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Friday, August 9, 2002 |
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• CableLabs drops cost, streamlines testing • Time Warner Cable reorganizes senior management • FCC mandates DTV tuners; CEA blasts it • OpenTV revenue drops sharply • Allen weighs plans for
his Charter stake; • OSGi-compliant devices closer to reality CableLabs drops cost, streamlines testing
CableLabs Inc. will consolidate its testing program for three projects and lower testing fees by as much as 60 percent, all in an effort to help vendors speed products to market. The Louisville, Colo.-cable technology consortium has announced it will consolidate its DOCSIS, PacketCable and CableHome testing schedules in 2003, and create shorter testing processes for cable modem vendors seeking re-certification. Essentially, the same mechanism used to oversee DOCSIS testing will now be applied to PacketCable, the initiative aimed at achieving interoperability of IP devices linked to cable networks, and CableHome, CableLabs' home networking specifications project. CableLabs also is dropping the prices to test gear. The cost for integrated device testing will fall by as much as 60 percent, while stand-alone cable modem charges will drop about 25 percent. The cost to test cable modem termination system (CMTS) units will not change. CableLabs presently charges each vendor about $95,000 for each new product they submit for DOCSIS certification and qualification testing. More good news for vendors is that minor tweaks to their products won't require a full re-certification process. The new test program calls for three testing certification waves lasting 12 weeks for new entrants, and four certification waves lasting nine weeks for those who already have certified or qualified products. At first, these shorter waves will be applied to DOCSIS 1.0 products that have undergone minor changes. "Our modem and CMTS suppliers have been asking for fewer waves and more time between waves in order to allow them to fix problems that they discover during a certification wave," said Rouzbeh Yassini, senior executive consultant in charge of the cable modem and CableHome projects. "These important changes also will allow our experienced CableLabs team to give suppliers more support in troubleshooting problems."
Time Warner Cable reorganizes senior management Time Warner Cable said it has reorganized its core senior management as part of a plan to tie together three basic business "pillars": new product development and deployment, marketing and customer service. In the moves announced Thursday, the MSO promoted former Vice President of Corporate Development Mike LaJoie to the newly created position of vice president of advanced technology. Joining that group are Mike Hayashi, who will remain as the MSO's senior vice president for advanced engineering and subscriber technologies, and Kevin Leddy, who is now the senior vice president of platform development. Previously, Leddy was Time Warner Cable's senior vice president for new product development. Additionally, the MSO said Executive Vice President Chuck Ellis has added chief marketing officer to his title. Joining him are Brian Kelly, who remains senior vice president for marketing, and David Temlak, who stays on as senior vice president of customer care. Time Warner Cable added that Carl Rossetti will become executive vice president of new business development. The senior management team in Rossetti's group will be comprised of Rick Davies, senior vice president for corporate development; Gerry Campbell, senior vice president for voice; and Pat Armstrong, senior vice president for new product management. Moreover, the MSO's operating management team, which had consisted of six executive vice presidents, has been trimmed to five • all reporting to Time Warner Cable President Tom Baxter. In related decisions, Jeff King, the MSO's executive vice president of network engineering and president of Road Runner, also will report to Baxter. Senior Vice President of Network Engineering Paul Gemme will be part of that group, reporting to King. Time Warner's reorganization announcement follows news that it
plans to relocate most of its corporate offices in the Denver area
to Charlotte, N.C. and Herndon, Va. by the end of 2002. That decision
is expected to affect about 200 of the MSO's 300 employees based
in Denver.
FCC mandates DTV tuners; CEA blasts it Hoping to jump-start the digital television era, the Federal Communications Commission voted Thursday by a 3-to-1 margin that it will require the installation of off-air DTV tuners in nearly all new television sets by 2007. As part of the FCC's five-year plan, the requirement will start with larger, more expensive televisions, claiming the move is designed to minimize the cost for equipment manufacturers and consumers. The FCC noted that prices of large TV sets have been declining at a clip of $100 to $800 per year, "so the additional cost of the DTV tuner may be partially or completely offset by the general price decline." Under the FCC's phased-in mandate, all sets 13 inches and larger are required to have on-board off-air DTV tuners by July 2007, but half of all sets 36 inches and wider must comply with the ruling by July 2004. Moreover, all TV interface devices (VCRs, DVD players, etc.) must come equipped with DTV tuners by July 1, 2007. As expected, National Association of Broadcasters President and CEO Edward O. Fritts applauded the vote, but noted, "cable carriage and other issues still need attention." Tied to the DTV tuner vote, the FCC also suspended the adoption of labeling requirements for TV receivers that are not able to receive any over-the-air broadcast signals, noting that it was unclear when or if such products will become commercially available or how they will be marketed. The Consumer Electronics Association (CEA) President and CEO Gary Shapiro, meanwhile, blasted the FCC order, calling it "a multi-million dollar annual TV tax on American consumers." He also said cable compatibility, not off-air tuners, will help accelerate the digital TV transition, noting that a mere 13 percent of American households rely on over-the-air TV signals. In a related development, the FCC also said it is in the process of exploring whether the agency can and should mandate the use of copy protection measures for digital broadcast television via a Notice of Proposed Rulemaking (NPRM). The tangle, the FCC said, is that the absence of digital copy protection could hinder the broadcast of "high quality" programming, but, without such programming, consumers may be reluctant to buy DTV equipment. The FCC added that "private industry negotiations" have spawned a technical "broadcast flag" standard that would limit copying of some programming aired by broadcast TV stations, but there is no universal agreement on the use and implementation of the flag. The agency said comments on that issue are due Oct. 30. That work could have implications for the cable industry, which today is handling digital copy protection measures in OpenCable-based set-tops via the CableLabs Point of Deployment Host Interface License Agreement (PHILA). That license gives set-top box makers access to Motorola Inc.'s proprietary Dynamic Feedback Arrangement Scrambling Technique (DFAST) copy protection technology. If activated, the copy protection would limit a viewer's ability to record and store digital video. The CEA has argued against such restrictions, and has pushed for the FCC to put PHILA out for public comment. Thus far, Motorola, Pace
Micro Technologies , Pioneer
and Scientific-Atlanta
are the only set-top vendors to sign the PHILA agreement.
In reporting its second quarter financial results, interactive TV platform provider OpenTV revealed a stark drop in quarter-over-quarter revenue for the latest quarter, detailing a 38 percent revenue drop from the same period a year earlier. The company announced that second quarter revenue was just $14.2 million, compared to $22.8 million a year ago. CEO James Ackerman painted a rather grisly picture for the rest of the year as well, saying in a conference call that he believes it "unlikely the Company will achieve pro-forma profitability in the fourth quarter of 2002." As a result, Ackerman added, he expects to "institute a series of aggressive cost cutting measures" to preserve the cash OpenTV currently claims. It reported cash, cash equivalents and marketable debt securities of $166.4 million compared to $189.5 million as of December 31, 2001. OpenTV seems a company in flux these days, despite claiming the
world lead in interactive TV software deployments with more than
27 million set-tops worldwide. OpenTV's market leading middleware
penetration was certainly one of the more attractive reasons that
John Malone's Liberty Media Corp. scooped up a controlling interest
in OpenTV in early May of this year. That deal was part of a larger
initiative within Malone's Liberty group to establish an interactive
TV subsidiary, dubbed Liberty Broadband Interactive Television Inc.
And it appears that Malone got OpenTV on the cheap, relatively speaking
... today OpenTV is trading on the NASDAQ at around a buck and a
half.
Allen weighs plans for his Charter
stake;
Paul G. Allen might increase his stake in Charter Communications Inc. —or he might not. Allen, a co-founder of Microsoft Corp., filed papers with federal regulators Thursday indicating that he is considering several courses of action that could expand the controlling stake he has in the cable company: • Buying some of the company's public debt, either at its
depressed market rate or through a private transaction. In any case, Allen hasn't made a specific proposal to Charter or a decision about which option to pursue, if any, the filing said. Allen owns 56.4 percent of the company through various stock and stock equivalents, and he has 92.5 percent of the voting power. In June, he bought 5 million shares at prices ranging from $ 3.30 to $ 4.24 a share. Last month, he acquired an additional 286,007 shares when members of the Rifkin family exercised options that required Allen to buy their shares at $ 21.45 a share. Shares of Charter, based in Town and Country, closed Thursday at $ 2.90, up 32 cents. Charter is the nation's fourth-largest cable-television operator, with about 7 million subscribers. Allen's filing is the first public confirmation that he is considering a change in his ownership stake. Charter's chief executive, Carl E. Vogel, declined to comment at the company's shareholder meeting July 23 in Bellevue, Wash., on rumors that Allen might take Charter private. He declined to comment on them again this week in a conference call after the company issued its second-quarter report. Robin Diedrich, an analyst with Edward Jones, said Allen could help to boost shareholder and bondholder confidence if he bought more stock or debt. "It would help shareholders and bondholders have more confidence in the company's liquidity," said Diedrich, who has a "buy" rating on the stock for aggressive growth investors. She doesn't own the stock. Charter's debt load is manageable if Charter meets its targets for revenue growth and margin improvement, Diedrich said. But "any misstep could throw a curveball for them to meet their goals," she said. Vogel has said Charter believes the debt is manageable. The company is considering the sale of some cable systems to reduce debt, but only at prices of $ 3,000 or more per subscriber.
There's a real dust-up going on at SONICblue, providers of the PVR technology ReplayTV and the Rio line of digital audio players. Today, the company announced an interim replacement at the CEO level by naming marketing executive L. Gregory Ballard to the position. The company abruptly (and not so subtly) fired CEO and chairman Ken Potashner, the apparent result of Potashner publicly lobbing allegations of below-board loans made to company executives in conjunction with SONICblue's RioPort spinoff. Ballard today was trying to cut off any negative speculation about the loans, saying nothing about them was either illegal or secretive, noting that all of the loans in question were disclosed in recent SEC filings. Ballard also denied to investors and analysts that the Potashner termination was connected to the allegations leveled against the board by the former CEO, but the timing appears too consistent to be categorized as a simple coincidence. Rather, Ballard pointed to the company's new direction moving away from its graphics chip heritage and into the consumer electronics sphere, noting the company was at a "turning point." Change is not a new phenomenon at SONICblue. Ballard only joined
the company as of April of this year, and around that same time,
both the COO and CFO flew the SONICblue coop.
OSGi-compliant devices closer to reality At the center of the drive to connect your home computer, home theater, home appliances, and even your automobile, is an effort called OSGi, or the Open Services Gateway Initiative, which aims to unify connection protocols among all of these consumer platforms. It's a tall order, considering the wide range of existing networking and computer technologies as well as the host of related networking standards and initiatives currently underway. The OSGi group formally announced that a series of companies had achieved the group's first wave of certification under the OSGi Service Platform Release 2 Specification, meaning products with OSGi interfaces are a step closer to the mainstream market. The specification makes possible the installation and operation of multiple services on a single service gateway, which could end up being anything from a set-top box, a broadband modem, a PC, or even an automobile telematics platform. The companies making the OSGi grade are: The group's first big shindig is slated for later this year. The
first OSGi World Congress is scheduled for September 24 -27, 2002,
in Stockholm, Sweden.
• Study: 'Urban Hispanics' an untapped digital cable market According to new Horowitz Associates Inc. findings, urban Hispanic consumers are "largely untapped market for digital cable services." Horowitz Assoc. added that a recently conducted survey showed that 16 percent of urban Hispanic households report subscribing to digital cable service today, but data suggests that number could soon rise to 28 percent. Horowitz Assoc. noted, however, that awareness of digital cable overall is low among "Spanish-dominant" urban Hispanics. "Without successful marketing to Hispanics, a real opportunity for digital and broadband services will be lost," said Horowitz Associates President Howard Horowitz, in a press release. • Liberty Livewire names Williams COO Entertainment production company Liberty Livewire named a new chief operating officer, Kenneth S. Williams. He most recently served as President of Technicolor Digital Cinema, the joint venture between Technicolor and Qualcomm, where he oversaw the worldwide rollout of next-generation digital cinema systems. Before that, Williams held a senior executive position with Stan Lee Media, and spent 18 years with Columbia Pictures and Sony Pictures Entertainment. • MPEG LA sues Apex over MPEG-2 license MPEG LA said it has filed suit against Apex Digital Inc., alleging that the DVD player manufacturer has failed to pay millions in royalties for its MPEG-2 license. MPEG LA said the suit, filed in the U.S. District Court in Colorado, seeks undisclosed monetary damages, including interest, an accounting of all Apex products on which royalties are payable, and an audit of Apex Digital's books and records.
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