Harmonic announced on Thursday, May 6 an agreement to acquire video server and storage infrastructure company Omneon in a stock-and-cash deal worth $274 million. Harmonic has agreed to pay $190 million in cash and approximately 17.1 million shares of its common stock as part of the transaction. The acquisition, which must still be approved by regulators and shareholders, is expected to close in the third quarter.
Omneon is a highly-recognized name in the broadcast and production space. It has regularly played key roles in important broadcast events like the Olympics. Customers include BBC, BSkyB, CBS, Comcast, Discovery Communications, EchoStar, NBC Universal, News Corporation, Televisa, Turner Broadcasting System and Viacom and many call letter broadcasters. Harmonic claims that, combined, the two companies have 2000 customers across more than 100 countries. About two-thirds of Omneon’s revenues come from non-U.S. customers.
Harmonic has purchased several video companies over the past several years. The list includes Entone’s VOD business for $45 million in 2006 and Rhozet’s transcoding technology in 2007.
Congressman issues bogus letter praising FCC’s action
Rep. Jay Inslee, D-WA, was caught circulating on Capitol Hill a letter signed by him expressing gushing support for FCC Chairman Julius Genachowski's controversial proposal to regulate ISP’s broadband delivery. One problem: Although he signed the document as the author, he didn’t write the laudatory letter.
In a post from techdailydose.com, we learn that the letter was actually written by Ben Scott who is policy director of Free Press, a media watch group. Scott is head of the group’s “policy team in Washington.”
The letter Rep. Inslee distributed to his elected colleagues contained MS Word metadata showing that the letter actually came from Scott’s computer and his organization.
While advocacy groups and corporations provide guide letters and even write legislation for lawmakers, the authors usually remove all traces of their authorship. Scott apparently forgot to remove the metadata from the Word document before he gave it to Rep. Inselee for presentation as his own work.
The letter states, “As legislators committed to expanding access to open, affordable, world-class broadband networks, we have a very strong interest in promoting policies that can support these goals."
In truth, the author was not a “legislator” nor an elected representative, but merely a paid hack for an advocacy group.
Trust me, I will not regulate the Internet
FCC Chairman Julius Genachowski is spinning hard to kill any perception that he will "regulate the Internet" when his agency moves to change how it controls broadband providers. As part of the chairman’s National Broadband Plan, he plans to move ISP delivery into Title II-like (lite) control and regulations.
Genachowski used a YouTube video to claim his approach "does not involve regulating the Internet. It would preserve the freedom and openness of the Internet. It flows from a deep recognition that one of the Internet's greatest strengths — its unprecedented power to foster innovation and free speech — stems from the absence of any central controlling authority, either public or private. The approach should not and does not involve regulating the Internet."
In Washington speak, the FCC chairman called his plan a "third way" approach to police phone and cable companies. Genachowski is attempting to make the distinction that the FCC would only regulate broadband providers … but not the Internet or content. The FCC claims there is a distinction between the Internet, i.e. content, and physical access. Genachowski says that only broadband access, "the transport component of broadband services such as DSL or cable modem services that consumers subscribe to from their phone and cable companies in order to access the Internet," would be regulated.
That distinction is being challenged by many others. Said AT&T, "We believe this is without legal basis. Make no mistake — when it regulates the networks that comprise the Internet, the FCC is in fact, and for the first time, regulating the Internet itself ... We feel confident that if the FCC proceeds down this path, the federal courts will ultimately reach the same conclusion."
The NCTA said, “Nothing has occurred either in the marketplace or in broadband technology to change the fact that our broadband services are ‘information services,’ and not ‘telecommunications services’ that are regulated under a model designed for a previous era and for very different services."
Verizon had the most pointed response to Genachowski’s move: "We believe that the chairman’s stated approach is legally unsupported."
If industry statements didn’t shake Genachowski’s confidence, perhaps his own commissioner’s comments should. The FCC's two Republican members, Robert McDowell and Meredith Baker, disagreed with the chairman’s viewpoint. They said any changes in ISP regulation should be made by Congress and not the FCC. Both claimed that such action by the commission will likely lead to another defeat in the courts for such FCC action.
The Republicans issued a joint statement saying, "This proposal is disappointing and deeply concerns us. It is neither a light-touch approach nor a third way. Instead, it is a stark departure from the long-established bipartisan framework for addressing broadband regulation that has led to billions in investment and untold consumer opportunities."
Genachowski’s fellow Democrats Michael Copps and Mignon Clyburn embraced the chairman’s statements. Said Copps, “We should welcome this step toward bringing broadband back under the Title II framework where it belongs."
Clyburn issued a press release saying, "If we truly support universal access to broadband ... then Title II authority is essential.
The fact that the chairman has been able to find a way to accomplish this without unnecessary and burdensome regulations on industry means a victory for all parties."
Combined, these statements make a quick resolution on the matter unlikely.