U.K.-based set-top box maker Pace is buying U.S. counterpart 2Wire in a $475 million cash deal that will give Pace better access to the Tier 1 U.S. telco market--especially AT&T's U-verse deployment--expanding upon its already solid position with cable and satellite operators in North America.

The proposed deal likely will be completed during the fourth quarter, following approval of Pace and 2Wire shareholders, as well as regulatory approvals.

Acquiring 2Wire, which currently is owned by a consortium including Alcatel-Lucent, AT&T, Telmex, Oak Investment Partners, Meritech Capital Partners, and Technology Crossover Ventures, would make Pace the number one provider of telco residential gateway devices in the U.S. and the number three provider globally. It already ranks as the number one global digital set-top box company, according to IMS Research.

"Pace is an excellent strategic fit for the 2Wire business and will enable us to take our products and services to the next level of their development," said Pasquale Romano, CEO of 2Wire. "The combined customer base, engineering capability and product breadth of Pace and 2Wire make this a compelling transaction for our customers, our employees and our end users globally."

2Wire products and services include residential gateways, multi-service media platforms, remote management systems, value-added services, customer support, and end-to-end integration and professional services. 2Wire customers are leading broadband providers throughout the U.S., Canada, Latin America, Europe, Australia, and Asia, including AT&T, Bell Canada, Telmex, BT, SingTel, and others.

The deal gives Pace deep leverage in the telco marketplace.

"This acquisition will strengthen our Americas business, extending Pace's U.S. market coverage with entry into the Tier 1 telco market," said Neil Gaydon, Chief Executive Officer of Pace. "2Wire, with its expertise in the broadband residential gateway market, will enable us to address a full range of U.S. operator requirements."

Gaydon said the 2Wire acquisitions will help further Pace's home entertainment convergence strategy development and introduce deep client relationships with important customers including AT&T.

"We admire 2Wire's technology and the position they have built as an acknowledged leader in the telco gateway market. We look forward to working together," he said. Pace has been in the marketplace for more than 25 years and counts among its clients some of the biggest pay-TV operators in the world including BSkyB, Time Warner Cable and some 100 other pay-TV operators.

For more:
- see this release

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It took two years, and a promise from AT&T(NYSE: T) CEO Randall Stephenson in May, to get AT&T's U-verse rolled out in Chattanooga. The company began offering the IPTV service today, part of its continuing expansion in Tennessee.

In May, at the company's annual shareholder's meeting in Chattanooga, Stephenson told attendees: "I had dinner with your mayor, and because of his commitment to open markets and competition, Chattanooga looks like an attractive place to invest capital."

AT&T will go head-to-head with Comcast, the nation's largest MSO, and existing fiber network operator EPB, a branch of EPB Power, Chattanooga's electric company.

U-verse is being expanded in Tennessee thanks to The Competitive Cable and Video Services Act of 2008, HB 1421. The law provides an environment that encourages new video providers, such as AT&T Tennessee, to invest in Tennessee to compete against incumbent cable providers. Tennessee was among a dozen states AT&T lobbied in an effort to open up the video franchise system on a statewide basis. The company spent a ton of money in the Volunteer State, in fact, it was one of the most extensive lobbying efforts in the state's history, with at least 20 lobbyists putting $180,000 into lawmakers', their PACs' or party's campaign chests.

The regulations, signed into law in 2008, allows AT&T to operate under a statewide franchise agreement rather than under local agreements.

Consumer activist groups have been less-than-thrilled with the early rollouts of U-verse in other parts of the state, like Nashville in December 2008, and Memphis, which saw service arrive last summer, with little of the pricing competition AT&T has promised during its lobbying. In October, U-verse launched service in East Tennessee with a rollout in Knoxville.

"This investment by AT&T is great news for Chattanooga, as it brings exciting new technology to our community," said Rep. Gerald McCormick. "As Tennessee policymakers, our goal was to increase investment throughout the state and give consumers more choices and innovative new services and I'm honored to help AT&T celebrate this launch."

For more:
- see this release
- and this Chattanooga Times Free Press article

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Digital media services company Avail-TVN says it will provide MPEG-4 linear television transmission services, PPV Channels and VOD to NewWave Communications. The MSO will be the first multi-system cable company in the U.S. to sign on for Avail-TVN's full suite of services.

Landing NewWave, which serves more than 115,000 customers in Arkansas, Illinois, Kentucky, Missouri, South Carolina and Tennessee, is a big win for the company, Avail-TVN CMO Brian Matthews told FierceIPTV, as well as a proof-point for its merger. Avail Media and TVN Entertainment combined in 2009.

Avail-TVN will provide NewWave with a mix of HD linear networks, a comprehensive VOD offering, and PPV services. By combining the services under a comprehensive affiliation with Avail-TVN, NewWave is increasing efficiencies, improving quality of service and providing an optimized customer experience.

"Our focus on MSOs (as customers) predates the merger," Matthews said. "As operators face continuing bandwidth pressure, our MPEG-4 solution is a low-cost, fast-to-market alternative for them. From a competitive standpoint, they have a need for both HD and VOD to compete with satellite providers who are offering this to customers."

The HD linear channel service will be provided in MPEG-4 format, allowing NewWave to maximize bandwidth efficiency immediately, while providing a transition path to an all-MPEG-4 service in the future.

Avail-TVN also will provide NewWave with a full suite of managed services including licensing, marketing, royalty processing, transport, and live-to-VOD services for both linear and on demand content packages.

NewWave will have 24/7 access to Avail-TVN's online tracking and reporting tools including ADONISS and ViewTrak--which offers a customized online dashboard for tracking VOD usage, tools for linear and VOD advertising and dynamic menu management.

NewWave customers are in Kentucky, Illinois, southeast Missouri, northeast Arkansas and western Tennessee. The company provides cable TV, high-speed broadband and data services and telephone service specializing in smaller and mid-sized communities. It's headquartered in Sikeston, Missouri.

For more:
- see this release

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