NextLevel said revenue growth in 2001 would be lower than expected because of “slower than anticipated customer deployment.” Company said it would revise its guidance for year in Jan. 24 conference call on 4th-quarter earnings. NextLevel also reported that progress in growing its customer base in 4th quarter had been “offset by reduced revenue from Qwest and slower than anticipated customer development in Korea.” Revised 4th-quarter revenue will be about $31 million with net loss, excluding special items, of about 22 cents per share, company said.
President-elect Bush “is increasingly turning his attention to the agencies, and so I think you can anticipate announcements on those at any time,” Press Secy. Ari Fleischer told reporters Thurs. after being asked when FCC and SEC chairmen would be named. He said Administration would appoint someone at Office of Management & Budget to focus on technology issues, and said it still was undecided whether higher level “technology czar” would be appointed.
Sprint PCS became latest carrier to drop out of FCC’s C- and F-block auction, which resumed Thurs. and reached $12.01 billion in net high bids. Sprint’s bidding eligibility was reduced to zero after 27 rounds Thurs., FCC said. Lehman Bros. research note issued before auction resumed after holiday hiatus said Sprint was among carriers likely to abandon bidding, path already taken by Nextel and several other carriers since auction started Dec. 12. (Bidding was suspended between Dec. 22 and Thurs. for holidays). Lehman said Sprint PCS didn’t place bids Dec. 21, using waivers instead. “It seems as if Sprint PCS feels the prices are too high and is going to exit the auction shortly after bidding resumes,” Lehman said. Following CDMA agreement with Palm, Sprint shares soared 15.41% Thurs. to close at $23.88. (Pact covers Sprint’s provision of first CDMA solutions for Palm’s handheld devices). Meanwhile, Verizon maintained strong lead with $4.06 billion in net high bids, followed by AT&T-backed designated entity Alaska Native Wireless with $2.67 billion and Cingular Wireless-backed Salmon PCS with $2.19 billion. Verizon Wireless had been high bidder for 2 N.Y. licenses for last several rounds, but ended Thurs. with high bid for only one license at $968.6 million. Alaska Native Wireless bid $716.57 million for another N.Y. license, with Salmon PCS vying for 3rd with $714.45 million. Lehman Bros. indicated auction could wrap up in several weeks. DCC PCS placed high bid of $519.7 million for L.A. license. Verizon also placed high bids for licenses in L.A., Chicago, San Francisco, Philadelphia, Boston, Seattle. Alaska Native Wireless placed high bid for L.A. and Salmon for Atlanta. In top 15 markets, VoiceStream had high bid for Washington license.
Verizon urged N.Y. state lawmakers to consider legislation this year to require that drivers use hands-free mobile phones. Carrier said if mobile phone usage restrictions were needed, they should be imposed statewide rather than through patchwork of local ordinances. N.Y.C. and at least 6 other local govts. are considering handheld mobile phone bans, in addition to the 2 N.Y. counties that adopted restrictions last year. Verizon said statewide uniformity was critical and municipal or county laws would only confuse drivers. It also said statewide law would ensure uniformity in defining offenses and in penalties. N.Y. legislature opened its 2001 session Wed.
As FCC continued to wrestle with imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), Microsoft and other online rivals of AOL pressed their furious campaign for instant messaging (IM) requirements. In latest letter to FCC Chmn. Kennard Thurs., Microsoft called again for “imposition of a meaningful and enforceable condition that facilitates IM interoperability by enabling consumers to communicate with each other regardless of the IM system they use.” Along with brief letter, Microsoft and its allies sent 2-page fact sheet listing 8 consumer groups, 53 companies and associations, 10 senators, 12 House members and 7 publications that are calling for IM interoperability. At minimum, Microsoft argued in separate filing with FCC Tues., “the Commission should obligate AOL to enter into multiple contracts with leading IM providers to allow for interoperability prior to offering any advanced services over the broadband infrastructure of Time Warner’s cable systems.” In earlier filing with Commission, nationwide group of ISPs that had brought class action lawsuit over AOL’s 5.0 and 6.0 software urged agency to force company to modify its offending software feature. They argued that regulatory condition changing that feature, which directs modem calls away from user’s desired ISP to AOL access number, “would do more to introduce competition in Internet access than the instant messaging condition that has been the subject of recent press reports.” Meanwhile, new op-ed piece published by Cato Institute said FTC’s open access conditions on AOL-TW merger would hurt consumers and hamper competition and innovation by dampening incentives for rivals to build competing high-speed data systems. “The entire forced access campaign is an unfortunate example of unelected regulators overstepping their bounds,” wrote Clyde Crews, Cato technology studies dir. “They are exploiting their power over industries to make regulatory ‘law’ that should require an act of Congress. Forced access represents a regrettable new incarnation of industrial policy.”
WSNet said it signed strategic agreement with Ashe County Cable TV of Fleetwood, N.C., to offer its subscribers privately branded direct-to-home (DTH) digital satellite TV service using WSNet’s satellite programming technology. Agreement marks official entry of WSNet into small and rural franchise cable market. Other terms of deal weren’t announced.
Qwest proposed settlement of pending Ariz. class action lawsuit filed against its predecessor, U S West, that would give credits ranging from $15 to almost $1,500 to estimated 300,000 customers who have suffered phone installation delays in last 8 years. Qwest filed $22 million settlement offer Wed. in Maricopa County Court, offering to compensate customers who suffered service installation delays between Jan. 1, 1993, and Nov. 20, 2000. Court hearing on settlement offer will be April 23. Current Qwest customers would get automatic bill credit while former customers would receive checks. Residential refund would range from $15 for 4-day delay to $880 if delay exceeded 5 months. Business refund would range from $59 to $1,465 per line. Credits for delay on additional residential lines would be $3. Qwest wouldn’t have to admit wrongdoing. Ariz. suit is outgrowth of original suit filed in 1997 in Denver alleging U S West had diverted resources from local service to fund new wireless and cable ventures, contrary to customer interests. Qwest last year settled Colo. suit for $36 million in refunds to 244,000 customers and similar N.M. suit for $6 million to 70,000 customers.
XM Satellite Radio signed agreement with Visteon to jointly design, develop, manufacture, market and license XM satellite radio technology receivers. XM also said it would unveil its full product line from Alpine, Pioneer and Sony at Consumer Electronics Show in Las Vegas Fri. and offer sneak preview of service leading up to launch of first satellite on Mon.
Despite steep rise in Internet use, consumers remain devoted to watching TV, listening to music and even reading, according to latest home media study released by CTAM. Monthly telephone survey of 1,000 consumers found home Internet usage soaring to 58% of PC households in Dec., from 38% year earlier. It also found that more than 50% of U.S. homes now had at least one PC and 40% were online. In addition, study said, 31% of consumers now have TV sets and PCs in same room. But watching TV remains most popular way of spending leisure time, with 98% of consumers reporting that they view shows, equal to ratio in 1999 and up from 96% in 1998. Study said 36% of households now owned large-screen TVs (bigger than 35 inches), up from 22% in 1998. Consumers’ top expected purchases in 2001 are PCs (16%), DVD players (11%), CD players (11%).
Integra Telecom said it secured $41 million in equity financing from shareholders including Bank of America Capital Investors, Boston Ventures, Navis Partners, Shaw Venture Partners. Investment will be used to expand Integra’s customer base in its regional markets and pushes its total financing in 2000 to $252 million. Integra CEO Dudley Slater said he was “gratified” by market response since CLECs have been struggling for financing. Integra provides telecom services to small and midsized businesses.