BOSTON -- Although scant few viewers actually can watch high-definition TV (HDTV) shows right now, TV programmers and cable operators and marketers increasingly see business model emerging for offering HDTV fare. In first day of annual conference sponsored here by Cable TV Assn. for Marketing (CTAM), speakers extolled HDTV’s virtues and spelled out plans for offering it as premium service or tier to cable subscribers. They also stressed relatively low extra cost of producing high-definition programming as extension of their conventional programming. And they agreed that cable operators would lose more high-income customers to DBS if they didn’t roll out HDTV services aggressively.
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PASADENA -- Reiterating warnings about potential impact of PVR technology, Turner Bcstg. Chmn. Jamie Kellner told TV critics here Fri. that consumers needed to understand big picture of entertainment economics. “I get into trouble when I talk about this, but somebody has to pay to produce programming. What we do is make a program and sell it to advertisers, who in turn get their message out. In return, we get money to make more programs.” Kellner cited recent study that reported 71% of PVR users skipped commercials: “I am not opposed to commercial-less television. But before we damage the economics of an industry [that] are already frail… we should all understand the potential loss. If we don’t watch commercials, the business will be forced to change to a fee structure. Don’t think there’s going to be a free lunch.”
NTIA Dir. Nancy Victory urged FCC Chmn. Powell Fri. to drop requirement that cellular carriers continue to provide analog service as long as carrier had either analog customers or roamers on its system. “Given the widespread availability of digital cellular technologies, which are undeniably more spectrally efficient and secure than analog transmissions, it seems contrary to the public interest for the Commission to continue to mandate the use of this old technology,” Victory said. She said original rationale for mandate -- that it ensured nationwide roaming -- no longer was needed.
Colo. took first enforcement actions under state’s new no-call telemarketing law, even as Mass. no-call bill advanced and N.C. considered no-call measure. Colo. Attorney Gen. filed first actions against telemarketers under state no-call list law that took effect July 1. AG Ken Salazar said his office issued cease-and-desist notices to 7 telemarketers that were subject of multiple no-call complaints. Under law, telemarketers are supposed to avoid calling numbers on state’s list. Notices were sent to Advantage Travel and its telemarketing agent Impressa Inc., which together were subject of 24 complaints; Front Range Home Improvements, 19; International Business Advantage Inc., 15; Premier Destinations, 11; CSI Consulting, 10; Advantage Communications Systems, 7. Mass. House Commerce & Labor Committee advanced no-call list bill (HB-5225) that would provide for no-call list to be maintained and enforced by state Attorney Gen. Penalties would include $5,000 fine per offending call, plus civil damages. Bill originally was filed as HB-234 but was renumbered after being substantially amended. It would provide exemptions for businesses calling existing customers, charities and nonprofits, debt collectors, responses to inquires. Bill now goes to House Ways & Means. With session due to adjourn July 31, bill must move quickly from now on if it’s to have chance at passage. In N.C., telemarketing businesses urged N.C. House committee to defeat bill (HB-1612) that would establish state no-call telemarketing list maintained and enforced by state Attorney Gen. Telemarketers also would have to register with AG in order to obtain copy of list. At hearing before House Judiciary II Committee, businesses said no-call bill’s restrictions would go too far. Only exemption in bill is for nonprofit organizations. Telemarketers said there also should be exemption for businesses calling established customers. Consumer groups said they supported bill’s restrictions. AARP said bill offered protection to senior citizens who often were targeted by unscrupulous telemarketers. It wouldn’t set specific penalty for no-call violations, but offenses could be prosecuted as unfair trade practice, which carries $5,000 fine.
Global Crossing and Sprint mounted new challenges to embattled Defense Research & Engineering contract (DREN) that Defense Information Systems Agency (DISA) recently awarded to WorldCom. Focus of protests filed at General Accounting Office (GAO) under seal appeared to be that new facts had emerged on WorldCom’s troubled finances since DISA’s decision in April to award it $450 million IP network contract. Global Crossing, which filed for Chapter 11 protection in Jan., unsuccessfully protested DREN award earlier this year. DISA had rescinded original contract from Global Crossing based on latter’s own financial situation. Meanwhile, GAO released text of decision denying Global Crossing’s first protest, explaining that DISA reasonably determined that company couldn’t meet financial responsibility requirements of contract, even though it had determined otherwise before its Chapter 11 filing.
Qwest is ready to file Sec. 271 applications at FCC for 4 more states following state decisions to support carrier’s long distance entry. It said it was ready to file its 2nd group of Sec. 271 applications for Mont., Utah, Wash., Wyo. Elsewhere in states, SBC/Ameritech urged Ill. regulators to replace KPMG Consulting as 3rd party tester of its operation support systems (OSS) and Fla. said it would double BellSouth wholesale performance failure credits owed to CLECs.
Despite several complaints to SEC about how merged company would be managed, shareholders overwhelmingly approved corporate marriage of AT&T Broadband and Comcast. If ultimately approved by FCC and Dept. of Justice (DOJ), as well as local franchise authorities, merger would form nation’s largest cable company, with 22 million subscribers. Comcast said deal, currently valued at about $50 billion, was expected to close in 4th quarter. Approvals were announced at separate shareholder meetings in Charleston, S.C., (AT&T investors) and in Philadelphia (Comcast). Although analysts had expected votes to favor deal, several institutional investors in AT&T had objected to corporate governance structure of deal. Provisions keep Comcast Pres. Brian Roberts in place as CEO of new company until 2010 unless 75% of board -- 9 of 12 of members -- vote to oust him. Originally, corporate structure didn’t contemplate board elections until 2005, 2-1/2 years after deal was scheduled to close, but investor outcry prompted move to hold elections in 2004 instead. There also were objections to provision that would bar anyone from amassing more than 10% voting power without first getting board approval, but in end that plank passed along with deal.
FCC granted request by NCTA to extend deadline for reply comments on proceeding involving appropriate regulatory treatment of broadband access to Internet over cable. Originally, replies were due July 16. NCTA requested delay until Aug. 6, and FCC said there was “good cause” for extension, noting that more than 100 organizations, individuals and institutions had submitted initial comments.
WorldCom’s financial troubles continue to create ripples at state level. Iowa Telecom Services, centralized equal access provider for small Iowa incumbent telcos, asked Iowa Utilities Board for authority to cease providing intrastate access services to WorldCom unless beleaguered carrier made substantial security deposit. Iowa Telecom had wanted emergency order authorizing cutoff at will, but Utilities Board refused to go along, saying that could terminate long distance service to innocent end-user customers of Iowa Telecom’s member telcos who had selected WorldCom as their preferred carrier. Board said there was no evidence of major WorldCom delinquency so there was no need for emergency authority Iowa Telecom sought and no need for action until after it held hearing. W.Va. Investment Management Board, which manages state employee pension funds, said WorldCom’s financial meltdown had given state fund $4.1 million unrealized financial loss on carrier’s bonds. Board controls $5.5 billion investment portfolio, but its loss on WorldCom was relatively small because of its diversification policies. In Ga., WorldCom reassured nervous Ga. Corrections Dept. officials that its financial troubles wouldn’t affect its ability to fulfill terms of its statewide inmate payphone contract that covers 47,000 inmates in state’s 100 prisons, jails, halfway houses. Pact requires WorldCom to pay Corrections Dept. $13.1 million through June 2003. State awarded contract to WorldCom in June 2001 as part of program to consolidate all inmate payphone services with single vendor and use payphone commissions to support inmate mental health services. Pact originally provided for percentage commission to state but resulting collect call charges prompted inmate families to protest to Ga. PSC, which ordered rates cut in half last fall. WorldCom and Corrections Dept. renegotiated compensation to provide for flat $13.1 million annual fee to state in lieu of commissions in return for exclusive right to provide inmate payphone services.
Ill. Commerce Commission (ICC) was scheduled to hold special meeting today (July 9) to discuss testing program for SBC/Ameritech’s operation support systems (OSS). Meeting comes on heels of last week’s advisory to ICC by OSS tester KPMG Consulting that date for final report on Ill. OSS testing had slipped again, to Oct. 22 from Sept. 18. Testing originally was to have concluded by May. ICC at today’s meeting expects to hear presentations from Ameritech, CLECs AT&T, WorldCom, McLeod USA and TDS Telecom, and possibly other CLECs and KPMG.