Analysts bombarded Broadcom officials with questions about spending in a third quarter conference call after the company said Q3 profits had sunk 75 percent from a year earlier. Net income plunged to $27.8 million after the chip maker spent $352.3 million on research and development, almost $80 million more than it did in 2006. But strong Bluetooth, wireless LAN and DTV businesses drove company revenue to $950 million, up 5.2 percent from last year, it said late Tuesday.
Adam Bender
Adam Bender, Senior Editor, is the state and local telecommunications reporter for Communications Daily, where he also has covered Congress and the Federal Communications Commission. He has won awards for his Warren Communications News reporting from the Society of Professional Journalists, Specialized Information Publishers Association and the Society for Advancing Business Editing and Writing. Bender studied print journalism at American University and is the author of dystopian science-fiction novels. You can follow Bender at WatchAdam.blog and @WatchAdam on Twitter.
Merger synergies and strong wireless growth drove AT&T to another strong quarter, the company said Tuesday. It reported $30.1 billion revenue and $3.1 billion profit in the third quarter. AT&T Chief Financial Officer Rick Lindner avoided political and legal issues in a Tuesday conference call.
Level 3 reduced expectations for 2007 and 2008 after struggling to integrate delivery processes among recent network acquisitions in the third quarter, it said Tuesday. The backhaul company saw high sales orders, but had operational problems moving efficiently along the provisioning process to the final installation, testing and activation, it said. Level 3 met Q3 predictions, but didn’t see the provisioning capacity increase it needed “to meet the revenue increases we had previously projected” for 2007 and 2008, said CEO James Crowe. Level 3’s problems are not caused by demand, pricing or marketing ability, he said. “The breadth of the [provisioning] problem was greater than we had earlier diagnosed.”
Claims that Verizon thwarts workers’ efforts to form a union “are without merit,” Verizon told us Tuesday. The nonprofit American Rights at Work sent a report to about 1,500 state and local elected officials Monday contending that Verizon management has “aggressively intimidated employees who support forming a union” and has closed facilities where workers have tried to do so. “We strongly disagree with this report,” the Bell said. Verizon said it has created jobs for thousands of unionized employees by investing billions in broadband fiber connections to homes and small businesses in 16 states. “We look forward to proving the underlying assertions false.”
An AT&T lawsuit against Vonage may be more a strategic move to hurt the top independent VoIP carrier than a “me too” case following Verizon’s and Sprint’s legal success, observers said Monday. AT&T seeks damages, an injunction and attorney’s fees on allegations that Vonage infringed a VoIP patent, in a complaint filed last week in the U.S. District Court for Western Wisconsin. A litigation-weary Vonage wants to settle but should have the money to survive another defeat if that happens, an analyst said.
An exemption giving the FCC, not the Federal Trade Commission, jurisdiction over communications companies as common carriers no longer may make sense given telco deregulation and convergence of communications technologies, panelists said Wednesday at a Federal Communications Bar Association lunch. Recent FCC forbearance decisions and service bundling by telcos and cable companies can complicate assignment of jurisdiction, they said.
Level 3 bought BellSouth fiber that AT&T divested to meet a Justice Department merger condition, the backhaul provider said Tuesday. Level 3 gets rights to use dark fiber connections to 27 buildings and more than 450 metro fiber route miles in nine markets: Atlanta, Birmingham, Ala., Charlotte, N.C., Chattanooga, Knoxville and Nashville, Tenn., Orlando and Jacksonville, Fla., and South Florida. Under the deal, Level 3 may add new buildings to acquired assets. Level 3 didn’t disclose the financial terms. But a source close to the deal said the price was less than what Level 3 had paid in April for AT&T’s divested SBC assets. Level 3 picked up the assets to expand its metro market reach, said Raouf Abdel, the company’s Business Markets Group president. Adding the assets won’t be difficult, since the acquisition “does not require the type of integration associated with recent metro and backbone transactions,” Abdel said. The Level 3 announcement is “not huge,” nor is it “new news” except that it specifies acquired assets, said Jeffries analyst Jonathan Schildkraut. The deal makes sense for Level 3, which is positioning itself as the largest backbone provider in the U.S., said Stephan Beckert, a Telegeography analyst. Traffic growth is adding pressure to bulk up the access side of the backbone as opposed to the long-haul side, he said. The new assets also reduce Level 3 reliance on third party providers like AT&T, he said.
Apple iPhone headphone cables contain four dangerous paint chemicals banned by the EU from toys and other children’s goods, Greenpeace said in a report Monday. Europe classifies the two most abundant PVC phthalates found as “toxic to reproduction” due to their ability to “interfere with sexual development in mammals, especially in males,” Greenpeace said. The other two chemicals are similarly banned, but only in toys that children might put in their mouths. After the report’s release, the California Center for Environmental Health took legal action against Apple, claiming violation of a state law.
T-Mobile doesn’t share customer data with affiliates or third parties, said a spokeswoman responding to the recent Verizon Wireless controversy over Customer Proprietary Network Information sharing. Verizon is sending customers CPNI notices explaining that it may share customer usage data with “affiliates, agents and parent companies (including Vodafone) and their subsidiaries” unless customers opt out within 30 days (CD Oct 15 p8).
Verizon Wireless is only following FCC rules by using an opt-out rather than opt-in system for Customer Proprietary Network Information sharing, a spokesman said Monday. Verizon took heat last week after sending subscribers a Customer Proprietary Network Information notice explaining it could share customer usage data with “affiliates, agents and parent companies (including Vodafone) and their subsidiaries,” unless customers opted out within 30 days (CD Oct 15 p8). FCC rules “prescribe specifically that opt-out is the way to share information with telecommunications affiliates [and] to market telecom services,” the spokesman said. Opt-in, preferred by privacy groups, is required only on sharing customer data for non-telecom services and with businesses outside Verizon, he said. “There’s no selling of consumer information to third party advertisers” at Verizon Wireless, he said. Verizon is working to ensure that all customers are notified and opt-out is “as easy as possible,” the spokesman said, alluding to other carriers’ trouble with CPNI notification. In early 2007, consumer groups attacked Sprint when the carrier forced customers to send opt-out requests by mail. In 2006, AT&T faced an FCC investigation after running out of bill inserts on privacy policy and then using the CPNI of nearly 11,000 customers who were not sent opt-out instructions. Verizon Wireless sent notices to customers in September and early October, the spokesman said. Verizon Wireless included an insert in the bills of account holders sent paper bills and separately mailed a first-class notice to those billed electronically, he said. An AT&T spokesman wouldn’t comment on Verizon’s program but concurred that the FCC, not individual carriers, decides how CPNI may be used. “FCC regulations are very explicit about how CPNI is to be handled,” he said. “AT&T is scrupulous in following those regulations.” Meanwhile, Alltel said Monday it doesn’t have a CPNI sharing program like Verizon’s. “We are not doing anything like this and have no plans to do so,” a spokesman said.