Cable operators’ royalty fees likely will grow in a deal with programmers boosting rates for transmitting some signals, cable lawyers said. The hike will be offset partly by raising certain revenue thresholds, perhaps shifting some systems to lower rate tiers, they said. The deal, approved with little notice by the Copyright Office, took effect July 1, according to a Oct. 6 Federal Register document.
The America Channel says Comcast and Time Warner are hurting its prospects by unfairly denying carriage to the digital network, which hasn’t begun programming. But America Channel’s greatest risk may be its own tactic of agitating against the cable operators’ pending $17.6 billion purchase of Adelphia. America Channel acknowledged that it has been claiming the Adelphia deal will make it even harder for independent networks to get carriage, with corresponding risk of payback. “There is the possibility of retaliation,” The America Channel (TAC) CEO Doron Gorshein told us: “That is clearly a consideration. However, sometimes you have to take a stand for what is right.”
A dividend proposal by the Dolan family, which killed a plan to buy Cablevision, was panned by analysts wary of seeing the company’s debt load rise. Four months after the Dolans offered to buy the firm’s cable unit for $5 billion, the deal disintegrated after a special board committee and the Dolans couldn’t agree on a price. Release of a letter from the clan to Cablevision’s board scuttling the takeover sent the firm’s shares tumbling 13%.
Verizon expects to spend more than $5 billion total on its FiOS fiber project, company officials said, in the first update in some time on costs for video and broadband services. The Bell may spend several times that figure, predicted some analysts. Verizon’s FiOS service passes more than a million homes and businesses (CD Sept 26 p8). The company has said it expects service to be available to 3 million by year-end. Not all homes will be able to get video.
The FCC is set to expand emergency alert system (EAS) requirements to include satellite radio and other digital platforms as the Commission prepares to seek comment on its role in enabling such alerts on new technologies, sources said. The Commission said late Fri. that this week’s meeting will include consideration of EAS rules, as had been expected (CD Oct 17 p11). The FCC document wasn’t more specific, as is typical in so-called Sunshine notices.
Some cable vendors face an uncertain quarter as customers allocate budgets among services such as digital simulcasting and set top boxes, said executives of equipment makers we spoke with. Outlays for some products, such as digital set tops, are “mature,” while VoD and simulcasting spending could contract near term as cable operators use existing inventory, officials said. The comments followed last week’s release of financial results by vendors of all sizes, from Motorola to Concurrent Computer. Shares of other firms, including C- COR and Harmonic, fell as investors found sequential growth and company forecasts disappointing.
Scientific-Atlanta’s bookings for products such as set top boxes declined sequentially last quarter, as sales missed estimates of some analysts. A 10% decrease in subscriber bookings was partly offset by a 12% surge at the transmission business. Sales and profit in the first quarter ended Sept. 30 each rose about 8% from a year earlier, though backlog declined. Revenue of $490 million was less than the $514 million anticipated by American Technology Research’s Rob Sanderson and below Oppenheimer & Co. analyst Lawrence Harris’s $536 million forecast. “Our customers have not yet finalized their spending plans,” said Wallace Haislip, senior vp-finance & operations, on a conference call. Scientific-Atlanta, which has been urged by analysts to buy back stock, said it couldn’t do so because the company has “material non- public information.” The company wasn’t more specific in a statement or on the teleconference, but Scientific- Atlanta said it expected a resolution by Dec. 31. Separately, the company said it got an order to sell NTL a new set-top box. Work on the product is expected to be completed next year.
Illustrating what some dub a “gray area” in an SEC rule meant to promote corporate transparency, a union is weighing whether to file a formal complaint on disclosures Comcast made in a meeting with a Wall Street analyst. The question isn’t whether Comcast should have disclosed the information, union and securities law experts said, but whether Comcast should have disclosed it more widely. At the least, they said, firms like Comcast should err on the side of disclosure. Comcast “emphatically” denied any wrongdoing, and some experts agreed.
The FCC has authority to require multilingual emergency alert system (EAS) announcements, said the Minority Media & Telecom Council (MMTC), Independent Spanish Bcstrs. Assn. and other groups. The Commission can opt only to approve local and state govt. EAS proposals that “reasonably provide for widespread multilingual communications” in disasters, MMTC said in a FCC filing released Tues. While multilingual EAS broadcasts are a “laudable” goal, NAB said in a response filed last week, “statutory and practical questions” remain. NAB questioned whether the FCC, rather than FEMA, has authority to require multilingual emergency broadcasts. While raising practical questions about which Spanish-language station alerts would have to be re- broadcast, the group had no immediate comment on MMTC’s filing. The EAS issue is “non-controversial,” MMTC Exec. Dir David Honig claimed. “The NAB didn’t say that this was unimportant… or that the commission doesn’t have jurisdiction,” he told us. “We think we've made a very strong case that the Commission should step up and address this right now.” Still, there’s no indication such action is forthcoming. More than 150,000 Spanish-speakers in the New Orleans area were without a source of information in their language during Hurricane Katrina (CD Sept 21 p5). “The Commission has both the jurisdiction and the moral authority” to require multilingual EAS, MMTC said.
None of two dozen small Cal. businesses questioned knew they could get advanced cable services, found a study commissioned by a group partly backed by Verizon. Officials from the businesses weren’t aware they can get VoIP and other products from cable operators, said Esteban Soriano, research dir.-Cal. Small Business Education Foundation. His study was sponsored by Consumers for Cable Choice. “The vast majority of small business participants indicated their cable services were or had been unreliable and that cable providers had very low customer service,” the report said. But Soriano said: “Our respondents indicated that competition for cable services was good and should result in better technology deployment.” The business foundation hopes to expand the research to include more companies, Soriano told us. Cable operators will have about 3.5 million business customers by 2009, Kagan Research has predicted (CD Oct 6 p12). In response to the study, an NCTA spokesman said: “It’s hard to take seriously any survey produced by a group which is funded by telephone monopolies that are asking Congress for special favors in order to fulfill their decade-long promises to provide local video service."