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New Visual Developing Broadband for Copper

By Larry M Edwards, Web Editor
Tuesday, 19 June 2001

SAN DIEGO — A new kid on the broadband communications block is New Visual Entertainment Inc., which is claiming to be able to effectively bridge the so-called "last mile" between office networks and high-speed optical fiber networks.
Yes, we've heard it all before. And, yes, the name is confusing. Until last year the publicly held company was in the film production business, and according to a recent filing with the Securities and Exchange Commission (SEC), a movie is scheduled to be released sometime next year.

But New Visual, facing stiff competition in the special-venue, short-film market, did an abrupt about-face last year with the acquisition of New Wheel Technology in a $6 million stock deal. New Wheel was based in Silicon Valley, but has since relocated in Pleasanton, Calif.

The now wholly owned New Wheel subsidiary is making the transition from research to product development. Its technology, which enables high-speed data transmissions over existing copper telephone cables, has been dubbed "Cu@OCx" (pronounced "copper at OCX", and loosely translates as "optical fiber speed over copper lines").

Field trials are to begin early next year, and product sales are expected within 18 months, says Rich Wilson, New Visual's vice president of marketing and business development.

Wilson acknowledges this a tough time to be entering the telecommunications market and that people are skeptical of his company's claims, but he says several major telephone companies are aggressively encouraging product development.

Although he wouldn't identify the company, Wilson says one of the telephone companies has been eyeing the technology development for more than a year, and has agreed to sponsor the field trials.

"We probably won't be taken seriously until [the trials begin]," Wilson admits.

"We're still in a development phase, so it's not like we're knocking on doors trying to sell product right now anyway," he adds. "But by the time we're ready, we still feel like there will be such a vast improvement over the technologies available that we're going to have some success."

New Wheel has developed proprietary broadband transmission technology purported to deliver data at 52 megabits per second (mbps) over copper lines for a distance of 9,000 feet — almost two miles.

Wilson says the 52 mbps transmission rate was independently verified by Lucent Technologies in February, and is about a nine-fold improvement over current very high digital subscriber line (VDSL) service. The best the phone companies can achieve at this time is 52 mbps over 1,000 feet, he adds.

In geek-speak, Cu@OCx uses a patent-pending multi-channel modulation technique the company has named group frequency modulation (GFM). The technique addresses the problems that have typically limited effective bandwidth and distance capability of other high-speed transmission technologies, such as discrete multitone (DMT) or single-carrier modulation (SCM), the company says.

The equipment, to be supplied to telephone companies, is the rough equivalent of a high-speed modem or multiplexer, depending on whether there is a single tenant or multiple tenants. Units will be installed in Central Offices and on customer premises.

The first installations will be aimed business-class users who need a lot of bandwidth, but don't have fiber available and need a lower-cost alternative to installing fiber, Wilson says.

With its new direction, the company is also assuming a new name — New Visual Corp. — pending shareholder approval at the company's annual meeting next week.

Stock in the company, public since 1996, trades over the counter (OTCBB: NVEI) and closed at $2.26 a share, down 3 cents. The 52-week range is $1.70 to $15 a share.

In its latest SEC report, filed last week, New Visual reported no revenues for the six months ended April 30. Revenues for the six months ended April 30, 2000, were $6,800.

Total operating expenses decreased to $1.9 million for the six months ended April 30, from $8.8 million for the same period in 2000. The decrease was principally related to $1.8 million in compensatory element of stock issuances, plus a $6 million charge to earnings for the New Wheel acquisition, and the $50,000 acquisition of Impact Pictures in 2000, according to the SEC filing.

The company reported one-time charges related to $500,000 in amortization of unearned financing fees and $1 million paid to settle litigation involving the acquisition of New Wheel.

The company issued 250,000 shares of common stock valued at $1 million for the Feb. 16 settlement with San Francisco-based Astounding.com Inc. and Jack Robinson. Robinson had led New Visual to wrongly believe he was a principal in New Wheel, but still insisted on receiving a finder's fee once he was no longer a middleman in the transaction, Wilson says.

Web site: www.newvisual.com


Contact the writer: [e-mail]




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