|
White Papers & Reports |
||
|
Broadband
Week's Library is an invaluable resource for networking
professionals who build, manage and sell broadband applications
and services. White papers, analyst reports, vendor information
and more can be found at www.bbwlibrary.com. |
|
Thursday, April 11, 2002 |
|
• Ma Bell Proposes Reverse Stock Split • SoftNet Shuts Down Intellicom • Dominion Closes Telergy Deal • BigBand Reaches Digital Milestone • Telecom Worries Send WorldCom Shares Lower • Additional Broadband Bills Under Construction
Ma Bell Proposes Reverse Stock Split AT&T Corp. is looking to immediately raise the value of its shares by implementing a one-for-five reverse stock split. Ma Bell proposed the reverse stock split in a proxy statement filed with the Securities and Exchange Commission yesterday. In the filing, the company said the reverse split would "adjust the trading prices of AT&T common stock following the various transactions to effect AT&T's restructuring plan, including the AT&T Comcast transaction." Without actually increasing the value of anyone's holdings, the reverse stock split is designed to raise the price of AT&T shares fivefold. Analysts are predicting that AT&T's stock price will fall to between $8 and $10 a share after it sells AT&T Broadband to Comcast. In 1999, AT&T shares traded around $60 -- if the stock split is approved AT&T shares would be boosted once again to between $40 and $50. Investors raised their eyebrows at the AT&T proposal -- reverse stock splits are normally used by smaller companies to boost their stock price. At one point in early trading today, the company's shares lost 6 percent of their value, trading at $13.51. The reverse split also would reduce the number of outstanding shares. The company has 3.5 billion outstanding shares, and the split would reduce that number to roughly 700 million. AT&T
also is seeking shareholder approval of a plan to issue a new
class of tracking stock for its consumers-services unit.
Earlier this week Nortel Networks said it was taking precautionary measures and drawing down its bank line, but a last minute agreement with lenders makes that action no longer necessary. The new agreement reduces Nortel's credit line from $1.75 billion to $1.175 billion, and extends the terms of the facility for another 364 days. The telecom gear maker announced its decision to draw down the bank line after three members of its 27-member lending group failed to agree to an amended facility. Late Tuesday, just before the credit facility was due to expire, the lenders unanimous decision to amend the bank line. The company has no immediate needs for the funds, says Nortel President and CEO Frank Dunn. Nortel revised its first-quarter 2002 forecast on Tuesday. The company is projecting a pro forma loss of 14 cents a share, excluding acquisition-related charges, on revenue of $2.9 billion, compared to a loss of 9 cents a share on revenue of $5.75 billion in the first quarter 2001. On average, analysts were expecting a loss of loss of 13 cents on revenue of $3 billion, according to Thomson Financial/First Call. Nortel will report Q1 results on April 18.
SoftNet Systems Inc. shed another asset late Thursday, this time shuttering its Intellicom Communications satellite subsidiary. SoftNet says Intellicom, which used two-way satellite technology to deliver Internet services to schools and businesses, will cease operations "following the disposition of certain assets." According to SoftNet, Intellicom operated earth stations in the U.S., Latin America and in the Caribbean. "The decision to discontinue the operations of Intellicom reflects the Company's continuing focus on maximizing the value of the company's cash and other assets," said Edward Bennett, SoftNet's acting non-executive chairman, in a press release. "We expect a decision on the future direction of the Company shortly, and will then establish a date for any stockholder vote required on that decision promptly thereafter." SoftNet, succumbing to financial strife caused by industry consolidation, shut down its "turn-key" ISP Channel cable-modem service subsidiary at the end of 2000. Cable ISPs such as High Speed Access Corp. and Excite@Home Corp. have since followed suit. -- Jeff Baumgartner, CED Magazine
Dominion Telecom continues to swallow up long-haul networks from bankrupt Telergy. The latest: the acquisition of Telergy's network in upstate New York. A New York Bankruptcy Court approved Dominion Telecom's bid for the long-haul and metro fiber network. The facilities-based broadband service provider will fork over $7.4 million for the assets. In the past two years, Dominion Telecom has purchased Telergy's long-haul fiber between Buffalo, Syracuse, Albany and New York City. Dominion Telecom views the acquisition as an
opportunity to gain entree into Canada with long-haul conduit and
fiber facilities that link Albany, N.Y. with Montreal. The goal by
the end of 2003 is to expand Dominion Telecom's fiber-optic
network from 346,000 fiber miles to more than 400,000 fiber miles.
BigBand Reaches Digital Milestone BigBand Networks Inc. said its Broadband Multimedia-Service Router (BMR) now serves more than 500,000 digital cable subscribers in North America thanks in part to deployment deals with Time Warner Cable, Cox Communications, Blue Ridge Communications and Canadian operator Rogers Cable. BigBand, which is working with other undisclosed MSOs, said it reached that milestone less than six months after the first commercial sale of the BMR system. BigBand's technology is designed to boost bandwidth efficiency by grooming standard-definition television (SDTV) and high-definition TV (HDTV) in the same channel. In addition to HD and SD grooming, the BMR platform also is designed to handle new services such as targeted digital advertising and video-on-demand over standard video and data interfaces such as DVB-ASI, Fast Ethernet and Gigabit Ethernet. BigBand Co-Founder and CEO Amir Eskenazi said the BMR allows cable operators to maximize their bandwidth efficiency for HD and VOD without expensive rebuilds or upgrades. "Cable operators are choosing to leverage existing capital investment and manage it smartly, versus doing it by brute force," he added. Eskenazi declined to say how many BMRs BigBand has deployed, but noted that a single unit used for broadcast services can scale to the "high tens of thousands" of subs that hang off a particular hub on a cable network. Under a VOD scenario, one BRM can support "thousands" of concurrent streams. Blue Ridge, the latest MSO to join BigBand's customer base, plans to deploy the BMR in all of its headends over the next few months in an effort to expand its digital repertoire to include HDTV, VOD and digital ad insertion. Blue Ridge, a division of Pencor Services Inc., serves about 175,000 subs in Northeast Pennsylvania. "The ability to better manage bandwidth enables us to deliver more content and advances television services," said Blue Ridge Assistant General Manager Mark Masenheimer, in a statement. In comparison, Time Warner Cable is using the BMR for broadcast grooming and Cox and Rogers are employing the equipment for enhanced television applications. -- Jeff Baumgartner, CED Magazine
Telecom Worries Send WorldCom Shares Lower
Shares of AT&T's archrival, WorldCom Inc., slumped to a new multi-year low Wednesday on fears that corporate spending on telecom services won't revive soon. WorldCom Group, the stock that represents the company's commercial data and Internet businesses, slid 66 cents, or 12%, to $ 4.77 on Nasdaq, the lowest price since 1992. WorldCom MCI, which tracks the firm's long-distance unit, dropped 60 cents, or 12%, to $4.32, also on Nasdaq. The MCI stock began trading last year. WorldCom's bonds also tumbled in value, traders said. Some analysts also have warned that the firm is likely to cut the dividend it pays on the MCI stock. The annual dividend now is $2.40 a share, which provides a huge annualized yield of 55.5% based on the stock's closing price Wednesday -- that is, if the company continues the dividend at the current rate. Claire Hassett, a spokeswoman for Clinton, Miss.-based WorldCom, declined to comment. WorldCom is cutting network costs to make up for slowing sales. The company last week announced the elimination of 3,700 jobs at the data unit.
Additional Broadband Bills Under
Communications industry can expect additional broadband bills to be introduced in Senate before close of 107th Congress, industry insiders say. Bill by Sen. Breaux (D-La.) is being drafted that sources say will parallel Tauzin- Dingell bill (HR-1542) passed by House earlier this year (CD Feb 28 p1). Breaux will seek to deregulate the provision of high-speed Internet service by Bell companies, providing companion to bill by House Commerce Committee Chmn. Tauzin (R-La.) and ranking minority member Dingell (D-Mich.), sources say. Senate Commerce Committee Chmn. Hollings (D- S.C.), one of most vocal opponents of Bell deregulation, is developing another legislative means of preserving CLEC access to Bell networks as called for in 1996 Telecom Act. Although Breaux's office didn't comment by our deadline, it will be noted he was one of few Commerce Committee members in last month's hearing on HR-1542 to expressly support such an approach to regulatory reform. He had emphasized need to achieve regulatory parity between telcos and cable providers and said "right now you have an unlevel playing field" that Tauzin-Dingell was attempting to address. Breaux had echoed similar deregulatory stance in that hearing taken by Sen. Brownback (R-Kan.), who earlier in this Congress introduced his own version of broadband deregulation. Brownback bill (S-1126) is similar to Tauzin-Dingell in that it either would preserve Bell company investments in new Internet infrastructure or attempt to eliminate CLEC access to Bell networks, depending on perspective of competing industry segments. It wasn't known whether Breaux would incorporate tax credit provisions of Brownback measure or would stick primarily to deregulation of high-speed Internet infrastructure subsequently deployed by Bells as proposed by Tauzin-Dingell. Tauzin's office reiterated its position that Senate support for broadband deregulation was strong, but didn't specifically address legislation that might be in works. However, spokesman Ken Johnson confirmed Tauzin's openness to possible compromise: "There are quite a few senators who share Chairman Tauzin's belief that we need to jump-start competition in the broadband market. Our legislation is important to the American economy, and we're willing to make some compromises to assure its passage." Hollings last year introduced legislation that would take Bell regulation in different direction than Tauzin- Dingell or Brownback bills. Rather than releasing Bells from some of their requirements under Telecom Act as means of sparking broadband competition, Hollings bill would bolster punitive regulatory measures -- including structural separation -- if Bells failed to open their markets to competitors. Details of new Hollings bill haven't been disclosed. Hollings spokesman would neither confirm nor deny our sources' claims that new bill was being drafted. On related broadband matter, industry sources said Farm Bill conferees Tauzin and Dingell were backing away from their opposition to Agriculture Committee's moving broadband loan program measure. Supporters of Rural Utilities Service- administered initiative recently criticized Tauzin and Dingell for attempting to remove telecom loan-related language in conference. Critics charge such move would serve only to improve HR-1542's chances in Senate, and actually would jeopardize broadband deployment in underserved areas. Conference was scheduled to meet late Tues. afternoon, but details on whether it made progress on issue weren't available at our deadline. Johnson reiterated that House leaders were simply asserting rightful committee jurisdiction over telecom issue: "It's my understanding that negotiations have been intense and are making progress, but there are still several unresolved issues related to the rural loan guarantee program... We're optimistic that a compromise can be reached, but as in all negotiations there are no sure things." • airBand Communications inks deals to provide high-speed Internet access service to Jesuit College Preparatory School, The Hockaday School, St. Rita Catholic School, St. Monica Catholic School and St. Anthony's School. • James de Castro, a radio veteran who most recently was CEO of AMFM Radio Group, has been named president of AOL Interactive Services, where he will run the flagship AOL service. De Castro will report to AOL Chief Operating Officer Michael Kelly when he takes up his new post on April 15. • Net2Phone Inc. partners with ISP CalTiger to deliver voice over IP services to consumers, Internet cafes and businesses in India. CalTiger also will sell Net2Phone's services directly to calling centers. • Hoping to boost customer service levels and field productivity, Time Warner Cable says its Columbia, S.C. division will use PointServe's Wireless Dispatch product to foster mobile management of its dispatchers and field-based workforce. PointServe's technology is designed to help dispatchers make better use of their time by automating simple decisions. Wireless Dispatch plugs into Time Warner Cable's CSG billing system and Cingular wireless network, PointServe says. • Ellipsis Digital Systems secures $4.3 million in first round financing from private investors. The broadband chipmaker plans to use the fund to continue developing chips for networking gear. • Qwest Communications International Inc. tells auditor Arthur Andersen LLP that it is no longer needed for nonauditing services, such as consulting. Some of Qwest's accounting practices are the subject of a SEC formal inquiry.
|
|
Broadband Announcements |
Check out Broadband Week's People on the Move page. To find out who's coming and going in the broadband
industry, click
here. |
|
Broadband Week Resource Links |
Broadband Web Directory |
|
Recent BBW Directs |