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Monday, August 12, 2002 |
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• Silicon home networking sector set for boom • Dzuban goes full-time at Cedar Point • Asian companies acquire
majority interest • Curtain may fall on AOL-AT&T venture • WorldCom creditors want broader financial review When times are tough, it is often the strong that reap the rewards. Case in point, facilities-based communications provider Conversent Communications has snatched up struggling REON Broadband Corp. REON went full throttle into the in-building broadband service sector a couple of years ago, but then the market went soft. Enter Conversent. The company has acquired REON for an undisclosed sum of Conversent stock. The deal is designed to grow Conversent customer base, which includes 30,000 businesses from Maine to New Jersey. REON doles out high-speed Internet access services to roughly 150 buildings in New England. The decision to purchase REON seemed natural, because the company already uses Conversent's network for long-haul data access. As part of the deal, Conversent has received a $9 million investment from REON's financial partners, Seaport Capital and BancBoston. The equity investment will be used to fund future growth of Conversent's network and customer base.
Silicon home networking sector set for boom Consumers are finally jumping on the home networking bandwagon, news that bodes well for the home networking silicon market. The sector is expected to grow to a $1.4 billion industry by 2006, one analysis says. The number of worldwide home networks is projected to be at about 16.6 million this year, according to In-Stat/MDR, a sister company to CED. The need for these networks will in turn increase demand for technology that enables disparate devices to be interconnected. Silicon technologies, including the communication processor and PHY layer, will benefit from this demand, growing from a $261 million industry in 2001 to a $1.4 billion industry by 2006, In-Stat says. Vendors are looking to system-on-a-chip products to assist in the integration of LAN interfaces and Media Access Control layers as they look to integrate wireless LAN, Ethernet and other LAN media connections into their devices. The "Chips Ahoy: Home Networking Chipsets Set Sail for a Prosperous Future" report also found that the number of silicon devices in home networks will grow from 20.5 million this year to more than 167 million in 2006. The goal of the report is to "demystify" the home networking silicon market by explaining the different PHY standards and technologies. The report also looks at the various market segment players, including PHY, communications processor and access silicon.
Dzuban goes full-time at Cedar Point Mark Dzuban, a cable telephony expert, has gone full-time at start-up Cedar Point Communications after being named executive vice president, cable telephony deployment. Dzuban previously served on the board of Cedar Point, an IP telephony equipment startup based in Derry, N.H. In his new role, Dzuban will collaborate with cable operators as Cedar Point shifts from the technology implementation phase to the deployment phase for the vendor's IP telephony gear. Cedar Point makes the Safari C3, a PacketCable-based platform designed to simplify VoIP architecture by integrating several components, including the call management server and media gateway controller, into one box. To date, the company has scored a laboratory trial with Comcast, and a field trial in New England with MetroCast Cablevision. Before joining Cedar Point, Dzuban was president of Hatteras House Consulting, a firm he also founded. Before that, he was senior vice president, telephony engineering and operations for AT&T Broadband, where he was responsible for the MSO's traditional circuit switched telephony service rollout. At Cedar Point, all of his attention will be given to a more advanced - and more complicated -- packet-based voice platform. Dzuban said his interest in start-ups and their ability to add new services on existing cable networks drew him to Cedar Point and his decision to move from an advisory role to a full-time role at the company. After "chipping in" at Cedar Point for about 18 months, he said now "was the appropriate time to take my support to the next level." In the short-term, Dzuban said he will attempt to create a viable VoIP business that scales and to help cable operators determine which routes are safer and more riskier than others. "My charge is to help the industry walk through a more complex IP rollout," he said, noting that 2003 will be "a big year of convergence" for IP telephony as operators attempt to integrate a spate of hardware and software elements with their back office systems. Integration of that technology, not the technology itself, Dzuban predicted, will become the priority over the next year for MSOs that include IP telephony in their service plans. Related stories:
Asian companies acquire majority interest in Global Crossing Although at times it looked like a deal between Global Crossing Ltd. and two Asian conglomerates would never come to fruition, the companies have signed a definitive agreement that will give Hutchison Whampoa and Singapore Technologies Telemedia Pte. Ltd. a 61.5 percent majority interest in Global Crossing. The $250 million investment will facilitate Global Crossing's emergence from bankruptcy-protection proceedings. Under the terms, Global Crossing's banks and creditors will receive 38.5 percent of the common equity in the reorganized company, plus $300 million in cash and $200 million of new debt in the form of senior notes. As in many telecom reorganizations, current shareholders will get nothing. The $250 million investment will mostly likely assure Global Crossing's network will continue to operate, but is a far cry from covering what Global Crossing owes. When it filed for bankruptcy in January, the company listed $12.4 billion in liabilities. In April, Hutchison Whampoa and ST Telemedia made a $750 million offer for the company, but creditors balked at the bid saying it was too low. A U.S. bankruptcy court approved the agreement on Friday. Global Crossing has canceled its asset auction scheduled for Aug. 14. The companies expect to obtain regulatory approvals and meet other closing conditions early next year. Related stories:
The Nasdaq may be below 1,300, companies may be getting tangled in the webs they have spun, and corporate executives may be becoming part of the criminal justice system, but the broadband industry is still trying to move forward. Several companies have launched new products, including Broadcom, LSI Logic and National Semiconductor. Broadcom Corp. has launched the BCM5823 CryptoNetX IPsec Processor, a 500 Mbps IP security processor. The product addresses the security needs of mid-range performance Advanced Encryption Standard compliant VPN equipment. The product supports 200 Mbps and 500 Mbps and can scale up to 1 Gbps, Broadcom says. "With the BCM5823, we are addressing a gap in the marketing by providing a PCI-based, full-features AES solution with 256-bit key support that specifically targets the midrange network security equipment market," says Devesh Greg, Broadcom's Security Line of Business security director. The HomeBASE ADSL Ethernet chipset from LSI Logic Corp. consists of a fourth-generation analog front end (the SpeedREACH AR8202), a high-performance network processor and an Ethernet PHY. The chipset is designed to be integrated into a HomeBASE reference modem, which complies with the DSL Forum's TR-048 performance test and the new rate/reach limits being proposed by US telephone companies. National Semiconductor has rolled out two synchronous regulator controllers to deliver low output voltage for set-top boxes, ADSL and cable modems. Features of the LM2727 and LM2727 switching regulator controllers include 0.6 V internal band gap, switching frequency from 50kHz to 2MHz and synchronous conversion. The LM2727 has over-voltage and under-voltage protection.
Curtain may fall on AOL-AT&T venture
AOL Time Warner Inc.'s new management team could unwind the beleaguered media giant's complex entertainment venture with AT&T Corp. as early as this week, in the process taking a big step toward building its high-speed Internet strategy. Sources familiar with the situation said the most probable resolution calls for AOL Time Warner to offer up to $2 billion in cash, some AOL stock and about a 20 percent stake in a publicly traded cable TV business for the stake in Time Warner Entertainment, held by AT&T and Comcast Corp., which agreed this year to purchase AT&T's cable operations. Such a deal would give AOL Time Warner full control of HBO and Warner Bros. Studios and access to offer AOL high-speed Internet service on AT&T and Comcast cable systems, the nation's largest, sources added. AOL Time Warner then could sell some small assets to alleviate its debt load, said industry insiders, who also look for the company to replace more managers at its AOL unit now that a new chief has been named for that business. AOL Time Warner has seen its stock price drop 70 percent this year amid slower growth, federal probes of its America Online division and an unclear strategy of how to add high-speed Internet customers. AOL Time Warner closed at $11.05 on Friday on the New York Stock Exchange. Related story:
WorldCom creditors want broader financial review
The Wall Street Journal (8/12, Solomon) reports, "Some of WorldCom Inc.'s creditors, concerned that the depths of the telecommunication giant's accounting scandal haven't been fully disclosed, plan to push the company for an even broader review of its financial records." WorldCom last week "said it planned to expand its financial restatements to $7.2 billion from $3.85 billion, to reflect improper accounting that inflated profits as far back as 1999." But as the company "seeks to reorganize under Chapter 11 bankruptcy-court protection, some creditors and bankruptcy experts say any uncertainty about accounting in years prior to 1999 could reduce the price potential bidders may be willing to pay for WorldCom assets." Daniel Golden, an attorney at Akin, Gump, Strauss, Hauer & Feld, who represents WorldCom's unsecured creditor committee in the bankruptcy case, said he "expects the (creditor's) committee to push the company to broaden its review." He also said the committee, "through its own forensic accountant, will probably conduct its own review of years prior to 1999. He said he expects the committee to review WorldCom's past accounting until it can 'run through a couple of clean years.'" Related stories:
• Liberate completes Sigma buy Less than a month after announced its intention to purchase Sigma Systems, Liberate Technologies has completed the deal. When the deal was announced on July 24, iTV software
company said it would fork over $62 million in cash to enable it
to deliver voice and high-speed data services on its traditionally
video-based software. Liberate said it would use Sigma's $20 million
cash to help finance the deal. • Intelsat launches in Columbia Intelsat Ltd. has rolled out its broadband via satellite service in Columbia, South America. The service is available to small- and medium-size businesses. The company was conducting a three-month trial there with a 150 end customers. Service provider ConexSat will offer the service directly to customers. • XTel taps CopperCom CLEC XTel Communications has selected CopperCom's local exchange softswitch system to replace its legacy switch. The system consists of CopperCom's CSX 2100 media gateway and CopperController softswitch. Financial terms were not disclosed. Separately, CopperCom appointed James Edmunds as vice president of product development. He responsibilities will include overseeing the product architecture, design and testing activities of CopperCom's next-generation local exchange product line. Edmunds will report to Julian Thomson who has been named senior vice president and chief operating officer.
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