Audiovox shares were down about 1% in early-afternoon Nasdaq trading Tues., day after shares fell to $6 in after-hours trading from its Nasdaq close of $7.27 on announcement that company would miss its previously disclosed forecast for 4th quarter. Audiovox said it expected “modest” improvements sequentially in 2nd half of fiscal 2002. But in preliminary guidance for first quarter, company said it expected net profit decline to $1-1.5 million (4- 7? per share) vs. year-earlier income of $2.6 million (12?) on flat revenue growth to $320-$330 million. Chmn. John Shalam said fiscal 2001 was marked by “challenging business climate” from economic slowdown and effects of Sept. 11. He said company recently had observed start of “some positive signs of stabilization” in market, but price erosion in wireless phones was “stronger than ever.”

Commerce Secy. Donald Evans sent FCC Chmn. Powell letter late Fri. asking for 60 additional days to complete analysis of ultra-wideband (UWB) systems, Commerce Dept. source said. Evans believes 60 more days are needed to complete evaluation of UWB systems to ensure protection of critical govt. operations and safety of life services, source said. Letter comes after Deputy Defense Secy. Paul Wolfowitz asked Evans to advocate delay in final regulatory decision until at least Feb. (CD Nov 29 p1). NTIA officials and engineers are meeting on accelerated basis with other govt. agencies and FCC to try to reach unified govt. position on UWB, several sources said. Wolfowitz letter to Evans had indicated that DoD review of preliminary draft of FCC’s UWB rules found “they will not provide adequate protection for GPS and other critical DoD systems.” Wolfowitz had asked Evans to seek additional 60 days from time that final FCC draft is ready for review by other govt. agencies. Several sources have said item on UWB began circulating on 8th floor at FCC last week. But how Evans’s letter may affect timing of UWB placement on agenda for FCC’s Dec. 12 meeting wasn’t clear at our deadline. Powell had told House Appropriations Subcommittee earlier this year that FCC could issue UWB rulemaking by year-end, although at time it was awaiting final govt. evaluation of interference issues. Wolfowitz letter had pointed out that NTIA, Transportation Dept. and industry tests had concluded UWB devices could cause significant harmful interference to GPS and other key DoD systems. Goal of Evans seeking more time from FCC before final decision is to “find a solution that takes into account the importance of bringing new technologies like UWB to the market without compromising critical life systems related to public safety and national defense,” Commerce Dept. source said. “The analysis we are doing is based on facts and it is extremely complex and time-consuming.” Docket at FCC on UWB proceeding (98-153) has attracted nearly 780 filings. UWB developer Time Domain told Commission in recent ex parte filing that it believed testing had shown UWB could operate at levels set in FCC’s notice of proposed rulemaking without causing harmful interference to existing services. FCC spokeswoman said Commission wasn’t releasing letter Mon. and had no comment on request for additional time.

Ultra-wideband (UWB) developer XtremeSpectrum said it disagreed with recent letter by Deputy Defense Secy. Paul Wolfowitz on regulatory restrictions DoD was advocating be placed on technology. XtremeSpectrum CEO Martin Rofheart said company agreed with Wolfowitz that “rules can be crafted to allow this technology to move forward.” Rofheart said: “We strongly disagree, however, with the unnecessarily stringent technical limitations that the Deputy Secretary proposes, outside the GPS bands. Not only would those limitations deprive consumers and public safety users of valuable UWB applications, but there is absolutely nothing that justifies them in the very extensive technical record compiled by the FCC in this three-and-one-half-year-old proceeding.” Wolfowitz told Commerce Secy. Donald Evans that he advocated delay in final regulatory decision on UWB until “at least February.” Expectation is that UWB could be on agenda for FCC’s Dec. 12 meeting, although timing wasn’t clear late Fri. Wolfowitz said DoD review of preliminary draft of FCC’s UWB rules indicated that they wouldn’t provide adequate protection for GPS and “other critical DoD systems” (CD Nov 29 p1).

In deal designed to keep XO Communications out of bankruptcy, venture capital firm Forstmann, Little and Telefonos de Mexico reached preliminary agreement to infuse broadband communications provider with $800 million in cash. Deal, already approved by XO’s board, will result in Forstmann, Little and Telmex each owning 39% of XO and reduce its total debt to about $1 billion. Senior note holders of XO will hold remaining 22% of company, except for stakes held by employees. “Consequently, current holders of the company’s equity securities are expected to lose substantially all of the value of their investment as a result of the restructuring,” XO said. It said preliminary agreement provided for completion of final agreement on or before Dec. 14. Stakes of $400 million each that Forstmann, Little and Telmex are taking is contingent on XO’s successfully restructuring its balance sheet and regulatory approvals. XO said that at end of 3rd quarter it had more than $1 billion in cash or cash equivalents on hand, which would let it continue business operations during restructuring. Company’s shares fell 22% to 80 cents before trading was halted at midmorning on Nasdaq. XO also said that under terms of new investment and as part of its financial restructuring, it would not make scheduled interest and dividend payments on its unsecured notes or preferred equity securities after Nov. 30. “The investment will allow us to build upon our solid foundation with a strengthened balanced sheet, significantly reduced debt and a fully funded business plan,” XO Chmn.-CEO Daniel Akerson said.

Deputy Defense Secy. Paul Wolfowitz asked Commerce Secy. Donald Evans to advocate delay in final regulatory decision on ultra-wideband (UWB) until “at least February.” Expectation of some industry observers had been that UWB could be taken up at FCC’s Dec. 12 agenda meeting, although timing was unclear because NTIA still must submit final input to FCC on rulemaking, sources said. FCC Chmn. Powell told House Appropriations Subcommittee earlier this year that Commission could issue UWB rulemaking by year-end, although he said at time that agency was awaiting final evaluation from govt. on UWB interference issues (CD May 23 p7). In letter to Evans last week, Wolfowitz said DoD’s review of preliminary draft of FCC’s UWB rules “indicates they will not provide adequate protection for GPS and other critical DoD systems… They also raise significant national spectrum management policy issues such as the intentional operation of nonlicensed devices in nationally restricted bands and in internationally designated passive-only bands.” Several sources said item on UWB began circulating on 8th floor at FCC earlier this week.

Consumer intentions on buying TV sets rose in Nov. from Oct., even though overall consumer confidence fell for 5th straight month, according to preliminary data in Conference Board monthly survey. Of 5,000 households polled, 7.7% said they plan to buy TV set in next 6 months, vs. 6.8% in Oct., 7.5% in Sept., 6.2% in Nov. 2000. Consumer Confidence Index fell 3 points in Nov., marking 2nd significant decline in as many months, Conference Board said: “Rising unemployment and continuing layoff announcements are dampening confidence. Pessimistically, it said that turnaround in consumer confidence isn’t likely before year-end, “nor are retailers likely to enjoy a blockbuster holiday season.”

Mont. PSC decided to open generic inquiry into line extension rules and cost recovery policies. Agency acted as result of CenturyTel application for line extension to serve 24 potential customers in new housing development. Project would require about 20 miles of cable, and CenturyTel proposed recovering $500,000 cost through surcharge on intrastate terminating access. Questions by staff and other carriers on cost recovery plan prompted PSC to order generic inquiry before ruling. CenturyTel withdrew its application until PSC completed inquiry. Meanwhile, PSC set Jan. 9 for forum with state’s CLECs to discuss their experiences operating in Mont. At least 4 CLECs have expressed interest in forum -- AT&T, Montana Wireless, New Edge Networks, TouchAmerica. PSC plans to hire outside facilitator to conduct forum, probably person from Liberty Consulting Group because it has been facilitator for 7-state collaboration on Qwest’s compliance with non-OSS-related items on Sec. 271 long distance entry checklist. PSC also set Nov. 19 deadline for comments on its preliminary finding that Qwest had met Telecom Act checklist items #5 (CLEC access to unbundled transport) and item #6 (CLEC access to unbundled switching). PSC proposed adopting list of recommendations by Liberty Consulting relating to items 5 and 6, which were made following series of workshops and comment-reply cycles. Consultant recommended that Qwest shouldn’t be obligated to construct new SONET high- speed network facilities for CLECs and said it had opened its advanced intelligent network functions sufficiently to comply with Telecom Act’s requirements.

Cal. Supreme Court will be next setting for effort to corral DeCSS program that hacks DVD’s Content Scrambling System for copy prevention. DVD Copy Control Assn. (DVD CCA) said Fri. it would go to state’s top court to appeal Nov. 1 decision by Cal. appellate court to overturn trial court’s preliminary injunction that prohibited individuals from posting DeCSS code on their Web sites.

Boeing wants Hughes to refund “hundreds of millions” of dollars, contending Hughes had overvalued satellite manufacturing unit when Boeing made $3.85 billion purchase in Oct. 2000. Companies refused comment, but said dispute would be decided through arbitration at accounting firm. Boeing reportedly is seeking $600 million-$1 billion. They closed deal using “purchase method” that bases sales price on preliminary assessment of fair value of assets. Contract terms allow Boeing to examine whether sales price was equal to value placed on Hughes at time of sale. That’s what arbitrator now must decide. Hughes CFO Michael Gaines said in Oct. 17 conference call that Hughes had agreed to pay Boeing $160 million related to satellite manufacturing unit. Hughes spokesman said $160 million was “mechanical correction” unrelated to sale. Gaines said Hughes had “adequate amount” in reserve to settle dispute Settlement won’t have major financial impact on Hughes because company is receiving $1.7 billion from subsidiary PanAmSat, analyst said. Boeing had determined that goodwill in purchase of Hughes was $740 million and other intangibles was $631 million, according to Oct. 25 SEC filing. It later increased amount to $2.2 billion, but said that since sale image of Boeing Satellite Systems had suffered major setback because of problems and defects found in Hughes’s HS-601 and HS-702 satellite models.

Federal court ruled Mon. that AOL probably committed copyright infringement by using and distributing computer software owned by PlayMedia Systems without latter’s audio player “WINAMP.” In Oct. 29 order granting preliminary injunction against AOL, U.S. Dist. Judge Howard Matz, L.A., said PlayMedia was likely to succeed in proving that: (1) AOL exceeded terms of license given by PlayMedia to Nullsoft -- company later acquired by AOL -- for AMP software that decoded digital audio files compressed in MP3 format. (2) AOL, even if it were using AMP source code in conjunction with WINAMP, violated licensing agreement by sublicensing AMP in object code form other than for use in conjunction with WINAMP only. (3) PlayMedia had suffered irreparable injury and was entitled to injunctive relief. AOL reportedly has said it will seek stay of injunction and appeal it.