Broadband Week Direct

Today's report from Web Editor Susan Rush

• SBC, Yahoo!: Make the switch, it's easy

• TWC, Scripps make VOD pact

• Proxim intros Wi-Fi combo cards

• Optinel completes field trial

• NetGear, AOL team for home networking

• AOL-MSN rivalry picks up speed with broadband

• Cable industry to issue new reporting guidelines

• Broadband briefs

SBC, Yahoo!: Make the switch it's easy

Now that SBC Communications Inc. and Yahoo! have rolled out their co-branded DSL and dial-up services, the companies are ready to go after the competition.

The duo plan to release a suite of automated tools to help ease the migration from competitive ISPs to either the SBC Yahoo! DSL or Dial service. Although specific details of the new tools were not released, the companies said the tools will go beyond the current tools they use that enable customers to port some preferences. The new automated tools will most likely enable potential customers to migrate personal preference information from their current ISP to the SBC Yahoo! services. SBC noted that importing personal information may not be possible for customers whose account with their original dial-up ISP has been terminated. The companies plan to roll out the automated tools in the next few months.

"The switching tools will help us better meet this demand [for Internet services] by letting customers quickly and effortlessly switch from their current dial-up Internet service," SBC Group Vice President of Marketing and Sales Ray Wilkins said.

The SBC Yahoo! DSL service is available to customers in SBC's 13-state region. To attract customers, the high-speed service is being offered to new customers at an introductory price as little as $29.95 a month for the first six months. The monthly fee is bumped up to $42.95 a month thereafter.

TWC, Scripps make VOD pact

Time Warner Cable and Scripps Networks are moving beyond the trial phase in their VOD relationship, and are gearing up to launch free on-demand Scripps programming across 30 TWC systems.

The deal calls for Scripps to supply 30 hours of on-demand programming each month. Ten hours of content will be supplied from each of Scripps' three networks -- Home & Garden Television, Food Network and DIY-Do It Yourself. Each week, the content will be refreshed with six hours of new content.

Programming from a fourth network may be added to the mix down the line, according to Scripps. The Fine Living network, Scripps newest network, will receive more consideration to launch in TWC's on-demand markets as the network is added to TWC's lineups across the country.

The 30 system launch follows a trial in TWC's Cincinnati market. During the trial, which ended in July, customers plunked down between 99 cents and $1.49 to view an on-demand title from one of the three Scripps networks.

The companies say they are in the "introduction and education" phase of VOD with the customers, and don't expect the VOD programming to always be free-of-charge. "Working with Time Warner Cable in these new markets, we will work toward defining a viable subscription video-on-demand model that will help all of us move this business forward," said Channing Dawson, senior vice president of New Ventures at Scripps, in a prepared statement.

Related stories:
Time Warner Cable taps Convergys, 10/14/02
Charter to carry Scripps' Do It Yourself network, 2/1/02

Proxim intros Wi-Fi combo cards

With Wi-Fi access gaining in popularity, Proxim Corp. has developed a combo card to take the worry out of having to have the same network in the office, at home and at a public hot spot.

The ORiNOCO ComboCard is designed to access either a 802.11b or 802.11a wireless network, making it easier for users to move between various Wi-Fi networks. Proxim has designed the card to store multiple location profiles so users can seamlessly switch networks or locations, the company said. Users have the option to specify their preferred type of network, so the card will default to that standard whenever it is available.

The ORiNOCO card will be available in October in Silver and Gold Levels. The Silver card, which will retail for $149, delivers standard Wi-Fi-compliant WEP security up to 152 bits. The Gold combo card, which will retail for $179, is designed to offer enhanced security, including 802.1x with dynamic rekeying. The 802.1x provides secure, scalable authentication using dynamic keying, user name and password authentication and mutual authentication.

The cards support Windows XP, 2000, ME, 98SE and NT 4.0.

Earlier this month, Proxim lowered its third-quarter guidance, citing delays in several major projects. The company said it expects third-quarter pro forma revenue of about $46 million, compared with its previous guidance of $50 million to $55 million. Analysts on average were expecting revenue of $51.9 million, according to a survey conducted by Thomson First Call. Proxim will report third-quarter results after the market closes today, Oct. 15.

Related stories:
Proxim offers cash for Agere wireless LAN equipment biz, 6/17/02
Proxim launches 802.11a in Europe, 5/2/02

Optinel completes field trial

Marking the end of its first major field trial, Optinel Systems says Adelphia Communications Corp. has wrapped the trial of its PLEXiS MFX transport system.

The trial tested the long-distance optical transport of live digital video signals over Adelphia's Northern Virginia ring. Optinel's Functional Optical Multiplexer enables all-optical sharing of traffic among several sites, according to Optinel.

The system is designed as an alternative to SONET-based systems. "Optinel's system yielded several improvements over traditional systems, including better picture quality and lower error count," said Abe Naghibi, Adelphia's regional corporate director of engineering.

Optinel debuted its optical transport system for the cable market at the SCTE Cable-Tec Expo 2002 in June.

The company's transport system is a scalable system that enables information to remain in its hybrid fiber/coax-compatible format, thus reducing the cost and improving the performance of existing networks, according to the company. The "bolt-on" solution seamlessly interfaces with existing cable plant equipment, according to Optinel.

Related story:
Cable vet Best joins Optinel board, 4/17/02

NetGear, AOL team for home networking

Home networking gear provider NetGear Inc. has sealed a deal with America Online to make its products compatible with the ISP's services.

The pact calls for NetGear to work with AOL to ensure its home networking products, including its routers, are AOL Broadband compatible. NetGear will identify its products as compatible with AOL services. The companies say they are committed to developing future products that will work together.

In August, NetGear inked an agreement to deliver Listen.com's Rhapsody digital music subscription service to customers who purchase the company's Platinum Family of networking products.

NetGear's products are sold in North America, Europe and Asia and are available in roughly 4,500 retail outlets.

Related story:
Listen.com deals to put Rhapsody in the home, 8/19/02

AOL-MSN rivalry picks up speed with broadband

Thomas S. Mulligan

The Walled Garden is under siege.

America Online has launched its latest software package, AOL 8.0, today with a splashy concert by Alanis Morissette, but it might as well start with a call to battle as Microsoft Corp. gears up for another push against the online giant.

Through a combination of user-friendly technology and clever marketing, America Online has created a virtual community -- dubbed the Walled Garden by outsiders because much of its content is available only to AOL members -- that rivals have found tough to dent.

AOL features such as instant messaging, parental controls on children's Internet surfing and the familiar "@aol.com" e-mail address have made for a stable subscriber base in an industry in which fickle customers are the norm. AOL boasts more than 26 million U.S. subscribers, compared with about 8 million for Microsoft's MSN service.

However, as more and more personal computer users migrate from poky dial-up service to high-speed broadband, the competition will intensify and it will get harder for AOL to maintain subscriber growth and profitability, analysts say.

Microsoft, with a seemingly bottomless well of cash, announced it will spend $300 million to support the Oct. 24 launch of its Internet service software, MSN 8. Much of Microsoft's push will be aimed at getting AOL customers to switch.

And Microsoft, by no means coincidentally, also is kicking things off with a New York launch party, headlined by singer Lenny Kravitz.

The heightened competition and lower profit margins of broadband, plus a brutal drought in online advertising and a widening federal probe of America Online's accounting practices, explain why the unit has been -- at least from Wall Street's perspective -- an anvil around the neck of parent AOL Time Warner Inc.

AOL Time Warner's other businesses -- movies, publishing, cable TV and music -- are performing so well that their combined operating profit growth is expected to rise a robust 16 percent this calendar year, Merrill Lynch analyst Jessica Reif Cohen said last week in a report.

But when you add America Online, she said, the figure drops to 5 percent.

As AOL's network access costs rise in the coming years and the fees it charges consumers fail to keep pace, its EBITDA -- earnings before interest, taxes, depreciation and amortization, a key profit measure -- could shrink to $830 million in 2005 from $2.3 billion in 2001, Cohen added.

"If we did nothing, it could look very much as (Cohen) portrays it," Jonathan Miller, AOL's new chief executive, acknowledged in an interview.

"But we're not going to do nothing."

Indeed, he said, AOL 8.0 incorporates some 100 improvements over the current version, most of them in response to suggestions from AOL customers.

Miller has high hopes for a "MatchChat" feature that will allow users with similar interests to find one another online. Other features make it easier to block junk e-mail, to share pictures and music and to customize the content of the "home" screen.

For an extra $ 3.95 a month, dial-up users get a call-waiting service that notifies them of calls without breaking the connection.

The new package also represents "the first time that AOL has really embraced broadband," Miller said. Not only will such functions as music- and picture-sharing work better and faster on broadband, but there will be new features exclusively for high-speed subscribers, including improved video and CD-quality radio.

Microsoft, meanwhile, is counter-programming with mirror-like precision.

Beyond the rival New York launch parties and the product names both incorporating the number 8, Microsoft's new offering incorporates for the first time some of the distinctive features of AOL, such as controls that let parents monitor their children's use of the Internet and block them from certain sites or chat rooms.

But Microsoft is not just matching what AOL offers, said Larry Grothaus, lead project manager for MSN. As a software development company first and foremost, Microsoft "prides itself on great technological delivery," he said.

Pricing will be one key front on which the broadband competition plays out. MSN is offering broadband at $39.95 and AOL at $44.95.

It appears AOL also is making high-speed service easier to install with a one-click sign-up for DSL service through such telecom partners as Verizon Communications Inc. The cost is an additional $30 a month.

Cable industry to issue new reporting guidelines

The Wall Street Journal (10/15, Grant) reports, "Shaken by the crisis of confidence in American corporations, the cable-television industry is set to announce new financial-reporting guidelines that will give investors a clearer understanding of how companies define subscribers and capital spending."

The National Cable & Telecommunications Association will "release the guidelines next week after three months of behind-the-scenes discussions among top executives of the country's largest cable companies.

"Some companies will start using the guidelines in their quarterly financial reports as early as this month." Although "the guidelines are voluntary, most cable companies have agreed to use them," says Michael Willner, chairman of the cable association and chief executive of Insight Communications Co. of New York, the country's ninth-largest cable company.

Broadband briefs:

• Conexant intros router system

Conexant Systems Inc. has introduced a HomePlug 1.0 certified router gateway system. The system is designed to deliver up to 14 megabit-per-second networking rates over a home's existing electrical wiring.

Conexant's HomePlug system includes a reference design, CX82100 home network processor, CX11656 HomePlug 1.0 physical layer transceiver and an analog front-end.

The gateway is the first complete HomePlug 1.0-certified router system, according to Conexant. The system is available for $18 each in quantities of 25,000.

• ServiceFactory inks deal with Transat

ServiceFactory has inked a deal to resell Transat Technologies Inc.'s SIM-card authentication with its Orbyte Wireless system.

Transat enables WLAN users to be authenticated via a SIM card attached by a USB dongle to the user's personal digital assistant or laptop. The partnership will enable ServiceFactory to enable roaming between wireless ISPs and operators. Financial terms of the deal were not disclosed.

• Bezeq taps Radware

Israel-based ISP Bezeq International has selected Radware's Peer Director to provide control of its Internet routing and border gateway protocol (BGP).

Peer Director is designed to monitor all link traffic operations and provide real-time link load information and historical performance to shape BGP routing decisions.