Northland Cable faces an $8,000 forfeiture for “willfully and repeatedly” violating cable signal leakage standards, according to a Dec. 22 FCC order. An FCC investigation found that Northland’s cable systems experienced signal leaks at 38 locations on frequency 121.2625 MHz, and that the measured leaks ranged from 84 to 931 microvolts per meter.
High-speed lines connecting homes and businesses to the Internet rose 15% during the first half of 2004 to 32.5 million, the FCC said in a report. It used the criterion of speeds exceeding 200 kbps in at least one direction. That compares to a 20% increase to 28.2 million lines the 2nd half of 2003, it said. The 12 months ended June 30, high-speed lines rose 38%. The report said that of the 32.5 million high-speed lines in service, 30.1 million served residential and small business subscribers -- a 16% increase from the 26 million lines 6 months earlier. For the full year, high-speed lines for residential and small business subscribers rose 46%. The report said high-speed connections in service over asymmetric DSL technologies increased 20% the first half of 2004 to 11.4 million lines, compared to a 24% increase to 9.5 million lines the preceding 6 months. For the full year, it said, high-speed ADSL rose 49%. The report said high-speed coaxial cable connections rose 13% the first 6 months of 2004 to 18.6 million lines, compared to a 20% increase the 2nd half of 2003 to 16.4 million lines. For the full year, it said high-speed cable modem connections rose 36%. The report said the remaining 2.5 million high-speed connections used satellite, wireless, wireline other than ADSL and fiber high- speed connections. The FCC said of the 32.5 million high- speed lines, 23.5 million provided advanced services, delivered at speeds exceeding 200 kbps in both directions. It said advanced services lines increased 15% the first half of 2004 to 23.5 million lines. The 12 months ended June 30, advanced services lines rose 44%, it said. The report said about 21.2 million advanced services lines served residential and small business subscribers. Among advanced services lines, it said, ADSL lines rose 24% and cable modem service 15% the first 6 months of 2004. In the 12-months ended June 30, ADSL advanced services lines rose 49% and cable modem 47%, the report said -- www.fcc.gov/wcb/stats. SBC said while DSL growth has been “impressive, it lags behind cable broadband service, partly because a myriad of government-mandated requirements apply to DSL service, not cable broadband service, including open access obligations, funding of the universal service program and a matrix of accounting and separate affiliate rules. We are hopeful that policy-makers and Congress will take the thumb off the broadband marketplace scale next year so that consumers can receive the benefits of a truly competitive marketplace.”
The FCC voted 3-2 to reduce Bell requirements to share unbundled network elements (UNEs). The FCC: (1) Eliminated the UNE platform (UNE-P) as a CLEC entry strategy, although it extended the transition to a year from the 6 months proposed in the Wireline Bureau’s original proposal. (2) Dropped dark fiber loops from the list of elements the Bells must share. (3) Slightly reduced the number of situations when the Bells must share high-capacity loops and transport.
Pegasus Satellite Communications’ financial data became public when a request for confidential treatment slipped through the cracks and the file was posted on the FCC’s public electronic filing system. The information pertains to the broadcast operations of WSWB-TV (Ch. 38, WB) Scranton, Pa. Pegasus, the debtor-in-possession and proposed assignee of the station, requested that the “competitively sensitive” information about the revenue, margins and cost structures of WSWB-TV not be disclosed. Pegasus said the information could hurt the company’s ability to compete in the Scranton market. The financials showed WSWB-TV’s projected 2004 revenue of $2.3 million to be double the 2000 level. Pegasus and the FCC wouldn’t comment.
President Bush signed into law the Satellite Home Viewer Extension & Reauthorization Act (SHVERA) Dec. 8. The law gives the satellite industry 18 months to abolish a 2-dish system for receiving local channels. EchoStar said the requirement will force the company to shift signals between satellites -- a process that will require customers in some markets to install an additional dish anyway. “It doesn’t matter if you have 5 satellite dishes on your house… as long as we're providing local channels on one dish,” an EchoStar spokesman said. The company has 38 markets that use the 2-dish method: Several markets have already moved to one-dish. EchoStar said it was too early to tell how the estimated $100 million expense will be covered and if any cost would trickle down to their customers. DirecTV said its system wasn’t affected by the legislation since it provides all channels including locals on one dish. The company is particularly pleased with a provision that allows satellite TV to transmit “significantly viewed” stations to customers who live outside the station’s main market. The new law also creates a “digital white area” that the industry said will motivate local broadcasters to build towers and broadcast at full power to serve their communities (CD Nov 24 p5).
The VoIP industry has made significant progress on 911 in the past year, the VON Coalition said Wed. Celebrating the first anniversary of the original 911 agreement with NENA (CD Dec 2'03 p1), the Coalition released a survey saying all the respondents that offer residential VoIP service also offer 911 service that allows a caller to connect to an emergency answering center. The survey covers 14 VoIP providers that either signed the original VON-NENA agreement or are VON Coalition members. It found that 60% offer E911 access with automatic call-back number and location information to emergency call centers similar to traditional wireline service. It said 30% expected to offer this service within a year, and 10% to roll out new services as the next generation I2 service is developed. “In just a year, the VoIP industry is stepping forward, making great progress and providing 911 solutions compatible with traditional E911 functionality -- a level of functionality that took the wireless industry more than a decade to begin offering,” said NENA Dir.-Operations Issues Rick Jones. He said NENA looked forward to “continuing to work collaboratively with the VoIP community in the weeks ahead to find additional steps we can take together in order to ensure continued progress on delivering E911 for VoIP.” The study also found: (1) 56% of VoIP companies allow call routing to the 10 digit number for the PSAP, and several companies provide both a 10 digit solution for nomadic users and an E911 service for fixed users. (2) 63% provide 911 as a standard feature with their service. (3) 75% of those that signed the agreement with NENA collect and remit state and local 911 fees for VoIP customers, and 25% indicate they will when they gain access to incumbent trunking and other databases. (4) All will adopt more-advanced 911 solutions within a year after standards and solutions are developed; 63% expected to do so immediately, 38 in 6-12 months. (5) All inform customers about the level of 911 service provided and 75% also inform the emergency response centers about their approach to 911 service. (6) More than 1,000 calls to 911 have been delivered to emergency personnel since Dec. 1, 2003, when the agreement was signed. (7) All believe that when fully implemented, IP-based 911 solutions can be more robust than the solutions provided by the current network.
Cingular has completed its “phase-one” integration activities on or ahead of schedule, following its acquisition of AT&T Wireless, company officials told analysts Wed. Officials said Cingular hopes to realize significantly increased operating synergies and reduced accounting impacts compared to the estimates the company provided in Feb., when the acquisition agreement was first announced. Cingular CEO Stan Sigman said the company’s 4th quarter adds were ahead of the companies’ combined 3rd-quarter pace. He said Cingular expects to be cash flow and earnings positive in 2005, one year earlier than previously projected. Sigman said Cingular’s “spectrum depth” would drive the company’s “high-quality network performance” and “operating efficiencies.” He said the new Cingular had an average of 58 MHz in top 100 metropolitan areas, compared to 38 MHz at Verizon Wireless, 26 MHz at Sprint and 24 MHz at T-Mobile USA. He said 90% of covered points of presence used spectrum in the 850 MHz band. Sigman said Cingular’s scale would create opportunities for cost synergies and sustainable operating efficiencies. He said he expected Cingular would benefit globally from its GSM-based network since that technology is used by over 70% of world’s digital wireless market. Sigman said Cingular’s 4 goals were: (1) To build the best network. (2) Deliver great customer service. (3) Provide unmatched distribution. (4) Deliver compelling products and services. Sigman said there was a “misconception” about Cingular’s announcement earlier this week that it would build a 3G network nationwide by 2006. For example, a Verizon spokesman said that was “no big surprise. Sprint’s been saying it for years as well. But neither offers service.” Sigman added: “We will deploy [a 3G network] quickly… The speed [Cingular will provide] will be well above what competing technologies expect to deliver. UMTS is a huge step forward for Cingular.” Sigman said the company’s goal was “continuous progress starting day one.” He said he expected Cingular to achieve the industry’s leading churn and margins by the end of 2007. Outlining the network integration schedule, Cingular COO Ralph de la Vega said he expected Cingular to have 6% of points of presence covered by the completed network by the first quarter of 2005. He said he expected that number to reach 35% by the 2nd quarter 2005, 80% by the first quarter 2006 and 100% by the 2nd quarter 2006. He also said he expected 40% of the former AT&T Wireless customer base to move to the Cingular billing system by the 4th quarter of 2005, and 100% by the 4th quarter of 2006, when consolidation of major systems is expected to be complete. He said all points of distribution would remain through the holiday season, with the distribution rationalization happening over the next 2 years: “Going forward, our primary focus will be on optimizing distribution productivity.” SBC, which owns 60% of Cingular, said it expected the AT&T Wireless acquisition would have “significantly improved impacts in 2005-2007 earnings [over those] earlier forecast.” SBC CFO Rick Lindner said SBC would now have “an increased exposure to wireless.” If before the acquisition wireless represented 20% of SBC proforma 2004 year-to-date total revenue, it will be 32% after the acquisition, he said. SBC said excluding accounting costs, it expects the acquisition will be earnings positive starting in 2006, a year earlier than previously expected. SBC now expects the diluted earnings per share impact from the deal to reach $0.27- $0.30 by 2007, compared with its earlier estimates of $0.01-0.03 per share. BellSouth CFO Ron Dykes said the new Cingular would bring 40% of its total revenue and would help BellSouth improve its normalized results. Both SBC and BellSouth said Cingular’s operating cash flow would be used to fund the business and any cash excesses would be shared by the parents.
Wireless firm revenue rose dramatically from $92 billion in 2002 to $104 billion in 2003, while wireline revenue fell sharply, the U.S. Census Bureau said Tues. in a report that also looked at broadcasting and cable revenue. Cable network revenue increased 12% to $27 billion, with advertising revenue increasing 14% to $11 billion. Taken as a group, the bureau said, revenue from broadcasting and telecommunications information firms increased 2% in 2003 to $490 billion. The 13.9% wireless growth came on top of a 17% increase the previous year. In contrast to strong wireless growth, revenue for wireline telecom was down 6.2% to $223 billion. That’s on top of a fall of $23 billion (8.7%) the previous year. Not surprisingly, long distance revenue fell relatively hard, down 13% to $53 billion. On the wireline side, carriers cut expenses 3% to total operating expenses of $197 billion in 2003. Payrolls remained flat at $43 billion after falling 16.3% in 2002. The bureau provides a relatively complete breakdown of other expenses. The biggest other than payroll in 2003 were depreciation at $42.5 billion and access charges at $29.7 billion. Despite declining revenue, taxes rose 11.6% to $6 billion. Among wireless carriers, operating expenses were up 6.2% to $87 billion, compared to the 13.95 billion revenue growth. Annual payroll shot up 14.9% to $11.3 billion for the year, after falling 6.5% the previous year. Advertising was up 11.1% to $4.9 billion. Expenses for cable increased 9% to $19 billion, led by program and production costs, which increased 14% to $10 billion. Depreciation was up 19.2% to $18.4 billion. Wireless carriers reported paying only $6.4 billion in access charges. Taxes rose 12.9% to $729 million. Cable and other program distribution revenues increased 12% between 2002 and 2003 to $63 billion; basic programming revenue increased 10% to $38 billion and revenue from Internet access services increased 79% to $7 billion. Expenses increased 6% to $56 billion with program and production costs increasing 15% to $17 billion. - HB, AV
Lockheed Martin will build Rainbow DBS’s next 5 geostationary satellites at a reported price tag of $740 million, as expected, the companies said Nov. 29. The satellites -- designated Rainbow Ka-1 through Ka-5 -- will be completed over 38-50 months, but no launch details have been announced. The satellites are based on Lockheed Martin’s A2100AX and have a predicted service life of 15 years, the company said. They will be at 62W, 71W, 77W, 119W and 129W degrees. The 5 will serve the continental U.S. and the westernmost satellites will serve Alaska and Hawaii. They will allow the company, which operates the 39-channel Voom satellite service, to increase channel capacity to at least 5,000 HD channels when operating in spot beam mode (CD Nov 24 p10).
Univision revenue increased 21% to $477.4 million in the 3rd quarter ended Sept. 30, and operating income increased 38% to $167.9 million. TV revenue increased to $328.1 million and radio revenue increased to $89.9 million. Univision revenue growth was due to increases in viewership from its TeleFutura networks and capitalizing on its recent 3-year $100 million cross-platform ad deal with Miller Brewing Co., the company said.