February 1998

Universal Service
TelecomAM: Senate Communications Subcommittee To Examine SLC Administration
TelecomAM: California Align School Telecom Support Fund To FCC E-Rate
For 95% Discounts
TelecomAM: Iowa Network Asks FCC To Rule That It Can Receive
'E-Rate' Payments
TelecomAM: Missouri PSC Establishes State Universal Service Fund

Competition
TelecomAM: AT&T Loses $3 On Every Local Customer, Armstrong Says
FCC: Status of Local Telephone Competition

Internet
NYT: Senators Again Take Up Internet Restrictions
TelecomAM: FTC Plans Net Sweep To Check On Industry Self-Regulation
NYT: E-Mail Sender Convicted of Civil Rights Violation
NYT: This Is your Brain. This Is Your Brain as A Computer Interface

Mergers
WP: Foes See Lawyer's Civil Rights Agenda in Attack on MCI
WSJ: Sprint Plans Accord With EarthLink To Combine Internet-Access
Businesses

** Universal Service **

Title: Senate Communications Subcommittee To Examine SLC Administration
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Senate Comm. Subcommittee will hold hearings on the
"excessive" administrative overhead of the Schools and Libraries Committee [sic]
and the "unpredictability" of the Section 271 application process, Chairman
Conrad Burns said. He said another hearing will feature Wall Street
representatives on whether phone companies who complain about legislation
and regulation really are suffering financially. [For more information on
the Schools and Libraries *Corporation* see http://www.slcfund.org/]

Title: California Align School Telecom Support Fund To FCC E-Rate For 95%
Discounts
Source: Telecom AM---feb.11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Calif. Public Utilities Commission has approved changes to
the Calif. Teleconnect Fund (CTF) so that schools and libraries can use it to
supplement the federal universal service fund's E-Rate discounts to produce
discounts of 60% to 95% on educational telecom services. The PUC has aligned
the CTF's guidelines with those of the federal E-Rate program. A school that
qualifies for, say, a 40% discount using the E-Rate program now can also
apply for a CTF discount equal to half the remaining charge, producing a
total 70% discount from the combined federal and state support. [For more on
the CPUC decision see ftp://ftp.cpuc.ca.gov/gopher-data/telecom/T16118.doc]

Title: Iowa Network Asks FCC To Rule That It Can Receive 'E-Rate' Payments
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Iowa agency that runs the state's telecom network wants the
FCC to give expedited consideration to a petition that would declare the
state-owned Iowa Communications Network to be a common carrier eligible to
receive federal universal service subsidiaries for discounted telecom
services to the schools and public rural health centers it serves. The FCC
concluded that state communications networks in general don't meet the
definition of an eligible telecom carrier for universal service subsidies
because they are not common carriers providing services to the public. [For
more on the Iowa Communications Network see http://www.icn.state.ia.us/]

Title: Missouri PSC Establishes State Universal Service Fund
Source: Telecom AM---feb. 10, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Missouri Public Service Commission has adopted rules
establishing a Missouri Universal Service Fund to ensure affordable basic
local telephone service, pursuant to a mandate of a 1996 state universal
service law. The Missouri fund is to be used to ensure provision of
essential telecom services at rates in high-cost areas, and assist poor and
disabled customers in obtaining affordable phone services. Initial estimates
show the fund will need about $16.1 million a year.[For more info see
http://www.ecodev.state.mo.us/]

** Competition **

Title: AT&T Loses $3 On Every Local Customer, Armstrong Says
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Competition
Description: AT&T has stopped marketing local phone service to consumers
because it loses money on ever customer, CEO Michael Armstrong said. He said
that because court battles have blocked the leasing of unbundled network
elements, the only immediate way to enter the local market is through
resale, and incumbents' discounts are too low for competitors to make money.
Armstrong also said that AT&T spent $3.5 billion to enter the local market
over the last two years and signed up more than 300,000 customers but is
losing $3 per month on every customer. "AT&T is not going to spend money on
this fool's errand and that's what [resale] is today," he said.

Title: Status of Local Telephone Competition
Source: FCC
http://www.fcc.gov/enbanc/012998/eb012998.html
Issue: Competition
Description: FCC Releases Transcript of February 29 En Banc Presentations on
the Status of Local Telephone Competition.Includes: Heather Gold, President,
Association for Local Telecommunication Services; Roy Neel, President,
United States Telephone Association; Michael Mahoney, President & COO, RCN
Corp., Princeton, NJ; Alex Netchvolodoff, Vice-President, Cox Enterprises,
Washington DC; and Jack Reich, President & CEO, ACSI, Annapolis Junction, MD.

** Internet **

Title: Senators Again Take Up Internet Restrictions
Source: New York Times
http://www.nytimes.com/library/cyber/week/021198porn.html
Author: Jeri Clausing
Issue: Internet Regulation
Description: The censorship debate reopened in Congress on Tuesday with
committee consideration of two bills designed to restrict children's access
to Internet material deemed to be indecent. Most of the hearing focused on
the bill introduced by Senator John McCain (R-AZ) on Monday that would
require all schools and libraries receiving federal Internet funding to
install screening software. The other bill discussed is known as CDA 2, a
bill filed late last year by Senator Dan Coats (R-IN) that would require
commercial Web site operators that distribute material "harmful to minors"
to restrict access to adults with personal identification numbers or credit
cards. McCain said, "I am very concerned about censorship, but I think we
need to act to try and provide some rules, otherwise we may find ourselves
in a situation where Americans say, 'Look, this has got to stop; we are
willing to sacrifice some of our civil liberties to protect our children.'"
Free speech and civil liberties groups have vowed to fight against any
mandates on Internet access or content.

Title: FTC Plans Net Sweep To Check On Industry Self-Regulation
Source: Telecom AM---feb. 10, 1998
http://www.telecommunications.com/am/
Issue: Internet Regulation
Description: The Federal Trade Commission plans to survey more than 1,200
Web sites next month to
determine whether industry self-regulation is working, a top Commission
official said. Lee Peeler, FTC associate director of advertising practices,
said that Commission staffers will examine the 100 most-visited Web sites
and 200 sites aimed at children. Peeler said the FTC sweep will be a way to
determine the extent to which the online industry has kept promises it has
made over the last three years to develop policies on privacy and
information distribution. [See the FTC's website at http://www.ftc.gov/]

Title: E-Mail Sender Convicted of Civil Rights Violation
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/021198hate.html
Author: Rebecca Fairly Raney
Issue: Legal Issues/Internet
Description: Richard Machado, a 20-year-old Los Angeles man who sent
threatening email to students with Asian sounding names at the Univ. of
Calif. at Irvine in September 1996, was convicted yesterday of interfering
with the civil rights of those Asian university students. Assistant U.S.
Attorney Mavis Lee said, "[the conviction] sends a message out there that
hate crimes are serious and hate crimes on the
Internet are no different."

Title: This Is Your Brain. This Is Your Brain as A Computer Interface
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/surf/021198mind.html
Author: Ashley Dunn
Issue: InfoTech
Description: "The Brain," developed by Natrificial, based in Santa Monica,
CA, is the latest interface entry created to help us process through the
mass amounts of information on the Internet. The program is a
two-dimensional interface that gives users the ability to link pieces of
information to what Natrificial calls "thoughts." The thought can be a word
processing document, a Web page or a topic point. When a group of thoughts
are connected, they make up the structure of your personal "brain." When you
click on a thought, it moves to the center of your screen so all of its
immediate links are displayed. This design was created to be similar to the
human mind. Vannevar Bush, Director of the Office of Scientific Research and
Development in 1945 and who wrote the ground breaking essay "As We May
Think", described the human brain as one which "operates by association.
With one item in its grasp, it snaps instantly to the next that is suggested
by the association of thoughts, in accordance with some intricate web of
trails carried by the cells of the brain." One of difficulties we encounter
today is that our modern interfaces force a linear vision of information
instead of a true associative process for organizing information. "The idea
behind The Brain is that the user constructs the organization of their
information as they work. Thus all the data on your computer and the Net are
not lumped together by category or function, but rather by how you use it."

** Mergers **

Title: Foes See Lawyer's Civil Rights Agenda in Attack on MCI
Source: Washington Post (A1,A18)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/11/103l-021198-idx.html
Author: Paul Farhi and Mike Mills
Issue: Merger
Description: David Honig, a communications lawyer, civil rights advocate and
person who is known for challenging dozens of TV and radio station deals in
the past, is arguing that Worldcom's acquisition of MCI Communications Corp.
would fail the FCC's requirement of being in the "public interest" because
the newly merged company would mostly serve "big-ticket business" and ignore
the needs of lower-income customers. Honig and Jesse Jackson point to
Worldcom's all-male, all-white board of directors and say that the merger
would go against the FCC's goals of fostering minority involvement in the
telecommunications industry. A Honig foe, who asked not to be identified,
said: "The system is set up in a way that rewards people for making these
filings. The only people who would spend the time and effort to proceed are
those who see a payoff at the end of the line." Honig also has orchestrated
an advertising campaign, underwritten by the Rainbow/PUSH Coalition and MCI
rivals the Bell Atlantic Corp. and GTE Corp., that in one draft print ad
compares Worldcom and MCI to Bonnie and Clyde, where it says, "America needs
public hearings and more time to examine the real impact of this merger."

Title: Sprint Plans Accord With EarthLink To Combine Internet-Access
Businesses
Source: Wall Street Journal (B11)
http://wsj.com/
Author: Thomas E. Weber
Issue: Merger
Description: Sprint plans to combine its consumer Internet-access business
with that of EarthLink Network and take a 30% stake in a deal valued at $180
million. Under the arrangement EarthLink will add 130,000 subscribers of
Sprint's Internet Passport service to its own member base of about 445,000.
For Sprint, the move is a tacit admission that its consumer Internet
service, launched in '96, never took off. Sprint will make a $24 million
investment in EarthLink and provide a $100 million line of credit in
exchange for 4.1 million convertible preferred shares of EarthLink.
*********

Campaign Finance Reform
WSJ: Campaign Reform Is Returning to Center State, but Not for Long

Television
B&C: A new look for HDTV
B&C: Dollars, deals fly in CP gold rush
B&C: White House wants auction date lifted

Internet/Online Service
WSJ: Explosion of Internet Trading Accounts Makes Big Brokerage
Firms Go On-Line
NYT: Museum Takes on Science Project
NYT: Hollywood Pros Put Music Hits, Movies and More on PC

Encryption
NYT: Support for Encryption Is Less Than U.S. Claims, Study Says

Antitrust
NYT: Microsoft Case May Be Prelude to a Wider Antitrust Battle

InfoTech
NYT: Leap Day 2000 Might Pose Big Problems for Some Computers' Software
NYT: A Maverick Builds a New Supercomputer in a PC World

** Campaign Finance Reform **

Title: Campaign Reform Is Returning to Center State, but Not for Long
Source: Wall Street Journal
http://wsj.com/ (A20)
Author: David Rogers
Issue: Campaign Finance Reform
Description: The Senate will soon vote on sweeping campaign finance reform
-- a bipartisan bill backed by the White House. But the long-waited showdown
may not resolve the issue. CEOs and businessmen -- like famed billionaire
Warren Buffett -- are pushing for campaign finance reform because they feel
like prisoners of the big-money, political "arms race" that they often
dominate. Many believe that the 1998 election cycle will be even worse than
1996 -- "There's a great cancer that's just eating the guts out of our
democratic institutions," says Rep George Miller (D-CA). "If you give us
enough rope, we will hang ourselves. There is plenty of evidence of that."

** Television **

Title: A new look for HDTV
Source: Broadcasting&Cable (p.8)
http://www.broadcastingcable.com/
Author: Steve McClellan & Glen Dickson
Issue: Digital TV
Description: Two major television networks -- ABC & NBC -- are considering
using the 720 scanning lines progressive (720P) format for high definition
television (HDTV) programming. 1,080-line interlace format has been the
front-runner as the standard for HDTV and has been supported by CBS, but
720P will allow broadcasters to simulcast one HDTV and one standard
definition television (SDTV) channel (in 480P). [In a related story, Fox
officials say that 480P SDTV will meet the needs of viewers for years to
come. By using the SDTV format, Fox will be able to air several channels of
cable-like programming.] "Whatever you do, in order to optimize the use of
the channel, it must be progressive," an ABC official said. "It's
irresponsible not to do that. You have only 6 mhz, and you need to make the
best possible use of it." Rep Billy Tauzin (R-LA), the Chairman of the House
Telecom Subcommittee who blasted ABC in 1997 for suggesting that it might
not do HDTV, says that he anticipated use of 720P and "I simply want to make
sure that Americans have a chance to see HDTV. If [broadcasters] can do it
in a format that allows them to use the rest of their spectrum for other
things, that's fine." The question remains whether 720P equipment will be
available to broadcasters anytime soon.

Title: Dollars, deals fly in CP gold rush
Source: Broadcasting&Cable (p.10)
http://www.broadcastingcable.com/
Author: Chris McConnell
Issue: Television
Description: Taking advantage of a waiver of Federal Communications
Commission Rules, some 50 new TV stations may be coming on the airwaves as
competing bidders have settled on cash agreements. Millions of dollars --
none of which will be seen by the government -- exchanged hands as competing
applicants for TV licenses struck deals among themselves. "This is the
greatest era I've ever seen," said Paxson Communications chief Bud Paxson.
His company purchased six new stations -- the new Paxson network will reach
~70% of US households via 71 stations.

Title: White House wants auction date lifted
Source: Broadcasting&Cable (p.18)
http://www.broadcastingcable.com/
Author: Chris McConnell
Issue: Spectrum/Digital TV
Description: As part of the 1999 budget, the Administration has asked
Congress to repeal provisions in the 1997 Balanced Budget Agreement
requiring the Federal Communications Commission to conduct spectrum auctions
of former TV channels in 2002. The 1999 budget states that the expected
funds from auction of channels 60-69 will not be needed in 2002 and that the
FCC should be allowed to conduct the auction when market value will be
maximized.

** Internet/Online Service **

Title: Explosion of Internet Trading Accounts Makes Big Brokerage Firms Go
On-Line
Source: Wall Street Journal
http://wsj.com/ (B7G)
Author: Rebbecca Buckman
Issue: Electronic Commerce
Description: Even if only a "trickle" of customers is leaving the big firms
to trade at smaller, online companies, Wall street's biggest brokerage firms
-- including Merrill Lynch and Prudential -- "want to make sure it doesn't
turn into a flow." These firms are now entering the business they once
downplayed: online trading. Many of the bigger firms plan to be online
before the end of the year.

Title: Museum Takes on Science Project
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/digimet/020998digimet.html
Author: Pamela Mendels
Issue: Arts/Education
Description: Museum officials at the American Museum of Natural History are
hoping to reach people who live more than a commuter ride away from the
complex of buildings located on Manhattan's Upper West Side, across from
Central Park. One of their main vehicles for doing that is the Internet. The
effort is coming from the museum's National Center for Science Literacy,
Education and Technology, launched two months ago with a $25 million budget
over the next three to five years. The mission of the project is to help
people overcome science illiteracy by using a combination of technology --
everything from CD-ROMS, to the radio and Web sites. "How can we extend the
relationship we've had beyond the metropolitan area?" Nancy Hechinger,
director of the center, said this past week. "That's were technology offers
some powerful opportunities". Andrew Blau, director of Communications Policy
and Practice at the Benton Foundation, says that museum Web site efforts are
helping to fill a huge void on the Internet. "One of our concerns when we
wrote the [Learning Connection] was where is the content going to come
from?" Blau said. "Museums have terrific content,
precisely the kind of things that could enrich education. A number of
museums are stepping up to the challenge." The Benton report can be accessed
at http://www.benton.org/Library/Schools/, the NCSLET's site at
http://www.amnhonline.org/NationalCenter/, and a similar site from the San
Francisco Museum of Art, called the Thinker, can be accessed at
http://www.thinker.org/index.shtml

Title: Hollywood Pros Put Music Hits, Movies and More on PC
Source: New York Times (D7)
http://www.nytimes.com/library/cyber/week/020998intertainment.html
Author: Andrew Pollack
Issue: Content
Description: Jonathan Taplin,along with two other Hollywood veterans, has
formed Intertainer Inc., a company which aims to deliver movies on demand,
music, electronic shopping and other services to personal computers through
"broadband" circuits, so called because of their large carrying capacity.
Intertainer's services will be demonstrated for the first time this week at
the Networked Entertainment World exposition in Beverly Hills, CA. "They are
the beginning of what I call the aggregators, that are aggregating content
and putting it out there," said Stephen McKenna, director of sales to
entertainment and media companies at Sun Microsystems Inc., whose equipment
and software is used by Intertainer. "There are other people who are trying
to do it, but they've done it in an elegant way."

** Encryption **

Title: Support for Encryption Is Less Than U.S. Claims, Study Says
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/020998encryption.html
Author: Jeri Clausing
Issue: Encryption
Description: A report scheduled to be released today by the Electronic
Privacy Information Center http://www.epic.org, based in Washington DC ,
says that the Clinton Administration is losing its battle to increase
international controls over "how reliably computer data can be scrambled to
insure privacy." The report which surveyed 243 governments, says that "the
United States is virtually the only democratic, industrialized nation
seeking domestic regulation of strong encryption." David Sobel, who has
directed research for the Global Internet Liberty Campaign
http://gilc.org/, a civil-liberties advocacy group, said of the
administration: "They make the claim that other countries are accepting the
U.S. position on this, then in an attempt to make that a reality, our
government launched a worldwide lobbying campaign on encryption policy." The
report comes as Congress is preparing to renew its debate on encryption policy.

** Antitrust **

Title: Microsoft Case May Be Prelude to a Wider Antitrust Battle
Source: New York Times (D1,D8)
http://www.nytimes.com/library/cyber/week/020998antitrust.html
Author: Steve Lohr
Issue: Antitrust
Description: Discussion, debate and negotiations have begun regarding
whether the Justice Department should file a broader Sherman Act case
against Microsoft. If such a case is filed, it is sure to be a lengthy and
intensive courtroom battle. The issue at hand, according to policy makers
and economists, is to try to insure that the software giant's near-monopoly
of PC operating-system software is not used to exercise control over new
markets of the Internet commerce and software. The goal of the antitrust
policy is to make sure that the door is open in Internet markets for the
"next Microsoft" to enter the market and unseat the current industry leaders
by means of innovation, business skill and luck.

** Info Tech **

Title: Leap Day 2000 Might Pose Big Problems for Some Computers' Software
Source: New York Times (D5)
http://www.nytimes.com/library/cyber/week/020998year.html
Author: Matthew L. Wald
Issue: Technology
Description: There is a new twist of the so-called year 2000 problem.
Computers that survive New Year's Day 2000 by pretending its 1900 may
function fine, but only for 59 days as February 29 will offer new
opportunities for computers to fail. Why is this a problem? Because 2000 is
a leap year where 1900 was not. Any computer that believes it is 1900 will
not allow for Feb. 29 to exist.

Title: A Maverick Builds a New Supercomputer in a PC World
Source: New York Times (D1,D4)
http://www.nytimes.com/library/cyber/week/020998smith.html
Author: John Markoff
Issue: Technology
Description: Burton Smith, a supercomputer designer at the Tera Computer
Company, is on the verger of creating a new supercomputer company based on a
new approach to parallel processing. Although Tera's engineers are still
wresting with last-minute bugs, many believe that Smith's machine will shake
up the computer world once it is complete. Supercomputers are defined as
being the fastest computers available at any given time. In the past they
have been used for everything from designing nuclear weapons and predicting
weather, to simulating car crashes and designing drugs. However, with the
end of the cold war, a decline in government funding and an increase in
desktop computing, innovations have increasingly come first from the PC
industry. Now, Burton Smith believes he has found a way to overcome the
problem of memory latency, a measure of time wasted while microprocessors
wait for new data, found in is today's parallel supercomputers. If Tera's
new approach proves to be successful, it will affect the entire computer
field because all levels of computers suffer from some form of imbalance
between memory speed and processor speed.
*********

Telephony
FCC: Commission Affirms Key Provisions of LMDS Second Report & Order,
Paving Way for Auction
WSJ: Mexican Regulatory Fight Spurs MCI Pullback
WSJ: BellSouth Corp. Set Back In Long Distance Strategy

Internet
NYT: Judge To Decide Legality of Net Registration Fees
WSJ: Internet Address-Rerouting Incident Raises Concern
Over Control of System
NYT: Clinton Aide Stands Behind Net Founder Who Altered Network

Corporate
WSJ: Netscape Mulls Sale of Whole Or Part of Firm
WSJ: Microsoft Partners in 'Active Desktop' Are Subpoenaed
in U.S. Antitrust Probe
WP: Primus to Acquire Florida Phone Firm

Lifestyle
NYT: Making Computers Cute Enough To Wear
NYT: In Brussels, Gates Takes a Pie in the Face

** Telephony **

Title: Commission Affirms Key Provisions of LMDS Second Report & Order,
Paving Way for Auction
Source: FCC
http://www.fcc.gov/Bureaus/Wireless/News_Releases/1998/nrw18002.html
Author: Elizabeth Kyle
Issue: Wireless
Description: Today the Commission generally affirmed key provisions of the
Local Multipoint Distribution Service (LMDS) service rules that it adopted
in March 1997. The action paves the way for the auctioning and licensing of
LMDS, a fixed, broadband point-to-multipoint wireless service that has
significant potential in offering a broad range of one-way and two-way
voice, video, and data service capabilities, and a substantial amount of
capacity that is larger than currently available wireless services.

Title: Mexican Regulatory Fight Spurs MCI Pullback
Source: Wall Street Journal (A17)
http://wsj.com/
Author: Craig Torres
Issue: Long Distance
Description: MCI has shelved plans for some $900 million in additional
investment in its Mexican long-distance joint venture, Avantel SA, saying
weak regulation of former monopoly Telefonos de Mexico SA has severely
dimmed the outlook for Avantel to compete profitably. MCI's decision comes
after only a year of competition against Telmex. The U.S. carrier's pullback
is a dangerous sign for Mexico, which is trying to encourage large
direct-foreign-investment projects to create skilled jobs and help the
country finance a deficit in its trade accounts.

Title: BellSouth Corp. Set Back In Long Distance Strategy
Source: Wall Street Journal (B6)
http://wsj.com/
Issue: Long Distance
Description: The FCC rejected BellSouth's application to sell long-distance
service in Louisiana. The FCC called the application "indistinguishable"
from its earlier, rejected application to provide long distance in S.
Carolina. The FCC said it turned down the application because the Bells
haven't opened their local networks to competition as required by law. FCC
Chairman Kennard said that "while BellSouth continues to make progress
toward opening its local market to competition, the commission was compelled
by law to deny" the application because the company hasn't yet gone far enough.

** Internet **

Title: Judge To Decide Legality of Net Registration Fees
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/020598domain-side.html
Author: Jeri Clausing
Issue: Internet Regulation
Description: Judge Thomas Hogan of federal district court in Washington has
frozen the governments $50 million Internet infrastructure development fund
while he decides if the domain registration fee that finances it is legal.
Judge Hogan said that plaintiffs in a class-action lawsuit "have made a
significant showing that the [fund] is an illegal tax." William Bode, a
lawyer for the plaintiffs, said yesterday that he plans to also ask the
court to require Network Solutions Inc. (NSF) to refund the profits it has
made as the sole registrar of top-level domains. "Federal law prohibits
independent executive agencies like the NSF from collecting fees that exceed
the cost of administering the service they are providing," Bode said. "The
same argument applies to fees that NSI charges over and above its cost of
doing business."

Title: Internet Address-Rerouting Incident Raises Concern Over Control of
System
Source: Wall Street Journal (B6)
http://wsj.com/
Author: Rebecca Quick
Issue: Internet Regulation
Description: A recent incident in which one Internet official took control
of most of the global network's address system has renewed concern about the
casual manner in which the Internet is run. The rerouting coincided with the
release of a Clinton administration plan that would dilute the power of Jon
Postel, who operates the address system under a government contract that he
stands to lose. Mr. Postel called the incident a test of the system and
denied he meant any harm. No Internet traffic was disrupted, but that did
little to mollify companies that use the network or oversee its high-speed
arteries. Some say it appeared that Mr. Postel was, in effect, trying to
hijack the Internet.

Title: Clinton Aide Stands Behind Net Founder Who Altered Network
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/020598domain.html
Author: Jeri Clausing
Issue: Internet Regulation
Description: Last week, Jon Postal, a founding father of the World Wide Web
who runs the computer that assigns the addresses behind Internet domains,
alarmed the Internet world by redirecting at least half of the 13 root
servers that run the Internet away from the main root, known as "the dot" or
A server, to the B server that he administers at the Univ. of S. Calif.
under a Defense Dept. contract. The test drew speculation that the network
was being hijacked because it came at the same time Ira C. Magaziner,
President Clinton's top Internet advisor, was releasing his controversial
proposal for moving oversight of the Internet away from government and to a
private system. In response to Postal's rerouting of the Internet, Magaziner
said that the test was poorly timed and would not be repeated. "I admire and
trust this man, I don't have any reason to question his motives or
observations. He has been a tremendous asset to the Internet. If he did
something whose timing was a mistake, I sure would be one to cut him a lot
of slack."

** Corporate **

Title: Netscape Mulls Sale of Whole Or Part of Firm
Source: Wall Street Journal (A3)
http://wsj.com/
Author: Kara Swisher & Don Clark
Issue: Corporate Retrenchment
Description: Netscape is holding "serious discussions" with AOL, Sun,
Oracle, and IBM about strategic investments in Netscape or purchasing the
entire company. AOL, for example, has discussed the possibility of either
taking over or buying Netscape's popular World Wide Web site, they said.
Although no deal is imminent, the discussions illustrate the severity of
Netscape's problems, and a recognition that it may need outside help in
overcoming them.

Title: Microsoft Partners in 'Active Desktop' Are Subpoenaed in U.S.
Antitrust Probe
Source: Wall Street Journal (B6)
http://wsj.com/
Author: John R. Wilke & David Bank
Issue: Antitrust
Description: The Justice Dept. issued new subpoenas in its antitrust probe
of Microsoft that focus on exclusive deals the software giant may have cut
with entertainment and information publishers on the Internet. The
department is seeking documents from Microsoft media partners that are
carried on the "Active Desktop," a feature of Microsoft's IE 4.0 software.
The Active Desktop will play an even bigger role in Windows 98. As a part of
their licensing of Windows to computer makers, Microsoft requires licensees
to display the desktop screen with the dozen media partners Microsoft has
selected. The Active Channel strategy may be seen by the Justice Dept. as a
form of tying -- using Microsoft's Windows monopoly as leverage in new markets.

Title: Primus to Acquire Florida Phone Firm
Source: Washington Post (E5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/05/184l-020598-idx.html
Author: Mike Mills
Issue: Merger
Description: Primus Telecommunications Group Inc., the Vienna-based
international long-distance company, announced yesterday that it will buy
TresCom International Inc., of Fort Lauderdale, FL, for $125 million. "The
merger provides Primus entry into Caribbean and South American markets,
rounding out our presence in every major region of the world and making
Primus the carrier with the broadest coverage among our peer group," said K.
Pul Singh, Primus's chairman and chief executive. TresCom owns switching
facilities in New York, Fort Lauderdale, and Puerto Rico, as well as
capacity on undersea fiber-optic cables reaching the Caribbean and South
America. Those assets will combine with Primus Telecommunications Group's 11
switches in the U.S., Canada, Australia and Britain and soon two more in
Germany and Japan.

** Lifestyle **

Title: Making Computers Cute Enough To Wear
Source: New York Times (C1,C4)
http://www.nytimes.com/library/cyber/week/020598ive.html
Author: John Markoff
Issue: Lifestyle/Technology
Description: Computer designer, Jonathon Ive, is interested in creating
computers based on what he calls "emotional human forms." Ive's has little
good to say about today's computers. To him, the majority of personal
computers are sad, chunky, gray boxes. "The curse of computing is that it's
generic," he said with a sigh. But Jonathon Ive, director of the industrial
design studio at Apple Computer, has an upbeat vision for a new generation
of machines. The designs he and his designers are working on have more in
common with Swatch or Nike than Dell or IBM. Ive's is obsessed with
designing machines that evoke more human reactions than "the
pocket-protector litany of bits and bytes and MIPS and megahertz." The new
machines, though still in the experimentation phase, are Ive's way of
struggling with what the television has done to the modern home. "For many
homes the television has replaced the hearth," he said, and the television,
when it's turned off, is a dead black hole. Ive does not want to see the
same thing happen with the computer. With the computer replacing the
television in many homes, Ive and his team are working to design machines
that work and blend into its surroundings in a living space and that allow
its user choice in deciding where they want to log on. People who have had a
look at some of the newly designed machines say they appear "organic and
integrated." One woman's initial reaction to a portable computer that looks
like a sleek appointment book was that she wanted to lick the translucent
green case.

Title: In Brussels, Gates Takes a Pie in the Face
Source: New York Times (D11) / Washington Post (B3)
http://www.nytimes.com/yr/mo/day/news/financial/gates-pie.html
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/05/158l-020598-idx.html
Author: Reuters / Ann Gerhart and Annie Groer
Issue: Lifestyle
Description: William H. Gates, chairman of the Microsoft Corp., was hit in
the face with a cream pie last night as he arrived in Brussels for a meeting
with Belgian business and government leaders. Organizers of the visit said
that five people, equipped with a large stock of pies, appeared to be
involved in the incident. The organized "pieing" was the work of Noel Godin,
a Belgian who has made a lucrative business and name for himself by hurling
custard pies into the faces of the rich and famous. "That was a victory for
us," said Godin who had the pleasure of landing a pie directly onto Gate's
face. "We will continue to send our burlesque statements." Erin Brewer, a
company spokeswoman said Mr. Gates was "surprised and disappointed" but
unhurt by the attack. Ms. Brewer said she did not believe that Microsoft or
Mr. Gates would press charges.
*********

Telephony
WSJ: Sprint PCS' Subscriber Count Near One Million, at High End of
Estimates

Antitrust/Microsoft
WP: Ruling Halts 'Master' In Microsoft Case
WSJ: Subpoenas Issued in Probe Of Microsoft
WSJ: Microsoft Plans New First Page On the Internet

Internet
WP: Judge Freezes Internet 'Preservation' Fund

Legal Issues
WSJ: Bell Atlantic's Dispute With Ex-Agent CTC Now May Go to Trial
NYT: Prosecutors Study Computer Company in Reuters Case

Universal Service
FCC: Appointment to the Federal-State Joint Board on Universal Service

Funding
WP: Clinton Asks Big Increases for Science, Technology Research
WP: Clinton Seeks More Arts Funds

** Telephony **

Title: Sprint PCS' Subscriber Count Near One Million, at High End of Estimates
Source: Wall Street Journal (B5)
http://wsj.com/
Author: Elizabeth Jensen
Issue: Wireless
Description: Sprint PCS has signed up nearly one million subscribers for its
digital wireless phone service, presenting a formidable challenge to
entrenched players such as AT&T. Sprint PCS is the highest-profile new
wireless company to be launched in the past year and is building the largest
national system to rival AT&T's. But Sprint watchers have been frustrated by
the company's refusal to release any data until now. For example, the
company said it will announce that its average monthly revenue per
subscriber in 1997 was about $64. While that tracks the average PCS company,
it is well ahead of the average cellular provider.

** Antitrust/Microsoft **

Title: Ruling Halts 'Master' In Microsoft Case
Source: Washington Post (D1,D4)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/03/112l-020398-idx.html
Author: Rajiv Chandrasekaran and Elizabeth Corcoran
Issue: Antitrust
Description: A federal appeals court ruled yesterday that Lawrence Lessig, a
Harvard professor and technology expert, appointed "special master" to study
technical issues in the Justice Department's lawsuit against Microsoft, must
discontinue his work until a three-judge panel reviews his role in the case
more carefully. The ruling was delivered by the U.S. Court of Appeals for
the District of Columbia one day after Microsoft filed its latest legal
brief to dismiss Professor Lessig.

Title: Subpoenas Issued in Probe Of Microsoft
Source: Wall Street Journal (A3)
http://wsj.com/
Author: David Bank
Issue: Antitrust
Description: Attorney generals from 11 states issued new subpoenas in their
antitrust probe of Microsoft, broadening their investigation to include the
software giant's marketing practices for Windows 98. But as the states'
investigation widened, Microsoft won a round in the federal case brought by
the Justice Dept. The U.S. Court of Appeals for D.C. granted the company's
motion to suspend the inquiry of a special master who was appointed by a
lower court to sort out the legal and technical issues in the case.
Microsoft objects to the appointment of Professor Lawrence Lessig on
procedural grounds and claimed that Mr. Lessig was biased against the company.

Title: Microsoft Plans New First Page On the Internet
Source: Wall Street Journal (B5)
http://wsj.com/
Author: Kara Swisher
Issue: Microsoft
Description: Microsoft is developing a new home page, code-named
"start.com," that will be launched in late summer or early fall. Its
features will include many of its Web-based properties, free e-mail, a
search engine called Yukon and an ability for users to personalize the page
to include stock quotes, weather and news of their choice. Microsoft
officials said the new site isn't meant to replace its Web-based proprietary
on-line service called the Microsoft Network. Instead, it is entering the
fast-paced race to become a premiere destination spot on the Web, by better
integrating its offerings.

** Internet **

Title: Judge Freezes Internet 'Preservation' Fund
Source: Washington Post (A6)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/03/077l-020398-idx.html
Author: Rajiv Chandrasekaran
Issue: Internet Regulation
Description: Yesterday, a federal judge issued a preliminary injunction
preventing the U.S. government from "tapping a $46 million fund set up to
promote the Internet's 'preservation and enhancement.'" The judge said that
the endowment is generated by user surcharges that likely constitute an
illegal tax. The decision could make it difficult for the Clinton
administration to pay for the development of a "next generation" Internet
this year.

** Legal Issues **

Title: Bell Atlantic's Dispute With Ex-Agent CTC Now May Go to Trial
Source: Wall Street Journal (B7)
http://wsj.com/
Issue: Competition/Legal Issues
Description: A dispute between Bell Atlantic and its former agent CTC Comm.
may go to trial following a federal court ruling. Judge Wood of the U.S.
District Court in Manhattan issue a temporary restraining order against CTC,
preventing the company from selling local telephone services to customers it
previously served as a Bell Atlantic agent. CTC recently began acting as a
reseller of local phone service, competing with its former partner, Bell
Atlantic. In a lawsuit filed last month, CTC charged Bell Atlantic with
failing to open its markets to local competition. Bell Atlantic, in a news
release, hailed the court's ruling as a victory, saying, "Bell Atlantic is
likely to succeed on the merits of its claim that CTC violated the
non-compete clause in its sales agency contract with Bell Atlantic."

Title: Prosecutors Study Computer Company in Reuters Case
Source: New York Times (D6)
http://www.nytimes.com/library/cyber/week/020398reuters.html
Author: Kurt Eichenwald
Issue: Legal Issues
Description: Federal prosecutors are investigating the relationship between
Reuters Holdings PLC and Cyberspace Research Associates Inc., a Manhattan
based company. They believe that Cyberspace Research may have been
commissioned to steal information electronically from Bloomberg LP, one of
Reuters competitors. Prosecutors are said to believe that the New York
company was working with Reuters Analystics Inc. to assist it in obtaining
information about Bloomberg's operating code. Robert Crooke, a spokesman for
Reuters America, and Chris Taylor, a spokeswoman for Bloomberg, both
declined to comment.

** Universal Service **

Title: Appointment to the Federal-State Joint Board on Universal Service
Source: FCC
http://www.fcc.gov
Issue: Universal Service
Description: Commissioner Gloria Tristani has been appointed to the
Federal-State Joint Board on Universal Service by FCC Chairman, William Kennard.

** Funding **

Title: Clinton Asks Big Increases for Science, Technology Research
Source: Washington Post (A9)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/03/088l-020398-idx.html
Author: Curt Suplee
Issue: Funding/Science & Technology
Description: The Clinton Administration has proposed a sizable increase in
funding for science and technology in fiscal 1999. "Overall, the budget
requests $78.2 billion -- a comparatively modest expansion of about $2
million, or 3 percent above 1998 levels -- for military and civilian
research programs combined." But other agencies, including the Department of
Energy, National Institutes of Health and the National Science Foundation,
are also up for substantial increases, reflecting the administrations
support of energy efficiency, medical research, climate studies and science
education.

Title: Clinton Seeks More Arts Funds
Source: Washington Post (B1,B5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/03/013l-020398-idx.html
Author: Jacqueline Trescott
Issue: Arts
Description: Yesterday, President Clinton asked Capitol Hill lawmakers for a
substantial increase in the fiscal 1999 budget for the National Endowment
for the Arts. The president proposed $136 million, matching the strategy he
used last year when he requested the same amount. In his proposal, Clinton
also requested modest increases for other federal cultural agencies.
*********