Tuesday, July 29, 2014
Inquirer Daily News

POSTED: Friday, July 11, 2014, 10:55 AM

"Unfortunately for Comcast," despite the "powerful lobbyists" working to push approval of its planned acquisition of Time Warner Cable, the Federal Communications Commission has put together a merger review team that don't look likely to "rubber stamp" anything, writes bond analyst Dave Novosel in a report to clients of Gimme Credit LLC, new York.

Team includes:
   - William Rogerson, Northwestern U economist and ex-FCC Chief Economist, who opposed the Comcast/NBC deal on grounds of "significant competitive harm, while pay TV customers would face huge increases"
   - Hilary Burchuk, "who represented the Justice Department in its lawsuit against the proposed merger of AT&T and T-Mobile," which the goernment ultimately rejected -- "the position several critics have taken with regard to the Comcast acqusition of TWC"

That adds up to "intense scrutiny." Novosel still thinks the deal will be approved -- with conditions: more customer divestitures, "additional net neutrality promises," guaranteed content.

POSTED: Friday, July 11, 2014, 10:20 AM

Computer parts maker Vishay Intertechnology Inc., Malvern, says it has agreed to pay shareholders $205 million ($Taiwan 139 a share) to buy Taiwan-based optoelectronics maker Capella Microsystems Inc., deal scheduled to close in September.

"Capella makes optical sensors such as ambient light sensors and proximity sensors and we think will be a good addition to Vishay's portfolio," analyst J. Steven Smigie told clients of Raymond James Equity Research in a report this morning. Capella has a comfortable 30% operating profit margin; the sale is priced at 2.5X this year's sales, in hopes Capella will gain clients in Korea's electronics assembly industry; Vishay will likely keep Capella's bosses and staff.

Smigie adds that "Vishay's existing R&D efforts in the opto area" makes Capella "a good set of technology to add, as sensors are being adopted into multiple new end-markets at an increasing pace.

POSTED: Thursday, July 10, 2014, 1:54 PM

New Jersey economic development officials have approved a $26 million a year, 10 year taxbreak for Holtec, a Marlton power plant parts maker that wants to start building nuclear power plants, so it can build a plant employing 235 new and 160 relocated workers in Camden, reports my colleague Maddie Hanna here.

Holtec currently makes heat exchangers, nuclear fuel containers and other large parts at an old Westinghouse factory near Pittsburgh and a second facility in Ohio. It is building another plant in an export zone in India, and has a proposal to add a factory in South Carolina. Holtec is developing what it calls the model SMR-160 small nuclear reactor with help from PSEG, New Jersey's dominant utility, which hopes to install the units at its Hope Creek-Salem nuclear facility, if federal nuclear officials approve its plan on schedule next year.

The new factory would employ hundreds making parts for the nuclear plants as well as more conventional parts. The state says Holtec won't handle nuclear fuel in Camden. More from Julia Terruso and Maddie Hanna here; more on Holtec here.

POSTED: Thursday, July 10, 2014, 11:21 AM

In 2011, Brandywine Property Trust bought 1919 Market Street -- "one of the central business district's most desirable development sites," as Timothy B. Monahan of office tenant rep Savills Studley puts it in a new report, "Philadelphia's Trophy Office Market." Once slated for high-rise offices, later for housing, after 3+ years with Brandywine, it's still a fenced, grassy field, amidst the city's busiest office canyon, two blocks from bustling Rittenhouse Square.

Which is smart -- from the landlord's point of view, Monahan adds: "This purchase allows Brandywine to control another key place on the board and eliminates the opposition from seeking to develop competing office space along this key office corridor. This should add value and vitality to (Brandywine's office) buildings across the street at 1900 Market and Commerce Square." Monahan notes that Brandywine's nearby University City properties at 3020 Market St., the former Post Office, FMC Tower and Cira Center cement the Radnor-based landlord's "dominance in the Philadelphia real estate Monopoly board."

What does Brandywine have planned for 1919 Market, eventually? In June 2012 Brandywine proposed a 292-unit apartment high-rise, plus 55,000 sq. ft. of stores, with backing from neighbor Independence Blue Cross. With apartment towers blooming across central Philadelphia, and more planned, this one hasn't started yet. "A residential project is still planned with an anticipated commencement for fall 2014," Brandywine spokeswoman Marge Bocciuti assures me.

POSTED: Thursday, July 10, 2014, 9:37 AM
An artist's rendering of the proposed data center and power plan on the University of Delaware's campus. (Illustration from datacenters.com)

The University of Delaware says "it has terminated its lease agreement with The Data Centers, LLC, putting a halt to TDC’s plans to develop a data center" and natural gas power plant on the Science, Technology & Advanced Research (STAR) Campus adjoining the partly state-backed Newark, Del. school, after a committee of UD officials and profs "unanimously" voted against the project. Statement here, report link below.

According to UD, administrators and professors in the Working Group assigned to review the proposal "concluded that the proposed facility, which included a 279-megawatt cogeneration power plant, is not consistent with a first class science and technology campus and high quality development to which UD is committed. The findings are detailed in the Group’s report," posted on the UD website. 

Data Centers boss Eugene Kern didn't immediately respond to phone and email messages to his Paoli office. The project had been supported early on by Gov. Jack Markell, UD President Patrick Harker, legislators from both parties, and construction contractors and unions who hoped to build the $1 billion-plus plant, but opposed by Newark neighbors and a unanimous Spring vote of the UD faculty senate, who questioned the large natural gas-burning electric power plant the project's backers included in their proposal.

POSTED: Wednesday, July 9, 2014, 10:40 AM
(istock photo)

Genetically-modified roosters aren't fathering chicks like their more-natural predecessors, and that's driving up the price of chicken, writes Reuters' Tom Polansek here. Highlights: 

"The world's largest chicken breeder has discovered that a key breed of rooster has a genetic issue that is reducing its fertility, adding to problems constraining U.S. poultry production and raising prices... Aviagen Group's standard Ross male [fathers] as much as 25 percent of [U.S.] chickens raised for slaughter... Sanderson Farms, the third-largest U.S. poultry producer and one of Aviagen's largest customers, said it and Aviagen [have measured and tested] a decline in fertility before determining a genetic issue was at the root of the problem." Aviagen is owned by Germany's EW Group.

The genetically-modified roosters got fat quickly, but "did not breed as much," according to Mike Cockrell, Sanderson's chief financial officer. Also, more of the eggs were duds: "The fertilization went way down, and our hatch has been way down." Aviagen "sent a team of scientists to Sanderson last autumn to study the issue and has acknowledged that an undisclosed change it made to the breed's genetics made the birds 'very sensitive' to being overfed, Cockrell added.

POSTED: Tuesday, July 8, 2014, 3:37 PM
(istock photo)

State agencies can save money by shrinking regional offices, working from home, cutting back on taxpayer-owned cars, and shifting from old-fashioned U.S. Mail to local secure cloud computing, says Eugene DePasquale, the state's elected auditor general. He says it worked for him: The auditor's yearly budget has fallen to $42 million, from $51 million in 2008, including more than $1.2 million in savings from the past year.

DePasquale's recent cuts included: reducing the number of cars his office operates by nearly 2/3, to 83; shutting the New Castle and Strawberry Square (Harrisburg satellite) offices and Harrisburg leased parking spaces; moving the Scranton office into a government building from leased private space; and "downsizing" the Erie and Pittsburgh offices. Also, "we shifted from PeopleSoft into the cloud," taking advantage of the Commonwealth’s secured Microsoft-based SAP shared services, backed by servers at Reading-based Omega Systems, supporting electronic transmission of audits to reduce paper from auditors working at home, via secured Wi Fi hotspots.

Result: "we're much more mobile on a larger scale," DePasquale told me. Who watches the watchers? "Each audit now has a certain amount of budgeted hours. We determine if they've completed their audit in appropriate hours." Would this kind of reorganization scale for other government agencies? "Any agency where you have people spending a lot of time in the field, this could absolutely be replicated."

POSTED: Tuesday, July 8, 2014, 2:04 PM
A map of Comcast's wifi coverage from its web site, wifi.comcast.com.

Although Comcast and other cable companies are rapidly spreading "Wi Fi deployment" of high-speed Internet service, and Comcast has told the FCC it is weighing a strategy to use its "grid of Wi-Fi hotspots [in users' homes and businesses] as a launching point for a national 'Wi-Fi first' mobile wireless service," Wi Fi "will never be able to provide the ubiquitous, seamless coverage provided by cellular service," predicts analyst Paul de Sa, Ph.D, in a report to clients of Bernstein Research. 

Wi Fi keeps growing in Septa stations and other places "where a large amount of traffic is delivered," but it can't beat cell phones "for truly mobile usage," in travel and shopping, where smartphone access and reliability are worth a premium, he adds.

By de Sa's calculation, the cable companies would need a billion "hotspot" Wi Fi transmitters (customers or businesses) to guarantee service as reliable as today's wireless phones. "Cable has neither the motive nor the ability to be a head-to-head competitor with the cellular carriers," da Sa writes. "We do not believe it would make business sense for Comcast to disrupt their current (limited) competition with AT&T and Verizon by going head-to-head" for the wireless companies' "core mobile voice-and-data business, potentially triggering a mutually-destructive price war."

About this blog

PhillyDeals posts raw drafts and updates of Joseph N. DiStefano's columns and stories about Philly-area finance, investment, commercial real estate, tech, hiring and public spending, which he's been writing since 1989, mostly for the Philadelphia Inquirer.

DiStefano studied economics, history and a little engineering at Penn, taught writing at St. Joe's, and has written the book Comcasted, more than a thousand columns, and thousands of articles, and raised six children with his wife, who is a saint.

Reach Joseph N. at JoeD@phillynews.com or 215 854 5194.

Joseph N. DiStefano
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