October 1999

DIGITAL DIVIDE
Irving Urges Community Action on Digital Divide (NNN)
Blacks Spending on Computers Surges-Survey (SJM)

MERGERS
Bell Atlantic offers Internet trust to speed GTE merger (SJM)

INTERNET
House Passes Cybersquatting Bill (CyberTimes)
ICANN Board Selected (USA)
Online Retail Sales Sour, Jobs Rocket (USA)
Thirst for Knowledge Drowns Site (ChiTrib)

INFRASTRUCTURE
Phone Convergence Not So Fast, Exec Warns (ChiTrib)

DIGITAL TV
Waves of Interference Slow Digital TV (USA)

INTERNATIONAL
A Web-Savvy Singapore Seeks To Turn People Into E-Citizens (WSJ)
China's Web Boom Attracts Big Crowd of Entrepreneurs (WSJ)

FCC REFORM
FCC Reshapes for the Future (FCC)

DIGITAL DIVIDE

IRVING URGES COMMUNITY ACTION ON DIGITAL DIVIDE 10/19/99
Issue: Digital Divide
Larry Irving, recently departed from the National Telecommunications and
Information Administration (NTIA), urged a luncheon audience to take active
steps to bridge the digital divide. Irving's speech was delivered at the
public policy forum entitled "Resolving the Digital Divide: Information,
Access, and Opportunity," sponsored by the Joint Center for Political and
Economic Studies. Building upon the legacy of NTIA's "Falling Through the
Net" reports, Irving spoke of his accomplishments, frustrations and future
plans for addressing the questions of the digital divide. He stressed the
need to address cultural aspects that perpetuate the situation. "There is
something wrong with a culture that says 'be like Mike' and they mean
Michael Jordan (and not) Michael Dell... we have got to get our kids right."
Irving urged the preservation of the E-rate and issued a challenge to
leaders of African American, Latino, and Native American tribal colleges to
make information technology a priority. Irving left the luncheon audience
with vague, but enticing, information about a pilot program that he is
considering launching, modeled on an Australian program for community
Internet access. He plans to make a formal announcement about the program
before the end of the year.
Recordings of the entire day's events are available in RealAudio format
(http://www.jointcenter.org/pressrel/digital.htm)
[SOURCE: NewsBytes News Network , AUTHOR: Staff Writer]

BLACKS' SPENDING ON COMPUTERS SURGES-SURVEY
Issue: Digital Divide
According to "The Buying Power of Black America," the annual market survey
published by Target Market News, African American households nearly
quadrupled the amount they spent for computer hardware in 1998 compared to a
year earlier. The spending increase pushes African American household
computer-related spending to $1.3 billion. Additionally, the survey found
that annual income also increased by 12%, outpacing the increase in White
and Latino households. Ken Smikle, president of Target Market News,
attributed
the increase in computer-related spending to the lure of the Internet as an
alternative to traditional media.
[SOURCE: San Jose Mercury, AUTHOR: Reuters]
(http://www.sjmercury.com/svtech/news/breaking/reuters/docs/1010276l.htm)

MERGERS

BELL ATLANTIC OFFERS INTERNET TRUST TO SPEED GTE MERGER
Issue: Merger
Bell Atlantic has proposed a deal that would let it close its $74 billion
merger with GTE without selling its Internet assets. Bell Atlantic is
suggesting that it place GTE's Internet backbone business into a trust that
it could not control until it got approval to offer long-distance in most of
its region (about 65%). Bell Atlantic, like other Bells, cannot offer
long-distance voice or data traffic to its customers until it convinces the
Federal Communications Commission (FCC) its markets are open to rivals.
Analysts believe the FCC appears open to the idea. Analysts also expect the
FCC to approve Bell Atlantic's request to offer long-distance in New York by
December, making it the first Bell to win such approval. This could mean
that Bell Atlantic would have the Internet backbone out of the proposed
trust as early as late 2000, assuming it also receives long-distance
approval in New Jersey and Pennsylvania because those three states combined
would put the company at the 70% mark of its existing phone lines. The
proposal would allow Bell Atlantic to create the largest local phone company
and use GTE's Internet network to compete with AT&T, SBC Communications and
MCI WorldCom by offering a package of voice, data and wireless services to
customers nationwide. Bell Atlantic has also said it is willing to sell
GTE's
100,000 long-distance customers in Bell Atlantic's region. The company does
not want to lose GTE's Internet backbone, as it is key to offering
businesses and consumers high-speed Net and other data services, and the
company argues to that interstate Internet traffic should be exempt from the
long-distance prohibition.
[SOURCE: USA Today (3B), AUTHOR: Paul Davidson]
(http://www.usatoday.com)

INTERNET

HOUSE PASSES CYBERSQUATTING BILL
Issue: Internet Regulation
"This legislation will make cybersquatters think twice before trying to
profit off the hard work of others," Representative J.C. Watts Jr. of
Oklahoma, the House Republican conference chairman, said. "Congress acted
today out of the best interests of e-commerce as well as simple fairness."
The House passed, by voice vote, a bill to crack down on so-called
cybersquatting, the practice of buying up popular words as Internet
addresses in the hopes of reselling them to companies and trademark holders
at a hefty profit. The Senate has passed a similar bill, so the legislation
will now go to a conference committee. Civil libertarians are concerned that
the proposals will hinder free speech on the Internet.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing (jeri( at )nytimes.com)]
(http://www.nytimes.com/library/tech/99/10/cyber/articles/27cybersquatting.h
tml)
See Also:
EVICTION NOTICE: HOUSE BILL TO OUTLAW 'CYBERSQUATTING' WITH INTENT TO PROFIT

[SOURCE: Wall Street Journal, AUTHOR: Jon Simons]
(http://interactive.wsj.com/articles/SB940977109375239764.htm)
CYBERSQUATTING BILL PASSED BY HOUSE
[SOURCE: USA Today(E2), AUTHOR: AP]
(http://www.usatoday.com/life/cyber/tech/ctg518.htm)

ICANN BOARD SELECTED (USA)
Issue: Internet
The Internet Corporation for Assigned Names and Numbers (ICANN) concluded a
round of board elections Tuesday, selecting three Europeans, one Canadian,
one Asian and one US candidate to fill six remaining available board seats.
Each of ICANN's three supporting organizations selected 3 board members.
Earlier this month the Domain Name Supporting Organization (DNSO) elected
the first three permanent board members including Mexican candidate
Alejandro Pisanty, Spanish candidate Amadeu Abril i Abril and Canadian
Candidate Jonathan Cohen. On Tuesday, The Address Supporting Organization
(ASO) and Protocol Supporting Organization (PSO) completed their elections
Tuesday. The PSO selected Philip Davidson (Europe), Vinton Cerf (United
States), and Jean-Francois Abramatic (Europe). The ASO elected Ken Fockler
(Canada), Pindar Wong (Asia), and Rob Blokzijl (Europe). When all is said
and done, ICANN's permanent board will consist of 18 members -- three each
from its supporting organization and nine elected from ICANN's
still-undetermined at-large membership. Under the structure for electing the

at-large board members, an at-large "membership" of no fewer than 5,000
Internet stakeholders will elect an 18-member at-large council, which will
select nine of its own members to serve on the ICANN board. Those elections
are slated to take place in the next year. ICANN is the not-for-profit
company charged by the US Commerce Department with managing the DNS.
[SOURCE:USA Today, AUTHOR: David McGuire)
(http://www.usatoday.com/life/cyber/nb/nb5.htm)

ONLINE RETAIL SALES SOUR, JOBS ROCKET
Issue: E-Commerce
Online retailing is expected to hit $176 billion this year, according to a
study from the University of Texas, sponsored by Cisco Systems. The study
indicates revenue from online sales grew 127% to $37.5 billion in the first
quarter of 1999, from $16.5 billion in the first quarter of 1998.
However, Internet sales accounted for only a small portion of overall retail

sales of $2.7 trillion in 1998. The study also found that 2,000 secure Web
sites, capable of conducting electronic transactions, are added to the
Internet each month. The number of jobs relating to Internet commerce
increased 78% to 900,000 in the first quarter of 1999. The increase in the
number of Internet commerce related positions created offsets the decline in

retail store jobs, Anitesh Barua, co-director of the study said. The 10
largest Internet retailers garnered 27% of the online sales revenue in the
first quarter of 1999. The study available online
(http://www.internetindicators.com).
[SOURCE: USA Today (3B), AUTHOR: Sara Nathan]
(http://www.usatoday.com)

THIRST FOR KNOWLEDGE DROWNS SITE
Issue: Internet Content
Ten million people have been trying to log into Encyclopedia Britannica's
new Web site (www.britannica.com) each day since its launch last week. Only
about 1 in 100 have been able to reach the first page of the Web site and
even they have probably not been able to browse the 40-volume reference set.
With Britannica's reputation on the line [all puns intended], the company is
scrambling to add the large number of servers needed to handle the traffic.
Jorge Cauz, the company's chief of marketing, said "Nobody in his right mind
would have built an infrastructure capable of addressing the demand we had
in the first day." "The fact that hardly anybody in Internet history ever
inspired the traffic that Britannica triggered shows you the enormous
potential of the open-source model they are offering," said one observer.
The allure of Britannica, he noted, is the impeccable accuracy of its
encyclopedia in an online world teeming with information, much of it false,
dubious or hopelessly slanted.
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: James Coates & Darnell
Little]
(http://chicagotribune.com/business/printedition/article/0,2669,SAV-99102701
39,FF.html)

INFRASTRUCTURE

PHONE CONVERGENCE NOT SO FAST, EXEC WARNS
Issue: Convergence
Robert Taylor, chief executive of Focal Communication, a Chicago-based local
phone carrier, threw some cold water on the excitement of the annual meeting
of the National Communications Forum. The annual meeting draws
telecommunications engineers from throughout the country to discuss the
redesign of the phone network from a vehicle intended primarily to carry
voice conversations to one that will mostly convey data. Even though Taylor
said he is as eager as anyone to see the phone network upgraded into a data
system, he pointed out that "we're dealing with a physical network, and
working with physical media requires manual labor, time and effort."
Converting copper lines to carry data at high speeds with so-called DSL
technology, for example, requires each pair of wires to be touched and
reconfigured, Taylor said. "As long as upgrading the network is a physical
process, it'll be a slow process." The successful companies of the future,
Taylor says, will be those that react fastest to the future, not the ones
that predict it better.
[SOURCE: Chicago Tribune (Sec 3, p.3), AUTHOR: Jon Van]
(http://chicagotribune.com/business/printedition/article/0,2669,SAV-99102701
35,FF.html)

DIGITAL TV

WAVES OF INTERFERENCE SLOW DIGITAL TV
Issue: Digital Television
The good news is that broadcasters started transmitting the first digital
signals last year and more than half of all US homes should be within
reception range of at least one DTV signal by next month. The bad news is
that DTV is still very expensive and consistent good reception wanes. Some
recent developments haven't helped ease the way for digital TV: 1.) the FCC
has been petitioned to reconsider the transmission standard due to
reception problems in urban areas, 2.) digital TV sales are lagging and a
congressional study has indicated that prices won't drop fast enough to meet

the FCC's full transition target of 2006, 3.) broadcasters are about to fall

behind the FCC's rollout schedule, with only about 100 out of 120 stations
sending out signals in November and 4.) few cable companies are passing
along high-definition signals to subscribers. Industry leaders say they do
not consider any of these issues to be critical.
[SOURCE: USA Today (7D), AUTHOR: Mike Snider]
(http://www.usatoday.com)

INTERNATIONAL

A WEB-SAVVY SINGAPORE SEEKS TO TURN PEOPLE INTO E-CITIZENS
Issue: International
The Singapore government is attempting to rewire its citizens. Singapore
hopes to transform this island nation of about four million, which lacks any
natural resources, from an economy built on trade and services to one built
upon information technology, says Michael Yap, chief executive of the
National Computer Board. To achieve that goal, Singapore has begun one of
the most far-reaching technology-promotion efforts in the world within its
government. "Our purpose is to prepare Singaporeans for a Web life, so they
become the 'netizens' of tomorrow, super-connected, technologically savvy,
civic-minded and knowledgeable," says Pam Soh, an official at the National
Computer Board. Singapore officials have launched a host of services that
have the ability to make the government more efficient. Such examples of
the technologies are 1) central databases allowing bureaucrats to track
everything from immigrant work permits to detailed information on the
population; 2) during tax time, an online filer can call up a tax form that
already has personal wage information and family data completed by the
government; 3) immigration officials at airports can swap data with the
government agency that issues work permits to turn away foreign workers who
lack a valid permit immediately; and 4), a citizen can register a change of
address at local police stations, which is immediately sent electronically
to government agencies. Some people are still concerned that the government
has poured millions into developing a technology infrastructure with no
people to use it, as Singapore One, the countries' costly Internet service,
has only 30,000 paying subscribers. George Yeo, Singapore's minister of
trade and industry, believes it is a generational divide and the young will
be the ones to embrace it.
[SOURCE: Wall Street Journal, AUTHOR: Michelle Levander]
(http://interactive.wsj.com/articles/SB940977342335830954.htm)

CHINA'S WEB BOOM ATTRACTS BIG CROWD OF ENTREPRENEURS
Issue: International
In China, the Internet is taking off because the country is hungry for
community and news of the world. China's online population will hit seven
million by the end of the year, up from two million last year, according to
Internet consultant BDA Ltd. There are many things attracting people to the
web, such as China.com Corp. (www.china.com), a Chinese-language Web portal
backed
by AOL and Hong Kong's New World Infrastructure Ltd. Since travel in outside
of China is limited, the Internet is a diverse place for citizens to go and
explore. Netease.com (netease.com), another portal started two years ago has
become one of the top Web sites in China, according to industry surveys,
with chat rooms, bulletin boards, free services allowing users to set up
their own Web pages and in July, the company held its first online auction.
China's Internet market is clearly still in its infancy and Netease has not
yet turned a profit. The growth of e-commerce is slow because by the lack of
a nationwide credit-card network. There are also no laws governing the
industry and no organizations to monitor site traffic, leaving open the
possibility that companies are distorting data. Despite the uncertainty,
Internet consolidation is beginning to happen --companies are merging and
beginning to expand their offerings.
[SOURCE: Wall Street Journal, AUTHOR: LESLIE CHANG]
(http://interactive.wsj.com/articles/SB940977439170199782.htm)

FCC REFORM

FCC RESHAPES FOR THE FUTURE
Issue: FCC Reform
The Federal Communications Commission (FCC) today announced the official
creation of two new bureaus -- the Enforcement Bureau and the Consumer
Information Bureau -- that will become effective November 8. FCC Chairman
William Kennard made the announcement during testimony today before the
House Telecommunications Subcommittee on the FCC's 5-Year Strategic Plan.
"Our decision to establish bureaus devoted exclusively to enforcement and
consumer information signals the enormous importance of these functions in
our transition from an industry regulator to a market facilitator. This
reorganization is the first step in a larger effort to streamline and
modernize the FCC. I look forward to continuing to work with my colleagues
at the Commission and in Congress to implement the additional measures that
will be critical to redefining ourselves as we enter the 21st Century."
Consumer Information Bureau contact: Stacey Mesa at (202) 418-0254
Enforcement Bureau contacts: Jane Mago at (202) 418-1100 until November 8,
and 418- 7450 beginning November 8; and John Winston at (202) 418-1107.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/1999/nrmc9072.html)
See Also:
FCC REFORM FOR THE NEW MILLENNIUM
Links to the testimony delivered by Chairman Kennard and the four other FCC
commissioners.
[SOURCE: House of Representatives]
(http://com-notes.house.gov/cchear/hearings106.nsf/12b6a0781fa86e88852567e50
07558f4/b1da34d22461b9d485256810004d911e?OpenDocument)

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

INTERNET
The Internet vs. the First Amendment (WSJ)
In Europe, Labor Movement Takes Protests to the Internet (WSJ)
Internet Firms Plan to Offer Subsidized PCs in Europe (WSJ)
Study: TV, Radio Stations Lag In Creating Local Web Content (USA)

E-COMMERCE
Digital Commerce: Internet Economy Grows on Plans, Not Products
(NYT)
E-Commerce Report: Product Reviews From Anyone With an Opinion (NYT)
Role of Standards in the Growth of Global Electronic Commerce
(Senate)

CABLE
AT&T's Plans for Cable Deals Suffer a Number of Setbacks (WSJ)

INFRASTRUCTURE
Local Competition and Broadband Reporting (FCC)
Trust in Cyberspace (FCC)

INTERNATIONAL
Europe Is Next Frontier For U.S. Telecom Deals (WSJ)
FCC Approves AT&T/British Telecom Joint Venture (FCC)
Latin American Telecommunications Summit (NTIA)

FCC REFORM
FCC Reform for the New Millennium (House)

INTERNET

THE INTERNET VS. THE FIRST AMENDMENT
Issue: Intellectual Property
[OP-ED] Jason L. Riley tackles the issue of online copyright law. Regulators
attempted to regulate pornography on the Net and were unsuccessful as
the Supreme Court overturned such regulation. The technological market
responded with new technologies and search engines,
which could be used to filter smut. Now, Riley says, the regulatory battle
with respect to content is copyright and trademark infringements. He says
that like the case of pornography, people should end all of the lawsuits
which cost a lot of money and create inconsistency within intellectual
property law with all of the different rulings. He believes the Internet
will find a way to solve the problem. Riley stated, "The rise of
technological methods to keep kids away from online pornography is one
example of this, and new technology may be the wildcard in addressing
copyright concerns. In the future, copyright holders may come to rely less
on legal cover that they may or may not have, and instead turn to
technological protections, such as access codes, encryption software and
tracking devices.
[SOURCE: Wall Street Journal, (A53), AUTHOR: Jason L. Riley, Wall Street
Journal Interactive Editor]
(http://interactive.wsj.com/articles/SB940802435959274053.htm)

IN EUROPE, LABOR MOVEMENT TAKES PROTESTS TO THE INTERNET
Issue: Internet
Jim Catterson, a functionary at the International Federation of Chemical,
Energy, Mine and General Workers Unions (ICEM), which represents 400 trade
unions in 115 countries, is changing the face of traditional labor protests
by moving strikes, pickets and other union actions into cyberspace. It is
unclear if the electronic tactics are changing the outcome of such disputes
but they are putting unprecedented pressures on management. For one strike,
Catterson set up a Web site to give the union's take on the strike and made
it easy for strikers to send e-mail to management, as well as to U.S. and
foreign government officials. "Cyber-picketing is just a highfalutin' word
for sending out thousands and thousands of e-mails and annoying the hell out
of people," says David Cockroft, general secretary of the International
Transport Workers Federation. Cockroft considers the ICEM to be the most
aggressive labor player on the Net. Some people complained that some of the
messages being sent to managers were caustic. ICEM's information officer,
Ian Graham, replied that he is unaware of any offensive messages being sent
but says "we would certainly disapprove of any messages based on hatred of a
nation or a race. We asked people to protest based on the merits of the
case. It is not part of our campaign to target the nationality of any
individual." In the end, unions and management reached a negotiated
settlement that gave the 1,450 striking workers their first general wage
increase in a decade. The United Steelworkers and ICEM counted the agreement
as a major victory.
[SOURCE: Wall Street Journal, (A36), AUTHOR: Julia Flynn]
(http://interactive.wsj.com/articles/SB940802435959274053.htm)

INTERNET FIRMS PLAN TO OFFER SUBSIDIZED PCS IN EUROPE
Issue: Internet
AOL Europe and other Internet-access providers will start subsidizing the
cost of PCs to European customers in an effort to increase the number of
users online. Deals will include a discount on PC's or a monthly
installment plan for customers who agree to use an Internet service for two
or three years. AOL Europe, a joint venture between America Online and
Bertelsmann AG,
is negotiating with Fujitsu Siemens Computers BV to provide subsidized
computers in Germany, Britain and possibly other countries. German
customers would likely get a Fujitsu multimedia PC if they sign up for AOL
for three years and pay 50 marks per month, people familiar with the talks
say. Deutsche Telekom AG, whose T-Online service is the leader in Germany,
is considering special deals for specific groups, such as customers of
banks that cooperate with T-Online. Even chip maker Intel Corp. is looking
for ways to play a role in subsidizing Internet access. The European market
is right for such offers analysts say. "PC penetration is not as high as in
the U.S. and the cost [of a PC] is still one of the main detriments to
going online," said Alex Rainer, an analyst at market researcher
Datamonitor.
[SOURCE: Wall Street Journal, AUTHOR: Neal E. Boudette]
(http://interactive.wsj.com/articles/SB940797534829755267.htm)

STUDY:TV, RADIO STATIONS LAG IN CREATING LOCAL WEB CONTENT
Issue: Internet
Many television and radio stations are ignoring the Internet's potential
for garnering audiences for local newscasts. While about 25% of the US's
1,100 TV stations and 12,000 radio stations have Web sites, only about 15%
run significant, local-oriented news, according to the
Middleberg/Ross Broadcast Media in Cyberspace Study. "If local stations
can't catch up, they risk losing their most profitable audience -- the
audience for local news -- to upstarts who can Webcast without a broadcast
license," Columbia University's Steven Ross, co-author of the study, said.
Chains that own print and broadcast outlets appear best positioned to
become powerful local Web content providers.
[SOURCE: USA Today, AUTHOR: David Lieberman]
9(http://www.usatoday.com)

E-COMMERCE

DIGITAL COMMERCE: INTERNET ECONOMY GROWS ON PLANS, NOT PRODUCTS
Issue: E-commerce
The focus of the Internet economy seems to be selling business plans for
their own sake, rather than planning viable businesses. "MBAs aren't going
to class anymore; they're taking two-year sabbaticals to write business
plans," said Ann Winblad of Hummer Winblad Venture Partners in San
Francisco. "I call it 'the millennial pause,"' said Richard Miller, a
veteran Silicon Valley strategist and investor who is distressed at the
frenetic coupling of people with half-baked ideas and those with an
overabundance of money to finance them. "It's the industry's saturnalia."
"Business school has become business-plan school," said Winblad, whose
company looks at 5,000-7,000 business plans/yr. "Students go there, find a
team and start creating a company." But the market continues to invest in
these companies that really don't have a product. Blue Mountain Arts -- the
e-greeting card site, for example, has a $1 billion valuation, 10 million
users and virtually no revenue. "These companies have voracious,
unsustainable cash requirements. And their business models are based on cash
being available. It's not a even a Ponzi scheme, because there's nothing
downstream to pay off the investors," says William Davidow, a 20-year
veteran of the venture game and a general partner at Mohr, Davidow Ventures.
And by nature of their interconnections -- Internet businesses are nothing
if not linked to each other, by their swapping of advertising "revenue,"
their reliance on each other to drive each other's businesses, their
critical need for cash to acquire customers -- a few crumpled companies
could quickly turn into a big tumble for the successful businesses in the
networked economy. As one investor put it, "The point is that they will pull
down the good companies with them."
[SOURCE: New York Times (C4), AUTHOR: Denise Caruso]
(http://www.nytimes.com/library/tech/99/10/biztech/articles/25digi.html)

E-COMMERCE REPORT: PRODUCT REVIEWS FROM ANYONE WITH AN OPINION
Issue: E-commerce
Epinions (http://www.epinions.com), a company started this summer by several
Silicon Valley venture firms, provides users with opinions on what to buy
and while offering rewards and rating the reviewers. Anyone can sign up to
give advice on products that fit into the site's 12 categories, and
prospective shoppers can browse through the reviews and rate them on a scale
from "not useful" to "very useful." The site relies on a "web-of-trust" in
which, over time, users, reviewers and advisors are matched with people
whose opinions they all come to trust. "It mimics the way word-of-mouth
works in the real world," says a company executive. Other consumer sites
include Productopia.com (http://www.productopia.com), Deja.com
(http://www.deja.com), and Exp.com (http://www.exp.com). Exp.com is betting
that consumers will pay for advise from experts. Introduced last month,
Exp.com
enables consumers to buy advice and services on topics ranging from career
planning and tax shelters to what type of roses to plant. According to Mark
Benning, the company's president, the site allows users to rate the
performance of its advisers, and takes a 20 percent cut of whatever the
advisers charge. The service is unusual in that users contact the expert
with a specific question or request, and negotiate a fee before the advice
is given. "So they get a much more personalized response," Benning said.
[SOURCE: New York Times (C16), AUTHOR: Bob Tedescho]
(http://www.nytimes.com/library/tech/99/10/cyber/commerce/25commerce.html)

ROLE OF STANDARDS IN THE GROWTH OF GLOBAL ELECTRONIC COMMERCE
Issue: E-commerce
Science, Technology and Space Subcommittee hearing on the Internet standards
for e-commerce and compatibility in enabling the growth of global electronic
commerce. The hearing will be on Thursday, October 28, at 10:00 a.m. in
room 253 of the Russell Senate Office Building. Senator Bill Frist (R-TN),
Chairman of the Subcommittee, will preside. Following is the tentative
witness list: Honorable Andrew J. Pincus, General Counsel, U.S. Department
of Commerce; Dr. Andrew B. Whinston, Director, Center for Research in
Electronic Commerce, University of Texas at Austin; Mr. Randy Whiting,
President and CEO, CommerceNet; Mr. Dan Schutzer, Chairman of the Board of
Financial Services Technology Consortium, Citigroup; Mr. Glenn Habern,
Senior Vice President, New Business Development, Wal-Mart Stores
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/106-117.htm)

CABLE

AT&T'S PLANS FOR CABLE DEALS SUFFER A NUMBER OF SETBACKS
Issue: Cable/Telephony
AT&T's bid to build a national phone network is hitting a snag. Since the
announcement of a sweeping pact to give AT&T access to Time Warner's 12
million cable subscribers for local phone access almost 10 months ago, talks
between the two companies have slowed. In addition, AT&T's negotiations with
other big cable operators are on hold. The other cable companies are waiting
to see what kind of terms Time Warner will get before cutting deals. The
result of these lingering discussions is a big cloud over AT&T's hopes of
linking arms with other cable operators to offer ubiquitous local phone
coverage. When AT&T disclosed its plans to buy TCI in June 1998, it vowed to
have phone pacts in place by the end of this year that would cover at least
50 million consumers. AT&T wants access to more than half of
America's homes and to provide a viable local phone alternative to Bell
service. The causes of the slowed talks between the cable companies could be
that AT&T was negotiating access deals with Internet providers and setting
precedents for how cable will work with Web players without consulting the
rest of the cable industry. Time Warner executives say they expect to
discuss the phone deal in the course of working out a number of other
matters with AT&T. Cablevision declined comment on where the company
currently stands in talks about local phone service. Dan Somers, AT&T's
chief
financial officer said that AT&T's proposed purchase of MediaOne came with a
lot of regulatory baggage, and changes in the cable industry have slowed
things down a bit on the phone front. He notes that AT&T's pilot projects to
provide local phone service and network-upgrade work are on schedule. With
the Baby Bells trying to get back into long distance, AT&T may be even
further behind than it expected to be. Somers said AT&T didn't really expect
to
beat the Bells to market and that AT&T's number one priority is its long
distance customers.
[SOURCE: Wall Street Journal, (B1), AUTHOR: Leslie Cauley]
(http://interactive.wsj.com/articles/SB940803442576956857.htm)

INFRASTRUCTURE

LOCAL COMPETITION AND BROADBAND REPORTING
Issue: Competition
In this Notice of Proposed Rulemaking (Notice), the FCC proposes rules to
collect basic
information about two important aspects of communications: the status of
local telephone
service competition and the deployment of "advanced telecommunications
capability."
The Commission requires this information for two reasons (both of which
result from obligations imposed by the
Communications Act of 1934, as amended): 1) the need for timely and reliable
information about the pace and extent of developing local competition in
different geographic areas -- including rural areas -- in order to evaluate
the effectiveness of actions the Commission and the states are taking to
promote local competition, actions mandated by the Telecommunications Act of
1996 and 2) the need for timely and reliable information about developing
local competition and broadband deployment in order to avoid "one size fits
all" regulation of incumbent local carriers and others, and, specifically,
in order to reduce regulation wherever the Commission can pursuant to new
sections 10 and 11 of the Act.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Common_Carrier/Notices/1999/fcc99283.txt)

TRUST IN CYBERSPACE
Issue: Infrastructure
Earlier this year, the National Research Council published a study ("Trust
in Cyberspace") addressing the lack of "trustworthiness" of networked
information systems. The study, initiated by a request from the Defense
Advanced Research Projects Agency and the National Security Agency, contains
findings concerning the trustworthiness of the internet, the public
telephone network, and the software that is used in networked information
systems. At 2:00 P.M., Wednesday, October 27, three of the study's authors
will present and discuss the study's findings in the Commission's meeting
room, Room TW-C305, 445 12th Street, S.W., Washington, D.C. The presenters
will be Dr. Fred Schneider, Committee Chair and Professor, Cornell
University; Dr. Steven M. Bellovin, Fellow - AT&T Laboratories; and Dr.
Stephen T. Kent, Chief Scientist for Information Security at BBN Corporation
and Chief Technical Officer for CyberTrust Solutions (both part of GTE
Internetworking). For further information, contact Kent Nilsson at
202-418-0845
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Engineering_Technology/Public_Notices/1999/pnet9
022.html)

INTERNATIONAL

EUROPE IS NEXT FRONTIER FOR U.S. TELECOM DEALS
Issue: Mergers
Consolidation in the US telecommunications market has reached a cap with
the recent announcement of MCI Worldcom's merger with Sprint.
U.S. telephone companies are now increasingly likely to look towards Europe
to make big acquisitions, rather than trying to forge joint ventures or
make small investments in European operators. Telecommunications
joint ventures historically haven't fared well, and construction projects
take a long time to complete. One European company on the A-list of
possibilities that would give an American company an instant presence in
the European market is Mannesmann AG, the German operator that last week
agreed to buy British cellular operator Orange PLC. Mannesmann, launched
initially as a competitor to German incumbent Deutsche Telekom AG, now has
footholds in Italy, the United Kingdom and Germany. The interest in the
European market stems from telecom firms wanting to provide their
largest corporate customers with "one-stop" shopping for clients' global
telecommunications needs. "Germany, France, the U.K. and Italy are the
largest telecommunications markets in Europe by some distance and are the
cornerstone of any operator's global strategy," said Steve Jobber of
Paribas SA. "Controlling these assets is essential and invaluable."
Currently, U.S. telecommunications executives are pursuing a variety of
strategies for entering the European market. AT&T formed a
multibillion-dollar joint venture with British Telecommunications PLC to
serve international clients. MCI WorldCom is building its own networks
linking cities in Europe.
[SOURCE: Wall Street Journal, (B12), AUTHOR: Stephanie N. Mehta and Anita
Raghavan]
(http://interactive.wsj.com/articles/SB940800209839368524.htm)

FCC APPROVES AT&T/BRITISH TELECOM JOINT VENTURE
Issue: International
The Commission voted to approve the application of AT&T and British
Telecommunications to obtain or transfer licenses and authorizations in
connection with a proposed joint venture (JV) to provide international
telecommunications services. The Commission's action grants the JV Section
214 authorizations to provide international telecommunications services, and
authorizes AT&T to transfer to the JV AT&T's existing ownership interests in
submarine cable stations and facilities and certain earth station licenses.
While finding the JV application to be in the public interest, the
Commission imposed limited conditions on the JV: 1) the JV should be
regulated as dominant on the U.S.- U.K. route because of its affiliation
with BT, a foreign carrier with market power, 2) neither AT&T nor the JV
will be permitted to accept any special concessions either directly from BT
or through the JV's subsidiary in the UK, 3) the JV cannot accept traffic
from BT to the extent BT does not comply with the U.K. regulations
implementing the EC's equal access requirement, and 4) the Commission
conditioned its grant of the application on compliance with an agreement
regarding law enforcement, national security and public safety issues
reached between the parties and the Department of Defense, the Department of
Justice and the Federal Bureau of Investigation.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/International/News_Releases/1999/nrin9032.txt)

LATIN AMERICAN TELECOMMUNICATIONS SUMMIT
Issue: International
The Commerce Department's National Telecommunications and Information
Administration (NTIA) and International Trade Administration (ITA) along
with the Telecommunications Industry Association (TIA) will host an industry
briefing for the fifth Latin American Telecommunications Summit (LATS),
scheduled for March 13-15, 2000, in Lima, Peru. LATS, the annual
telecommunications policy meeting among U.S. government/industry officials
and Latin American government/industry officials, serves to foster, promote
and develop foreign and domestic commerce. The LATS organizers are also
hosting this meeting to provide an opportunity for telecommunications
industry representatives to comment on the event. November 10, 1999 at 1:00
PM. Telecommunications Industry Association, 1300 Pennsylvania Avenue, N.W.,
Suite 350.
Judy Kilpatrick, NTIA (202) 482-1087, Jkilpatrick( at )ntia.doc.gov
Elizabeth Farrand, ITA, (202) 482-2953, Elizabeth_Farrand( at )ita.doc.gov
Jonathan Streeter, TIA (202) 383-1493, Jstreete( at )tia.eia.org
[SOURCE: NTIA]
(http://www.ntia.doc.gov/ntiahome/press/latspr102199.htm)

FCC REFORM

FCC REFORM FOR THE NEW MILLENNIUM
Issue: FCC Reform
Tuesday, October 26, 1999 9:30 a.m., in 2123 Rayburn House Office Building.
The Subcommittee on Telecommunications, Trade, and Consumer Protection
hearing on Federal Communications Commission Reform for the New Millennium.
[SOURCE: House of Representatives]
(http://www.house.gov/commerce/schedule.htm)

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

TELEVISION
Out With Old, In With 18-49 (ChiTrib)
Appeals Court Rejects Damages Against ABC in Food Lion Case (NYT)

OLD VS NEW MEDIA
All Aboard The E-Train (WP)

INTERNET
New Privacy Rules for Children's Web Sites (NYT)
Online Ad Spending Grows (WP)
Online Banner Ads Spring To Life With IBM's Latest (USA)
Web Site Removes Charities' Tax Reports (NYT)
The Web Discovers Its Voice (NYT)

TELEPHONY
FCC May Hike Phone Subsidies (WP)
Proposal Would Tax Cellphone Calls At User's Address (SJM)

TELEVISION

OUT WITH OLD, IN WITH 18-49
Issue: Advertising/Television
What's the real point of network television? Not to elevate -- or, as many
suggest, enervate -- the culture but simply to assemble viewers, Johnson
writes. The soul of network TV are the ads. And, increasingly, the networks,
following what executives say are the dictates of its advertisers, are
shunting aside the elderly (which, in TV practice, means those over 55 or
even 50), the minority, and the fiscally tenuous to focus on those who
possess youth and money. This narrowcasting is a new reality that carries
with it implications of forgotten groups being marginalized, of networks
eschewing their moral responsibility to telecast to the entire population
whose airwaves allow them to exist, of the perpetuation of culturally
damaging images of youth and beauty triumphant.[yes, yes, Johnson's words]
"The current way television time is bought and sold is essentially on the
basis of age and sex, demographic parameters that really don't count anyone
over 55 years of age. And, of course, that is an economic reality that does
influence programming," says a CBS executive. "You're not going to work hard
to serve an audience that advertisers will not pay for -- even though these
people are the most affluent in the country in terms of available
discretionary income, even though they are healthier and more active than
previous generations were in their 50s."
[SOURCE: Chicago Tribune (Sec 5, p.1), AUTHOR: Steve Johnson]
(http://chicagotribune.com/leisure/tempo/printedition/article/0,2669,SAV-991
0210450,FF.html)

APPEALS COURT REJECTS DAMAGES AGAINST ABC IN FOOD LION CASE
Issue: Journalism
The United States Appeals Court for the Fourth Circuit District threw out
all but $2 of the damages that a jury had awarded the Food Lion supermarket
chain after ABC reported the grocery chain sold tainted food. The Court
ruled that Food Lion's attempt to win a multimillion-dollar fraud verdict
because two ABC employees had lied their way into jobs in Food Lion stores
was "an end-run" around First Amendment protections for journalists. Media
law specialists say this ruling sets high Constitutional hurdles for
plaintiffs whose lawsuits focus on journalists' news gathering techniques.
David Westin, the president of ABC News who was the network's general
counsel when the lawsuit was filed -- applauded the ruling, which, he said,
"should help blunt" an "important and dangerous shift." Instead of
plaintiffs "challenging what we said, through libel and defamation, they are
trying to get around through the back door, attacking the process we used to
get" the information used in news reports. For the history of the case, see
Jury Awards $5.5 Million in ABC Case (Jan. 23, 1997)
(http://www.nytimes.com/yr/mo/day/early/012397food-lion.html).
[SOURCE: New York Times (A1), AUTHOR: Felicity Barringer]
(http://www.nytimes.com/yr/mo/day/news/national/food-lion-verdict.html)
See Also:
APPEALS COURT REVERSES VERDICT WON BY FOOD LION AGAINST DISNEY'S ABC
[SOURCE: Wall Street Journal (B16), AUTHOR: Sally Beatty]
(http://interactive.wsj.com/articles/SB940456078163596847.htm)

OLD VS NEW MEDIA

ALL ABOARD THE E-TRAIN
Issue: Media
The Internet may be devouring the traditional media culture by redefining
news and coverage but the so-called old media are also invading the world
of new media and reinvented themselves as providers of "e-news." Have the
traditional media outlets become part of the hype machine that is leading
to the media saturation? "The Internet sells better than sex or crime,"
says John Huey, managing editor of Fortune. "The hunger for the thing is
great. The story's become so rich and ubiquitous that we can no longer
contain the thing in Fortune without turning it into an Internet
magazine." However, only 25 percent of Americans are connected to the
Internet. Some cities, led by the Washington area, boast higher rates of
access with nearly 60 percent, The media devotion to technology has led the
press to embrace a whole new vocabulary while delivering free publicity.
Early stories depicted the Internet as a technical oddity and a topic of
interest primarily to nerds. Recent coverage now celebrates the financial
growth that has been generated by the Internet. "There is something wrong
with journalists serving as cheerleaders for the mega-rich," writes William
Powers in National Journal. While the media derided the 1980s of Ronald
Reagan as the "greed decade," they seem to view the growth of the Internet
and the entrepreneurial nature that goes with it more favorably disposed.
Meanwhile, Internet companies are spending $2.8 billion on advertising this
year, with 83 percent for print and television outlets, according to
Forrester Research. E-news is also a favored topic of the media because
it appeals to the younger audience that media companies are desperate to
attract. Eighteen percent of people under 30 are major users of the
Internet for news, says a Pew Research Center survey, compared with just 3
percent of senior citizens. Reporters and editors were classic early
adopters of the new technology but the press must now move to the next
level of scrutiny Jonathan Weber, editor of the Industry Standard says.
[SOURCE: Washington Post (C1), Howard Kurtz)
(http://www.washingtonpost.com/wp-srv/style/features/daily/net102199.htm)

INTERNET

NEW PRIVACY RULES FOR CHILDREN'S WEB SITES
Issue: Privacy/Media&Society
As a result of the Children's Online Privacy Protection Act (COPA), passed
by Congress last year, the Federal Trade Commission
(http://www.ftc.gov/opa/1999/9910/childfinal.htm) has adopted new rules on
how privacy policies should be posted and what companies need to do to
comply with prohibition from collecting personal information without a
parent's permission. The rules will take effect in April 2000 and are
expected to have a dramatic effect on hundreds of
popular Internet sites. The law requires that all Web sites that gather
information from children under 13 first gain "verifiable parental consent."
For computer use in schools, the rules also allow teachers to act as
parents' agents or intermediaries. Because Congress left it up to the FTC to
define how that test could be met, the FTC approved, 4-0, a "sliding scale
that will allow Web sites to vary how they gain permission, depending on
what information is being gathered and how it is used. For example, Web
sites will be required to use reliable forms of consent, like postal mail,
fax, credit card or "digital signatures" before children can participate in
chat rooms or give out personal information that will be made available to
third parties. But if the site is only using the information internally, the
operators will be able to accept e-mail from parents, if a follow up e-mail
or call is made to them. There are also several exceptions to the rules.
Analysts say the third party information will be the most difficult to
handle.
[SOURCE: New York Times (B10), AUTHOR: Jeri Clausing]
(http://www.nytimes.com/library/tech/99/10/cyber/articles/21privacy.html)
See Also:
PRIVACY RULES ISSUED TO GUARD KIDS ONLINE
[SOURCE: San Jose Mercury, AUTHOR: Deborah Kong]
(http://www.sjmercury.com/svtech/news/indepth/docs/ftc102199.htm)
FTC SETS RULES FOR COLLECTING PERSONAL DATA FROM CHILDREN
[SOURCE: Wall Street Journal Interactive, AUTHOR: Ted Bridis - Associated
Press]
(http://interactive.wsj.com/articles/SB940437399961040055.htm)

ONLINE AD SPENDING GROWS
Issue: Advertising
A new survey from Intermedia Advertising Services shows that overall
advertising spending on more than 300 Web sites was up 80 percent to $359.4
million in the first quarter of 1999 compared with 1998. Computers and
software, including online and Internet services, remain the top-spending
category at $137.3 million. However the fastest growth award goes to
retail, where spending increased more than fivefold to $25.9 million. The
second-fastest-growing category was schools, camps, seminars, up 198
percent to $5.9 million, followed by government and organizations;
beverages; and business and technology. Advertisers increased the portion
of their total ad budgets devoted to the Internet to 1.83 percent in the
first quarter from 1.29 percent reported for the full year in 1998.
[SOURCE: Washington Post (E5)]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-10/21/206l-102199-idx.html
)

ONLINE BANNER ADS SPRING TO LIFE WITH IBM'S LATEST
Issue: Advertising
IBM is attempting to rejuvenate online banner ads and their potential to
generate sales. Traditional banner ads have met with limited success,
enticing a limited number of voluntary clicks from users. Consumers click
on an average of 0.6 percent of all banner ads they see online. IBM is
releasing a new version of its HotMedia technology which will enable
advertisers to animate ads quickly and cheaply. The goals of such
technology, developed by other companies as well, is to improve the
performance of banner ads. "Fundamentally, advertising on the Web is not
about traditional brand image stuff. It's about delivering a useful,
valuable experience," Jim Nail, senior analyst at Forester Research said.
New advertising applications such as HotMedia allow ads to act like
windows into advertiser's stores. This way users aren't taken away from the
Web page they are on. The advantages associated with such media
applications have previously been offset by the fact that they are more
expensive than static banners and have crashed users' systems. Currently,
about 5% of banner ads incorporate rich media.
[SOURCE: USA Today (2B), AUTHOR: Greg Farrell]
(http://www.usatoday.com)

WEB SITE REMOVES CHARITIES' TAX REPORTS
Issue:
The Web site where tax returns of 190,000 charities were posted on Monday
pulled most of the returns off the Internet yesterday after discovering that
some of the names of donors and the amounts they gave were released. Since
Federal law requires charities to report the names of donors and the amounts
they gave, the Internal Revenue Service collected the information. But the
law also allows charities to withhold these details when releasing their tax
returns -- so the donors' names were supposed to be withheld by the IRS when
it scanned the charity tax returns for the Urban Institute in Washington and
Philanthropic Research, a charity in Williamsburg, Virginia. Arthur W.
Schmidt Jr., president of Philanthropic Research, which operates the Web
site (www.guidestar.org), said he hoped that all of the returns, minus any
donor information, would be reposted today. He said that less than 1% of the
returns scanned by the IRS might have included donor names. By law,
charities may keep donor names and amounts confidential, but some charities
publicize the names of their donors.
[SOURCE: New York Times, AUTHOR: Staff]
(http://www.nytimes.com/library/tech/99/10/biztech/articles/21gift.html)

THE WEB DISCOVERS ITS VOICE
Issue: Internet
It is becoming increasingly common for people to actually chat online. In
the last six months, hundreds of thousands of people have downloaded some
version of voice-chat software that allows them to speak and be heard over
the Internet. Some users are gathering to talk in public chat rooms, while
others are having one-to-one conversations, using their computer in much
the same way as they would use the telephone. An added advantage to most
voice-chat systems, is that people have the option of typing messages and
speaking at the same time. "Now we're seeing instant messaging married to
voice, to become close to a real-time conversation," said Mark Plakias, a
senior analyst for the Kelsey Group. Voice-chat software has the potential
to impact everything from e-commerce to online education. The Saddlebrook,
N.J., Police Department is even starting to use it to provide another
communication channel between residents and the police.
[SOURCE: New York Times (E1), AUTHOR: Lisa Guernsey]
(http://www.nytimes.com/library/tech/99/10/circuits/articles/21chat.html)

TELEPHONY

FCC MAY HIKE PHONE SUBSIDIES
Issue: Universal Service/Rural
The Federal Communications Commission is today expected to more than double
subsidies given to local phone companies in high cost areas. This action is
part of the Commission's reorganization of the Universal Service program,
which distributes fees gathered from long-distance providers in an effort
to ensure that basic telephone service and Internet access are affordable
and available to all Americans. In some parts of Mississippi, for example
the costs of providing local service exceeds $39 a month, yet, because of
subsidies, Bell South is able to charge less than $20. "This money will go
to customers who truly need it," said company spokesman John A.
Schneidawind. Some of the recipients, however, question whether the subsidy
will be sufficient to make costs affordable in all areas. "This model
underestimates the costs of serving rural customers in the West," said
Melissa E. Newman, vice president for regulatory affairs at US West.
[SOURCE: Washington Post (E03), AUTHOR: Peter S. Goodman]
(http://www.washingtonpost.com/wp-srv/business/feed/a22779-1999oct21.htm)

PROPOSAL WOULD TAX CELLPHONE CALLS AT USER'S ADDRESS
Issue: Telephone Regulation
Yesterday a bill was introduced by Senator Sam Brownback (R-KS)
and Byron Dorgan (D-ND) that would make cell phone calls taxable as if they
came from a caller's home or office regardless of where in the country they
were made. The backers of the plan include cities, governors and cell phone
companies, that contend it would eliminate a confusing patchwork of taxes on
calls from mobile phones. Taxation of wireless phone calls currently is
based on various factors such as the relay tower that picks up a phone's
signal or the switching center that directs the call to its recipient --
meaning the same call could be taxed several times, especially if the caller
moves through several cities, counties or states while talking. The bill
would allow calls to be taxed on the state and local governments with
jurisdiction over the caller's home or office address. Cellular phone
companies say the change would make it easier for them to collect state and
local taxes and consumers could benefit from streamlined bills and possibly
lower rates, supporters say.
[SOURCE: San Jose mercury, AUTHOR: Associated Press)
(http://www.sjmercury.com/svtech/news/breaking/merc/docs/005638.htm)

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

POLITICS & THE INTERNET
Candidate on the Stump Is Surely on the Web (NYT)
The Internet Begins to Click as a Political Money Web (WSJ)

INTERNET
Capital Dispatch: U.S. Shut Out in First Round of
Internet Board Elections (CyberTimes)
Microsoft Joins Telmex to Build an Internet Portal for Hispanics (WSJ)

ECOMMERCE
Capital Dispatch: Fight Over Electronic Contracts Heads
to House (CyberTimes)
Chamber Plans A For-Profit Web Venture (WP)

PUBLIC BROADCASTING
Now a Word From Our Spon ... uh, um ... Our Friend (NYT)

TELEPHONY
N.Y. Regulators Seen Backing Bell Atlantic's Bid (SJM)
Speech: Competition and Deregulation: Striking the
Right Balance (FCC)
France Telecom Seeks Stake In German Wireless Carrier (WSJ)
Norway, Sweden Sign $47 Bln Telecoms Merger (SJM)

ANTITRUST
Hardball and Windows (WP)

POLITICS & THE INTERNET

CANDIDATE ON THE STUMP IS SURELY ON THE WEB
Issue: Political Discourse
"It used to be said the candidate had to have a good message, a good ground
game and enough money to wage a good air game on TV," said Rick Segal, the
Internet strategy adviser to Presidential hopeful Steve Forbes. "This is the
first cycle that it can be proven that a candidate needs to have a good
online game as well." In the 2000 election, it is not good enough to just
have an electronic version of your campaign brochure up on the Web. By
posting everything from their baby pictures (as George W. Bush has done) to
their favorite Bible stories (an offering from Elizabeth Dole), candidates
are using the Internet as a fireside chat room, to portray themselves as
just plain folks, Kelley writes. Four years ago, in the last election cycle,
7.5 million Americans were online -- now 67 million are: the Internet has
become a new variable in campaign calculus. Sen John McCain's (R-AZ) press
secretary, Howard Opinsky, says it is "almost the 51st state." In many
respects, the partnership between established candidates and the wild, wild
Web is uneasy as they plumb the possibilities of this new technology.
"Campaigns are a tight, disciplined, focused message delivered in a focused
way, reducing chance, variables and conflict to a minimum," said Phil Noble,
president of PoliticsOnline of Charleston (SC), a company offering Internet
expertise. "The Internet is about millions of voices colliding, all at the
same time, about all kinds of things in a near-chaotic pattern."
[SOURCE: New York Times (A1), AUTHOR: Tina Kelley]
(http://www.nytimes.com/library/tech/99/10/biztech/articles/19site.html)

THE INTERNET BEGINS TO CLICK AS A POLITICAL MONEY WEB
Issue: Politics
Millions of Americans will be bombarded with pitches from political
candidates seeking money via the Web. Online political fund raising is
growing faster than anticipated. The Mellman Group, a survey firm,
highlighted the Internet's challenge to traditional direct mail last month
in a study. Mellman noted that the potential for traditional direct-mail is
about 12 million donors. Moreover, nearly two-thirds of those donors are age
60 or older. The potential Internet market dwarfs that finite and aging
class. As the Mellman Group reported, "the number of Americans with Internet
access who report giving time or money to social causes represents 25% of
the adult population, or approximately 50 million people." Even if the
number is limited to the current 16% of Internet-wired Americans who say
they are willing to give to charity or to public-interests groups over the
Web, that still works out to 16 million people. In addition to demographics,
cost factors heavily favor the Internet. According to campaign consultant
John Aristotle Phillips, a traditional direct-mail pitch costs 30 cents to
40 cents per address and yields a response rate of 1% to 1.5%. Internet
pitches via targeted banner ads have a similar yield, but cost a dime or
less. E-mail solicitations run 50 cents to a dollar per address, but have a
response rate of 10% to 12%. The new medium also has the potential for
vastly increased effectiveness because reaching potential donors
electronically allows messages to be tailored to individuals. Theoretically,
a politician will have the capability, through in-depth survey research, to
appeal to an individual right down to sending the message in the person's
favorite color.
[SOURCE: Wall Street Journal, (A28) AUTHOR: Glenn R. Simpson]
(http://interactive.wsj.com/articles/SB940285433425429727.htm)

INTERNET

CAPITAL DISPATCH: U.S. SHUT OUT IN FIRST ROUND OF INTERNET BOARD ELECTIONS
Issue: Internet
According to people close to the election process for the business
constituency of the Internet Corporation for Assigned Names and Numbers
(ICANN), the vote for the last of its three seats is between a Canadian, a
New Zealander and a Ghanaian. ICANN's Domain Name Supporting Organization,
the business constituency, is the first group holding elections. Its
19-member Names Council plans to finish voting Wednesday. Last week it
elected Alejandro Pisanty, a Mexican computer scientist, and Amadeu Abril i
Abril, a Spanish law professor, to fill the other two seats. The finalists
for its last seat are Jonathan Cohen, a trademark lawyer from Canada, Peter
Dengate Thrush, a trademark lawyer from New Zealand, and Nii Quaynor, a
computer scientist from Ghana, according to people involved in the process.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing (jeri( at )nytimes.com)]
(http://www.nytimes.com/library/tech/99/10/cyber/capital/19capital.html)

MICROSOFT JOINS TELMEX TO BUILD AN INTERNET PORTAL FOR HISPANICS
Issue: Internet Content
Yesterday, Microsoft announced it is launching a joint venture with the
Latin American communications company Telefonos de Mexico (Telmex), to
develop the hemisphere's largest Spanish-language Internet portal, with a
joint investment of about $100 million. "Telmex is providing the expertise
in the access business and Microsoft is providing the portal technology like
Hotmail, Passport, Messenger and all the technology related with
e-commerce," Mauricio Santillan, Microsoft's vice president for Latin
America, said. "Telmex will try to expand its access business in Latin
America, which we estimate will be an additional 30 million Internet users
in the next three to four years." Microsoft will offer all traditional
services available on the Internet to subscribers in the U.S. The
Microsoft-Telmex portal will go head-to-head against a proliferating number
of providers targeting the Latin American market.
[SOURCE: Wall Street Journal, AUTHOR: Joel Millman]
(http://interactive.wsj.com/articles/SB940283032998196140.htm)

ECOMMERCE

CAPITAL DISPATCH: FIGHT OVER ELECTRONIC CONTRACTS HEADS TO HOUSE
Issue: Ecommerce
Legislation that would give equal weight to electronic signatures as their
traditional paper counterparts may move to the House floor this week. The
House is scheduled to take up digital signature legislation as early as
Tuesday, But Republicans and Democrats in the House are still battling over
how far the legislation should go. The White House and Democrats want to
enact legislation make digital signatures legal only in those states that
don't already have laws recognizing the validity of electronic contracts.
Republican leaders are pushing for more sweeping legislation that would not
only pre-empt state digital signature laws but would also eliminate some of
the paper-record keeping and notification requirements that some states
impose on financial institutions and insurance companies.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing (jeri( at )nytimes.com)]
(http://www.nytimes.com/library/tech/99/10/cyber/capital/19capital.html)

CHAMBER PLANS A FOR PROFIT WEB VENTURE
Issue: E-Commerce
The U.S. Chamber of Commerce will unveil its first for-profit venture, an
Internet portal called ChamberBiz, to link small businesses around the
country and provide them with relevant news and information. The portal
will be found at (www.chamberbiz.com), and be officially launched in
December. The new portal plans to make money by selling advertising and
making joint marketing deals and will exist as a separate entity from the
rest of the chamber, so it can potentially be spun off as a public company
at a future point. The market for business-to-business Web commerce is
predicted to grow from $109 billion in 1999 to $1.3 trillion in 2003,
according to Forrester Research. ChamberBiz is funded by Rajendra Singh, a
Washington area telecommunications investor. Through Telcom Ventures -- his
venture-capital firm -- Singh will invest $24 million in ChamberBiz. Under
the terms of the deal, Telcom Ventures of Alexandria will own two-thirds of
ChamberBiz and the Chamber of Commerce -- a nonprofit association of
businesses and business groups -- will own the remaining third.
[SOURCE: Washington Post (E1), AUTHOR: Shannon Henry]
(http://www.washingtonpost.com/wp-srv/business/feed/a12325-1999oct19.htm)

PUBLIC BROADCASTING

NOW A WORD FROM OUR SPON ... UH, UM ... OUR FRIEND
Issue: Public Broadcasting
The Newshour on PBS gained two new news correspondents recently -- Gwen
Ifill, late of NBC, and Ray Suarez, the former host of NPR's Talk of the
Nation. These high-profile reporters must demand high salaries -- how can
PBS afford them? Alas, the answer in part must be the commercials that have
grown like sores on this purportedly noncommercial endeavor, Goodman writes.
Advertising runs smack against the ideal of public broadcasting as a haven
from marketing. To the degree that programs even as distinguished as the
"Newshour" have to succumb to market imperatives, it puts the nation on
notice that public broadcasting in the United States is fated never to be
able to make it in an unadulterated form.
[SOURCE: New York Times (B2), AUTHOR: Walter Goodman]
(http://www.nytimes.com/yr/mo/day/news/arts/newshour-tv-notebook.html)

TELEPHONY

N.Y. REGULATORS SEEN BACKING BELL ATLANTIC'S BID
Issue: Long Distance
Today, New York State regulators are expected to support Bell Atlantic's
efforts to become the first Baby Bell to break into the $90 billion
long-distance telephone market. Bell Atlantic, the dominant local phone
company in 13 states from Maine to Virginia, last month submitted its
application to the Federal Communications Commission to offer long distance
phone service in New York State. The New York Public Service Commission is
expected to outline its support of that application today, meeting the
20-day recommendation deadline for the review process. The Department of
Justice is expected to weigh in by November 1st. The FCC will weigh the
comments from the PSC and the DOJ before they make its decision, which is
expected by late December. Under the 1996 Telecommunications Act, Baby Bell
companies created in the 1984 break-up of AT&T cannot offer long-distance
service within their home regions until they open their local markets to
competition. Over the past two years, Bell Atlantic has worked closely with
state regulators, the FCC and the DOJ to develop what it hopes is a
successful application. Since Bell Atlantic and New York regulators have
been working so closely together, analysts said they'd be surprised if the
PSC raised any new complaints. Other long distance carriers and local
start-ups have said Bell Atlantic has not yet opened its local markets to
competition. The PSC declined to comment on the nature of its comments.
[SOURCE: San Jose Mercury, AUTHOR: Reuters]
(http://www.sjmercury.com/svtech/news/breaking/reuters/docs/976135l.htm)

SPEECH: COMPETITION AND DEREGULATION: STRIKING THE RIGHT BALANCE
Issue: Competition
Chairman Kennard's October 18th Remarks at the USTA Annual Convention. "So
what does competition mean? ... Most agree that competition means the
elimination of all entry barriers, so that anyone who wants to provide a
telecommunications service to the consumer can do so. And to make this
possible, everybody agrees that we need collocation and cost-based
interconnection of networks to allow the seamless and efficient handoff of
customers and services; and, once competition arrives, a significantly
deregulated environment." " Most of the controversies that I deal with as
chairman do not tend to focus on what our ultimate objectives should be, but
rather on how to achieve them and when. And today at the FCC, much of the
debate surrounds the question of when there is enough competition in the
marketplace to warrant more deregulation: striking the right balance between
competition and deregulation."
[SOURCE: FCC]
(http://www.fcc.gov/Speeches/Kennard/spwek936.txt)

FRANCE TELECOM SEEKS STAKE IN GERMAN WIRELESS CARRIER
Issue: Merger
France Telecom plans to buy a majority stake in German wireless carrier
E-Plus Mobilfunk GmbHs. France Telecom plans to expand
internationally in partnership with Deutsche Telekom AG were shattered last
spring when the German carrier launched a doomed solo bid to acquire
Telecom Italia SpA without France Telecom. The new merger will give
France Telecom a powerful foothold in Deutsche Telekom's home market.
France Telecom's proposed 7.4 billion euro ($8.06 billion) purchase of RWE
AG and Veba AG's combined 60.25% share in E-Plus, in addition to its
standing agreement to buy Vodafone AirTouch PLC's 17.24% stake in the
company, will enable the French carrier to begin a serious attack on the
German market, Europe's largest. E-Plus's 3.1 million subscribers make it
the No. 3 wireless operator in the country, where E-Plus also holds a
fixed-line license. The deal still has to be approved by regulators. U.S.
local carrier BellSouth Corp., which holds a 22.51% E-Plus stake, has the
right of first refusal on the shares that France Telecom is seeking to
purchase.
[SOURCE: Wall Street Journal, (A20) AUTHOR: Kevin J. Delaney]
(http://interactive.wsj.com/articles/SB940287782100649514.htm)

NORWAY, SWEDEN SIGN $47 BLN TELECOMS MERGER
Issue: Merger
Earlier today, the Swedish and Norwegian governments signed an agreement to
merge state-owned telecoms operators Telia and Telenor. The agreement was
signed by Sweden's Industry Minister Bjorn Rosengren and Norway's Transport
and Communications Minister Dag Jostein Fjaervoll and will create Europe's
sixth largest telecom group. The deal has been problematic since the outset
and brought to the surface underlying, historic national rivalry that exists
between the neighbors. But after the merger received approval from the
European Union competition authorities last week on condition Telia and
Telenor sell certain overlapping units, it seemed all differences were
settled. It went into intense negotiations in the end with those intense
rivalries, but the deal has now been signed.
[SOURCE: San Jose Mercury, AUTHOR: Belinda Goldsmith]
(http://www.sjmercury.com/svtech/news/breaking/reuters/docs/976300l.htm)

ANTITRUST

HARDBALL AND WINDOWS
[Op-Ed] Last month Microsoft began lobbying Congress to cut
$9 million from the Clinton administration's proposed budget for the
Antitrust Division of the Department of Justice. Furthermore, nonprofit
groups which have received gifts from CEO
Bill Gates -- such as Citizens for a Sound Economy, the National Taxpayers
Union and Americans for Tax Reform -- sent a letter urging the House to stick
with its $105 million spending plan for the antitrust division which is $7
million less than the Senate has proposed and $9 million below the
administration's request. This letter was sent two days after
representatives of these organizations returned from a round of briefings
at Microsoft headquarters. "This is a sorry attempt to use political
pressure to influence a judicial process -- and a sign that Microsoft's
critics may have been right when they warned that the company has grown so
powerful through the monopoly of its "Windows" operating system that it
poses a threat to its industry and the public," Ignatius writes. If Microsoft
feels it has been unfairly accused of violating antitrust laws, it has
legal recourse subsequent to Judge Jackson's decision: it can appeal to the
D.C. circuit court, and from there to the Supreme Court. This would be a
"fair fight."
[SOURCE: Washington Post, AUTHOR: David Ignatius]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-10/19/010l-101999-idx.html)

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