Sonera said it received final FCC approval to exercise put option to convert its Eliska Wireless Ventures shares to 2.8 million Deutsche Telekom shares. Sonera said that completes sale of its entire stake in DT. It had received shares as part of Deutsche Telekom’s merger with VoiceStream and Powertel. Sonera said proceeds from sale totaled $38 million.
“You don’t necessarily need bombs or explosives to cripple the world economy,” White House Homeland Security Dir. Tom Ridge said Tues. Speaking at EIA dinner in Washington, Ridge said “information technology is the common denominator, the driving force” throughout President Bush’s $38 billion FY 2003 budget request for homeland security. He cited many examples of technology’s role in securing homeland, including coordinated communications systems for first responders and need to roll out broadband so it could serve as tool to educate and inform citizens in time of emergency. Ridge also urged high-tech executives to do more to secure their own networks in all ways, saying he had conducted tours of companies where their servers were secured with sophisticated software but there was no one at front desk to restrict visitors. Ridge praised EIA and its member associations such as CEA and TIA for creating Internet Security Alliance, which is gathering database of best practices among companies.
Tribune Co. bought WTTV (Ch. 4, Ind.) Bloomington/Indianapolis, and satellite WTTK-TV Kokomo (Ch. 29, Ind.) from Sinclair Bcst. Group for $125 million (38 times cash flow), companies said. Sinclair described stations as “nonstrategic television assets.” “Since we were not able to create a duopoly in the Indianapolis/Bloomington market, it made more sense at this time to exit and provide Tribune the opportunity to get the longer term benefit of having a duopoly there,” Sinclair CEO David Smith said. Tribune owns WXIN (Ch. 59, Fox) Indianapolis. “The Indianapolis duopoly significantly increases Tribune’s presence in that market,” Tribune TV Pres. Pat Mullen said. Tribune COO Dennis FitzSimons said: “By creating a 2-station cluster in Indianapolis we have immediate opportunities to reduce costs and improve revenue, which makes the purchase price very attractive in today’s environment.” Deal, creating Tribune’s 4th duopoly, is expected to be funded with proceeds from sale of Denver radio stations to Entercom Communications. Tribune, meanwhile, said broadcast operating profit fell to $71.9 million in first quarter, from $88.8 million year ago, and broadcast revenue to $283.5 million from $290 million. Standard & Poor’s issued bulletin saying that Tribune faced potential tax liability of about $880 million as result of adverse IRS ruling on reorganization of 2 subsidiaries. If liability is upheld, S&P said, it would “negatively affect” Tribune’s debt rating.
Iowa Gov. Tom Vilsack (D) signed bill (SF-429) that allows periodic review and amendment of price cap regulation plans for state’s 3 largest incumbent telcos. Old 1995 law prescribed cap framework that incumbents could elect, but didn’t provide any mechanism for changing system in future years. New law allows telco, regulators or 3rd parties to petition for major changes to cap system, including rate increases, once every 3 years. Cal. Senate passed bill (SB- 1253) that would repeal 14-year-old state ban on possession or use of mobile phones or pagers by public school students. Bill sent to Assembly on 38-1 Senate vote would allow local school boards to set policies on students’ use of wireless phones. Old 1988 law, passed when cellphones still were something of novelty, was aimed at preventing use of mobile phones and pagers for drug dealing at schools. But now, said supporters, cellphones are commonplace communications tool and may make crucial difference in emergencies. Bill contains unusual disclaimer that it’s “not the intent of the Legislature to encourage pupils to use electronic signaling devices at school.” Minn. House passed no-call telemarketing bill (HF-2710) that would give state commerce commissioner authority to establish and enforce state no-call telemarketing list. Bill would set $2,000 fine per offending call and require local exchange carriers to inform customer how to get on state list. Bill also would require that names on state list be forwarded to federal authorities in charge of any national no-call list. Bill is similar to measure recently passed by Senate (SF-3246). Both measures now go to conference committee to reconcile relatively minor differences.
FCC Mass Media Bureau denied application by Paxson to move its LPTV station in Amityville, N.Y., to Ch. 19, granting petition by local police saying new channel assignment would interfere with public safety communications. Station, WPXU-LP, was displaced from Ch. 38 by DTV allocation of WWOR-TV Secaucus.
Latest DTV stations on air: WTKR (DTV Ch. 58, CBS) Norfolk; KBME-TV (DTV Ch. 22, PBS) Bismarck, N.D.; KCFW-TV (DTV Ch. 38, NBC) Kalispell, Mont.; KTVM (DTV Ch. 2, NBC) Butte. NAB said new stations meant DTV was available to 77.74% of U.S. households.
Residential wireline long distance (LD) min. of use will decline average 10% per year in U.S. through 2006, Yankee Group said Thurs. With 130 million U.S. wireless users at end of 2001, “penetration of wireless services will only grow in its threat to the wireline voice market,” research firm said in teleconference. Called “substitution” by telcos, consumers increasingly are using wireless phones with regional or national calling plans or sending e-mail or IM instead of calling long distance. Prepaid calling cards and Internet telephony pose much smaller challenge, but “do account for some substitution today,” it said. Yankee Group estimates by 2006 wireline direct-dial long distance market will have lost about 135 billion min. of use to other communications technologies compared with 29 billion substitution min. last year. Of this, 107 billion min. will be wireless calls (from 22 billion 2001) and 27 billion min. e-mail/IM (from 6 billion). Prepaid plans will account for 800 million substitution min., down slightly from 900 million last year. Internet telephony will take least bite from long distance carriers, accounting for 500 million min. from 200 million in 2001, it said.
“The more that Americans watch movies on DVD and VCR, the more they go to the movie theater,” said MPAA Pres. Jack Valenti. Speaking Tues. at SHOWEST in Las Vegas, he said 50% of those who viewed DVDs in their homes and 38% who watched VCRs were “frequent” or “occasional” moviegoers. Valenti had high praise for motion picture code (upon which TV code is patterned, with Valenti CEO of both), saying parents “like and trust what we are offering them. Year after year, parental approval of the rating has risen steadily.”
FCC Consumer Information Bureau released quarterly report on public inquiries and complaints that showed overall 38% decline in total complaints in 4th quarter. In 3rd quarter, Commission had received 15,599 consumer complaints on broadcast, cable, wireless and wireline issues. In quarter ended Dec. 31, agency received 9,729 complaints and inquiries. FCC said drop could be due to postal disruptions in Washington following anthrax scares in Oct. On wireless, it received 2,423 complaints, 1,323 of them on billing. In 3rd quarter it had 3,076 on wireline telecom services. Report said Commission received 7,186 complaints in 4th quarter, of which 3,588 involved slamming. In previous quarter, agency had 12,362 complaints about wireline service.
Broadband is being deployed “in a reasonable and timely manner,” FCC said in its 3rd annual report to Congress on availability of advanced telecom services. Report, which was issued Thurs. and includes data through June 30, 2001, said market for advanced services continued to grow, with both availability and subscribership increasing significantly. Report said number of subscribers had increased to almost 10 million, despite widespread economic downturn. Chmn. Powell said Commission wouldn’t flag in its efforts to promote broadband, despite positive steps cited in report. “It is one of our highest priorities and is never far from our thoughts as we decide communications policy,” Powell said.