“Fast start” out of gate for XM Satellite Radio should serve as “case study” in risk management that “telematics providers would be wise to emulate,” Forrester Research report said. Report praised XM’s 3-pronged strategy for “outmaneuvering” Sirius Satellite Radio and putting company ahead of schedule to meet year-end goal of signing up 350,000 subscribers. While Sirius invested in 3 elliptical-orbiting satellites and 8-chip receiver chipset designed from scratch, Forrester said, XM went for simpler 2-satellite system and chipset adapted from 2 existing designs. Moreover, report said, “one way to manage risk is to share it with key partners,” such as General Motors, which has 22% equity stake in XM and “wants very much” for it to succeed. Forrester also gave XM high marks for creating “hybrid” business model that relies both on ad and subscription revenue streams. As result, report said, XM maintains $3 lower monthly subscription fee than Sirius “while keeping its business model options open.”
Qualcomm net income fell 60% to $43.9 million in quarter ended March 31, with revenue decreasing nearly 3% from year ago to $696.1 million. Qualcomm said lower revenue was result of reduced royalties and shipment volumes of MSM chips and smaller revenue from its business with Globalstar. Revenue drop in 2nd quarter was “partially offset” by higher software development and service revenue related to Binary Runtime Environment for Wireless (BREW) application platform and effect of “higher average selling prices” of 3G CDMA2000 1x phone chips, Qualcomm said. It said it projected that 3rd quarter pro forma revenue would increase 3-6% over 2nd quarter and revenue for fiscal 2002 would be up 4-8%. Qualcomm based estimate on expected growth of CDMA2000 1x market in 2nd half of year and “on the sale of 80-85 million CDMA phones in calendar 2002 with a 5-10 percent annual decrease in average selling prices of CDMA phones.”
Piracy of software and entertainment might never be curtailed “unless someone is in charge to take the credit and take the blame,” House Appropriations Commerce, State, Justice Subcommittee Chmn. Wolf (R-Va.) said Tues. At field hearing in Loudoun County, Va., Wolf told panel of 5 federal officials that “it does seem someone should be responsible domestically and someone internationally” for both enforcement of piracy laws and education on topic. Those officials, representing Depts. of Commerce, State, Justice and the U.S. Trade Representative (USTR), seemed less than enthusiastic. PTO Dir. James Rogan, who also is undersecy. of Commerce for intellectual property, told us after hearing that he wasn’t convinced federal govt. needed “an IP czar.” Wolf held hearing in his district at Va. campus of George Washington U. to emphasize importance of federal funding for intellectual property protection. Witnesses repeatedly focused on need for both enforcement and consumer education.
“Congressional action tends to be a blunt instrument” that involves “fights from 5 years ago,” state regulator said Thurs. to explain why regulators were better equipped than legislators to spur broadband. At panel hosted by advisory committee to Congressional Internet Caucus, W.Va. Public Service Commission Dir.-Consumer Advocate Div. Billy Jack Gregg was backed in that assessment by CEA Pres. Gary Shapiro and National Grange Legislative Dir. Leroy Watson, but opposed by CapNet Exec. Dir. Tim Hugo. Hugo also found himself in minority on regulation of new broadband deployment by incumbents, with other 3 reaching rough consensus that old Bell equipment should be subject to existing regulations but new build-outs would operate under new rules. Panel was bit refreshing in that not single member represented ILEC or CLEC, although many arguments echoed theirs, particularly when pro-Bell Tauzin-Dingell bill (HR-1542) was discussed.
NxtWave Communications said it had developed chip with 3 high-performance circuits that combined digital terrestrial reception and cable compatibility. Solution overcomes cable compatibility questions and provides cost-efficient alternatives for manufacturers and cable system operators, NxtWave said. “OpenCable requirements, combined with ‘must- carry’ legislation for digital television transmissions, make the need for dependable, digital reception for either cable or terrestrial receivers more important than ever,” NxtWave said.
Six industry associations said Wed. they had formed ad hoc coalition to work for elimination of regulations on telephone companies that they said impeded rollout of broadband service to homes and offices. In bid to boost broadband Internet deployment, coalition’s main role will be to file comments with FCC Fri. in triennial review of agency’s unbundled network element (UNE) rules, said CEA Pres. Gary Shapiro, one of participants. Group will recommend scaling back UNE rules, which require Bell companies to lease parts of their network to competitors for low-cost rates. Bells have complained that that sharing requirement has made it difficult to obtain investment to build out broadband networks.
Even though Senate Judiciary Committee Chmn. Leahy (D- Vt.) vowed March 14 that digital rights bill proposed by Senate Commerce Committee Chmn. Hollings (D-S.C.) wouldn’t pass Congress this year (CD March 15 p6), all of parties involved in debate -- content providers, consumer electronics manufacturers, Internet providers and IT manufacturers -- find themselves enmeshed in raging Capitol Hill policy debate that promises to continue indefinitely. House Judiciary Committee began investigation of digital copyright issues March 12, while Leahy elicited guarantees of updates every other month on cross-industry negotiations on protecting digital content online. Even as he was burying any chance of passage of Hollings’ bill -- which would have had federal govt. mandate hardware and software solution in every digital CE device to protect content if industries hadn’t reached agreement in 18 months -- 2 studio heads involved in drafting bill continued lobbying for govt. solution.
CTIA Pres. Tom Wheeler said that as carriers voluntarily provided priority access service (PAS) capacity to emergency service and national security personnel, federal govt. had to “get on with the allocation of additional spectrum” for that and other users. At New America Foundation lunch on spectrum policy Fri., he said federal govt. asked carriers after Sept. 11 to set aside “a minority of their spectrum in case of emergency” to provide access to prioritized national security and emergency workers. Trade-off for consumers, he said, is that as one of 5 priority classes of govt. users is occupying given channel, “then somebody else isn’t.”
Majority of senators attending Senate Commerce Committee hearing on copyright protection Thurs. would at least consider supporting govt. intervention to mandate technology standard. Hearing was called by Chmn. Hollings (D-S.C.), who along with Sen. Stevens (R-Alaska) is considering bill that would have govt. set copyright standard to be inserted in all digital CE devices if copyright holders and CE manufacturers couldn’t reach agreement in 18 months. Good news for broadcast industry was that high-tech witness promised specifications on DTV signal protection by end of March.
Qualcomm confirmed its previous forecast for 2nd quarter, saying it expected earnings of 20 cents per share in period, excluding its strategic initiatives program. Company earlier predicted earnings of 19-21 cents per share in quarter. Qualcomm Chmn. Irwin Jacobs said 2nd-quarter targets for phone chip shipments were coming in at “upper end” of original estimate of 13-14 million units and CDMA2000 1X shipments now were expected to reach 1 million more units than early estimate.