12/20/01
1. Comcast Wins Bid for AT&T Broadband
2. Bankruptcy Court Approves New Affiliate Deals
3. GCI to Deploy Toshiba's DOCSIS 1.1 Modems in Alaska
4. Com21 Announces New International Customers
5. Blonder Tongue to Distribute TMT's MDU Data System
6. PentaCom to Deploy Motorola's CMTS in Moscow Region
7. Open Access Regulations Likely in The Netherlands
8. IE Introduces Out of the Box Auto Provisioning
9. Circuit City to Carry EarthLink's Broadband Services
1. Comcast Wins Bid for AT&T Broadband
AT&T has agreed to sell AT&T Broadband, its cable division, to Comcast in a
deal valued at $72 billion. The new company, T&T Comcast, will be a
super-power MSO serving approximately 22.3 million customers in 17 of the
top 20 markets in the U.S. The agreement calls for Comcast to issue 1.235
billion new shares to AT&T shareholders, valued at about $47 billion. In
addition, Comcast will assume $25 billion in debt, including $5 billion in
convertible preferred securities owned by Microsoft. AT&T shareholders will
own 56% of the company and maintain a 66% voting interest. The Roberts
family will control a third of the voting interest. Comcast's willingness
to take on debt and concede a majority voting interest were key in giving
the MSO an edge over other suitors including AOL Time Warner and Cox
Communications.
Under the terms of the deal, AT&T shareholders will receive about .34
shares of AT&T Comcast for each share of AT&T owned. Comcast shareholders
will receive one share of AT&T Comcast for each Comcast share.
AT&T and Comcast will each choose five board members for the new company
and after, will jointly select two additional members. Michael Armstrong
will be the Chairman and Brian Roberts will serve as Chief Executive. The
headquarters will be in Philadelphia.
AT&T Comcast will have about $19 billion in revenues, including both
companies' cable systems, AT&T's 25% interest in Time Warner Entertainment,
and Comcast's interest in QVC, E!, The Golf Channel, and other
entertainment properties.
To editorialize, one must question whether or not Comcast really won
anything. An unattractive side of AT&T's character has been quickly
surfacing over the last year. The company was blamed by many for causing
@Home's demise so that it could move data subscribers to its own network
expeditiously and takeover the multi-billion dollar company's assets for
around $300 million. AT&T denies the allegation, but the practice is modus
operandi for the telecom giant, as disclosed by Dave Dorman, the company's
president, at a Lehman Brothers' conference held earlier this month.
Dorman stated, "We think we can create infrastructure now because of the
bankruptcies and the size of the bulk pile of assets out there to pick
over, cheaper than we could if we had to build it all ourselves." He added
the company has a "full-time scavenger team" looking for opportunity buys
from bankrupted companies. Earlier this year, AT&T purchased the assets of
Northpoint Communications at fire sale prices.
AT&T did rescind its bid to buy @Home's assets after a bondholder
initiative led to the abrupt termination of the company's network
connectivity and forced AT&T to quickly move its subscribers to its own
network.
AT&T's reputation is not only realized at the executive level, but also at
the consumer level. AT&T cable modem subscribers have been jamming phones
lines and company chat rooms since the provider moved its @Home subs to its
own network earlier this month. The customers are complaining that their
new connection speeds are either slower than dialup or completely dead.
Customer service reps are reportedly asking subscribers to reboot - the
infamous industry wide limit to level one tech support's capabilities.
Sarah Eder, an AT&T spokesman, attributed connectivity problems to the
crush of new customers on the network and a "DNS blip," but acknowledged
that it will not provide credits to customers or a time when the problem
might be resolved. Eder said that it is only natural to incur network
problems when moving more than 850,000 users to a new network over a 6-day
period, but customers are angry that they were not warned of the potential
and that they will not be compensated for the lack of service.
Comcast may be a part of the largest MSO but the company makes itself
vulnerable to contamination by a company that has proven to misunderstand
the value of customer satisfaction and by a company that may be willing to
betray its own partners and investors to get a really good deal on some
networking equipment. And we thought AT&T would be a great alternative to
TCI.
AT&T
http://www.att.com
Comcast
http://www.comcast.com
AT&T Broadband
http://www.attbroadband.com
2. Bankruptcy Court Approves New Affiliate Deals
Earlier this month, the Bankruptcy Court in San Francisco approved a new
set of agreements between @Home and several of its affiliates that would
keep the network active for these select MSOs until February 28 2002 in
exchange for $355 million. The agreements call for Cox and Comcast to each
pay $160 million, Rogers to pay $15 million, and Insight and Mediacom to
each pay $10 million. The MSOs would pay these flat fees in lieu of the
standard per subscriber fees paid as part of previous agreements. After
reaching the deals, @Home cut 400 employees, holding 900 to maintain
operations through February. After February 28, @Home will completely shut
down.
@Home
http://www.home.net
3. GCI to Deploy Toshiba's DOCSIS 1.1 Modems in Alaska
Toshiba has said that GCI will deploy its DOCSIS 1.1 certified modems
throughout Alaska, with tiered services scheduled to be launched by the
provider in the first quarter of next year.
GCI
http://www.gci.com
Toshiba
http://www.toshibamodems.com
4. Com21 Announces New International Customers
Com21 has announced a set of new customers for its cable modems including
Starman Internet in Estonia (165,000 video subs) and Aktif Kablo in Turkey
(650,000 HHP), as well as a recently extended agreement with N.V. Delta
Nutsbedrijven in The Netherlands. Starman, Estonia's largest cable ISP,
has said that it will source 75% of its modem supply from Com21. PCT
Arvutid will serve as the systems integrator.
Delta's new agreement calls for $7 million worth of the vendor's
proprietary headends and cable modems. The cable operator already has 30
headends and 21,000 Com21 cable modems deployed over its network.
Com21 has shipped more than 1,700 headends and 1.8 million cable modems.
Com21
http://www.com21.com
5. Blonder Tongue to Distribute TMT's MDU Data System
Blonder Tongue has announced that it will exclusively distribute TMT's MDU
data solution per a one-year agreement. TMT's solution consists of a media
access switch in combination with intelligent outlets. The system is
compatible with DOCSIS, DSL, and TI networks.
Blonder Tongue
http://www.blondertongue.com
TMT
http://www.tmt3.com
6. PentaCom to Deploy Motorola's CMTS in Moscow Region
Motorola has said that PentaCom, a Russian cable operator, will deploy its
networking equipment to support voice, video and data services in the
Moscow region. The provider will deploy Motorola's CG4500E residential
gateways, BSR 1000 CMTS/routers, SURFboard SB4000 DOCSIS and SB4101
EuroDOCSIS cable modems, OmniStar optical platform video encryption system
and CT-1900 cable television decoders.
PentaCom is developing a 27 city netork that will serve approximately one
million homes over the next four years.
PentaCom
http://www.pentacom.ru
Motorola
http://www.motorola.com/broadband
7. Open Access Regulations Likely in The Netherlands
The Dutch cabinet has accepted a proposed open access law, and will be
passing the proposal to the Dutch Parliament next year for final approval.
The Parliament is expected to approve the initiative since the group
requested the cabinet to ass the measure a year ago. A few Dutch cable
operators, such as Casema, have already announced plans to open up their
networks to competitors. However, The Netherlands' largest MSO, UPC, is
opposing the regulation.
8. IE Introduces Out of the Box Auto Provisioning
Interactive Enterprise has introduced Conexon Accel 7.1, an "out of the
box" auto provisioning solution that can be installed and implemented from
a software download or CD. A trial license of the technology is be offered
via the company's web site.
The software enables deployment of an operator-defined set of services and
service tiers for net access, assignment of cable modems and classes of
services to subscribers, , CSR access to subscriber management and support
tools, management of network elements, subscriber self-service
capabilities, integration of Accel data with other back office systems, and
integration with IP management solutions providing DHCP, TFTP, and DNS
services.
In a separate announcement, IE reports that Kabel Hessen, a German cable
operator that passes 1.8 million homes, will use its auto-provisioning
solution for voice, video and data services.
Interactive Enterprise
http://www.interactive-enterprise.com
9. Circuit City to Carry EarthLink's Broadband Services
EarthLink has reached a deal with Circuit City that calls for the retailer
to include EarthLink's cable modem, DSL, and satellite service offerings
within its Broadband Station kiosks which display provider and availability
information to consumers regarding high speed net access alternatives.
EarthLink
http://www.earthlink.net
Circuit City
http://www.circuitcity.com
© Copyright 2000 Gecko Research & Publishing
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