Communications-related Headlines for 6/30/99
MERGERS
FCC SBC-Ameritech Conditions Draw Broad Positive Reactions (WSJ)
Cisco to Buy Stratum One for $435 Million (WSJ)
CMGI Buys Alta Vista from Ailing Compaq (WP)
TELEPHONY
Access Charges Cut: Lower Long Distance Rates Should Follow (FCC)
Bell Atlantic to Raise Access Fee 51 Cents (WP)
EDTECH
For Religious Schools, a Victory on Money for Net Access (CyberTimes)
INTERNET
Hackers Attack Army's Main Internet Site (CNN)
Telefonica Casts Net for Latin Market (USA)
RADIO
Ever a Voice of Protest, Radio KPFA Is at It Again, but With a Twist
(NYT)
ANTITRUST
U.S. Said to Probe Ocean Cables (CNN)
MINORITIES
U.S. to Assist Small Tech Firms (WP)
MERGERS
FCC SBC-AMERITECH CONDITIONS DRAW BROAD POSITIVE REACTIONS
Issue: Merger
The Federal Communications Commission has proposed 28 conditions for approval
of the SBC - Ameritech merger. These conditions include: 1) timetables for the
Bells to enter new markets; 2) discounted rates for competitors leasing network
space; 3) promises to offer high-speed data service to low-income areas and 4)
fines totaling more than $2 billion for failure to comply with the conditions
set forth. The settlement package will be open for public comment a month
before being put to vote by the commissioners. So far no Bell company has won
approval by the FCC to enter the long-distance game because they have not met
the conditions set forth in the Telecommunications Act of 1996. This may give
SBC - Ameritech a leg up in being the first Bell company to do just that if the
FCC conditions of the merger are met. Gene Kimmelman of the Consumers Union
said, "It will take an army of regulatory policemen to oversee these
conditions" and that he doubts this will benefit residential customers.
[SOURCE: Wall Street Journal (B10), [AUTHOR: Kathy Chen]
(http://wsj.com/)
The 28 conditions can be found at the FCC Web site:
(http://www.fcc.gov/ccb/Mergers/SBC_Ameritech/conditions062999.html)
CMGI BUYS ALTA VISTA FROM AILING COMPAQ
Issue: Internet
Alta Vista, one of the best-known search engines on the Internet, was sold
yesterday to CMGI, an Internet company. The deal vas valued at $2.3 billion.
Though Alta Vista ranks 15th among the most popular online sites, its previous
owner, Compac Computer was struggling with its own financial problems and saw
that Alta Vista was drifting away from core activities. For the deal, Compac
will receive 19 million shares of stock in CMGI. In return, CMGI will own 83%
of Alta Vista. Compac will also get a share of the 40 Internet companies that
CMGI operates and hopes to generate sales of its hardware as part of its
"preferred relationships" with CMGI companies.
[SOURCE: Washington Post (E3) AUTHOR: John Schwartz]
(http://washingtonpost.com/wp-srv/WPlate/1999-06/30/126l-063099-idx.html)
CISCO TO BUY STRATUM ONE FOR $435 MILLION
Issue: Merger
Cisco Systems, continuing with their aggressive policy of buying technologies
they do not want to develop internally, agreed to acquire StratumOne
Communications, which designs chips for high-speed computer networking. This is
Cisco's 36th acquisition and seventh this year. Analysts say the deal
demonstrates how chips are becoming more important as companies such as Cisco
build devices to route computer traffic faster over longer distances.
StratumOne's chips can process 10 billion bits of data a second.
[SOURCE: Wall Street Journal (B10), [AUTHOR: Scott Thurm]
(http://wsj.com/)
TELEPHONY
ACCESS CHARGES CUT: LOWER LONG DISTANCE RATES SHOULD FOLLOW
Issue: Telephony
Beginning July 1, 1999, long distance companies will see overall reductions in
access charge payments and contributions to universal service programs of over
half a billion dollars annually. These changes are designed to improve the
price structure for long distance calling in the U.S. and are likely to lower
prices, further stimulate long distance calling and boost the economy in
general. Federal Communications Commission Chairman William E. Kennard said,
"If consumers see higher flat fees without reduced per-minute rates, they may
want to shop around for another long distance company or even consider not
having a pre-subscribed long distance company at all." The FCC is releasing a
Consumer Fact Sheet - "Tips for Lowering Your Long Distance Telephone Bill."
(Check out the FCC site below for more information and the fact sheet.)
[SOURCE: Federal Communication Commission]
(http://www.fcc.gov/Daily_Releases/Daily_Business/1999/db990629/nrcc9038.txt)
BELL ATLANTIC TO RAISE ACCESS FEE 51 CENTS
Issue: Telephony
On July 1, Bell Atlantic will begin charging local area residents 51 cents more
on their monthly phone bills. This is the company's response to an action by
the Federal Communications Commission to reduce the "access charges" that
long-distance carriers pay local phone companies for the use of their telephone
networks. The company says it will lose $230 million in revenue over the coming
year and that the 51cent increase will make up for some of that loss. The new
charge will appear on bills as an increase from 53 cents to $1.04 in a line
item called "federal access charge." Bell Atlantic is referring all complaints
to the federal government and long-distance carriers AT&T, MCI World Com and
Sprint.
[SOURCE: Washington Post (E1), AUTHOR: Shu Shin Luh]
(http://washingtonpost.com/wp-srv/WPlate/1999-06/30/132l-063099-idx.html)
EDTECH
FOR RELIGIOUS SCHOOLS, A VICTORY ON MONEY FOR NET ACCESS
Issue: EdTech/First Amendment
Last week, a Federal District Court ruled that a Wisconsin program which
subsidizes Internet access for schools, including religious schools, does not
violate the First Amendment separation of church and state. The judge,
however, did find that a related state grant program that gives subsidies to
parochial schools that have already established Internet access does violate
the constitution. This is the first major ruling on the government's ability to
help religious schools gain access to the Internet. Judge John Shabaz decided
that subsidy program -- a state version of the Erate program -- was acceptable
in part because the money goes directly to high-speed telecommunications
providers and not to the schools themselves. "Sectarian schools cannot convert
subsidized telecommunications links into an economic benefit to them to be used
for the advancement of the institution as a whole and its religious mission,"
he wrote. The grants program was deemed unconstitutional because it involved
direct cash payment to religious schools with few restrictions on how the money
was to be spent. Sharon Schmeling, executive director of the Wisconsin
Association of Nonpublic Schools, was pleased with the ruling. She said that
many of the 900 religious schools receiving state help might not be able to
afford Internet access without the program.
[SOURCE: CyberTimes, AUTHOR: Pamela Mendels]
(http://www.nytimes.com/library/tech/99/06/cyber/education/30education.html)
INTERNET
HACKERS ATTACK ARMY'S MAIN INTERNET SITE
Issue: Internet/Security
Yesterday, computers hackers succeeded in infiltrating the U.S. Army's main Web
site, as well as the Internet site for the National Oceanic and
Administration's Storm Prediction Center. The hacker took advantage of a
well-publicized flaw in the off-the-self software used to create the sites. The
attack on the NOAS's Storm Prediction Center prevented emergency management
officials from being able to track thunderstorms or tornadoes on the Web site.
Although one of the Army's Web pages was vandalized, there were no reported
security breaches. Yesterday's incident is the latest in a string of attacks on
government Web sites, including thoes of the White House, the Senate, and the
FBI.
[SOURCE: CNNInteractive, AUTHOR: Associated Press]
(http://www.cnn.com/TECH/computing/9906/29/army.hacked.02.ap/index.html)
TELEFONICA CASTS NET FOR LATIN MARKET
Issue: Internet
Telefonica, the Spanish telecommunications giant, said yesterday that it hired
Lucent Technologies to create an Internet based network for booming Latin
markets. Other new offerings for this market include: 1) Quepasa.com of Phoenix
as a Spanish portal; 2) Jazztel and Telefonica offering free Internet access;
and 3) since many U.S. companies will not ship outside of the US or Canada,
Skybox will offer a U.S. address and mail forwarding service. Nazca Saachi &
Saachi said that the number of Internet users in Latin America will reach 34
million by 2000. Visa International and International Data Corp. said
electronic commerce revenue in Latin America will hit $8 billion in 2003, up
from their $300 million last year. Deployment in Brazil and Chile will begin
this year.
[SOURCE: USA Today (5B), [AUTHOR: Steve Rosenbush]
(http://usatoday.com/)
RADIO
EVER A VOICE OF PROTEST, RADIO KPFA IS AT IT AGAIN, BUT WITH A TWIST
Issue: Radio
At KPFA, a San Francisco public radio station steeped in the tradition of
protest and free expression, recent protests have been aimed at the station's
owner, the Pacifica Foundation. Over the past few years there has been
increasing tension between staff members and the station's management, which
has been pushing for more national program and centralized decision making. The
conflict escalated into full-scale protests when Nicole Sawaya, KPFA's general
manager was fired two weeks before the station's 50th anniversary. "KPFA is the
closest thing that the Bay Area secular left has to a church," explained
Matthew Lasar, a former news reporter at the station "and Pacifica threw out
the preacher two weeks before Christmas." When national news reporter Larry
Bensky spoke out against the firing of the general manager, he was dismissed
too. The most recent protest on Monday evening included more than 100 people
chanting "Free KPFA." According to Pacific's executive director, Lynn Chadwick,
the station's problems are a result of a small group of people who are
resistant to change.
[SOURCE: New York Times (A12), AUTHOR: Everyn Nieves]
(http://www.nytimes.com/yr/mo/day/news/national/pacifica-radio.html)
ANTITRUST
U.S. SAID TO PROBE OCEAN CABLES
Issue: Antitrust
The U.S. Justice Department is investigating whether or not a consortium of the
world's leading telecommunications companies -- including AT&T, Sprint, MCI
Worldcom and three of Japan's biggest telecom firms -- unfairly dominate the
undersea cable business. The concern is that the more than 30-member consortium
has been violating antitrust laws by mopping up all available customers.
Upstart companies such as Global Crossing have complained of difficulties in
attracting customers for a trans-Pacific cable. Demand for undersea cable
traffic has soared in recent years with the rapid growth of the Internet and
the existing cables have traditionally been laid and maintained by a tightly
knit group of telecom giants. The Justice Department sent letter to several of
the consortium's members demanding details of a $1.2 billion undersea cable the
consortium is laying between the United States and Japan.
[SOURCE: CNN, AUTHOR: London (CNNfn)]
(http://cnnfn.com/1999/06/30/worldbiz/under_sea/)
MINORITIES
U.S. TO ASSIST SMALL TECH FIRMS
Issue: Technology
The Commerce Department launched a campaign to steer $1.5 billion in federal
technology contracts over the next five years to a select group of small
businesses, most of them headed by women and minorities. Why the new focus? The
Commerce Department says it is a response to its previous strategy that began
in the mid-1990s to award contracts to the nation's largest firms as it
streamlined its own purchases of computer systems and software. The Washington
area, where there is a large concentration of minority contractors, has been
largely affected. Although the total 1993 federal contracts in the region
increased by 51%, those awarded to minority-owned firms grew only by 6%. Why
such a difference? Analysts say it is partly due to the elimination of
affirmative action plans (such as the Small Business Administration's Section
8(a) program) to aid small and minority-owned companies as well as the
aforementioned government procurement plan.
[SOURCE: Washington Post (E3), AUTHOR: Peter Behr]
(http://washingtonpost.com/wp-srv/WPlate/1999-06/30/147l-063099-idx.html)
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