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.
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.
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%).
News Corp said it wasn’t going to “risk negative credit rating” following negative forecast from Standard & Poor’s (CD Dec 27 p2) and would “proceed cautiously” in its negotiations for Saban Entertainment’s 49.5% stake in Fox Family Worldwide. S&P report on News Corp. came after Fox Family Chmn. Haim Saban exercised his option to sell his stake back to News Corp. Analysts valued stock at $1.2-$1.7 billion, while Saban estimated worth at $2 billion. Buying at that price, News Corp. could pick up bad credit rating, analysts said, which would undermine its effort to purchase DirecTV from Hughes Electronics.
Several members of Congress got off to fast starts this week, introducing Internet-related bills on familiar topics within days of returning to Washington. Among them: (1) Rep. Green (D-Tex.) introduced bill (HR-95) to protect “individuals, families and Internet service providers” from spam. It was referred to both Commerce and Judiciary Committees. (2) Rep. Frelinghuysen (R- N.J.) offered bills to require Federal Trade Commission to set regulations protecting Internet privacy (HR-89) and to regulate Internet companies’ use of social security numbers and other personally identifiable information (HR-91). He also dropped measures prohibiting telemarketers from interfering with any caller ID service (HR-90) and to ensure efficient allocation of phone numbers (HR-92). All were referred to Commerce Committee, of which Frelinghuysen isn’t yet member.
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.
NextLevel said revenue growth in 2001 would be lower than expected because of “slower than anticipated customer deployment.” Company said it would revise its guidance for year in Jan. 24 conference call on 4th-quarter earnings. NextLevel also reported that progress in growing its customer base in 4th quarter had been “offset by reduced revenue from Qwest and slower than anticipated customer development in Korea.” Revised 4th-quarter revenue will be about $31 million with net loss, excluding special items, of about 22 cents per share, company said.
President-elect Bush “is increasingly turning his attention to the agencies, and so I think you can anticipate announcements on those at any time,” Press Secy. Ari Fleischer told reporters Thurs. after being asked when FCC and SEC chairmen would be named. He said Administration would appoint someone at Office of Management & Budget to focus on technology issues, and said it still was undecided whether higher level “technology czar” would be appointed.
FCC will consider possible reform of intercarrier compensation at its Jan. 11 open meeting but long-awaited reciprocal compensation didn’t show up as companion item (CD Jan 4 p1). FCC is overdue to act on reciprocal compensation, which is one of many intercarrier payment schemes that will be addressed in broader notice of inquiry listed on agenda. Other agenda items agency will consider at meeting: (1) Proposal for technical and operational rules for use of frequencies by public safety entities. Idea is to assure various jurisdictions could talk to each other. (2) Memorandum opinion and order on reconsideration concerning rules that require broadcasters, cable operators and other video programming distributors to provide video description and make emergency information more accessible to visually impaired. (3) DTV transition and reception issues for broadcasters. (4) Declaratory ruling in case of DTV-only Fla. station that’s seeking cable must-carry status. (5) Implementation of Satellite Home Viewer Improvement Act, including DBS local-into-local, must-carry, network non-duplication, syndicated exclusivity and sports blackout rules.
Qwest proposed settlement of pending Ariz. class action lawsuit filed against its predecessor, U S West, that would give credits ranging from $15 to almost $1,500 to estimated 300,000 customers who have suffered phone installation delays in last 8 years. Qwest filed $22 million settlement offer Wed. in Maricopa County Court, offering to compensate customers who suffered service installation delays between Jan. 1, 1993, and Nov. 20, 2000. Court hearing on settlement offer will be April 23. Current Qwest customers would get automatic bill credit while former customers would receive checks. Residential refund would range from $15 for 4-day delay to $880 if delay exceeded 5 months. Business refund would range from $59 to $1,465 per line. Credits for delay on additional residential lines would be $3. Qwest wouldn’t have to admit wrongdoing. Ariz. suit is outgrowth of original suit filed in 1997 in Denver alleging U S West had diverted resources from local service to fund new wireless and cable ventures, contrary to customer interests. Qwest last year settled Colo. suit for $36 million in refunds to 244,000 customers and similar N.M. suit for $6 million to 70,000 customers.