Despite steep rise in Internet use, consumers remain devoted to watching TV, listening to music and even reading, according to latest home media study released by CTAM. Monthly telephone survey of 1,000 consumers found home Internet usage soaring to 58% of PC households in Dec., from 38% year earlier. It also found that more than 50% of U.S. homes now had at least one PC and 40% were online. In addition, study said, 31% of consumers now have TV sets and PCs in same room. But watching TV remains most popular way of spending leisure time, with 98% of consumers reporting that they view shows, equal to ratio in 1999 and up from 96% in 1998. Study said 36% of households now owned large-screen TVs (bigger than 35 inches), up from 22% in 1998. Consumers’ top expected purchases in 2001 are PCs (16%), DVD players (11%), CD players (11%).
Integra Telecom said it secured $41 million in equity financing from shareholders including Bank of America Capital Investors, Boston Ventures, Navis Partners, Shaw Venture Partners. Investment will be used to expand Integra’s customer base in its regional markets and pushes its total financing in 2000 to $252 million. Integra CEO Dudley Slater said he was “gratified” by market response since CLECs have been struggling for financing. Integra provides telecom services to small and midsized businesses.
“Nothing would be gained by further delaying a decision” on core DTV must-carry issues, NAB Pres. Edward Fritts said in letter Thurs. to FCC in which he said Commission could defer decision on must-carry itself while adopting some “rules of the road” for carriage of DTV stations. He said there would be no benefit in delay, “certainly nothing that would be worth the harm to the progress of the transition.” NAB also pressed FCC for requirement that all new TV sets have tuner capable of receiving DTV.
Wireless Internet and e-mail provider OmniSky plans to acquire NomadIQ in all-stock transaction worth at least $18.75 million based on buyer’s Wed. closing price of $7.50 per share. Privately held NomadIQ provides location-based applications and services for handheld devices. OmniSky said it would issue 2.5 million shares of common stock, as well as up to one million additional shares over 12 months if certain performance targets were met.
Verizon urged N.Y. state lawmakers to consider legislation this year to require that drivers use hands-free mobile phones. Carrier said if mobile phone usage restrictions were needed, they should be imposed statewide rather than through patchwork of local ordinances. N.Y.C. and at least 6 other local govts. are considering handheld mobile phone bans, in addition to the 2 N.Y. counties that adopted restrictions last year. Verizon said statewide uniformity was critical and municipal or county laws would only confuse drivers. It also said statewide law would ensure uniformity in defining offenses and in penalties. N.Y. legislature opened its 2001 session Wed.
As FCC continued to wrestle with imposing additional regulatory conditions on AOL’s pending purchase of Time Warner (TW), Microsoft and other online rivals of AOL pressed their furious campaign for instant messaging (IM) requirements. In latest letter to FCC Chmn. Kennard Thurs., Microsoft called again for “imposition of a meaningful and enforceable condition that facilitates IM interoperability by enabling consumers to communicate with each other regardless of the IM system they use.” Along with brief letter, Microsoft and its allies sent 2-page fact sheet listing 8 consumer groups, 53 companies and associations, 10 senators, 12 House members and 7 publications that are calling for IM interoperability. At minimum, Microsoft argued in separate filing with FCC Tues., “the Commission should obligate AOL to enter into multiple contracts with leading IM providers to allow for interoperability prior to offering any advanced services over the broadband infrastructure of Time Warner’s cable systems.” In earlier filing with Commission, nationwide group of ISPs that had brought class action lawsuit over AOL’s 5.0 and 6.0 software urged agency to force company to modify its offending software feature. They argued that regulatory condition changing that feature, which directs modem calls away from user’s desired ISP to AOL access number, “would do more to introduce competition in Internet access than the instant messaging condition that has been the subject of recent press reports.” Meanwhile, new op-ed piece published by Cato Institute said FTC’s open access conditions on AOL-TW merger would hurt consumers and hamper competition and innovation by dampening incentives for rivals to build competing high-speed data systems. “The entire forced access campaign is an unfortunate example of unelected regulators overstepping their bounds,” wrote Clyde Crews, Cato technology studies dir. “They are exploiting their power over industries to make regulatory ‘law’ that should require an act of Congress. Forced access represents a regrettable new incarnation of industrial policy.”
Sprint PCS became latest carrier to drop out of FCC’s C- and F-block auction, which resumed Thurs. and reached $12.01 billion in net high bids. Sprint’s bidding eligibility was reduced to zero after 27 rounds Thurs., FCC said. Lehman Bros. research note issued before auction resumed after holiday hiatus said Sprint was among carriers likely to abandon bidding, path already taken by Nextel and several other carriers since auction started Dec. 12. (Bidding was suspended between Dec. 22 and Thurs. for holidays). Lehman said Sprint PCS didn’t place bids Dec. 21, using waivers instead. “It seems as if Sprint PCS feels the prices are too high and is going to exit the auction shortly after bidding resumes,” Lehman said. Following CDMA agreement with Palm, Sprint shares soared 15.41% Thurs. to close at $23.88. (Pact covers Sprint’s provision of first CDMA solutions for Palm’s handheld devices). Meanwhile, Verizon maintained strong lead with $4.06 billion in net high bids, followed by AT&T-backed designated entity Alaska Native Wireless with $2.67 billion and Cingular Wireless-backed Salmon PCS with $2.19 billion. Verizon Wireless had been high bidder for 2 N.Y. licenses for last several rounds, but ended Thurs. with high bid for only one license at $968.6 million. Alaska Native Wireless bid $716.57 million for another N.Y. license, with Salmon PCS vying for 3rd with $714.45 million. Lehman Bros. indicated auction could wrap up in several weeks. DCC PCS placed high bid of $519.7 million for L.A. license. Verizon also placed high bids for licenses in L.A., Chicago, San Francisco, Philadelphia, Boston, Seattle. Alaska Native Wireless placed high bid for L.A. and Salmon for Atlanta. In top 15 markets, VoiceStream had high bid for Washington license.
WSNet said it signed strategic agreement with Ashe County Cable TV of Fleetwood, N.C., to offer its subscribers privately branded direct-to-home (DTH) digital satellite TV service using WSNet’s satellite programming technology. Agreement marks official entry of WSNet into small and rural franchise cable market. Other terms of deal weren’t announced.
Ind. Utility Regulatory Commission (IURC) adopted first comprehensive update of service quality rules in 30 years. New rules are intended to take effect in May, pending legal review by state attorney gen. Among other changes, new rules covering incumbents and CLECs alike would require faster carrier responses to customer service complaints, toughen standards for outage restorations, require performance to be monitored at wire center level rather than by statewide averages. IURC said it began work on quality rule rewrite in late 1999, before last summer’s flood of service complaints against Ameritech.
France Telecom (FT) said its Itineris GSM wireless service added 2.5 million subscribers in quarter ended Dec. 31, increasing total wireless base to 14.3 million. FT said it added record 278,000 in weekend before Christmas. In Dec., more than 450,000 Itineris subscribers used Wireless Application Protocol (WAP) services, threefold increase from Sept. FT has target of one million “active” WAP users by summer.