NEWS Monday 7th October - Monday 14th October 2002

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EchoStar - Hughes merger stopped

US regulator, the Federal Communication Commission, has rejected the creation of a states-wide satellite TV monopoly by blocking the E16.2 billion merger of EchoStar and Hughes -particularly its subsidiary DirecTV.

The two companies did not demonstrate that approval of the transaction would serve the public interest, convenience, and necessity says the FCC as the combined entity would have 90 per cent of the US satellite broadcasting market - some 18 million subscribers. The FCC also gave little hope that any amendments proposed by the companies would resolve their concerns.

As a result, it appears likely that Rupert Murdoch's global satellite ambitions are likely to be revived with a renewed bid for Hughes from News Corp. Asked at a meeting in Adelaide earlier this week of News Corp's intentions toward DirecTV, Murdoch answered, "We are certainly undecided". The company has some E3 billion in cash available for acquisitions, but the valuation of its lawsuit-hit Gemstar and NDS subsidiaries - which were part of its earlier proposed Sky Global venture - have fallen drastically. "Based on the record, the commission cannot find that this merger is in the public interest," FCC Chairman Michael Powell said at a news conference.

EchoStar Communications Corporation and DirectTV's parent company, Hughes Electronics Corporation, a subsidiary of General Motors Corporation, have argued the deal would increase competition in the pay-television market by giving cable a stronger competitor, that it would reduce inefficient use of spectrum to deliver programming, and give consumers more local channels and high-speed Internet service.

UK ITV merger talks 'advanced'

The Boards of Britain's two largest ITV companies, Carlton and Granada, confirmed today (11/10/02) that they are in advanced discussions about merger of the two companies, effectively an all-share takeover of Carlton, to create a single E4.7 billion valued ITV.

The companies have agreed in principle that Granada shareholders will receive 68 per cent of the equity and E317 million of cash on completion. Carlton shareholders will receive 32 per cent of the equity, upon completion, potentially increasing to 34 per cent in 2006 dependent on the achievement of a share price of the merged group equivalent to 140 pence per Granada share and on achievement of an agreed earnings target. Carlton intends to pay an unchanged final dividend for the year ended 30 September 2002 of 5.0 pence per share.

Michael Green, Chairman of Carlton, would become Chairman of the merged group and Charles Allen, Chairman of Granada would be Chief Executive. In addition three non-executive directors from each company will join the board of the merged group. No role was mentioned for Gerry Murphy, Chief Executive of Carlton, rumoured to be leaving to become Chief Executive of retail group Kingfisher.

It was emphasised that it is not guaranteed that a final agreement will be reached. Advertising groupings have opposed the move, calling on the regulator to reject the establishment of a 'price fixing monopoly' in control of some 55 per cent of Britain's television advertising. Carlton and Granada control 12 of ITV's 15 existing regional television companies. A current combined selling proposition is planned to make up to E24 million pa savings, while a merger of sales and marketing could achieve up to E63 million annual savings.

Carlton shares í which had fallen recently on fears of a dividend cut in the face of weak advertising sales - rose nine pence to 113p while Granada was up 1.25 at 66.5p.

SportsPlus launches in France
By Sotires Eleftheriou

French media giant Vivendi Universal's TV subsidiary CanalPlus is to launch a new sports channel, SportsPlus, on October 26. It will be available on the basic package of the Canal Satellite platform and via, "all the cable networks that ask for it," said Xavier Couture.

The channel will be available to over two million households at launch. It replaces the existing Pathe Sports which Canal acquired earlier this year and is in fact the result of merging the sports team of Canal Plus and Pathe Sports (see Advanced Television archive). Couture pointed out that this is the first channel to have a 'Plus' in its name since the launch of CanalPlus itself in 1984, and that the channel really is a little sister to the main channel.

The annual budget of the channel is E34.5 million and it has a staff of 120, who will supply sports material to both Canal Plus and to Sports Plus. Michel Denisot, head of sports at CanalPlus and head of the new channel, emphasised that the new channel will in no way take away from the sports content on CanalPlus which will continue its sports coverage exactly as at present. SportsPlus will cover only live sport and on exclusive basis, "We will never show the same match as any other channel," said Denisot.

The line up of sports channels on Canal Satellite now comprises Eurosport France, Equipe TV (sports news), ESPN Classic, Equidia (horse racing and betting) as well as Pathe Sports which is to be replaced by SportsPlus. There are also some channels with extensive sports coverage, such as Motors TV, occasional channels such as OMTV (the channel of the Marseille football team) and extensive sports coverage on PPV.
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Murdoch questioned over pay

Media mogul Rupert Murdoch has been questioned by the group's shareholders over the rewards made to his senior executives after the company recorded the biggest loss in Australia's corporate history, reports the Guardian.

Despite posting a record E6.4 billion deficit, Murdoch received a E1.5 million pay rise, while sons James and Lachlan were paid E6.8 million between them.

The Head of BSkyB, Tony Ball, banked more than E11 million from salary and share sales last year despite the company making a record E1.9 billion loss and suffering a 25 per cent fall in its share price.

The raises related to an increase in group revenue. However, the company's plans to increase its quota of independent non-Executive Directors might put a stop on these rewards.

Murdoch admitted that the recent spate of corporate scandals had done little for investors' confidence in executives. But he insisted he and his directors "know what's right and what's wrong, and we do what's right and we always have."

He added that, after the "dark days" of September 11, News Corp was now "fundamentally as strong as any time in its history."
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EchoStar could quit DirecTV deal

US satellite TV provider DirectTV said that EchoStar Communications Corp will probably abandon its proposed E18 billion acquisition of DirectTV's parent company Hughes Electronics Corp if the deal is not approved by regulators by January 21st, according to Reuters.

January 21 2003, is a key day for the EchoStar/ Hughes merger. By then the deal would have been going on for over a year. If an agreement is not reached, either party has the right to terminate the deal, subject to break up fees.

"By January 21, we will have been at this process for 15 months," said Eddy Hartenstein, Chairman and Chief Executive of DirectTV, at a Satellite, Broadcasting and Communications Association meeting in New York. "If there is no approval by January 21, it is a fair assumption we would go our separate ways."

As previously reported, the companies are considering possible structural remedies in hopes of getting approval from the US Department of Justice and Federal Communications Commission.
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Foxtel-Optus cooperation progresses
By Owen Hughes

Australian pay TV leader Foxtel has received a boost in its bid to create a content sharing agreement with the Optus platform after a regional cable TV provider ended its objections to the deal going ahead.

Neighbourhood Cable, which serves rural viewers in the state of Victoria had been among the media companies that objected to Foxtel and Optus sharing content in order to cut content costs, lower subscriptions and drive up subscriber numbers in the loss-making industry.

Neighbourhood Cable feared that it would be cut out of any channel access if the Foxtel/Optus programming slate was exclusive to the two platforms - a situation that had prevented it from showing Foxtel and Optus channels in the past. But Neighbourhood Cable has concluded an agreement to buy Foxtel programming on a wholesale basis.

The regional operator already took the two Showtime channels from Foxtel, but under the agreement it will now be able to access Foxtel and Optus' other basic and tiered channels. It already had separate agreements with a further 20 other independent channels that it can package to consumers individually.

Foxtel and Optus' original plan was rejected by regulators in June and since then the companies have unveiled a 12-point series of undertakings to allay concerns about programming in order to gain approval for the changes.
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Crown Media axes 130 jobs

US-based Crown Media Holdings is cutting 80 jobs from its headquarters in Greenwood Village and another 50 throughout its international system - 30 per cent of its work force.

The company, owner of the Hallmark cable television network, said it would take a E20 million restructuring charge in the fourth quarter, as well as a non-cash charge of E55 million to E60 million for programming changes.

Crown's Vice President of Corporate Development, Mindy Tucker, was reported as saying, "In reviewing some of the programming we had committed to air on the channel, and had valued as an asset, we made the determination that given our new (family-oriented) programming strategy, this programming was of a lesser value."

The company has doubled the number of job cuts it forecast last year.

Crown Media investors include Liberty Media - with 9.1 per cent stake in Crown - and the private company Hallmark Cards Inc. The restructuring moves follow a report in the entertainment industry trade paper Daily Variety on Monday that Liberty Media is considering buying the 50 per cent of Court TV it does not already own from AOL Time Warner and transferring Court TV's assets to Crown.
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BCE 2003 moves to Netherlands

PBI Media, organiser of the previously London-based Broadband Communications Europe (BCE) exhibition and conference, is to move the annual event to Maastricht, Netherlands next year, held from October 14 to 16.

A fortnight ago PBI Media announced a partnership agreement with the European Cable Communications Association (ECCA) to organise and manage its European Broadband Communications (EBC) conference and exhibition next April in Prague. PBI Media has re-focussed BCE's content to 100 per cent broadband technology, implementation and strategy for European cable operators.

"We look forward to relocating our show on continental Europe in 2003," said Tim Hermes, BCE Show Director. "The convenience and proximity of Maastricht will enable BCE 2003 to attract an even broader scope of European cable operators to truly increase the pan-European focus of the event."
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Liberate-enabled automation

US-based Liberate Technologies, a provider of digital infrastructure software and services for cable, satellite, and telecommunications networks, has a new software solution called Digital Services Automation.

The new product family enables a wide variety of digital services, including enhanced TV, service management, video-on-demand (VOD), voice, and high-speed data communications.

Encompassing the complete life cycle of digital services, Liberate's software lets cable, satellite, and telecommunications companies more efficiently create, configure, deliver, and manage digital services over video, voice, and data on high-capacity digital networks.

Liberate's Digital Services Automation software is designed to increase customer satisfaction and dramatically reduce operating expenses by automating provisioning, configuration, call centres, customer service, and technical support. And it is claimed to give network operators a faster return on investment by letting them quickly launch new services, use push-button buys to promote on-demand content and services, and tailor content and services to consumer usage patterns.

The new software applies to eight core components of the high-capacity digital network: consumer services, business rules, business operations, services platforms, integration platforms, network platforms, consumer devices and developer tools.

Liberate also announced new customers for telephony and operational solutions using its new software suite - ISP @NetHome Japan, Chinese cable operator Guandong Network Cable Company, Dutch cable operator Essent Kabelcom - and a collaboration with Signatures Network to create personalised music television.
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Name change for ND Satcom

ND SatCom - Gesellschaft fr Satellitenkommunikationssysteme mbH, which provides advanced network solutions for satellite communications, has become a quoted stock corporation. The change was made in September when the company's name became ND SatCom AG.

ND Satcom has seen sales rise by more than 35 per cent in the first nine months of the current fiscal year compared to the same period in 2001.

"The legal framework of a stock corporation will allow us to access new funding in order to facilitate the company's growth world-wide," said Dr. Karl Classen, the company's former Managing Director and new Chief Executive Officer.

Members of the Supervisory Board are: Heinz-Josef Kraus as Chairman, Jack Schmuckli as deputy Chairman and Martin Halliwell. The former Managing Director, Dr. Karl Classen, has been appointed as Chief Executive Officer, Dr Gerhard Bommas as Chief Technology Officer and Dr Engelbert Quack as Chief Commercial Officer.
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News Corp positive outlook
TV5 launches on Sky
Vivendi eyes Cegetel stakes
Shanghai ahead on digital TV
Nine Network pulls out
Swedish UR recruits technical veteran
24 hours of ITV News Channel

Shanghai ahead on digital TV
From Owen Hughes

Viewers in Shanghai have become the first in China to be able to view digital TV programming over 30 channels in a variety of genres including movies, sports, news and music.

Reports in the state-run media in China's most populous city said that Shanghai, the capital Beijing and the prosperous southern city of Shenzhen had been chosen by state planners as pilot cities for digital TV as part of China's push to make all Chinese TV digital by 2015.

The roll out is also a trial for different standards and set ups of digital TV ahead of the expected decision in 2005 by regulators as to what standard they will opt for to spearhead the phased introduction of digital TV.

The channels are being run over Shanghai Cable TV and subscribers have to pay E168 for a digital converter, as well as almost E6 a month extra on their cable TV bill. The sum is significant, given that the average Chinese cable TV viewer will pay between E1.50 and E2 for cable TV.

Shanghai Vice-Mayor Jiang Yiren was quoted as saying that the introduction of digital was part of a plan to link the city's cable, Internet and telecommunications networks on a single platform.
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Nine Network pulls out
By Owen Hughes

The conflict of interest of Australian media company Publishing & Broadcasting created by its ownership of the leading commercial terrestrial Nine Network and 25 per cent of the Foxtel pay TV platform has been brought to a head after it pulled out of a submission by broadcasters against a planned content sharing agreement in the pay arena.

Nine's last minute decision to remove its name from a comprehensive list of Australia's national commercial, regional and government-funded terrestrials was explained in a statement that said, "Nine strongly supports the retransmission of free to air services and access to pay TV infrastructure but does not consider it appropriate to pursue it through this forum."

The forum in question is a written submission to the Australian Competition and Consumer Council (ACCC) which is assessing Foxtel's plans to share content with third-ranked pay TV provider Optus in a bid to cut programming costs, lower subscription fees as part of the process of bringing the industry into the black.

The terrestrial's submission expressed concerns that Foxtel's undertakings to the ACCC did not address their concerns about access to the network or carriage on the pay TV platform. The broadcasters want the pay TV providers to guarantee that all free to air channels available in any given area are carried by the former. In addition they are calling for access to the digital network Foxtel promises to build if it gets the sanction of the ACCC.

Foxtel dismissed the terrestrials' submission as, "the self-interested bleating of a cosseted industry sector trying to stop competition strengthening from subscription TV," adding it was up to the networks to bring digital signals to their viewers.
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Swedish UR recruits technical veteran
By Goran Sellgren

One of Sweden's most experienced experts in television technology and facilities, Olle Mossberg is the new Director of Technical Operations at Utbildningsradion, UR, the Swedish Educational Broadcasting Company. Mossberg has almost forty years of experience from the Swedish world of television technology.

Mossberg started with Sveriges Television, SVT, Sweden's public service broadcaster, ending up as its Head of technical operations. After 24 years he left SVT in 1987 to become Managing Director of Sonet Studios, at that time Sweden's biggest private facilities and studio operation.

When TV4, Sweden's first and biggest private television operation, began in the early Nineties Mossberg was recruited as Director of Technical Operations, a position he held for over eleven years.

"Then I had the intention of reducing my workload and starting to enjoy life, but after a while I felt a trifle restless, so when I was approached by UR and offered the role of taking over their technical operations, that was an offer I simply could not resist. As I see it my greatest challenges for the future will be to continue technical development in the three main areas identified by the new management of UR: web, radio and television."

UR was formally formed in 1978, as part of the Swedish public service television and radio system. The company has its own studios, production facilities etc in the city centre of Stockholm. UR programmes are broadcast on existing Sveriges Televison and Sveriges Radio channels; for the last couple of years UR is also running an expansive Internet-based operation. The plan is soon to have all UR television and radio production throughout the years digitally stored and available for Internet users.

In the summer of 2001 UR also launched a digital television service, UR Weekend.
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24 hours of ITV News Channel

Carlton and Granada's recently renamed ITV News Channel is going to broadcast 24/7 ahead of the October 30th launch of the new Free-To-Air digital platform Freeview. Previously the channel only broadcast between the hours of 6am and 9am.

This is an important step for the channel as it already faces competition on the DTT platform from the 24hour 'BBC News 24' channel. This competition will increase with the launch of Freeview as it will also introduce Sky News - another 24/7 news channel.
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Wednesday 9th October 2002

ITV merger talks rekindled
OpenTV completes Wink purchase
Pace's Miller quits
Freeview starts testing
EchoStar/Hughes merger decision delayed
AtSky's digital tuner for PVR
Steinberg to chair Two Way TV
Vivendi stands ground on asset value
Suez completes sale of TPS and Sagem

Pace's Miller quits

UK set top technology company, Pace MicroTechnology is looking for a new boss after its Chief Executive Officer, Malcolm Miller, said he will leave the Company on 1 January 2003.

Miller will join Raymarine Group Limited as Chief Executive Officer. Raymarine makes products such as radar systems and satellite navigation equipment.

Pace reported a full-year loss in July and it is expected sales will fall again this year after cutting the price of its television set-top boxes. The losses were also affected by NTL's move into bankruptcy protection, and the demise of ITV Digital that caused a dramatic collapse in sales. Pace had to cut 180 jobs - a fifth of the company's staff - in a bid to stem losses.

A committee of Pace MicroTechnology's non-executive Directors led by Chairman Sir Michael Bett started the search for a successor and will consider internal and external candidates.

A Pace statement said, "The board would like to thank Malcolm Miller for his service over the last five years and wishes him well for the future."

Pace & IVR End-End VoIP Solution

Pace Micro Technology's VegaStream will enable more enhanced IP and real-time billing services through its Voice over Internet Protocol (VoIP) gateways. The announcement follows a successful interoperability tests with the 'Talking SIP' Interactive Voice Response (IVR) and billing software from IVR Technologies.

Telecommunications operators' use Pace Vega gateways to deploy new revenue-generating VoIP services over existing networks. To protect these new revenue streams, telcos require advanced real-time billing systems to enable the 'Authentication, Authorisation and Accounting' (AAA) of end-users before or at the point of using services such as pre-paid calling cards and 800/900 termination.

Using Pace's Vega gateways with Talking SIP software, end-users would be able to pay for telecommunication services via various methods including a 'voucher recharge' system or a web-based self-management system that empowers end-users and reduces the cost of business overheads for customer service and network management personnel.
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Freeview starts testing

Freeview, the UK free-to-air digital terrestrial service, which will launch at the end of October, has started its engineering tests across the UK this week.

Freeview is a joint venture between the BBC and Crown Castle, in conjunction with BSkyB that will initially have coverage of three-quarters of the country's households. Its aim is to reach more 1.5 million more households at launch than ITV Digital's 65 per cent of households - achieved as a result of increased transmission power and altered modulation (see News Archive).
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EchoStar/Hughes merger decision delayed

US satellite TV operators EchoStar and DirecTV Inc parent Hughes Electronics told the Federal Communication Commission on Monday (7/10/02) they will revise their proposed merger in an effort to win approval from the US Justice Department.

The FCC gave the companies until the end of the month to come up with changes in the structure of the deal which would make it acceptable to regulators.

On Monday EchoStar and Hughes offered concessions in a filing with the Federal Communications Commission, showing their willingness to negotiate to win approval for the deal - which is facing vehement opposition from consumer groups and rival media companies which don't want a satellite pay-TV monopoly. Their proposed E26 billion merger, would create the largest pay-TV service in the country.

Entertainment conglomerate Cablevision Systems Corp, the number seven US cable operator, has suggested that the deal could be made acceptable to regulators if EchoStar promised to divest some of its satellite slots to Cablevision.

EchoStar Chief Executive Charlie Ergen, spent last Thursday and Friday defending the deal's merits to the DoJ and is preparing to give further evidence.

If the merger is given the go ahead, Australian-born media mogul Rupert Murdoch, who already lost the bid for DirecTV last year, will be out of the race. However, most antitrust experts do not believe the concessions will be enough to prevent the authorities from blocking the deal, potentially opening the door for Murdoch to snap up Hughes at a lower price.

Michael Powell, the FCC chairman, was reported as saying that the Commission's decision was imminent on the public interest aspects of the deal. EchoStar and Hughes also asked for the FCC to hold a public hearing on the merger, as it has with previous large deals such as AOL's take-over of Time Warner.

"There are many important consumer benefits at stake so we are asking the FCC not to rush to judgement before the DoJ completes its review," EchoStar said.

EchoStar and Hughes have tried to convince the department that joining forces would allow them to reduce duplication and make more efficient use of spectrum, providing local broadcast channels across the entire country for the first time, along with other new services such as high-speed Internet and high-definition television.
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AtSky's digital tuner for PVR
By Sotires Eleftheriou

French telco AtSky, which launched an offline satellite Internet service called Infocast last year, is to introduce a stand-alone terminal, priced at E399.

Called the @SkyBox, the terminal can be transformed into a fully-fledged PVR simply by connecting it to the USB port of a PC. This configuration provides new features such as the ability to record onto CD-R in Divx format, or recording onto DVD.

Used stand-alone, the @SkyBox is optimised for home cinema. It connects to the TV and satellite dish like any other satellite set top box. It features embedded Viaccess and @Skycrypt conditional access and two PCMCIA ports for additional access control modules.

Connected to a nearby PC, it uses the hard disc drive on the PC to provide PVR functionality, with the @SkyBox remote control operating the PC, which displays on the TV. In addition, the PC stores a selection of Internet sites transmitted by AtSky via the Astra 1 satellite, which can be consulted later in off-line mode, displayed on either the TV or the PC. AtSky has concluded deals with several Internet sites to provide their sites in a form that is suitable for viewing on a TV screen.

AtSky has also licenced its '@Sky Videolink' technology to other manufacturers.
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Steinberg to chair Two Way TV

Bruce Steinberg, former BSkyB General Manager of Broadcasting, has joined Two Way TV as its new non-executive Chairman, taking over from founder Bill Andrewes who is retiring from full-time executive responsibilities.

Over the past 18 months Two Way TV has shifted its business from developing interactive programmes towards supplying its Ark enabling technologies and creative services wholesale to third parties. Clients include BBCi, Channel 4, Sky Digital, Flextech TV, NTL and Telewest, with further deals planned.

Bruce Steinberg's earlier roles include driving the growth of MTV Europe as Sales Director; Chief Executive of new channels UK Gold and UK Living TV, and General Manager, Broadcasting, at BSkyB, responsible for Sky One, Sky News, Sky Movies and Sky Box Office, as well as channel distribution and the management of BSkyB's shareholdings in ten joint venture companies.

Steinberg subsequently co-founded technology and media venture capital company i-Spire, which has equity stakes in Ministry of Sound, Cheapflights.com and Pacific International.

Matthew Tims, Two Way TV CEO, said, "Bruce has an impressive track-record of developing and launching new channels in the highly competitive multi-channel sector which went through the same evolutionary curve that interactive has experienced. Big broadcasters have gone from being resistant and sceptical to embracing interactive's significant commercial potential, so Bruce's arrival couldn't be more timely."

Stephen Carter, NTL Managing Director and Two Way TV board director adds, "Over the past year Two Way TVés strong management and unique technology have confirmed its position as the provider of enhanced TV technology to UK cable. Adding Bruce's enormous experience in multi-channel pay television will ensure that the Two Way TV brand is synonymous with enhanced TV excellence for both broadcasters and distributors. We are delighted to see him on board."

Steinberg commented, "Under Bill's chairmanship Two Way TV has become a market leader in interactive television. From its early inception it has developed an outstanding business that combines the use of its patented technologies with the expertise of broadcasters and platforms to deliver enhanced television for consumers. Their successful projects for clients like the BBC with Test the Nation and Channel 4 with 15 to 1, prove that this is a great team that can deliver exactly what it promises. I look forward to helping it become an even bigger success."
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Vivendi stands ground on asset value

French multimedia giant Vivendi Universal said that under its asset sale to cut its debts it is unlikely to consider any offer that falls short of its own valuation of E3.5 billion- E4 billion for its publishing assets, according to the Financial Times.

It's believed that there are three bidders for the education, trade and consumer publishing operations, but all of them fall short of E3 billion.

Vivendi is trying to accomplish a E12 billion disposal programme to sort out part of its debts - planing to raise E5 billion by March next year. Preliminary offers for the publishing division are due in mid-October.

One of the bidders for Vivendi Universal Publishing (VUP) is Eurazeo, the French private equity fund, in alliance with Carlyle Group of the US. A consortia of PAI, the private equity arm of BNP-Paribas, along with Blackstone Group, Kohlberg Kravis Roberts & Co and Thomas H Lee Partners form the second group; and Lagardœre of France and Quadrangle Partners are leading the third group.

The sale of VUP would be the biggest disposal to date by the French group, which has also vowed to withdraw from the international television operations of its Canal Plus division, sell a minority stake in its games business, and seek buyers for surplus properties and aircraft.

*advanced-television.com correspondent, Sotires Eleftheriou, reports that more people are leaving Canal Plus. Bernard Guillou, Groupe Canal Plus, Director Delegate to the President Gaspard de Chavagnac, Groupe Canal Plus, Group Director of financial affairs and development Stephane France, Groupe Canal Plus Director of DTT Project Pascal Somarriba, Canal Plus (premium channel), Directeur déantenne (programme manager) Alexandre Michelin, Groupe Canal Plus, Director of Programmes and Services Group, are the names quoted by 'Toutsurlacom' news letter.
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Tuesday 8th October 2002

Bids in for DT, Liberty out
NTL, debts and doubts remain
FCC expected to stymie Echostar deal
Murdoch to pay tax!?
AOL to become more like TV
League's new TV deal
Channel 6 not until 2005

NTL, debts and doubts remain

Moody's, the credit rating agency, has put the bank and bond debt at UK lead cableco NTL below investment grade, saying the prospects for recovery of the bondholders' debt are "weak" and the company's recovery prospects reduced due both to the remaining debt, ongoing funding requirements and the limited near-term ability to invest in growth.

Debts of E6.3 billion will remain following this year's debt restructuring in which bondholders write off E11 billion of debt to gain control of the company,

The Independent newspaper cited a London banker as questioning whether NTL's cash flow would be sufficient to keep it from breaching banking covenants.

The same report quoted James Roome of Bingham McCutchen as saying that despite coming out of bankruptcy protection, the business itself faces the same issues it always had, except that the banks would be more likely to work with the company rather than trying to bring it down.
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FCC expected to stymie Echostar deal

US satellite TV broadcaster EchoStar Communications Corp's planned E23 billion purchase of Hughes subsidiary DirecTV faces is set to be rejected by the Federal Communications Commission when it is voted on this month according to US reports, thereby opening the way for BSkyB to re-enter the fray to set up a global satellite network.

This would be an ironic result as it is concern that US consumers' choice would be reduced that has apparently led to the FCC staff recommendation that its four commissioners oppose the transaction. US Government antitrust enforcers are also reported to be preparing to ask the Justice Department to challenge the purchase.

EchoStar says it needs to buy DirecTV parent Hughes Electronics Corp from General Motors Corp to compete effectively against AT&T Corp and other cable-TV providers, and to offer new services such as high-speed Internet access.

EchoStar has about 7.46 million satellite-TV customers, while Hughes' DirecTV has 10.7 million; a combined company would control more than 95 per cent of US satellite-TV viewers and most US licenses to operate TV satellites

Hughes spokesman Richard Dore was quoted by Bloomberg as saying that it's premature to conclude that the purchase won't be approved. EchoStar spokesman Marc Lumpkin described the move as beneficial for consumers.
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Murdoch to pay tax!?

Rupert Murdoch's satellite TV company BSkyB was expected to be free from paying tax for at least another two years as it has reported approximately E717 million 'tax losses' for the financial year, which would result in the company avoiding paying around E207 million of tax.

However, the company is including a provision in its financial results to pay the full rate of corporation tax, reports the Independent newspaper. In effect BSkyB has not yet paid any UK corporation tax due to large losses when it was first set up and a policy of investing income rather than declaring profits.

The provision makes it likely that the company will declare a profit for the first time since the digital service launched in 2003. It is assumed that the company will pay the full 30 per cent rate of tax, despite its losses. The Independent goes on to ask whether this payment will have to be in cash.
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AOL to become more like TV

Just ahead of America Online's version 8.0 launch this month, AOL's newly appointed Chairman and Chief Executive Jonathan F Miller says the ISP could become more like cable networks and deliver programming via the Internet,

Miller, a former executive at USA Interactive who joined America Online in early September, has eliminated America Online's deal-making unit and reorganised its executive structure. During the Internet World conference he outlined new initiatives that AOL would be developing in the near future. The WSJ noted that his remarks were similar to those of AOL Time Warner Chairman Steve Case, who last week suggested ways that America Online could be used to develop a digital-media delivery service as well as a new sort of 'personal television.'

The new developments are aimed at making the service more available and more desirable to its 35 million subscribers. Developing broadband is a key aim, with Miller commenting, "Our commitment to broadband is clear, and it is unwavering."

AOL version 8.0 will provide broadband users with separate screens and dedicated community features as well as more original exclusive content similar to this summer's offer to subscribers of an early listening to unreleased songs from artists like Tom Petty and the Heartbreakers and Bruce Springsteen.

Some programming and offerings could become part of "premium content and services that our members will pay extra for," said Miller.
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League's new TV deal

The UK's soccer Premier League will start discussions on a new TV deal next month, according to the Guardian newspaper.

Only six months ago ITV's Carlton and Granada, who had acquired the television rights to the League's games for the now collapsed ITV Digital, pulled out of a E502 million deal with the League that would have expired in two years.

The Sunday Times reported that a new contract with ITV - worth E8 million over two years, for highlights only - will outrage chairmen of the League's 72 clubs, many of whom are financially crippled from the collapse of the DTT operator. Nevertheless, in a vote last week, more than 50 per cent backed the deal over a rival joint bid from the BBC and Channel Five.

Richard Scudamore, the League's Chief Executive, was reported as saying that the 20 Premiership clubs would use the extended timetable to 'extract value' from broadcasters.

Scudamore said the league was confident it would match the record-breaking E2.5 billion raised by its current three-year deal, signed in June 2000 with BSkyB, ITV and NTL.

Sports rights consultancy Reel Enterprises, run by former Reuters executive David Kogan, is advising the Premier League on the new deal, which is set to run from 2004 to 2007.

"We will start working on it [the new TV deal] in November but we will not be slaves to any timescale. We will use time as a tactic to extract value," he said.

"When you look at the health of the pay TV market, the strength of the competition in the league and the interest in it globally, I don't see any reason why we will not get the same this time," he added.

Scudamore confirmed that setting up of a breakaway pay TV channel, called 'Premier League TV', was under consideration, despite a 10-year broadcasting partnership with BSkyB, which paid E1.7 billion for the live rights in 2000. But reports have suggested the league would lose out on more than E247 million a season if it launched its own TV channel

However, any negotiation will have to be approved by EU competition watchdogs. EU competition commissioner Mario Monti, has already ordered a shake-up of the way Champions League games are sold to broadcasters but the league insists its methods do not break monopoly laws.

"The way we went about the process has been very transparent and very pro-competitive. We also view the actual outcome as being very pro-competitive," said Scudamore.
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Channel 6 not until 2005

Rupert Murdoch's BSkyB is planing a new 'Sky One Mix' channel by 2005, which will feature new programmes as well as repeats of the parent channel's most popular shows.

With former Channel 5 boss Dawn Airey as the new Sky Networks Managing Director, BSkyB is now looking to improve its programming and channel offerings, using Airey's expertise.

The channel will only be available to Sky Digital customers reports the Telegraph newspaper.

Sky is thought to be making plans to turn its Sky Travel Channel on the new digital terrestrial television service, Freeview, into a 'Channel 6' - mainstream entertainment channel to rival the existing broadcast networks.
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NTL gets Irish licence warning
Further writs for NDS
CanalPlus revenues down E5m
Liddiment urged to stay?
Disney/AOL-TW merger denied
Two Way/Red Fig in joint iTV offer
TiVo boosts DVR storage

NTL gets Irish licence warning

Ireland's Office of the Director of Telecommunications Regulation has warned UK-based cableco NTL that if customers continue to be denied full access to digital services, and no reasonable explanation if provided by October 15, then steps will be taken that could lead to the company having its' digital licence withdrawn.

NTL had only upgraded 36,000 households and businesses to digital services - mostly in the Dublin area - by March 31 2002, whereas NTL's licence requires it to supply digital services to over 100,000 customers in its franchise area.

Customers in Dublin, Waterford, Galway and west Mayo are still unable to get digital services.

By October 15 NTL must produce a satisfactory explanation for the failure to upgrade, or steps can be taken that could include revoking, suspending or making amendments to NTL's licence, or perhaps adjusting the area that the licence covers. The warning applies only to NTL digital licences, not its cable services.
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