Tuesday, April 22, 2003

Judge Orders Verizon to Disclose Identity of Internet Subscriber

U.S. District Court Judge John Bates ordered Verizon Communications to reveal the identity of an Internet subscriber accused of music piracy. In response, Verizon vowed to seek a stay from the U.S. Court of Appeals, saying the ruling goes beyond the interests of the music industry and "exposes anyone who uses the Internet to potential predators, scam artists and crooks, including identity thieves and stalkers." The case stems from a subpoena filed last summer by the Recording Industry Association of America (RIAA) demanding that Verizon Online turn over the name of a customer whom the RIAA alleges possesses illegal copies of copyrighted music files. Verizon has argued that such a demand is not supported by the Digital Millennium Copyright Act and that a court ruling in favor of the RIAA would enable anyone who makes a mere allegation of copyright infringement to gain complete access to private subscriber information without the due process protections afforded by the courts.http://newscenter.verizon.com/proactive/newsroom/release.vtml?id=80021

NTT Outlines Three-Year Business Plan

Japan's NTT Group outlined its three-year business plan (FY2003-2005), including its vision for a new optical generation of broadband services. Some key trends and strategies highlighted in the announcement include:

  • with the proliferation of competition and increased penetration of various DSL services, Japan is poised to enter "the full scale broadband era"


  • the expansion of flat-rate access services and the full-fledged penetration of IP telephones and IP-VPN are accelerating the shift in traffic from fixed-line telephones to IP networks


  • growth in mobile communications has slowed given that there were 80 million subscribers in Japan at the end of 2002. Competition is expected to become even more intense with the continued slashing of rates and the introduction of high-performance applications.


  • The Asian markets are gaining greater importance as demand for IP solutions grows, primarily among Japanese-affiliated companies in the region, and as markets for mobile phones continue to grow rapidly in China and elsewhere in Asia. NTT Communications will especially focus on the Asian region.


  • The NTT Group is dedicated to developing "total services" that integrate everything from terminals and access to platforms and applications. The NTT Group will pursue partnerships and alliances in various fields to deliver this vision. The company is targeting the spring of 2005 to rollout new business services in major metro areas that deliver this new, integrated collaborative communication environment.


  • The NTT Group has identified optical access as the mainstay of its broadband services and NTT will concentrate its marketing efforts in this field. The company is working to shorten significantly the installation time for direct fiber connections. It will also continue marketing ADSL aggressively by engaging in competition while identifying potential users for optical access.


  • Best-effort IP telephone services will be offered as an option to ADSL, to respond to competition and user needs.


  • NTT DoCoMo will continue to expand the service area of FOMA, its 3G service, including in underground areas and inside buildings.


  • NTT is committed to R&D activities with both 3-to-5 year and 10-year time horizons.


  • The NTT Group will accelerate the pace of business and financial reform, especially in terms of outsourcing many functions to other firms.


  • The NTT Group is calling on government authorities to review regulations so as to provide incentives for capital investment, especially related to optical infrastructure and broadband services. The company warns that the accelerated shift to IP means that it will become increasingly difficult to maintain the current fixed-line telephone network. Regulations must take into account the requirements of maintaining universal services amidst today's competition.
http://www.ntt.co.jp/news/news03e/0304/030423.html

Ample Communications and Big Bear Test 40 Gbps Technology

Ample Communications, a start-up based in Fremont, California, completed interoperability testing of its Blackbird 40 Gbps frame processor and Big Bear Networks' Kodiak 40 Gbps transponder. Ample Communications' Blackbird 40 Gbps frame processor is a single-chip 40 Gbps packet over SONET framer targeted for single port STS-768/STM-256 and four port STS-192/STM-64 SONET/SDH applications. It combines multiple functional blocks including framer, overhead processor, pointer processor and data link logic into a chip. Big Bear Network's Kodiak 40 Gbps transponder is an MSA standard 300-pin module supporting OC-768 SONET and STM-256 SDH transport, as well as 43 Gbps OTU-3 digital wrapper applications. The transponder incorporates several Silicon Germanium (SiGe) chipsets developed by Big Bear. The companies described the interoperability as an important step forward for 40 Gbps applications.
http://www.amplecomm.com

Level 3 Announces Dial-Up Program for Mid-Market ISPs

Level 3 Communications launched a dial-up program for mid-market ISPs serving between 10,000 and 50,000 customers in the US. Level 3's mid-market pricing options include a fixed port, fixed port with bursting, usage-based (per hour), subscriber-based and 800 nationwide access plans. Service is available in all 50 states and covers more than 90 percent of the U.S. population.
http://www.Level3.com
  • In January, Level 3 surpassed the 20 billion minute per month milestone on its softswitch platform.

iBasis Carries 792 million VoIP Minutes, up 6% Sequentially

The iBasis network carried 792 million minutes of voice traffic in Q1, a 43% increase over the 555 million minutes carried in Q1 2002, and a 6% sequential increase over the 748 million minutes in Q4 2002. Average revenue per minute was 5.3 cents per minute in the first quarter of 2003, compared to 5.7 cents per minute in Q4 2002. Some other highlights for Q1:

  • iBasis generated revenue of $41.8 million. Net income was $4.0 million, or $0.09 per share. Net income included a gain of $12.9 million on the exchange of convertible subordinated notes.


  • Overseas-originated calls accounted for 50% of wholesale telecommunications revenue and 43% of wholesale traffic, compared to 49% of wholesale revenue and 41% of wholesale traffic in Q4 2002.


  • Tier One carrier customers generated approximately 62% of revenue in Q1 2002, compared to 67% of revenue in Q4 2002.


  • iBasis believes it will achieve positive cash flow and net income in mid-2004.
http://www.ibasis.net

GlobespanVirata Offers ADSL USB modem

GlobespanVirata announced the availability of a new ADSL USB modem offering speeds greater than 8 Mbps. GlobespanVirata's Centragate USB chip set is a fully programmable multimode chip set that supports all standard compliant versions of ADSL. The device integrates line driver and filters, while the digital chip integrates a USB 1.1 compliant interface and memory.
http://www.globespanvirata.com

Foundry Reports Q1 Revenue of $91 Million

Foundry Networks reported Q1 revenue of $91.1 million, compared to $86.7 million in the previous quarter, and to $62.4 million in the same period last year. Foundry earned net income of $13.4 million, or $0.11 per diluted share, in the March 2003 quarter, compared with net income of $10.5 million, or $0.08 per diluted share, in the prior quarter, and net income of $1.0 million, or $0.01 per diluted share, for the same period in 2002. Foundry said sales to the U.S. federal government were strong during the quarter and added unusual strength to what is typically a seasonally soft periodhttp://www.foundrynet.com

Fujitsu Introduces IP-Phone for SOHO Devices

Fujitsu Microelectronics America introduced an IP-Phone VoIP chip designed for Internet telephony and Multimedia Terminal Adapter (MTA) applications in SOHO environments. The chip incorporates a DSP engine based on a customized ARC core and a tightly coupled custom-designed DSP hardware accelerator. It also incorporates a RISC host processor, an Ethernet switch and memory controller, along with a rich set of peripheral functions. Pricing starts at $12 in 10,000-unit quantities.
http://www.fma.fujitsu.com/asic/

TIA to Create Standard for WLAN Telephony

The Telecommunications Industry Association (TIA) initiated work on standards to address VoIP over wireless local area network (WLAN) mobile terminals and WLAN/LAN infrastructure. The work is undertaken by TIA's engineering committee TR-41, User Premises Telecommunications Equipment Requirements. The effort is based on the standard ANSI/TIA/EIA-810-A: "Telecommunications -- Telephone Terminal Equipment -- Transmission Requirements for Narrowband Voice over IP and Voice over PCM Digital Wireline Telephones." TIA is cooperating with the Internet Engineering Task Force (IETF), Institute of Electrical and Electronic Engineers (IEEE) 802.11 and the Wi-Fi Alliance. A working draft is expected by the end of this year. A published standard is expected by the end of 2004.
http://www.tiaonline.org

FCC Establishes Rules for 4.9 GHz Band

The FCC established licensing and service rules for the 50 megahertz of spectrum in the 4940-4990 MHz band (4.9 GHz band), saying the action promotes public safety communications and innovation in wireless broadband services. The new rules are intended to promote spectrum access for a variety of applications, such as high-speed digital technologies and WLANs for incident scene management, dispatch operations and vehicular operations. Some specifics include:

  • eligibility for licensing in the 4.9 GHz band is limited to entities providing "public safety services"


  • permitted uses include broadband mobile operations, fixed hotspot use, and temporary fixed links on a primary basis in the band. Furthermore, the FCC allowed fixed point-to-point operations on a secondary basis.


  • licensees are encouraged to work with non-traditional public safety users, such as utilities, to develop public safety networks


  • a "jurisdictional" geographical licensing approach will be used for operations in the band, whereby licensees will be authorized to operate in those geographic areas over which they have jurisdiction.
http://www.fcc.gov

FCC Updates Universal Service Fund for Schools

The FCC adopted new rules to streamline the operation of the schools and libraries program of the universal service fund (USF), which enables qualified applicants to receive discounts for eligible telecommunications services, Internet access, and internal connections. The USF has provided over $9.8 billion in funding to public schools and libraries since the program was launched in 1997. The USF is capped at $2.25 billion annually to provide eligible schools and libraries with discounts - ranging from 20% to 90% - for authorized services. The FCC estimates that 87% of U.S. public school classrooms are now connected to the Internet, compared with 14% in 1997.
http://www.fcc.gov

FCC Rules Against Verizon in CLEC Interconnection Complaint

The FCC agreed with a complaint by Core Communications alleging that Verizon had violated the Communications Act and Commission rules by failing to interconnect with Core on reasonable terms. The FCC found that Verizon delayed for four months interconnecting with Core in the Washington D.C. Metropolitan area, and also failed to provide Core with critical information about the delay and its expected duration. The delay occurred because Verizon allowed the capacity of certain crucial pieces of equipment within its network to exhaust and to remain at exhaust for an extended period. Core Communications may now file a supplemental complaint against Verizon for damages resulting from the violationhttp://www.fcc.govhttp://www.corecomm.us
  • Last week, the FCC found SBC Communications and its nine incumbent local exchange affiliates in violation of an order issued in conjunction with the SBC/Ameritech merge. The FCC action arose following a complaint by two CLECs, Core Communications and Z-Tel Communications, who said SBC refused to allow their use of a shared transport unbundled network element needed for transporting intraLATA toll calls.

Nokia Signs Reseller Agreement for F5's Traffic Management Products

Nokia signed a new reseller agreement covering F5 Networks' Application Traffic Management products. As part of the agreement, F5 intends to complete custom development work by mid-year on its traffic management products to support integration with Nokia's NetAct, a solution for monitoring, measuring and configuring the wireless network. Nokia Networks is bundling F5's BIG-IP products for Multimedia Messaging Service (MMS) load balancing to build increased high availability, security and scalability into wireless customers' networkshttp://www.f5.com
http://www.nokia.com

Bell Canada Deploys Cramer Inventory/Provisioning Software

Bell Canada will deploy Cramer Systems' inventory and provisioning automation software to
manage and further modernize its inventory platform. Under the agreement, the Cramer4 suite of products will be deployed in a phased implementation that will commence with an initial implementation of 300 users in September of this year and subsequently grow to approximately 1500 users by mid-2004. Bell Canada currently serves about 25 million customer connections. Financial terms were not disclosed.
http://www.cramer.com
http://www.bell.ca

BellSouth Reports Level Revenue and Customer Trends

BellSouth reported consolidated Q1 revenues of $5.52 billion, compared to $5.53 billion in Q1 2002. Net income was $1.2 billion, compared to a net loss of $154 million in Q1 2002. Some highlights of the quarter:

  • CAPEX was $631 million, a reduction of 37.2% compared to $1.0 billion in Q1 2002. The CAPEX-to-revenue ration for the quarter was 11.5%, although the guidance for future spending remains 15%.


  • Operating free cash flow (defined as cash flow from operations less capital expenditures) was $1.3 billion.


  • total debt was reduced by $753 million


  • BellSouth added 101,000 DSL customers, giving it a total of 1,122,000 customers. DSL customers now represent 7% of BellSouth-qualified lines.


  • At the end of the quarter, BellSouth had more than 1.9 million consumer and business long distance customers, nearly double the level three months ago. BellSouth now has 13% consumer LD penetration and 24% business LD penetration.


  • Data revenues were $1.09 billion, level with the first quarter a year ago.


  • Total access lines of 24.5 million at March 31 declined 3.6 percent compared to a year earlier, impacted by a continued weak economy, market share loss and technology substitution. Year-to-year retail line loss was 1.6 million - consumer line loss was 7%, small business line loss was 3.7%, and large business line loss was 6.5%.


  • UNE-P lines served to competitors grew by 231,000 to 1,774,000, a 110% increase over Q1 2002. The UNE-P growth was nearly all for consumer lines; business UNE-P lines were flat on a sequential basis. Wholesale resale lines provided to competitors declined by 56,000 to 380,000.


  • Cingular Wireless added 189,000 net subscribers in Q1, giving it a total of 8.8 million customers.
http://www.bellsouth.com
  • Shares in BellSouth closed at $24.21, up by $2.50 or 11.5% for the day.

Lucent Reports 16% Sequential Revenue Increase

In what it described as significant progress toward a turnaround, Lucent Technologies reported quarterly revenue of $2.4 billion, which represents a 16% sequential increase over the previous quarter. The company recorded $3.52 billion in revenues in the year-ago quarter. Net loss for the quarter was $351 million or $0.14 per share, including charges associated with the global settlement of Lucent's shareowner litigation and the repurchase of convertible securities and certain debt obligations and special tax benefits. Some highlights:

  • the company is reducing its quarterly breakeven point to about $2.4 billion in quarterly revenue by the end of the fiscal year


  • the company hopes to be profitable by the end of the year, and is planning for about a 25% revenue decline year-over-year


  • Lucent had $3.4 billion in cash and short-term investments at the end of Q1 and said this is sufficient to fund its plans


  • gross margins rose to 31.7%, compared to 21.9% for the prior quarter. The improvement was driven by continuing cost reductions across the business as well as higher sales volume and favorable product mix, primarily in the Mobility business. Increased patent licensing revenues this quarter also contributed to the higher margin rate.


  • there were no customer financing write-offs during the quarter


  • Lucent reduced its employee headcount by 1,500 during the quarter, for a total of 38,500 employees. The company expects to employ about 35,000 at the end of the year.
http://www.lucent.com

AT&T Sees Growth in Managed Services, Overall Revenue Declines

AT&T reported Q1 revenue of $9.0 billion, which included $6.4 billion from AT&T Business Services and $2.5 billion from AT&T Consumer Services. This represents a decline of 5.9% versus Q1 2002, primarily due to continued declines in long distance (LD) voice services, partially offset by growth in several key segments of AT&T Business Services, as well as the continued success of AT&T Consumer Services' bundled local and LD offering. AT&T Business Services revenue declined by 1.4% compared with the prior year first quarter, while AT&T Consumer Services revenue declined by 17.8%. Income from continuing operations of $529 million, or $0.67 per share, which compares favorably to income of $446 million, or earnings per diluted share of $0.60, in Q1 2002. Some highlights:

  • Total data services revenue declined 0.9% and IP & enhanced services (IP&E) revenue grew 9.1%, from the prior year quarter.


  • The managed component of total data services, and IP&E-services revenue grew nearly 7% from Q1 2002 and now comprises 30% of this revenue total.


  • approximately 157,000 local access lines were added in Q1, for a total of 3.8 million. Local voice revenue grew approximately 25%.


  • Business long distance voice revenue declined 2.9% on a year-over-year basis, driven by continued pricing pressure and weakness in retail demand, partially offset by growth in wholesale revenue. Volumes grew approximately 12%


  • Overcapacity and aggressive pricing continue across the industry, especially in high-bandwidth applications and business retail voice services


  • At the end of the first quarter, AT&T Consumer provided local service to approximately 2.8 million customers, an increase of more than 119% from the prior year first quarter. The company is targeting 4 million local customers by year-end, as it begins serving UNE-P lines in more states.


  • AT&T ended the quarter with net debt of $12.0 billion.


  • CAPEX for Q1 was $662 million, a decline from $1.346 billion in Q4 2002. The company lowered its CAPEX target for 2003 from a prior range of $3.3 to $3.5 billion to around $3.0 billion.


  • AT&T expects that it will meet or exceed its previously stated 2003 consolidated revenue growth and operating income margin guidance.
http://www.att.com
  • Shares in AT&T closed at $17.01, up by $3.20 or 23% for the day. Q1 results were $0.15 ahead of market expectations.


  • Separately, The Wall Street Journal published a report speculating on the prospect of a merger between AT&T and BellSouth or another RBOC. Motives for such a merger range from AT&T's stock price to the expected re-emergence of MCI as a market power. The companies have denied the rumors.