LAS VEGAS -- American consumers have adopted wireless technologies faster the last 3 years than experts had anticipated, prompting Hollywood studios and networks to make mobile a top priority, speakers said at the NATPEMobile++ conference here Mon. Alex Bloom, Verizon Wireless assoc. dir.-programming, said “the Internet taught us [that] speed kills,” and “the consumer experience has improved. There is also real revenue now in mobile deliver content.”
With Comcast CEO Brian Roberts making no secret of his ambitions for further acquisitions, consumer advocates are concerned that the biggest U.S. cable operator could become too big. But there’s no clear answer to the question: How big is too big? The U.S. Appeals Court, D.C., in Time Warner v. FCC, found in 2001 that the FCC wasn’t justified in establishing the old 30% horizontal ownership cap and remanded the case to the agency. The FCC has been examining the issue since then but has come to no conclusions.
AT&T said it received favorable tax ruling from IRS on its planned spinoff of AT&T Broadband to Comcast. Under ruling, spinoff will be tax-free to AT&T Corp.’s U.S. shareholders. IRS ruling satisfies condition of proposed merger of AT&T Broadband and Comcast and “marks a significant milestone toward completion of that merger,” AT&T said.
Women still hold few executive or board positions in communications companies, according to 2nd annual Annenberg Public Policy Center (APPC) study issued Tues. There’s been little change since last year’s study, said ex-FCC Comr. Susan Ness, dir. of APPC’s Information & Society Section. “The results continue to be appalling,” she said at news conference. “With few exceptions, we have not moved beyond tokenism in the number of women in top leadership positions or serving on the boards,” she said. Study reported 2001 figures, based on annual reports and Web sites.
AT&T Pres. David Dorman has been named chmn.-CEO, replacing Michael Armstrong when company completes spinoff of AT&T Broadband and merges with Comcast to form AT&T Comcast. Armstrong will leave AT&T at that time and become chmn. of new company. Transaction is expected to be completed at end of year, following regulatory approvals. Dorman, who joined AT&T as pres. in Dec. 2000, was CEO of Pacific Bell when SBC acquired it in 1997. He was named exec. vp of SBC and later became CEO of now disbanded Concert, joint venture created by AT&T and BT Group.
AT&T’s board was weighing its options for its broadband unit at our deadline. Board was meeting Thurs. evening and again Fri. to discuss ways to handle possible spinoff or sale. AT&T Chmn. Michael Armstrong in recent weeks has talked with several companies including AOL-Time Warner, Cox, Disney and Microsoft on either or acquiring or investing in unit. Talks came after AT&T rejected unsolicited Comcast $44.5 billion offer as too low (CD July 19 p5).
Now that AT&T’s board has basically put its cable operations up for sale, Wall St. and public policy analysts believe several other large media firms may well bid for AT&T Broadband. They also see possibly lengthy, drawn-out battle for AT&T’s cable unit as parent company angles for time, delays its spinoff plans and seeks to boost unit’s financial performance and value to earn higher offers. Moreover, analysts predict that several other MSOs may end up with chunks of AT&T Broadband no matter who makes eventual winning bid. But they still view Comcast as favorite to win overall sweepstakes because of its strong balance sheet, highly regarded management team and relative lack of antitrust and other regulatory hurdles to overcome.
Despite protests from public interest groups, Comcast’s unsolicited $58 billion offer for AT&T Broadband stands good chance of earning federal regulatory approval if it gets that far, according to public policy analysts. They said Justice Dept. (DoJ) and FCC were likely to allow proposed deal to go through largely unscathed, especially if AT&T shed its 25.5% stake in Time Warner Entertainment (TWE) as Comcast pledged. They also predicted that FCC’s expected new horizontal cable ownership cap shouldn’t be problem for proposed combination of nation’s largest and 3rd largest MSOs, assuming Comcast won AT&T’s consent. Nor did they see either govt. agency imposing such conditions as open access and interactive TV nondiscrimination on deal, even though those obligations were placed upon AOL’s recent takeover of Time Warner (TW) and AT&T and Comcast co-own Excite@Home, nation’s largest cable ISP.
CHICAGO -- Despite nation’s economic slowdown and depressed media ad spending, cable operators painted bright picture of industry’s future Mon., boasting about success of their digital video and high-speed data services. Speaking at opening session of NCTA’s annual convention here, heads of 3 of 4 biggest MSOs said they would continue to roll out digital, data and even newer services such as video-on-demand (VoD) and home networking briskly over next couple of years because of unquenched consumer demand. They also said slowing economy had had little impact on their core video products so far. “It [the economy] really hasn’t held us back,” Charter Communications Pres. Jerry Kent said.
Hughes Electronics decided not to sell DirecTV to News Corp. because companies weren’t able to agree on price, CEO Michael Smith said. Smith made first public comments on talks at Morgan Stanley Analysts Conference in N.Y. since rumors begin to surface about possible sale to Rupert Murdoch and News Corp. last month in transaction that would have created $75 billion global satellite empire. It was widely speculated by industry insiders that Murdoch was offering stock while partners Microsoft and Liberty Media would ante up $5 billion and $1 billion in cash, respectively. New company reportedly would have been owned 65% by Hughes shareholders and 35% by News Corp., which would manage new company. “It doesn’t make any sense to us and we won’t do that deal,” Smith said. “It’s as simple as that. There’s not enough value in the deal. End of story.”