March 1999

PUBLIC BROADCASTING
Prospects Sobering on Hill, In Media World (Current)
Local Docs Satisfy Yearning: To Know Where We Came From (Current)
Network Growing Into 'Creative Impresario' Role in Program
Development (Current)

TELEVISION CONTENT
Reality Tv Goes Feminine With Hugs Instead Of Thugs (WP)

INTERNET
Taking Web as a Given, Museums Go After Net Audience (CyberTimes)
Future Management and Administration of the .us Domain (NTIA)
Reno Announces Alliance to Curb Cybercrime (NYT)

MERGERS/OWNERSHIP
AT&T Merge Starts New Era (B&C)
Investor Puts Plans For Media Empire On Hold (WSJ)

FCC
FCC In Direct Line of Fire From The Hill (B&C)

CAMPAIGN FIANCE
GOP Got More Media Bucks in 1998 (B&C)

FREE SPEECH
Punishing The Mirror (B&C)

ANTITRUST
19 States to Seek an Overhaul of Microsoft (NYT)

PUBLIC BROADCASTING

PROSPECTS SOBERING ON HILL, IN MEDIA WORLD
Issue: Budget Issues/Digital TV/Competition
"I can't imagine any scenario in which you'll get the kind of money you're
talking about by 2003, even with an authorization," Lisa Sutherland,
legislative director for the Senate Appropriations Committee said. That
message -- called "suicidally sobering" by one public station leader -- was
delivered by several key contributors at the annual meeting of America's
Public Television Stations. Public stations are gearing up for their digital
transition and want Congress to authorize and appropriate $770 million for
that massive change. Current caps on federal spending, disputes over how to
use budget surpluses, previous Congressional committee positions on funding
digital for public broadcasting, and Congress' present disinterest in
passing major legislation appear to doom the effort. A second harsh message
delivered at the meeting was that public TV is "increasingly vulnerable" to
competition from cable. Multi-tiered, deep-pocketed cable competitors will
be much better positioned to extend their services and strengthen their
brands in the digital environment.
[SOURCE: Current (p.1), AUTHOR: Karen Everhart Bedford]
http://www.current.org/

LOCAL DOCS SATISFY YEARNING: TO KNOW WHERE WE CAME FROM
Issue: Content
PBS stations have discovered locally-produced documentaries that look at
neighborhoods or ethnic groups can be useful pledge vehicles to raise
interest and draw in dollars. Softer documentaries of the '80s have given
way to harder-edged documentaries, more historically heavy ethnic pieces.
For WGTE in Toledo, Ohio the result has been "Cornerstones," an occasional
series that has, to date, covered the history of the Irish, German, Polish
and African-American communities in Toledo. Three more are planned. Bill
Fredette of WGTE said, "Fiscally, it's been a very wise move, but that
wasn't our original intent." San Francisco's KQED made the same discovery
when it launched its "Neighborhoods: The Hidden Cities of San Francisco"
series in 1994. The "Searching for San Diego" series of KPBS profiled San
Diego's Little Italy and San Ysidro. Three documentaries done by Milwaukee's
WMVS (which did not air in pledge periods) discuss the past but concentrate
on what the neighborhoods are like today. Some stations, such as Georgia
Public Broadcasting and Kentucky ETV, are able to make money from video
sales. They peddle an extensive collection of videotapes on local history
and landmarks. National or local, nostalgic or not, these documentaries are
helping Americans feel connected, Peter Stein of KQED thinks.
[SOURCE: Current (p.1), AUTHOR: Geneva Collins]
http://www.current.org/hi/hi904.html

NETWORK GROWING INTO 'CREATIVE IMPRESARIO' ROLE IN PROGRAM DEVELOPMENT
Issue: Policy Makers
Two editors of Current talked to Ervin Duggan about his first five years as
PBS President and plans for year six. A few excerpts: Q: Is there a creative
role that has been missing from PBS...? A: With the creation of the Chief
Program Executive Model, a more active role for PBS in programming -- having
ideas and bringing them forward -- was implied. But that does not happen
overnight. If you look at the role of Alice Cahn in children's programming
or Ellen Hume in the Democracy Project, you will see emerging a kind of
creative impresario's role that I think will increasingly be expected by our
member stations. Q: Could the Forum Network -- from the Freedom Forum and
WETA -- end up as one of the DTV multicasting channels offered through PBS?
A: There is every possibility that that could happen. When you look at the
history of public television, in programming, good ideas have always bubbled
up from the local level to the national, and there's no reason that couldn't
happen on the distribution side as well. Q: Another way public TV may be
able to generate revenues is through what the FCC calls "ancillary and
supplementary" uses of DTV. APTS filed comments with the commission on that
matter, but PBS reportedly decided not to file separate comments. Could you
say what your personal concerns are? A: We described our concerns in a memo
to general managers and assured them that we would rely on APTS to be the
advocate before the FCC. I'm not going to go there now, because it would
appear to involve me in a debate that I'm not involved in.
[SOURCE: Current (p.10), AUTHOR: Steve Behrens & Karen Everhard Bedford]
http://www.current.org/

TELEVISION CONTENT

REALITY TV GOES FEMININE WITH HUGS INSTEAD OF THUGS
Issue: Television
According to audience research, there's something appealing for both men and
women in the newest addition to the reality TV/ "video verite" genre of
television. "Blind Date" will make its debut in syndication this fall. Hopeful
participants will wire themselves with a concealed mike and set out to find
romance. Psychologists and comedians will offer commentary on the experience as
it is happening, via balloon graphics that will pop up on the screen. The show
is said to appeal to men and women, but for different reasons: "Men guffaw at
the comic," says PolyGram Television President Bob Sanitsky, "while inevitably,
women tell us they love watching the dates." This is part of a trend that
commentators are connecting to "Cops" that began in 1988. Once only car crashes
and hold ups, now The Learning Channel's "lifestyle documentaries" feature the
"realities" of people's weddings and childbirth stories. Without having to pay
actors and write scripts, this kind of television is also cheaper than
traditional sitcoms says Gingold of the Leaning Channel. Gingold explains that
the stories are accentuated in order to build sympathy for the characters.
Participants are asked to reveal the history of their relationship in detail.
While this show is attempting to appeal to both genders, most advertisers are
still holding to gender stereotypes: "Brewers and off-road vehicle
manufacturers want their spots to reach male buyers, while the Learning Channel
afternoon block is thick with commercials for honeymoon cruises,
yeast-infection medications and Gerber's baby products."
[SOURCE: Washington Post (A1), AUTHOR: Paula Span]
http://www.washingtonpost.com/wp-srv/WPlate/1999-03/16/150l-031699-idx.html

INTERNET

TAKING WEB AS A GIVEN, MUSEUMS GO AFTER NET AUDIENCE
Issue: Museums
450 officials from cultural institutions in 26 countries are meting this
week in New Orleans for the third annual Museums and the Web conference
http://www.archimuse.com/conferences/mw.html. They are exchanging ideas on
the best ways to reach a virtual audience through online information,
education and entertainment. Peter Walsh, information director of the Davis
Museum at Wellesley College in Wellesley, Mass., said: "If you're not on the
Web, you don't exist. That word has gotten to the powers that be [museum
executives and trustees]. Now the question is, what kind of Web site do you
want to be?" See also ArtMuseum.net http://www.artmuseum.net/ and Museu da
Pessao http://www.museudapessoa.com.br/.
[SOURCE: CyberTimes, AUTHOR: Matthew Mirapaul mirapaul( at )nytimes.com]
http://www.nytimes.com/library/tech/99/03/cyber/articles/16museums.html

FUTURE MANAGEMENT AND ADMINISTRATION OF THE .US DOMAIN
Issue: Internet Regulation
NTIA held a public meeting on March 9 to discuss the future administration
and management of the .us domain space. The agenda for this meeting and
copies of presentations given at the meeting are now available. Program
included ".us Issues and Opportunities" and "Models for Management."
[SOURCE: NTIA]
http://www.ntia.doc.gov/ntiahome/domainname/dotusagenda.htm

RENO ANNOUNCES ALLIANCE TO CURB CYBERCRIME
Issue: Internet
Attorney General Janet Reno announced a new public-private initiative to
help fight cybercrime. "A decade ago, cybercrime and cyberterrorism didn't
really exist outside of Hollywood movies. Today, they are very real
threats," Attorney General Reno said. The Cybercitizen Partnership will
feature a "personnel exchange program" between business and federal agencies
so that they can better help each other in responding to Internet crime. The
initiative also will include programs to educate children about acceptable
online behavior. Attorney General Reno said that not enough children know
"that it's wrong to break into their neighbor's computers and snoop through
their computer files." [Dennis! Have you been reading the Johnson's email
again?]
[SOURCE: New York Times (Online), AUTHOR: The Associate Press]
http://www.nytimes.com/library/tech/99/03/biztech/articles/16reno.html

MERGERS/OWNERSHIP

AT&T MERGE STARTS NEW ERA
Issue: Merger/Broadband
The merger that closed last week between TCI and AT&T was valued at
approximately $59 billion. AT&T hopes to have local telephone service,
once again, up and running by the end of the year. AT&T CEO
Michael Armstrong says, "the merger is a huge step forward in the
transformation of AT&T to an any-distance company." The deal mixes
corporate and technological interests in such a way that will spark
competition said Mike Luftman, spokesman for Time Warner Cable: "The
entrance of AT&T into the cable business is the ultimate endorsement of the
cable broadband architecture, and it's a transforming event."
Former TCI President Leo Hindery is now the CEO of AT&T Broadband &
Internet Services that will remain operating out of Denver. So far 10 TCI
employees have been laid off, but no more than 100 layoffs are expected.
TCI's John Malone says that he has plans to use Liberty Media
Group, TCI's former programming subsidiary, to "become an active
venture-capital player in interactive media, technology and e-commerce."
[SOURCE: Broadcasting & Cable (p. 39), AUTHOR: Price Colman]
http://www.broadcastingcable.com/

INVESTOR PUTS PLANS FOR MEDIA EMPIRE ON HOLD
Issue: Mergers
Chancellor Media, one of the US's largest radio companies, was up for sale and
has gone off of the market. The original plan was to have Chancellor buy Lin
Television, controlled by Hicks Muse. Instead, stock holders pressured Hicks
Muse to find a buyer for Chancellor. Investor Thomas Hicks says Chancellor's
chief executive is resigning and the plans to buy Lin Television have been
dropped. "Some of our investors called me and said they didn't want Chancellor
to be a TV company. We paid attention to them," Hicks says. Clear Channel
Communications was the company most likely to buy Chancellor. Investors were
concerned with Chancellor's debt and the company's close relationship with
Hicks Muse, the company that controls Lin and Capstar Broadcasting, a medium-
market radio group that Chancellor still has plans to buy. Investors are
also frustrated with Mr. Marcus's extravagant spending as CEO of Chancellor and
his lack of radio experience. His $1 million salary is augmented by a $2-$4
million annual bonus. Changes announced yesterday include Thomas Hicks as CEO
of Chancellor and Hicks Muse will purchase $500 million in Chancellor stock as
part of it's continued commitment to the company.
[SOURCE: Wall Street Journal (B1), AUTHOR: Carlos Tejada]
http://wsj.com/
See Also:
GIANT DECIDES TO STAY IN RADIO
Issue: Ownership
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: Tim Jones]
http://chicagotribune.com/textversion/article/0,1492,SAV-9903160207,00.html

FCC

FCC IN DIRECT LINE OF FIRE FROM THE HILL
Issue: Regulation
Rep Billy Tauzin (R-LA) is expected to voice his desire to "radically
reshape" the Federal Communication Commission (FCC) on Wednesday, March 17,
when FCC Chairman William Kennard testifies before the telecommunications
panel. He criticizes the application of a vague, "Depression Era mandate" of
regulating "in the public interest." [Yeah, what's all this cr*p about the
public interest, anyway?] This mandate includes FCC initiatives like free
airtime for political candidates, tightening of broadcast ownership rules,
and creating a low power FM service. Rep Tauzin says, "we haven't had a
comprehensive review of the FCC since the 1970's, when there was one
telephone company, three networks and not even Bill Gates had heard of a
laptop with Internet access." Rep Tauzin, along with other lawmakers, plan
to introduce legislation this summer that would reduce the FCC's
operations. Rep John Dingell (D-MI) is among Chairman Kennard's most vocal
critics, saying he has botched up the implementation of the 1996
Telecommunications Act. Here's the restructuring Rep Tauzin has in mind: 1)
Congress should get rid of FCC rules lawmakers see as unnecessary; 2) some
FCC functions should be given over to the private sector; and 3) some of the
bureaus should be combined to prevent overlapping of duties. With the
telecommunications industry as huge, fast growing and profitable as it is,
McConnell reports that lawmakers will have a hard time succeeding. In
addition, the Clinton Administration, a source of many of Chairman Kennard's
initiatives, would oppose curtailing the FCC's authority. Chairman Kennard
may support streamlining of the agency, but is expected to support the FCC's
"public-interest mandates," saying that Congress has given the FCC authority
to make social policy. Case in point: The 1996 Telecom Act ordered the FCC
to "impose public-interest obligations on satellite broadcasters,"
McConnell reports.
[SOURCE: Broadcasting&Cable (p. 19), AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/

CAMPAIGN FIANCE

GOP GOT MORE MEDIA BUCKS IN 1998
Issue: Campaign Finance
According to political watchdog group Common Cause, telecommunications, media,
and entertainment companies gave more money overall to Republicans and
Democrats in 1998 as compared to the midterm elections of 1993-1994. When each
industry is looked at separately, Common Cause found that telecommunications
companies preferred to give money to deregulating Republicans ($5.5 million)
over
Democrats ($3.6 million). Hollywood, on the other hand, is much more partial
to Democrats. Media and entertainment industries gave Democrats $3.6 million
and the GOP $2.8 million. Rupert Murdoch's News Corp. broke the Democratic
trend of the industry by giving $460,250 to Republicans and only $60,000 to
Democrats. Disney handed out a fare share to both parties: $367,175 to
Republicans and $471,206 to Democrats.
[SOURCE: Broadcasting&Cable (p. 20), AUTHOR: Bill McConnell]
http://www.broadcastingcable.com/

FREE SPEECH

PUNISHING THE MIRROR
Issue: Free Speech
[Editorial] The Supreme Court decision to consider a suit against Oliver
Stone and his company -- charging that Natural Born Killers provoked a
teenage couple to commit crimes similar to those portrayed in the film -- is
a blow to the First Amendment. The suit before a Louisiana jury argues that
the movie did not only adversely influence two young criminals, but that it
actually set out with the intention of encouraging individuals to kill. Yes,
movies can have an affect on their audiences, say the authors, but they also
point out: "That's what art is supposed to do."
[SOURCE: Broadcasting&Cable (p.90), AUTHOR: B&C Editorial Staff]
http://www.broadcastingcable.com/

ANTITRUST

19 STATES TO SEEK AN OVERHAUL OF MICROSOFT
Issue: Antitrust
As the optimism builds over the possibility of a government victory in the
Microsoft antitrust case, the 19 states involved with the suit are
considering various remedies for the company's operating system monopoly. As
co-litigants in the case, the states are very encouraged by the their
accomplishments in court and are eager to find lasting solutions. One of the
most favored proposals would require Microsoft to license the Windows source
code to competitors. Some state would also like to collect fines from the
software giant. Other possible recommendations from the states involve
structural remedies, which could break up the company into two or three
parts. It is Judge Thomas Penfied Jackson, however, who will ultimately
decide what, if any, remedy is needed in the Microsoft case.
[SOURCE: New York Times (C1), AUTHOR: Joel Brinkley]
http://www.nytimes.com/library/tech/99/03/biztech/articles/16microsoft-stat
es.html

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LIBRARIES
The Too-Much-Information Age (WP)

INTERNET
Speech: A Stable Market, A Dynamic Internet (FCC)
FCC Won't Regulate Internet. Really. (WP)
A TV Titan And A Webmaster Clash Over Lycos (WSJ)
AT&T Scrambles To Meet Demand For Its Worldnet (WSJ)
FTC Targets Internet Scams (WP)
High-Speed Net Service Planned by AOL and SBC (SJ Merc)

MERGERS
Ameritech Already Raising Prices, Report Says (ChiTrib)

PRIVACY
Companies Fight Anonymous Critics With Lawsuits (CyberTimes)
Panel Passes Bill to Halt Limits on Encryption (CyberTimes)

LIBRARIES

THE TOO-MUCH-INFORMATION AGE
Issue: Libraries & the Information Age
The Library of Congress has 113 million items already, and every morning
20,000 more items slam into the loading dock. The amount of information we
are accumulating is staggering. "It's significant that we call it the
Information Age," James Billington, the Librarian of Congress, said. "We
don't talk about the Knowledge Age." The problems are not just how to deal
with storage and cataloging of information, but also how to deal with
preservation. The problem of digital preservation has to be addressed, says
an official at the National Archives, "or memory will be lost for the latter
half of the 20th century." White House correspondence from the Reagen and
Bush administrations is already in danger of being lost forever because the
computer system used is out of date. And then there's the Internet. The
Library of Congress has been putting many of its priceless prints, maps and
documents on a searchable Web site. The dream of many librarians is that
someday the collective knowledge of civilization will be available on the
Web. It takes time and money to move books or other sources into digital
format. A venture called Project Gutenberg has the goal of putting 10,000
texts online by the year 2001, but that is about the equivalent of two weeks
worth of book arrivals at the Library of Congress. James Billington also
worries about broader philosophical matters, such as: Are we truly wiser
with all this information?
[SOURCE: Washington Post (A1), AUTHOR: Joel Achenbach]
http://www.washingtonpost.com/wp-srv/WPlate/1999-03/12/172l-031299-idx.html

INTERNET

SPEECH: A STABLE MARKET, A DYNAMIC INTERNET
Issue: Internet Regulation
Chairman Kennard's 3/11 Remarks before Legg Mason in Washington (DC): I
believe that two things are most responsible for the explosion of the
Internet, the fastest growing communications tool in the history of the
world. First, this tradition of openness. Second, the fact that the Internet
is unregulated. The Internet grew so fast that regulators hardly had a
chance to regulate it even if they wanted to. And that's a good thing. Now,
two weeks ago, the FCC made a decision that addressed the payment of
reciprocal compensation for Internet-bound traffic. Now, in plain English,
this means that the decision dealt with the way in which different phone
companies pay each other for connecting your call to the Internet. With this
order, it's clear that the FCC, and the FCC alone, has jurisdiction over
Internet traffic. It means that no state can impose long-distance charges.
And the FCC won't either. Let me say this as clearly as I can: as long as I
am chairman of the FCC, we will not regulate the Internet.
[SOURCE: FCC]
http://www.fcc.gov/Speeches/Kennard/spwek910.html

FCC WON'T REGULATE INTERNET. REALLY.
Issue: FCC
"As long as I'm chairman of the Federal Communications this agency will not
regulate the Internet," FCC Chairman William E. Kennard told a meeting of
telecommunications analysts and Internet analysts Thursday. He was
addressing rumors that have circulated on the Internet for a long time as
well as concerns of some consumer groups. He repeated that the FCC has no
intention of making computer users pay long-distance fees for dial-up access
to the Internet, as people now pay when they make long distance telephone
calls. "Now I know this painfully because every so often when one of these
rumors flares up I get literally, about 600 e-mail messages a day by people
who are telling me to keep my hands off the Internet," Chairman Kennard
added. Separately, Kennard said the FCC is monitoring to ensure cable
companies providing high-speed Internet services are not freezing out
competitors or restricting consumers' options for Internet service.
[SOURCE: Washington Post (E3), AUTHOR: Jeannine Aversa (Associated Press)]
http://www.washingtonpost.com/wp-srv/WPlate/1999-03/12/180l-031299-idx.html

A TV TITAN AND A WEBMASTER CLASH OVER LYCOS
Issue: New Media vs. Old Media
A veteran of television, Barry Diller, chairman of USA Networks, has been
airing views recently that clash with Internet conglomerate CMGI chief
executive David Wetherell. The pending merger between USA Networks and Lycos
is the topic of the debate, but their views are being expressed more broadly as
a conflict between the viability of the "old media" television in the face of
the "new media" the Internet. CMGI's Wetherell, who owns 20% of Lycos shares,
originally supported the merger as a Lycos board member, but is now doubtful
after the drop in Lycos shares since the announcement of the merger and has
quite the board. At an Internet conference last week in New York, Mr. Diller
called "the Internet a 'land rush' and the 'Wild West' and warned that some
day real businesses with real metrics -- sales, margins, profits -- are going
to be built." Wetherell argues that Diller is, "stuck in an old media mind-set
and doesn't see that the Internet is eclipsing television." He also says the
Internet is not overvalued as many have argued, with the audiences expected to
grow to 300 million by 2002, from the 1 million today. He also notes the
decline in television viewing. However, experts say this decline can't be
attributed to the rise of the Internet. Lycos' chief executive continues to be
supportive of the USA Networks/Lycos deal which includes the Home Shopping
Network, TicketMaster, and Ticketmaster Online Citysearch. Wetherell sees it
this way: "the media world needs Lycos a lot more than Lycos needs the media
world."
[SOURCE: Wall Street Journal (B1), AUTHOR:Jon G. Auerbach and Eben Shapiro]
http://wsj.com/

AT&T SCRAMBLES TO MEET DEMAND FOR ITS WORLDNET
Issue: Internet Access
Customers are complaining of busy signals when trying to connect to WorldNet,
AT&T's Internet service. Some analysts say, in general, Internet traffic has
increased since December. AT&T says they had 1.3 million customers in December
and now have 1.5 million, compared to AOL's 16 million. Back in December, AT&T
allowed customers unlimited use for $21.95 per month and attribute this deal to
a surge of 100,000 new subscribers in January. AT&T officials say they are
rushing to add network capacities in 60 new cities and that the complaints are
only coming during peak hours. Blumenstein reports that the demand outweighing
the capacity is an echo of a similar situation with AOL in 1997 when they
offered a flat rate for unlimited use and subscribers soared. This comes at
an "uncertain" time for AT&T and the Internet when it has just
has just assumed ( at )Home from TCI. Analysts say AT&T's interest in the Internet
lies more with ( at )Home than with WorldNet.
[SOURCE: Wall Street Journal (C11), AUTHOR: Rebecca Blumenstein]

FTC TARGETS INTERNET SCAMS
Issue: Electronic Commerce
The Federal Trade Commission announced actions against 67 defendants
promoting what the authorities called "pyramid schemes" on the Internet. The
commission also launched a sweep of the Web to locate other sites that might
be hosting illegal multilevel marketing scams. What distinguishes pyramid
schemes from legitimate multilevel marketing ventures is that they focus on
recruiting new members, not on selling products, Holly Cherico, a spokesman
for the Council of Better Business Bureaus, said. Officials warn that the
Internet makes it easy for fraudulent operations to hide, shut down or move
when someone begins to catch on. Jim Lanford, co-editor of Scambusters, an
online magazine about Internet fraud, said e-mail offers an alternative way
to target consumers, while making the schemes more difficult for law
enforcers to trace.
[SOURCE: Washington Post (E3), AUTHOR: Kalpana Srinivasan (Associated Press)]
http://www.washingtonpost.com/wp-srv/WPlate/1999-03/12/136l-031299-idx.html

HIGH-SPEED NET SERVICE PLANNED BY AOL AND SBC
Issue: Bandwidth
The high price for digital subscriber line service (DSL) in the US may start
to come down with the announcement by America Online of high-speed Internet
service to be offered in the SBC Communications service area, which includes
California and several other western states. The expected price of $42 per
month is lower than any other California provider of high-speed phone line
charges today, including SBC subsidiary Pacific Bell. Based on current deals
with SBC and another carrier, AOL expects to be able to offer high-speed
service to nearly 16 million homes by the end of the year. AOL plans to
carry its market dominance in the dial-up access arena into the new market
for high-speed services. From a competitive standpoint, observers say the
AOL-SBC deal could hurt other providers of Internet access. AOL's massive
size enables it to pay less than its competitors do for high-capacity links
to the Internet.
[SOURCE: San Jose Mercury News, AUTHOR: Jon Healey and Stephen Buel]
http://www.mercurycenter.com/svtech/news/indepth/docs/dsl031299.htm

MERGERS

AMERITECH ALREADY RAISING PRICES, REPORT SAYS
Issue: Mergers
Ameritech has a monopolist's grip on Illinois customers and is already using
this strength to raise phone rates, the staff of the Illinois Commerce
Commission warns. Since the state opened up the local phone market to
competition, the company has lost less than 6% of market share. In the same
amount of time after the long distance market was opened, AT&T lost 20% of
the market. "Perhaps most disturbing," the report said, "SBC intends to
produce operational cost savings in Ameritech Illinois' service territory."
Citing an SBC expectation to trim $115 million in costs for provisioning and
maintaining telephone operations by applying "best practices," the staff
said that "SBC has apparently already committed to squeezing additional
savings out of the single Ameritech Illinois function most directly
responsible for service quality." The next step in the merger review process
in Illinois is expected to be a meeting with representatives from the Ohio
regulatory commission which reached a compromise between the company and staff.
[SOURCE: Chicago Tribune (Sec 3, p.3), AUTHOR: Jon Van]
http://chicagotribune.com/textversion/article/0,1492,ART-24874,00.html

PRIVACY

COMPANIES FIGHT ANONYMOUS CRITICS WITH LAWSUITS
Issue: Internet/Privacy
In the latest of a string of Internet related lawsuits, the Wade Cook
Financial Corp. has sued 10 "John Does" for posting unkind messages about
the company's CEO on one of Yahoo's bulletin boards. Last week, Raytheon
filed a similar suit - also involving information discovered on one of
Yahoo's message boards -- against individuals who allegedly revealed
confidential company information online. According to Blake Bell, a New
York securities lawyer who reports to know of 23 lawsuits involving online
attacks on companies, the problem is out of control. "There is a
long-running tension in the cyber world -- a battle between anonymity and
accountability," notes Marc Rotenberg, director of the Electronic Privacy
Information Center. "One problem is that if we make it too easy to get at
the identity of the anonymous person who engages in libel, we also make it
easy to get at the anonymous whistleblower," Rotenberg said. While Yahoo has
pledged to protect the privacy of it's subscribers, it said that will comply
with court subpoenas.
[SOURCE: CyberTimes, AUTHOR: Carl Kaplan]
http://www.nytimes.com/library/tech/99/03/cyber/cyberlaw/12law.html

PANEL PASSES BILL TO HALT LIMITS ON ENCRYPTION
Issue: Encryption
A bill to remove export restrictions on encryption software unanimously
passed the House Judiciary Subcommittee on Courts and Intellectual Property
yesterday. The Clinton Administration currently restricts the export of
powerful encryption software, which they fear could be used by terrorists
and other criminals to conceal information. Critics of the current laws
argue that American software companies are put at a competitive disadvantage
by the export limits. "Dozens of countries around the world have developed
products to meet the global demand for encryption, yet outdated regulations
have not allowed the United States to compete on a level-playing field,"
Robert Holleyman, president of the Business Software Alliance, said in a
statement applauding the subcommittee vote. The administration would like
any easing of export restrictions to be tied to requirements that all
encryption software have key recovery systems that would allow law
enforcement officials unscramble information if needed.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing]
http://www.nytimes.com/library/tech/99/03/cyber/articles/12encrypt.html

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...and we're outta here. Enjoy the March Madness.

In our 3/8 summary:
COMPANY TROLLS FOR SCUTTLEBUTT ON THE INTERNET [New York Times]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08grim.html we
mistakenly reported the annual fee for the service as $130,000. Ewatch
actually charges just $13,000/yr.

TELEPHONY
AT&T Completes $55 Billion Purchase Of TCI (SJ Merc)

SCHOOLS/LIBRARIES
Schools Split on Using Internet Filters (CyberTimes)
Homeless Find A Home Base On the Net (ChiTrib)

INTERNET
Entering The High-Speed Sprint (B&C)
AOL to Launch Online Photo Service (WP)

BROADCASTING
NBC Moves to Sell Goods to Its Viewers (NYT)

TELEPHONY

AT&T COMPLETES $55 BILLION PURCHASE OF TCI
Issue: Merger
Tele-Communications Inc. is now a part of AT&T. The $55 billion acquisition
was completed Tuesday creating a one-stop shop for local, long distance and
cellular phone service, Internet access, and cable television. The
acquisition gives AT&T direct access into customers homes, something it has not
had since the creation of the Baby Bells. Using TCI's cable TV wires, AT&T
intends to offer a variety of services, including telephone service over the
cable networks in 10 US cities by year-end. AT&T and TCI together reach
about one-third of the nation. AT&T forged a joint venture with Time Warner
and is looking at alliances with other cable companies to provide similar
services in other parts of the country. Under the acquisition TCI becomes
AT&T's newest business unit, AT&T Broadband & Internet Services.
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
http://www.mercurycenter.com/svtech/news/breaking/reuters/docs/222915l.htm

SCHOOLS/LIBRARIES

SCHOOLS SPLIT ON USING INTERNET FILTERS
Issue: Edtech/Content
Although 39 of public schools already use filters on computers from which
students access the Internet, Congress is currently considering legislation
that would require such filters to be used in all schools that receive the
federal E-rate subsidy. Several education groups, including the National
PTA, the National Education Association and the National School Boards
Association oppose the measure, which they say would interfere with their
ability to make this decision locally. "The main issue for us is not that we
are supporting kids going to bad sites on the Internet," explains Jefferson
G. Burnett, director of government relations for the National Association of
Independent Schools. "It is the federal government even thinking about
dictating to the schools how to approach this issue." While many schools are
grateful for software that blocks material harmful to minors, some school
districts have had problems with filters that prevent students from
accessing legitimate sites.
[SOURCE: CyberTimes, AUTHOR: Pamela Mendels]
http://www.nytimes.com/library/tech/99/03/cyber/education/10education.html

HOMELESS FIND A HOME BASE ON THE NET
Issue: Universal Access/Libraries
Some 2 million people spent at least some time homeless last year. A growing
number of them are starting to use Internet access at public libraries to
stay connected. "As an interurban library we've always had people coming in
here smelling bad or looking tattered," said Cathy Camper, a librarian with
the Minneapolis Public Library. "Our library has always been used in that
way and the Internet is just an extension of that. My sense is what really
changed things was Hotmail. When free services started popping up, that's
when I noticed more people regularly coming in." Free email accounts and
Internet access can provide the homeless with "lockers" -- a place to keep
addresses and notes that are too important to use. The Internet can also
become their main news source. And, of course, its a great place to connect
with people. "It's like that famous cartoon that says, `On the Net, nobody
knows you're a dog,' " said Katherine Venturella, editor of "Poor People and
Library Services." "Well, on the Internet, nobody knows you're homeless."
[SOURCE: Chicago Tribune (Sec 5, p.1), AUTHOR: Margie Wylie, Universal Pres
Syndicate]

INTERNET

ENTERING THE HIGH-SPEED SPRINT
Issue: Broadband
US West will select two urban markets to test an integrated telephone and
Internet service on TV using Network Computer software, says Micki Jacoby,
director of US West.net product development. The trial is set to precede
the introduction of a new service, US West ( at ) TV, which will run across 14
states at the end of 1999, enabling viewers to make and receive phone calls
on TV using speakerphones built into set-top boxes. They will also be able
to use the Internet with technology that will reduce the video signal to
small window on the TV screen. Jacoby says users will also have access to
email and electronic programming guides and eventually video-on-demand will
be available. Sean Kaldor of Internet Development Corpotation (IDC) says it
is an appropriate response to partnerships AT&T has developed with cable
operators, especially TCI.
[SOURCE: Broadcast & Cable (p. 53), AUTHOR: Richard Tedesco]
http://www.broadcastingcable.com/

AOL TO LAUNCH ONLINE PHOTO SERVICE
Issue: Online Services
Your opportunity to trade family photographs via the America Online service
may come by this summer, earlier if you are located in the test markets of
Cleveland, Orlando, and Tampa. AOL announced the "You've Got Pictures"
service almost a year ago but has been cautious to proceed because of the
need to assure their network can support the transmission of huge numbers of
electronic images. "It is much more traffic than anybody technically thought
we could deliver as we began to do the research," said Bob Pittman,
president of AOL. The service would allow consumers to drop off their
ordinary film with participating retailers and check the AOL box on the
envelope. After processing electronic versions of the pictures would be
loaded to the user's AOL account for distribution or printing. (The consumer
also would get paper copies.)
[SOURCE: Washington Post (E1), AUTHOR: Shannon Henry]
http://www.washingtonpost.com/wp-srv/business/daily/march99/aolphoto10.htm
BROADCAST

NBC MOVES TO SELL GOODS TO ITS VIEWERS
Issue: Broadcasting
NBC announced Tuesday that it plans purchase a portion of Value Vision, a
cable shopping network. In becoming the first broadcast network to own a
portion of a home shopping channel, NBC's ultimate goal "is to turn viewers
into buyers and consumers," says president of NBC cable, Thomas Rogers. NBC
plans to link the shopping channel to CNBC, MSNBC, and eventually "re-brand
Value Vision in conjunction with an Internet portal." Rogers says that in
exploring a commerce relationship between broadcast, cable and Internet, the
network is "figuring out ways to drive sales of product though our broadcast
platform."
[SOURCE: New York Times (C1), AUTHOR: Bill Carter]
http://www.nytimes.com/yr/mo/day/news/financial/nbc-ad-column.html

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TELEVISION
Cable Rates Rising as Industry Nears End of Regulation (NYT)
Survey Shows Viewers Want Interactive HDTV Options (NYT)

INTERNET
Criteria Are Set for Applicants to Join Internet Name Registry (NYT)
What Hath Drudge Wrought? (NYT)
Company Trolls for Scuttlebutt on the Internet (NYT)
Internet Retailers Work to Turn Shoppers Into Buyers (NYT)
Firm Gives Web Artists A Paid Forum (SJ Merc)
Britain Unveils New Legal Framework For E-Commerce (SJ Merc)

TELEPHONY
AT&T's Embrace of New Technology Signals Next Era (NYT)
In Phones, The New Number Is Four (WSJ)

PRIVACY
Microsoft to Rid Windows of Tracking Numbers (WP)
Tales From the Crypto, Without an End in Sight (WP)

TELEVISION

CABLE RATES RISING AS INDUSTRY NEARS END OF REGULATION
Issue: Cable
"We may now be facing the worst of all worlds, which is an unregulated
monopoly," said John McCain (R-AZ), head of the Senate Committee on
Commerce, Science and Transportation. In theory, the cable industry would
have faced enough competition by now from satellite providers and telephone
companies. But with the sunset of cable regulation approaching this month,
consumers have seen cable rates increase 22% since passage of the Telecom
Act of 1996 (4x the rate of inflation) and they should expect additional
increases (averaging 5%) after March 31. Cable executives claim the
increases are due to the sky rocketing cost of programming and investments
they have made to upgrade their systems. But consumer groups dispute these
claims: said Gene Kimmelman, a co-director of the Washington office of
Consumers Union, "In those few areas where there has been competition, cable
companies charge 10 to 15 percent less than where there's a monopoly to
provide the exact same quality programming. And government data show cable
rates going up twice as fast as programming cost increases." Billy Tauzin
(R-LA) who is chairman of the House Subcommittee on Telecommunications,
Trade and Consumer Protection, said, "It's a date that's arising somewhat
prematurely in terms of competitive opportunities for consumers, and that's
troublesome for a lot of folks, me included."
[SOURCE: New York Times (A1), AUTHOR: Stephen Labaton]
http://www.nytimes.com/yr/mo/day/news/financial/cable-tv-deregulate.html

SURVEY SHOWS VIEWERS WANT INTERACTIVE HDTV OPTIONS
Issue: Digital TV
Survey says..."I want my interactive TV." That's what consumer electronics
executives heard from their trade group. The television industry has bet the
farm on high definition television (HDTV) making it the most important new
product they have offered in 50 years. Some manufacturers are even paying
television stations to broadcast HDTV programming. But results from focus
groups assembled by the Consumer Electronics Manufacturers Association show
that consumers don't just want prettier pictures -- they want interactive
services as well. "People want a high-quality picture and data at the same
time, and they want us to figure out how to do it," Todd Thibodeaux, a vice
president with the manufacturers' association, said in his presentation of
the findings. HDTV sets on the market now cost $3,000 - $12,000. About
20,000 have been sold. But they do not have the interactive data capacities
that consumers may want. Executives are calling it a "2nd generation"
feature. Of the three options digital technology makes available to
broadcasters, consumers seemed least interested in multicasting.
[SOURCE: New York Times (C1), AUTHOR: Joel Brinkley]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08hdtv.html

INTERNET

CRITERIA ARE SET FOR APPLICANTS TO JOIN INTERNET NAME REGISTRY
Issue: Internet Regulation
Starting a week from today, companies may begin to compete with Network
Solutions in registering Internet domain names. Accreditation guidelines are
among the first decisions made by Internet Corporation for Assigned Names
and Numbers (Icann). "We made some major progress toward creating a truly
competitive environment in the .com, .net and .org domain-naming system,"
said Esther Dyson, chair of Icann's board. "We also showed the consensus
process in operation by changing our initial proposals to reflect the
community's feedback." Icann's goal is to have five competitors in the
domain name business by May 1 -- two months later, Icann hopes to let an
unlimited number of companies compete around the world.
[SOURCE: New York Times (C6), AUTHOR: Jeri Clausing jeri( at )nytimes.com]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08net.html

WHAT HATH DRUDGE WROUGHT?
Issue: Internet Content/Journalism
"Drudge may have started it, but there are many more Drudges out there, and
more to come." A posting to Capitol Hill Blue www.capitolhillblue.com was
picked up by The Hotline, a respected electronic tip sheet that's an
offshoot of The National Journal, and journalists from broadcast, US News &
World Report and several newspapers. The case is another example of how
online-only publications are affecting mainstream journalism. Barringer
gives a look at the who behind Capitol Hill Blue and Free Republic.
[SOURCE: New York Times (C10), AUTHOR: Felicity Barringer]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08web.html

COMPANY TROLLS FOR SCUTTLEBUTT ON THE INTERNET
Issue: Internet Content
Ewatch has taken the work of traditional clipping services and adopted it to
the Internet. The company searches listservs and chat rooms and discussion
forums looking for rumors etc about corporate clients. For example, after
the verdict in the OJ Simpson trial, there was a rumor -- reported that Mrs
Fields Cookies had sponsored a party for the jurors. Cookie sales dropped.
Ewatch found the places on the Internet that the rumor was being discussed
and posted corrections. Cookie sales then jumped back up. [Heavy Internet
users *love* cookies, BTW] The service costs $130,000/year and Ewatch hopes
to expand the service. One day, they hope to offer a service that allows an
executive to type a natural language question like "Why are sales lagging in
Minnesota? and receive reports about marketing, media and mendacity that
might help explain the problem.
[SOURCE: New York Times (C4), AUTHOR: Matt Richtel]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08grim.html

INTERNET RETAILERS WORK TO TURN SHOPPERS INTO BUYERS
Issue: E-Commerce
Having problems with follow through while shopping online? Internet
retailers are discovering that up to two-thirds of purchases begun on the
Internet are dropped before they are completed. Some executives believe that
it's because consumers are still getting used to shopping online, that they
are really just browsing, or that they are hesitant to share personal
information over the Internet. But Ken Casser, an e-commerce analyst at
Jupiter Communications, believes the problem is shipping and handling costs
which are often not disclosed until late in the buying process: "It's
sticker shock. A lot of people just aren't willing to pay what is
essentially a 30 to 40 percent markup." In any event, e-retailers are trying
to devise ways to make a consumer's purchase decision as slippery as
possible. Excite, for example, allows users to enter their credit card
number once and shop at a number of vendors with the network.
[SOURCE: New York Times (C4), AUTHOR: Bob Tedeschi]
http://www.nytimes.com/library/tech/99/03/cyber/commerce/08commerce.html
See also
Internet Concern Plans System for Small Online Transactions
[SOURCE: New York Times (C8), AUTHOR: John Markoff]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08gold.html

FIRM GIVES WEB ARTISTS A PAID FORUM
Issue: Intellectual Property
Cybergold takes a huge step forward today toward realizing a long-held goal
of content producers everywhere: a Web marketplace for intellectual
property. Cybergold is debuting a system that will let artists post their
works online and charge users a small fee to download them. They even have a
way for consumers to buy such products without shelling out any cash.
Cybergold in partnership with 19 online vendors of books, music,
photography, software and other goods and services will work on the payment
system permitting content producers to focus on the creative side of the
business. Cybergold will assume all the administrative and financial details
of collecting money from consumers. The company hopes to gain from both
sides of the equation, by taking a 10 to 20% share of revenues from its
creative partners and also profiting from the sale of advertising.
Meanwhile Qpass went live Tuesday with its own solution to the problem.
Qpass plans to allow people to post content online and set their own price
for it. Cornelius Willis of Qpass said the company hopes to have dozens of
content providers by 2000 and thousands by 2001.
[SOURCE: San Jose Mercury News, AUTHOR: Stephen Buel]
http://www.mercurycenter.com/svtech/news/indepth/docs/cyber030899.htm

BRITAIN UNVEILS NEW LEGAL FRAMEWORK FOR E-COMMERCE
Issue: Electronic Commerce
British Trade Secretary Stephen Byers has introduced a consultation document
intended to give Britain the most attractive legal framework in the world
for doing economic business. The document "Building Confidence in Electronic
Commerce" offers the first glimpse at government plans. The British
government intends to introduce legislation in Parliament in April in hopes
of passing new laws later in the year. Byers said that the proposed
legislation "will start removing the legal barriers to using electronic
means, instead of pens and paper. It will also enhance confidence in the
technologies which people can use to ensure that others cannot read their
credit card data when shopping online and businesses can ensure that
sensitive information is not being read by competitors."
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
http://www.mercurycenter.com/svtech/news/breaking/internet/docs/214544l.htm

TELEPHONY

AT&T'S EMBRACE OF NEW TECHNOLOGY SIGNALS NEXT ERA
Issue: Infrastructure
Perhaps lost in last week's headlines was an announcement from AT&T that it
would no longer invest in traditional telephone switches for its core
network. With its large influence on the market, AT&T's decision may mean
that the aging and crowded phone network may be rejuvenated with younger,
more efficient technology. For consumers the move could mean lower prices
and new services and features. "As the functionality moves closer and closer
to the customer, the bottom line for the consumer is that clearly we will
drive the economics down," said Neil J. Grenfell, an engineering vice
president at Sprint. "This can also help give the customer more and more
control and more and more integration." The heart of the switch is a move to
packet switching technology like that used by the Internet. Packet switching
is much more efficient than today's circuit switching system.
[SOURCE: New York Times (C1), AUTHOR: Seth Schiesel]
http://www.nytimes.com/library/tech/99/03/biztech/articles/08phon.html
See also:
Data networks: new weapon in phone competition
[SOURCE: Chicago Tribune (Sec4, p.1), AUTHOR: Jon Van]
http://chicagotribune.com/textversion/article/0,1492,ART-24548,00.html

IN PHONES, THE NEW NUMBER IS FOUR
Issue: Mergers
Recent trends in phone companies has led to basically four parts of an
"oligopoly": AT&T/TCI, Bell Atlantic/GTE, SBC/Ameritech, and MCI WorldCom.
These "megacarriers" are battling for the best customers and some communities
may be left behind, Mehta reports. Wireless service is especially exclusionary,
as companies are not obligated to serve everyone and can deny people with bad
credit. AT&T has led the way with its pending merger with TCI, which it plans
to use to bypass Baby Bells and offer local phone service and Internet access.
Other wireless companies are trying to keep up with AT&T's flat-rate nationwide
calling plan. Currently, SBC, based in San Antonio, is waiting to hear from
regulators that would allow it buy Ameritech, extending its reach into the
Midwest. Reed Hunt, former chairman of the Federal Communication Commission,
says the big four is sparking competition and consumers will benefit: "There
will be multiple national carriers, a handful of local regional operators and
great variety and tremendous creativity in marketing." But Royce S. Caldwell,
President of SBC, admits rural homes, low-spending phone users and small
business are customers that "nobody wants to serve." For example, Mayor Fred
Peralta of Taos (NM) says that companies will not spend millions to provide
service to just a handful of customers in rural towns. But William Barr, of
GTE's general counsel says competition is hurt by federal subsidies. It is
impossible for non-subsidized companies to compete in rural areas where firms
are receiving federal funds to serve residents, he says.
[SOURCE: Wall Street Journal (B1), AUTHOR: Stephanie N. Mehta ]
http://wsj.com/

PRIVACY

MICROSOFT TO RID WINDOWS OF TRACKING NUMBERS
Issue: Privacy
Richard M. Smith, a computer programmer, compares it to a Social Security
number being stamped on every document a person creates on a computer
operating with the Microsoft Windows 98 operating system. "It" is a unique
32-digit serial number that is generated in the latest version of Windows
and planted within electronic documents. It could be used to trace the
author's identity. Microsoft officials said they are investigating whether
the company is collecting the serial numbers from customers even if they
explicitly indicate they didn't want them disclosed. "If it is, it's just a
bug," said Robert Bennett, Microsoft's group product manager for Windows.
"If it is indeed happening, we'll absolutely fix that." Bennett said
Microsoft will create a software tool to let customers remove the Windows
number, which he said is meant to help diagnose problems for customers who
call with technical problems. Privacy activist Jason Catlett of Junkbusters
said, "This is going to be a cleanup job larger than the Exxon Valdez oil
spill." [Bug...or feature?]
[SOURCE: Washington Post (A8), AUTHOR: Ted Bridis (Associated Press)]
http://www.washingtonpost.com/wp-srv/business/feed/biztop920897272397.htm

TALES FROM THE CRYPTO, WITHOUT AN END IN SIGHT
Issue: Encryption
John Schwartz explains the latest round on the US battle over encryption.
"Encryption? It might seem arcane, that technology for scrambling secret
data and communications so that only the intended users can read them. But
it's anything but dull: Crypto sits at the center of a massive global
struggle that should resonate with anyone who cares about privacy, national
security and the extent to which government is able to peer into our lives."
The new round in the fight is centered on the recent reintroduction of the
Security and Freedom through Encryption Act (SAFE), sponsored by Reps.
Robert W. Goodlatte (R-VA) and Zoe Lofgren (D-CA). That bill, which has 200
co-sponsors, would greatly limit the government's power to restrict
encryption use or export. It's a response to attempts by the Clinton
administration to slow or stop the spread of strong crypto through export
controls and to move toward a system in which it would be illegal to sell
encryption software that law enforcement officers working under court
authority can't break. The bill is available at
http://thomas.loc.gov/cgi-bin/query/z?c106:H.R.850.IH:.
[SOURCE: Washington Post (F28), AUTHOR: John Schwartz]
http://www.washingtonpost.com/wp-srv/business/feed/biztop920897289648.htm

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