AT&T is seeking FCC permission to discuss sale of MSO’s minority stakes in several cable networks, including E! Entertainment, Digital Cable Radio, Sunshine Network, New England Cable News, In Demand, Fox Sports New England, National Cable Communications, Food Network. Spokeswoman for AT&T said move was part of company’s drive to cut its debt load and improve its prospects on Wall St. In Jan. 10 ex parte filing with Commission, AT&T, which inherited those programming interests from MediaOne, said it sought govt. approval to shed stakes because it “could be required to advise, or obtain permission from, its current partners in these services.” In addition, company said, “a potential purchaser could be AT&T’s current partners in these services.” AT&T promised it “would not be involved in discussions directly relating to the video programming activities of these entities,” as FCC stipulated in approving MSO’s purchase of MediaOne last year. AT&T previously gained Commission approval to sell its inherited stakes in Speedvision and Outdoor Life networks.
E-rate supporters are preparing concerted opposition to provision in President Bush’s education reform package that would roll e-rate into larger technology plan and potentially alter its funding structure. Program to subsidize school and library Internet connections currently is funded at $2.4 billion annually through surcharges on long distance bills, called “Gore tax” by its detractors since former Vice President pushed hard for its inclusion in Telecom Act and for program to be funded at high level by FCC. Moving program into Education Dept. and requiring annual appropriations “would be a major step backwards, and I will fight it aggressively,” Sen. Rockefeller (D-W.Va.) said. “It would utterly change the program,” said spokesman for Sen. Snowe (R-Me.).
Comcast Corp. Pres. Brian Roberts predicted his company would end new year with 2 million digital cable subscribers, roll out video-on-demand (VoD) service commercially by July and integrate personal video recorder (PVR) technology into its digital set-tops by close of year. Speaking at Economic Club of Washington Wed., Roberts said Comcast, which ended 2000 installing 18,000 digital cable boxes per week, will add 650,000 digital customers this year. He said MSO, which ended last year with more than 400,000 high-speed data subscribers, averaged installation of 10,000 cable modems per week in Dec. Showing off Comcast’s new VoD service, Roberts termed it “the next big product coming” and predicted it would be “a huge, popular product.” He also said Comcast, which is testing joint PVR-cable services with TiVo and ReplayTV in 2 N.J. cable systems, aims to put PVR functionality into upgraded version of its digital cable set-tops by close of year. Roberts pledged that Comcast, which recently took over Washington’s trouble-plagued cable system from AT&T, would transform it into technological showcase in 18 months. He said Comcast, which has become Washington-Baltimore area’s dominant MSO with 80% market share and 20% of company’s nationwide customer base, would end up spending more than $250 million to upgrade its area systems.
LAS VEGAS -- Programming for children under FCC’s 3-hour mandate is “a terrible financial business for broadcasters… and we don’t think the government should tell us to run 3 hours of kids programming,” Madelyn Bonnot of Emmis Communications told NATPE panel here on “Kid-Friendly TV.” With exception of Tom Lynch of program company bearing his name, other panelists seemed to agree with Bonnot. “We have to be in there [kid programming],” Lynch said. “It’s a public service. They're public airwaves.” All that’s needed, he said, is a hit children’s show.
SBC reported it had 44% increase in data revenue to $2.2 billion in 4th quarter, 15% of company’s total revenues of $14.1 billion in period. Company said it has 767,000 DSL subscribers and more than half of its customer locations now are capable of receiving DSL service. Among data growth drivers was 68% increase in SONET revenue, primarily from large corporate customers. SBC also reported strong wireless results through its 60% ownership of Cingular Wireless, joint venture with BellSouth, with pro forma revenue increasing 17% to $3 billion. Overall, company said revenue increased 9% in quarter and profits 5.6% after one-time charges. SBC also reported it added 547,000 long distance customers in Tex. in 4th quarter and at year’s end served 1.7 million long distance lines representing 1.4 million customers. SBC expenses rose 14%, which it attributed to development of long distance and DSL markets and start of Cingular Wireless. “In 2000, we made the investments and strategic decisions necessary to put SBC in the best position to pursue data and wireless growth opportunities,” SBC Chmn. Edward Whitacre said.
Without broad audience guaranteed by cable carriage of digital signals, PTV stations will face additional difficulty raising money from local, state and national sources for digital transition, heads of 3 public broadcasting organizations said in response to FCC’s decision to require cable operators to carry only one multicast digital channel in rulemaking on digital must- carry (CD Jan 24 p3). In joint statement, CPB Pres. Robert Coonrod, PBS Pres. Pat Mitchell and APTS Vp-Policy & Legal Affairs Marilyn Mohrman-Gillis said carriage of only one digital channel, if allowed, would undermine PTV stations’ plans to provide wide range of multicast educational services to their communities. Millions of school children and 70% of nation’s TV viewers get PTV through their local cable system, they said, and for entire public to benefit from “our comprehensive array of digital education and local public affairs content, these cable systems must deliver all the educational noncommercial services that each station provides.” Thanking Chmn. Powell and Comrs. Ness and Tritani for “recognizing the potential impact of this decision on PTV,” they said they would work with them for “ a resolution of this issue that is faithful to the statute as well as to the public interest.” They said they would use opportunity in further notice to provide information to Commission to demonstrate that dual analog and digital carriage requirements during digital transition won’t burden cable operators’ First Amendment interests.
Verizon Senior Vp Thomas Tauke told reporters Thurs. that company was seeking lobbying support from cable industry for new deregulated form of broadband policy that both telcos and cable could live with. He emphasized that no formal coalition had been formed, although 2 sides have had “discussions.” Tauke said he envisioned 3rd “basket” of regulations, separate from traditional cable and telephony models, that would apply only to broadband services. Under that scenario, broadband networks would be lightly regulated, along wireless telephony model, he said.
W.Va. state govt. may owe 3 phone companies $5.6 million in unpaid phone charges for services over last 3 years because of “gross negligence” by former manager in state Div. of Communications & Information Services who was in charge of internal system for billing bulk phone charges to state’s 570 individual agencies. State’s new Secy. of Administration, Greg Burton, estimated state could owe Verizon $4.1 million, Citizens Telecom $1 million, AT&T $500,000. But Burton plans meetings soon with companies to pin down actual amounts. Problem arose because former manager apparently didn’t want responsibility of verifying and distributing monthly bills and just kept recycling past statements. Manager resigned last fall when persistent carrier inquiries about state underpayments prompted administrative investigation. Problem for state and carriers is that back bills from 1998 and 1999 can’t be paid from current state budget without special act of legislature.
Rural Telecommunications Group (RTG) “adamantly” objected to request by Verizon Wireless to postpone start of 700 MHz auction scheduled for March 6. RTG argued carrier hadn’t provided FCC with “extraordinary or unforeseen reason to postpone” auction by at least 2 months, or ideally until Sept. 6. “The Commission should not establish auction deadlines that comport with the business plans of any private company; and, stripped to its essence, Verizon urges the Commission to delay the 700 MHz auction merely for Verizon’s business convenience,” RTG told agency.
AOL Time Warner announced plans to lay off some 2,000 employees -- 3% of its total staff -- as part of its general postmerger restructuring. The cutbacks encompass 725 at AOL, including 300 in Washington area, and 1,300 at Time Warner in N.Y., L.A., Washington and elsewhere. Company also said it intended to sell or close its 130 Warner Bros. retail stores, affecting another 3,800 employees. AOL Time Warner said it would consolidate some of Warner Bros.’ Web sites and freeze hiring at its cable systems, cable programming networks and WB network. Moves come on top of restructuring CNN announced last week that will eliminate another 400 jobs. Although they don’t expect latest restructuring to generate big cost savings, company officials said AOL Time Warner was on track to meet its revenue growth targets of 12%-15% for year.