December 1998

As is tradition here, the Headlines staff will be taking a few days off to
serve as elves at Macy's (where our motto is: If you can't find it here,
check Gimball's). There will be no CRH service Wed 12/23 -- Fri 1/1. We will
be back Monday January 4, 1999.

TELEVISION
Charting the Digital Broadcasting Future (NTIA)
Gore Panel Takes Middle Ground (B&C)
Networks Battle Nielsen as Young Viewers Turn Up Missing (NYT)
Fifth Annual Report on Competition in Video Markets (FCC)
Remade DBS Braces for '99 (B&C)

SPECTRUM
FCC Mulls Wider Commercial Use of Radical Radio Technology (NYT)
Wireless Provider Boosted By 3Com (WP)
Motorola to Buy Lucent Technologies' Consumer Wireless
Phone Operations (WSJ)
France Telecom Joins Communications Pact For Global Platform (WSJ)

COMPETITION
AT&T, Known for Its Gentlemanly Ways, Gets Tough (WSJ)
TCI/AT&T likely to dodge unbundling (B&C)

JOURNALISM
Less Pressure From Wall St. for Cutbacks in Newsrooms (NYT)

PHILANTHROPY
Prospectus: Silicon Alley Companies Help Nonprofit Groups (NYT)

==========
TELEVISION
==========

CHARTING THE DIGITAL BROADCASTING FUTURE
Issue: Digital TV
From the Media Advisory
http://www.ntia.doc.gov/ntiahome/press/piac121898.htm: Today, the Advisory
Committee on the Public Interest Obligations of Digital Broadcasters
submitted its final report to the Vice President. The report, "Charting the
Digital Broadcasting Future" is available on the Advisory Committee's
website at www.ntia.doc.gov/pubintadvcom/pubint.htm. Copies of the report
are also available from the Government Printing Office (GPO) by calling
(202) 512-0132 and requesting stock number 003-000-00685-9.
[SOURCE: NTIA]
www.ntia.doc.gov/pubintadvcom/pubint.htm
http://www.ntia.doc.gov/pubintadvcom/piacreport.htm

GORE PANEL TAKES MIDDLE GROUND
Issue: Digital TV
The public service recommendations made by the 22-member Gore Commission go
beyond what most broadcasters are willing to offer, but fall short of
public interest advocates' demands. Four members refused to endorse the
report; three broadcasters thought the recommendations too specific. They
include Harold Crump, VP Hubbard Broadcasting; Robert Decherd, President,
A.H. Belo Corp; and William Duhamel, President, Duhamel Broadcasting. The
FCC will consider the recommendations early in 1999.
[SOURCE: Broadcasting & Cable (p.7), Author: Paige Albiniak]

NETWORKS BATTLE NIELSEN AS YOUNG VIEWERS TURN UP MISSING
Issue: Television Economics
The relationship between broadcasters and Nielsen Media Research (the
ratings company) are, at best, tense. Nielsen reports that viewership in the
18- to 34-age group has dropped 6% over last year have started an angry
debate between the company and its clients. One network executive has
accused Nielsen of flawed measurements: "If we don't get an answer soon,"
about how Nielsen intends to correct its data, Nick Schiavone of NBC said,
"then they are in breach of their contract with us." The reports are costing
the broadcast networks tens of million of dollars and arrive at a time when
NBC's profits are already falling because of the los of "Seinfeld" and the
higher costs for "E.R." and "Mad About You." Nielsen contends that the
numbers are good -- but the targeted television audience may have dropped by
as much as 10%.
[SOURCE: New York Times (C1), AUTHOR: Bill Carter]
http://www.nytimes.com/yr/mo/day/news/financial/nielsen-ratings.html

FIFTH ANNUAL REPORT ON COMPETITION IN VIDEO MARKETS
Issue: Competition
From the News Release: "The Commission has adopted its fifth annual report
on competition in markets for the delivery of video programming. This Report
will be submitted to Congress in accordance with Section 628(g) of the
Communications Act. The Report provides updated information on the status of
competition in markets for the delivery of video programming, discusses how
the regulatory changes enacted in the 1996 Act have affected the competitive
environment, and describes barriers to competition that continue to exist.
This is the last annual report the Commission will publish on the state of
cable competition prior to March 31, 1999, the date on which the
Commission's authority to review increases in rates for cable programming
service tiers sunsets. The Report finds that competitive alternatives and
consumer choices are still developing but that cable television continues to
be the primary delivery technology for the distribution of multichannel
video programming and continues to occupy a dominant position in the
multichannel video programming delivery ("MVPD") marketplace. As of June
1998, 85% of all MVPD subscribers received video programming service from
local franchised cable operators compared to 87% a year earlier. The cable
industry has continued to grow in terms of subscriber penetration, channel
capacity, the number of programming services available, revenues, audience
ratings, and expenditures on programming."
[SOURCE: FCC]
http://www.fcc.gov/Bureaus/Cable/News_Releases/1998/nrcb8024.html

REMADE DBS BRACES FOR '99
Issue: Direct Broadcast Satellite; Cable
While the DBS industry is soaring, due in part to recent consolidations
(DirecTV-USSB merger and EchoStar-News Corp. deal), 1999 may be a tough
year due to the cable industry accelerating its digital cable rollout.
"Will digital cable have an impact? Yes, but... the more they talk about
it, the more broadly it comes to people's minds they can get 200 channels.
Cable still has to prove they can deliver on that," said DirecTV President
Eddy Hartenstein. A recent FCC study shows DBS subscriber counts
increasing 43% for the year (as of 6/30/98), compared to less than 2%
growth for cable. But DBS lacks the two-way bandwidth capability of cable
that provide high-speed data and telephony features. An additional factor
that may influence DBS's success in 1999 are regulatory-legislative issues
including local-into-local programming, and the phasing in of must-carry rules.
[SOURCE: Broadcasting & Cable, 12/21/98, p. 4; AUTHOR: Price Colman]

========
SPECTRUM
========

FCC MULLS WIDER COMMERCIAL USE OF RADICAL RADIO TECHNOLOGY
Issue: Spectrum
The Federal Communications Commission is considering changing its rules to
make way for wider commercial use of ultrawide band radio or digital pulse
wireless. The technology helps create low-power communications systems that
are impossible to jam, can penetrate physical obstacles easily and are
invulnerable to eavesdropping. "When you take its attributes and compare it
to the competition, you have very interesting technology that could lead to
awesome possibilities," said Paul Turner, executive director of
PricewaterhouseCoopers' Global Technology Center in Menlo Park (CA). The FCC
will have to change rules because ultrawide band uses certain frequencies
set aside for civilian aviation and military agencies.
[SOURCE: New York Times (C1), AUTHOR: John Markoff]
http://www.nytimes.com/library/tech/98/12/biztech/articles/21time.html

WIRELESS PROVIDER BOOSTED BY 3COM
Issue: Info Tech
3Com Corp. is investing $6 million in Aether Technologies Inc. to support
wireless delivery of news, information and stock quotes to 3Com's
popular Palm hand-held organizers. Aether, a start-up firm, will use the
money to expand network operations and customer service. In March Aether
launched a service called MarketClip which delivers real-time stock quotes
and other financial data to stockbrokers and others. The service requires a
wireless modem that attaches to a Palm or similar device. The companies
plan to expand Palm capability to include order placement, inventory control
and monitoring specific business activities.
[SOURCE: Washington Post (F6), AUTHOR: Mike Mills]
http://www.washingtonpost.com/wp-srv/WPlate/1998-12/21/022l-122198-idx.html

MOTOROLA TO BUY LUCENT TECHNOLOGIES' CONSUMER WIRELESS PHONE OPERATIONS
Issue: Wireless/Merger
Motorola is expected to announce the purchase of Lucent Technologies'
consumer wireless phone operations. Analysts estimate the value of
the purchase at $100 million to $200 million. Lucent will drop a service
that is less important since a joint venture with Phillips Electronics for
cellular operations ended. Motorola is interested in the research and
development of handsets for wireless calls. Observers say Motorola fell
behind in the move to digital communications and is rushing to catch up.
[SOURCE: Wall Street Journal (B8), AUTHOR: Rebecca Blumenstein & Quentin Hardy]
http://www.wsj.com/

FRANCE TELECOM JOINS COMMUNICATIONS PACT FOR GLOBAL PLATFORM
Issue: Wireless
France Telecom is joining the world-wide push to standardize
third-generation mobile telecommunications. In joining forces with a group
of other international companies including Germany's Deutsche Telekom and
Japan's NTT Mobile Communications Network, France Telecom will push
early implementation of International Mobile Telecommunication-2000 networks
to keep pace with consumer demand. The companies are pushing for the ITU to
set up key radio-transmission parameters by March 1999 to promote reduction
of the number of radio-transmission technologies.
[SOURCE: Wall Street Journal (A4), AUTHOR: Dow Jones Newswires]
http://www.wsj.com/

===========
COMPETITION
===========

AT&T, KNOWN FOR ITS GENTLEMANLY WAYS, GETS TOUGH
Issue: Telephony
AT&T has traded in its white shoes for boxing gloves. The company's efforts
are much more aggressive under its current management as it tries to
influence state and local telecommunications policy where today's major
telecommunications battles are being fought. AT&T is fighting mergers such
as Bell Atlantic Corporation and GTE Corp. while promoting its own purchase
of TCI. "Since Mike Armstrong's arrival [as Chairman] and the appointment of
Jim Cicconi [as general counsel], AT&T has been noticeably more aggressive
and creative in its pursuit of pro-competition policies," says Jonathan
Sallet, MCI WorldCom's chief policy counsel.
[SOURCE: Wall Street Journal (B4), AUTHOR: Rebecca Blumenstein & Stephanie
N. Mehta]
http://www.wsj.com/

TCI/AT&T LIKELY TO DODGE UNBUNDLING
Issue: Telephone Regulation
The Federal Communications Commission is likely to require AT&T to create a
strict schedule for rolling out local telephone competition to all customers
in its market as a requirement for its acquisition of Tele-Communications
Inc. For AT&T this approach is preferable to the request of some other
companies that it be required to open its high-speed data network to
Internet competitors. During an FCC hearing last week on pending
telecommunications mergers, FCC Chairman William Kennard indicated that
committing to a firm schedule might be the quid pro quo AT&T must provide.
The FCC could address the unbundling issue in a later ruling that will apply
to the entire industry. The Commission's apparent enthusiasm to approve the
deal worries consumer activists, who urged the panel to put a damper on cable
rates by barring AT&T from subsidizing its foray into local phone service
with higher prices. "Consumers have received too many empty promises of
competition tomorrow in return for rate increases today," says Gene
Kimmelman, co-director of Consumers Union.
[SOURCE: Broadcasting and Cable (16), AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/

==========
JOURNALISM
==========

LESS PRESSURE FROM WALL ST. FOR CUTBACKS IN NEWSROOMS
Issue: Journalism/Ownership
Pressures from Wall Street have usually meant trouble and cut backs for
newspapers. But of late, Wall Street seems like an ally of the newsroom.
Douglas Arthur of Morgan Stanley Dean Witter & Co. said recently, "If you
invest in color presses and you invest in editorial, it sells papers and
drives circulation, and that's the point." One analyst is often asked, What
does Wall Street think about Pulitzer Prizes? "The quick response I usually
give is, 'For the most part, they don't care, unless it involves the paper
they're reading,"' said Merrill Lynch's Lauren Rich Fine. "Then they care a
lot." New York Times Co., she added, "has been able to get away with lower
margins because it's universally accepted that we don't want the paper to
cut back on the newsroom because it offers in-depth analysis." Another
analyst reminded that colleagues "tend to be reflecting more quantitatively
than qualitatively. You're not recommending one stock over another because
you think their newspaper is better," he said. "You're recommending it
because the earnings growth is better."
[SOURCE: New York Times (C1), AUTHOR: Felicity Barringer]
http://www.nytimes.com/yr/mo/day/news/financial/newspaper-finances.html

===========
PHILANTHROPY
===========

Prospectus: Silicon Alley Companies Help Nonprofit Groups
PROSPECTUS: SILICON ALLEY COMPANIES HELP NONPROFIT GROUPS
Issue: Philanthropy
Silicon Alley companies are showing a growing commitment to share time and
cash with nonprofits set up to distributing the benefits of technology.
"Many of the people in the community don't have the ability to write a big
check," said one non profit head speaking of an industry full of cash-short
start-ups. "But they can leverage something more valuable; they can leverage
their expertise." "The companies need to realize there aren't any customers
if people can't get online," he continued. "They have to help create their
future customers and their future employees. You have to light a fire, and
then the customers will demand it."
[SOURCE: New York Times (C3), AUTHOR: Janel Stites]
http://www.nytimes.com/library/tech/98/12/biztech/articles/21pros.html

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TELEPHONE
FCC to Adopt Rules on Slamming (WP)
1998 Common Carrier Scorecard Annual Report (FCC)

INFOTECH
Virtual Assistants, With Personality (NYT)

INTERNET
Prime Time on the Web (WP)

CABLE
Discovery Communications to Spend $300 Million to Launch Health
Network (WSJ)

ANTITRUST
For Microsoft, Growing Sense Of Isolation On Browsers (NYT)

==========
TELEPHONE
==========

FCC TO ADOPT RULES ON SLAMMING
Issue: Telephony
Today, the Federal Communications Commission will vote on the adoption of
new rules intended to curb the growing practice of "slamming", which is when
a customers' long distance carrier is changed with out their permission. The
new regulations would absolve consumers from paying for the first month's
bill from a company to which they had been illegally changed. The commission
also plans to require long distance companies to use more stringent
verification procedures when switching customers to their plan. The number
of slamming complaints to the FCC have risen over 50% in one year alone,
resulting in pressure from both congress and consumer groups to adopt
measures to discourage the practice. "This is the first time that the
consumer is treated as a victim and that's good news," said Sam Simon,
chairman of the nonprofit Telecommunications Research and Action Center.
[SOURCE: Washington Post (B7), AUTHOR: Carloline Mayer]
http://www.washingtonpost.com/wp-srv/WPlate/1998-12/17/178l-121798-idx.html

1998 COMMON CARRIER SCORECARD ANNUAL REPORT
Issue: Telephone
"The Common Carrier Bureau's Enforcement and Industry Analysis Divisions are
proud to make the November 1998 edition of the Scorecard available to the
public via the FCC World Wide Web site on the Internet." A related report --
The December 1998 FCC Telephone Consumer Complaint Scorecard -- is also
available at http://www.fcc.gov/Bureaus/Common_Carrier/Reports/tccsc98.zip
[SOURCE: FCC]
http://www.fcc.gov/Bureaus/Common_Carrier/Reports/score_card_98.html

========
INFOTECH
========

VIRTUAL ASSISTANTS, WITH PERSONALITY
Issue: InfoTech
A look at the efficiency and frustrations of using the computer-generated
administrative assistants offered by Portico, Wildfire and Webley. Using
speech recognition, these services manage telephone, e-mail and fax
communications for busy people. But since the systems only recognize preset
phrases, they can be maddeningly literal and impenetrable. And as two
professors who helped create Portico point out, humans do not distinguish
between communicating with a live person or an electronic creation which
means their reactions to th computer may be even worse than their dealing
with a underachieving live assistant.
[SOURCE: New York Times (Circuits/D1), AUTHOR: Deborah Claymon]
http://www.nytimes.com/library/tech/98/12/circuits/articles/17voic.html

=========
INTERNET
=========

PRIME TIME ON THE WEB
Issue: Internet
Will "portals" be to the Internet what networks are to television? Some
people say that they already are. Internet portals - such as Yahoo, Lycos,
and America Online - all provide "programming", and fight for both
advertisers and audiences. These online networks are rapidly buying
independent sites and services, and linking them together so that people
will never need to leave one they have entered through the portal's front
doors. More and more, it appears that the Internet's market power is being
consolidated into the hands of a few powerful players. Perhaps, though, the
Internet is more like cable than television - meaning there is room for more
than just three big winners.
[SOURCE: Washington Post (B1), AUTHOR: Leslie Walker]
http://www.washingtonpost.com/wp-srv/WPlate/1998-12/17/186l-121798-idx.html

======
CABLE
======

DISCOVERY COMMUNICATIONS TO SPEND $300 MILLION TO LAUNCH HEALTH NETWORK
Issue: Cable/Health
The cable giant, Discovery Communications, has plans to create a new cable
network devoted to health and fitness. Discovery, which is owned in part by
TCI, is hoping to take advantage of the growing market for consumer medical
information by launching a channel dedicated to topics of health and
well-being. The new network will also include interactive Internet tie-ins.
TCI will carry the new channel on its analog tier, but it might be more
difficult to gain carriage on other crowded cable operating systems. Many of
which are relegating new networks to their digital tiers.
[SOURCE: Wall Street Journal (B10), AUTHOR: Leslie Cauley]
http://www.wsj.com/

=========
ANTITRUST
=========

FOR MICROSOFT, GROWING SENSE OF ISOLATION ON BROWSERS
Issue: Antitrust
Testimony in the ongoing (and going and going) Microsoft trial revealed that
companies that develop operating systems are including Internet software,
but only Microsoft tied the two together in a way that prevents them from
being separated. "Everyone who testified said consumers want to be able to
choose which Web browser they use, or maybe to have no Web browser at all,"
said David Boies, the Government's lead trial lawyer. Microsoft did not
dispute the fact that no one else integrated a Web browser with an operating
system. "But from a legal standpoint, that's irrelevant," said a spokesman,
Mark Murray. "The Government does not have the right to dictate how we
design our products." The trial will soon break for the holidays.
[SOURCE: New York Times (C1), AUTHOR: Joel Brinkley]
http://www.nytimes.com/library/tech/98/12/biztech/articles/17soft.html

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EDU-TECH
Networking classes: Who benefits? (Mercury)

INTERNET
Digital Commerce: The Online Day-Trader Phenomenon (NYT)
Crusader Thwarts Invaders of the E-Mailbox (NYT)

RADIO&TELEVISION
Spanish Broadcasting Builds on a Growing Radio Audience (NYT)
FCC Expected to Blast Ad Discrimination (B&C)
'Bigwigs' weigh in On Ownership (B&C)
Union Blue (B&C)

MERGERS
Commission to Hold En Bancs Regarding Telecom Mergers (FCC)
FCC Regulations Aren't in the Public Interest (WSJ)

NEWSPAPERS
Alabama School Papers Serve Communities, Too (NYT)

========
EDUTECH
========

NETWORKING CLASSES: WHO BENEFITS?
Issue: EduTech
With the increased presence of technology in schools, there is also a
growing visibility of businesses in education. High school students all
around the country are participating in specialized job skills programs
supported by high tech companies such as Cisco and Microsoft. Schools are
given the curriculum, but must provide computer labs and pay for teacher
training. The special courses provide students with high demand technology
training, including how to set up and maintain computer networks. While the
supporters of such programs say they give students necessary skills to
compete in today's job market, some critics worry that the courses are too
narrowly focused. There is a concern that the trend towards this type of
vocational education will lure students to high-paying jobs strait out of
high-school, but limit long term career options that could come with a
college education.
[SOURCE: San Jose Mercury (Mercury Center Online), AUTHOR: Michael Bazeley]
http://www.mercurycenter.com/local/education/docs/net121498.htm

========
INTERNET
========

DIGITAL COMMERCE: THE ONLINE DAY-TRADER PHENOMENON
Issue: E-Commerce
The Friday after Thanksgiving marked the first day that home-based, online
day traders had a major impact on trading volume. Playing the stock market
used to be the purview of an elite few -- now anyone with a computer, an
Internet connection and the stomach for risk can play. William Hambrecht,
co-founder of the investment banking firm Hambrecht & Quist, said "I've been
amazed they've been able to have such an impact on some of these big-cap
Internet stocks," said Hambrecht, who now runs W.R. Hambrecht & Co., an
entrepreneurial investment firm. "This isn't a few people with a few small
stocks." He calls the current day trader phenomenon "mob rule," and adds:
"In a free market, it plays itself out. Professionals are trying to tell
these people that they're playing with dangerous stuff, but people don't
listen when they're in a feeding frenzy."
[SOURCE: New York Times (C3), AUTHOR: Denise Caruso]
http://www.nytimes.com/library/tech/98/12/biztech/articles/14digi.html

CRUSADER THWARTS INVADERS OF THE E-MAILBOX
Issue: Security
Paul Vixie created and maintains the Realtime Blackhole List
http://maps.vix.com/rbl -- a frequently updates list of Internet Service
Providers that he concludes are being used to send unsolicited bulk e-mail
or "spam." It can be costly to end up on the list since many companies,
universities, and other organizations heed Mr. Vixie's advise and block
email messages to their systems that originate from listed ISPs. "I got
e-mail from some mother who could no longer send e-mail to her son in
college," Vixie said. "But either I cause a lot of uncertainty for people
until their ISP becomes a model network, or the spammers win, and you and I,
and that mother, would have hundreds of messages coming in every day." Some
question Mr. Vixie's power -- comparing him to Joseph McCarthy. But
anti-spam advocates love him: The Realtime Blackhole List "works because
people trust Paul to make ethical, intelligent decisions about who goes on
and who stays off," said John Mozena, co-founder and vice president of the
Coalition Against Unsolicited Commercial E-Mail http://www.cauce.org, an
anti-spam lobbying and trade group. "If there is a consensus leader among
the anti-spammers," Mozena said. "it would be Paul."
[SOURCE: New York Times (C6), AUTHOR: Matt Richtel]
http://www.nytimes.com/library/tech/98/12/biztech/articles/14spam.html

=================
RADIO&TELEVISION
=================

SPANISH BROADCASTING BUILDS ON A GROWING RADIO AUDIENCE
Issue: Minorities/Radio
Spanish is now the primary language for 10% of the US population and 30% in
metropolitan New York. Spanish radio now makes up 6.5% of the nation's total
listening audience. In New York, the number 1 station is Mega 97.9 which
offers a combination of salsa and merengue music aimed at listeners 18 to
34. The station and 11 others are owned by Spanish Broadcasting System Inc,
based in Miami. Privately owned, the company is considering taking on a
partner or going public so it can better compete with Heftel Broadcasting
which owns 39 Spanish-language stations.
[SOURCE: New York Times (C7), AUTHOR: Geraldine Fabrikant]
http://www.nytimes.com/yr/mo/day/news/financial/spanish-radio-media-art....

FCC EXPECTED TO BLAST AD DISCRIMINATION
Issue: Minorities
This week, the FCC is expected to release a report that criticizes major
advertisers for discrimination against minority owned broadcast outlets and
consumers. Reportedly, the study found that even highly rated stations aimed
at minority audiences ranked low for advertising revenue. The study also
found minority owned stations landed less advertising dollars white owned
stations with similar formats. The report is being criticized by some civil
rights leaders because its lack of recommendations on how to curb the
practice of advertiser discrimination. Thomas Hart, council for the
Rainbow/Push Coalition, says, "It's a good start, but it really doesn't have
any teeth," he adds, "There should be suggestions for coordination between
government agencies and enforcement mechanisms."
[SOURCE: Broadcasting and Cable (p18), AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/

'BIGWIGS' WEIGH IN ON OWNERSHIP
Issue: Ownership
Pressure is mounting for Federal Communications Commission Chairman William
Kennard to ease ownership restrictions on broadcasters. Both industry
officials and Republican congressmen have vehemently protested Chairman
Kennard's proposal to eliminate local marking agreements (LMAs), which allow
one station to manage another without actually owning it. Wall Street
executives are concerned about the effect the proposed rules might have on
capital markets. While other expected changes will liberalize the current
limitations on cross-ownership, broadcasters are not satisfied. Chairman
Kennard has already put off a commission vote on the ownership rules, and
has said that he will continue to listen to "all interested parties". The
elimination of LMAs is intended to curb the increasing consolidation trend
in broadcasting.
[SOURCE: Broadcasting and Cable (p22), AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/

UNION BLUE
Issue: Jobs
Much of ABC's technical workforce has been locked out of their jobs for six
weeks now. What started as a one-day strike over health benefits has turned
into a battle over the future of union workers at the broadcast networks. As
technology becomes easier to operate the major networks are less dependant
on experienced union technicians, and are increasingly using part-time
workers and subcontractors. While the number of technical jobs is actually
growing, broadcasters are simply less likely to fill those positions with
full-time union workers. Both CBS and NBC are scheduled to negotiate new
contracts with their technical unions soon. Meanwhile, sources say that the
ABC lockout will last until a new contract is signed.
[SOURCE: Broadcasting and Cable (p26), AUTHOR: Steve McClellan]
http://www.broadcastingcable.com/

=======
MERGERS
=======

COMMISSION TO HOLD EN BANCS REGARDING TELECOM MERGERS
Issue: Mergers
From the Public Notice: two En Bancs will take place on Monday, December
14, 1998 in the Commission Meeting Room (Room 856) at 1919 M Street, N.W.,
Washington, D.C. In the first En Banc, from 9:30 a.m. to 12 noon, interested
parties, including state, consumer, community and industry representatives,
will discuss the impact on telecommunications markets of the proposed
mergers between incumbent local exchange carriers SBC and Ameritech (CC
Docket No. 98-141), and Bell Atlantic and GTE (CC Docket No. 98- 184). In
the second En Banc, from 1 p.m. to 2 p.m., interested parties, including
consumer, community and industry representatives will discuss the impact on
telecommunications markets of the proposed merger between AT&T and
Tele-Communications, Inc. (CS Docket No. 98- 178). For additional
information contact Florence Grasso at 418-1579 News media contact: Rochelle
Cohen at 418-0253. See the agenda
http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1998/nrcc8092.html
. Listen on the Web http://www.fcc.gov/realaudio/.
[SOURCE: FCC]
http://www.fcc.gov/Bureaus/Common_Carrier/Public_Notices/1998/da982415.html

FCC REGUALTIONS AREN'T IN THE PUBLIC INTEREST
Issue: Mergers
(Op-ED) This week, the FCC will be considering the "public interest"
ramifications of three mergers: SBC-Ameritech, Bell Atlantic-GTE, and
AT&T-TCI. In the eyes of Commissioner Harold Furchtgott-Roth, the process
for approving corporate mergers - no matter how large -- "should be as
predictable and fair as transferring titles and licenses for automobiles."
While the FCC processes thousands of license transfers every year, only few
of those receive public interest scrutiny. Since it would be impractical to
subject the transfer of every radio license to a public interest review, it
is unfair to conduct such investigations on just some of the potential
license holders, argues Mr. Furchtgott-Roth. He suggest that the FCC adopt
more transparent rules for license transfers "that do not discriminate among
applicants."
[SOURCE: Wall Street Journal (A18), AUTHOR: Harold Furchtgott-Roth
(Commissioner of the Federal Communications Commission)]
http://www.wsj.com/

==========
NEWSPAPERS
==========

ALABAMA SCHOOL PAPERS SERVE COMMUNITIES, TOO
Issue: Newspapers
Through a program at the University of Alabama at Tuscaloosa, high school
newspapers are serving small rural towns as the major source of local
information. "These schools are the linchpins of their communities," said
Jim Wrye, program manager for Pacers, which is short for Program for the
Academic and Cultural Enhancement of Rural Schools. "And these newspapers
get people in the loop." So beyond Homecoming news, the papers have articles
on crime and city politics as well. Students receive training supported by
the Lyndhurst Foundation at the University, but the papers are expected to
be self-sustaining. "The kids do everything," Wrye said, "writing stories,
selling ads, managing the business." Wrye's aim is to expand the program to
every rural town in Alabama and start similar programs in North Carolina,
Tennessee and Georgia.
[SOURCE: New York Times (C7), AUTHOR: Bernard Stamler]
http://www.nytimes.com/yr/mo/day/news/financial/alabama-hs-papers.html

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MERGERS
AT&T to Purchase IBM Data Network (WP)
FCC Officials Concerns With Baby Bell Mergers (WSJ)
McLean Firm to Acquire Esprit Telecom (WP)

CABLE/COMPETITION
Time Warner and CBS in Digital TV Deal (NYT)
Ameritech Launches Cable Service in Chicago (ChiTrib)
Cablevision Can't Intervene in Case Involving a BEC
Energy Telecom Venture (WSJ)

INTERNATIONAL
16% World Illiteracy to Grow, Study Says (NYT)

LIFESTYLES!
A Concert Communion With Cell Phones (NYT)

========
MERGERS
=======

AT&T TO PURCHASE IBM DATA NETWORK
Issue: Merger
AT&T will purchase IBM's global communications network for $5 billion in
cash. The IBM data network serves several hundred large, multinational
corporations, thousands more mid-size businesses and more than 1 million
individual Internet subscribers in 59 countries. AT&T has sought to expand
its data service business, especially on networks that use Internet protocol
(IP) standards since it lags MCI WorldCom and others in IP capability. IBM
had been trying to sell its network in recent months to allow it to place
more efforts behind its computer business. While the price was higher than
expected, observers said the sale made sense for both parties. The deal also
includes side agreements to make AT&T the main phone-service provider for
IBM and will give IBM management of some of AT&T's computer services,
including payroll and other functions. Approximately 7000 workers will
switch companies under the agreement. The companies expect the deal to be
completed by the middle of 1999.
[SOURCE: Washington Post (C11), AUTHOR: Mark Leibovich & Mike Mills]
http://www.washingtonpost.com/wp-srv/WPlate/1998-12/09/081l-120998-idx.html
AT&T TO PAY $5 BILLION FOR IBM NETWORK
[SOURCE: Wall Street Journal (B7), AUTHOR: Rebecca Blumenstein & Raju Narisetti]
http://www.wsj.com/
AT&T BUYING IBM'S NETWORK IN $5 BILLION DEAL
[SOURCE: New York Times (C1), AUTHOR: Seth Schiesel]
http://www.nytimes.com/library/tech/98/12/biztech/articles/09phone.html

FCC OFFICIALS CONCERNS WITH BABY BELL MERGERS
Issue: Mergers
After several large telecommunications mergers in the last two years, the
FCC is beginning to question whether the rampant consolidation of regional
bells actually serves the public interest. After the break-up of AT&T in the
mid-eighties, there were seven Baby Bells and GTE. If two currently pending
mergers are approved, there will only be four different regional carriers
left. The FCC - which is reviewing SBC's acquisition of Ameritech and Bell
Atlantic's merger with GTE - appears to be concerned about the effects these
deals will have on potential competition. "Certainly there comes a time at
which recreating AT&T East and AT&T West crosses the line," says Thomas
Krattenmaker, who is leading the FCC merger review.
[SOURCE: Wall Street Journal (A2), AUTHOR: Bryan Gruley and Stephanie Mehta]
http://www.wsj.com/

MCLEAN FIRM TO ACQUIRE ESPRIT TELECOM
Issue: Merger
Global Telesystems Group Inc., a US firm with fiber optic capacity in
Europe, is purchasing Esprit Telecom Group PLC, a British telecommunications
firm, for nearly $1 billion. Observers say the merger will be complementary
since Esprit presently has a network of European business customers for
voice and data services but depends on other companies for its long-distance
lines. Now those customers will be folded into Global as it builds a
fiber-optic network between major European cities along railroad lines.
Global, which started as a Russian phone company, presently wholesales its
services to other companies. Wide-open competition in telecommunications
began in Europe in January.
[SOURCE: Washington Post (C15), AUTHOR: Jerry Knight]
http://www.washingtonpost.com/wp-srv/digest/wtech002.htm
GTS TO PURCHASE ESPRIT TELECOM FOR $645 MILLION
[SOURCE: Wall Street Journal (B7), AUTHOR: Kimberley A. Strassel]
http://www.wsj.com/

=================
CABLE/COMPETITION
=================

TIME WARNER AND CBS IN DIGITAL TV DEAL
Issue: DTV/Cable
Time Warner, the nation's second largest cable operator, has signed an
agreement with CBS to carry the digital signals of the network's 14 owned
and operated television stations. As of now, only four CBS owned stations
are transmitting digitally. CBS hopes that this agreement will ensure
carriage during transition, and also serve as a model for agreements between
Time Warner and other CBS affiliated stations. Many cable operators claim
that they do not have enough bandwidth to carry both the analog and digital
signals of local broadcasters without crowding out cable networks. Time
Warner, however, has upgraded the capacity of most of its systems and will
have no trouble finding space for the new digital channels. The Federal
Communications Commission is hoping that broadcasters and cable operators
will independently reach digital carriage agreements, avoiding the need for
federal regulation.
[SOURCE: New York Times (C2), AUTHOR: Lawrie Mifflin]
http://www.nytimes.com/library/tech/98/12/biztech/articles/09digi.html
See also:
TIME WARNER INC. AGREES TO CARRY CBS'S DIGITAL TV
[SOURCE: Wall Street Journal (B6), AUTHOR: Leslie Cauley]
http://www.wsj.com/

AMERITECH LAUNCHES CABLE SERVICE IN CHICAGO
Issue: Cable/Competition
Local telephone incumbent Ameritech has started to provide cable service on
Chicago's southwest side. The service, Americast, will compete with TCI
which has offered cable TV service for 15 years. Another company, 21st
Century Cable, is competing with TCI in northeast Chicago by providing cable
TV, high-speed Internet access and local phone service in high-rise
apartments. TCI is being purchased by AT&T with plans to use the cable
system to provide local phone and high-speed Internet access.
[SOURCE: Chicago Tribune (Sec3, p.5), AUTHOR: Jon Van]
http://chicagotribune.com/textversion/article/0,1492,SAV-9812090256,00.html

CABLEVISION CAN'T INTERVENE IN CASE INVOLVING A BEC ENERGY TELECOM VENTURE
Issue: Broadband
Massachusetts's highest court ruled that Cablevision Systems Corp. cannot
intervene in a regulatory case involving the transfer of 126 miles of fiber
optic lines by Boston Edison Co. to an unregulated telecommunications joint
venture. Cablevision says that Boston Edison transferred the assets at an
artificially low $7 million to avoid taxes. The joint venture is using the
lines to provide cable television, telephone and Internet service in the
Boston area -- the same area in which Cablevision provides cable TV service. The
Massachusetts government is investigating the deal. The dispute is being
widely followed, because many utilities are planning to sell cable TV, phone
or Internet services via their existing rights-of-way and fiber optic networks.
[SOURCE: Wall Street Journal (B6), AUTHOR: Mark Maremont]
http://www.wsj.com/

=============
INTERNATIONAL
=============

16% WORLD ILLITERACY TO GROW, STUDY SAYS
Issue: Literacy
Unicef, the United Nations' children's fund, has released its annual report
"The State of the World's Children" for 1999
http://www.unicef.org/sowc99/. The report finds that one-sixth of the 5.9
billion people in the world cannot read -- and predicts this number will
grow since only 1 in 4 children in the poorest nations is in school.
Education is most often denied to girls. Illiteracy has a direct
relationship to important health indicators and fertility rates. "A
10-percentage-point increase in girls' primary enrollment can be expected to
decrease infant mortality by 4.1 deaths per 1,000, and a similar rise in
girls' secondary enrollment by another 5.6 deaths per 1,000," the report
says. "This would mean concretely, in Pakistan for example, that an extra
year of schooling for 1,000 girls would ultimately prevent roughly 60 infant
deaths." Unicef and other organizations that work with children say
education should be guaranteed under the 1989 Convention on the Rights of
the Child. But the intentions of that treaty are being overwhelmed by a host
of problems, including economic crises in countries like Russia and Indonesia.
[SOURCE: New York Times (A10), AUTHOR: Barbara Crossette]
http://www.nytimes.com/library/world/global/120998unicef-literacy.html

CHINA SOLICITS COMMENT VIA INTERNET
Issue: Internet/International
The State Development Planning Commission of China received approximately
1,000 comments about China's future on a website in the past week. In
China's first time to use the Internet to solicit comments, the Government
reports that 3,000 people visited the site to offer comments about the next
five-year development plan. A Chinese official said that about 80% of
the comments were positive and that most of the dissenting views came from
outside China. China's Communist Party wants to use the Internet for modern
commerce but is wary of its power to spread dissent. Last week the Chinese
government put a computer entrepreneur on trial for subversion for providing
Chinese e-mail addresses to a pro-democracy online magazine. With about 1.2
million registered users, the Internet is booming in China.
[SOURCE: Washington Post (Online), AUTHOR: Renee Schoof (Associated Press)]
http://www.washingtonpost.com/wp-srv/WAPO/19981208/V000335-120898-idx.html

===========
LIFESTYLES!
===========

A CONCERT COMMUNION WITH CELL PHONES
Issue: Life Styles
Some people have noticed a new trend at rock concerts these days. Cell
phones have begun to replace lighters as a favorite concert prop. These
items do not just provide light, but they also allow people to share the
experience with other who are not there. Michael Marion, general manager of
Alltel Arena in Little Rock, Ark., observed this phenomena during
"Stairway to Heaven" at a recent Led Zeppelin Show. "Everybody was holding
up their hands, and here and there I could see guys holding up their cell
phones, playing music for someone else," he remembered. (Kevin, did you
bring you cell phone when you went to see the Spice Girls in concert? -- RA)
[SOURCE: New York Times (B1), AUTHOR: Neil Strauss]
http://www.nytimes.com/yr/mo/day/news/arts/concerts-cellphones.html

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