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Friday, June 21, 2002 |
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• General Bandwidth confirms cuts • EchoStar, StarBand settle spat • Microsoft, Verizon climb into bed • Adelphia Communications shouldn't fade to dark • Wi-Fi said to solve
broadband problem, General Bandwidth confirms cuts Looking to avoid following in the footsteps of two of its competitors, General Bandwidth is cutting a portion of its staff to conserve cash, the company confirmed today. General Bandwidth received an influx of funding in September, and has decided to reduce its staff in an effort to outlast the economic downturn, said Shannon Pleasant, General Bandwidth's director of corporate communications. Affected workers were notified this week, and for the most part, have already cleared out, said Pleasant. Some of the employees will stay on through the summer. Although the company is not releasing specific numbers, one report from a Texas-based newspaper indicated the cuts were as high as 60 percent of the staff. Last week, TollBridge Technologies was forced to cease operations after it failed to secure funding. JetStream closed up shop in April for the same reason. "The money just isn't there," Norm Bergen, director of carrier networks and services for research firm In-Stat/MDR, told Broadband Week. It is no surprise to Bogen that the voice-over-broadband market is suffering. In-Stat/MDR released a report in Aug. 2001 on this market, which concluded that the outlook was "fairly negative." "No major vendor has offered this type of equipment because it is temporary solution. It also is telling that no major equipment vendor had acquired any of these companies," he said. Unlike TollBridge and JetStream, General Bandwidth received a pile of money late in the game, which should hold them for at least 12 months, Bogen said. General Bandwidth believes its cash will last a bit longer than 12 months. Pleasant said the company has enough money in the bank to last three years without other monies coming in. "And, we do have money coming in," she said. In May, General Bandwidth introduced its Converged Service Delivery application, which is designed to enable the delivery of converged voice and data services to small- and medium-sized businesses over existing infrastructure. The application is fueled by the company's G6 Central Office Platform, which aggregates and grooms voice and data traffic originating from voice-over-broadband networks, passive optical networks and next-generation digital loop carriers. The G6's ability to act as the voice gateway and the aggregator eliminates the need for additional switching and routing equipment, enabling more efficient utilization of the service provider's transport network, according to the company. The G6 platform has been deployed in Atlanta, Boston, Chicago, Cleveland, Dallas, Detroit, Houston, Minneapolis, Los Angeles, Miami, New York, Philadelphia, San Francisco, Seattle and Washington, D.C. General Bandwidth is working to enhance its product to make it a true VoIP gateway, said Bogen. "We are confident that the telecom
market will turn around, but we no longer think it will happen in
the next three to six month," said Pleasant. "Fortunately
we have enough money in the bank." Related stories:
EchoStar, StarBand settle spat A month after David decided to take on Goliath, StarBand Communications Inc. is claiming victory in its lawsuit with EchoStar Communications Corp. On May 24, StarBand filed the lawsuit against EchoStar, claiming "EchoStar has not forwarded any of the millions of dollars in fees it has collected and is collecting as its billing agent." The marketing agreement between the two companies was terminated in February. As part of the settlement, which requires approval from the Bankruptcy Court, EchoStar has agreed to pay $710,000 and surrender its voting power in StarBand. StarBand has agreed not to make any negative EchoStar comments in public. The two-way broadband satellite provider also agreed not to seek further legal action against EchoStar. At the end of May, StarBand filed for Chapter 11 bankruptcy protection from its creditors. At the time of the filing, StarBand blamed EchoStar for its bankruptcy filing, but EchoStar denied responsibility. Related stories:
Microsoft, Verizon climb into bed together Look out America Online, Microsoft Corp. is moving full-speed ahead with its broadband agenda. The latest: the software giant has forged a DSL partnership with Verizon Communications. The co-branded service, dubbed "Verizon Online with MSN," will be available to all MSN Broadband customers and Verizon Online DSL customers in the Verizon Online DSL service area. The service is slated to roll out early next year. In addition to a high-speed Internet connection, subscribers will be privy to "unique features" from Microsoft. Subscribers also will have access to MSN content, instant messenger and Hotmail. The companies did not provide details of what the "unique features" might be, but said they would be part of the MSN 8.0 package when it is released. Financial terms of the deal were not disclosed, but the companies said they plan to share revenue. MSN Broadband is available in 70 markets nationwide. The partnership builds on a deal Microsoft
recently struck with Verizon Wireless. The companies plan to jointly
develop and market wireless data services. The service, dubbed "VZW
with MSN," offers Verizon Wireless customers who have Web-enabled
phones to access Microsoft services, including MSN Messenger, Microsoft
.Net alerts and Hotmail. Microsoft has existing broadband partnerships
with Qwest Communications International Inc. and Charter Communications
Inc. It also has stakes in Comcast and AT&T. Related stories:
Terayon Communications Systems Inc.'s shares were down more than 40 percent in early trading today, following news that the company more than halved its second-quarter outlook. The broadband networking gear provider slashed its Q2 revenue outlook to $21 million and $30 million, down from an earlier forecast of as much as $60 million. Terayon expects to post a loss of between 38 cents and 43 cents a share. On average, analysts were expecting a loss of 26 cents a share, according to Thomson Financial/First Call. The drastic change in the forecast was fueled by reduced customer spending and price cuts for Terayon equipment. Terayon's new CMTS was not among the equipment to receive DOCSIS 1.1 certification yesterday. The company said it is focusing its efforts on developing equipment that is DOCSIS 2.0 based. During a conference call this morning, the company said it had already received orders from three of the five largest MSO for its DOCSIS 2.0 products. It remains unclear whether those orders will be processed to have an affect on Terayon's second quarter results. The Nasdaq halted trading of Terayon shares in the afternoon yesterday, in anticipation of the selloff that would follow Terayon's news. As of 12:50 p.m. today, the shares had dipped to a new 52-week low of 92 cents. Related story:
Adelphia Communications shouldn't fade to dark Copyright 2002 Knight Ridder/Tribune Business News By Jack Katzanek Communities served by Adelphia Communications Corp. probably won't have any service disruptions if the cable company is forced to declare bankruptcy, an attorney said Thursday. Representatives of several dozen Southern California areas served by Adelphia were at the Ontario Convention Center to discuss hypothetical situations if the nation's sixth-largest cable operator went bankrupt. Adelphia serves more than 20 Inland Southern California cities and several unincorporated areas, many of which are wondering if televisions will revert to static if the Coudersport, Pa.,-based firm was insolvent. Several are owed as much as $100,000 in delinquent franchise fee payments from the company. At a meeting of the California and Nevada chapter of the National Association of Telecommunications Officers and Advisers Thursday, a panel of lawyers with bankruptcy and cable TV expertise discussed what might happen if worst-case scenarios come to play. Kevin Randolph, an attorney for the Riverside-based firm Best Best & Krieger, said the general opinion is not if Adelphia will declare bankruptcy but when. But Randolph said it would most likely be a Chapter 11 filing, which would allow the firm to continue while it reorganized. "We don't believe it would affect them in a way that it would make them go dark," Randolph said. "The basis of Chapter 11 is to let a business continue to operate. Generally, the panel said Adelphia would do everything it needed to stay on the air." Randolph, who has negotiated cable agreements for several cities, including Yucaipa and Ontario, said Adelphia has been forced to stop working on some system upgrades, including one in Yucaipa. Also, negotiations to renew some franchise agreements have stopped in some areas. "Also, Adelphia is missing some franchise payments. Some are getting paid, but late," Randolph said. "It's sporadic." The legal briefing was filled with uncertainties. Angela Rushen, media and communications administrator for Moreno Valley, said she was worried about Adelphia's future. Following Thursday's meeting, she said she's still worried. "Some of our questions were answered, and for some we just don't know," Rushen said. "We won't know until it happens. The underlying feeling is that bankruptcy is imminent, but there's too much speculation." The meeting gave government officials a chance to look at their options, said Lori Panzino, division chief for franchise programming for San Bernardino County. Four unincorporated areas of the county have Adelphia systems. "Our main goal is to keep the systems running for the citizens," Panzino said. "I think we'll keep the lights on." Related story:
Wi-Fi said to solve broadband problem, Copyright 2002 Warren Publishing, Inc. A former federal regulator said during an Internet conference Thursday that wireless LAN technology, or Wi-Fi, could solve broadband last-mile problems and lead to communications "nirvana," but only if the federal government didn't block its growth. Former FCC Chmn. Reed Hundt told Internet Society's INet 2002 that the use of unlicensed spectrum to wirelessly extend broadband connections could lead to ubiquitous Internet interconnection unless "the government steps in and by accident, with indifference or intent, acts to kill Wi-Fi." Hundt acknowledged the current FCC chairman had said he supported Wi- Fi's deployment, but noted that policymakers couldn't always back up their positions and "Michael's (Powell) got to get the votes." Meanwhile, Earthlink's founder discussed his new project, Boingo Wireless, that seeks to bring together various operators of Wi-Fi "hot spots" to allow users continuous coverage with technology that has a propagation range of about 300 feet. Wi-Fi, he said, is "fundamentally underhyped as the next chapter of the Internet." Both Hundt and Boingo CEO Sky Dayton drew distinctions between Wi-Fi, which they said is here now and growing at a phenomenal rate, and 3G wireless Internet service promised by wireless phone providers. They said those carriers had spent billions on spectrum and specialized equipment from relatively few vendors, while the device size of a paperback book that created wireless LAN hot spot cost less than $200, and a wireless LAN card for laptop or PDA (personal digital assistant) cost less than $100. Transmission cost is several times cheaper via Wi-Fi and the gap is growing daily, Dayton said: "It has a price per bit that no other technology could touch." Hundt, now a consultant with McKinsey & Co., predicted that by the end of 2005 cellular would be carrying 17 percent less data traffic than it otherwise would due to Wi-Fi and the ubiquity of Wi-Fi would increase the total wireless data pie 19 percent. "The total pie will be bigger and the slice for cellular will be smaller," he said, and the only thing that could thwart that prediction would be government regulation stifling Wi-Fi. Cellular carriers presumably would be resistant to Wi-Fi, he said, given their financial commitment to 3G on purchased spectrum, but he cited other concerned parties as well. "There is not a more aggressive group in America" in lobbying than ham radio operators, Hundt said, and they and manufacturers of cordless phones, microwave ovens and others are complaining to the FCC about Wi-Fi's use of the same unregulated spectrum. One pitch made by Wi-Fi opponents, Hundt said, is that the FCC has an obligation to require minimum quality-of-service (QoS) standards, which he said would kill entrepreneurship because no start-up could hope to match an incumbent on that standard. "Once you get in the stalking horse of quality of service, you allow for the stifling of innovation." Dayton said that regardless of regulators, Wi-Fi "has gotten an incredible escape velocity. It's almost an industry at this point. It will be in a year." He left Earthlink two years ago looking for the next big thing, and found it in Wi-Fi, he said. With numerous manufacturers and a unified transmission standard, he said equipment costs would continue to plummet and it wouldn't be long before hotels, restaurants, retail establishments and public places were covered by Wi-Fi. He said policy-makers needed to recognize fact that "Wi-Fi has the potential to be the last 300 feet of the Internet." Dayton conducted a live test during his presentation and detected four separate Wi-Fi networks "hot" in Arlington County, Va., Crystal Gateway Marriott's main conference room, and connected to one seamlessly. At least one journalist in the room was using one of the Wi-Fi connections to file in real time to his newspaper's Web site. Hundt described what he saw as broadband "nirvana." In that scenario, the federal government would subsidize the deployment of fiber across the country and it would be interconnected with Wi-Fi. On those two platforms carriers would be free to compete, a model similar to that of S. Korea, a nation with the highest broadband penetration rate. That country hasn't incorporated wireless into its formula, but Hundt said that "in Korea everybody lives in the same apartment building in Seoul." As for concerns about security, Dayton said "that's quickly becoming a nonissue" as companies such as his incorporate encryption and virtual private networks (VPNs). Dayton did share Hundt's concerns about entrenched interests opposing Wi-Fi: "This obviously is running up against companies that have spent a lot." But he said that with Wi-Fi's inherent distance disadvantage, it could be teamed with cellular networks for true Internet ubiquity: "It is a platform that empires will be built on."
• Shaw launches VOD nCUBE is providing the services for this VOD launch. • Optical Solutions wins FTTH contract The initial deployment will feature Optical Solutions' FiberPath 440 product, which is designed for businesses and multiple dwelling units. There are plans to expand the reach to residential customers in the area in the future. Financial terms were not disclosed. • NACE promotes Davies
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