Gemstar International Group took fresh shot at Time Warner (TW as FCC continued to ponder AOL’s pending acquisition of TW. In 2-page letter to FCC Thurs., Gemstar, which has been sparring with TW over MSO’s temporary blocking of Gemstar’s electronic program guide on TW cable systems last year, warned Commission that cable operator easily could do same thing again because it had shown no remorse. Despite TW’s June “decision to desist from stripping,” Gemstar said, TW “neither acknowledges that stripping is a violation of the FCC’s rules and policies, nor undertakes that it will not resume stripping without awaiting definitive FCC action.” Gemstar urged Commission to “deal with the issues” raised “regarding the anticompetitive nature of Time Warner’s behavior” before approving AOL-TW deal. Specifically, Gemstar wants agency to impose conditions on AOL-TW prohibiting it from discriminating against rival interactive TV content providers.
FCC Chmn. Kennard will announce his resignation as soon as Commission votes on AOL takeover of Time Warner, which is expected this week, Commission source told us. Kennard’s term expires in June but he was expected to leave once George Bush was sworn in as President Jan. 20. It will be up to Administration to decide whom to name as interim FCC chairman until permanent replacement for Kennard is appointed. FCC Comr. Powell is expected to be tapped but he hasn’t confirmed that. Source didn’t say when Kennard actually was leaving or reveal where he planned to work once he left. He moved to Commission from Verner, Liipfert, Bernhard, McPherson & Hand, where he was partner.
EchoStar could receive valuable Ka-band slot over continental U.S. if FCC approves request from VisionStar to transfer its Ka- band satellite slot to company, VisionStar said in Dec. 15 filing at agency. If Commission agrees, VisionStar/EchoStar partnership would take control of satellite licenses at 113 degrees W, directly over continental U.S. Commission granted VisionStar license for slot in May 1997 in first round of Ka-band allocations.
USTA Pres. Roy Neel, who has been on leave of absence to work in Vice President Gore’s campaign for President, won’t be returning to his post, Assn. announced Mon. Neel officially leaves USTA March 31 but will be working on special projects until then. Interim Pres. Gary Lytle will stay on to run USTA while search committee seeks permanent replacement. Neel, who had been at USTA 7 years, didn’t say what he planned to do.
Bidding in FCC’s record-setting C- and F-block auction Mon. continued to move at more languorous pace, reaching $13.52 billion. AT&T Wireless became latest major carrier to quit bidding Mon. after 35 rounds, although carrier still was involved in auction through Alaska Native Wireless. AT&T has 39% equity in that designated entity but noncontrolling interest. Other carriers that already have departed include Alltel, Nextel, Sprint PCS. Verizon Wireless had somewhat smaller lead of $5.1 billion in net high bids. Cingular Wireless-backed Salmon PCS rose to 2nd place from 3rd with $2.92 billion, followed by Alaska Native Wireless with $2.49 billion. Momentum of auction has slowed, inching up from $13.07 billion in net high bids after 31 rounds Fri. Allegheny Communications also dropped out Mon. after its bidding eligibility reached zero. Designated entity drew attention in early Dec. when it made last-min. attempt to halt auction in U.S. Appeals Court, D.C. Court turned down Allegheny’s emergency motion for stay before Dec. 12 start of auction. Other top bidders now include VoiceStream with $802.1 million, Dobson Communications subsidiary DCC PCS with $735.3 million, Cook Inlet with $405.6 million, Leap Wireless with $327.3 million. Largest bid continued to be $1.17 billion that Verizon placed for one N.Y.C. license.
Sprint PCS said it now reaches more than 1 million wireless Web customers, which it said represented first time N. American carrier had hit that total. Sprint began service in Sept. 1999.
Officials of Simi Valley, Cal., are urging cable subscribers to protest increase in fees, announced by former owner Comcast day before Adelphia Communications took over ownership of Ventura County cable system Jan. 2. City officials accused Adelphia of orchestrating increase, which takes effect Feb. 1, that raised monthly cost of 51-channel basic package to $39.26 from $37.10. Adelphia, which didn’t mention planned increase before taking over, said it was justified because of system upgrade, including 10 new channels and establishment of local customer service center. In Dec., city had increased franchise fee to 5% of gross revenues from 3%.
To no one’s great surprise, cable TV remains dominant technology for delivering video programming to consumers, according to 7th annual video competition report adopted last week and released by FCC Mon. Commission found that cable industry totaled 67.7 million subscribers in June 2000, up one million (1.5%) from 66.7 million in June 1999. But DBS continued to make steady inroads in cable’s market share, adding almost 3 million subscribers over same period to reach nearly 13 million last June, up 29% from year earlier. Largely as result, cable operators now control 80% of burgeoning pay-TV market, down from 82% year earlier, while DBS providers now command growing 15.4%.
Metromedia Fiber Network obtained $350 million credit facility from Citicorp USA and said it expected strong growth year. Company plans deployment of 3.6 million fiber miles by end of 2004. It said estimated revenue for 2000 was $184.6 million, up $69.7 million from 1999.
XM Satellite Radio expected to launch first of 2 Boeing 702 model satellites after our deadline Jan. 8 with window for XM-1 satellite called Roll opening at 5:35 p.m. ET. from sea site 3,000 miles west of Long Beach, Cal.