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.
Consumer intentions on buying TV sets fell in Oct. from Sept., according to preliminary data in Conference Board monthly survey. Of 5,000 households polled, 6.7% said they planned to buy TV set in next 6 months, down from 7.5% in Sept., 7.3% in Aug., 6.9% in Oct. 2000. Consumer Confidence Index fell in Oct. for 4th consecutive month, and at 85.5 stood at lowest point since Feb. 1994. Conference Board said: “Widespread layoffs and rising unemployment do not signal a rebound in confidence any time soon. With the holiday season quickly approaching, there is little positive stimuli on the horizon.”
Tenth U.S. Appeals Court, Denver, upheld decision by lower court that granted preliminary injunction to Dominion Video Satellite in contract dispute case with EchoStar currently in arbitration, but court left decision to U.S. Dist. Court, Colo., on whether further proceedings and hearing on factual findings in case were necessary. Lower court also will decide on amount and form of bond Dominion must post to continue case. Company has posted $10,000 bond based upon lower court ruling following hearing Feb. 8. Case involves type of payment required for subscribers of Dominion’s Sky Angel Network and whether Sky Angel customers are required to purchase DISH network packages or DISH receiver to fulfill terms of Dominion contract with EchoStar. EchoStar sent Dominion letter Jan. 26 announcing EchoStar no longer would activate Dominion subscribers unless they bought minimum amount of DISH network programming, unsubsidized satellite receiver directly from EchoStar or Dominion- specific smart card. EchoStar said goal was to “remedy the problem” of Dominion subscribers’ receiving subsidized prices without fulfilling their commitment to EchoStar, which would make them eligible for subsidies.
FTC, along with attorneys gen. (AGs) of Ill., Okla., Ore., N.C., Va. and Wis. announced actions against 9 “unscrupulous cold callers and telemarketing fraud.” In addition to 9 FTC, state or joint law enforcement actions, 6 Assurances of Voluntary Compliance were also filed. Actions focused on advance fee loans, credit card protection insurance and low-cost office supplies. Examples include: (1) R&R Consultants, which promised to remove consumer’s personal information from Internet. (2) Membership Services, American Card Services and Icon America, which sold credit card loss protection under false pretenses. (3) Pendleton Group, which conducted “classic ’toner-phoner’ scam” by tricking small businesses into believing seller was regular copy machine toner supplier and offered special deal before prices go up. In each case, FTC seeks or has been granted preliminary relief, including injunctions and, in most cases, asset freezes.
Federal judge has granted preliminary injunction that stops Southwestern Bell from continuing ad campaign denigrating cable modems as susceptible to slowdowns during peak Internet usage hours. U.S. Dist. Judge Catherine Perry in St. Louis said that while Southwestern Bell’s ads were “very funny” and even memorable, Charter probably would win its suit on false advertising claims at trial and was suffering irreparable harm from ads. Perry referred case to mediation, saying “the time is ripe for meaningful settlement discussions.” Under order, Southwestern Bell is enjoined from airing its “Cable Modem Slowdown” ad campaign, which included TV commercials showing drowsy family scheduling Internet use after 10 p.m. to avoid peak usage times. Campaign included similar radio commercials and Web page references, as well as published materials. Southwestern Bell was promoting its own DSL service as better. “The message of the ads is false and that falsity is likely to deceive the consumers because it is material to the target audience’s purchasing decision, and the ads are likely to injure Charter,” Perry said in her ruling. Charter filed its lawsuit in Aug. (CD Aug 30 p5), contending that Southwestern Bell had violated federal Lanham Act, which governs truth in advertising and unfair competition. Spokesman for SBC, Southwestern Bell’s corporate parent, said that while company executives were disappointed with decision, they intended to prove their case at trial. Although company said it would honor decision and pull ads, spokesman said: “What we continue to attempt to do is educate our consumers about broadband choices.” He said cable companies had roughly 70% of the broadband market nationwide, which he called stranglehold. Ads ran in 13 states served by Southwestern Bell and other SBC subsidiaries.
PanAmSat’s Loral-built PAS-7 satellite is suffering from solar array anomaly that causes 25% reduction in power but will not affect any others in Loral’s fleet of FS 1300 satellites, Loral spokesman said: “At this point we believe it’s unique to that satellite… We are delaying the shipments of any other satellites until we conclude our investigation.”