NEWS Monday 18th March- Monday 25th March 2002

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Weekend news Friday 22nd - Monday 25th March

Banks to rescue Kirch?
UK TV regs - don't help Murdoch
... But Australian rules more favourable
Canal Plus to buy Pathe Sports
Fox iTV revenues/losses up
DirecTV subs up

Banks to rescue Kirch?

Given their level of exposure, and the local politics involved, it comes as no surprise to industry observers that Kirch Gruppe's largest creditor banks look set to provide a rescue plan for the indebted German media company.

DZ Bank, Commerzbank, HypoVereinsbank, and Bayerische Landesbank are the banks cited by the FT as working on a rescue plan to provide Kirch with new funds, initially to ease liquidity and later providing access to capital markets.

Each of the banks would take a significant equity stake in KirchMedia, Kirch's 72 per cent owned core rights trading and broadcasting subsidiary, through a capital increase by the unit. While no figures have been given, KirchMedia reportedly needs E500 million to E600 million this year to continue operations. The banks could later float the business via an initial public offering of KirchMedia - separate from ProSiebenSAT.1 which abandonded plans for a merger on Thursday (21/3/02).

The FT reports bankers saying that they hoped to have a deal with Kirch wrapped up before the end of the month, but details still need to be finalised and competing solutions remain on the table. Any final agreement could be more complex, involving a degree of debt-for-equity swap by the banks, an extension of debt repayment deadlines on existing short-term loans, and some new credits. Reuters reports that any investment by the banks would not necessarily be long-term.

In addition to its E6.5 billion ($5.7 billion) debt, the biggest single threat facing Kirch Gruppe is a put option which would force Kirch to buy back News Corp's 22 per cent stake in Premiere for E1.7 billion, which News Corp has said it will excercise in October.

Publisher Axel Springer exercised a similar E767 million option in January to sell back to Kirch its 11 per cent share in ProSiebenSAT.1 before the end of April.
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UK TV regs - don't help Murdoch

Revision of the UK media regulation laws due out in May look set to allow major television and radio mega-mergers. But concerns over editorial independence are believed to have led ministers to retain limits on newspaper expansion into broadcasting - a move which they deny is specifically designed to curtail expansion of Rupert Murdoch's News Corporation into UK television and radio via the take-over ITV or Channel 5. No group with more than 20 per cent of the national newspaper market is currently allowed to own more than 20 per cent of a free-to-air TV or radio station - which rules out News Corp as it owns The Times and The Sun, plus 36.3 per cent of BSkyB.

Tessa Jowell, Culture Secretary, intends to raise the threshold preventing any one ITV company from owning more than 15 per cent of total audience share.

The radio points system - by which companies cannot owning licences representing more than 15 per cent of total points - is expected to be replaced.

Percentage limits could be removed for TV and radio, but restrictions on the takeover of ITV by non-EU companies would remain. The relaxation is expected to facilitate the merger of Carlton and Granada, notwithstanding normal competition rules.

Murdoch's News Corp, whose papers have supported the Blair government, is expected to lobby against the retention of restrictions that limit the group's TV ambitions.

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Friday 22nd March

Microsoft iTV US setback
Premiere basic for E5
TV3 programming director axed
Brinkmanship at ITV Digital
NTL Dropped from Dow
Foxtel to carry C7
Astra 3A bird to launch

Microsoft iTV US setback

The St Louis, USA, cable company Charter Communications Inc is not going to deploy Microsoft iTV software early this year, as it had hoped, and may not use Microsoft software at all when it rolls out its home-media centre set-top box this Autumn reports the WSJ. In November last year Charter said it expected to use Microsoft software in up to a million homes over the next several years- but failed to designate a software supplier when it announced plans for the high-profile set-top device last month. The box is being developed with digeo Inc, a television company founded by Microsoft co-founder and Charter Chairman Paul G Allen.

What technology Charter ultimately uses in those boxes is "still being looked at," Charter spokesman Andy Morgan told the WSJ- adding that Microsoft products were expected to eventually be used in some way.

Ed Graczyk, a Microsoft marketing director, said the company still expects its software "to be deployed across Charter's network in large volumes," adding, "whether that means things get rolled out a couple months later than the initial plan, that doesn't matter in the end."

Microsoft missed delivery deadlines with cable operators in Europe, including UPC and NTL - allowing competitors in to companies in which it had significant shareholdings - which are now being cut.

Microsoft recently cut its stake in Britain's NTL Inc from nine per centlast year to 1.1 per cent, and reduced its holdings in United Pan-Europe Communications NV, of the Netherlands from eight per cent to 2.6 per cent.

AT&T Corp, in which Microsoft took a E5.66 billion stake in 1999, does not appear to be ready to deploy Microsoft's software in its DCT5000 Motorola Inc set-top box.

There is some speculation in the US that Microsoft may use its financial muscle to partner or buy into at least one of its more successful set top middleware competitors - with Open TV and Liberate - in that order - seen as the most likely.
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Premiere basic for E5

Premiere World CEO Georg Kofler has introduced his rescue plan for the loss making German digital Pay TV platform Premiere World, which has led the cash hemorage at the Kirch Gruppe. Kofler intends to slash costs by some E500 million per year. This will result in some 25 to 30 per cent of Premiere employees loosing their jobs; the company's Munich call centres will be closed down completely. The program bouquet will be streamlined and more adult entertainment is due to be introduced.

Kofler also hopes to attract more subscribers by dramatically slashing the price of subscriptions. The basic package will now be available for E5 - consisting of one channel, Premiere Start, which also provides a taster of all the other channels in the bouquet, from kids to soft adult entertainment. The new offer is being launched on May1 - though the price had already had been cut to E15 at the end of last year.

Over the past year the subscriber figures have been stable, between around 2.4 million to 2.5 million. "Of course", Kofler said, "it would have been better to launch this much sooner." It is the third re-launch within two years. That's one reason why Kofler might still fail in this task.

The Premiere rescuer intends to break even in 2004. Bank analysts still believe the best move would be to shut down the entire venture and they ask who will come up with the additional E900 million that the venture will swallow until then. BSkyB has said it will return its 22 per cent stake in Premiere to Kirch by October - in exchange for E1.7 billion cash, and there is no new investor in sight.
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Brinkmanship at ITV Digital

UK terrestrial TV chiefs Charles Allen, Chairman of Granada, and Gerry Murphy, Chief Executive of Carlton Communications, who jointly own digital terrestrial platform ITV Digital, have threatened closure of the entire ITV Digital platform - within weeks - if their talks with the Football League fail to slash the cost of its E509 million ($448 million) broadcasting contract.

Previously ITV Digital's position was that if it closed, the company's owners could not be held legally liable by the Football League for breach of contract - there are not believed to be any guarantees from Carlton and Granada. This heightened the significance of the owners' presence at the meeting with Stewart Prebble, ITV Digital's Chief Executive, David Burns, Chief Executive of the Football League, and Keith Harris, its Chairman.

ITV Digital is believed to have made a 'non-negotiable' E80.8 million offer for the remaining two years of the deal - E207 million less than the E288 million stipulated in the contract when sports rights valuations were at their peak.

The Football league's 72 member clubs were informed of the latest offer yesterday (21/3/02), (SEE UPDATE BELOW) but many have already 'spent' the expected revenue via player contracts, and up to a third of smaller clubs could face closure if the money is not forthcoming. Yet if ITV Digital were to close - with the cable companies heavily in debt, the bidding would be between the cash-strapped terrestrials and BSkyB. In the short term there may be no alternative bidders.

Nonetheless, many of the Chairmen do not want to renegotiate, with First Division Bradford City's Chairman, Geoffrey Richmond, a member of the Football League board, reported as saying, "We have a binding contract with ITV Digital and we expect them to abide by it. The league will not be happy about accepting a renegotiated contract. Our position is quite clear. We have a contract that obligates ITV Digital to pay us E288 million over the next two years and we expect them to honour that."

It is believed that both sides will eventually move, and agree a figure nearer the E80.8 million offered than the E288 million contracted sum.

Granada and Carlton have spent E1,293.5 million on ITV digital to win 1.2 million subscribers and a further E484 million is believed required to reach break, hence further operating cost reductions are required - with the cost of the current sports contract seen as unsustainable. A distribution deal with Sky could provide 5.7 million additional viewers which could make the advertising proposition viable.

Accountancy firm Deloitte & Touche is handling the company's restructure including deals with suppliers of content such as the Football League.

UPDATE 9.30 AM 22/3/02:

Last night (Thursday 21/3/02) the reduced £50 million contract offer for TV rights with the UK's Football League was rejected."Unless we can put this business on a sound economic footing, we will shut it down," one ITV digital executive was quoted as saying by the FT. With the £800 million spent to date now counted as dead money, and no inclination to spend the £300 million needed to achieve breakeven, ITV Digital is reportedly prepared to put the company into administration over the weekend if the revised offer is not accepted.

Keith Harris, Chairman of the Football League was equally adamant that Carlton Communications and Granada, owners of ITV Digital, would be held legally liable to meet the contractual obligations of their pay-TV venture.
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NTL Dropped from Dow

The dramatic fall in the value of US run E19.25 billion indebted UK cableco NTL has caused it to be dropped from Dow Jones' media index, to be replaced by Fox Entertainment.

NTL trades in the US on the New York Stock Exchange, is trying to shore up finances and restructure E19.25 billion in debt. The price for its American depository receipts has fallen from E36.69 in May 2001 to below a dollar.

The current restructure is seen as heavily favouring bondholders, with Merill Lynch predicting that shareholders will be left with less than five per cent of the company after restructuring.
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Foxtel to carry C7

After exchanging pot-shots, the Australian pay TV leader Foxtel and free to air Seven Network are set to meet next week to discuss carriage for the latter's cable service C7.

Foxtel confirmed it will meet Seven's CEO of New Media Steve Wise to talk about how the four C7 channels could be carried on Foxtel's hardwire network. Foxtel CEO Kim Williams wrote to Wise saying that "in a constructive spirit" he was prepared to discuss carrying a "suite" of C7 channels.

Yet Williams repeated Foxtel's position that they would be tiered and not on the platform's basic package. He toned his remarks earlier this week that there was no guarantee about the quality of the C7 offerings, saying that he would seek assurances about the content.

Seven said, "We have advised Foxtel we are more than happy to enter into good faith discussions for a presence on their platform on terms that make good business sense."

Seven has successfully fought three rounds of court battles to get access to the Foxtel system which is owned by the pay platform's 50 per cent owner Telstra. Foxtel has argued that it cannot spend E283.7 million ($250 million) to digitise its network until it can charge an "economic" access rate to outsiders.
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Astra 3A bird to launch

Final preparations for the launch of Luxembourg-based satellite operator SES Astra's Astra 3A satellite are underway at the European Space Port in Kourou, French Guyana.

Astra3A, the thirteenth satellite in the SES Astra constellation, will be the company's first spacecraft to be permanently positioned at 23.5õ East, Astra's third orbital position over Europe. Built by Boeing Space Systems Inc, this is the second 'spinner' satellite in the Astra fleet, featuring 20 Ku-Band transponders in the frequency range 11.45 - 11.70 GHz and - 12.50 - 12.75 GHz.

Astra 3A will provide follow-on capacity to Deutsche Telekom's Kopernikus satellite at 23.5õ East. The spacecraft will carry cable feeds for networks in Germany, Austria and Switzerland as well as broadband and Internet services.

Astra 3A is scheduled to be carried into geo-stationary transfer orbit onboard an Ariane 4 booster during the early evening of March 28th 2002. The launch window for the eighth Astra launch with Arianespace (Ariane Flight 149) opens at 10.29 pm Kourou time, (ie 02.29 am Central European time or 01.29 am UK time on March 29th, 2002).
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Thursday 21st March

Finnish broadband via telco
ITV merger to be revived
Kirch/ProSieben merger off
ICable launching 17 channels
Foxtel C7 disclosures
UK broadband roll-out
Charter launches HDTV in 2Q
China conference gets US interest

Finnish broadband via telco

Finland's Elisa Communications, a teleco and new media operator, and Maxisat, a Finnish technology specialist, have launched a new broadband TV service over the local telephony network in the capital, Helsinki. Subscribers can already watch all current Finnish digital TV channels via the service. When the DTT service launched in late August last year there were 18 services, but since then some have backed out, mainly due to lack of efficient enough STBs. In addition subscribers will get access to the Internet, either via their TV sets or via PCs.

An EPG service is already included and games and VOD services can be added. But the service is not for free: a joining fee of E160 is charged, plus a monthly subscription fee of E95.

Elisa Communications is also implementing a wireless service network to be called Arabia, for use in a new shopping centre in Helsinki launched March 14. Wireless Internet services are being offered, free of charge, for visitors to the shopping centre, whose shops can 'narrowcast' offers, adverts etc after customers have registered on the web sites of Arabia.
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ITV merger to be revived

Charles Allen, the Chairman of UK terrestrial TV company Granada, says a single ITV company in the UK is inevitable and merger talks with Carlton are expected to resume when regulatory hurdles were cleared. Speaking at the company's AGM, Allen said that the focus of the company must move from restructuring Granada to restructuring ITV.

"This process both logically and inevitably leads towards a single ITV company when legislation and regulation permits," said Allen, adding that a merger would bring in at least £50 million (E81 million) a year in cost savings.

Last month the two ITV companies called off merger talks - which they said they did not want to conduct in the blaze of publicity surrounding discussion of ITV Digital's financial failure.

Allen said that the company's initial estimates showed that ITV's ad revenues would be up nine per cent in May compared with last year. "We continue to have very limited forward visibility and the figures for May should not therefore be extrapolated through the rest of the year," he added.

Independent consultants Deloitte & Touche have been appointed to assist in reducing third party costs and the company is conducting meetings with all key suppliers, hoping to reduce the cost of its £315 million (E508 milliion) ITV Digital contract with the Nationwide League and its £60 million (E97 million) programme supply contracts with BSkyB.
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Kirch/ProSieben merger off

Kirchmedia and ProSiebenSat.1 MediaAG jointly announed yesterday that they are termnatiing discussions on the merger porposed in September 2001.

Bowing to the inevitable, th management Board of KirchMedia and the Executive Board of ProSiebenSat.1 media AG agreed that given the current economic climate and the situation of the KirchGruppe, the merger would not be feasible in the forseeable future - though the companies will continue working together and take advantage of cost savings identified in merger preparation talks.

This means that the BSkyB put option - which would come into effect if the merger did not go ahead - is now expected to be acted upon - with BSkyB already saying it will be seeking a cash payment of more than a billion euros.

ICable launching 17 channels

Hong Kong pay TV company i-Cable Communications is launching 17 new channels this year - as competitors launched an attack on what they are said to have described as unfair subscription discounts to protect its market share.

Managing Director Stephen Ng said that the new channels would be launched at the end of May and four would be dedicated to World Cup 2002 programming, with six given over to adult pay per view and the rest would be foreign language channels.

Ng said the channels would build subscriber numbers from the current total of 560,000 out of Hong Kong's 1.8 million homes, and increase income. He made the announcement when i-Cable announced its results. The cable TV side of the business saw an increase in subscribers of eight per cent, lower than expected by analysts. Ng attributed the shortfall to piracy and a poor overall economic conditions in Hong Kong last year. Revenue per subscriber fell by seven per cent to HK$232 ($32) a month.

The broadband unit performed better, recording a $1.2 million operating profit for the last quarter of 2001 and increasing user numbers to 160,000 by the start of 2002, compared to 50,000 twelve months earlier and taking a 32 per cent share of the local broadband market.

Meanwhile i-Cable's cable TV promotional plan which dropped prices by 30 per cent came under attack from newly-launched competitors Yes TV and Pacific Digital Media (Hong Kong) for what they said was an unfair advantage by the incumbent. Yes TV offers a six-channel and two VOD channels for $39 while Pacific Digital Media's trial service charges 40 cents for two channels.
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Foxtel C7 disclosures

The long running battle between Australian pay TV leader Foxtel and media tycoon Kerry Stokes has come to head with the satellite and cable TV system releasing confidential documents showing it offered carriage to his pay sports channel C7 last year.

Stokes, boss of the Seven Network, has fought a three-year battle to gain access to Foxtel's hardwire system for C7 built by Australia's dominant telco Telstra which owns half of Foxtel. When news broke that Foxtel had reached an accord with another pay platform, Optus, on channel-sharing to cut content costs and boost subscriber numbers, Stokes warned that the two companies wanted to create a "monolith."

This enraged Foxtel CEO Kim Williams who called the comment, "preposterous, extravagant garbage." At the same time Foxtel released correspondence showing that it offered carriage on a premium tier to C7 last year; but Stokes is adamant that he wants to be on the basic tier and have a suite of channels as it was not interested in being a one-channel service.

Williams said that Stokes wanted "a free lunch, breakfast and dinner and on silver service with a restaurant full of waiters."

The issue has been through three major court battles with judges ruling in favour of Seven each time. The two sides have been in talks with Australian regulators without a result for the last six months. The ill-feeling between the two sides has been aggravated by Foxtel's leading role in a consortium of pay and free to air channels who successfully outbid Seven for the rights to Australia's leading winter sport, Australian Rules Football, removing the code from the broadcaster's schedules after 45 years.
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UK broadband roll-out
By Geny Caloisi

The UK government has unveiled plans to boost the roll-out of broadband across Britain (Tuesday 19/03/02).

The projects will be financed by a £30 million (E48 million) fund allocated by the Government in October last year to explore and make broadband access a reality in the UK.

The plan includes a broadband town, wired up business parks, broadband links to schools, health-centres and libraries and trials of satellite and wireless technologies.

E-Commerce Minister Douglas Alexander said, "For the individual user, broadband will offer a whole new surfing experience. Ensuring that more people can take advantage of this - regardless of where we live - is a major priority. And these projects are making important steps in that direction."

The projects have been designed to meet the individual needs of each region, with a strong emphasis on providing broadband to rural communities where access is limited. This aspect of the project will be managed by Regional Development Agencies, reporting to the Prime Minister.

The projects include:

• wiring up business parks in Yorkshire and Humberside with broadband links;
• broadband in rural areas of the East Midlands;
• providing SMEs in the South East with broadband connections at reduced or free rates;
• setting up broadband demonstrators in local areas allowing people to sample the dramatically different internet experience that is broadband; and
• setting up a 'connecting communities' competition in the East of England, where broadband facilities will be provided in a number of communities, from small villages to market towns to demonstrate the benefits of broadband.

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Charter launches HDTV in 2Q

Charter Communications Inc, one of the main broadband communications providers of the US, is to deliver high-definition-television programming during the second quarter to five US markets: Alhambra/Pasadena and Glendale/Burbank, California; University Park, Texas; South Miami, Florida; and Birmingham, Alabama.

During the third quarter Kalamazoo, Michigan, and St Louis will be added.

Charter will initially be able to deliver HDTV programming from the Home Box Office and Showtime Networks Inc premium networks and the major broadcast-television networks, where available.

"As more high-definition televisions are purchased by our customers, we need to be responsive to their special needs," said John Pietri, Charter's Senior Vice President of Engineering. "HDTV technology provides an incredible viewing experience, and Charter's hybrid fibre-coax infrastructure, perhaps the most advanced in the industry, will provide high-definition television owners with the ultimate viewing experience."

Pietri said that this is just the beginning, the company is expecting to deliver HDTV programming to even more markets by the end of the year. He added that customers with HDTV sets will use a special device from Charter to access HDTV programming. Details of the HDTV packages will be announced in a few weeks, he added.
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China conference gets US interest

US middleware company Liberate Technologies and set-top-to-headend manufacturer Scientific-Atlanta are among companies aiming to boost their presence in China, attending the third annual Sino-International Cable Television Conference in Beijing, which began last Sunday.

During the conference companies are presenting their digital media products and ideas to the State Administration of Radio, Film and Television (SARFT).
SARFT expects to draft middleware standards in the second half of this year, with a final standard set to debut in 2003, says Harry Pan, Liberate's Managing Director of China. Tom Stitt, VP-Asia Pacific at Liberate, adds, "We think it's the right time to be making a major investment in China as new standards are being created for digital television."

Liberate, whose CEO Mitchell Kertzman was scheduled to speak at the conference, opened an office in Beijing last week and is investing millions in developing middleware for China, Stitt says. Creating software code to interact with program guides and head-ends for a language with thousands of characters is described as a monumental task.

Scientific-Atlanta is also interested in the development of middleware standards and digital television in China.
"China is a market unto itself," says Samson Lim, VP and GM of S-A's Media Networks Group. "With the recent entry into the World Trade Organisation and its Olympics in 2008, the market has reached a point where more foreign investment in China is likely to occur. In the cable market, the biggest cable head-end in the world is in Beijing."
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Wednesday 20th March

MTV to revive Metropol?
Bertelsmann's RTL offer withdrawn
MTV Nordic/Telia broadband launch
S-A in Charter iTV rollout
Intelsat boosts terrestrial facilities
TV web browser launched
Austrian Embassies use satellite

MTV to revive Metropol?
By Goran Sellgren

Viacom's MTV could become the saviour of Metropol, the Norwegian 'yuppie' channel that had to close down a fortnight ago, recommending its viewers "to read a book instead," after funds were running out at an unexpected speed. Now it appears that Metropol - in which Norwegian telecom giant Telenor, Italian MB Venture and Norwegian investment major Moeller were the biggest investors - is being courted by three different parties, one being MTV. The two other bidders have yet to reveal themselves.

"I can confirm that there have been contacts between us and MTV," Metropol's Head of Marketing, Paal Gladsoe, comments. "Further than that I have no comments at present, but we expect to know more during the course of this week. Nothing is guaranteed, but if things go the right way we might be able to restart the channel right after Easter."

Metropol was launched in the autumn of 1999, on the ruins of a collapsed news service for greater Oslo, then with a regional terrestrial licence. Metropol then managed to add one area after another of Norway's biggest urban areas, by a combination of more terrestrial regional licences, cable and DTH distribution. From the beginning the target group was what was then called 'yuppies,' well-off younger viewers in the country's more densely populated major cities.

Both Telenor and the Moeller group are reported to be interested in staying on as major investors, should Metropol be resuscitated.
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Bertelsmann's RTL offer withdrawn

German media group Bertelsmann's plan to take RTL private is now on hold as the company has withdrawn an offer for the 11 per cent of RTL it does not already own. Bertelsmann does not intend to raise its offer of E44-per-share, after minority shareholders rejected this sum as too low according to reports in the FT.

Instead it is to shelve its plan to buy-out RTL shareholders until June 2003 when it will be able to raise its price without being forced to pay compensation to Pearson. Pearson's earlier sale of shares in RTL to Bertelsmann included a clause requiring an extra E51million to be paid for each additional euro per share paid to minority shareholders above the E44 price.

The rejection of the proposed share price has been attributed to Bertelsmann Chief Thomas Middelhoff earlier putting an implied value on the shares of between E120 and E200 when it bought the 30 per cent stake owned by Albert Frere's Groupe Bruxelles Lambert in February last year.

The case is seen as indicative of how the privately owned group is likely to treat minority shareholders when it floats on the stock exchange in 2004 or 2005.
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MTV Nordic/Telia broadband launch

MTV Live, Europe's first 24 hour service made specifically for broadband technology, is to be launched in Sweden in conjunction with Telia.

MTV Live is seen as a key step in MTV Networks Europe's new media development strategy for 2002.

MTV Live, which the company says is the only channel made specifically for IP broadband technology, allows the channel to be viewed in near-TV quality via PCs. Targeted at Europe's 16 to 34 core demographic, it draws on MTV Networks Europe's 15 year archive of material, including footage from award shows, Unpluggeds, MTV Lives and many moments in the history of MTV, biggest television network in Europe.

The partnership with Telia will allow users from the Nordic region to access MTV Live for the first time, whilst simultaneously accessing music news and artist biographies, plus it gives the user the opportunity to take part in a variety of interactive add-ons, including a virtual tours around backstage areas.

MTV Live also offers the opportunity for the user to create their own track using a variety of samples, whilst simultaneously watching live performance footage via a minimised window on the PC screen.

Steffan Rossell, General Manager, MTV Networks Nordic, commented, "Via MTV Live, we are significantly increasing the representation of live music available on our network, which will be available 24 hours a day for our users. We are constantly looking at new and exciting ways of offering our audiences live music via a variety of platforms."

"comhem.se is a meeting point for all kinds of entertainment services. In order for our broadband customers to be able to fully utilise our service we must collaborate with top quality suppliers of content on all levels." Added Indra Asander, Manager, Telia Internet Services.

Content is streamed on comhem.se to allow viewing without downloading. MTV Live is accessible 24 hours a day to all of Telia's subscribers and allows users to view material on a full screen at VHS quality.
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S-A in Charter iTV rollout

US cableco Charter Communications Inc has selected Scientific-Atlanta's service arm, SciCare Broadband Services, to help prepare the operator's iTV network plans for 27 of its cable sites.

SciCare Broadband Services helps cable operators manage and maintain their digital interactive networks and successfully integrate and launch new iTV services to cable customers. The agreement covers network monitoring, software upgrades, project management and technical support, and training certification.

Scientific-Atlanta will provide Charter with an extensive accounting of its operations and network strengths and weaknesses at 27 sites and 78 hubs, through its SciCare assessment program called OpsNOW/NetNOW. SciCare will provide specific recommendations and specialised training to Charter technicians on activating and operating digital customer networks, digital broadband delivery systems troubleshooting and broadband network controller certification.

"Scientific-Atlanta's SciCare Broadband Services is truly a value-add organisation. Our technicians will work along side the SciCare consultants to address the issues in our networks and prepare us to deliver ITV services," said Powell Bedgood, Charter Communications' Vice President, Digital Services.

"The days of just resetting a set-top to correct a problem are over. Our networks are complex and need specific expertise to keep them running at optimal levels. As Charter continues to focus on delivering the services that our customers want, SciCare will be addressing our technical support requirements to ensure we have the platform in place to launch and expand on these exciting, interactive TV services."

"SciCare works directly with each cable operator to augment their current resources in tackling the issues around interactive application and video-on-demand readiness and launch support. No two cable systems are alike, but our experience in launching over 250 digital systems and servicing dozens of network operations has given SciCare the skill sets, defined processes, tools, and expertise to quickly generate solutions in a complex environment," said Sherita Ceasar, Vice President and General Manager of Scientific-Atlanta's SciCare subscriber network services.

Charter Communications is also implementing SciConnection, a remote network monitoring service.
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Intelsat boosts terrestrial facilities

Intelsat is to acquire the World Systems business unit of Lockheed Martin as well as a teleport facility in Fuchsstadt, Germany, from Deutsche Telekom.

Consequently the satellite provider will be able to assemble a new ground-based infrastructure which will complement its global satellite system. Intelsat was reported as saying that it will use the new ground-based infrastructure to offer a satellite/terrestrial service in a portfolio called Global Connectivity Solutions.
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TV web browser launched

The ANT Fresco browser has been launched for Internet access via digital TVs following cooperation between communications appliance software provider ANT Limited and the Tao Group, a founding member of the Open Content Platform Association (OCPA).

Under a new strategic partnership, ANT and Tao have integrated ANT's browser to Tao's the intent platform, which runs on a wide range of devices including set top boxes (STBs), interactive digital TVs (iDTVs), personal digital assistants (PDA's) and smart phones. This is intended to extend the range of multimedia functionality, applications and content that Tao is able to deliver and makes it easier for ANT's OEM customers to use Fresco in a Java environment.

"ANT enables a streamlined, customisable native browser which is well suited to applications that don't require the full Java Virtual Machine to be present," said Graham Nice, Tao's Strategy Director. "Tao strives to provide OEMs with a broad selection of proven technology for multimedia functionality and content development. With ANT Fresco, we have added a reliable and robust, highly-respected browser to our portfolio of intent-supported applications for our customers."

intent is a binary portable platform, compatible across a wide range of processors and RTOSs. Third-party applications integrated into the intent infrastructure essentially become plug-in components, capable of being run anywhere that intent is deployed. Fresco has been fully integrated within Tao's platform, alongside the many other multimedia solutions.

Jon Hoskin, Chief Operating Officer for ANT comments, "Our browser is already highly portable due to its unique architecturebut intent extends that portability even further. Our browser can now run anywhere that uses the intent platform, including a JVM which means that, in addition to being an alternative to Tao's non-Java customers, ANT can now compete with Java browsers on equal terms, making it even easier for our Java-based customers to use Fresco in their digital TV or other appliance solutions."

The core browser code resides within ANT's own patent-pending, three-layer software architecture, which consists of a portability environment to manage the interface to the hardware platform, an applications layer to house the browser core and other applications, and a graphical user interface layer to enable customisation.

ANT and Tao have already completed the integration work of Fresco with intent, so ANT customers choosing to use Tao's platform will not have to do any additional porting work for Fresco, as intent should slot seamlessly into their platform and RTOS. In addition, ANT customers who also choose intent will now have access to a wider range of ready-ported content, applications and functionality through Tao's other strategic technology partnerships and members of OCPA, such as gaming engines, input method technologies, sound engines, databases and file viewers.
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Austrian Embassies use satellite

Satellite Services Provider Xantic has awarded ND SatCom the contract to provide Austria's embassies world wide with a satellite communications network.

Satellite communication solutions are regarded as ideal for Austrian embassy requirements in countries with poor terrestrial infrastructures. During phase one of the project nine stations will be installed in Europe, the Middle East and Asia and nine further embassies will be equipped in the near future. The VSAT network will be ready for operation by June 2002.
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Tuesday 19th March

ZDF II planned
Kirch options under discussion
Tele 5 launches next month
Sky games reach 1.4 m
Dutch schools get broadband satellite
German Astra reach up
Porn to boost VOD

ZDF II planned

Markus Schaechter, the new General Director of German public broadcaster ZDF, intends to strengthen his networks by launching a second general interest channel. "In the new age of digital services, a one-channel network will face problems surviving," Schachter said during his first press conference at the networks Mainz head office. The strategic setting for the launch of 'ZDF II' is within a ten year plan. It not planned to be a specialised thematic offer but a full general interest channel covering all genres of TV programming in an complementary setting to the first channel, said Schachter.

However, the first reaction to the announcement was not generally positive. "Germany needs less public broadcasting, not more," said a high ranking German TV executive. For the core channel, Schaechter intends to make the programme younger and make it a leader in the 30 to 50 year old age group. He also intends to strengthen the position of ZDF in the East German Lander.

ZDF is seen as having both too old an audience, and to be poorly perceived in the former GDR, were commercial offers or the regional public channels MDR or ORB are preferred. "But you can't expect somebody who was running the network as Program Director for years to come up with a completely new concept the next day," he said referring to his former position.
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Kirch options under discussion

German media conglomerate KirchGroup's crisis talks with its creditor banks (including Deutsche Bank AG, HypoVereinsbank AG, Bayerische Landesbank Girozentrale, and Lehman Brothers Holdings Inc) ended without result this weekend. However, talks were described as "constructive," by a Kirch spokesperson quoted on newswire yesterday (Monday 18/3/02). Other local newspaper reports stated that some banks had already decided to increase the group's line of credit to provide more flexibility to find a solution.

A weekend report in Der Spiegel said that Hans Tietmeyer, former President of the Deutsche Bundesbank, might coordinate the efforts of Kirch's creditor banks. Der Spiegel had said that high-level bankers in Frankfurt wanted Mr Tietmeyer to take on the role.

Meantime Bernd Schumacher, a regional German media tycoon running the regional BTV channels in Baden Wurtemberg, is said to be interested in acquiring Kirch regional channels tv.berlin, Hamburg 1 and tv.muenchen. These loss-making channels are on sale to limit Kirch's huge deficits. However, media analysts doubt that Schumacher will be able to raise the funding required to acquire all of these channels, which would have made him a nation-wide player in regional TV in Germany.

Officials in Berlin were also reported on Sunday (17/3/02) to have said that Premiere, Kirch's loss-making pay-television business, will need more than E500 million to restructure.

Premiere Managing Director Georg Kofler is to present the restructuring plan, including the call for additional financing, to the supervisory board today (19/3/02).

'More realistic' revenue and expenditure targets and appreciable cost cuts will be proposed, to be achieved via renegotiation of license fees and production and marketing savings.

Premiere, which loses about E2 million a day, previously announced plans to cut more than 10 per cent of its work force of about 2,400 employees.

Other moves being made by Kirch Group to cut its E6.5 billion debt are reported to include new talks with public TV broadcaster ARD over the sale of broadcast rights for the 2006 Soccer World Cup in Germany. The Sueddeutsche Zeitung reported Saturday that ARD is willing to pay E250 million for the right to televise all 64 World Cup games. Kirch spokesman Hartmut Schultz denied that such talks were underway.
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Tele 5 launches next month

A new analogue TV channel, Tele 5, is to be launched at the end of April say GetOnAir, the company providing operational management for the service on behalf of the TeleMunchen Group (TMG) which owns the project.

Initially the new channel will reach 50 per cent of all German TV homes. This figure is made up from 2.5 million cable homes in Bavaria and 12.36 million homes reached by the Astra satellite. The new operating company TM-TV GmbH & CoKG will be located within the studio complex of the Bavaria Studios in Munich where the server-based technical components will also be installed.

At launch operations will be run by 10 people. The 24-hour programme will mainly be made up from feature films and TV series along with some wildlife and music clip formats on Sunday. The channel's corporate design with its bright red loge picks up the concept of the old but trendy Tele5 channel which was shut down in the mid 90's.

From April 15 onward there will a teaser on air to introduce the new channel to its audience.
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Sky games reach 1.4 m

Sky Gamestar, the TV games zone on Sky Active - the BSkyB digital service in the UK - reports reaching some 1.4 million viewers on average each week according to the latest Broadcasters' Audience Research Board (BARB) figures. This total is higher than many conventional broadcast channels, and it is reported tht viewers use it for longer and more frequently than any other interactive service on digital TV.

Over a one-month period, 14 January 02 to 10 February 02, BARB tracked the usage of 23 games on Sky Gamestar. Figures released show that:
2.8 million individuals or 18.5 per cent of digital satellite viewers accessed Sky Gamestar; 75% used the service for longer than 10 minutes in one session; Sky Gamestar's viewing share was almost four times higher than Playjam's dedicated games channel; Sky Gamestar attracts a broad audience with equal appeal for both men and women.

Jim Rudder, Director of Interactive Programming at Sky said, "Sky recognised the importance of games early on and developed what is now the most sophisticated games portal on digital television in the UK. Research has shown time and time again that Sky Gamestar is a hit with viewers of all ages and now that it receives an official BARB rating the results have exceeded all expectations. With more big names launching on Sky Gamestar throughout 2002, we expect games to drive new viewers to interact with their TV."

Adrian Pilkington, Head of Games at Sky adds, "Audience measurement for interactive channels such as Sky Gamestar exposes the broad appeal of games on the TV. For example, women are using Sky Gamestar more than on any other gaming platform in the UK. Reaching out to these previously untapped audiences and being able to target games to specific groups of players allows us to create a truly exciting TV experience."

Some of the games are free to play. Others use a premium rate call via the set-top-box either on a pay to play basis or to register a high score. Tetris alone has generated 4.5 million premium rate calls in the last year.

The interactive TV version of retro arcade game Taito Space Invaders is also now arriving from space via digital satellite, available on Sky Gamestar.

BSkyB and Taito are to launch the Gamestar 2002 version and re-create the original 1978 Space Invaders experience for digital satellite viewers, played using the Sky digital remote. Adrian Pilkington, Sky's Head of Games at Sky digital said, "Whether you remember it from the first time around, or are playing it for the first time Space Invaders is a fantastic game. It was a turning point in gaming history and we are excited to bring it back for our audience. With over 1.5 million viewers playing games each week, Sky Gamestar offers the perfect platform to revive classic titles. It will be a great hit with our viewers."

Masaaki Ohzuno from Taito adds, "The game was first created back in 1978 and was licensed to Sky Interactive, who have done a great job converting it for digital television. The quality of the game is as close to the coin-op original as one could hope."

* Denmark's Visionik Interactive TV, an iTV developer in global markets, has been chosen by Sky in the UK to develop Cartoon Network branded games which were launched in December, 2001.

The Cartoon Network games portal is part of Sky's Gamestar games channel. The Cartoon Network Interactive portal offers pay-to-play games, free news, competitions, game tips, trivia and gags based around Cartoon Network's TV programming.

The games are based on the Cartoon Network's characters such as the Powerpuff Girls, the Flintstones, Dexter's Laboratory, Samurai Jack and the Jetsons. The Cartoon Network games portal consists of four games available at any one time. The games offering will rotate on a regular basis, which gives Sky the ability to offer new games at all times.

Pilkington, comments, "Sky worked with Visionik Interactive TV to launch the UK's first fully interactive games channel. The Cartoon Network games are great fun and Visionik has worked to get the most from the platform. We are very pleased with the results, the games provide an engaging and challenging experience for digital satellite viewers of any age."

Casey Harwood, VP Commercial Director, UK and Ireland, Cartoon Network said, "The launch of Cartoon Network Interactive illustrates how companies with well defined media brands, along with digital friendly content can develop products outside of the linear TV environment. Whilst these represent new products to sit alongside our TV channels, the level of integration digital technology allows, means each product is working with the other, equating to a much more cohesive consumer offering."

"It is a great challenge for us to meet Sky and Cartoon Network's ambitious requirements for an entertaining and compelling game zone, "Jesper Knutsson, Managing Director, Visionik Interactive TV commented.

*Also launching this year is the PC game Worms, with the company adding that there are, "many more big names to follow throughout 2002."
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Dutch schools get broadband satellite

Hughes Network Systems of the US is to provide its DirecWay satellite high-speed Internet access to approximately 800 schools in the Netherlands.

A Dutch cable industry joint venture, nl.tree, will use DirecWay to provide IP-based services to approximately 800 schools and other educational institutes outside urban centres which it says can only be served cost effectively by satellite. Also, nl.tree will provide broadband access for various IP-based applications, such as two-way Internet access, hosting and email services.

Installation is to begin immediately and be completed before June 2002, according to Hughes Network Systems in the US.
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German Astra reach up

Digital satellite penetration in Germany rose by 57 per cent, or 510,000 homes, during the past 12 months to reach 1.4 million households by year-end 2001, according to the Astra Satellite Monitor conducted by NFO Infratest.

In comparison digital cable grew by just five per cent, some 70,000 homes. Analogue and digital satellite penetration increased by a combined 440,000 homes to more than 13.3 million. Cable coverage remains stable at 20.3 million, while terrestrial reception fell by nine per cent to a total of 2.6 million homes.

The report showed PC ownership and online access as significantly higher in ASTRA digital satellite homes than in German cable households. PC ownership in ASTRA digital homes stands at 71 per cent, versus 50 per cent in cable households. Online connections grew to 52 per cent of ASTRA homes, compared to only 35 per cent within cable homes.
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Porn to boost VOD

Broadband technology in the UK could lead to an explosion of porn on British TV according to a report in the Guardian newspaper (18/3/02).

Porn has always been at the forefront of new technologies - from photography to film and then the Internet, and could now become the driver for adoption of broadband on TV and via 3G in the UK suggest the report.

Buy rates double when consumers have access to porn on broadband video-on-demand (VOD) services. This gives viewers the convenience of being able to access a huge variety of adult TV material at any time, instantly and anonymously. Playboy Enterprises is seen by the Guardian as being in the front line supporting broadband and preparing itself to launch broadband services by the end of the year.

Network operators see VOD as providing several benefits: storage capacity on the powerful computer servers that drive VOD systems enable network operators to offer a far bigger choice than has been available on either pay TV or in hotel pay-per-view systems. They can charge more for porn than for other paid-for programmes in the UK - £5 compared to around £3 for a non-porn film. Playboy says it will keep less than 50 per cent of the income whereas Hollywood studios normally take around 80 per cent.

Playboy gleaned valuable information via US cable trials with companies such as Cox Communications, which built VOD systems using vast computer file servers incorporated into their broadband networks. Trialists avoided embarrassing conversations at their local video store and could buy on impulse.

Jeremy Yates, Deputy Managing Director of Playboy TV in the UK was reported in the Guardian as saying that, "Adult entertainment is generally viewed as an impulse purchase and it's frequently abandoned if a programme is halfway through."

"The content we supply to the UK is different," says Yates. "Sales would rocket if porn laws were loosened in the UK."

Demand in countries where censorship laws are more relaxed than in England, such as Germany, France and Sweden, is much higher, says Andy Birchall, head of On Demand Group, which manages a pay-per-view service for cable companies NTL and Telewest.

Britain is seen as the most competitive market for pay TV porn in the world with around 20 adult channel brands, including Playboy TV's Spice and The Adult Channel, Northern & Shell's TVX, BSkyB's 18+, and Red Hot's Private Girls and Private Blue.

Yates believes these services will seem inaccessible once broadband VOD services kick off. "Sky is doing a good job with 18+, but until you've actually seen video-on-demand, seeing something that starts programmes every 10 minutes maybe seems nearly as good."

A significant drawback for the development of broadband in the UK has been high costs charged by British Telecom for use of its broadband infrastructure. But recently BT's rates have dropped to the point where it is possible to run a viable business, says Yates.
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Monday 18th March

Criminal contacts at NDS?
Danish licence from Carlton
News Corp, no interest in Kirch
BBCi signs broadband deal

Criminal contacts at NDS?

As the looming anti-piracy legal battle between News Corp subsidiary NDS and Vivendi subsidiary Canal Plus hots up, News Corp has brought in its top legal guns, while a central figure on the NDS side is having his credibility questioned.

It is suggested in a UK newspaper (The Guardian), that a former Scotland Yard commander - Ray Adams, Head of Security for NDS UK - was in regular contact with Lee Gibling, a hacker who published ITV Digital codes through his House of Ill Compute website. It is also alleged that NDS paid several thousand pounds into Gibling's personal bank account.

Adams, formerly head of the London police intelligence gathering arm, SO11, was investigated along with other officers for taking bribes and having improper relations with criminal informants but the case was dropped when, after a three year inquiry, the director of public prosecutions announced there was no evidence to justify charges against Adams.

Adams retired from the Met in 1993 with back trouble. The earlier investigations related to Adams handling of the 1983 Brink's-Mat bullion raid, and the racist stabbing of Stephen Lawrence. The first involved Ken Noye, the gangster convicted of handling gold from the bullion raid, and in the second the Lawrence family claimed Adams may have had links to Clifford Norris, the father of Dave Norris, one of the chief murder suspects; again the accusations against Adams were judged to be unfounded.

In New York, News Corporation's most senior legal counsel is preparing defence and a countersuit against Canal Plus' $1 billion (E1.14 billion) lawsuit against NDS technology reports the UK's News Corp owned newspaper The Times.

Arthur Siskind, Group General Counsel and a News Corp board member, has been working on the lawsuit with lawyers from NDS.

News Corp, which owns 79 per cent of NDS, is not named as a defendant in the alleged encouragement of piracy via decryption of Canal Plus digital television smartcards.

Britain's digital terrestrial service, ITV Digital, a user of Canal Plus smart cards, is believed to loose up to £100 million (E160 million) a year through such piracy and is considering launching its own legal action, either directly against NDS or indirectly against Canal Plus,

Canal Plus' main action is claiming $1 billion (E1.14 billion) in damages from NDS. NDS has dismissed allegations that its staff made decryption keys available or funded pirate sites as "outrageous and baseless" and is preparing a counterclaim.

A judge has yet to be appointed to hear the case in a Californian court.

The French secret service's industrial espionage team is reported to have launched its own investigation into the allegations, prompted by the damage the hacking has caused Canal Plus' reputation and finances, as the company - a subsidiary of French media giant Vivendi Universal - is a significant employer.
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News Corp, no interest in Kirch

News Corporation's de facto number three, Chairman Rupert Murdoch's son Lachlan, has reinforced the company's refusal to bail out Germany's troubled KirchPayTV.

In an interview to be published in Australia this week (19/3/02) Lachlan was asked if News Corp was interested in Kirch after the News Corp-led BSkyB wrote off a E1.3 billion investment in the pay TV platform.

He said, "We have been telling people quite openly for months we are not interested in Kirch. The problem is that Kirch keeps on telling people we are. He is trying to build up xenophobia fear so that politicians will protect him during this election year. I think that this is working and that he won't go under before the elections.

"But we have looked at Kirch and we do not see much equity value in there. If anyone gets any money out of it, it will be the banks. We still see Germany as a promising market and would love to have a bigger business there."
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