NorthPoint Communications announced Fri. it pulled out of VersaPoint, joint venture with European broadband operator VersaTel, as part of its effort to reduce spending. NorthPoint sold its 50% share of venture to VersaTel which will relieve NorthPoint of capital commitment worth about $23.2 million, assume VersaPoint liabilities and pay NorthPoint about $6.5 million in cash. VersaPoint began commercial service in summer, offering retail DSL services in VersaTel’s core market of Benelux area and northwest Germany. “Under the circumstances, we do not have the resources to support this venture,” NorthPoint Chmn. Michael Malaga. Verizon, which had planned to combine its DSL business with NorthPoint’s, cited “deterioration” in NorthPoint’s business operations and financial condition as reasons for ending venture.
Last recession year for TV advertising was 1991, and “it appears the industry is heading that way again in 2001” in terms of national spot, prominent stock analyst predicted last week in face of broad indications of major cutbacks by largest TV advertisers. First quarter of year looks particularly bad for TV stations, he and others predicted. Radio on other hand will show ad growth of 7.5-8% next year, according to Gary Fries, pres. of Radio Ad Bureau. “Radio is 80% a local business with revenue sources that defy national trends,” he said.
OPASTCO said in Dec. 28 letter to House and Senate leaders that repealing estate tax is one of its top priorities. It’s “one of the most important actions Congress could take to encourage further economic growth in rural communities,” OPASTCO said. “For small towns, the sale of a family-owned business due to estate tax obligations adversely impacts the entire community,” said assn. which represents rural telcos.
Joint venture company has been established in Japan to administer use of Bluetooth logo on compliant products. Toshiba will own 80.5% of as-yet-unnamed company, which will be capitalized at Yen 40 million and will start operations in Feb. Other partners are Taiyo Yuden (with 10% share) and IBM Japan (9.5%). Partners said new company is expected to “make it much quicker and more convenient for Japan-based manufacturers to obtain qualification of Bluetooth-enabled products, and is also expected to contribute to shorter development terms and lower associated costs.”
After a year of tough negotiations and numerous retransmission consent extensions, Comcast and Disney announced Fri. agreement in principle on carriage of over-the-air signals of ABC owned stations in MSO’s markets. Spokeswomen for companies declined to divulge terms of agreement, citing confidentiality. Agreement covers Disney products and services including ESPN, ESPN2, ESPN Classic, ESPN News, Disney Channel, Toon Disney, SoapNet and retransmission consent for ABC-owned stations in Philadelphia, N.Y., L.A., Chicago, Flint, Mich., and Toledo, Ohio. Current ESPN and Disney Channel programming agreements were set to expire Dec. 31, 2000. Latest in series of retransmission consent extensions was also due to expire Dec. 31 (CD Dec 7 p9). Characterizing agreement as “important” one, Disney Pres. Robert Iger said it’s “clearly in the best interests of our viewers on all the Comcast systems.”
Indicating more cautious approach to bad customer debt, Lucent nearly doubled funds it set aside for “doubtful” accounts in fiscal 2000, according to SEC filing. Lucent boosted reserve by 58% to $501 million in fiscal year that ended Sept. 30. Company, which had set aside $318 million in 1999, added $252 million to that this year. Despite extra cushion, Lucent wrote off only $69 million for bad debt, compared with $112 million in 1999. Heftier debt reserve is seen as way to make Lucent less vulnerable in future to uncollected bills and defaults by customers to which it has extended credit. Manufacturers such as Lucent extend fairly generous credit terms to new telecom companies such as CLECs to encourage them to buy equipment as they grow. However, in recent times CLECs have begun facing financial trouble, making manufacturers vulnerable to debt collection problems.
Kan. Corp. Commission said its 2000 Lifeline public awareness campaign, which ran from June through Oct., was success. Agency said campaign boosted Lifeline enrollment with Southwestern Bell Telephone and Sprint/United by 50%. Program uses federal and state universal service resources to provide $10.50 discount on monthly local service charges.
Cyclone-3 rocket carrying 6 Russian communications satellites failed after launch Thurs., resulting in loss of all 6 spacecraft. Spokesman for Strategic Missile Forces said first and 2nd stages of rocket functioned normally, but 3rd failed. Launch failure from Plesetsk cosmodrome in Russian Arctic is 2nd in 2 months for agency, as EarthWatch lost satellite in Nov. 21 launch on Cosmos-3 from Plesetsk (CD Nov. 24 p4). Satellites burned up after re- entry into atmosphere, scattering debris into Arctic Ocean, but officials said debris caused no damage. Russian Aerospace Agency suspended launches on Cyclone-3 rockets until agency can determine cause of failed launch, agency spokesman said. Similar failure nearly cost agency 6 Strela military satellites 2 years ago, but agency saved them.
Ga. PSC said number of residential customers on state “No Call” telemarketing list topped 200,000 in Dec. Customers must pay $5 every 2 years to keep their name on list, which began taking names in Jan. 1999. Current total is 204,032 names. Telemarketers who call names on list can face fine of up to $2,000 per call. PSC said over 1,600 telemarketers from U.S., Canada and Carribean have accessed no-call database since its inception.
FCC Common Carrier Div. asked for comments on request by Elastic Networks for waiver to permit registration of its EtherLoop Modem, trade named Stormport 400. Elastic Network said modem conforms to all Part 68 requirements except signal power limitations. Company said waiver would further public interest by giving consumers more choices for advanced telecom services, particularly in rural areas that don’t have ADSL service. Comments are due Jan. 22, replies Jan. 29. Comments should refer to file number NSD-L-00-254.