Telecommunications Industry News
Qwest to Settle SEC Case for $250 Million
September 13, 2004
A union official from Qwest Communications said that the company agreed to settle fraud allegations by federal regulators for $250 million. Neither the company nor the US SEC would confirm the story. The SEC began investigating the Denver-based company in 2002, looking specifically at swaps in which Qwest sold items to customers around the same time those customers sold items back to Qwest; changes in publication dates for its phone directories that allowed revenue from the directory unit to be booked in a certain quarter; and when revenue was booked on long-term transactions involving optical capacity assets.
Qwest restated its financial results for 2001 and 2002, lowering revenue by about $2.5 billion, and former chief executive Joe Nacchio stepped down in June 2002. He has denied wrongdoing, but the Wall Street Journal is reporting that the staff at the SEC will recommend civil action against Nacchio concerning the accounting problems. Qwest earlier this year put up about $500 million in reserves for ongoing litigation in shareholder lawsuits and securities investigations. The SEC and some shareholders have sued former and current employees.
Cisco Set to Introduce new Access Routers
September 13, 2004
According to a story on C|Net News.com, Cisco Systems is set to introduce faster, more feature-laden versions of its access routers, in an attempt to fend off competition from rivals Juniper Networks and 3Com. Cisco's new 1800, 2800, and 3800 WAN access routers feature embedded security measures and support for VoIP. The routers are targeted at the small- to mid-sized business market or at enterprises with branch operations, and are typically sold through carrier clients.
FCC Releases Report on Broadband Access
September 10, 2004
A divided FCC adopted and released its fourth report on the availability of advanced telecommunications in the US, concluding that its mandated goals to spread the availability of high-speed access for all Americans was being met. According to the FCC, the report demonstrates slow but steady progress in closing the gaps in access for traditionally underserved areas, rural parts of the country, low income people, and those with disabilities.
The report also documents the development of new access technologies, including Wi-Fi Internet access hotspots, WiMax, 3G services, PANs, satellite technologies, FTTH, and broadband over power lines. Some highlights of the report were: subscribership to 200K-bps or higher services more than tripled since the FCC’s last report, from 5.9 million lines in June 2001 to 20.3 million lines in December 2003; high-speed lines almost tripled from June 2001 to December 2003, from 9.6 million lines to 28.2 million lines; and cable modem and ADSL service providers provide the vast majority of advanced services lines, with cable representing 75.3 percent, ADSL representing 14.9 percent, and other technologies representing 9.8 percent in December 2003.
Only 6.8 percent of the zip codes in the US reported no high-speed lines, compared to 22.2 percent in June 2001. The percentage of zip codes reporting four or more providers of high-speed lines increased from 27.5 percent in June 2001 to 46.3 percent in December 2003. While the report sounds positive, the US ranks 11th in the world in terms of residential broadband penetration with its 6.9 subscribers per 100 residents, ranking behind South Korea with 21.3 per 100, Hong Kong at 14.9 percent, Canada at 11.2 percent, Taiwan at 9.4 percent, Iceland at 8.4, and five other countries.
Verizon Sells Canadian Directory
September 9, 2004
Verizon Communications signed an agreement to sell its directory firm in Canada for $1.54 billion to Bain Capital. In 2001, Verizon purchased the business from Telus for $520 million. SuperPages Canada is the second-largest directory publisher in the country and is the Telus phone book publisher. After the sale to Bain is completed, Verizon Information Services will still use the SuperPages brand for directory services, including online directories; however, the company is focusing more on US operations, which are creating yellow pages advertising options for cell phones and the Internet.
Nortel Signs With Vodafone
September 9, 2004
Nortel Networks signed a contract to built an advanced wireless network for Vodafone's operator in Spain. Cinco Dias, a business newspaper in Spain, reported that the company would be building approximately 5,000 stations and delivering switching equipment for a third-generation network that would cover the entire country. Nortel said that the contract will last until March 2007, but it did not release financial details. Cinco Dias reported that the value of the contract was one billion euros, but the Globe and Mail reported that the price was incorrect.