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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: Maya who wrote (41044)	5/14/1999 9:33:00 AM
From: J Fieb	Read Replies (1) \| Respond to of 50808

SFA @$39 ??Yikes. CUBE /DIVI get that open cable door open a little more! Thursday May 13, 7:40 pm Eastern Time Cable set-top box scramble just beginning By Aaron Pressman WASHINGTON, May 13 (Reuters) - Cable operators' best laid schemes of mice and remote controls may go awry if federal regulators succeed in cracking open the companies' set top box monopoly. But regulators face a formidable task in jump-starting competition for the boxes that soon will bring consumers not only cable TV channels but also high-speed Internet connections, movies on demand, interactive shopping and more. On Thursday, the Federal Communications Commission rejected cable industry demands to scale back the transition to a new kind of box that separates the operators' proprietary security devices from other functions of the box. With cable operators required to provide a standardized security module for all advanced boxes, whether bought in stores or provided by the cable company directly, regulators hope a new market will blossom. Under the FCC's rules, first announced last year and mandated by the 1996 Telecommunications Act, separate security modules will be available in July, 2000 and cable operators will be barred completely from distributing any all-in-one boxes starting in 2005. The FCC action, along with a string of recent good news from quarterly earnings, analyst upgrades and corporate dealmaking, gave stocks of the leading set-top box makers a boost on Thursday. General Instrument Corp. (GIC - news) rose nearly $4 to $47.6875, setting a new 12-month high in trading on the New York Stock Exchange. Scientific-Atlanta Inc. (SFA - news) gained $2.50 to close at $39.3125 on the NYSE, also a new 12-month high. Now where is CUBE's new 12 mo. high? Even that isn't very high. Gemstar International Group Ltd (GMST - news), maker of program guide software, almost made a new 12-month high. The stock closed up $5.75 to $123.75 after rising as high as $127.25 earlier in the day on the Nasdaq. Microsoft Corp. (MSFT - news), which last week agreed to invets $5 billion in AT&T Corp. (T - news) for a non-exclusive right to supply set top box operating software to millions of AT&T cable customers, did not fare as well. The software giant's stock fell $1.375 to close at $79.125 on the Nasdaq. Despite the latest rulings, the development of competition remains uncertain, according to industry analyst Gary Arlen. Arlen said cable companies face a tough dilemma. On the one hand, the companies would love to get the expensive boxes off their balance sheets. But the companies have no interest in surrendering what is likely to be the gateway to a host of lucrative offerings in the 21st Century, Arlen said. ''The cable guys have a very split mentalitu,'' Arlen said. As a result, ''this story should have been further along already. This has not been a hurried process.'' Consumer electronics manufacturers and cable operators continue to negotiate over just how the new boxes will interact with cable networks. ''For consumer electronics, the standards have to be very exact,'' said Consumer Electronics Manufacturers Association director of technology policy Michael Petricone. ''On our end, we're doing everything we can to hasten the process.'' Petricone promised that a competitive market for boxes would drive down prices and bring many new features. ''The cable box that's on the set looks much like the box that was there 10 years ago,'' he said. Once competition develops, ''they're going to get cheaper and evolve new functions and features.'' Decker Anstrom, president of the National Cable Television Association, said the groups are making ''good prgress'' and are ahead of schedule to meet the July, 2000 deadline. Anstrom complained that the FCC's failure to change the 2005 deadline would harm consumers who did not want to buy their own boxes. He said the association would appeal the decision. FCC commissioners, however, appeared more worried about rooting out possible loopholes cable operators might exploit to thwart competiton. They promised to closely monitor developments to prevent that from happening. Commissioner Susan Ness said she feared operators could flood customer with new all-in-one boxes just before the 2005 cut-off. The transition was only meant to allow cable firms ''to draw down their inventories,'' she said. And FCC chairman William Kennard admonished firms not to use proprietary program guides to try and lock in customers. He said boxes should remain open and accessible to all competitors.