the reins to Seidenberg, formerly CEO of Bell Atlantic. Lee came to the company in 1983 after serving a stint as senior vice president for finance at Columbia Pictures. "Our operational results are well ahead of our synergy targets, and Verizon is well positioned for profitable growth in the coming years," Lee said. "Ivan and I have shared a vision in creating this company, and it's time for one CEO to focus on the long-term strategies and day-to-day execution that will take Verizon to the next level. Ivan is that person." Lee will formally retire from Verizon June 30 and become non-executive chairman of the board until June 30, 2004.
WINfirst Wants To Renegotiate Seattle Contract
Denver-based WINfirst is seeking to renegotiate its contract with Seattle, where it's under fire over a promised cable network and for its focus on the Sacramento area. WINfirst reportedly has financial problems leading to the renegotiations. "We'd love to build in Seattle as well as our other franchise cities," President Frank Casazza told The Seattle Times. "But to be really honest, there's a finite amount of capital." WINfirst has lagged on the promised cable network, leaving the city with one provider, AT&T Broadband -- a situation that led the city to sign the contract with WINfirst, the Times says. Last week WINfirst laid off 212 employees, or about half of its workforce in Sacramento, and faces about $1 million in liens from subcontractor Bechtel.
Core Founder Resigns, Company Cuts Jobs
Jeff Campbell, Core Networks founder, president and CEO, resigned March 4, the company reports. The software company also reportedly laid off as many as 23 people. "Jeff made a personal decision to leave the company," says spokeswoman Natalie Oldfield. "I cannot speak for Jeff about his future plans." Oldfield says the decision was entirely Campbell's and not a mutual one, nor did it have anything to do with the company's rightsizing efforts. Core did lay off more workers last week as part of that effort, Oldfield says, but would not confirm how many. The company trimmed 14 jobs of its 70 in October, which Campbell at the time credited to a slowing economy. Campbell, 26, last year was designated entrepreneur of the year for Nova Scotia from the Business Development Bank of Canada, and the Halifax-based company placed among Canada's top 100 employers in a Mediacorp Canada Inc. survey last year. In October, it cut 14 of its 70 jobs, and last week reportedly trimmed up to another 23. Last week, Campbell told the Halifax Herald Ltd. it would be inappropriate for him to reveal the reasons he resigned so suddenly, stating it was between him and the board. Campbell will be replaced by Neil Baimel, co-founder, president and CEO of Syndesis in Toronto, Oldfield says. She could not say what plans Baimel may have for the rightsizing or company's future. Core credits Campbell with " bringing Core Networks to where it is today," it says in a statement. " Jeff made a personal decision to leave the company. We wish Jeff well in his future endeavors." Campbell was a vocal proponent of standards development, but would issue a caveat. "I think technologically, it's good," he told BroadbandWeek Direct about CableLabs' mid-January release of DOCSIS 2.0 specs. But, he cautioned, building an actual business around the technology might take longer. Software and hardware vendors, in the midst of consolidations, might be taking a close look at deployment timelines and whether or not to invest in 2.0, Campbell said then. "The timeline is longer than its proponents are espousing."
Sony Calls On Caraeff For Wireless
Sony Pictures Digital Entertainment has tapped Rio Caraeff to serve as veep of the company's wireless efforts. Caraeff becomes the first person to officially head up the studio's wireless entertainment services initiative within the company's recently created Digital Networks Division. He will oversee the development and distribution of new mobile applications, such as games based around Sony's film and television properties, for current and emerging wireless technologies and platforms. Projects will be distributed via partnerships with wireless carriers, device manufacturers and infrastructure providers. In addition, the Wireless Services group will work with SPDE Europe to penetrate the international mobile marketplace and with inhouse gaming group Sony Online Entertainment to extend its game library, which includes "EverQuest," "Wheel of Fortune" and "Jeopardy!," to the wireless arena. First titles to come out of the group are expected to be "Charlie's Angels Mobile Adventure" and "Men in Black 2: Alien Control" for Sony Ericsson's Java-enabled Z700 color cell phone, which will be available throughout Europe and Asia this year. Other content offerings will range from simple graphics for wallpaper and film and television logos to more interactive and robust services such as messaging services and film trailers. Caraeff reports to Tim Chambers, senior vice president of SPDE's Advanced Platforms group. "The global wireless marketplace is a vibrant arena," said Yair Landau, prexy of Sony Pictures Digital Entertainment. "We recognize value in wireless services as another way to engage and entertain consumers and are looking forward to our audiences having an additional channel to the studio." Prior to joining SPDE, Caraeff was managing partner and co-founder of Fabric, a media and technology consultancy firm. Before that, he held senior positions in new business development and technology at Sony 550 Digital Media Ventures, Sony Music Entertainment and Capitol Records. Sony Pictures Digital Entertainment oversees Sony Pictures Imageworks, Sony Online Entertainment, the Digital Networks Division (which includes SoapCity and Screenblast) and Spin, which represents the studio's online promotional presence.
Japan's No. 2 Telecom To Start 3G Service Next Month
Japan's second-largest telecommunications operator KDDI Corp. announced Monday that it will launch its third-generation mobile phone service as originally planned on April 1. The announcement allayed concerns that KDDI might delay the service, which puts super-fast Internet access in the hands of mobile phone users, and gave the company's shares a boost in Tokyo trading. KDDI is rolling out the technology to challenge Japan's top mobile service provider, NTT DoCoMo Inc., and stay ahead of up-and-coming rival J-Phone, which has recently been outpacing KDDI in signing up users for its mobile Internet services. KDDI's third-generation or 3G service is based on a different technology than a competing service started in October by NTT DoCoMo, which became the first company in the world to commercialize 3G. Called CDMA 2000 1x, the KDDI service is expected to be used by global mobile operators in 12 nations, including Sprint Corp. in the United States and South Korea's LG Telecom Co. KDDI president Tadashi Onodera said that the company hopes to
ship 7 million 3G handsets by March 2003. The Casio model will have a built-in camera. J-Phone, which is majority owned by Vodafone Group PLC of the United Kingdom, has scored success with mobile phones with built-in cameras. KDDI's shares closed up at 357,000 yen (dlrs 2,800) or 6 percent on the Tokyo Stock Exchange on Monday.
• AT&T Broadband has four days to coax more than 150,000 e-mail subscribers in New England to switch from mediaone.net to attbi.com. The cableco says only 60 percent have switched, a number based on how many people used their account at least once in the last two weeks, the Boston Globe reports. The switch stems from a lawsuit filed by Sioux Falls, S.D.-based Media One Inc. against AT&T and MediaOne Group, which AT&T bought three years ago. Under settlement terms, AT&T has until Friday to switch addresses. ... • Cable-maker Superior Essex will close its Elizabethtown, Ky., copper cable plant and cut 230 jobs. The company, a unit of Superior Telecom, stems from Superior's purchase of Essex International in 1999. The company also cut 15 jobs at its Atlanta offices, citing slow sales. • A new consulting firm is targeting venture-funded startups and established companies in the wireless telecom industry. Coracle Group says it develops and implements media, industry and government relations plans, and provides corporate and technical writing services for its clients. The venture is headed by Judith S. Purcell, a founding editor of RCR Wireless News and Wireless Week magazine, owned by Reed Business Information, which also owns CEDaily. More information at www.coraclegroup.com • ARRIS released its Touchstone Telephony Port, an outdoor embedded, multimedia terminal adapter that lets cable operators offer an all-weather, easy-to-install and maintain network interface unit for IP telephony and high-speed data services, ARRIS says. The product is based on ARRIS' Cornerstone Voice Port technology, an NIU installed in more than 2.6 million telephony lines worldwide. • Yet another interactive television development group has formed, even as the industry struggles to define itself and find deployments. The Interactive Television Council is a collection of companies including Canal Plus Technologies, Inc., Open TV, Liberate Technologies Inc., Concurrent Computer Corp. Microsoft Corp. and TiVo Inc., among others. The group will work under the umbrella of the Information Technology Association of America to promote interactive TV technology and provide a forum to discuss issues. -Karen Brown, Broadband Week • EarthLink Inc. launched its high-speed Internet service to 220,000 homes on Time Warner Cable's El Paso system. The two have linked services on more than 20 systems nationwide since the middle of last year. AOL also launched in the El Paso service area.
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