May 1999

EDTECH
Gore Tax Hike (WSJ)
Plugged In: Biz Schools Teach Managing In Net Age (SJ Merc)

MERGERS/ALLIANCES
Cox To Buy TCA Cable For $3.26 Billion (WSJ)
AOL Signs 4 Deals in Bid to Get TV Access (WP)

OWNERSHIP
In San Francisco, A Revival Of Newspaper Speculation (NYT)

INTERNET
Anti-NATO Hackers Sabotage 3 Web Sites (WP)
Internet Companies Prepare For Privacy Report Card (SJ Merc)
Case: Internet a Civil Rights Issue (WP)
For Dueling Lawyer, The Internet Is Unlikely Referee (WSJ)
Survey Indicates Increased Use of Filters (CyberTimes)

ADVERTISING
Falwell Lights Into Budweiser (WP)

MUSIC ONLINE
Sony, Following Universal, To Sell Digital Music Online (NTY)
Yahoo To Offer Net Radio (CyberTimes)
Grateful Dead Lets Fans Swap Concert Recordings Over Web (SJ Merc)

EDTECH

GORE TAX HIKE
Issue: EdTech
[Editorial] The E-rate, a program that provides schools and libraries with
access to the Internet, is little more than an indulgent "pet project" of
Vice President Gore, says the Wall Street Journal. Mr.Gore's allies and
contributors, such as those in Silicon Valley and at the National Education
Association, argue the authors, are the real ones who the reap rewards from
the tax on phone companies. The program, the Journal claims, may even
possibly be illegal, because taxes should originate with the House Ways and
Means Committee, and not with a federal agency such as the Federal
Communications Commission (FCC). Now, FCC chairman William Kennard has plans
to almost double the program's original budget. The increase will reportedly
result in an average charge of 40 cents a month to phone customers. The
Journal dismisses the FCC claim that these new costs will be offset by a
reduction of long distance access charges.
[SOURCE: Wall Street Journal (A22), AUTHOR: Wall Street Journal Staff]
(http://wsj.com/)

MERGERS/ALLIANCES

AOL SIGNS 4 DEALS IN BID TO GET TV ACCESS
Issue: Interactive TV
Anticipating using TVs for e-mail, Internet access, and other services in
homes without computers, America Online announced corporate alliances
yesterday with satellite television company Direct TV and three other
corporations. Hughes Network Systems and Philips Electronics will design set
top receivers, and Network Computer Inc. will provide the software for the
system. AOL anticipates TV viewers will be able to watch ordinary shows and
at the same time use AOL services. Yesterday's deals are step one in a
long-term strategy that the company calls "AOL Anywhere." One industry
analyst called it "the beginning of the next phase for AOL." The country's
largest online service will be competing with Microsoft's WebTV for Internet
service via
television. Recently AT&T is threatening to become its foremost rival with
its emphasis on providing Internet service through cable connections.
Subscribers to AOL TV could use the service with cable TV, broadcast TV or
the DirecTV satellite service. AOL would still come in through the phone
line; the set top boxes would convert its signals for display on TV.
[SOURCE: Washington Post (A1), AUTHOR: Shannon Henry]
(http://www.washingtonpost.com/wp-srv/business/daily/may99/aol12.htm)
See also:
AOL DEAL ENVISIONS WEB SURFING VIA SATELLITE
[SOURCE: Wall Street Journal (B1), AUTHOR: Thomas Weber and Andy Pasztor]
(http://wsj.com/)

COX TO BUY TCA CABLE FOR $3.26 BILLION
Issue: Merger/Cable
Indicative of the recent wave of consolidations sweeping the cable industry,
Cox Communications is expected to announce their plans to acquire TCA cable
for $3.26 billion, in addition to the assumption of $736 million in debt.
The deal would expand Cox's reach into smaller markets, where few large
cable systems have shown interest. Cox, one of the first cable companies to
prepare its systems for two way digital services, was also attracted to TCA
because of its upgraded systems. Until now, Cox has stayed away from much of
the merger hype -- attempting to focus on getting better, not bigger.
[SOURCE: Wall Street Journal (A3), AUTHOR: Leslie Cauley]
(http://wsj.com/)

OWNERSHIP

IN SAN FRANSICO, A REVIVAL OF NEWSPAPER SPECULATION
Issue: Newspapers/Ownership
The family that owns Chronicle Publishing in San Francisco has called on
investment bankers to evaluate the company's assets. Observers say this move is
an indicator that the company is preparing to sell The San Francisco
Chronicle, the country's 11th largest newspaper, and NBC affiliate KRON-TV.
Since 1965, when The San Francisco Chronicle and its afternoon rival, The
San Francisco Examiner entered a joint operating agreement, the two papers
have been losing suburban readership. A likely buyer is the owner of The
Examiner -- Hearst. The two papers run joint business offices but run
separate, highly competitive newsrooms. Anthony Ridder, chairman and chief
executive of Knight Ridder, whose San Jose Mercury News competes with The
Chronicle, says a buyer would find Chronicle Publishing "very attractive
properties." The assets are valued at over $1 billion. It is not clear if
the buyer would be able to purchase both KRON and The Chronicle. Chronicle
Publishing has a FCC granted waiver, enabling the company to own a major
newspaper and TV station in the same market. A new owner, however, may not
receive the same waiver.
[SOURCE: New York Times (C6), AUTHOR: Felicity Barringer]
(http://www.nytimes.com/yr/mo/day/news/financial/chronicle-publishing.html)

SURVEY INDICATES INCREASED USE OF FILTERS
Issue: Internet/Content
According to two recent studies, the use of filters to block objectionable
Internet content is increasing. Quality Education Data, a Denver-based
education market research company, found that 58% of 403 public school
teachers surveyed said Internet access was filtered at their school. That is
an increase from the 38% reported last year. A survey of parents, by the
Annenberg Public Policy Center, found almost a third of online American
households with children use filting software. The study also found that
parents have "mixed feelings" about the Internet. While 80% said their kids
use the Internet for help with homework, 77% said they feared kids would
give out personal information, and 60% said that too much time online would
lead their kids to become more isolated. In addition, 60% disagreed with a
statement that the Internet was safe for children. Makers of Internet
filters, such as Cyber Patrol and Net Nanny, report a huge increase in sales
since the shootings at Littleton, CO. Parry Aftab, executive director of
Cyberangels, an online safety group, says the daily inquiries about
filtering have jumped from 2 per day to 50. Critics of filters are not so
positive about their increased use. Jamieson McKenzie, editor of From Now
On, an online journal on education technology, sees theincreased use of
filters in schools as misguided. Jonathan Wallace, an Internet lawyer and
founding member of The Censorware Project,says filters are
"placebos" and often block access to legitimate material.
[SOURCE: CyberTimes, AUTHOR: Pamela Mendels]
(http://www.nytimes.com/library/tech/99/05/cyber/education/12education.html)

ANTI-NATO HACKERS SABOTAGE 3 WEB SITES
Issue: Internet
Computer hackers, protesting NATO's bombing of the Chinese embassy in
Belgrade late Sunday, inserted messages into Web pages operated by the
Energy Department (DOE), the Interior Department (DOI), and the National
Park Service. An Interior spokesman said the Interior Department hacker "was
traced back to China by DOI computer experts." The message on the DOE site
included phrases like "Protest U.S.A.'s Nazi action! Protest NATO's brutal
action!" DOE officials said electronic firewalls protected other parts of
the departmental computer systems from attack. The White House Web site was
shut down Monday night after attempts were made Monday morning to hack into
its system.
[SOURCE: Washington Post (A25), AUTHOR: Stephen Barr]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-05/12/157l-051299-idx.html)

INTERNET COMPANIES PREPARE FOR PRIVACY REPORT CARD
Issue: Privacy
An industry-funded survey of companies on the Internet, expected to be
released today, will grade the efforts of roughly 360 Internet sites for
their efforts to protect the personal details they collect about consumers.
Last summer a similar study found that only 14% of sites adequately warned
how they used private information they collected about customers. The
Federal Trade Commission, expected to recommend to Congress this summer
whether new Internet privacy laws are needed, has said it wanted to see
results from the study before making any decisions. Privacy groups complain
that the online industry has done a poor job protecting customer
information, noting that some Web sites sell the information to third-party
advertisers
and others. Some critics complain that the latest study didn't measure
whether a Web site's privacy policy was sufficient, but just looked to see
whether one existed.
[SOURCE: San Jose Mercury News, AUTHOR: Associated Press]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/055591.htm)

CASE: INTERNET A CIVIL RIGHTS ISSUE
Issue: Minorities
Equal access to online services is "the civil rights issue of the 21st
century," according to America Online Chairman Steve Case speaking to the
Leadership Conference on Civil Rights in Washington Tuesday. Using figures
from a 1998 Commerce Department study on minority access to the Internet,
Case said that whites are more than twice as likely to own a computer than
blacks and Hispanics. Case also called for work place diversity and said
that low numbers of minority students graduating in the technical sciences
gave him
reason to be concerned. He did not, however, provide figures for minority
employment at AOL.
[SOURCE: Washington Post (Online), AUTHOR: Associated Press]
(http://search.washingtonpost.com/wp-srv/WAPO/19990511/V000093-051199-idx...)

FOR DUELING LAWYER, THE INTERNET IS UNLIKELY REFEREE
Issue: Internet
Just as people can fill prescriptions and obtain degrees online, now they
can also settle legal disputes via the World Wide Web. A new Wed site,
cyber$ettle.com, allows lawyers to make and accept settlement offers online.
The cases, most of which are personal injury claims, are settled through a
blind-bidding system. A computer program automatically settles the case when
the parties' offers are in $5,000 or 30% of each other. "In some cases it's
more effective, because the parties don't get a chance to yell at each
other," says Ethan Katsh, a legal studies professor who oversees the program.
[SOURCE: Wall Street Journal (B1), AUTHOR: Ann Davis]
(http://wsj.com/)

ADVERTISING

FALWELL LIGHTS INTO BUDWEISER
Issue: Advertising
Last month, Jerry Falwell complained in his e-mail newsletter, Falwell
Confidential, that Anheuser-Busch "presents two Bud-drinking homosexual men
in a hand-holding posture." Actually neither of the men is shown drinking a
Bud. But they really are holding hands. So far, the ad ("Be yourself and make
it a Bud Light") has run only in EXP, a small, gay biweekly magazine in St.
Louis, and is only scheduled to run in other gay publications.
Anheuser-Busch set up a toll-free line for callers to register support for
the new campaign. After Falwell complained that the company had not set up a
number to register opposition, Anheuser-Busch promptly set up a separate
line for callers to do just that. The company will not say which line has
generated more calls. The company tactfully says;"Today's consumer is not
one of a specific gender, race, geography or orientation." Budweiser been
running less overt ads in gay magazines for several years.
[SOURCE: Washington Post (C1), AUTHOR: Hanna Rosin]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-05/12/046l-051299-idx.html)

MUSIC ONLINE

GRATEFUL DEAD LETS FANS SWAP CONCERT RECORDINGS OVER WEB
Issue: Internet
Spokesmen for the Grateful Dead, pioneers in using freely available live
recordings as a promotional tool, announced Tuesday the band will let its
fans legally swap online recordings of live performances. At a time some
industry observers are warning that Web distribution of pirated music could
destroy the market for compact discs, the Dead stand as a compelling example
of the opposite principle. Using a file-compression format known as MP3,
millions of people have begun using their computers as jukeboxes. Next week
the groundbreaking rap group Public Enemy will release its latest album in MP3
format on the Web -- one month before it hits stores. Industry observer Mark
Hardie, of the market analysis firm Forrester Research, predicted that the
widespread acceptance of MP3 would prompt even the major record labels to
adopt a business model once unique to the Dead. The Dead's policy also
includes the provision that no third parties may profit from the band's music,
either by selling recordings directly or by making money off advertising or
other services.
[SOURCE: San Jose Mercury News, AUTHOR: Stephen Buel]
(http://www.mercurycenter.com/svtech/news/indepth/docs/dead051299.htm)

SONY, FOLLOWING UNIVERSAL, TO SELL DIGITAL MUSIC ONLINE
Issue: Internet
Sony announced Wednesday that it will use Microsoft technology to sell music
digitally online. Following Universal's announcement last week that it will use
Microsof's rival, Intertrust Technologies to sell music online, the two
companies are getting ahead of the industry group -- Secure Digital Music
Initiative -- set to create industry standards by June 30. Fred Ehrlich of Sony
says the company will wait until the standards are released before they begin
selling, but that "it doesn't hurt the record industry to try to establish
relationship in anticipation." The Microsoft technology, Media 4.0, allows
songs to be downloaded from the Internet, stored or copied to a computer hard
disk, CD or floppy disk. The software prevents the music from being played
unless "the user pays for them or meets other licensing agreements," said
Microsoft's Will Poole.
[SOURCE: New York Times (C2), AUTHOR: Matt Richtel]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/12sony-music-on
line.html)

YAHOO TO OFFER NET RADIO
Issue: Internet/Radio
Yahoo unveiled Yahoo Radio that offers 10 channels of music delivered over the
Internet. Erik Schwartz, senior producer of Yahoo Radio, said there is only one
difference between Yahoo Radio and traditional radio, "we're using the Internet
as a broadcasting medium." Like Lycos Radio Network, to listen to Yahoo
radio, online audiences must have a PC with a sound card and free software
from Real Networks. Earlier this month, Arbitron Company and Edison Media
Research released a study that found the number of people listening to the
radio online has doubled over the last six months. There are several
advantages of online radio for advertisers. Whereas banner ads may be
ignored, it is hard to avoid ads played between songs. People can do other
things while listening as well, which means longer online sessions. Marc
Morgenstern of the American Society of Composers and Performers says the
increased availability of music online is a good thing. "It's good news for
the audience because they can find what they want, and its good news for the
creators because they can find an audience."
[SOURCE: CyberTimes, AUTHOR: Lisa Napoli]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/12radio.html)

--------------------------------------------------------------

PART I

PRIVACY
An Upfront Approach to Internet Privacy (NYT)
Formation Of Net Fraud Council To Be Announced (SJ Merc)
Targeted Marketing Confronts Privacy Concerns (CyberTimes)

MERGERS
Why Laissez Faire Is The Washington Line On Telecom Mergers (WSJ)
...Or The Wave Of The Future? (WSJ)

INTERNET TECHNOLOGY
Lucent Unveils Single Chip For Internet Phones (SJ Merc)
U S West To Introduce Web-Phone Internet Access (SJMerc)
Microsoft Agrees to Experiment With Nortel's Optical Network (NYT)

INTERNET
Five-Day Test Of Survival Planned On Internet (SJ Merc)
Chinese Log On To Vent Anti-U.S. Protest (SJ Merc)
Microsoft Plans Virtual Clinic (WP)

BROADCASTING
Mitsubishi Eletric Sets Pact With CBS To Aid Digital (WSJ)
Microsoft Hunts Its Whale, The Digital Set-Top Box (NYT)

MEDIA AND SOCIETY
Cybertalk: The Tools of Protection (WP)
Washington Memo: Searching For Causes of Youthful Angst (NYT)
Time Warner To Appeal Award Of $25 Million In Jenny Jones Case
(WSJ)

PRIVACY

AN UPFRONT APPROACH TO INTERNET PRIVACY
Issue: Privacy
Free PC may have clumsily created the model for handling personal data --one
that privacy advocates have been championing for years, and that also may be
acceptable to free-marketers. In a contest for free PCs and network
access for 10,000 households this year, more than a million people have
revealed virtually everything. The survey was required so that, if they were
chosen, Free PC could create their household's custom advertising profile
and provide them with customized continuous on-screen advertising. Called
the "permission model" the Free PC effort may have forced open the door to a
marketing model that puts control of personal information in the hands of
consumers, and even gives them something in return. Seth Godin, an online
marketer, said, that what does bother people is not giving information, but that
the possessors of such personal information do something unexpected with it.
A recent Vanderbilt University survey reported 72% of Web users would
relinquish data if they were assured of "a cooperative relationship
built on trust" -- specifically, if the sites would provide statements about
how the data were going to be used.
[SOURCE: New York Times (C4), AUTHOR: Denise Caruso]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/10digi.html)

FORMATION OF NET FRAUD COUNCIL TO BE ANNOUNCED
Issue: Internet
Today, the Federal Bureau of Investigation, the National White Collar Crime
Center, and the National Fraud Center will announce the formation of the
Internet Fraud Council and a complaint center to take complaints from
consumers about alleged Internet fraud. The council is to devise ways to
fight crimes in cyberspace, from credit card frauds, to stock manipulation to
get-rich-quick schemes. The council -- which will sell memberships to
corporations, colleges and universities, government agencie, and the media --
will provide legal and legislative information relating to the Internet, and
access to education and training. The center, based in West Virginia, will
open by late summer. Its data is seen as an important step in tracking
cybercrime trends, since the Justice Department has not tracked Internet
crimes specifically.
[SOURCE: San Jose Mercury News, AUTHOR: USA Today]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/055510.htm)

TARGETED MARKETING CONFRONTS PRIVACY CONCERNS
Issues: Privacy
These days, Internet retailers are focused on "conversion" -- the rate at which
visitors become buyers. The latest e-commerce software, like Vignette,
recognizes visitors to a site and changes product offerings based on the
shopper's behavior. Onsale.com, an auction retail site, tracks visitor's
movements from page to page and sends email messages with news about items
the user may be interested in. However, executives and analysts say these
"one-to-one marketing" techniques are expensive ("in the low six figures") to
implement, and are often a lot more hype than reality. Stev Podradchik of
Marketwave, brings up another obstacle to personalized marketing. Checking
customers' data could slow the system down, sacrificing a much-valued asset on
the Internet -- speed. Other obstacles include the difficulty of programming
software to keep up with the fickle customers. While executives and analysts
agree that consumers would embrace such software if it made for a more
efficient shopping experience, a recent survey shows Internet users are
increasingly uncomfortable with releasing personal information as companies are
becoming more aggressive in their tactics. A spokesperson for Jupiter
Communications says this is understandable, given that one third of Web sites do
not post privacy policies. Kaplan of Onsale.com, which posts its
privacy statement, says, hovever, that Internet companies are being held to
such a high standard, that an individual's privacy is better protected
online than with a
local mom and pop store. This may be true, says James McQuivey of Forrester
Research, but; "In the old days, a customer's information stayed in the head of
the local merchant. There was never a mechanism like the Internet to exploit
it."
[SOURCE: CyberTimes, AUTHOR: Bob Tedeshci]
(http://www.nytimes.com/library/tech/99/05/cyber/commerce/10commerce.html)

MERGERS

WHY LAISSEZ FAIRE IS THE WASHINGTON LINE ON TELECOM MERGERS
Issue: Mergers
In the last few years, telecommunication companies have been coupling, or
eating each other up, at an increasingly feverish pace. As a result,
regulators have become more vocal with their concerns about industry
consolidation and waning competition in the market for phone and
entertainment services. They have, however, taken little action to curb the
growing merger mania. Perhaps policymakers still hope that 1996
Telecommunications Act can achieve its goals of lower prices and better
service. Author Bryan Gruley gives additional reasons to explain the current
"hands off" approach of Washington towards recent telecommunications deals:
*Regulators believe that convergence will result in new competition between
industries that previously served different markets. As Steve Sunshine, a
former Justice department lawyer, explained; "It's no longer local, long
distance, and wireless or even cable; the market boundaries are eroding."
*The Justice Department has had a hard time blocking mergers on the grounds
that they would stifle competition, because most of the mergers have
involved companies that are not currently direct competitors.
*As in the case of the AT&T/MediaOne deal, policymakers are forced to make
arguments about areas that have yet to develop. It will be difficult to
block this merger on grounds that AT&T will dominate the broadband market
when the cable-broadband is not even available in many places.
[SOURCE: Wall Street Journal (A1), AUTHOR: Bryan Gruley]
(http://wsj.com/)

...OR THE WAVE OF THE FUTURE?
Issue: Mergers
(Op-Ed) With AT&T poised to gain access to 60% of all American cable
households once it acquires MediaOne, there is little question that it will
it will play a powerful role in the future of the Internet. By controlling
key elements of the Internet's infrastructure, namely the wires though which
customers access the Internet, AT&T will be able to influence the success or
failure of the various technologies vying to offer high-speed services. AT&T
is one of few companies with the size and cash flow necessary to convert
cable-TV lines into two way telecommunications lines - a job requiring
billions in additional investment. And while consumers might see short run
benefits from heighten competition to deploy broadband services, there is
question as to whether anyone but AT&T will benefit in the long run.
Companies like AT&T and Microsoft have proven themselves capable of
dominating industries, leaving consumers with limited choices. With the
future of broadband still subject to conjecture, there is little
policymakers can do at this juncture to prevent AT&T from moving ahead with
its high-speed plans. The authors suggest that; "Regulating on Internet time
has to become more like competing on Internet time: Regulators must learn to
respond quickly and flexibility, and not assume that any advantage is secure."
[SOURCE: Wall Street Journal (A23), AUTHOR: David Yoffe and Michael Cusumano]
(http://wsj.com/)

INTERNET TECHNOLOGY

U S WEST TO INTRODUCE WEB-PHONE INTERNET ACCESS
Issue: Internet/Telephony
US west has plans to be fist in offering a hybrid telephone-computer
technology that will allow customers to access the Internet in just one
step. The WebTouch phones, made by Alcatel, will be easier and lighter than
traditional computers. The technology will offer touch sensitive screens and
programmable buttons for simplified Web navigation. "This is the Internet
for the rest of us, " said Solomon Trujillo, CEO of US West. The new phones
will also be less expensive than other types of computers, but the exact
price is still unknown.
[SOURCE: San Jose Mercury News, AUTHOR: Associated Press]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/050071.htm)

LUCENT UNVEILS SINGLE CHIP FOR INTERNET PHONES
Issue: Internet/Telephony
Lucent Technologies has created "Phone-On-A-Chip," a computer chip that
distills the functions of five chips into a single chip for telephones that
carry voice on Internet networks. The chip, which will be available sometime
next year, will cut the costs of the specialized phones by 30%. Initial
interest is expected from small and medium-sized businesses that want to
use networked Internet technology for both voice and data. That technology
requires the use of specialized phones, currently costing $250 or more and
are different from mobile "Web phones."
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/029405.htm)

MICROSOFT AGREES TO EXPERIMENT WITH NORTEL'S OPTICAL NETWORK
Issue: Merger
Microsoft has agreed to try a new sort of communications technology from
Nortel Networks of Canada for its internal communications system used for
e-mail and for testing software. Microsoft plans to revamp its network next
year and will take the next six months or so to determine which
communications companies will get the lion's share of its business. The
agreement with Microsoft could give Nortel an advantage in the battle to
become the leader in wave division multiplexing. WDM transmits multiple
wavelengths, or colors, of light through a single strand of optical fiber.
The Microsoft connection is considered a good testing ground for the new
technology because the company says it demands more from its internal data
network that perhaps any other company in the nation. Its internal data load
quadruples about every 18 months.
[SOURCE: New York Times (C10), AUTHOR: Seth Schiesel]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/10net.html)

INTERNET

FIVE-DAY TEST OF SURVIVAL PLANNED ON INTERNET
Issue: Internet/International
Four volunteers -- men and women aged 30 to 67 -- each will spend 100 hours
this week in separate cells at a secret location in London in a test of
their ability to feed, clothe and entertain themselves using only the Net.
Apart from the Internet -- and deliveries ordered though it -- the four will
have no other contact with the outside world. Interested Internet
users will be able to check on how they are faring via a Web site
(http://www.MSN.co.uk). The four, selected from hundreds who repplied to an
ad in a national newspaper, were promised their own PCs and $800 to spend
via the Internet on items such as food, clothes, CDs, and even microwave ovens.
[SOURCE: San Jose Mercury News, AUTHOR: London Observer Service]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/019617.htm)

CHINESE LOG ON TO VENT ANTI-U.S. PROTEST
Issue: Internet/Politics
Protesting the NATO bombing of the Chinese embassy compound in Belgrade
Friday night, Chinese computer buffs flooded cyberspace with anti-US
rhetoric, hacking into a US embassy Web site and overloading chat rooms with
condemnations. Many students said they first heard on the Web about the
bombing and about the Beijing street protests that followed. More than 24,000
protest messages have been posted on one popular chatroomat
(http://www.netease.com). Most of the postings were one-line invectives
against President Clinton or the NATO bombing campaign. Many of China's
most popular sites added additional servers to keep up with demand. In
addition to the Web postings, Chinese hackers twice assailed the US embassy
Web site, replacing the home page with text reading "down with barbarians,"
reported the state-run China Daily. More than two million Chinese use the
Internet.
[SOURCE: San Jose Mercury News, AUTHOR: Christiaan Virant (Reuters)]
(http://www.mercurycenter.com/svtech/news/breaking/internet/docs/425771l.htm)

MICROSOFT PLANS VIRTUAL CLINIC
Issue: Internet/Health
Imagine a "virtual" treatment using a small camera atop your computer monitor
instead of driving across town to a see a doctor. Welcome to the "virtual
clinic," futuristic employee health care that may soon be available to
13,800 Microsoft employees at company headquarters in Redmond, Washington,
and to16,000 others around the country and the world using Microsoft
NETMeeting software. The concept is so new the American Medical Association
has never heard of it. Even Microsoft has no idea when it will become
reality. Persons familiar with the virtual-clinic concept said they could
not guess at the costs. Also insurance issues have yet to arise. And not
everyone thinks it is a good idea. Jamie Court of Consumers for Quality Care
said practicing medicine via computer to cut costs is a slippery slope that
could lead to poor patient care and litigation. Some medical centers already
use two-way conferencing -- called telemedicine -- to provide consultation
services and collegial help. Microsoft already has an "Ask the doctor" link
on the benefits Web site of the company's Intranet.
[SOURCE: Washington Post (Online), AUTHOR: Laurence M. Cruz (Associated Press)]
(http://www.washingtonpost.com/wp-srv/WAPO/19990509/V000724-050999-idx.html)

BROADCASTING

MICROSOFT HUNTS ITS WHALE, THE DIGITAL SET-TOP BOX
Issue: Digital TV/Media Strategies
With Microsoft's $5 billion stake in AT&T to develop set-top boxes, the
company has gotten closer to its goal of melding the PC, the Internet, and TV
into a "leviathan living-room entertainment and information machine," Markoff
reports. The intersection of the nation's most vibrant industries -- media,
computing, entertainment, and telecommunications motivate the quest for this
trio. So far, Microsoft's quest into digital television has included WebTV,
Time Warner's Road Runner, four European interactive cable TV investments,
and now AT&T. Whereas TV sets are in 98% of US homes, PC's are only in 50%.
A Windows operating system monopoly on set-top boxes could limit sales in
the PC industry even more. However, Gates may be ignoring challenges, such
as consumer indifference to interactive TV and alternative technologies for
delivering the Internet. PC companies, digital videocassette recorder
manufacturers, as well as video game makers will continue to fragment the
cable-TV market. Distancing the company from Time Warner's investment in
interactive TV that failed in 1997, Microsoft executives say there is currently
a business rationale for investing in interactive TV. "Deregulation is allowing
a single supplier and pipe into the home to provide digital television,
telephony, and high-speed Internet access," said Hank Vigil, vice president for
consumer strategy at Microsoft.
[SOURCE: New York Times (C1), AUTHOR: John Markoff]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/10box.html)

MITSUBISHI ELETRIC SETS PACT WITH CBS TO AID DIGITAL
Issue: DTV
Mitsubishi, a manufacture of digital TV equipment, has pledged to pay CBS's
extra production costs in airing prime-time series in high-definition for
the 1999-2000 television season. In this, the first deal in which a
manufacture will pay to stimulate demand for digital TVs, Mitsubishi had
agreed to spend over $10 million to help translate 12 to 14 hours of
prime-time shows into digital code. Since digital television receivers
became available last August, only 20,000 have been purchased, while 15
million analog TVs have been bought within the same time period. Mitsubishi
is hoping that CBS deal will enhance the manufacture's reputation in the DTV
arena.
[SOURCE: Wall Street Journal (B12), AUTHOR: Evan Ramstad]
(http://wsj.com/)

MEDIA AND SOCIETY

CYBERTALK: THE TOOLS OF PROTECTION
Issue: Internet
Last week, many big players in the online world announced what
they portrayed as a bold new initiative to help parents make the Internet
safer for their children. "Parents Protection Pages," which are supposed to
show up on major sites beginning in July, offer links to makers of
filtering software and information on how to keep kids safe online. Most of
this information is already available in cyberspace, but many parents don't
know about these programs and resources, or don't know how to find them.
Meanwhile, industry officials worry that politicians on all sides are simply
"trying
to play games with" the issue of child-online protection. One of the
problems for parents is that none of the available programs can do the job
alone. Programs like CyberPatrol and SurfWatch let parents block, not just
sexually explicit material, but also sites that feature violence, gambling,
bigotry, and drugs in any
combination. Most filter programs work by blocking a defined list. Others,
like newcomer Web Chaperone, rely on software to scan content on the fly.
Programs such as Cyber Snoop and Disk Tracy record Internet explorations
permit parents to review the sites their kids have been visiting. Programs
such as CyperPatrol offer a clock function that can set the times of day
that kids are allowed to surf or set a time limit on individual sessions.
[SOURCE: Washington Post (F26), AUTHOR: John Schwartz (schwartzj( at )washpost.com)]
(http://www.washingtonpost.com/wp-srv/business/feed/business926331615892.htm)

WASHINGTON MEMO: SEARCHING FOR CAUSES OF YOUTHFUL ANGST
Issue: Content/Legislation
At a meeting today, convened by the White House, President Clinton will look
beyond blaming the media or gunmakers for youth violence. Instead, the focus is
on "society's responsibilities, including the role of school, family and
faith-based institutions," Broder and Seelye report. The President will attempt
to find a solution between the space of the First Amendment, protecting free
speech and the Second Amendment's guarantee of the right to bear arms. The
session today will be attended by entertainment executives, representatives of
hunting groups, gun manufacturers, clergy, education official, non-profit
leaders, law enforcement officials, and students. Meeting planners say the
answer cannot be found in controlling media or restricting gun sales. Violence
needs to be defined as "public health problem," planners say. The White
House conference was initially planned to explore the link between media and
violence and was shifted to a broader approach after the President received
sharp criticism from Hollywood donors. Next week, Clinton will be the
featured speaker at a $1.5 million Democratic fundraiser in Beverly Hills,
held by David Geffen, co-founder of Dreamworks studio. Last week Clinton
proposed modest gun control measures, but also announced he wanted to "bury
the hatchet" in his feud with the NRA.
[SOURCE: New York Times (A16), AUTHOR: John M. Broder and Katharine Q. Seelye]
(http://www.nytimes.com/yr/mo/day/news/washpol/youth-violence conference.html)

TIME WARNER TO APPEAL AWARD OF $25 MILLION IN JENNY JONES CASE
Issue: TV
A Michigan jury has decided that Time Warner should pay $25 million to the
family of Scott Amdure for negligence leading to his death. Mr. Amdure was
shot and killed within days of revealing, on the Jenny Jones show, that he
had a crush on a Jonathan Schmitz, who appeared on the show as well. Lawyers
for the Amdure family claimed that Jenny Jones' producers had used dishonest
tactics to lure Mr.Schmitz onto the show, and caused him humiliation that
lead to his crime. "...That type of human exploitation needs to be
corralled," said Geoffrey Fieger, attorney for the Amdure family. Warner
Brother has plans to appeal the verdict. This decision comes in the wake of
the recent high-school massacre in Littleton (CO), which has lead to an
increased focus on the role that the media plays in social violence.
[SOURCE: Wall Street Journal (B12), AUTHOR: John Lippman]
(http://wsj.com/)

--------------------------------------------------------------

PRIVACY
House Republicans Offer Digital Signature Bill (SJ Merc)
Agreement Reached On Internet Privacy (NYT)
Court Call Encryption Rules Unconstitutional (CyberTimes)

INTERNET
Fast Phone Lines May Help AOL Trump Cable TV (WSJ)
Delivering on Promise of Convergence (WP)
Lockheed, Partners Plan System Of Satellites (WP)
Afghans To Get Phones, Mobiles, Internet (SJ Merc)
www.ihate (ChiTrib)
School's Online Publication Face Curbs of Their Own (CyberTimes)

MERGERS
Bill Would Pressure Fcc On Mergers (SJMerc)
Microsoft Windows Heads For TV Set (WSJ)
Ads Attack AT&T-MediaOne Deal (WP)
FCC Staff Cites Flaws In Phone Deal Plan (NYT)

FCC
A New FCC for the 21st Century (FCC)

MAGAZINES/ADVERTISING
Hot Response For Budweiser Gay Ads (WP)
Magazine Content Rules Are No Favor To Canadians (WSJ)

LOBBYING
Microsoft's Window of Influence (WP)

ECONOMY
Greenspan Credits Technology (WP)

PRIVACY

HOUSE REPUBLICANS OFFER DIGITAL SIGNATURE BILL
Issue: Privacy/Electronic Commerce
Digital signatures would gain greater legal acceptance under a bill proposed
on Thursday by House Commerce Committee Chairman Thomas Bliley (R-VA) and
other committee Republicans. The measure, which drew quick support from a
host of e-commerce businesses, is one of several that has been introduced in
Congress to promote use of electronic signatures. A digital signature allows
the user to agree to a binding contract, authorize a credit card payment or
enter into other transactions without requiring the exchange of a physical
signature -- often an impossibility when deals are done over the Internet.
The bill would provide for the acceptance of electronic signatures in
interstate commerce and in the securities industry, and directs the
Secretary of Commerce to promote the use of such measures overseas as well.
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/004938.htm)
See also:
ELECTRONIC SIGNATURES BILL
Issue: Legislation/Electronic Commerce
From Commerce Committee News Release: Chairman Tom Bliley (R-VA) and Reps.
Tom Davis (R-VA), Billy Tauzin (R-LA), and Mike Oxley (R-OH) introduced a
bill today to promote the growth of electronic commerce by making it easier
for Americans to do business on-line. The bill, H.R. 1714, The Electronic
Signatures in Global and National Commerce Act (E-SIGN), would allow
consumers and businesses to use electronic signatures, the same way they use
hand-written signatures, when making on-line business transactions. This
bill is needed to remove legal uncertainties surrounding the status of
electronic signatures and records. "Electronic signatures have been one of
the biggest barriers to the growth of electronic commerce. This bill fixes
this problem by ensuring electronic signatures carry the same legal
protections and guarantees as written signatures," Chairman Bliley said.
Specifically, H.R. 1714 would: provide for the acceptance of electronic
signatures and records in interstate commerce; direct the Secretary of
Commerce to promote the principles of this legislation overseas; and provide
for the acceptance of electronic signatures and records by the securities
industries. See a full summary at the URL below.
[SOURCE: House of Representatives]
(http://com-notes.house.gov/cchear/hearings106.nsf/a8421c4f5171dd23852567370
07cd80f/8326a162598910fb85256769005c8cf3?OpenDocument)

AGREEMENT REACHED ON INTERNET PRIVACY
Issue: Regulation/Privacy
The Federal Trade Commission (FTC) said Thursday that Liberty Financial's Young
Investor's Web site used information gleaned from children, including the
amount of the weekly allowances, whether their parents were saving for college,
to identify specific individuals. In its second Internet privacy action, the
FTC also said that Liberty Financial had failed to post a privacy notice and
obtain parental consent before collecting identifying information from
children, which the company had agreed to. Hal Thayer, a spokesperson for
Liberty Financial, said the company has kept children's information
confidential and supports complying with FTC policy.
[SOURCE: New York Times (A18), AUTHOR: David Stout]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/07privacy.html)
See Also:
FIRM SETTLES WEB CHILD-PRIVACY CASE
[SOURCE: San Jose Mercury News]
(http://www.mercurycenter.com/svtech/news/breaking/ap/docs/417695l.htm)

COURT CALL ENCRYPTION RULES UNCONSTITUTIONAL
Issue: Privacy
The US Court of Appeals ruled in California yesterday that the US government's
restrictions on the distribution of encryption software are an unconstitutional
violation of free speech. In the case of a math professor who wanted to
distribute information on encryption via the Internet, the court ruled that
export regulations "operate as a prepublication licensing scheme that burdens
scientific expression." The federal government has long viewed encryption
software as a national security threat. Many businesses have recently
lobbied to these regulations claiming that message scrambling is essential
to privacy and expansion of e-commerce. In addition, because encryption is
common overseas, American companies argue they need to use it in order to
compete.
[SOURCE: CyberTimes, AUTHOR: Peter Wayner]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/07encrypt.html)

INTERNET

FAST PHONE LINES MAY HELP AOL TRUMP CABLE TV
Issue: Broadband
After being shut out of the biding for MediaOne, AOL has begun to turn to more
tradition sources of broadband in an effort to build a national high-speed
data network. AOL is talking to the Baby Bells and GTE about a plan to link
their local DSL (digital subscriber line) networks. DSL technology, which
has recently taken a back seat to the attention given to high-speed cable
modems, uses copper wire to deliver super fast Internet access. With its
inability to make a deal with any cable company, AOL has turned its focus to
regional Bell companies. The ISP already has forged alliances with Bell
Atlantic and SBC to give subscribers high-speed access through DSL lines.
Currently, an estimated 750,000 households use cable modems, while only
50,000 take advantage of DSL technology.
[SOURCE: Wall Street Journal (B1), AUTHOR: Thomas Weber and Stephanie Mehta]
(http://wsj.com)

DELIVERING ON PROMISE OF CONVERGENCE
Issue: Broadband
The promise of "convergence" of TV, telephone and computers has been around
for years, but the technology has matured and the service is arriving.
Consumers will be able to order services a al carte or pay for a unified
bundle. Bell Atlantic, for example, provides traditional local phone
service, but also has high-speed Internet access over phone lines, through
Digital Subscriber Line service, and TV, through an agreement with satellite
company DirectTV. In the Washington market Bell Atlantic's current
competition is Starpower Communications, a venture half owned by Potomac
Electric Power Co. Comcast may join the fray offering not only
its traditional cable service, but also local and long distance phone
service through AT&T. Richard Shaffer of Technologic Partners says, "We've
got the content, we've got cheap pipes, and there's a huge future." He cites
dropping technology costs and growth of the Internet as
reasons for convergence's reemergence. Gene Kimmelman of Consumers Union
fears that companies will fight over customers who can afford the top tier
of service and will leave less affluent customers with the same monopoly
cable service they have always had.
[SOURCE: Washington Post (E1), AUTHOR: John Schwartz]
(http://www.washingtonpost.com/wp-srv/business/daily/may99/consumer7.htm)

AFGHANS TO GET PHONES, MOBILES, INTERNET
Issue: International/Telephony
The bulk of recent overseas expenditures in Afghanistan has been for bullets
and bombs to prosecute an unresolved 20-year war. A British businessman is
ready to bring phone service to Kabul within the next few weeks with mobile
phone and Internet service to follow in the first major foreign investment
in the country for years. Michael Cecil of the New Jersey-based Telephone
Systems International says his company is forming a joint venture with the
Taliban, a quasi-governmental group in the country. The existing 40-year-old
telephone network is in ruins and lacks international connections. The first
phase of the project will be to bring basic telephone service to several of
the major cities. Key potential subscribers include Taliban officials and a
fast-increasing local business community together with aid organizations.
"It is a very unusual project in that there are virtually no countries in
the world which have telecommunications as underdeveloped as Afghanistan,"
said Cecil.
[SOURCE: San Jose Mercury News, AUTHOR: Andrew Hill (Reuters)]
(http://www.mercurycenter.com/svtech/news/breaking/internet/docs/418581l.htm)

LOCKHEED, PARTNERS PLAN SYSTEM OF SATELLITES
Issue: Internet/Satellite
Space-based Internet service may be coming from Lockheed Martin and other
companies that are investing in a four-satellite system called Astrolink.
Yesterday the company's new telecommunications unit announced $900 million
in backing toward the $3.6 billion project. Minority partners in the
enterprise will be Italy's Telecom Italia Group and TRW. Astrolink as
envisioned will be a carrier of high-speed data and video Internet traffic
at speeds many times faster than today's computer modems. Lockheed will
provide the satellites and launch vehicles while TRW will provide the
digital communications equipment. Telecom Italia will supply the ground
equipment and will manage the system. Potential competitors are Spaceway by
Hughes Network Systems and Teledesic led by Microsoft's Bill Gates and
cellular pioneer Craig McCaw.
[SOURCE: Washington Post (E10), AUTHOR: Tim Smart]
(http://www.washingtonpost.com/wp-srv/business/feed/business926072012262.htm)

WWW.IHATE
Issue: Internet Content
The messages of hate are not new, but the medium is. It's relatively easy to
stumble across Internet web sites that provide hatemongering of every stripe.
"The Web site is basically a multimedia advertisement," said Rabbi Abraham
Cooper, associate dean of the Simon Wiesenthal Center, a research and
educational association based in Los Angeles. "The Internet is best
understood and still mostly used by young people," Cooper said, "and a
natural tendency of youngsters has nothing to do with the Net. It has to do
with being a teenager and wanting to go where you think adults don't want
you to even take a look." Mark Potok, editor of the Southern Poverty Law
Center's Intelligence Report, a quarterly journal covering the Radical
Right, said, "There's no question that the Net has been very important to
hate groups in this country. "Four or five years ago for a Klansman to
produce a shoddy pamphlet that might reach 100 people was quite an
enterprise. It involved finding a printer who would print it, which was
often very difficult. It involved a good deal of labor in terms of doing the
writing and so on. "On the Net, these people, if they're not literate, can
just go to other sites and copy down what they want onto their site. That
has clearly increased both the propaganda reach and the recruitment reach."
The Simon Wiesenthal Center and the Southern Poverty Law Center are tracking
the growth of hate Web sites and the Anti-Defamation League (adl.org)
provides software to filter these sites. David Goldman, founder and director
of HateWatch, a Web-based educational resource organization to combat online
bigotry said: "The issue is not getting bigots not to be bigots. That's
banging your head against the wall. It's reaching out to good people in the
U.S. and throughout the world who know that this stuff is vile and insidious
and (inspiring) them to speak up. It's apathy that allows this poison to grow."
[SOURCE: Chicago Tribune (Sec 5, p.1), AUTHOR: Connie Lauerman]
(http://chicagotribune.com/textversion/article/0,1492,SAV-9905070031,00.html)

SCHOOL'S ONLINE PUBLICATION FACE CURBS OF THEIR OWN
Issue: Education/Journalism/Technology
Many high school newspapers are publishing online in order to foster a dialogue
with their community, keep in touch with alumni, and feature interactive
surveys. However, administrators are putting different restrictions on online
versions of high school papers than print to protect kids' identities.
Administrators, such as those of Maize High School (KA), are not permitting
students to publish the last names of students in the online version of
their school paper, Express. Other schools are requiring permission from
parents before publishing a student's photo. Many high school journalism
teachers disagree with this policy saying it hinders their ability to teach
the true power of the medium. Sue Moeschl, director of information services
for Carmel Clay Schools (IN) explains why they have been cautious since they
began publishing online: "It almost seems silly in a way, but there has been
so much written about pedophiles on the Internet searching for little kids
to abuse." A 1974 law, written long before the Internet -- The Federal
Education Records Privacy Act -- limits the information schools can give out
about students. Mark
Goodman, executive director of the Student Law Center in Arlington (VA), says
"We have to ask, is it wise for us to cut off on one of the new potential
avenues to let kids express what they are thinking and feeling. It seems a much
wiser choice to channel kids into a school sponsored publication."
[SOURCE: New York Times, AUTHOR: Lisa Napoli]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/07schools.html)

MERGERS

BILL WOULD PRESSURE FCC ON MERGERS
Issue: Mergers
The Senate Judiciary Committee's Antitrust Subcommittee has just sent a
bill, which would set deadlines for the FCC's approval of mergers, to full
committee for consideration. The measure would give the FCC 180 days to
consider mergers valued at more than $15 million, and only 90 days to act on
smaller mergers. The Commission would have the ability to extend the review
period by 60 days for large deals and 30 days for small deals, if a majority
of the 5 commissioners agree to its necessity. Before becoming a law, the
bill must still receive the approval of the House, the Senate, and the
President.
[SOURCE: Washington Post (Online), AUTHOR: Associated Press]
(http://www.washingtonpost.com/wp-srv/WAPO/19990506/V000252-050699-idx.html)

MICROSOFT WINDOWS HEADS FOR TV SET
Issue: Mergers/Broadband
One may soon have to look no father than their TV set to find signs of
Microsoft software. In a 'nonexclusive' deal with Microsoft, AT&T agreed to
use Microsoft Windows CE software in set-top boxes that will deliver digital
TV, phone, and high-speed data services. The long distance company, which
will receive a $5 billion investment by Microsoft, has emphasized that the
deal will not give Microsoft a lock on cable software services for AT&T.
AT&T's Chairman, Michael Armstrong, required Microsoft to make an
interoperability pledge ensuring compatibility between software and hardware
of various vendors. As part of the complex pact to purchase MediaOne, this
agreement is a move toward Microsoft's goal of accelerating deployment of
high-speed data services, which they hope will drive demand for their
software. [And if you are still just scratching your head trying to figure
out who merged with whom, don't worry you are not alone.] According to
Microsoft's CFO Greg Maffie: "This is one of the most complex deals...I've
ever seen."
[SOURCE: Wall Street Journal (A3), AUTHOR: David Bank, Don Clark, and
Rebecca Blumienstien]
(http://wsj.com)
See also:
GUSTY AT&T DEALMAKING ALSO TECHNOLOGICAL GAMBLE
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: Jon Van]
(http://chicagotribune.com/textversion/article/0,1492,SAV-9905070286,00.html)

ADS ATTACK AT&T-MEDIAONE DEAL
Issue: Merger/Politics
"AT&T to America: The Electronic Frontier Is Closed," declared a nearly
full-page ad published in Wednesday's editions of several of the largest US
newspapers. A Washington consortium called Keep America Connected and local
telephone companies placed the ad prior to the announcement of AT&T's deal
to acquire MediaOne group. It was the first salvos of what could be a loud
and well-funded political campaign against the merger. Critics say that
AT&T's MediaOne and TCI purchases and other minority investments will cede
excessive control and influence to AT&T. And with Microsoft investing $5
billion in AT&T, the software powerhouse will gain access to the home, a
situation opposed by Mark Cooper of Consumers Union who says, "This is like
one big cartel." On Wednesday, Senate Antitrust Committee members Mike
DeWine (R-OH) and Herb Kohl (D-WI) called for hearings next month on the
deal. AT&T contends the merger will be good for consumers, bringing real
competition into local phone service.
[SOURCE: Washington Post (E1), AUTHOR: Mark Leibovich]
(http://www.washingtonpost.com/wp-srv/business/daily/may99/backlash7.htm)

FCC STAFF CITES FLAWS IN PHONE DEAL PLAN
Issue: Regulation
Staff investigators for the Federal Communication Commission said the proposed
SBC Communications and Ameritech merger "flunks the public interest test." At a
public hearing in Washington yesterday, staff's opposition, to the deal "might
indicate" that the companies would have to make concessions before the deal
could go through. The five commissioners who must vote on the merger were not
present at the public hearing yesterday. A spokesperson for SBC played down the
significance of the FCC's opposition: "We didn't hear anything we hadn't heard
before." The law requires the FCC to determine that the merger would serve the
public interest before the agency can approve the deal. Opponents of the merger
have suggested requiring SBC and Ameritech to demonstrate they have met the
goal of the 1996 Telecommunications Act -- aimed at stimulating local phone
competition -- before it gains the FCC's approval. To satisfy Justice
Department antitrust concerns, the two companies have divested themselves of
overlapping cellular phone service.
[SOURCE: New York Times (C2), AUTHOR: ]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/07cable.html)
See also:
FORUM OPENS ON TELECOM MERGER
[SOURCE: San Jose Mercury News]
(http://www.mercurycenter.com/svtech/news/indepth/docs/fcc050799.htm)
FCC STAFF LEANING TO CONDITIONS ON MERGER
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: Frank James]
(http://chicagotribune.com/textversion/article/0,1492,SAV-9905070285,00.html)

FCC

A NEW FCC FOR THE 21ST CENTURY
Issue: FCC
Chairman Kennard today announced that he will convene three public forums to
discuss the future of the Federal Communications Commission in the 21st
Century. The purpose of the forums is to assist the Chairman in preparing a
five-year strategic plan that would outline a timetable for restructuring
and streamlining FCC functions and management. Each of the forums will be
held in the Commission Meeting Room at 445 12th Street, S.W., Washington,
D.C. All three forums will be open to the public, and seating will be
available on a first come, first serve basis. Kathryn Brown, the FCC's Chief
of Staff, will moderate the discussion at each forum. The forums will be
carried live on the Internet, barring any technical difficulties. Internet
users may listen to the real-time audio feed of the forums via the FCC
Internet Audio Broadcast Home Page. Step-by-step instructions on how to
listen to the audio broadcast, as well as information regarding the
equipment and software needed, are available on the FCC Internet Audio
Broadcast Home Page. The URL address for this home page is
http://www.fcc.gov/realaudio/. Persons or organizations interested in
participating in the forums should contact the following persons: May 21st
Industry Forum -- Stephen Klitzman, (202) 418-1913; June 2nd Consumer, State
and Local Government Forum -- Ellen Blackler, (202) 418-0491; June 11th
Academic and Organizational Experts Forum -- Lisa Sockett, (202)418-2668.
News media contact: Maureen Peratino at (202) 418-0500. In order to solicit
this input, each of the public forums will be divided into three sessions
lasting approximately one hour each: 1) What Should the FCC's Role Be in the
21st Century?, 2) How Should the FCC Be Structured in the Communications
Marketplace of the Future?, and 3) How Can the FCC Work More Efficiently and
Effectively to Deliver Services to the Public? An e-mail site has been
established to receive additional input from the public on the above
questions. The e-mail address is (newfcc( at )fcc.gov). In addition, time
permitting, views and/or questions received during the course of the public
forums via this e-mail site will be addressed at the public forums along
with the views of the attendees. For more info, see A New 21st Century
Webpage (http://www.fcc.gov/21st_century/) or Benton's
(http://www.benton.org/Policy/FCC/fcc031899.html)
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Miscellaneous/Public_Notices/1999/pnmc9035.html)

MAGAZINES/ADVERTISING

HOT RESPONSE FOR BUDWEISER GAY ADS
Issue: Advertising
After receiving a flood of email, Anheuser-Busch set up a hotline for people
to call-in their support for a Bud Light ad featuring two men holding hands
in the April 22 issue of EXP magazine -- a free St. Louis publication. The
ad's tagline [no relation to taglang] -- "Be Yourself and Make It a Bud
Light." The magazine is distributed at mainstream outlets and geared toward
gays and lesbians. In addition to supporters of the ad, Conservative
Christian leader Jerry Falwell found the ad and encouraged Anheuser-Busch to
set up a hotline for those opposing the ad. Falwell wrote, "Let's keep the
heat on Anheuser-Busch so that they understand that pro-family Americans are
terribly concerned about homosexual images coming into our homes through
reckless advertising campaigns." Anheuser-Busch says they are surprised to
see a print ad attracting so much attention. The beer maker claims that
"Today's consumer is not one of a specific gender, race, geography, or
orientation."
[SOURCE: Washington Post, AUTHOR: ]
(http://www.washingtonpost.com/wp-srv/WAPO/19990507/V000446-050799-idx.html)

MAGAZINE CONTENT RULES ARE NO FAVOR TO CANADIANS
Issue: Magazines/International
(Op-ED) The Canadian Senate is currently debating a bill that would restrict
the ability to sell advertisements in non-Canadian publications distributed
in Canada. Bill C-55, which is intended to protect both the Canadian economy
and culture, focuses on the Canadian editions of foreign magazines, many of
which are from America. If passed by the Senate, these publications would no
longer be allowed to sell marketing aimed at the Canadian market. Stephan
Schwartz dismisses claims -- like that of Len Carter, an officer of the
Canadian Media Guild -- that such protections are "essential to the survival
of (Canadian) culture." The culture argument, according to Schwartz is
simple a "red herring". While the bill's intent may be to protect the
Canadian publishing industry, Stephen Schwartz suggests that it will harm
efficiency and growth, not encourage it. [Trust the WSJ to make decisions
about culture]
[SOURCE: Wall Street Journal (A19), AUTHOR: Stephen Schwartz]
(http://wsj.com)

LOBBYING

MICROSOFT'S WINDOW OF INFLUENCE
Issue: Politics
Four years ago the political action committee for Microsoft was financed
with a paltry $16,000. Chairman Bill Gates boasted that Washington was not
"on our radar screen." Times have changed, partly due to the government's
antitrust lawsuit against the software giant. Microsoft now has a 10-person
staff in downtown DC supplemented by a battalion of outside lobbyists. The
company has embarked on an all-out crusade to win friends in Washington that
draws from every page of the traditional political influence playbook.
Overall, political donations by Microsoft and its employees increased more
than fivefold in the last election cycle to $1.4 million, and expectations
for the PAC alone are running about $1 million for the 2000 election,
putting it in the top tier of corporate PACs. The firm almost doubled its
lobbying spending last year, to $3.7 million and has retained a Who's Who of
consultants with Republican names like Michael K. Deaver and Haley Barbour
and Democrats that include Thomas J. Downey and Vic Fazio. Microsoft has a
simple story to tell lawmakers on Capitol Hill: It would be unfair to
penalize a company for success that has helped set off the country's
economic boom.
[SOURCE: Washington Post (A1), AUTHOR: Rajiv Chandrasekaran & John Mintz]
(http://www.washingtonpost.com/wp-srv/business/longterm/microsoft/micro.htm)

ECONOMY

GREENSPAN CREDITS TECHNOLOGY
Issue: Budget Issues
Federal Reserve Chairman Alan Greenspan said yesterday that an unexpected
leap in technology is primarily responsible for the nation's "phenomenal"
economic performance and the current extraordinary combination of strong
growth, low unemployment, low inflation, high corporate profits and soaring
stock prices. In a Chicago speech Greenspan indicated he believes the US
economy can continue to grow more rapidly than in the past without producing
inflation. He built his case around technological innovations, most of which
involve computers and other information-processing equipment. This
technology has helped businesses operate more efficiently, allowing them to
control costs and increase profits without raising prices, Greenspan concluded.
[SOURCE: Washington Post (A1), AUTHOR: John M. Berry]
(http://www.washingtonpost.com/wp-srv/business/longterm/fed/fed.htm)

--------------------------------------------------------------
...and we are outta here. Have a great weekend.

CHILDREN & MEDIA
Parents, Kids, and Communications Page (FCC)
Gore Lets Parents In on Children's Internet Safeguards (WP)
Summit Tackles Concerns About Net (SJ Merc)

EDTECH
FCC Mulls Boosting Internet Funding For Schools, Libraries (WSJ)

MERGERS/COMPETITION
Comcast, AT&T Accord, Abandon Mediaone Bid (WSJ)
SBC Pledges Open Market in Illinois (ChiTrib)
SBC-Ameritech Public Forum Extended for Second Day (FCC)
Speech: A Competitive Call to Arms (FCC)
Telmex To Buy Sprint's Interest In Venture In The US (WSJ)

POLITICS
Congress Builds A Presence On The Web, Study Finds (CyberTimes)

INTERNET
Record Label Will Distribute Music Online (NYT)
Internet Address Firm to Be Probed (WP)
AOL Tests Free Calls To Internet In UK (SJ Merc)

CHILDREN & MEDIA

PARENTS, KIDS, AND COMMUNICATIONS PAGE
Issue: Children & Media
Chairman Kennard Announces Launch of "Parents, Kids, and Communications
Page" (http://www.fcc.gov/parents_information/) on FCC Web site in Remarks
at the Annenberg Public Policy Center Conference on Internet and the Family in
Washington (DC) (see http://www.fcc.gov/Speeches/Kennard/spwek916.html).
From Press Release: Noting that some parents, while excited about the
opportunities that the Internet offers, are overwhelmed by a medium that
seems too vast to control and too complicated to understand, William E.
Kennard, chairman of the Federal Communications Commission (FCC), offered
some help via the FCC's own Web site. In a speech at the Annenberg School of
Public Policy National Conference on the Internet and the Family today in
Washington, DC, he announced the inauguration of a "Parents, Kids, and
Communications Page" on the FCC Web site. The page will give parents
easy-to-understand information on some of the tools available to them to
provide a "chaperone" for their children as they explore the vast landscape
of the Internet. "In one easy-to-use, easy-to-find place www.fcc.gov -- we
have included information on a whole range of filtering software," Chairman
Kennard said. He added, "With one click of the mouse, parents will be able
to learn about these products, how they work, and how much they cost. With
one click of the mouse, parents will be able to take the steps they need to
protect their kids. We also included on the Web site information on how to
block 1-900 calls and on how to get a cable 'lock-box' to block out the
channels that you don't want your children to see." The site also includes a
section explaining the TV ratings system and the V-chip. With the V-chip,
parents can use the new TV ratings system that is in place to see what they
don't want their kids to watch, and then program the chip to block them.
Chairman Kennard said, "I am proud to say that because of the hard work of
the President, Vice President, and Congress, in two months time, half of all
new TV sets in this country will have this little silicon chip - the V-chip.
And, by January 2000, all TVs will have it."
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/1999/nrmc9024.html)
See also:
SUMMIT TACKLES CONCERNS ABOUT NET
Issue: Internet
Powerfully mixed feelings about the American family and the Internet were
quantified yesterday at a Washington summit called to introduce and debate
the results of a national survey on parents' attitudes about their
children's experiences online. The meeting included scholars, librarians,
government regulators, and other experts in the field. Joseph Turow, an
Internet expert at the University of Pennsylvania who directed the survey,
said, "Kids can go anywhere" and that produces rewards and dangers. Federal
Communications Commission Chairman William Kennard said the Columbine
killings exacerbated parental fears about the Information Age but renewed
the need for parents to talk to their children about everything, including
where they go on the Internet. Some at the meeting worried that filtering
software would inhibit free speech and
honest inquiry. Prior to the meeting Ann Symons, president of the American
Library Association, stressed the importance of teaching children critical
thinking skills and worried about limiting access, especially in libraries.
[SOURCE: San Jose Mercury News, AUTHOR: Mary Otto]
(http://www.mercurycenter.com/svtech/news/indepth/docs/family050599.htm)

GORE LETS PARENTS IN ON CHILDREN'S INTERNET SAFEGUARDS
Issue: Internet
Democratic presidential candidate Al Gore plans to unveil today computer
safeguards negotiated with industry executives that will make it easier for
parents to keep their children's online explorations safe. The package of
resources includes safety tips, a guide to child-friendly sites, and tools
for searching the Internet. The companies will also offer links to makers of
"filtering" software. Although much of this information was previously
available, the new initiative aims at placing such resources "one click
away" from popular Web sites. Gore's efforts are the most visible piece of
an initiative that cuts across several agencies. Federal Communications
Commission Chairman William Kennard yesterday announced a Parents, Kids and
Communications section on the FCC Web site.
[SOURCE: Washington Post (A6), AUTHOR: Ceci Connolly & John Schwartz]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-05/05/123l-050599-idx.html)
See also:
MARKETING VIOLENCE TO CHILDREN
Issue: Media & Children
Links to opening statements from the Senate Commerce Committee hearing May 4.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/hearings/hearings.htm)

EDTECH

FCC MULLS BOOSTING INTERNET FUNDING FOR SCHOOLS , LIBRARIES
Issue: EdTech
Chairman of the Federal Communications Commission, William Kennard, is
interested in increasing funding for the E-rate, the agency's program to
connect schools and libraries to the Internet. Chairman Kennard has
requested that the program receive $2.5 billion in 2000, which is about a $1
billion increase over the original $1.9 billion authorized for the first 18
months. The increase, according to William Kennard, is necessary to ensure
that undeserved rural school districts can participate in the Digital Age.
There is, however, strong resistance to the schools and libraries program
both with telecommunications companies-that pay for the program through
taxes -- and on Capitol Hill. Rep Billy Tauzin, Chairman of the House
Telecommunications Subcommittee and long time E-rate foe, has pledged to
announce a bill to abolish the program
[SOURCE: Wall Street Journal (B6), AUTHOR: Kathy Chen ]
(http://wsj.com)

MERGERS/COMPETITION

COMCAST, AT&T ACCORD, ABANDON MEDIAONE BID
Issue: Mergers
AT&T has reached an accord in which Comcast will receive 2 million cable
subscribers in exchange for dropping its bid for MediaOne. Comcast has also
agreed to allow AT&T to use its cable lines to offer phone service to
Comcast's 9 million subscribers. This agreement clears the way for AT&T to
proceed with its $54 billion dollar bid for the MediaOne cable company.
While AT&T is currently in negotiations to sway Microsoft from also making
offer, it is still possible that other parties, such as the software giant
or MCI WorldCom, could enter into the mix with bids of their own. With the
addition of MediaOne, AT&T could reach almost 60% of all American households
with cable lines. Regulators will likely hold the deal to close scrutiny
because of AT&T's growing hold on the cable industry.
[SOURCE: Wall Street Journal (A3), AUTHOR: Leslie Cauley and Rebecca
Blumenstien]
(http://wsj.com)

SBC PLEDGES OPEN MARKET IN ILLINOIS
Issue: Mergers
(Hand over heart) SBC General Counsel Jim Ellis promised that the company
would open the Illinois local phone market to competition once its takeover
of Ameritech is approved. "What assurances do we have, other than your
word?" asked Illinois Commerce Commissioner Terry Harvill, who noted that
when SBC took over Pacific Bell in California, its executives pledged that
the combined firm would compete in new markets, including Chicago. But soon
after that deal closed, those plans were changed. "If we approve this
merger," said Commissioner Harvill, "there are certain assurances we need."
Mr. Ellis said winning approval to get into the long distance business is
incentive enough to open local markets.
[SOURCE: Chicago Tribune (Sec 3, p.3), AUTHOR: Jon Van]
(http://chicagotribune.com/business/businessnews/article/0,1051,SAV-99050503
48,00.html)

SBC-AMERITECH PUBLIC FORUM EXTENDED FOR SECOND DAY
Issue: Mergers
A Public Notice issued on April 28, 1999, announced that a public forum will
be held on Thursday, May 6, 1999, from 10:30 am to 12:00 pm to report on the
progress of discussions that Commission staff has been holding with SBC
Communications Inc. (SBC) and Ameritech Corporation (Ameritech) regarding
their pending transfer of control applications. Because of the significant
number of participants interested in commenting, the hours of the Common
Carrier Bureau's public forum have been extended as follows: Thursday, May
6th from 10:30 am to 5:00 pm and Friday, May 7th from 9:00 am to 12:00 pm
Both sessions will be held at the Federal Communications Commission, 445
12th St., SW, Washington, DC, in the Commission Meeting Room. After a brief
review of the status of discussions between Commission staff and the
Applicants, members of the public will be invited to comment. Each member
of the public must confine his or her remarks to 5 minutes. This time
limitation will be rigorously enforced so as to allow the greatest number of
parties to participate. Parties will be invited to speak in the order in
which they signified their intentions. It is possible that all interested
parties may not have the opportunity to make oral comments by noon on May
7th. Consequently, the Commission urges members of the public to file
written ex parte comments at any time during the pendency of this proceeding
to ensure that their views are presented. A transcript and a videotape of
the forum will be placed in the public record.
[SOURCE: FCC]
(http://www.fcc.gov)

SPEECH: A COMPETITIVE CALL TO ARMS
Issue: Competition/Telephony
Chairman Kennard's Speech at the Association of Local Telecommunications
Services Convention in Nashville (TN): "The Internet, unlike the railroad,
can come into every office, every home in America, even in our briefcases
and pockets. We have the capability to bring broadband technologies to all
Americans wherever they live and wherever they may go. With cable, copper,
wireless, and satellite, we can build on-ramps to the Information
Superhighway for anyone anywhere. No town, no community has to be condemned
to becoming a ghost town in the New Economy. Part of the reason for this
flexibility is technological bits of data are a lot easier to maneuver than
iron and steel. But it is also because Congress made the right policy
decisions when it came to deciding what kind of telecommunications system we
wanted to establish for the 21 st century. When drafting the
Telecommunications Act of 1996, Congress wisely reached back to a value as
old as America itself: choice. The idea is that competition would drive
deployment of the networks of the future. And that once given an array of
options, individuals can best decide what is best for them." In his speech,
Chairman Kennard said that the Telecom Act of 1996 is working...that
"incentives are not lined up just right. But the good news is that it's
working." Chairman Kennard praised the work of ALTS members who are working
every day to compete. However, he said that it is not enough that "only
large businesses have choice in local phone service. Because the goal is to
bring all Americans the benefits of a competitive marketplace, we
must redouble our efforts to bring choice to residential subscribers --
choice in local phone service and choice in broadband access." Chairman
Kennard also said that the agency needs to ensure that "any merger serves
the public interest. And a big part of that interest is making sure that
competition in telecommunications from local phone service to broadband is
not stifled." (Summary courtesy of NECA).
[SOURCE: FCC]
(http://www.fcc.gov/Speeches/Kennard/spwek915.html)

TELMEX TO BUY SPRINT'S INTEREST IN VENTURE IN THE US
Issue: International/Alliances
Yesterday, Sprint and Telefonos de Mexico (Telmex) announced plans to
devolve their alliance. Telmex will purchase Sprint's 50% stake in
Telemex-Sprint Communications, a year old venture that offers long-distance
services to Hispanic households in the US. Telemex, the first foreign
telephone company to receive FCC approval to operate in the US, has plans
to take the venture in new directions, including the selling of bank draft,
money orders and other non-telecommunications products.
[SOURCE: Wall Street Journal (A14), AUTHOR: John Friedland and Nicole Harris]
(http://wsj.com)

CONGRESS BUILDS A PRESENCE ON THE WEB, STUDY FINDS
Issue: Internet/Politics
An American University study found that all Senators and 94% of
Representatives have official Web sites. The study, which evaluated sites
based on user friendliness, use of technology, content, and constituent
services,
is meant to be a benchmark to measure future sites and encourage legislators to
improve their Web sites. Don Goff, professor at University of Maryland and key
researcher for the study, said he was impressed with the depth of information
available -- meeting agendas, full text of legislation, and lawmakers'
positions -- on sites. The study, however, found that most sites did not use
the full potential of the technology, such as foreign language Web
translators. Instead
of an interactive dimension, sites usually offered people a form to print out
and send in. Brian Bilbray (R-CA) was listed as having one of the best Web
sites. His site opens with a formal portrait fading into a photo of Bilbray
surfing and is updated by staff members twice a week. The surfing theme is
intended to catch the attention of his San Diego constituency. Another
report released this week by Congressional Management Foundation, a
nonprofit that provides training and management reviews for Congress, found
that Congressional sites need to improve access to legislative information.
[SOURCE: CyberTimes, AUTHOR: Rebecca Fairley Raney]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/05congress.html)

INTERNET

INTERNET ADDRESS FIRM TO BE PROBED
Issue: Internet
Ownership of the database of 4 million customer names and electronic
addresses created by Network Solutions Inc. is sparking an antitrust
investigation by the Justice Department. NSI's responsibility as a monopoly
contractor of the government to handle the assignment of most Internet
addresses is ending, and other firms are being allowed to perform the same
function. Several NSI rivals argue that access to the customer database is
central to their ability to compete against the firm. NSI, however, says
that it has exclusive right to the database because of "intellectual
property" rights specified in the government contract. NSI does permit
individual "look ups" through its "WhoIs" service, but it does not provide
the information in bulk form.
[SOURCE: Washington Post (E1), AUTHOR: Rajiv Chandrasekaran]
(http://www.washingtonpost.com/wp-srv/business/daily/may99/nsi5.htm)

RECORD LABEL WILL DISTRIBUTE MUSIC ONLINE
Issue: E-Commerce
Universal Music announced Tuesday that it is investing in technology to sell
music over the Internet. Universal is working with Intertrust Technologies
to develop software that would deliver music to computers, embedded with a
code intended to prevent someone from playing the music without first paying
for it.
Universal's deal with Intertrust comes before the industry group, Recording
Industry Association of America, has come up with a standard for selling
recordings as data via the Internet. The group has been working with Universal
to come up with an alternative to MP3 -- free technology for delivering music
online that allows illegal copying of music. Larry Kenswil, head of e-commerce
at Universal, said they couldn't wait for the industry to decide on a standard
in order to have the software up and running in time for Christmas sales. An
ad hoc industry group, Secure Digital Music Initiative, which has been working
on developing an industry standard, will meet four more times before releasing
a standard in June. While head of initiative says they are not troubled by
Universal's efforts, Mark Hardie, a digital music analyst with Forrester
Research says Universal is "breaking ranks," by not waiting for the industry to
decide. Kenswill of Universal disputes this assertion and says Intertrust
Technology will be flexible in order to adjust to whatever industry standard
emerge.
[SOURCE: New York Times, (C1), AUTHOR: Matt Richtel]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/05music.html)

AOL TESTS FREE CALLS TO INTERNET IN UK
Issue: Internet
Britain's AOL is offering new pricing packages for its Internet service in
an effort to recapture ground lost to rival service providers, such as
electrical retailer Dixons' Freeserve. One package, priced around $24.40
monthly, gives subscribers free telephone connections to access its Internet
service. In the UK customers have to pay the cost of local telephone calls
connecting them to the Internet. The major draw to Freeserve, now Britain's
biggest service provider with more than a million subscribers, has been free
Internet service, but callers still must pay for the local calls. Today pay
TV giant BskyB also announced plans for a June 1 launch of its own free ISP
called skynow.
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
(http://www.mercurycenter.com/svtech/news/breaking/internet/docs/410308l.htm)

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