Charter Communications buying 1 million set-top boxes from GIC:
Paul Allen's Charter Communications
To Expand Into Interactive Services
By LESLIE CAULEY
Staff Reporter of THE WALL STREET JOURNAL
LOS ANGELES -- Charter Communications Inc., the cable-TV concern
headed by billionaire Paul Allen, plans to buy one million advanced
digital-TV set-top boxes from General Instrument Corp. in a deal valued at
more than $300 million.
The agreement, which could be announced as early as Wednesday, puts
Charter, St. Louis, on a fast track to deploy interactive services. Under the
deal, the boxes, which allow users to access the Internet through television
sets, would be delivered to Charter in 2000 and 2001, and include some
of the most-advanced features that General Instrument, Horsham, Pa.,
offers.
For example, some boxes will include a "personal video recorder" feature
that allows customers to record programs. Cable companies have talked
about the concept for years but few have offered it.
For General Instrument, the deal helps cement its place as the leading
provider of digital set-top boxes. General Instrument, which is being
acquired by Motorola Inc., Schaumburg, Ill., has been a favored vendor in
the cable-TV community.
The technology and other innovations are on display here this week at the
cable industry's annual winter trade show.
Charter's deal is the latest high-profile move made by the company, which
is angling to become a major player in cable and the Internet. Mr. Allen, a
co-founder of Microsoft Corp., Redmond, Wash., has invested in Internet
startups, including a provider of high-speed services that caters to rural
markets. In another move, Mr. Allen invested $1.65 billion in RCN Corp.,
Princeton, N.J., a rival that competes with cable and phone companies.
Mr. Allen wants to set a "wired world" in which consumers will be able to
use their televisions to connect to the Internet. When all of Charter's
pending deals close, Mr. Allen will be sitting atop an empire with more
than six million customers.
General Instrument's main rival is Scientific-Atlanta Inc., Atlanta, which has
been gaining steam with other equipment providers as cable operators rush
to upgrade their networks for digital services.
At 4 p.m. Tuesday on the Nasdaq Stock Market, Charter was down
31.25 cents to $22.6875. On the New York Stock Exchange, General
Instrument was down $5.2227, or 7.1%, to $67.9375, and Motorola was
down $9.75, or 7.6%, to $118.875. |
