Pat,these two press releases clearly prove oncoming trend:
regards
Zbyslaw
Thursday July 30 7:46 PM EDT
Paul Allen agrees to buy Charter for $4.5 billion
By Susan Nadeau
CHICAGO (Reuters) - Microsoft Corp. co-founder Paul Allen took another step toward his goal of a "wired world"
Thursday, announcing he will buy closely held cable television operator Charter Communications for $4.5 billion.
The deal, Allen's largest personal investment to date, follows his April acquisition of Marcus Cable, then the 10th largest
cable company, for $2.8 billion.
The merged cable companies, which together would form the No. 7 cable operator in the country, will join a wide-ranging
portfolio of Allen's that also includes entertainment, technology and new media companies and sports teams.
"It is a long-term investment as we ... begin to offer not only Internet access services ... but also a plethora of new
opportunities," Bill Savoy, Allen's financial adviser, said on a conference call. "What you are seeing is our strategy unfold.
This is a multistep process."
Cable TV companies are key to Allen's vision because they provide "bandwidth," or the high-capacity network that allows
movies or Web sites, for example, to be transmitted rapidly into homes via the Internet.
Cable companies already have high-speed lines into millions of consumers' homes, giving them an edge over other
companies with data technology, Savoy said.
Last year, Microsoft, which Allen co-founded in 1975 with Bill Gates, invested $1 billion in Comcast Corp., one of the
biggest U.S. cable companies. The software giant has made related investments or acquisitions.
The Allen deal pushed other cable companies' stock higher, with Cablevision Systems Inc. up $3.375 to $82.75 on the
American Stock Exchange, and MediaOne Group Inc. up $1.69 to $49.625 and Cox Communications up $2.31 to $49.375,
both in composite New York Stock Exchange trading.
The so-called wired world is Allen's broad investment strategy in which people around the world are connected via a vast
network.
Possible products in a wired world include video on demand, cheap telephone calls over the Internet, immediate access to any
kind of information and "a new class of services customers have not been able to see yet because existing opportunity for the
Internet is so limited because of bandwidth," Savoy said.
Savoy would not give a timeline as to when the new services might be available, but officers of the two cable companies said
they expect their networks to be ready for Internet access within the next couple of years.
Allen also has founded or has major stakes in software company Asymetrix Corp., Internet content provider Starwave Corp.,
movie studio Dreamworks SKG and the Portland Trail Blazers basketball and Seattle Seahawks football teams.
"This investment marks another step forward in my wired world strategy, which is a connected future marked by the merger
of high-bandwidth data channels, the power of the personal computer and the availability of valuable content," Allen said in a
statement.
Allen did not take part in the conference call.
Under Allen's plan, the two cable companies will be combined, creating the seventh-largest cable operator in the United
States.
The combined company, which has yet to be named, will consolidate its executive offices in St. Louis, where Charter is
based, but maintain a presence in Dallas, where Marcus has its headquarters.
Charter was considering an initial public offering before agreeing to a deal with Allen, company Chief Executive Jerald Kent
said on the conference call. Kent will serve as CEO of the combined company.
The announcement comes just days after top members of Congress said they are increasingly likely to reimpose regulation on
the cable TV industry amid rising prices.
Allen's acquisition of Charter is subject to government and franchise approval, but Savoy said he was not concerned about
getting authorization for the deal.
Allen will continue to look for other investment opportunities in cable TV and other industries, Savoy said.
Separately, an investment banker who works with Allen said he was no longer interested in buying PolyGram Filmed
Entertainment. Allen had been mentioned as a possible suitor of the operation.
Reuters/Variety
Earlier Related Stories
Newbridge Networks Delivers IP Service over
MainStreetXpress Multiservices Platform for
Suburban Cable Television
Business Wire - June 24, 1998 09:52
Newbridge Flexibility, Efficiency of ATM Solution Will Enable Pennsylvania Firm to Expand
Service Offerings
Newbridge Networks (NYSE:NN) (TSE:NNC.) today announced Suburban Cable Television
has installed an end-to-end Newbridge(R) asynchronous transfer mode (ATM) switching
solution to support Internet protocol (IP) traffic across its network.
Suburban Cable Television selected the Siemens/Newbridge MainStreetXpress(TM) 36170
Multiservices Switch, MainStreetXpress 36150 Access Switch and MainStreetXpress 46020
Network Manager because of the many advantages that will be gained by implementing a
single, unifying solution capable of delivering multiple traffic types without the performance
delays inherent in a traditional router-based solution.
"The Newbridge ATM multiservices platform can simultaneously support Virtual Private
Networks (VPNs) and IP services including Internet, intranets and extranets," said Jerry
Lenfest, chairman, Suburban Cable Television. "Our new network enables us to offer frame
relay, private-line and ATM services to competitive local exchange carriers, Internet service
providers (ISPs), inter-exchange carriers and other enterprises. Suburban Cable is positioned
to meet FCC requirements for entering the long distance service provider market."
The center-weighted network, service and policy management capabilities being provided by
the MainStreetXpress 46020 Network Manager eliminate the complexity of traditional
router-based infrastructures. These features, combined with the operational efficiencies
provided by a broadband multi-services solution, will enable Suburban Cable Television to
enjoy operational cost savings it can, in turn, pass on to its customers.
OC 3, OC 12 or DS 3 trunks will link Suburban Cable Television sites throughout
Pennsylvania, New Jersey and Delaware to the company's headquarters in Oaks, Penn. The
scalability of the Newbridge(R) solution will enable Suburban Cable Television to expand its
network and service offerings to meet the changing needs of its customers.
"The opportunity to provide this leading-edge network demonstrates our leadership in
deploying multi-service network platforms," said Conrad Lewis, Executive Vice President
Marketing and Product Management, Newbridge Networks. "We look forward to continuing
to work with Suburban Cable Television in the roll-out and delivery of this powerful
network."
Suburban Cable Television is an operator of multiple cable systems in the United States
serving about 990,000 customers in Pennsylvania, Delaware and New Jersey, making it the
largest cable operator in the tri-state area and among the nation's top 15 cable companies.
Suburban Cable Television is a wholly-owned subsidiary of Lenfest Communications, a
privately-held, international telecommunications company with extensive interests in cable
television and related industries.
Newbridge Networks designs, manufactures, markets and services networking solutions to
organizations in more than 100 countries. Newbridge leverages its relationship with 16
Affiliate companies and strategic alliances with Siemens and 3Com Corporation to deliver
seamless, end-to-end solutions. Newbridge customers include the world's 250 largest
telecommunications service providers and more than 10,000 corporations, government
organizations and other institutions. Founded in 1986, the Company employs more than
6,000 people on five continents. News and information are available at www.newbridge.com.
Newbridge, logo are registered trademarks of Newbridge Networks Corporation.
MainStreetXpress is a trademark used by the Siemens/Newbridge alliance for comprehensive
solutions in broadband communication. No agency relationship, partnership, or joint
ownership of a legal entity is to be inferred or implied by the term alliance.
CONTACT: Newbridge Networks Corporation
Melissa Moffi, 703/736-5740
mmoffi@newbridge.com
or
Lisa Pittenger, 703/736-5852
lpitteng@newbridge.com
or
John Lawlor, 613/591-3600
jlawlor@newbridge.com
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