Ciena had $352 million revenue for first quarter ended Jan. 31, up from $287.6 million. First quarter adjusted net income was $54.1 million, 31% increase from previous quarter, company said. After planned acquisition of Cyras Systems by end of current quarter, company expects 95-105% growth in 2001, with revenue range of $1.67-$1.76 billion. Level 3 became Ciena’s newest customer in first quarter.
Overbuilder RCN Corp. said it’s withdrawing its bid for competitive cable license in Philadelphia after trying unsuccessfully for 2-1/2 years to convince City Council to approve its $250 million, 7-year buildout plan. “We gave it our best effort, but 2-1/2 years is an unreasonably long time to wait for approval when other towns are clamoring for our service,” RCN Senior Vp-Regulatory Affairs Scott Burnside said. It had become clear that some members of City Council “are not ready to give Philadelphians a choice of cable providers,” he said. RCN’s proposed licensing terms for competitive cable and phone services met with stiff opposition in City Council from incumbent Comcast, which said RCN’s plan for constructing and operating in selected areas (Areas 3 and 4 of city) didn’t reflect fair-play approach. Comcast claimed RCN’s proposal contrasted sharply with city’s cable franchising approach in 1986, when it wouldn’t grant franchise for one section until suitable franchises were found for all areas and city also required construction of entire service area within 2-4 years. In testimony before City Council, Comcast Regional Vp Edward Pardini said city should require RCN to build out entire city and establish specific 2-4 year timetable for build-out. Council must not permit RCN to “cherrypick its way to big profits,” he said. RCN will focus on many other communities “who have welcomed us with open arms,” CFO Timothy Stoklosa said: “We have the financing in place to pass more than 4 million homes, and we will continue to grow in our existing markets.” RCN spokeswoman denied pull-out had to do with financial pressures. “Speed to market is essential to our plans,” she said, and City Council had been putting up “over and over again,” series of issues including those dealing with company’s relationship with labor unions and its build-out plans. There are plenty of opportunities out there, she said, and RCN had $2.2 billion in liquidity. Referring to reports of scaling back of plans to build in some cities after its stock price took hit last year, she said it related only to new markets where company didn’t already have infrastructure. Company already was in 7 of 10 top markets in U.S., she said. Expressing surprise at RCN’s decision, Comcast Vp-Treas. John Alchin, said it had “everything to do with Wall St. and nothing to do with Philadelphia.”
Sycamore Networks said 2nd-quarter earnings soared 414% to $149.2 million from $29 million in year-ago period. Revenue for intelligent optical network provider beat first quarter’s $120.4 million. While outlook is uncertain for next 2 quarters in customer capital expenditure, next-generation optical equipment purchases by large incumbent carriers is expected in last 2 quarters of fiscal 2001, company said. Revenue growth in next 2 quarters is projected at 205-210% over fiscal year 2000, company predicted.
Alltel unveiled plan to trim its more than 20,000-strong work force by 1,000 positions through early retirements and job reductions. It said it expected fully diluted cash earnings for 2001 to be $2.85-$3 in 2001, close to consensus forecast of $2.98. As part of its reorganization, Alltel also will reduce its operating regions to 3 from 5, with regional hq remaining in Cleveland, Charlotte, Little Rock. Wireless growth is expected to accelerate this year by 2.4 million to 2.5 million customers, company said. “This reorganization reaffirms Alltel’s commitment to grab its share of the customer growth in the wireless business,” Alltel CEO Scott Ford said.
DTV channel changes approved by FCC: (1) WQHB-TV Sumter, S.C., can substitute DTV Ch. 39 for Ch. 38. (2) KOTA-TV Rapid City, S.D., can substitute DTV Ch. 2 for Ch. 22. (3) KAUN Sioux Falls, S.D., can substitute DTV Ch. 51 for Ch. 40.
State regulators in Ariz. and Ind. took action to address phone number depletion. Ariz. Corporation Commission approved geographic split of 520 area code that will put Tucson and Yuma into separate codes. Tucson and its suburbs in Cochise, Pima, Pinal and Santa Cruz Counties will keep 520. Yuma and rest of current area will be reassigned to new code starting June 23. Meanwhile, Ind. Utility Regulatory Commission (IURC) implemented process to reclaim 220,000 unused phone numbers from inventories of local service providers. IURC will review reports from national number administrator on assigned exchange prefixes that have gone unused for 6 months. IURC will ask carriers for proof that exchange codes have been activated or will be activated within 60 days, or that carriers return unused numbers to state pool for reassignment. IURC will start recovery process in already congested Indianapolis 219 code, and hopes to recover about 30,000 numbers. Later this year, it will seek to recover another 190,000 numbers in central and southern Ind. IURC said that even with number reclamation and other conservation measures in 219 area, relief via split or overlay would be necessary by early 2003, when code is projected to run out of numbers.
Number of customer complaints to Verizon about service dropped 16% in Jan., compared with last year, National Operations Pres. Eileen Odum said at briefing Thurs. Company officials said there were 8,244 complaints in Jan., down from 9,838 in Jan. 2000, from both residential and business customers. Year ago figure is combination of Bell Atlantic and GTE, companies that merged to form Verizon. Spokeswoman said Verizon had made conscious effort to reduce complaints, including development of 14 regional complaint centers dedicated to handling any customer gripes that came in. “Customers want instant gratification” because they have grown to expect that through use of Internet, she said. DSL complaints still are higher than acceptable, she said. Many of them are from consumers who can’t get DSL for variety of reasons, such as being more than 3 miles from central office, Odum said. She said Verizon would have DSL capability in nearly all of its 6,607 central offices by end of this year.
Public broadcasting and foreign ownership of telecom companies were among subjects on what House Commerce Committee Chmn. Tauzin called panel’s “ambitious” oversight agenda. List released Wed. includes topics Tauzin and others on Committee have talked about repeatedly in last few weeks, such as FCC reform, DTV transition, networks’ election night coverage, broadband deployment. But it also includes: (1) Review of federal funding needed for CPB, including “in-depth examination of the estimated transition costs of the public broadcasters for converting from analog to digital television.” (2) Cybercrime prevention and critical infrastructure protection activities of various agencies, including FCC. (3) Wireless privacy and wiretapping issues, including examination of law enforcement’s needs under Communications Assistance for Law Enforcement Act (CALEA). (4) Violent content in media. (5) State of high-tech industry, including examination of causes of “economic malaise affecting the e-commerce industry. (6) FCC’s broadcast ownership rules and whether they comport with congressional intent. (7) Copyright rules online. (7) Spectrum management and other wireless policies such as spectrum cap. (8) Educational technology programs. Agenda said Committee planned to find “best way to combine the many differing and competing programs into a single funding mechanism.” (9) Phone calling rates for calling cards and in hotels. (10) Efforts of other countries to comply with their trade obligations, particularly in regard to telecom agreements, on which U.S. Trade Representative will release assessment March 31. Meanwhile, Tauzin and ranking Democrat Dingell (Mich.) submitted a budget request giving the Republican majority two- thirds of the Committee’s funds and staff, an arrangement Dingell called “a significant improvement” from the previous session.
Financials: Viacom TV operating profit soared to $310 million in 4th quarter ended Dec. 31 from $86.1 million year ago. Revenue from CBS, UPN, TV stations group and TV syndication reached $1.9 billion from $669.1 million because of acquisitions. In addition, Infinity Bcstg. added $490 million operating profit and $1.1 billion revenue for quarter. Cable network operating profit was $475.5 million, up from $347.2 million, and revenue $1.2 billion from $925 million. Overall, company had $30.4 million net profit, down from $133.1 million year earlier, in part because of increases in interest cost and income tax. Although TV revenue was up, it was down 4% on pro forma basis, with gains all attributed to acquisitions. Viacom did cite improvements at CBS. At cable, MTV revenue rose because of higher subscriber fees and double-digital ad increase, as Showtime also gained… Clear Channel loss deepened to $192 million in 4th quarter ended Dec. 31 from $22.8 million loss year ago. Revenue grew to $2.2 billion from $986 million because of acquisitions, but interest expense jumped $100 million to $152.3 million. Cash flow was $684 million, up from $353 million in year… Cablevision Systems had net income of $557 million on higher net revenue of $1.25 billion in 4th quarter, thanks to sale of many of its cable systems outside N.Y.C. area. Cablevision said it earned nearly $1.1 billion on cable asset sales in quarter, up from zero in year-ago period. On pro forma basis, MSO said its net revenue climbed 10% to $1.2 billion and its adjusted operating cash flow 13% to $235.4 million as its cable operations, commercial telephony division and Rainbow Media Holdings unit all posted healthy gains.
Mo. PSC gave SBC business unit Southwestern Bell Telephone (SBT) list of changes it must make in interconnection and unbundling tariffs if it wants agency’s endorsement for Sec. 271 interLATA bid. PSC last week told telco it wouldn’t endorse long distance entry based on record before agency. To win approval, PSC told SBT Tues. it must implement Mo. colocation tariff with Tex. rates and Kan. service terms, adopt Tex. rates for unbundled loop conditioning charges and for 95 specific unbundled network elements (UNEs). Agency said carrier it also must adopt Tex. rates and terms for Mo. line sharing, unbundled local transport and most nonrecurring wholesale service charges. Tex. rates will serve for interim until permanent cost-based Mo. rates are developed, PSC said. Agency also told SBC it must reduce service deposits required of CLECs. It said that if SBT implemented PSC’s list of changes and continued to meet Tex.-type wholesale service performance standards it already had established for Mo., SBT would meet Sec. 271 checklist and PSC could endorse company’s long distance entry. Company has until Feb. 23 to respond.