FCC sent out the first of its equal employment opportunity audit letters to randomly selected broadcast stations and multi-channel, video program distributors (MVPD) Fri. In a public notice the FCC listed about 206 radio stations, 30 TV stations and 38 MVPD units to be audited. Under the rules, the Commission said it would conduct random audits and targeted investigations resulting from reports of possible EEO violations, targeting 5% each of radio and TV licenses per year (CD May 19 p4). The FCC has been criticized for not conducting the audits sooner.
SBC said it would pull back its contract offer on the table for CWA-represented employees at 11:59 p.m. today (Mon.) if it hasn’t been accepted by the union. About 100,000 SBC workers in 13 states started a 4-day strike Fri. after the bargaining between the company and CWA for a new 5- year contract stalled over job security and health care issues. The national bargaining was moved from Washington to regional tables in New Haven, Conn., Chicago, Austin, and Pleasanton, Cal., where the talks resumed Fri. afternoon. One of the 4 previous contracts expired April 1, and the others April 3. An SBC spokesman said the company didn’t expect any financial damage as a result of the strike. SBC said its communications network and services were functioning with “normal 99.99% reliability,” as contractors, retirees and management workers replaced technicians and customer service representatives who went on strike. The spokesman said there “could be some delays in some services, like installation,” but said “most customers won’t notice a thing.” CWA called the strike “a limited job action,” saying a longer strike could lead to SBC losing its major customers and cause other damage to the company. But it said it was asking SBC customers to agree to switch to AT&T, which operates in 11 SBC states, if the union asked them to. SBC said its “very strong proposal” called for: (1) A health care co-pay increase to 10% from 4-7%, with no monthly contribution required. (2) A guaranteed job offer in the state an employee works in if his or her job becomes redundant. (3) A 4% lump sum pay increase the first year, 2.5% each the 2nd and 3rd years and 2.25% increases with cost of living adjustments the 4th and 5th years. (4) Pension band increases. CWA rejected the proposal, demanding stronger employment security and preservation of health care benefits. It said a one-time lump sum payment of 4%, instead of a 3% base wage increase it asked for, would save SBC more than $1 billion over 4 years. “Incredibly, SBC wants to take $1 billion out of our members’ pockets in wages, not to pay for rising health costs, but just to fatten its profits,” said CWA Pres. Morton Bahr. But the SBC spokesman said the health care changes the company had proposed wouldn’t allow it to pay less than it does now. He said health care costs were increasing 10% per year, and even with the changes proposed the company would still have to pay $9,500 per employee next year, compared to $8,000 per employee in 2003 for health care. He said the co-pay would still be “far less” than the 38% most Americans pay, and would average only about $35 per month. It would also be less than what SBC managers pay. The changes would just “help offset the double digit increase” in health care costs SBC pays, the spokesman said. SBC also said its proposal provided for wage increases “even better than those negotiated by the CWA last year with Verizon.” CWA also criticized the company’s job security offer. Although SBC would guarantee a new job for surplus employees in the same state, it wouldn’t have to be in the same city. The spokesman said if an employee turned down the new job offer, it would be considered a resignation. The company also proposed utilizing union-represented employees for future technology work, such as fiber-to-the-premises, Wi-Fi, video, DataComm and DSL technical support, as long as the labor agreements for this work were competitive on wages, benefits and overall costs with those of outside contractors. It proposed that qualified surplus employees move to wholly owned subsidiaries before those subsidiaries hired from outside. SBC said its competitive environment explained its difficulties negotiating the new contract. “We lost 10 million access lines in the last 3 years,” the spokesman said. He said the changes the company asked for would help it to “offset” some costs that continued to rise. SBC union employees haven’t been on strike since 1983.
Twenty-eight Democratic House members led by House Telecom Subcommittee Chmn. Markey (Mass.) and Rep. Holt (N.J.) urged the FCC to enact tough rules against wireless spam. The FCC is conducting a rulemaking on the issue as it enacts a portion of the CAN-SPAM Act passed late last year. Markey inserted in the bill a provision banning unauthorized transmissions on mobile phones, based in part on legislation (HR-122) sponsored by Holt. The letter cites NTT DoCoMo in Japan, which has reported that in one day alone, 38 million wireless customers received 150 million pieces of spam. “Unlike traditional spam,” the members wrote, “wireless spam is more than a nuisance and a waste of time -- under most current text messaging plans, consumers have to pay every time they send or receive a message.” They also urged the FCC to require an easy opt-out method, such as sending a “no” text message. Meanwhile, the Senate Commerce Committee Thurs. will hear testimony on the progress federal agencies are making in carrying out the CAN-SPAM Act, mere months after its passage. Chmn. McCain (R-Ariz.) will preside. A committee statement said the hearing will focus “on the effectiveness of the CAN-SPAM Act and the anticipated effect of new anti-spam initiatives in curtailing the delivery of unwanted e-mail, known as spam, to consumers.” The FTC and FCC still are crafting rules and preparing reports for Congress on proposals such as a do-not-spam list, but ISPs have brought legal action against spammers under the new law. S-877 by Communications Subcommittee Chmn. Burns (R-Mont.) and Wyden (D-Ore.) cleared McCain’s committee last year, and McCain shepherded the legislation on the floor, leading negotiations with members on amendments. McCain, Burns and Wyden all made strong statements upon passage about how effective the new law would be against spammers, but several studies in recent months have suggested there has been little decrease in spam.
Loral said in its 10-Q it won’t need additional financing to fund further operations: “We anticipate using excess cash flows from operations to populate our available slots with new satellites to meet market demand.” The company entered Ch. 11 bankruptcy protection in July (CD July 16 p6). Loral still plans to reorganize around its manufacturing operations and international satellite fleet for service in Southeast Asia, the Middle East and S. America. Loral didn’t provide an estimate of how long reorganization would take. Meanwhile, Loral reported an $80 million loss for first quarter 2004, an increase from a loss a year ago of $48 million. Total revenue decreased to $103 million from $155 million in first quarter 2003. The company also said it reached a settlement with ChinaSat and China Great Wall Industry Corp. (CGWI) in April resolving disputes between the companies concerning Loral’s delay in delivering a launch vehicle for the ChinaSat 8 launch. Loral is manufacturing the launcher and satellite. The settlement would release claims ChinaSat may have had against Loral, or Loral against CGWI, for payments made in connection with the launcher. Loral said it hasn’t received State Dept. licenses that would allow it to export the launcher and the satellite to China: “Delays in obtaining the necessary licenses and technical assistance agreements have in the past resulted in, and may in the future result in, the delay of [Space System/Loral’s (SS/L)] performance on its contracts, which could result in the cancellation of contracts by its customers.” Despite the settlement, Loral said ChinaSat can still cancel the contract with Loral, and may still seek a refund of $81.6 million for the satellite, plus $6.5 million in penalties. Loral said it doesn’t “believe that ChinaSat is entitled to such a refund or penalties and would vigorously contest any such claims by ChinaSat. If the ChinaSat 8 contract were terminated, SS/L estimates that it would incur costs of approximately $38 million to refurbish and retrofit the satellite.”
The 20 largest cable and DSL providers in the U.S., with 98% of the market, added 2.34 million subscribers first quarter, said Leichtman Research Group (LRG). LRG said quarterly net broadband additions were the largest ever, making almost 27 million subscribers total. According to LRG, DSL had its best quarter ever with 1.17 million additions, bringing DSL to a “virtual dead-heat with cable” in net new subscribers. The top cable companies maintained a 6.4 million subscriber advantage over DSL, though, with cable counting more than 16.67 million subscribers, vs. 10.26 million for DSL. LRG also said the top cable providers have a 62% market share compared with 38% for DSL.
EchoStar would spend more than $100 million if it’s forced to comply with a single-dish mandate before 2008, it said in a quarterly report filed with the SEC. EchoStar customers in 38 of 120 U.S. markets now need a 2nd dish to receive local channels. If use of the 2nd dish is barred, as is currently being debated in Congress, EchoStar would be forced by satellite capacity limitations to move local channels to a new bird in up to 30 markets, the company said. “The transition would result in disruptions of service for a substantial number of customers” and could result in increased churn, it said. DirecTV executives also have told analysts that new customers in 24 markets that would get local channels from a satellite at 72.5 degrees W. will likely need a 2nd dish to receive them. Current customers in those markets would need to modify their existing dish, company officials said. Meanwhile, a hearing before the American Arbitration Assn. began on April 28 in N.Y.C. relating to EchoStar’s $219.3 million insurance claim for its EchoStar-4 satellite. EchoStar filed a claim for a total loss on EchoStar-4 in 1998 and a consortium of insurance carriers responded with an $88 million settlement offer. About 35 days of hearings have been conducted in N.Y.C. and London, where EchoStar is pursuing claims against Ace Bermuda Insurance, the company said.
As Senate Commerce Committee Chmn. McCain (R-Ariz.) and Rep. Deal (R-Ga.) said Wed. they would search for ways to get an “a la carte” or tiered pricing package bill through Congress this year, activist groups said they had the money and will to carry the issue forward to next year if Congress fails to act. Deal has proposed an amendment to the Satellite Home Viewer Improvement Act (SHVIA), but acknowledged his amendment would likely have to apply only to DBS providers. McCain said he would try to move a la carte through an amendment, but said it was looking less likely that anything but the most essential legislation would move this year.
NEW ORLEANS -- Cable operators see so many profitable technology options that their main difficulty is choosing among them, system officials said repeatedly at the NCTA convention that opened here Sun. In fact, questions about the best opportunity elicited at least a half dozen answers from senior cable officials. Best opportunities include PVR- based “media centers,” VoIP, voice telephony in general, more focus on cable modems, new types of video on demand, high definition and video in general, industry officials said. “There is so much out there that we could be doing, and only so much money to do it with,” said Chris Bowick, chief technology officer (CTO) for Cox.
Sirius in March captured a 44% share of the retail market for satellite radio receivers, selling over 32,000 aftermarket radios, the company said Fri., citing the latest available NPD point-of-sale data. Sirius said its March sales volume was a 110% improvement over the same month a year earlier and a 38% increase from Feb. CEO Joseph Clayton told analysts that March was his company’s 2nd best sales month ever, behind only Dec. An XM spokesman responded that the NPD data cited by Sirius doesn’t include all major retail accounts, but especially Wal-Mart. With all those retailers and outlets factored in, Sirius’s share would be much less than 44%, he said. The bottom line of success is not how many radios are sold but how many subscriptions are activated, the XM spokesman said. In terms of subscriptions activated from receivers sold at retail, XM had a 72% share to Sirius’s 28%, the spokesman said. Moreover, XM had 1.68 million subscribers to Sirius’s 360,000 as of April 1. “We added 320 000 subscribers in the first quarter,” or nearly as many “as Sirius has overall,” the spokesman said: “We've nearly equaled their subscriber amounts in one quarter.”
Connexion by Boeing will provide Korean Air with its in- flight high-speed Internet service, Connexion said. The service will be installed on 38 of the airline’s planes in 2005 with service scheduled to begin shortly after installation, Connexion said. Terms weren’t revealed.