NEWS Monday 28th October - Monday 4th November 2002

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Bauer named buyer at KirchMedia
Vivendi seeks Belgian aid for Cegetel
Freeview launch marred by dispute
Telewest bond unpaid?
3D video games on IPTV
Swedish Vodafone uses Cisco IP for 3G
AT&T in free HDTV
VOD for voters

Vivendi seeks Belgian aid for Cegetel

Cash-strapped French media giant Vivendi Universal is seeking financial help from Belgian state-controlled telecoms operator Belgacom, which, it has been reported, may consider merging with Cegetel, in which Vivendi is a major shareholder.

The French media group is putting the finishing touches to a deal to sell its US publisher Houghton Mifflin for some E1.7 billion, as it endeavours to raise cash to pre-empt Vodafone offers the other Cegetel shareholers BT and SBC for their stakes. Meanwhile VU is reportedly in finance talks with Belgacom and the Belgian government - which are understood to be keen to use any financing to get closer to Cegetel, aiming at some kind of association or merger of the businesses once Vivendi secures control.
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Freeview launch marred by dispute

The UK's new digital terrestrial service, Freeview launched on Wednesday (30/10/02) with its line-up still incomplete í with just four extra channels airing on the TV on Wednesday morning; Sky News, Sky Sports News, Sky Travel and contentious UK History.

UK History added a note of controversy to the launch of Freeview as it is produced for Freeview by BBC Worldwide, the commercial arm of the BBC. BSkyB, one of the venture's backers together with the BBC and Crown Castle, is unhappy about UK History, because it directly competes with the History Channel, a pay-TV service half owned by Sky. The History Channel is available in seven million homes through cable and satellite.

Ex-UK Culture Minister Chris Smith has also called for an inquiry into the UK History channel. MP Smith asked the Minister Tessa Jowell, to set up an inquiry into the BBC's use of licence fee money to promote the commercial station. "Even though UK History may itself be a purely commercial operation, if it is being provided free to viewers on Freeview and Freeview itself is being financed to a certain extent by the licence fee then there is a question there and it needs exploring," Smith was reported as saying.

The History Channel is challenging the legality of UK History, which it claims was 'secretly' given the go-ahead by the Department for Culture with no consultation in 2000. The History Channel has discovered that the BBC was given approval to launch an unlimited number of commercial channels, a development that rivals said would allow the corporation to challenge all commercial rivals.

It's been reported that BSkyB is considering taking the matter to a judicial review but first it needed to see the government approval papers, which were not being released.

Sports fans get Sky Sports News, a 24-hour updating service, and European football is free on ITV's digital channels. News channels Sky News and the ITV News broadcast continuously as does BBC News 24. BBC Four delivers a video equivalent to the ­serious' channel four radio station, and the platform delivers two free Music channels

Planned additions include entertainment channel F tn and the BBC's UK TV business, a joint venture with Telewest, and Freestyle leisure and lifestyle channel due next year.

Digital terrestrial TV's text services are considered slow, unreliable and clunky compared to digital satellite or Ceefax and the picture quality overall is poorer..
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Telewest bond unpaid?

British number two cableco Telewest Communications Plc was expected to skip a E109 million bond coupon payment due yesterday (Thursday 31/10/02) as it finalises its debt refinancing, Reuters reported.

Having reached a deal with bondholders to swap 97 per cent of the company for E5.5 billion of bond debt in late September, Telewest is now agreeing a final deal with its lenders.

"Nothing is completely certain, but it looks like Telewest will skip the interest payment as long as talks to continue to go well," said the Reuters report, quoting an unnamed source.
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3D video games on IPTV

UK set-top-box technology company Pace Micro Technology, games system provider G-cluster, and Pace's IPTV partner Thirdspace, a broadband TV enabling company, have teamed up to provide PC-style video games through IPTV home gateways from Pace.

Using G-cluster's multi-player broadband video, games provided via Thirdspace can be delivered as real-time MPEG streams over IP networks direct to Pace's DSL4000, IP500 and IP400 gateway family.

Operators using Pace's IPTV gateways will be able to provide on-demand game services to household TVs from simple card and board games to sophisticated 3D multi-player action titles.

The open architecture of Pace's IPTV gateways and G-cluster's gaming systems will allow future upgrades of new gaming titles to be added online when they are launched.
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Swedish Vodafone uses Cisco IP for 3G

Vodafone Sweden will use a Cisco-powered IP backbone system to support the launch and spread of forthcoming 3G services.

The network, supported by Cisco partner Eterra, will boost both the speed and quality of Vodafone's UMTS-based services.

Jon Hindle, Strategic Technology Manager for World Wide Mobility, Cisco Systems said, "Our aim is to help enable operators to track users moving between access networks and use IP to understand the type of connection and access device being used, adapting content and applications accordingly."

Vodafone will use the Cisco 12404 Internet Router, with the Catalyst 6500 Series switch. For metropolitan regions and wide area coverage, the Cisco 7606 Internet Router is being utilised.
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AT&T in free HDTV

Subscribers to AT&T Broadband's premium high-definition-TV, which rolled out in Seattle, USA, this week, will now not be charged the proposed E75 access fee following intervention by the country's communications regulator.

'The Seattle launch is still going ahead, but without the fee,' AT&T Broadband spokeswoman Tracy Baumgartner said.

At US regulator, the Federal Communications Commission, Chairman Michael Powell has been leaning on the cable industry and other industries to encourage HDTV use at low cost í and gave a strongly negative reaction to AT&T Broadband's planned access charge.

AT&T Broadband said Tuesday (29/10/02) that it was rolling out HDTV to 850,000 Seattle-area homes October 30, initially offering Home Box Office and Showtime. Local TV stations would be added in a few months, the company said.
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VOD for voters

US cableco Altrio Communications Inc is offering video-on-demand access to brief features on the politicians and referenda on next week's election ballot, reports TV insite.

Los Angele-based Altrio, in conjunction with the Center for Governmental Studies, will give its Arcadia, Monrovia and Pasadena, California, subscribers free VOD access to a group of eight videos on election candidates and issues.

The pieces were produced by Pasadena Community Access Corp, which manages public-access channels for both Altrio and Charter Communications Inc systems, and is distributed on Altrio's free on-demand lineup by the CGS.
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Mediaset bidding for KirchMedia
By Dieter Brockmeyer

Mediaset, the Italian media conglomerate, controlled by Italian Prime Minister Silvio Berlusconi's family holding Fininvest, confirmed that it is interested in placing a bid for Germany's insolvent Kirch Media - although only last week the company denied having re-joined the bidding for KirchMedia.

The move was announced by Mediaset President Fedele Confalonieri who said his group will line up with the investment bank Lehman Brothers, the old Kirch shareholder, the German retail group REWE, the Saudi Prince Al Waleed Al Talal and Germany's Commerzbank.

The company is entering the auction at the last moment. KirchMedia's creditor banks plan to select a buyer by the end of this month. Mediaset Chairman Fedele Confalonieri was reported as saying, "It is an opportunity to run a television network in Europe's most interesting market with 87 million inhabitants," adding that the bidding process could take a while, "for political and economic reasons."

German politicians have already expressed their opposition to the entry of Berlusconi, via his family interests, into German broadcasting.

However, bidders had waited to place their offer because they considered the price for the stake being too high. A creditor meeting was scheduled for yesterday (30/10/02), expected to decide on the bids.
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Canal Plus not for sale
By Sotires Eleftheriou

Jean-Bernard Levy, COO of Vivendi Universal, is reported to have reassured Xavier Couture and Bertrand Meheut, CEO and COO of Canal Plus group, by e-mail that Vivendi has no plans to sell off the Canal Plus Group.

Couture sent a copy of the e-mail to all the staff of Canal Plus. In it Levy explains that Canal Plus' long term development will be in keeping with the plans adopted last July.

This follows recent press speculation, notably in the Tuesday afternoon issue (October 30) of the influential daily Le Monde. Le Monde explained that there has been a good deal of interest in Canal Plus. Last summer the Lagardere group had expressed its interest, followed by Jerome Seydoux's Pathe group with the backing of TF1. Neither sale took place and the case was closed.

According to Le Monde, discussions have recently reopened between VU and a group of investors comprising TF1, Pathe, with the possible involvement of additional investors such as Albert Frere, Robert-Luis Dreyfus (who owns the Olympique Marseille football team and holds the 2006 World Cup rights) Jean-Claude Darmon (President of Sportfive, sports rights company). The new initiative is explained by VU needing cash to fight off the Vodafone raid on Cegetel (see separate news story this issue). Another factor is the imminent deadline for the new round of football rights (November 12), in which both TF1 and CanalPlus have a considerable interest. The consortium would be prepared to pay E650 to E700 per subscriber, payment in cash (a significant factor for VU at present).

However, the Lagardere group does not agree with the transaction. Lagardere holds 34 per cent of Canal Satellite along with a priority in purchasing the remainder if it goes up for sale and a veto on the projects concerning it. Lagardere is reported to have been furious when he learnt of the project and said he would exercise his veto or priority buying right.

One industry watcher has suggeted that the whole process had been initiated by TF1 to 'destabilise' CanalPlus in the run up to the football rights auction.
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Vodafone E13.7bn Cegetel bid fails

Vivendi Universal's board of directors has rejected UK mobile operator Vodafone's E6.8 billion bid for its 44 per cent stake in French mobile operator Cegetel saying it was not enough. A statement was issued by Vivendi's board saying that, "Following its examination (of Cegetel's prospects), the Board considers that the amount offered by Vodafone does not reflect the true value of Cegetel and has decided, on behalf of Vivendi Universal's shareholders, not to accept the offer as it stands."

Vodafone controls 15 per cent of Cegetel, and had bid E13.07 billion for the 85 per cent of the French mobile firm that it does not already own - currently shared between Vivendi and minority owners BT Group (26 per cent) and SBC (15 per cent).

A day earlier (see News archive) Vivendi had been granted an extra month, to December 10, to raise cash and preempt Vodafone's bid for the Cegetel shares held by BT and SBC as it is legally entitled to do. However, it would have to offer SBC a 13 per cent premium to the E2.3 billion price that Vodafone had pledged to pay. Chairman Jean-Rene Fourtou is believed to want to increase the company's stake in the profitable Cegetel, strengthening the company's French identity, and the board said it would be considering this option.

Nonetheless, Vivendi could still accept an increased offer from Vodafone which would help reduce its vast debts. Vodafone had been on the verge of taking the 56 per cent of the company owned by Vivendi's partners, BT and SBC. If Vodafone were to succeed, it would gain control of Cegetel's biggest asset - the mobile phone network SFR.

Vivendi shares fell some 10 per cent to E12.15 on fears it might increase its stake in Cegetel rather than raise cash and reduce debts. Vodafone's current bid for Cegetel expired yesterday (Wednesday 30/10/02).
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Grand Prize for Tele5
By Dieter Brockmeyer

The new German commercial free-to-air channel Tele5 is to be distributed throughout the entire ish cable systems in North Rhine Westphalia and Baden Wurttemberg starting with the Cologne and Dusseldorf area.

Eventually the entire reach will be 6.5 million cable homes. In addition, Tele5 will become an integrated part of the ish digital offer that is scheduled to be launched in 2004.

"That's like winning the grand prize in the lottery," says the channel's Managing Director Jochen Kroehne, who sought to increase distribution to ensure the channel's future.

However, Kroehne was well placed to achieve such an expansion, having been a consultant to ish since its parent company Callahan Associates took over the assets of Deutsche Telekom AG in these regions and formed the ish-companies about two years ago. Tele5 is a full subsidiary of Herbert Kloiber's TeleMunchen Group which was previously limited to some very regional cable systems in Bavaria and the analogue Astra satellite system.
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Murphy quits Carlton, goes DIY

The merging UK ITV companies will suffer another blow with the departure of Gerry Murphy, Chief Executive of Carlton Communications Plc, who is to quit the company, and the industry, on February 1 2003, and become Chief Executive of retail and DIY group Kingfisher plc. Kingfisher's current head, Geoff Mulcahy, leaves this Friday, with Chairman Francis Mackay standing in until Murphy arrives.

Murphy, who is highly regarded in the TV industry, took up the Carlton post in July 2000, but when it became clear he would not have an executive role in a merged ITV, his departure was seen as simply a matter of time. He commented, "Carlton is a great company and it has been my privilege to work here. Its prospects as a key component of a consolidated and cohesive ITV are excellent and I wish Michael and my colleagues every good fortune."

Michael Green, Chairman of Carlton Communications Plc, and Granada's Charles Allen will now control the ITV network. Green, who will take over Murphy's responsibilities, commented, "Gerry and I have worked well together. I will miss him as a colleague but I look forward to working with him as a friend at Kingfisher, one of our biggest advertisers."

Should the proposed E4.1 billion merger of Carlton and Granada occur, Green would become Chairman of ITV plc, with Allen taking the Chief Executive's role.
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Nokia and Orca provide broadband iTV

Finish mobile manufacturer Nokia, and interactive television provider, Orca Interactive Ltd, have teamed up to deliver broadband iTV services for fixed network operators.

The companies signed a co-operative marketing agreement to enable the delivery of high-bandwidth video and TV type of services over DSL-based networks, after having also completed the integration of their respective product sets.

Delivery of the integrated solution to a fixed network operator in Taiwan is currently underway and will be used for its media on demand (MoD) service to be launched later this year.

The agreement covers co-operative marketing of each other's products in broadband customer cases, as well as integration of Orca software with Nokia access and edge products, ensuring the compatibility and interoperability of Orca software applications and Nokia broadband products. It will also ensure that Orca's multi-device and multi-network delivery modes, in this case over ADSL and VDSL, are supported by the broadband network equipment.

Ari Lehtoranta, Vice President, Broadband Systems, Nokia Networks said, "Over the last few months we have been working very closely with Orca to create systems that can deliver full streamed video and TV-type content simply and at a reasonable cost. The Orca software has already been integrated into the Nokia broadband products. This is a step forward toward our goal to create a reliable, cost-efficient, end-to-end system for delivering high-capacity video services and moving ahead to convergent services."
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No more politician's agenda on TV in Asia
By Owen Hughes

Taiwanese officials have approved a draft bill designed to stop political parties from using cable and free to air TV stations and networks as platforms for their own agendas - although the proposal is likely to face a rough ride in the legislature.

China's free-to-air networks are currently in the process of being privatised after originally being started as platforms for the then ruling Nationalist, or Kuomingtang Party. The island's cable TV network started life as the 'fourth network' in the local slang, to counter the stream of information slanted towards the government.

But since voters dumped the Nationalists out of office at the end of the 1990s the ruling Democratic Progressive Party has been dismantling the former rulers' institutional props. The Nationalists accuse the administration of using the legislation to force it to abandon its commercial holdings and weaken its funding base.

In a bid to meet criticisms that it is unwilling to meet voter concerns about its media interests, the Nationalists had been preparing to sell or place in trust its holdings in the free to air China Television Company.

In an unrelated move Taiwan's cable television and broadband operators are to form the Taiwan Cable TV and Broadband Industry Association, to accelerate the growth of the island's digital broadband industry. Members include Eastern Multimedia, China Network Systems and Taiwan Broadband Communications.
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Berlin to go Digital by 2003

Next year Berlin's public radio and television stations will switch off their analogue broadcast signals, becoming the first German city to adopt digital TV, following a recent decision by the Public Broadcasting Authority in the states of Berlin and Brandenburg.

More than150,000 households will soon only be able to get digital reception as analogue signals are due to be cut off from the end of 2003 forcing viewers to buy the E200 decoders.
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CSA chooses DTT channels
By Sotires Eleftheriou

French broadcasting regulator, the Conseil Suprieur de l'Audiovisuel (CSA) announced its choice of channels for DTT.

The channel line up is as follows: Direct 8, I-MCM, M6 Music, NRJ TV, NT 1, TMC, in addition to simulcasts of TF1 and M6, plus eight channels from the public sector: simulcasts of France 2 and France 3, a simulcast of France 5 extended to a 24 hour version, a simulcast of Arte extended to a 24 hour version (France 5 and Arte currently share an analogue frequency), the Parliamentary channel, plus the three channels planned by France Televisions.

Pay channels: AB 1, Canal J, Cinecinema, Eurosport, I-Television, LCI, Match TV, Paris Premiere, Planete, Sport +, TF6, TPS STAR, plus two channels which will share a slot, namely Cuisine TV (daytime) and Comedie (evening) and a simulcast of Canal Plus.

Three channels will be used for local broadcasts. Over the next few months the CSA will negotiate the detailed contracts with the channels, which will be signed by the end of February 2003, followed by the technical implementation. If all goes according to plan, the first transmissions should be available to 40 per cent of the population by the end of 2004.

The CSA had to choose from 65 candidates. 14 channels were already attributed to incumbents (8 to the public sector, 3 to the private sector for simulcasts and one 'bonus' channel to each of the private sector incumbents), leaving the CSA to fill just 16 slots.

Most of the channels are already on cable and satellite, infact, only three are completely new: Direct 8, NT1, and NRJ-TV. The largest French cable operator, Noos, had stated that it would contact the new channels for carriage negotiations as soon as the list is announced.

The government has criticized France Televisions' plan for three new channels, currently a news channel, a replay channel and a regional channel. The CSA has recommended France Televisions devise a new children's channel, with little or no advertising.
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