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9 January 2008

Products, Partnerships and Deals

The Federal Trade Commission (FTC) has now cleared Google’s $3.1 billion acquisition of online advertising company DoubleClick of any anti-trust element. The European Union still has to give the deal clearance but that is looking more and more like a formality.

The DSL Forum has just announced its latest Technical Report which is supposed to standardize on set top approaches for IPTV and triple play services over VDSL2. In its next release, version 3.0, it will support remote management of set tops and attached storage devices, due late 2008.

The first market reaction to the EchoStar spinoff on Jan 1st was highly favorable, but since then, the combined value of the two companies, one dedicated to the Dish satellite TV network and the other to satellite technologies, has fallen. Their combined value leapt to a value of $18.9 billion, a rise of $2.5 billion on the day the deal happened. But although the technology company held a market capitalization of around $2.7 billion, there has been a big drop off in the value of DISH down to $13.7 billion, on stories of rival Comcast building out its network in DOCSIS 3.0 to offer higher speeds and more VoD capability, and in response to partner AT&T issuing a profit warning on softness in its consumer business.

Microsoft said this week that British Telecom would be among the first operators to use its Xbox 360 gaming console as a set top for its BT Vision hybrid IPTV system. It will launch the offering in mid 2008. BT also said that it has chosen Motorola as the lead supplier of its next-generation set-top for BT Vision for deployment in 2009. It is HD ready, and offers 40 DVB-T TV channels and 30 radio channels, and will record 80 hours of content. We don’t think Motorola has ever made a DVB-T device before, but they’re not very tricky.

Wi-Fi access point supplier Netgear said at CES it would bring new antenna technology for its 802.11n products market known as ‘metamaterial’ antennas and wireless routers with up to 8 metamaterial antennas in dual-bands, both 5 GHz and 2.4 GHz, will be launched for delivering HD video around the home. Each device it attaches to will need an additional antenna unit too.

Broadcom said at CES that it would release an advanced HD AVC/MPEG encoder/transcoder chip, the BCM70020, which lets PCs function as a multimedia gateway in the connected home. The device comes as a system-on-a-chip and lets users transfer audio and video content in real-time across several classes of consumer devices to and from the PC. The device is in 65 nanometer CMOS process and supports AVC, MPEG-2, VC-1, MPEG-4, and DVD playback and has a separate security processor.

Broadcom also announced at CES that it has a new reference design for HD optical disc players, as the BCM97440, built around the Broadcom BCM7440, currently shipping in universal players that play both Blu-ray and HD DVD disks. The new design incorporates complete software stacks but comes just as Blu-ray appears to have left HD DVD in the dust (see earlier story).

The soccer governing body UEFA has just announced that ARD and ZDF will be the official German broadcasters for UEFA EURO 2008, the European soccer championships held across Switzerland and Austria this Summer and they have both duly filed to carry the content on the new German DVB-H service, being built there by T-Systems with content partner Mobile 3.0, a company jointly owned by Mobiles Fernsehen Deutschland (MFD) and Neva Media. There will be no extra charge for the soccer games on a handset, but of course customers will have to subscribe to the service and get a DVB-H phone. The service may just be ready in time for the finals.

Germany’s television research institute, the GfK in Nuremberg, said that German viewing of television fell noticeably during 2007, especially for young people, who viewed 178 minutes of TV each day, down from 184 in 2006. The decrease is being put down to the time Germans spend at their home PCs.

Telefonica in Spain has launched a free advertising supported video-on-demand (VoD) service, called Terra TV on its internet TV platform. It will also allow some content sharing and has a potential reach of 9 million users.

The Carlyle Group was the company that emerged to buy the 35% holding that UK private equity group Cinven put up for sale in French cable operator Numericable before Christmas, for around €1 billion.

BSkyB has been definitively told now by the UK Competition Commission that it must reduce it holding in ITV, the leading UK independent broadcaster, from 17.9% to under 7.5%.

French mobile streaming company Streamezzo said this week that it has raised $22 million in a 3rd round. The money included a contribution from new investor National Technology Enterprise Company from Kuwait plus existing investors.

The French Government has signed the decree required to offer digital radio (using Digital Radio Mondiale) and T-DMB Audio in VHF band III and L band spectrum. Both standards can now be used to offer digital radio in France. The adoption of T-DMB Audio instead of DAB+, was due to France wanting to use some of the spectrum for TV and video, not just digital radio.

Mobile intellectual property researcher InterDigital interpreted a pre-Christmas English High Court judgment over patents as a win against Nokia, because one of its core patents, often called the 610 patent relating to dynamically ascertaining the right power level for handset radios, was considered essential for the WCDMA European standard for 3G. Nokia also withdrew its challenge to another patent, relating to pilot codes. The decision effectively preserves many of InterDigital’s existing license revenues. Nokia named 31 InterDigital patents as not essential to the standard. InterDigital withdrew nine patents, two are past their date for enforcement and it chose not to fight on another fifteen patents, but it won the rest.

The US satellite TV DISH network said it would increase its national HD channel count from 76 to 100 during 2008 and will add local HD channels in 65 new markets, bringing its HD local market total to 100.

On Demand Group (ODG), which set up a VoD service for the Virgin Media cable operator in the UK, has sold off part of the FilmFlex movie company back to partners Sony and Disney. ODG was bought by SeaChange International which provided the hardware for the VoD service and it sold off the FilmFlex interest for £7.4 million, just under $15 million.

NextWave Telecom has re-organized its business, combining its PacketVideo portable device software business into its WiMAX chip business. It has also merged TDD equipment vendor IPWireless with WiFi vendor Go Networks which will now begin transition to the Nextwave brand. This part of the business will focus on wireless infrastructure equipment and mobile broadcast network systems.

Vonage has ludicrously now survived intact from no less than four separate VoIP patent negotiations, the last being with Nortel Networks which has been settled, this time with a cross-licensing on VoIP patents with no money changing hands. Previous settlements involved paying AT&T $39 million, Sprint Nextel $80 million and Verizon $120 million. The Nortel patent issue related to features such as 911 calling and click-to-call.

Sirius Satellite Radio added 38% to its subscriber base in 2007, now up to 8.3 million customers and said that for the last quarter of 2007 it was cash positive. It added 2.3 million customers net throughout 2007, but is still intent on seeing through its merger with rival XM.

Motorola has signed a definitive agreement to acquire Soundbuzz a privately held, pan-Asian music provider. Terms of the transaction were not disclosed. The acquisition, which is subject to customary conditions, is expected to close in the first quarter of 2008. The company says Soundbuzz will allow Motorola to expand MOTOMUSIC beyond China, into India, Southeast Asia, Australia and New Zealand.

US video chip maker Zoran said that it has ready VaddisHD, a High-Definition Multimedia Processor platform, supporting both the Blu-Ray Disk and HD-DVD standards, and will be showing it at CES this week. VaddisHD enables multi-standard decoding including support for HD H.264, VC1, MPEG2, MPEG4, and AVS.

News Corp has bought a 14.6% stake in Germany satellite TV operation Premiere, paying €287 million for a stake previously owned by Unitymedia. The move makes it the company’s largest shareholder. This was really Unity cashing in on the stake it acquired as part of negotiations over TV rights to the Germany Bundesliga soccer. News Corp now has pay TV operations in Germany and the UK, Italy, Spain, Bulgaria and Poland, as well as in its original markets of AsiaPacific.

Apple has told European papers this week that it is on the verge of resolving the European Commission investigation into varied charging for iTunes stores across Europe, which broke EU rules. It is likely that Apple will announce some minor price changes this week to put the issue to bed.