NorthPoint Communications filed for Chapter 11 protection in U.S. Bankruptcy Court, San Francisco, and said it planned to sell “substantially all” of its business and assets. NorthPoint CEO Liz Fetter said company would look for “financially sound strategic partner who is interested in our network, our skilled and dedicated employees and our attractive customer base.” Spokesman said NorthPoint would to go forward with suit it filed against Verizon for pulling out of planned merger (CD Dec 11 p6). Fetter said that when Verizon “unexpectedly pulled out of the merger… it created a funding shortfall” for NorthPoint. Company said it secured commitment for up to $38 million of debtor-in- possession financing from its existing lenders to continue day-to- day operations.
Following months of anticipation, Intelsat finally begins 6- month quiet period today (Thurs.) before becoming private company July 18, Intelsat CEO Conny Kullman said at Washington Space Business lunch Wed. It’s final step in Intelsat privatization authorized by Orbit Bill (CD Aug 4 p2). Kullman said company would “complete all internal work” by May. Company must conduct IPO by 2002. Privatization of Intelsat has been one of major issues in satellite industry for years, with several companies, including PanAmSat filing numerous petitions at FCC protesting what many called “preferential treatment” of company (CD July 28 p11). Kullman called transition biggest step since 1964 founding.
FCC approved WorldCom’s acquisition of Intermedia Wed., subject to only one condition -- that Intermedia and its subsidiaries be regulated as dominant in their provision of service on U.S.-Brazil route. Commission action transferred control of wireless, international and domestic wireline licenses from Intermedia to WorldCom. FCC’s action was somewhat perfunctory because WorldCom is required to divest all of Intermedia except its controlling interest in Web-hosting company Digex under consent decree with Dept. of Justice (CD Nov 20 p4). FCC said that it therefore viewed this order as “interim” transfer of licenses and authorizations. It said “once a third-party purchaser is identified, we will review the subsequent transfer of control of the Intermedia assets to ensure the public interest is served.” Agency rejected AT&T concern that merger would give WorldCom too much dominance over Internet backbone market. FCC pointed out that it didn’t regulate Internet Web hosting but said that, regardless, it disagreed with AT&T. WorldCom spokesman said company still needed “handful of state approvals” before deal could go through.
Canada’s Copyright Board is moving forward on Internet Webcasting tariff that may give legitimacy to such sites as iCraveTV and JumpTV (CD Oct 27 p8, Sept 26 p2). Board Secy. Gen. Claude Majeau sent letter to parties calling for interim hearings March 12 on JumpTV’s application for Internet retransmission tariff. Participants have until end of this week to respond to timetable that calls for prehearing conference early in March, he said.
Women hold smaller percentage of jobs in cable and DBS than year ago, while minorities hold more cable positions but fewer DBS jobs, FCC said in new report. Relying on annual employment reports submitted by cable operators, Commission found that total cable industry employment at companies with more than 5 employees had slipped to 130,953 in 1999 from 133,705 in 1998 and total female representation fell to 40.4% from 41.7%. Among full-time employees in upper-level posts, women held 26.9% of jobs in 1999, down from 28.9% year earlier. At same time, minorities boosted their representation in total cable work force to 32.7% from 30.9% and increased their share of upper-level jobs to 29.1% from 21.7%. Other multichannel video program distribution (MVPD) operators, consisting largely of DBS providers, nearly doubled their overall employee base to 10,322 in 1999, but total female representation fell to 43.2% from 52.7% and minorities to 27% from 27.7%. Among full-time employees in upper-level jobs, however, women increased their share to 33.6% from 32.2% and minorities to 22.9% from 16.9%.
Ill. Commerce Commission Chmn. Richard Mathias this week asked other 4 Ameritech state commissions whether they ought to call another joint session with top SBC and Ameritech officials to get explanations for seeming contradictions between what companies were telling states and what they were telling securities analysts about service quality, competition and regulatory compliance burdens. In letters Tues. to heads of Ind., Mich., Ohio and Wis. commissions this week, Mathias cited “discrepancies” in statements by SBC Chmn. Edward Whitacre and other top SBC/Ameritech officials to state regulators in Oct. 16 summit meeting, and what Whitacre and other officials told securities analysts in Dec. 16 briefing. He asked other states “whether it would be helpful to know” which story contained real reasons for company’s troubles of past year. Mathias said SBC/Ameritech told securities analysts service problems of 2000 were caused by aging outside plant and capacity difficulties but told states problems were caused by technician shortages coupled with weather problems and surges in demand. He also said SBC/Ameritech had been telling Great Lakes state regulators and legislators company was being hammered by local competitors, while telling securities analysts that Tex. was where most local competition was happening, and that elsewhere companies expected growth in vertical service revenues would offset access line losses to CLECs. Mathias also questioned SBC/Ameritech’s blaming regulators for delays in entering long distance and other new markets when companies were paying millions of dollars in penalties for failing to serve retail and wholesale customers they already had. He said that while Ameritech seemed to have improved service for retail customers, it still was falling short in wholesale service to its competitors. “We should determine whether the seeming discrepancies between the comments by SBC/Ameritech to securities analysts and to state regulators demand immediate clarification,” Mathias wrote, and asked whether states wanted another summit with Whitacre to hear explanations. Ameritech spokesman said there wasn’t any pressing reason for another joint session with regulators because service problems that led to first session in Oct. “by and large have been addressed.” He said Ameritech hired hundreds of technicians and its service performance was at or close to state service quality standards. In related action, SBC’s Whitacre Tues. publicly apologized for Ameritech’s poor phone service in appearance before 250 Mich. business leaders at Economic Club of Detroit. “I know we stumbled coming out of the gate” following Ameritech-SBC merger, he said: “I'm not saying the problems are over. We are all embarrassed by them, but we are well on the way to correcting them.” He said Ameritech was upgrading its network to digital fiber system, which he said should cut down on maintenance problems, and has hired and trained more technical workers. He said service quality in Mich. still wasn’t quite as good as in other states, but vowed that it “will be and will be quickly” as good as elsewhere in region.
Eight Chris-Craft TV stations will remain UPN affiliates under new agreement announced this week. Stations, which are being bought by News Corp., had been considered possible candidates for switch to Fox network. Deal runs through 2001-2002 TV season. Terms weren’t disclosed.
Internal Revenue Service established new rules for space, ocean and telecom income sources Jan. 16, setting guidelines that income from space or ocean activity by U.S. person will be sourced in U.S., while income from foreign people will be foreign-sourced. Exceptions to rules include foreign companies with half or more ownership by U.S. persons. As result, foreign satellite companies established in no-tax jurisdictions could conduct most of business in U.S. but pay no U.S. or foreign taxes on satellite leasing income.
SANTA CLARA, Cal. -- Internet is at a “critical time” as data and telephony converge, and that convergence could offer “the best or the worst of both worlds,” Packet Design CEO Judy Estrin said at Supernet conference here Jan. 16. Future trends include consolidation of voice, video, and data services, she said. “We are still in the covered wagon stage” of Internet, and it will progress via developments such as ubiquitous bandwidth, increased ease of use, greater connectivity and improved security, Estrin said.
James Packer, ex-Disney, appointed exec. vp-N. America TV sales, MGM Worldwide TV Distribution… Changes at CNN: Ken Jautz, n-tv Germany, named exec. vp-gen. mgr.-CNNfn after merger of those units; Teya Ryan, exec. vp, domestic networks, CNN News Group, appointed gen. mgr-exec. vp, CNN Headline News… Changes at Starpower: Don Mathison, ex-Media General Cable, named gen. mgr.; Andrew Nigolian, ex-Time Warner, appointed division vp- Adelphia… Michael Yorick, ex-A&E TV Networks, moves to vp- emerging businesses, USA Cable… Wis. PSC Exec. Asst. Robert Garvin appointed to fill Wis. PSC seat of John Farrow, who’s retiring when his term expires in March; Ave Bie reappointed Wis. PSC chmn… Elected to Satellite Industry Assn. board: Larry Atlas, vp-govt. relations, Loral Space & Communications, as chmn.; Peter Hadinger, dir.-telecom strategy, TRW, vice chmn.; Jeffrey Trauberman, dir.-information and communications systems, Boeing, treas.; and Kalpak Gude, vp-govt and regulatory affairs, PanAmSat, Suzanne Hutchings, regulatory counsel, Teledesic, and Gerald Musarra, vp-govt and regulatory affairs, Lockheed Martin, all as exec. committee representatives… Eugene DiDonato, ex- Peritus Software Services, named vp-gen. counsel, Lightbridge.