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To: DiViT who wrote (26530)	12/11/1997 4:19:00 PM
From: John Rieman	Respond to of 50808

Thanks David. Good data, I forgot what this item is while reading....................................... Oh yeah, "If you build it, they will come."...................... mediacentral.com Digitally Correct? (Cable World) Most of the shouting regarding digital TV is over now that Congress has assigned broadcasters the extra slice of spectrum they say they need to carve out digital or high-definition channels. And the FCC has laid out a schedule, beginning next year, for broadcasters to follow in offering the signals, assuming they can build the massive towers they need and the channel-allocation plan goes smoothly. But even though the public debate over the great channel giveaway has largely subsided, the U.S. TV industry and government still must settle a number of issues. Paramount for cable operators: How many channels will the FCC force them to carry under a new set of must-carry rules when digital broadcasting becomes the norm? New FCC chairman William Kennard recently said that the digital must-carry issue is "going to be a busy part of our agenda -- and a very important one, too." What's more, he pointed out that the federal government is involved in a proceeding that will spell out what additional public interest obligations -- if any -- broadcasters will have to meet in a digital universe. More answers are expected early next year when a 40-member commission that Vice President Al Gore appointed issues its report. Then there's the controversy over whether broadcasters will abandon plans to offer a crisp, high-definition signal or split the 6 MHz of spectrum they've won from Congress into six or seven multicast signals. ABC president Preston Padden rattled a few Capitol Hill cages this summer when he said his network may go straight to a multicast format, skipping the HDTV route. And former FCC chairman Reed Hundt has said that multicasting may not necessarily be a bad idea. "Ever since 1993, the technology has been digital, not high definition," Hundt said. "The only way there's going to high definition is if there's two or three channels." The political dust-up over multicasting vs. high definition may have caught broadcasters by surprise. Lawmakers originally said that broadcasters could have the additional spectrum if they used it to offer HDTV. But one broadcast industry lobbyist who requested anonymity said broadcasters aren't "going to offer high definition right away." One reason may be the fact that TV set manufacturers seem to be hesitant to build digital sets that receive a high-definition signal if broadcasters veer away from HDTV. On the flip side, broadcasters say they're reluctant to offer an HDTV signal if no sets, which are expected to cost $1,000 and up at first, can receive them. That chicken-and-egg scenario is "why the subject of multicasting raised its ugly head," the broadcast lobbyist said. "In the short term, some people are suggesting that people aren't going to buy a set to see better pictures. Multicasting may be a better way to get people [to buy into digital]. It's not a way to make money, but a way to attract people." Translation: If you build it, they will come. (Eric Glick)

To: DiViT who wrote (26530)	12/11/1997 8:17:00 PM
From: John Rieman	Respond to of 50808

Deutsche Telekom needs to spin off assets.......................... ijumpstart.com Telekom to Spin Off Cable Assets Next Year After EC Pressure <Picture><Picture><Picture> Despite its protests to the contrary, Deutsche Telekom's move to spin-off its cable business into an independent company early next year caught virtually nobody by surprise. The powerful German PTT has always taken the stance that it would not bow to European Commission (EC) pressure by selling off any of its cable network, believing that such a move would cripple Germany's media infrastructure and delay the rollout of new media services. However, the EC's German competition commissioner Karel Van Miert made no secret of his desire to take away some of the power that Europe's dominant telecom operators which also own cable TV systems (such as Telekom) will have when telecom markets are liberalised after Jan. 1, 1998. As we correctly predicted about 10 months ago, a compromise in which Telekom would retain control over a weakened cable division always seemed to be in the offing (EMB&F, Feb. 10, 1997). Telekom officials said that they have not decided whether to float the cable subsidiary on the stock exchange. Last week's announcement showed that Telekom was ready to comply with the EC, before the EC forced the issue. Early next year, Telekom are expected to split the cable division into regional companies that is expected to take on shareholders. This could mean that Germany's smaller regional cable operators could soon own a piece of their fiercest rival. Telekom officials acknowledged that they are exploring an option of selling shares to strategic investors, which could include some of the smaller operators - which serve a combined 10 million homes. Other potential investors that have been mentioned include Microsoft - which already has invested $1 billion in broadband cable and reportedly is looking to invest more - and German banks. Some reports put the worth of Telekom's cable business at close to Pounds 7 billion. Last week's announcement was expected, and it carried few surprises. Telekom still will retain control over much of the new group - having agreed to give away shares rather than selling its system in total. The most likely scenario will see the Munich-based T-Media Net become the central point for Telekom's cable activities. The PTT also runs T-Mobile and T-Online. The problem regulators will face deals with ensuring that Telekom upgrades its cable network sufficiently. Telekom would be more than happy to continue using the telephone as a response channel. Regulators also would try to make certain that Telekom does not inhibit the independent company from providing telephony services. Under the plan, Telekom still would control the interconnection, leaving its competitors to have to go through Telekom anyway in order to get their services to the consumer. This has caused some of Telekom's detractors to call for the PTT to give up control of the entire cable spin-off. Telekom's announcement beat the publication of a EC report aimed at Telekom (officially on the links between cable TV and telephony systems). The report is not expected to treat Telekom's situation kindly.