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Wednesday, June 5, 2002 |
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• EarthLink, Gateway make broadband pact • Motorola retools Internet unit • Movies-on-demand becoming a family thing • SCTE's Cable-Tec Expo 2002 in brief • Verizon executive says DSL should cost more • Tech leaders, studios agree on copy protection plan EarthLink, Gateway make broadband pact Gateway Inc. has lassoed another broadband partner. Consumers interested in signing up for EarthLink Inc.'s high-speed Internet service can now mosey on over to their nearest Gateway Country Store. Under the agreement, EarthLink will market its EarthLink High Speed Internet service over Time Warner Cable to consumers in 56 Gateway retail stores in 14 states. As part of the promotion, customers who sign up for the service will receive a free installation and a month of free Internet access. The package, which retails for $41.95 a month, includes 8 e-mail addresses, 10MB of personal Web space and dial-up roaming. At the Gateway stores, customers can preview the service and find out if it is available in their home. The EarthLink broadband service is available to qualified Gateway customers purchasing a new Gateway PC or Gateway YourWare bundle or to those wishing to upgrade their current PC to be broadband capable. Financial terms of the deal were not disclosed. The deal with Gateway, marks the first time EarthLink has entered a retail partnership solely to market its cable-modem service. In December, EarthLink unveiled a partnership with Circuit City to peddle its three-pronged broadband service offering -- cable, DSL and satellite -- throughout the United States. EarthLink has a similar deal with OfficeMax. Gateway has also signed promotional deals with Charter Communications Inc., AT&T Broadband, Comcast Corp. and Adelphia Communications. Related stories:
Motorola retools Internet unit Motorola Inc. is restructuring again. In what has become almost an annual ritual, the electronics giant is shuffling another one of its divisions, this time in an effort to advance the IP industry. The company is splitting its IP Systems Group into three businesses: IP Communications Gateway, IP Systems and Transmission Network Systems. The IP Communications Gateway business will focus its efforts on consumer applications such as wireless home networking and streaming audio. The applications will be based on Motorola's DOCSIS cable modems. Motorola has shipped roughly 8 million cable modems to date. John Burke will run the unit. The IP Systems unit provides new infrastructure technology and service management products. Specifically, the unit will concentrate on supporting broadband video, voice and data applications. Last year, Motorola acquired RiverDelta Networks to enhance its IP network infrastructure product offering. Bruce Swail will lead the IP Systems unit. The Transmission Network Systems business zeros in on optical networking capabilities and telecommunications, including products designed for high-speed fiber-optic networks. Charles Dougherty will run the TNS unit. The IP Systems Group was formed in February 2001, when Motorola split its Broadband Communications Sector unit into two separate entities. The Entertainment Group also was split out from the Broadband Communications Sector unit at that time to focus on the North American digital cable market. Separately, Motorola announced the sale of its Mexico-based set-top box and cable-modem repair business to Manhattan Digital Corp. Financial terms were not disclosed. Manhattan Digital expects to operate the business out
of the existing facility in Matamoros with the same employees.
Movies-on-demand becoming a family thing Right now adult content sites are fueling the video-on-demand-over-IP market, but family-oriented VOD services are gaining ground, one analysis says. The VOD-over-IP market is expected to balloon to a $1.9 billion industry by 2006, according to In-Stat/MDR. The revenue will be generated from subscriptions and pay-per-view. In-Stat predicts that by 2006 the market will support 17 million users. In terms of total subscribers and revenue, adult content Internet VOD services are way ahead of cable TV VOD deployments, but the introduction of more family-oriented VOD services is turning the tide, says Gerry Kaufhold, a principal analyst at In-Stat/MDR. CinemaNow, Intertainer, MovieLink and Movies.com have rolled out or are planning to roll out more family-oriented content. CinemaNow has deployments in North America, Taiwan and Singapore. Intertainer is in the midst of introducing its service in 35 U.S. markets. The other two services plan to launch later this year. At the end of 2002, the VOD market is expected to generate $460 million in revenue, with the majority of that revenue being generated by the adult content sector. By 2004, however, the number of subscribers and PPV users of family-oriented on-demand IP services will out number the users of adult content services. By 2006, this segment is expected to overtake the adult content sites in terms of annual revenue, In-Stat/MDR predicts. Looking at the VOD market from a regional perspective, the North American market is expected to lead the charge with 7.6 million users and $820 million in revenue by 2006. In that same year, Asia will represent 37 percent of the worldwide VOD-over-IP subscribers, producing more than $700 million in revenue. Europe will account for 15 percent of the market's revenue, with the rest of the world bringing up the rear with 4.7 percent. "Several million movie streams per month are currently being served up for free, but as the major movie studios enter the fray, with premium movie titles, pay-per-view and subscription services will gain traction," says Kaufhold.
AM Communications Inc. has snatched up one of its competitors Nex-Link Communications Project Services LLC. AM plans to roll the broadband network installer into its AM Broadband Services Inc. subsidiary. Once the merger is complete, Nex-Link will become a wholly owned subsidiary of AM Broadband Services and will operate under the name AM Nex-Link Communications Inc. To acquire the company, AM will give Nex-Link's principals roughly $4.59 million, which will be dolled out in cash, a promissory note and AM common stock. Specifically, AM will pay $1 million in cash and $1 million in a promissory note with the rest of the payment coming in the form of 7 million restricted shares of AM common stock -- the stock had a market value of $2.59 million at the close of the market on June 3. The transaction is subject to certain closing conditions and is expected to be completed on or before July 1. Separately, AM announced a partnership with Harmonic Inc. to integrate Harmonic's broadband networking systems with the AM Communications Omni2000 HFC Network Management System. As part of the deal, AM has added support for all Harmonic HFC headend and hub-based network transport equipment -- including the PWRLink, MAXLink and METROLink transmission systems -- to the Omni2000 system. The integrated system will give cable operators the
ability to more completely monitor and manage their environment
from the headend to the last mile, says AM. Financial terms were
not disclosed. Related stories:
SCTE's Cable-Tec Expo 2002 in brief A wave of companies will be showcasing their products and technologies this week at SCTE's Cable-Tec Expo 2002 in San Antonio. The CED Magazine staff will bring you the latest news and product information each day live from the show. Below is a glimpse of what's happening at the show, but for complete show show coverage visit www.cedmagazine.com/scte2002/index.htm Liberate, Equator team on set-top That's the thought behind a new collaboration between Liberate Technologies and processor developer Equator Technologies. The two announced that they're working on a new set-top reference platform based on Equator's Tetra Hardware Platform. The new design will integrate the Equator technology with the Liberate TV Platform software, in theory to enable more video-based interactive services, like various forms of on-demand services, electronic program guides, and PVR applications. Equator's Tetra CPU board touts video capabilities through a Broadband
Signal Processor chip at its core, but the platform will run operating
systems and the Liberate TV Platform software as well. That should
mean lower cost through the elimination of additional processors
in the design. Juniper Networks adds VoIP enhancement to its CMTS Based on CableLabs' DOCSIS 1.1 and interim PacketCable specifications, the enhanced G10 CMTS with Juniper Networks' M-series Internet routers allows cable operators to efficiently deliver advanced Internet Protocol (IP) services, including VoIP, through two-way cable plants. The G10 CMTS, paired with M-series Internet routers, offers interoperability with call management servers, media gateways, billing and provisioning systems and multimedia terminal adapters, according to the company. Juniper's M-series, and the recently introduced T-series routers, also support VoIP through intelligent routing and packet classification, robust quality of service (QoS) for low delay and jitter and multiprotocol label switching (MPLS) traffic engineering for congestion-free networks. The company's newest enhancements offer cable operators packet-based voice services with a high level of service availability from the CMTS to the end-user. While the G10 CMTS provides 1:N redundancy for all modules, its new feature set takes IP service reliability to a new level. The G10 CMTS continuously monitors flow, channel and port statistics to ensure the highest link quality and automatically correct impairments. Cedar Point creates telephony partnership program The new ServiceClass Partners Program will combine the attributes of Cedar Point's Safari C3 Media Switching System, an integrated carrier-class telephony product designed exclusively for cable system operators, with the strengths of other equipment manufacturers to create high-quality, standards-compliant voice service offerings. Charter companies participating in the program are: ADC; Alopa; Arris; Broadband Access Networking Group (BANG); C-COR.net (Worldbridge Technical Services); Ceon; Core Networks; DST Innovis; consulting and services company Lambert Communications Group; Motorola; and Terayon. "The voice 'Holy Grail' for the cable industry is a reliable, uncomplicated, cost effective system that easily scales to enable the global rollout of telephony services," said Richard (Rex) Rexroat, senior vice president of engineering of Liberty International. "Cedar Point's logical approach-first by significantly reducing the complexity by integrating all of the voice switching elements into one single chassis, and also by consolidating the expertise necessary to deploy and manage solutions-is a positive step toward that goal." Safari C3 uses a unique set of technologies to combine key high-quality attributes of traditional Class 5 voice switches with the elements in distributed VoIP networks in a single PacketCable-based chassis. The new technology entered initial trials with Comcast Corp. late last year, and will begin field trials this summer with MetroCast Cablevision. MetroCast serves 90,000 homes in Belmont and Rochester, N.H. and Sanford, Maine. SeaChange, Internet Photonics test VOD transport With that in mind, VOD server vendor SeaChange International and optical Ethernet transport provider Internet Photonics announced interoperability testing of the SeaChange VOD System and IP's LightStack MX Gigabit Ethernet transport platform. Combined, the integrated solution showed that cable operators can reduce the cost for a complete GbE connection, which in turn should enable more efficient deployment of VOD servers in a centralized architecture. Current VOD transport alternatives require additional cost and operational expense, while the integrated platform from SeaChange and Internet Photonics can enable 10 Gig optical transport over current digital networks.
Verizon executive says DSL should cost more Copyright 2002 Knight Ridder/Tribune News Service ATLANTA -- The precipitous fall in phone and Internet service prices during the last few years has been so steep it's jeopardizing the financial viability of many telecommunications companies, said Verizon Communications Inc.'s vice chairman and president Tuesday. Low cellular, long-distance and high-speed Internet prices have been a boon for consumers but have eviscerated profit margins and exacerbated the industry's downturn, Lawrence T. Babbio Jr. said. "We need to restore profitability to this industry," Babbio said during a speech at the Supercomm trade show in Atlanta. "Everyone wants every service to every home or business at ever decreasing prices. Digital subscriber lines, which cost about $50 a month today, should conceivably be 40 to 50 percent more expensive, Babbio told reporters at a press conference. He stressed New York-based Verizon wasn't planning to raise rates. "The industry started out too low," he said. "It will take longer to make money in this industry than we thought. I think a lot of companies suffered for it." Most local-phone companies increased DSL prices to $50 a month from $40 a month in early 2001. Comparable cable modem service typically runs about $45 a month. Consumer advocates say those price hikes prove there isn't enough competition for broadband services. It's also why Americans have been slower to sign for high-speed services than Canadians, who on average pay just $30 a month, said Mark Cooper, research director for the Consumer Federation of America. "Clearly if you have market power, you can put prices higher," he said. "Competition drives prices to cost, and that's the most efficient outcome." Babbio said the advent of hundreds of new phone and Internet companies during the late 1990s created a downward spiral of prices. The trend took the greatest toll on long-distance companies, but the cellular industry has also suffered. "In a lot of cases, companies, in order to gain market share and penetration, have lowered prices to the point where they can't make money anymore," he said. Babbio emphasized Verizon, the nation's largest local-phone and wireless company, remains profitable because of its heft and scale. "We are the most efficient game in town," he said. In their search for a way out of their protracted funk, telecommunications companies are re-examining all aspects of their business, including the prices they charge and the services they sell. In recent months, long-distance companies have increased
their per-month fees and certain rates and cellular-phone companies
have scaled back the number of minutes they offer during the day.
Internet access providers such as America Online have also hiked
prices. "Too many competitors in too many fields leads to excessive price erosion," he said. "Wherever you are, we are seeing consolidation, mergers and bankruptcies." Barrett said more extensive deployment of broadband could help spur the industry as well, but policy-makers must give phone companies the green light to invest in new networks by freeing them from certain regulations. That's a key priority for Verizon, which wants Congress
to assure it won't have to share updated DSL networks with competitors
at regulated rates before making substantial new investments.
Tech leaders, studios agree on copy protection plan Copyright 2002 Knight Ridder/Tribune News Service An influential group of technology companies, consumer electronics manufacturers and motion-picture studios recommended a new standard Wednesday to prevent digital television broadcasts from being spread over the Internet. The new technology represents a fresh chapter in Hollywood's escalating battle to curb online piracy. "The MPAA is pleased that what I would call a broad multi-industry consensus has been reached on this," said Jack Valenti, chairman of the Motion Picture Association of America. The Broadcast Protection Discussion Group, a working group formed last November by the same industry organization that set the standard for DVD copy protection, approved standards that make it possible for local TV stations to insert a "digital flag" in over-the-air broadcasts. A new generation of receivers equipped with similar technology would spot the flag _ and prevent users from uploading copyrighted movies or television shows onto Internet file-swapping services. The studios have said they need some form of copy-protection to prevent pristine digital broadcasts of popular shows such as "The Osbournes" from being uploaded to the Internet and distributed infinitely. Studios say the fear of being Napsterized has held up the availability of high-quality content. "You could either think of it as a business imperative for us to protect our business _ or a public-policy matter, which is a unique American institution called local broadcasting," said Andrew G. Setos, technology president for Fox Group and co-committee chair. "That is essentially what we were trying to protect." Privacy groups expressed outrage at the concept, hatched in secret by large corporations -- Intel, Mitsubishi and Fox -- that have a financial interest in the outcome. And they expressed concern that the licensing requirements set up a process that gives Hollywood studios veto control over budding television technologies that have yet to be invented. "The Hollywood studios fought the VCR when the VCR was first invented," said Seth Schoen, technologist for the Electronic Frontier Foundation. "If they had had the legal right to approve or disapprove it, they wouldn't have approved it. They would have said this device is built to infringe."
• Viadux secures $10 million in funding The company also added several new executives, including Vicki Marion as president and CEO, Jack McGuigan as vice president of worldwide sales and Mike Harman as vice president of business development. • Rigases step down from Adelphia Business
board • Fine Point Technologies launches new CyberTRUCK
products CyberTRUCK WatchDog is a client-side firewall designed to enhance and support anti-virus applications. The software prevents a user's personal data from being broadcast back to cyber-intruders, Fine Point says. The product also creates security protocols as defined by each user's habits. The CyberTRUCK Self-Repair Technician tool monitors, detects and repairs common connection-oriented computer issues for individual subscribers. The product is designed to reduce the number of calls customers make to service providers' help desks, says Fine Point. • Convergys inks multi-year billing deal
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