November 1997

Electronic Commerce
NYT: Mail-Order Retailers Retreat on Tax Deal

Internet
NYT: From Jail and Boardroom, A Street Fight for the Internet
NYT: Tiny Web Broadcasters Return to Radio Days

Mergers
NYT: U.S. Acts to Bar Chancellor Media's L.I. Radio Deal

Legislation
TelecomAM: McCain and Burns Lay Out Agenda For 1998 Congressional Session

Telephone
TelecomAM: Bell Atlantic N.Y. to File LD Application with FCC In January
TelecomAM: Bell South Files with FCC For Louisiana InterLATA Authority
TelecomAM: Ameritech Clec Unit Files Tariffs In Missouri For First Local Foray
WSJ: Italy's New Telecom Alliances Face Tall Regulatory, Competitive
Hurdles

Advertising
NYT: All Aboard for Campaign for a Few Good Mentors

Content
NYT: A Hearing Focuses on Lyrics Laced With Violence and Death

** Electronic Commerce **

Title: Mail-Order Retailers Retreat on Tax Deal
Angry Customers Hinder Mail-Order Tax Accord
Source: New York Times (A1/C1)
http://www.nytimes.com/yr/mo/day/news/financial/mailorder-sales-tax.html
Author: David Cay Johnston
Issue: Electronic Commerce
Description: Angry customer calls have some mail-order retailers backing a
was from a deal reported in the NYT yesterday. In the proposed deal,
mail-order retailers would begin collecting taxes on out-of-state purchases
in return for protection against multiple audits, the right to run
promotions and the right to maintain a limited business presence outside of
a home state. The public reaction "makes it a lot less likely that there
will ever be an agreement," said H. Robert Wientzen, president of the Direct
Marketing Association.

** Internet **

Title: From Jail and Boardroom, A Street Fight for the Internet
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/110797kashpureff.html
Author: Peter Wayner
Issue: Internet
Description: A look at two central figures in the Internet domain name
controversy: Network Solution's Gabriel Battista and Eugene Kashpureff,
formerly of AlterNIC. The men have vastly different opinions about how the
domain name system (DNS) should be run: Mr. Battista prefers today's system:
his company has monopoly control on top-level domain names and is making a
good business of it. Mr. Kashpureff believes that there should be many
top-level domain registrars, all of them competing to offer the most
reliable service at the lowest prices. Long article includes Mr.
Kashpureff's protest act.

Title: Tiny Web Broadcasters Return to Radio Days
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/nation/110797nation.html
Author: Jason Chervokas & Tom Watson
Issue: Internet Content/Radio
Description: Radio is hot again. Not only are radio stations hot commodities
right now, but webcast "radio shows" are reminiscent of radio's early days.
The Wicca Pagan Broadcast Network, for example, has attracted a small, but
dedicated following among New Agers. "Just like a real Marconi station with
the exception of everything being on the Internet," boasts its creator,
Talisman Winterhawk. This show and thousands like it are springing up all
over the Web and -- because they don't use radio spectrum -- are not subject
to Federal Communications Commission regulation. (Article lists URLs for a
number of webcast sites).

** Mergers **

Title: U.S. Acts to Bar Chancellor Media's L.I. Radio Deal
Source: New York Times (C10)
http://www.nytimes.com/yr/mo/day/news/financial/radio-merger.html
Author: David Johnston
Issue: Mergers/Radio
Description: After approving more than 1,000 station mergers since passage
of the Telecom Act of 1996, the Justice Department filed suit to block one
for the first time. The department contends that Chancellor Media's plan to
buy four popular radio stations in Long Island would undercut competition,
drive up radio advertising rates, result in higher prices for consumers.
(Joel Klein, where have you been all my life?) Chancellor disagrees with the
department's conclusions: "The Government didn't mention the strong
pro-competitive benefit that you get from radio consolidation that allows
this group to compete more directly with other advertisers."

** Legislation **

Title: McCain and Burns Lay Out Agenda For 1998 Congressional Session
Source: Telecom A.M.---Nov. 7, 1997
http://www.capitol( at )cappubs.com/
Issue: Legislation
Description: Senators John McCain and Conrad Burns spelled out plans to
hold hearings in the Commerce Committee and the Communications Subcommittee
on local competition, Section 271 applications, slamming, satellites, cable
rates, and tower-siting issues in an effort to analyze the Telecom Act of
1996. McCain said, "I want to reach beyond the rhetoric to identify real
problems and develop real solutions, either through FCC oversight or, where
necessary, by legislation." McCain noted that the hearings are necessary due
to rising phone and cable rates, increasing consolidation and continuing FCC
rules.

** Telephone **

Title: Bell Atlantic N.Y. to File LD Application with FCC In January
Source: Telecom A.M.---Nov. 7, 1997
http://www.capitol( at )cappubs.com/
Issue: Long Distance
Description: Bell Atlantic N.Y. has put the New York PSC on notice that
it intends to petition the FCC for interLATA long-distance authority in New
York during the first week in January 1998. They also asked the PSC to
endorse its petition and confirm that Bell Atlantic has met the competitive
local checklist outlined in federal law. In its PSC filing, Bell
Atlantic says it has irreversibly opened New York's local phone market and
is meeting all requirements for offering long distance in its own region.
They said
they've signed 33 interconnection agreements with competitive providers in
N.Y., and have sold more than 108,000 lines wholesale to local exchange
resellers serving N.Y. businesses and residents. James Cullen, president and
CEO of Bell Atlantic's telecom group, said, "New York is the brass ring. The
$7 billion a year long-distance market is home to 61 of the Fortune 500
companies, and we must begin to serve it."

Title: Bell South Files with FCC For Louisiana InterLATA Authority
Source: Telecom A.M.---Nov. 7, 1997
http://www.capitol( at )cappubs.com/
Issue: Long Distance
Description: Bell South asked the FCC to approve its petition for
interLATA long distance service in Louisiana, one of the 2 states in its
region that
have endorsed BellSouth interLATA entry. The Louisiana PSC on Aug. 20
determined that the Bell company met open-local-market requirements of the
Telecommunications Act of 1996. Bell South said it has signed local
interconnection agreements with 87 competitors that "want to do business" in
Louisiana. They also mentioned that they've lost 10,000 customers to
wireline and wireless local competitors in New Orleans, Baton Rouge, and
Shreveport. AT&T called BellSouth's application "a campaign to wear down
policy makers."

Title: Ameritech Clec Unit Files Tariffs In Missouri For First Local Foray
Outside Region
Source: Telecom A.M.---Nov. 7, 1997
http://www.capitol( at )cappubs.com/
Issue: Competition
Description: Ameritech Communications Inc., the competitive local
exchange carrier (CLEC) business unit of Ameritech, has filed tariffs with
the Missouri PSC for Ameritech's first offering of local exchange phone
service to customers outside of its five-state region. Pending PSC approval
on filed tariffs for local toll and interstate long distance service, ACI
plans to
market packages of local, interexchange and wireless phone services in the
St. Louis area in early '98. ACI is a familiar name already, since it
provides local exchange service to 500,000 customers in the Illinois portion
of St. Louis's metro area.

Title: Italy's New Telecom Alliances Face Tall Regulatory, Competitive Hurdles
Source: Wall Street Journal (B16B)
http://www.wsj.com/
Author: Jennifer L. Schenker
Issue: International
Description: A series of setbacks is roiling the telecom alliances
emerging in Italy. Delays in the issuing of Italy's third mobile license and
an unclear regulatory environment may curb competition in Italy when the
European telecom market opens to competition in January. This problem
underscores the ones that new entrants will have in challenging Europe's
phone monopolies, like Telecom Italia SpA.

** Advertising **

Title: All Aboard for Campaign for a Few Good Mentors
Source: New York Times (C10)
http://www.nytimes.com/yr/mo/day/news/financial/mentoring-ad-column.html
Author: Stuart Elliott
Issue: Advertising
Description: The ability of the communications industry to change their
behavior for what are deemed laudable causes is being tested by an ambitious
project from the people who brought you the designated driver campaign. An
effort to promote mentoring has gained support from six television networks
who will work with nonprofits like One to One/The National Mentoring
Partnership, Big Brothers Big Sisters of America and the Points of Light
Foundation.

** Content**

Title: A Hearing Focuses on Lyrics Laced With Violence and Death
Source: New York Times (A19)
http://www.nytimes.com/[available via search]
Author: David Stout
Issue: Content
Description: A hearing called by Sen. Sam Brownback (R-Kansas) examined the
effects of music on children. One parent testified to urge mandatory content
warnings for themes of violence, sex, drugs and death (there goes my Kiss
collection). A representative from the recording industry noted that it has
been labeling voluntarily since 1985 and mandatory labeling would "smack of
censorship."
*********

Microsoft
WP: Microsoft Tactics Draw Hill Criticism
WSJ: How Microsoft Lost Cloak of Invincibility While Getting On-Line
WSJ: Microsoft Is Poised to Control Commerce on Internet,
Witnesses Tell Senate Panel
TelecomAM: Microsoft Criticized at Senate Judiciary Hearing
NYT: Microsoft Seems Near Deal to Invest in US West Cable TV

Telephone
NYT: U.S. Opposes Application By BellSouth
WSJ: U.S. Opposes Long-Distance By BellSouth
NYT: AT&T Will Simplify Its Pricing Structure
TelecomAM: Competitors Lambaste AT&T for Rate Changes

Minorities
TelecomAM: Black Caucus Lobbies New FCC Head to Remember Minorities
TelecomAM: BellSouth Unit Creates Spanish Language Small
Business Telecom Web Site
Internet
WSJ: Ban on New Taxes For Internet Services Passes Senate Panel
WP: University Tries to Pull Plug on Internet Term-Paper Mills

Newspapers
WP: Finally, Some Good News for Newspapers?

FCC
FCC: Commissioner Gloria Tristani Names Personal Staff

** Microsoft **

Title: Microsoft Tactics Draw Hill Criticism
Source: Washington Post (C9)
http://www.washingtonpost.com/wp-srv/WPlate/1997-11/05/0651-110597-idx.html
Author: Rajiv Chandrasekaran
Issue: Antitrust
Description: At a hearing yesterday, Sen. Orrin Hatch (R-Utah) expressed
worries about Microsoft's expansion into cyberspace. "I have serious
concerns about Microsoft's recent efforts to exercise its monopoly power,"
he said. Kevin J. Arquit, a former FTC lawyer, told the committee that
regulators must act quickly when trying to enforce antitrust laws in the
computer industry. Only Charles Rule, head of the Justice Dept.'s antitrust
division during the Reagan administration, said regulators should refrain
from meddling in the market. Sen. Hatch used a licensing agreement between
Microsoft and Earthlink Network Inc. as a "textbook example of an artificial
entry barrier" used by Microsoft against competitors. Microsoft wasn't
present at this hearing. A Microsoft spokesman, Mark Murray, said, "It's
clear that the committee heard a great deal of misinformation from our
competitors. We believe once they've looked at the facts, they'll agree
there's lots of competition on the Internet."

Title: How Microsoft Lost Cloak of Invincibility While Getting On-Line
Source: Wall Street Journal (A1)
http://wsj.com
Author: Don Clark
Issue: Online Services
Description: Bill Gates, chairman of Microsoft Corp., agreed not to
collect money owed by thousands of subscribers to their online service
because of foul-ups in its billing system. The move cost them more than $20
million in revenue, says Laura Jennings, a VP who manages the service.
"Every time I go to the board, I have to apologize for the billing system."
The Microsoft Network itself is losing $200 million a year, and has angered
a variety of customers with an endless series of missteps, strategy
flip-flops and internal confusion. What went wrong? Remarkably enough,
Microsoft's feared leverage in software often turned into a liability.
Clunky e-mail, bloated software that was difficult to install, and
Hollywood-style programming were some of the problems that have plagued MSN
for 2 years. AOL -- with plans to expand --now has 9 million subscribers as
compared to MSN's 2.3
million. Bill Gates remains confident in MSN's track
record with their rivals as perhaps one of the world's most powerful
companies. But, Microsoft's failure to enter new markets fast enough is
evidence enough that they can't always steamroll the competition.

Title: Microsoft Is Poised to Control Commerce on Internet, Witnesses Tell
Senate Panel
Source: Wall Street Journal (B6)
http://wsj.com
Author: John R. Wilke
Issue: Antitrust
Description: Internet and antitrust witnesses said they enjoyed the
free-wheeling, fast-growing medium, but also said that they felt threatened
by Microsoft's market power. If Microsoft controls Internet access through
its Windows software, then it can steer customers to favored affiliates when
they begin to shop on-line, they said. Microsoft responded to the implied
charged against them concerning the antitrust violations, saying that it
doesn't limit consumer access to competing browser software. Jack Krumholtz,
Microsoft's Wash. lobbyist, added that, "it is very easy to change
browsers--the user decides." But, the consequences of Microsoft dominating
Internet commerce as well reach into many other industries, not just
software. Kevin Arquit, a former FTC lawyer, said, "The handwriting is on
the wall...it's a crisis."

Title: Microsoft Criticized at Senate Judiciary Hearing
Source: Telecom AM
http://capitol.cappubs.com/am/
Issue: Antitrust
Description: At a Senate Judiciary hearing on "Computer Innovation and
Public Policy
in the Digital Age," a number of participants fired shots at Microsoft: "I
have not made any secret of the fact that I have serious concerns about
Microsoft's recent efforts to exercise its monopoly power, and that I plan
to continue to examine the company's practices," said Sen. Orrin Hatch
(R-UT), committee chair. "I would like to emphasize that this hearing is not
a hearing on Microsoft." President and CEO Edward Black of the Computer &
Communications Industry raised concerns about Microsoft's attempt to gain
control of the World Wide Web and the Internet: "Enforcers should watch out
for companies that monopolize related markets through control of 'gateways'
through which consumers obtain information."

Title: Microsoft Seems Near Deal to Invest in US West Cable TV
Source: New York Times (D1)
http://www.nytimes.com/library/cyber/week/110597microsoft.html
Author: John Markoff
Issue: Cable/Mergers
Description: Microsoft appears to be close to investing $1 billion in US
West cable operations. The investment would get the software giant a 6.3%
share of that cable business at current stock prices. Microsoft made a
similar deal with Comcast in June and was reportedly close to a similar deal
with TCI, but those talks have been tabled. Bill Gates and Microsoft have
been pushing for cable operators to upgrade their systems so that they can
become the primary providers of high-speed access to the Internet and
Microsoft can become the major software player in set-top boxes.

** Telephone **

Title: U.S. Opposes Application By BellSouth
Source: New York Times (D1)
http://www.nytimes.com/yr/mo/day/news/financial/bell-longdistance.html
Author: Seth Schiesel
Issue: Telephone Regulation
Description: The Justice Department recommended yesterday that BellSouth not
be allowed to offer long distance service in South Carolina. The department
ruled that the regional Bell telephone company has not opened its local
network enough to merit its entry into the $80 billion long-distance market.
Justice's antitrust division chief Joel Klein said that BellSouth has made
"important progress" in opening its markets but "Much remains to be done,
however, to insure that the market is open to competition in the way
Congress intended." BellSouth claims the Justice Department exceeded its
authority, but consumer advocates cheered the decision.

Title: U.S. Opposes Long-Distance By BellSouth
Source: Wall Street Journal (B6)
http://wsj.com
Author: Bryan Gruley
Issue: Telephone Regulation
Description: The Justice Dept. recommended that BellSouth's bid to enter
the long-distance business be rejected on grounds that the company needs to
do more to open its local markets to competition. The 5 Baby Bells have been
barred from offering long-distance service in their own regions since the
'84 breakup of AT&T.

Title: AT&T Will Simplify Its Pricing Structure
Source: New York Times (D6)
http://www.nytimes.com/yr/mo/day/news/financial/att-prices.html
Author: Seth Schiesel
Issue: Long Distance
Description: AT&T will reduce from 33 to three the number of different rates
a residential customer may pay for long distance calls when they are not in
a special calling plan. After the changes go into effect on Saturday **
distance will no longer factor into the cost of a long distance call.** The
tree different rates will be affected by the time the call is placed.

Title: Competitors Lambaste AT&T for Rate Changes
Source: Telecom AM
http://capitol.cappubs.com/am/
Issue: Long Distance
Description: BellSouth and Sprint criticized AT&T's new basic rates based on
time periods instead of distance. BellSouth predicted that AT&T would not
pass savings on to consumers if access charges were dropped: "Here we are,
six months later and AT&T rates already are going up again. The other big
long-distance companies have already raised their rates in lock step,"
BellSouth's Vice President of Governmental Affairs David Markey said. AT&T
is extending peak hour periods.

** Minorities **

Title: Black Caucus Lobbies New FCC Head to Remember Minorities
Source: Telecom AM
http://capitol.cappubs.com/am/
Issue: FCC/Minorities
Description: Eleven members of the Congressional Black Caucus have sent new
FCC Chairman Kennard a letter asking him to do what he can to speed local
and long distance competition in African-American communities. The letter
was sent because of concerns that some carriers will ignore inner-city and
rural areas: "...new market entrants have focused on selectively serving a
few high-profit, major business customers," the letter said. "Indeed,
communications 'redlining' evidently is a part of the business plan of some
companies."

Title: BellSouth Unit Creates Spanish Language Small Business Telecom Web Site
Source: Telecom AM
http://capitol.cappubs.com/am/
Issue: Minorities
Description: To better serve the 175,000 hispanic-owned businesses with its
region, BellSouth Small Business Services has launched a Spanish language
telecom website www.smlbiz.bellsouth.com/espanol. Julio Perez, Hispanic
marketing manager for BellSouth Small
Business Services said, "This site offers Hispanic businesses a vast array
of business resources and valuable information in Spanish." Features include
news, a list of business resources, a product catalog and a survey to hear
back from customers.

** Internet **

Title: Ban on New Taxes For Internet Services Passes Senate Panel
Source: Wall Street Journal (B6)
Issue: Internet Regulation
Description: The Senate Commerce Committee approved the Internet Tax
Freedom Act introduced by Sen. Ron Wyden of Oregon. It prevents states and
municipalities from levying new taxes on Internet commerce for 5 years;
existing taxes aren't affected. This was done due to the fear among Internet
businesses that the nation's 30,000 taxing authorities may hinder 'Net
commerce by taxing transactions. Sen. Wyden said, "Just think of the
prospect of thousands of mini-IRS taxing authorities collecting Internet taxes."

Title: University Tries to Pull Plug on Internet Term-Paper Mills
Source: Washington Post (A1)
http://www.washingtonpost.com/wp-srv/WPlate/1997-11/05/1341-110597-idx.html
Author: Rene Sanchez
Issue: Ed Tech
Description: There is evidence of a flourishing online term paper
industry that's now a part of a lawsuit that has captured the attention of
campuses around the nation. Robert Smith, counsel to Boston University,
said, "This is a serious issue of academic integrity. It's getting
ridiculous. You can practically pay for your homework on the Internet now."
On some Web sites, students can get access to a paper just by typing their
credit card numbers onto a computer screen. Other colleges have spotted Web
sites offering lecture notes and even admissions essays to high school
students. Since the suit filed, there were some doubts of its success
because the sites may be protected by a right to free speech and disclaimers
on the Web sites themselves. Robert O'Neill, a law professor at the Univ. of
Virginia, said, "...the issues the case presents are difficult. We're in a
new era."

** Newspapers **

Title: Finally, Some Good News for Newspapers?
Source: Washington Post (C9)
http://www.washingtonpost.com/wp-srv/WPlate/1997-11/05/0661-110597-idx.html
Author: Paul Farhi
Issue: Newspapers
Description: The causes for the newspaper's decline in circulation are
many, according to experts. Higher newsstand prices, intense competition
from electronic media, and the simple time pressure of modern life.
Newspaper analysts say daily papers could be on the verge of regaining some
lost popularity with more people entering their prime newspaper-reading
years. Profits have remained strong as they have increased rates and prices.
Moreover, one of the key reasons for the decline--a deliberate cut back on
circulation outside "core markets"--may be playing itself out. Those cuts
being complete, newspapers are focusing on building up circulation in
close-in markets, said John Sturm, president of the Newspaper Assoc. of
America. Tom Curley, president and publisher of USA Today, said, "I think
the future is very positive, the way the public gets its news could switch
back to newspapers."

** FCC **

Title: Commissioner Gloria Tristani Names Personal Staff
Source: FCC
http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/1997/nrmc7082.html
Issue: FCC
Description: Rick Chessen has been appointed to Senior Legal Advisor. In
this role, he will advise the Commissioner on cable and mass media issues.
Chessen has recently served as Deputy Chief of the Policy and Rules Division
in the Cable Services Bureau. Karen Gulick has been named as Legal Advisor
on wireless and international issues. Gulick has served as the Assistant
Bureau Chief of the Wireless Telecommunications Bureau at the Federal
Communications Commission. Prior to her work in the Bureau, she served as
Special Counsel to General Counsel William E. Kennard and as interim Legal
Advisor to Commissioner Susan Ness. Paul Gallant has been named as Legal
Advisor on common carrier issues. Gallant has recently served as Legal
Advisor to Commissioner Quello and before that served as Legal Counsel to
the Chief of the Common Carrier Bureau. Helen Hillegass has been named as
Confidential Assistant.

*********