Put Your Spin on This: SBC-Ameritech Merger
(A Sample of Today's Merger Stories)
$62 Billion Deal To Shift Balance in Phone Industry (NYT)
Giving Ma Bell New Lease on Life (NYT)
Dialing For Dollars: Ameritech deal targets
stocks over consumers (ChiTrib)
And then there were four (ChiTrib)
Deal seen as threat to goals of '96 law (ChiTrib)
Alarm Bells: Is This Really What Congress Had in Mind With the
Telecom Act? (WSJ)
Regulator Vows Tough Scrutiny of Phone Deals (WP)
WorldCom, MCI Face Internet Objection (WSJ)
Telephone Regulation
Directory Assistance: 'Overlay' code means end of
7-digit numbers (ChiTrib)
Internet
A New Measure Of Disparities: Poor Sanitation In Internet Era (NYT)
Jobs
Visas Cut Off for High-Tech Workers (WP)
Canada Frets High-Tech 'Brain Drain' (WSJ)
Cable
Cable Rate to Freeze in Fairfax (WP)
Journalism
Magazine Dismisses Writer Accused of Hoax (NYT)
** Put Your Spin on This: SBC-Ameritech Merger **
Title: $62 Billion Deal To Shift Balance in Phone Industry
Source: New York Times (A1)
http://www.nytimes.com/yr/mo/day/news/financial/sbc-ameritech.html
Author: Seth Schiesel
Issue: Mergers
Description: The balance of power in the telecommunications industry could
be shifted by the proposed $62 billion acquisition of Ameritech by fellow
Baby Bell SBC. The resulting carrier would be #2 in the nation behind only
AT&T. The company would control 55 million local lines from Detroit to El
Paso along with California and Connecticut. Annual sales would be ~$40
billion per year. SBC's Chairman, Edward Whitacre Jr., said the new company
would move aggressively to compete with the remaining three Baby Bells
mentioning New York City as a prime target.
Title: Giving Ma Bell New Lease on Life
Source: New York Times (C1)
http://www.nytimes.com/yr/mo/day/news/financial/sbc-bells.html
Author: Steve Lohr
Issue: Mergers
Description: If the merger is approved, SBC would control local phone
service in 12 states including Texas, California, and Illinois. It appears
to run against the aim of the Telecommunications Act of 1996 which was to
promote competition in the telecommunications industry. The Government did
not stop mergers between SBC and PacTel or NYNEX and Bell Atlantic. "The
size of these deals alone is not horrifying, if we see an increase in
competition as well as increased concentration in the industry," said Eli
Noam, director of Columbia University's Institute for Tele-Information. "The
issue to watch is whether a deal like SBC is tied to targets and timetables
to increase competition for local phone service." Mark Cooper of the
Consumer Federation of America says, "the forces of concentration are
clearly running ahead of the forces of competition. But consumers may be
seeing the benefits of deregulation soon: "The Yankee Group estimates that
the typical American household's monthly bill for basic phone service --
roughly $25 for long distance, and just under $30 for local -- will decline
13 percent a year over the next three years." "Businesses are already
enjoying the benefits of deregulation in terms of lower costs and new
services, and consumers are just starting to see the benefits," a Yankee
Group analyst said. "In broad strokes, the deregulation of
telecommunications is working as it was intended, even if not quite as well
as some people had hoped."
Title: Dialing For Dollars: Ameritech deal targets stocks over consumers
Source: Chicago Tribune (p.1)
http://www.chicago.tribune.com/business/businessnews/article/0,1051,ART-842
9,00.html
Author: Jon Van
Issue: Mergers
Description: Analysts agree that the SBC-Ameritech merger will be good for
stockholders -- and of questionable value to consumers. Since passage of the
Telecommunications Act of 1996 some 27 months ago, Chicago-area consumers
have not seen the promised competition so much as a proliferation of new
area codes [see story below], proposed higher rates for basic residential
service, and no real alternative to Ameritech for local service. The leader
of a Midwestern consulting group said, "this whole deal is about two
monopolies getting together to extend their stranglehold on customers. This
isn't about competition, it's about scale. This is the same global
consolidation we've seen in automobiles, banking and other industries."
Title: And then there were four
Source: Chicago Tribune (Sec 1, p. 12)
http://www.chicago.tribune.com/news/opinion/article/0,1051,SAV-9805120059,0
0.html
Author: ChiTrib Editorial Staff
Issue: Mergers
Description: A lot has changed in the telephone industry since the break up
of AT&T 14 years ago, but one thing remains the same: consumers still have
little choice when it comes to who provides their local service. The
proposed Ameritech-SBC merger does little to change that. If approved, the
new SBC would control 1/3 of all the phone lines in the US. The two
companies were about to compete head-to-head for customers in St. Louis --
now customers there will have to wait longer for competition. The merger
should serve as wake-up call to Congress: the Telecommunications Act of 1996
is not achieving its goal. "Competition must be the watchword for Congress
and the regulators who must pass muster on the Ameritech-SBC deal."
Title: Deal seen as threat to goals of '96 law
Source: Chicago Tribune
http://www.chicago.tribune.com/business/businessnews/article/0,1051,SAV-980
5120241,00.html
Author: Frank James
Issue: Mergers
Description: "Where is this all going to end?" asked one congressional
staffer. Senate Commerce Committee Chairman John McCain (R-AZ) said, "The
1996 Telecom Act unintentionally, but quite effectively, stymies
competition. The proposed merger of SBC and Ameritech is yet another example
of the act's real-world effects. All this might still be for the good if the
act were also giving consumers more choice in services or at least lowering
their bills. But it's not. Consumer bills are increasing and competitive
one-stop shopping for the average consumer's local telephone business is
virtually nonexistent." Sen McCain is calling for overhauling the Act before
consumers are hurt further. Rep Edward Markey (D-MA), senior Democrat on the
House Telecommunications Subcommittee, said: "I believe that this merger is
bad for consumers, bad for competition and bad for innovation and job growth
in the telecommunications industry. It was the intent of Congress in the
Telecommunications Act that the local phone monopoly cease to exist and that
the benefits of robust marketplace competition be brought to consumers....It
is clear by SBC's actions...that the company has obvious disdain for that
intent..." Rep Markey added that the Federal Communications Commission and
the Justice Department should oppose the merger.
Title: Alarm Bells: Is This Really What Congress Had in Mind With the
Telecom Act?
Source: Wall Street Journal (A1,A8)
http://wsj.com/
Author: Bryan Gruley, John Simons and John R. Wilke
Issue: Mergers/Telecom Act
Description: When the federal government passed the 1996 Telecom Act they
expected it to break down local telephone monopolies and thus provide
consumers lower prices due to increased competition. Instead, it seems that
the urge to merge has overtaken the desire to compete. Most people continue
to wait for lower phone rates and better service while the nation's phone
companies are rushing to see who can become the biggest fastest. Lawmakers
and regulators have largely stood by hoping that the current landscape would
eventually give way to competition. But with SBC Communications Inc.'s
announcement of plans to buy Ameritech Corp., frustrated lawmakers and
regulators are now discussing where to draw the line. William Kennard,
chairman of the FCC, issued a challenge to the two companies in a statement
yesterday saying: "The bottom-line questions is: Is this merger going to
create competition, or will it be a nonaggression pact? The Telecom Act was
all about opening markets for competition. SBC and Ameritech must show us
that this merger will serve the public interest and enhance competition."
For the merger to take place, it must be reviewed by antitrust enforcers at
the Justice Dept., state regulators and five politically appointed members
of the FCC. The entire process will most likely take a year or longer.
Title: Regulator Vows Tough Scrutiny of Phone Deals
Source: Washington Post (A1,A11)
http://www.washingtonpost.com/wp-srv/WPlate/1998-05/12/114l-051298-idx.html
Author: Mike Mills
Issue: Merger
Description: FCC Commission, William E. Kennard, said that he would not
"prejudge" SBC Communications Inc. and Ameritech Corp.'s proposed merger,
but indicated that the agency's approval would not be easily won. Critics
said that the proposed transaction is further evidence that the 1996 Telecom
Act is fostering consolidation instead of competition. Companies consolidate
"when they can't compete, and consolidation without competition can hurt
consumers," said Senate Commerce Committee Chairman John McCain (R-AZ), who
is pushing for an overhaul of the law. "The proposed merger of SBC and
Ameritech is yet another example of the [law's] real-world effects" If the
SBC-Ameritech merger goes through, "regulators and analysts predict that the
remaining unwed Bell companies, BellSouth Corp. and US West Inc., along with
GTE Corp., AT&T and Sprint Corp., each will be under intense pressure to
find a partner and certify their status as one of the few biggest players in
the business."
Title: WorldCom, MCI Face Internet Objection
Source: Wall Street Journal (B6)
http://wsj.com/
Author: Jennifer L. Schienker
Issue: Mergers/International
Description: European regulators are expected to require that WorldCom Inc.
get rid of some of its Internet holdings before it merges with MCI
Communications Corp. The European Commission is holding closed hearings on
the issue in Brussels today and tomorrow. Telecommunications industry
executives familiar with the deal say that Europeans and U.S. regulators
agree that the combined strength of MCI and WorldCom's Internet
infrastructure holdings would pose a problem.
** Telephone Regulation **
Title: Directory Assistance: 'Overlay' code means end of 7-digit numbers
Source: Chicago Tribune (p.1)
http://www.chicago.tribune.com/news/metro/chicago/article/0,1051,ART-8443,0
0.html
Author: Cornelia Grumman
Issue: Telephone Regulation
Description: The Illinois Commerce Commission unanimously approved a new
"overlay" area code system for the north and northwest suburbs of Chicago --
even though less than 3.1 million of the 8 million number in the 847 area
code have been assigned to individual customers. Dozens of private companies
are hoarding the unused numbers and the ICC has not moved to make it any
harder for companies to do so. Number in the 847 area code are expected to
expire between July and September of this year. ICC Chairman Dan Miller
said, "Eleven-digit dialing is not only inevitable, it's here. That's the
price one pays for growth."
** Internet **
Title: A New Measure Of Disparities: Poor Sanitation In Internet Era
Source: New York Times (A11)
http://www.nytimes.com/yr/mo/day/news/world/world-survey.html
Author: Barbara Crossette
Issue: International
Description: "Vital Signs 1998," a new report from the Worldwatch Institute,
reports that around the world more people are getting access to telephones
and the Internet while an increasing number are without basic sanitation
such as toilets and latrines. In 1960, there were 89 million telephone lines
worldwide. Between 1990 and 1996, 200 million lines were installed bringing
the total number to 741 million. Cellular phone users have increased an
average 52% per year since 1991; there were 135 million users by 1996. The
Internet is estimated to have 107 million users mostly in industrial nations
-- 62 million are in the US with another 20 million in Europe. "With 500
million people -- 8% of humanity -- projected to be online by 2001," the
report says, "we can barely guess how the Internet phenomenon will shape the
21st century."
** Jobs **
Title: Visas Cut Off for High-Tech Workers
Source: Washington Post (A7)
http://www.washingtonpost.com/wp-srv/WPlate/1998-05/12/120l-051298-idx.html
Author: William Branigin
Issue: Jobs
Description: Yesterday, the Immigration and Naturalization Service stopped
issuing new visas for temporary high-tech workers saying that it has already
reached the category's limit for the year. The INS's move "injected"
increased urgency on Congress to raise the cap. Senator Spencer Abraham
(R-MI), sponsor of a bill to address what he calls a "critical shortage of
high-tech workers," said that he hopes for a vote on his measure as early as
today. The Clinton administration opposes raising the cap without providing
more training for U.S. workers interested in the high-tech field and
"reforming the visa program for these foreign employees to protect U.S.
workers."
Title: Canada Frets High-Tech 'Brain Drain'
Source: Wall Street Journal (A16)
http://wsj.com/
Author: Rosanna Tamburri
Issue: Jobs
Description: With U.S. companies finding an increasing shortage of high-tech
workers, they are stepping up recruitment efforts in Canada. Canadian
high-tech workers are attractive because they usually speak English and
adjust rather easily to the American workplace, but there is growing concern
in Canada about a "brain drain." "Every company is being affected," said
John Kelly, chief executive of Ottawa-based JetForm Corp. In an effort to
counter the "exodus," Canadian companies are "beefing up compensation
packages, introducing stock-option plans, offering referral bonuses,
sprucing up their corporate images and reaching out to young recruits."
** Cable **
Title: Cable Rate to Freeze in Fairfax
Source: Washington Post (B1,B5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-05/12/091l-051298-idx.html
Author: Michael D. Shear
Issue: Cable Rates
Description: Fairfax county renewed Media General Cable's franchise
yesterday only after the company's president, Thomas E. Waldrop, agreed to
freeze rates for a year and begin supplying customers with more modern
converter boxes next spring. Waldrop had initially announced plans to
increase basic cable rates by 2.4 percent, but he abandoned the plan to
boost rates after receiving disapproving comments by several members of the
Board of Supervisors.
** Journalism **
Title: Magazine Dismisses Writer Accused of Hoax
Source: New York Times (A17)
http://www.nytimes.com/yr/mo/day/news/national/new-republic-tale.html
Author: Robin Pogrebin
Issue: Journalism
Description: An editor at Forbes Digital Tools investigated an article
published in last week's The New Republic and found it to be a hoax. TNR has
fired the freelance writer, Stephen Glass, who wrote it. Mr. Glass has
worked at the Heritage Foundation, then worked as an intern for TNR, and was
promoted to associate editor. TNR's editor said that "there had been some
letters to the editor in the past that challenged the writer's work but Mr.
Glass 'always had an explanation.'" Glass had acknowledged error and
creations in previous works and is admitting he made up the story in
question about computer hackers. [Also see Chicago Tribune, "Writer's job
deleted over faked story," Sec 1 p.9]
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