FIVE HOLLYWOOD STUDIOS TO CREATE INTERNET ON-DEMAND DIGITAL MOVIE SERVICE
Metro-Goldwyn-Mayer Studios, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. entered into a joint venture to create an on-demand movie service for U.S. broadband Internet users.  The service will distribute digital films through an IP system, and other delivery methods will be explored after the initial launch.  Movies, which will include recently released films and content from film libraries, will be available to the service on a non-exclusive basis.  The service will also be available to film producers and distributors who are not part of the joint venture.  Each content provider will independently determine its own release timing and pricing strategies.  The service will be accessible by personal computer, and movies may be viewed on computers or on a television connected to a PC via an S-video cable or wireless connection.  The service will include copyright protection and Digital Rights Management software.  The studios said that a launch date would be announced at a later time.
August 16, 2001

AOL TIME WARNER FOCUSES ON INTERACTIVE VIDEO, IP TELEPHONY
AOL Time Warner created a new Interactive Video division, which will develop interactive television and advanced cable services including Video-on-Demand, Subscription Video-on-Demand, and cable IP telephony.  The division will work closely with Time Warner Cable and America Online.  http://media.aoltimewarner.com/media/press_view.cfm?release_num=55252122
AOL Time Warner, August 16, 2001

• As of June, AOL had more than 30 million members, and Time Warner Cable had more than 12.7 million customers, including 2.5 million digital cable subscribers and 1.4 million Road Runner cable modem subscribers.

ALCATEL TO SUPPLY MULTISERVICE EDGE SWITCH TO BEIJING TELECOM
Alcatel won a multi-million dollar contract to provide Digital Data Network (DDN) solutions to Beijing Telecom, a subsidiary of China Telecom.  The project includes deployment of the Alcatel 7470 Multiservice Platform (MSP), which functions as a multiprotocol, multiservice edge switch that aggregates traffic from all multiplexers and carries X.25, Frame Relay, leased line, ATM, MPLS and IP traffic.  Alcatel’s 3600 MainStreet systems will also be installed.   Financial terms were not disclosed.  Recently, Alcatel also delivered its DSL equipment to Beijing Telecom.  http://www.alcatel.com
Alcatel, August 16, 2001

AHEAD COMMUNICATIONS ACQUIRES GDC’S APEX ATM DIVISION
Ahead Communications Systems, a supplier of broadband access solutions based in Vienna, Austria, has acquired General DataComm’s APEX ATM division for $20 million, comprised of $3 million in cash and a $17 million note, which matures in one year.  Ahead Communications said GDC’s APEX ATM switches complement its own DSL-based access products, enabling it to provide a solution extending from the core to the customer premise.  The APEX team includes about 100 employees.  http://www.aheadcom.com  
Ahead Communications Systems, August 16, 2001

TDSOFT AND POLYCOM EXTEND VODSL PARTNERSHIP WITH ELCP SUPPORT
Polycom has successfully completed the integration of Tdsoft's ELCPCore standards-based BLES-CCS/ELCP signaling software stack, and carried out ISDN and POTS Voice over DSL (VoDSL) interoperability with Tdsoft's VoNGATE Voice Access Gateway.  ELCP (Emulated Loop Control Protocol) is a message-based protocol that specifies the mechanism where V5.2-based signaling messages are exchanged between the VoDSL Gateway and IAD (Integrated Access Device) to support both POTS and ISDN voice over ATM.  The companies said standards-based ELCP offers significant advantages, including dynamic bandwidth allocation and concentration capabilities, support for POTS and ISDN over ATM, support for national parameters, and reliable connectivity between the VoDSL Gateway and IAD.  Polycom offers a G.SHDSL IAD that integrates voice and data services, as well as IADs that address the widespread use of BRI-based telephones in European countries.  http://www.tdsoft.com  http://www.polycom.com
PolyCom, August 16, 2001

ENTERASYS LAUNCHES SOHO VPN GATEWAY
Enterasys Networks introduced two VPN gateways targeted at the small office home office (SOHO) market.  The first model offers two 10BaseT Ethernet ports for connectivity to any Internet access device.  The second model includes a 4-port 10BaseT/100BaseTX Ethernet hub and embedded hardware acceleration for more than 3 Mbps 3DES performance. Both models feature an IPSEC auto-configuration feature for one-button VPN connectivity. The products offer support for up to 25 concurrent VPN tunnels and PPPoE.  http://www.enterasys.com 
Enterasys Networks, August 16, 2001

QUALCOMM COMMITS $300 MILLION TO NEXTWAVE
QUALCOMM announced a commitment to make a $300 million strategic investment in NextWave Telecom, which is deploying a CDMA2000 wireless network.  QUALCOMM will also help facilitate NextWave's deployment of a next-generation, nationwide CDMA2000 1X/1xEV wireless network in the US.  QUALCOMM’s investment is in connection with the equity financing provided for in NextWave's plan of reorganization that was filed on August 6, 2001, and is subject to NextWave's successful consummation of its plan of reorganization.  http://www.qualcomm.com/ 
QUALCOMM, August 16, 2001

CIENA REPORTS REVENUE UP 7% TO $458 MILLION, REDUCES FORECAST
CIENA reported revenue of $458 million for its third fiscal quarter ended July 31, 2001, including revenue from six new customers.  The figure represents 7% revenue growth over the preceding quarter and 96% growth over the same period last year.  Adjusted net income was $58 million, or $0.17 per diluted share.  CIENA now has 55 revenue generating customers, 45 of which contributed to the company’s revenues during the most recent quarter.  During a conference call, the company revised and reduced its financial guidance, saying that Q4 revenue is expected to decline 12-20% from the past quarter, and revenue growth during 2002 should “approach the early teens.”  The company also announced that Alnoor Shivji, head CIENA's Metro Switching Division (formerly Cyras), has left CIENA.  Senior vice president Jesús León will replace him.  http://www.ciena.com/news/2001/08/08.16.2001pr.asp 
CIENA, August 16, 2001

• In its earnings conference call, CIENA said that it expects sales of long haul optical equipment to be flat or decline in 2002.  The company believes that the market for core switching products will double in 2002, and its CoreDirector product could make up 35% of total 2002 CIENA revenue.  It anticipates growth in the metro transport & switching category, which could represent as much as 15% of the company’s 2002 revenue.  The earnings conference call is available at: http://www.ciena.com/investors/highlights/conferencecalls/index.asp?
  eid=UB8Sfl1L1RGNyADQt2/U2A
• Alnoor Shivji was co-founder and CEO of Cyras Systems, which CIENA acquired for $2.6 billion in stock in December 2000.  Following the acquisition, Shivji headed the Cyras/CIENA multi-service access and switching division.
• Cyras was developing a data-optimized SONET transport and switching platform for metro networks that is designed to incorporate the functionality of digital cross-connects, SONET Add/Drop Multiplexers, ATM service access multiplexers and switches, Frame Relay access switches, DSLAMs, DWDM wavelength adapters and MPLS switches in a single network element.  The design offers granularity from fractional DS-1 to multiple OC-192s.

COVAD FILE FOR BANKRUPTCY PROTECTION
Covad Communications followed through on plans announced last week to file for Chapter 11 bankruptcy protection.  Holders of a majority of Covad's bonds have agreed in writing to the terms of a debt repurchase that, if approved by the court, would eliminate Covad's $1.4 Billion bond debt.  Covad says that it will continue to provide DSL services to its customers during the bankruptcy proceedings.  http://www.covad.com/ 
August 15, 2001

• Last week, Covad announced its plans to file for Chapter 11 and negotiate with its bondholders to eliminate approximately $1.4 billion of existing debt.  Under the terms of the proposed restructuring, the bondholders would exchange their bonds for a combination of cash and preferred stock.  The cash portion consists of $0.19 on the dollar for the face amount of the accreted value of both high-yield and convertible bonds.  In addition, the company expects to return all of the approximately $26.5 million in restricted cash reserved to the holders of its 12.5% bonds.  After a cash payout of $283 million, Covad would have approximately $250 million in cash, which is expected to fund the company's operations into the beginning of 2002.  Covad believes it would need an additional $200 million more in cash to get to a positive cash flow position, which it forecasts by Q3 2003.