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Thursday, June 28

EARTHLINK: Long CEO search ends

by Mike on Thu 28 Jun 2007 08:09 AM PDT

EARTHLINK: Long CEO search ends
EarthLink named a new president and CEO Monday, ending a long search to replace a top executive who died in January.

The Internet service provider turned to outsider Rolla P. Huff, ex-chairman and CEO of Mpower Communications, rather than hiring from within. Huff replaces interim EarthLink Chief Executive Mike Lunsford, who remains with the company as executive vice president.

Lunsford led EarthLink on a temporary basis starting in late 2006, when former President and CEO Garry Betty stepped down. Betty, who was diagnosed with cancer, died in early January at 49.

Huff joins EarthLink amid many challenges. The company lost about $30 million in the first quarter.

"I'm coming in truly with no preconceived notions of what we will or will not do," he said in an interview. "I'm going to spend the next 60 to 90 days getting into each of the various business units."

The learning process already is under way. Huff said he's using an Ocean cellphone from Helio, a joint venture of EarthLink and SK Telecom of South Korea. He plans to visit Anaheim, Calif., next week to personally test the company's fledgling municipal wireless Internet system.

EarthLink, which is best known for providing dial-up Internet service, has been trying to diversify because dial-up is on the wane. So far, the company has reported few tangible results for some of its investments. Robert Kavner, EarthLink's chairman, said in a prepared statement that Huff has the "experience and strategic acumen" to improve the company's share price.

EarthLink shares climbed 6 cents Monday to close at $7.31. However, shares are down about 11 percent compared with a year ago.

Before being named president and CEO, Huff purchased 100,000 shares of EarthLink stock. Huff said he expects to make money on the investment and that the purchase wasn't meant to simply show support.

"I wish I had enough money that I could throw that much around as a gesture of confidence," he joked.

EarthLink also granted Huff 100,000 shares of restricted stock and 1.5 million stock options. He'll be paid a base salary of $750,000 per year, plus a bonus that will vary depending on EarthLink's performance. Huff, 50, has a three-year employment contract.

Huff has worked at many companies. At the old AT&T, he was financial vice president in the corporate mergers and acquisitions group. After that, he served as chief financial officer for the former AT&T Wireless from 1995-97. He then joined Frontier Communications and played a key role in the company's merger with Global Crossing.

Most recently, Huff led Rochester, N.Y.-based Mpower. The company —- a provider of telecommunications services to business customers in California, Las Vegas and Chicago —- was sold to TelePacific Communications in 2006. Huff led Mpower from 1999 until its sale.

While EarthLink faces many challenges, Huff said the company's core business in providing Internet access continues to yield ample cash. "The balance sheet is still very strong," he said.

EarthLink also has a good brand the company can take advantage of, Huff said. "It may be dial-up, but people like the EarthLink brand," he said. "They have an affection for it."

Huff, a graduate of Purdue University in Indiana, was appointed to EarthLink's board of directors and to Helio's board. Helio is one of EarthLink's biggest financial bets. EarthLink expects to lose $110 million to $140 million this year, chiefly because of costs connected to Helio.

Sky Dayton, EarthLink's founder and CEO of Helio, said in prepared statement that Huff is a "proven leader."

"I think he is the perfect CEO to have at the helm during this very important time in EarthLink's history," Dayton said.

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Tuesday, June 19

AT&T Launches $10 DSL It Hopes No One Signs Up For

by Mike on Tue 19 Jun 2007 07:20 AM PDT

AT&T Launches $10 DSL It Hopes No One Signs Up For
AT&T has quietly begun offering DSL service for $10 per month for new customers. Offered as part of the concessions the telecom made to the Federal Communications Commission in order to gain approval for its merger with BellSouth, the speed is nothing to get excited about: 768Kbps down and 128Kbps up.

AT&T is also doing little to publicize the new offering. In fact, I was only able to discover any reference to the low-price service by clicking on the Terms and Conditions link at he bottom of AT&T's residential high-speed Internet product page. A note on AT&T Yahoo! High-Speed Internet buried six paragraphs down says that the "basic speed ($10.00)" tier is available to new customers only, those who have not subscribed to AT&T or BellSouth DSL during the past 12 months, and the service requires a one-year contract.

Customers must also order phone service to get the budget-priced DSL service; those looking for cheap, naked DSL should look elsewhere. Those living in BellSouth's former territory can get naked DSL for the next two-and-a-half years, however.

Along with the budget high-speed Internet and naked DSL, AT&T also promised to maintain a "neutral network and neutral routing in its wireline broadband Internet access service" while also giving up its rights to the 2.5GHz spectrum. (WiMAX provider Clearwire recently completed the purchase of AT&T's unused 2.5GHz holdings.) In addition, AT&T must offer broadband to 100 percent of all residential living units in its territory, with 85 percent of that delivered by wire.

As is the case with the naked DSL offering, AT&T is only required to offer the $10 per month tier for the next two-and-a-half years. After that, the company is free to make whatever changes it wants to the service.

It's only $5 cheaper than AT&T's current lowest-priced service, but at $10 per month, the service could appeal to budget-minded consumers—especially those who are paying about that amount for dial-up service. More importantly for AT&T, it gives the company another platform from which to pitch its U-Verse broadband and IPTV service. After two-and-a-half years of 768Kbps service, U-Verse may look very attractive to lower-tier customers.

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Friday, June 15

Satellite companies partner with Clearwire

by Mike on Fri 15 Jun 2007 07:08 AM PDT

Satellite companies partner with Clearwire
Satellite providers DirecTV and EchoStar Communications said on Thursday that they are teaming up with WiMax operator Clearwire to deliver wireless broadband services.

Clearwire, which was founded by mobile-industry billionaire Craig McCaw, delivers WiMax broadband services to fixed locations. DirecTV and EchoStar hope to use Clearwire's network to provide broadband services in addition to their satellite TV services.

Financial details of the deal weren't released. But Clearwire, which raised $900 million in venture funding last year and went public this year, is burning through money quickly. So it makes sense for the company to look for partners that might be able to help it continue to build its network. Since Clearwire's initial public offering in March, the stock has lost roughly 20 percent of its value.

Clearwire uses WiMax, a packet technology, to deliver its service. WiMax can deliver signals more than a mile in some suburban areas, with peak data rates of about 20 megabits per second. Average user data rates fall between 2Mbps and 8Mbps. Data rates for the next-stage 3G cellular service--sometimes called 3.5G--are about 3Mbps.

The WiMax Forum, the industry group that promotes the technology, has almost completed the necessary certification requirements for new products, another major step that could help push deployment. The technology also has the foundation for a strong ecosystem, thanks to support from handset and infrastructure makers such as Motorola, Samsung Electronics and Nokia, as well as from chipmaker Intel.

These companies are all expected to have WiMax products in the market sometime this year.

Clearwire operates in 39 U.S. markets and, as of March, has been serving fewer than 100,000 subscribers. The deal with DirecTV and EchoStar should help the company broaden its customer base.

"By expanding the reach of our services through DirecTV and EchoStar, and by incorporating direct-to-home satellite video services in our own distribution channels, we believe we have an opportunity to significantly expand our business opportunity," Perry Satterlee, Clearwire president and chief operations officer, said in a statement.

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Monday, June 11

Time Warner to decide on AOL’s future by end 2007

by Mike on Mon 11 Jun 2007 07:43 AM PDT

Time Warner to decide on AOL’s future by end 2007
For AOL it is either a spin off or merger with another company. According to Reuters, Time Warner will decide the fate of the online company by the end of this year.

“By the end of this year, we can make the call on AOL (on whether) we have found a business model or approach that can result in sustainable growth over time,” Parsons said in the Webcast presentation. “We’re in the right area.”

“It all comes down to the ability to transform AOL into a destination for the 12- to 35-year-old generation relative to surviving on their former dial-up or access subscriber base. If they can, they should keep it,” said Pali Capital analyst Richard Greenfield.