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Friday, August 2, 2002 |
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• Toshiba supplying Cox with DOCSIS 1.1 modems • AT&T looks to
reassure customers, industry • Study: Q2 a record for DOCSIS modems shipments • SwitchPoint completes IP telephony trial • CableLabs concludes second OCAP interop • Cable vet Ben Duval dead at 71 • JDS to take huge loss on sale of optical unit A lawsuit has been filed against Charter Communications Inc. for alleged misleading accounting practices. The MSO is defending its books, and says its SEC filings paint an accurate picture of its financial condition. The suit, filed in the U.S. District Court for the Central District of California July 31, claims that Charter used "misleading accounting practices that had the effect of misrepresenting its results of operations." Glancy & Binkow LLP has filed the suit on behalf of purchasers of Charter securities between Nov. 9, 1999 and July 17, 2002. The lawsuit is seeking class-action status. "Our financial statements comply with generally accepted accounting principles, in all material respects, and they, and the related SEC filings provide an accurate picture of the company, its financial condition, results of operations and the assumptions underlying them," Charter Senior Vice President of Communications David Andersen said in a statement. Charter hired independent auditor KPMG on April 22 to review its books. In its report, KPMG said it is not aware of any material modifications that should be made to the financial statements it has made, Andersen said. Charter intends to defend itself against the lawsuit. "(We) believe that our financial reports and disclosures will be validated," said Andersen. As of late, the Securities and Exchange Commission has had its eyes peeled for any accounting irregularities at telecom companies. Qwest Communications International Inc. is among the companies that have become the subject of an SEC probe. Former executives from Adelphia Communications Corp. and WorldCom Inc. have been arrested for financial wrongdoings. Both companies have admitted to misreporting several billion dollars in their quarterly financial reports. Related stories:
Toshiba supplying Cox with DOCSIS 1.1 modems
Cox Communications has selected
Toshiba America Information Systems as a “preferred” vendor of cable modems based on the advanced DOCSIS 1.1 specification. Financial terms were not disclosed. Related stories:
AT&T looks to reassure customers, industry in light of WorldCom scandal WorldCom Inc.'s shadow may be big, but even if the communications giant is forced to fold up shop, AT&T Corp. is says its service won't miss a beat. There have been rumblings in the industry about what will happen if WorldCom's backbone network goes dark. And although this is not likely to happen, AT&T is stepping forward to reassure its customers that its service will continue. "It's a myth that Internet traffic is at risk because it depends on any one provider," said Hossein Eslambolchi, AT&T labs president and chief technology officer. "Many of the concerns expressed in recent weeks are overstated, since we believe the level of traffic being carried on WorldCom's network is not as high as has been reported by some sources." AT&T said its network can handle migrating WorldCom customers. The company recently launched an advertising campaign aimed at luring WorldCom customers to AT&T. WorldCom was once heralded at the leader in backbone service, but for some time now enterprises have been using multiple carriers to help avoid network failures. AT&T has been steadily growing its backbone traffic and now expects to surpass WorldCom as the sector leader in a few months, Eslambolchi said. Although AT&T has the capacity and can transition masses of WorldCom customers quickly, the transition will most likely experience a few hiccups. When AT&T migrated Excite@Home customers to its network earlier this year, the transition was made within days, but some customers did experience transition problems. Separately, AT&T announced it has completed the exchange of $7 billion in notes that were privately placed in November. The communications company said its 6.5 percent notes due in 2006, 7.3 percent notes due in 2011 and 8 percent notes due in 2031 were exchanged for notes with identical terms. The exchanged notes, however, are not subject to transfer restrictions that were applicable to the original notes under federal securities laws. AT&T accepted tenders from noteholders equal to roughly 98.5 percent of the total aggregate principal amount of the notes outstanding. Related stories:
Study: Q2 a record for DOCSIS modems shipments
DOCSIS cable modem shipments topped 2.5 million units in the second quarter of 2002, a new quarterly record,
Kinetic Strategies Inc. said in its August report.
SwitchPoint completes IP telephony trial SwitchPoint Networks Inc. has completed its trial of Gemini Voice Solutions Inc.'s Gemini Broadband Voice feature-rich, "any-distance" telephony service over its digital switched data network. The 90-day trial was conducted in SwitchPoint's 1,000+ home research and development network in Springville, Utah. Through customer usage surveys, SwitchPoint found that the service demonstrated roughly a 90 percent service and call quality satisfaction among users. One-third of the customers rated the service better than that of their traditional telephone carrier. SwitchPoint tests technologies for interoperability with its broadband network. "We use our technology as a base line and test to see if technologies are interoperable with it, says Kenneth Granader, a SwitchPoint representative. During the trial, SwitchPoint found that Gemini Voice's hosted service applications and customer premise equipment passed its interoperability tests. The company believes the Gemini Voice solution is a valid service to integrate with its broadband offerings to its network customers. The companies first announced plans to conduct the trial in January. Related story:
CableLabs concludes second OCAP interop
CableLabs said its second OCAP (Open Cable Application Platform) interoperability event on July 22 was a success as fifteen different vendors joined in with “critical pieces” that make up the specification’s puzzle, including hardware platforms, middleware implementations, interactive television applications and development and test tools. Related stories:
Cable vet Ben Duval dead at 71 Ben Duval, a long-time cable industry figure, died at his home in Santa Monica, Calif. on July 25. He was 71. Duval, who termed himself a “peddler deluxe,” operated the B.E. Duval Company, a rep firm and equipment distributor, since the late 1960s. During his tenure at the company, Duval helped several companies make their entry into the cable business. Ben’s son, Glenn, continues to operate the B.E. Duval Company, and remains active in industry activities. Ben also is survived by another son, Charles, of Santa Monica, and a daughter, Michelle Ule, of Santa Rosa, as well as 10 grandchildren. His wife, Jeanette, a San Pedro schoolteacher and partner in Ben’s early business days, preceded him in death.
JDS to take huge loss on sale
of
JDS Uniphase Corp. said yesterday it will sell technology once considered critical in the rush toward next generation fiber-optic networks to France's MEMSCAP for about $9 million (U.S.). That's a fraction of the $565 million paid two years ago by JDS, the world's largest supplier of components and modules that boost the speed and capacity of optical networks. MEMSCAP will pay an additional $5.6 million for JDS's Cronos MEMS unit if it reaches set revenue targets over a 2.5 year period. MEMS, or micro-electromechanical devices, is technology based on tiny silicon structures that can be controlled to switch, add, direct and control light as it travels through fiber-optic networks. It is used in small, high-capacity switches and was expected to play a critical role in all-optical "megaswitches." But sinking demand for telecommunications equipment from phone companies has hurt demand for new tools that move data farther and faster. "We could see a two- to three-year lag here before any of these new technologies work their way into the market," said Max Schuetz, an analyst at Credit Suisse First Boston. Telecom companies, hit by falling prices and a glut in capacity, are only buying equipment to make small additions to capacity, rather than advanced gear for new networks, he said. "JDS decided, fairly wisely, that having 100 people and two semiconductor fabs (plants) down in North Carolina for three years before they really got a return on that investment probably wasn't the best they could do in the current market conditions," said Schuetz, who believes JDS fared well in the deal. "If nothing else, it saves them. There are 100 people working there, so just based on average costs, laying them off and shutting down the facilities could have cost JDS $7 million or $8 million." The sale marks a capitulation for JDS, which said MEMS technology formed a "key strategic resource" for its customers when it bought Cronos Integrated Microsystem Inc. as part of an intense acquisition spree. The sale comes one week after JDS said it would cut more jobs and shutter plants as it reported a fourth-quarter loss of nearly $1 billion and warned that sales would continue to erode. Chief executive Jozef Straus said at the time that his company needed to make "bets about where the technology and where the market is going." It may be harder for JDS to sell further parts of its business, said Schuetz. "The other bits are harder to carve out neatly," he said. Amplification equipment sales may lag for the next two years, but those products would be hard to carve out from JDS's research and development and manufacturing, he added. Under the Cronos deal, MEMSCAP will acquire the unit free of debt, other liabilities, working capital or cash balances, for 10.5 million common shares. MEMSCAP will issue a further 6.5 million shares if revenue targets are met. Under the arrangement, MEMSCAP will be an exclusive supplier to JDS for MEMS chips and other MEMS products for at least three years. JDS said it has committed to initial purchases, but did not specify the volumes. Shares in JDS dropped 28 cents to $2.25 on Nasdaq exchange yesterday and 26 cents to $4.24 (Canadian) on the Toronto Stock Exchange. Related stories:
• Guangdong Telecom selects Alcatel Guangdong Telecom has awarded Alcatel a multi-million-dollar contract to expand its broadband access network capacity. The contract, won through Alcatel Shanghai Bell, covers most regions of China's Guangdong province including Guangzhou, Shenzhen, Zhuhai, Zhongshan, Fuoshan, Hainan and Shantou. The expansion will bring Guangdong's DSL network capacity up to 600,000 lines. • iVAST secure MPEG-4 partners MPEG-4 software provider iVAST has formed a partnership with Oracle Japan and Sun Microsystems to deliver MPEG-4-based interactive multimedia services to Japan's cable, satellite, broadband, enterprise and digital broadcast networks. The partnership calls for iVAST to provide its MPEG-4 software, Oracle Japan to leverage its database architecture and network content distribution experience and Sun to provide the server hardware and technical support. • Verizon Online delivers "Internet Handyman" Verizon Online has teamed with Motive Communications to develop a 24/7 "Internet Handyman" that will assist DSL customers in solving some routine Internet problems. Motive's software is powering the product that enables users to detect, diagnose and resolve many simple online problems without having to call customer support. Verizon Online DSL customers can download the free software at www2.verizon.net/support center. Verizon will ship the software to new customers as part of a do-it-yourself DSL installation kit. Once installed, customers can access the software via an icon on their desktops. The tool can help customers resolve configuration glitches, e-mail troubles, billing questions, software registration and other frequently asked questions. If customers are unable to resolve their problems, an electronic request can be sent to a customer support representative, or customers can call the service center directly.
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