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Thursday, May 9, 2002 |
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• Adelphia puts some assets on the chopping block • Nokia calls for 3G-royalty cap • NTL files reorganization plan • Charter could exit CableLabs • RCN expands bundling with 'Essentials' option • NCTA re-elects Insight's Willner as chairman • Broadband Direct news briefs Adelphia puts some assets on the chopping block Beleaguered Adelphia Communications Corp. is making a move to try and improve its financial situation - the company is soliciting bids for cable systems that serve half its subscriber base. The systems that are up for sale serve roughly 2.7 million subscribers. The specific systems being put on the block include systems in Southern California (1.2 million subscribers), Florida (750,000), Virginia (575,000) and the Southeast (225,000). Adelphia has decided to put these systems up for sale after receiving informal inquiries for some of the systems. Adelphia says it is ready to solicit formal bids, and will begin distributing information about the systems to potential buyers next week. The company warns, however that it can make no assurances that the solicitation will lead to any sales. If the systems are sold, Adelphia says it will make some headway in reducing its debt and deleveraging its balance sheet. Like so many of its telecom brethren, Adelphia is under the watchful of the Securities and Exchange Commission for some of its accounting practices. Earlier this month, the cabler announced plans to restate financial results for 1999, 2000 and interim financial statements for 2001. At the time of the announcement, CED Broadband Direct reported Adelphia had tentatively concluded that restatement should reflect borrowings and related interest expense under certain co-borrowing arrangements with amounts payable directly or indirectly by certain Rigas family-owned entities. Those borrowings were approximately $1.6 billion as of Dec. 31, 2001; $1.2 billion as of Dec. 31, 2000; and $700 million as of Dec. 31, 1999. The Nasdaq has warned Adelphia it faces a possible delisting for failing to file its 10-K with the SEC.
Nokia calls for 3G-royalty cap Looking to promote widespread deployment of 3G technology, Nokia is calling on the wireless industry to institute a fixed licensing fee for 3G patents. Usually royalties are charged as a percentage of a piece of equipment's sale price. Nokia, which claims to own the most WCDMA patents, is calling on registered WDMA patent holders to limit their cumulative royalty rates for 3G technology to 5 percent, regardless of many patents the equipment includes. Nokia's proposal includes network gear and phones. "In our opinion, this is the level of royalties that encourages greater growth and innovation in the industry," Nokia's senior vice president Dr. JT Bergqvist said in a statement. Other WCDMA patent holders include Qualcomm, Ericsson, Motorola and NTT DoCoMo. Neither Ericsson nor Motorola could be reached for comment before deadline. It is likely, however that the plan could rustle some feathers of the other patent holders, especially for a company like Qualcomm, which holds the majority of key patents in the United States for the network standard CDMA technology.
Well it is official; NTL Inc. has filed its previously announced reorganization plan under the protective blanket of Chapter 11. The reorganization plan is based on an agreement with bondholders to swap $10.6 billion in debt into equity in two reorganized companies - NTL UK and Ireland and NTL Euroco. Bondholders will receive 100 percent equity in NTL UK and Ireland and 86.5 percent equity in NTL Euroco. NTL also has received a commitment from certain bonderholders of up to $500 million in new financing for the NTL UK and Ireland operations. The financing is subject to approval by a U.S. bankruptcy court. According to the filing, Britain's largest cable operator has $16.8 billion in assets and $23.4 billion in debt. NTL's debt has ballooned over the years as the company pushed forward to build cable networks in Europe. None of NTL's operating companies or customers in the United Kingdom, Ireland or Continental Europe will be affected by the bankruptcy proceedings, the company said in a statement. The company assures creditors, suppliers and employees will continue to be paid as usual.
A CableLabs official confirmed Thursday that Charter Communications Inc. notified the R&D consortium on April 4 that the MSO could withdraw its membership in three years. CED sister publication Multichannel News reported the development earlier this morning on its Web site and in its subscription-based daily, Multichannel News Day. If Charter were to pull its CableLabs membership, it wouldn't be an unprecedented event. MSOs such as Cablevision Systems Corp., considered by some a lone wolf in many of its business and technology approaches, withdrew its membership years ago. CableLabs Senior Vice President of Communications Mike Schwartz also confirmed that U.S.-based CableLabs members pay CableLabs monthly dues of 2 cents per subscriber, a fee that has not changed since CableLabs' 1988 inception. CableLabs members outside the U.S. pay a lower fee -- 1 cent per subscriber per month, he said. Charter serves approximately 7 million cable subscribers, putting its monthly nut with CableLabs at about $140,000. Just because Charter gave fair warning in a letter, doesn't mean the company will pull out of CableLabs, Schwartz said, noting that other MSOs have given similar notices, but ended up renewing their memberships. Plus, Charter continues to be involved in the organization's activities, Schwartz said, adding that MSO President and CEO Carl Vogel participated in a CableLabs executive session in New York on April 30. According to Multichannel News, Charter spokesman Dave Anderson downplayed the development, noting: "It's smart in today's business environment to leave your options open." Charter officials could not be reached for further comment by CED Broadband Direct's Thursday deadline. Louisville, Colo.-based CableLabs spearheads industry
specification initiatives, including projects such as DOCSIS,
OpenCable, PacketCable, CableHome and Go2Broadband, among others.
Fixed wireless broadband equipment provider SPEEDCOM Wireless Corp. snags a $1 million secured loan. The company intends to use the funds to accelerate the launch of its SPEEDLAN 9000 products, a line of wireless Ethernet routers. The SPEEDLAN 9000 provides a platform that enables the user to choose between mesh, star, or a point-to-point deployment. The company's division Wave Wireless Networks is slated to begin shipping the SPEEDLAN 9000 on June 7. "(The funding) bridges our working capital needs until we can find and complete a strategic transaction, beneficial to shareholders that brings in substantial equity funding," says Michael McKinney, SPEEDCOM CEO. The funding was achieved through a sale of secured notes - no warrants or other derivative securities were issued. Three unnamed institutional investors made the loan at an interest rate of 15 percent per annum. Following the financing deal, the company is left with roughly $1.1 million in debt.
RCN expands bundling with 'Essentials' option Overbuilder RCN Corp. has unveiled "RCN Essentials," a new family of bundled services designed to play up the company's core offerings and to lure more subscribers. For a flat fee ranging from $85 to $93 per month, the Essentials package is comprised of RCN's basic video package and one set-top, one phone-line with unlimited local calling and high-speed data service with the cable modem included. RCN said it has launched the package in markets such as Boston, New York, Philadelphia, San Francisco, Los Angeles and Washington, D.C. RCN Essentials will help the company "introduce consumers to RCN, and to broaden the appeal of our bundled services to people who aren't current RCN customers," said company Chairman and CEO David McCourt, in a statement. RCN, which serves more than 1 million customers today, said Essentials customers can add more products and features via a la carte rates. The new bundle also complements the company's more
comprehensive voice, video and data ResiLink package, which RCN
calls its "best overall value."
NCTA re-elects Insight's Willner as chairman The National Cable & Telecommunications Association (NCTA) said Wednesday that Insight Communications President and CEO Michael Willner was re-elected for a second term as chairman of NCTA's board of directors. Time Warner Cable Chairman and CEO Glenn Britt was elected vice chairman, and Adelphia Communications CEO and President John Rigas and Comcast Corp. President were re-elected, respectively, as secretary and treasurer. In addition to immediate past Chairman Joseph Collins (Chairman and CEO of AOL Time Warner Interactive Video) and NCTA President and CEO Robert Sachs, NCTA's executive committee will be comprised of: • Decker Anstrom, NCTA added that CommScope Inc. Chairman and CEO Frank Drendel was re-elected to a two-year term as associate director. The following were re-elected to three-year terms as at-large system directors: • Rocco Commisso, The following were also elected or re-elected to two-year terms as at-large programmer directors: • Decker Anstrom, Sjoberg Inc. President and CEO Richard Sjoberg was elected to a two-year term as rural/small system operator director, and Eagle Communications President and CEO Gary Shorman was elected to a two-year term as rural/small system operator committee director.
CED Broadband Direct news briefs: • Expansion prompts SPATIALinfo move The move "will provide needed space for the recent additions made to our staff and customer resources," said company President and COO Greg Foster. SPATIALinfo's worldwide headquarters is located in Melbourne, Australia. • InterDigital posts results • Xbox flies off the shelves in Europe • AOL Time Warner promotes Lynton He will report to AOL Time Warner COO-elect Robert Pittman.
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