Howard Buskirk

Qwest made a higher offer for MCI on Thurs., changing its bid to the equivalent to $8.45 billion. MCI said it would consider the new offer and provide a response by March 28.

Harvard Business School Prof. Clayton Christensen warned Wed. that the Bells could face the same challenges that deeply wounded integrated steel companies in the U.S., losing much of their revenue base to mini-mills - low cost “innovators” that now own half the market. Christensen, a best-selling author, addressed the future of the telecom sector during a speech at the National Press Club. Christensen warned that “disruptive” technologies pose the biggest threat to incumbents like the Bells, citing the steel industry example. Mini-mill operators with their low cost technologies were able to offer steel at 20% below the costs of their larger competitors. Initially, they captured the most- undervalued market segment - rebar or steel used to reinforce cement, he said. Soon, they captured much of the rest. Mini-mill success led to the collapse of prices in the market, with low-cost competitors fighting each other for market share, Christensen said: “Entrants tend to beat the incumbents when they engage in a disruptive strategy. They create a situation where [incumbents] flee rather than fight.” Christensen said it’s not clear how the Bells will fare vs. challengers like Vonage as VoIP becomes more of a disruptive factor in the market. “In almost every instance the disruptive technology appears to the incumbent as a threat and to the entrant as a growth opportunity,” he said: “In the end it always proves to be both. It’s the destruction that by making something simple and affordable creates a new wave of growth. There’s no reason why the incumbent couldn’t cause the growth to happen themselves.”

U.S. promoters of ultra wideband (UWB) are closely watching developments in the U.K., as regulators there complete work on rules governing the technology. Controls the U.K. establishes could prove significant since UWB chip makers are likely to pursue rollout of products worldwide that will meet limits in as much of the world as possible.

Ultra wideband firm PulseLink, which recently formed the CWave Alliance, will present its technology to the FCC today (Mon.) at the FCC Lab in Columbia, Md. The demonstration comes amid growing speculation the FCC will grant a waiver request on radio frequency rules to the Intel-Texas Instrument led Multi-band OFDM Alliance (MBOA).

Broadband equipment makers shipped 74% more units in 2004 than the previous year but revenue increased only 15%, Infonetics Research said Fri. The firm said revenue fell 7% 4th quarter from 3rd to $1.16 billion. That drop in the customer premises equipment (CPE) market came despite 17% sequential unit growth to 23.3 million.

The WiMedia Alliance and the Multi-band OFDM Alliance Special Interest Group (MBOA-SIG), 2 of the primary groups that have been promoting ultra-wideband (UWB), announced Thurs. they're merging. The development gives UWB of the MBOA stripe the same standardization Wi-Fi and WiMax have already achieved. Microchip manufacturers and consumer electronics companies will have to look to only one organization for a certification logo. The new group will be called the WiMedia Alliance.

Qwest took its offer to acquire MCI to the N.Y. financial community, holding a breakfast meeting Tues. with investors and analysts at which CEO Richard Notebaert accused MCI of refusing to negotiate over the deal and of responding only through the news media. In a development that could make the merger more controversial politically, Qwest revealed that the merger could result in 12,000- 15,000 job cuts. That development comes on the eve of a House hearing on telecom mergers.

NTIA Deputy Dir. John Kneur said Mon. that a group of multi-agency federal spectrum officials, the Policy & Plans Steering Group (PPSG), is on target to release a report in May on the next steps for implementing the recommendations of the President’s spectrum policy initiative, which was released in June. “We're going to meet that deadline,” Kneur said in comments to a conference sponsored by the E-Gov Institute. “That’s going to come up with the nuts and the bolts for an implementation… of each of these different recommendations.” Kneur told reporters the high-level members of the PPSG met once in Jan. but that smaller working groups have been holding continuing meetings. “The entire execution of this implementation plan is one that’s being worked on at the expert staff level. It’s being approved at the high level and we're getting contributions at the high level of the agencies as well,” he said: “We're working top down, bottom up, back and forth.” Kneur told the conference NTIA wants to make clear that the govt. is changing how it does business: “This is not just a one time exercise. We are building into our processes and into our management scheme these lessons, these improvements and we plan to execute on them.” Kneur wouldn’t disclose which spectrum ranges are being examined by NTIA for its contribution to the spectrum testbed, a key recommendation of the June NTIA report on U.S. spectrum policy in the 21st Century. Kneur said the testbed could be used to test geographic sharing of spectrum and the use of masks. “The ultimate goal is to really develop the state of the art of the technology,” he said.

NTT DoCoMo, the largest wireless carrier in Japan, announced it’s largely scrubbing its low-cost, no frills “personal handyphone system” (PHS) business and would cut its profit forecasts as a result. DoCoMo said it would stop accepting new customers April 30 and likely begin withdrawing from the business, though the carrier hasn’t made a firm decision to get out entirely. DoCoMo said it would have to post a $652 million charge that would reduce profits for the year to $7.4 billion from an anticipated $8 billion.

Verizon came out swinging Mon. against Qwest, its rival to acquire MCI, alleging that “cash-strapped” Qwest’s possible ownership of MCI’s Internet backbone has bad implications for national security. Meanwhile, the war of words between the rival suitors also escalated on the other side, as Qwest CEO Dick Notebaert questioned whether Verizon’s buying MCI would hurt telecom competition.