EDTECH
FCC Gives Approval For $Billion To Link Schools To Internet (WSJ)
Federal Universal Service Support for Schools and Libraries (FCC)
New FCC Data On Gore Phone Tax (House)
Universal Service Reform (FCC)
TELEPHONE REGULATION
Truth-in-Billing Principles (FCC)
Telephone Numbering Exhaust (FCC)
FREE SPEECH
Post-it digitally (SJ Merc)
In Intel E-Mail Case, Property Rights vs. Speech (CyberTimes)
INTERNET
Louisiana Mulls Internet Voting (SJ Merc)
Internet Board Backs Rules to Limit Cybersquatters (CyberTimes)
Online Companies Try to Walk Line Between Volunteers and Staff
(CyberTimes)
For At Home, Now Comes The Real Excitement (WSJ)
TELEVISION
Company Abadons Plan for Rival TV Ratings (NYT)
Fox Network and Affiliates in Financial Accord (NYT)
MERGERS
Bertelsmann Is Reorganizing Random House (NYT)
Deutsche Telekom to Keep Seeking Foreign Mergers (NYT)
ADVERTISING
Radio Plus Billboards Equals Ad Powerhouse (USA Today)
ANTITRUST
IBM: Microsoft Played Hardball to Push Windows (USA Today)
UNIVERSAL SERVICE
FCC GIVES APPROVAL FOR $BILLION TO LINK SCHOOLS TO INTERNET
Issue: Erate
Thursday, the Federal Communications Commission approved an almost $1 billion
dollar increase in funding for the federal program that helps link schools and
libraries to the Internet. FCC Chairman William Kennard said the funding would
help wire 528,000 poorer or rural classrooms to the Internet, benefiting some
40 million kids. The commissioners who voted for the funding boost, which will
bring total "E-rate" budget to $2.5 billion, said that it wont result in
increased phone bills for consumers. They say the increase will be offset by
some $1 billion worth of savings expected later this year from the reduction of
certain long-distance telephone fees. Commissioner Harold Furchtgott-Roth, one
of the two dissenting votes on the funding increase, disagreed with the other
commissioners on this issue. "Every billion dollars of direct fees is $10 per
household, per year in America. You pay for it through higher phone rates," he
said.
[SOURCE: Wall Street Journal (A6), AUTHOR: Dow Jones Newswires]
(http://wsj.com/)
See also:
DIVIDED FCC HIKES FUNDING FOR LINKING SCHOOLS TO INTERNET
[SOURCE: Chicago Tribune (Sec 1, p.3), AUTHOR: Frank James]
(http://chicagotribune.com/textversion/article/0,1492,SAV-9905280130,00.html)
FEDERAL UNIVERSAL SERVICE SUPPORT FOR SCHOOLS AND LIBRARIES
Issue: Universal Service/Erate
The Commission took steps to ensure that additional universal service
support will be available to eligible schools and libraries, particularly
those in rural America, during the second funding year of the support
mechanism. The Commission's decision will ensure that the Universal Service
Administrative Company (USAC) is able to allocate support to eligible
schools, libraries, and rural health care providers at a level that is equal
to or greater than the level of support that was allocated in the first
funding year. USAC estimated that demand for discounts in the second funding
year of the schools and libraries universal service support mechanism will
be $2.435 billion, up from $2.02 billion for the first funding year. Based
on USAC's demand estimates, the Commission set the funding amount at the
$2.25 billion cap adopted in the Commission's 1997 Universal Service Order.
The Commission directed USAC to collect only as much as required by demand,
but in no event more than $562.5 million per quarter for the third and
fourth quarters of 1999 and the first and second quarters of 2000 to support
the schools and libraries universal service support mechanism.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc9033.html)
NEW FCC DATA ON GORE PHONE TAX
Issue: Universal Service/Erate
As the Democratic-led FCC voted to double the Gore Tax today, Chairman Tom
Bliley (R-VA) and Subcommittee Chairman Billy Tauzin (R-LA) released FCC data
confirming that this monthly phone tax is both unfair and unevenly assessed.
Under the current tax, consumers in three-quarters of the States end up
exporting their hard-earned tax dollars elsewhere. Reps Bliley and Tauzin
requested the FCC data in a May 13th letter they sent to FCC Chairman William
Kennard on the proposed phone tax increase. Under the current tax, the 38
states (plus the District of Columbia) that export consumer tax dollars are:
Arkansas, California, Colorado; Connecticut, Delaware; District of Columbia;
Florida, Hawaii; Idaho; Illinois; Indiana; Iowa; Kansas; Maine; Maryland;
Massachusetts; Michigan; Minnesota; Missouri; Montana; Nebraska; Nevada; New
Hampshire; New Jersey; North Carolina; North Dakota; Ohio; Oregon;
Pennsylvania; Rhode Island; South Carolina; South Dakota; Tennessee; Utah;
Vermont; Virginia; Washington; West Virginia; and Wyoming. See a state-by-state
run down at the URL below.
[SOURCE: House of Representatives]
(http://com-notes.house.gov/cchear/hearings106.nsf/5bf2d3f651907e06852567360
055e45e/11111ad13c945dd38525677e0068928c?OpenDocument)
UNIVERSAL SERVICE REFORM
Issue: Universal Service
The Commission took a major step in reforming the high-cost universal
service support
mechanism for non-rural carriers. The Commission, in consultation with the
Federal-State
Joint Board on Universal Service, adopted the framework for a new,
forward-looking, high-
cost support mechanism that will provide support for carriers that do not
meet the
Communications Act's definition of a rural telephone company....The
Commission adopted the framework for a federal high-cost support mechanism,
consistent with the Joint Board's most recent recommendation, that will
provide support for non-rural carriers' intrastate, forward-looking costs
that exceed both a national cost benchmark and the individual state's
resources available to support those costs. The Commission stated that the
new federal high-cost support mechanism will be used only to determine
federal support amounts, and will not impose any obligation on a state to
adopt an intrastate support mechanism or impose an intrastate surcharge. In
order to prevent disruption in state rate design, the Commission also
adopted a "hold-harmless" approach under which the amount of support
provided by the new forward-looking mechanism will be no less than the
amount of explicit support provided by the existing mechanism. The
Commission also sought further comment on certain issues related to how
support should be calculated and distributed.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc9031.txt)
TELEPHONE REGULATION
TRUTH-IN-BILLING PRINCIPLES
Issue: Telephone Regulation
The Federal Communications Commission today adopted principles and
guidelines that will make it easier for all consumers to read and understand
their telephone bills. In 1998 alone, more than 60,000 consumers contacted
the Commission expressing confusion, anxiety and concern about their
telephone bills. The "truth-in-billing" principles and guidelines set forth
in the Order make telephone bills more consumer-friendly by providing
consumers with information they need to make informed choices in a
competitive telecommunications marketplace and to protect themselves against
unscrupulous practices. The Commission enacted broad guidelines that
implement three basic principles -- consumers should know: (1) who is asking
them to pay for service, (2) what services they are being asked to pay for,
and (3) where they can call to get more information about the charges
appearing on their bill. For example, under the guidelines adopted today,
new service providers must be highlighted on the bill. Thus, as a result of
the Commission's action, consumers will be better able to detect when their
carrier of choice has been changed without their authorization. This illegal
practice, known as slamming, is the number one complaint of consumers filed
at the Commission. Today's actions make it more difficult for the purveyors
of fraud to deceive customers and get away with it by taking advantage of
confusing telephone bills.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc9025.html)
TELEPHONE NUMBERING EXHAUST
Issue: Telephone Regulation
The Commission adopted a Notice of Proposed Rulemaking (Notice) to consider a
variety of measures intended to increase the efficiency with which
telecommunications carriers use telephone numbers. This Notice addresses the
growing exhaust of numbering resources in this
country, as demonstrated by the ever-increasing rate at which new area codes
are being assigned.
By way of example, in 1991, the United States had 119 area codes in service.
Today, that number
has almost doubled, with 215 area codes in service, and with over 70 about
to exhaust. Current
projections show that the North American Numbering Plan (Numbering Plan) may
completely run
out of area codes within the next ten to fifteen years, if no action is
taken. The Notice initiates a comprehensive examination of strategies that
will address these problems and could substantially extend the life of the
numbering system. The measures the Commission is examining are intended to
slow the rate at which new area codes are required and to prolong the life
of the Numbering Plan. The actions that the Commission proposed are
designed to promote the pro-competitive policies established by the
Telecommunications Act of 1996 by fostering the efficient allocation and
utilization of numbering resources. As a result, these measures should
ensure that new entrants have access to numbers they need to enter into
telecommunications markets, and that carriers already providing services are
able to expand their offerings. Common Carrier Bureau contacts: Jared
Carlson or Tejal Mehta at (202) 418-2320; TTY (202) 418-0484.
Wireless Telecommunications Bureau contacts: David Furth at (202) 418-0632
or Joel Taubenblatt at (202) 418-1513; TTY (202) 418-7523.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1999/nrcc9032.txt)
FREE SPEECH
IN INTEL E-MAIL CASE, PROPERTY RIGHTS VS. FREE SPEECH
Issue: Free Speech
Last month, the Superior Court of California granted Intel a summary judgement
in a case against a former employee, Ken Hamid, who sent letters of discontent
en masse to Intel employees after leaving the company. The Court ruled that the
messages trespassed on Intel's proprietary computer system and caused harm.
Cyberlaw thinkers disagree and believe the ruling violates the First
Amendment's right to free speech. Though the case might seem to be simply a
private matter between an individual's free speech rights and a company's
property rights, they say the court decision makes it a government decision
and, under the First Amendment, the government is prohibited from restricting
free speech. Additionally, they argue that this is a legal matter concerning
"tresspass laws", which warrant state action, and are concerned that this could
set a precedent for future censoring of unwanted speech. "Should the courts
continue to prove receptive to the theory of electronic trespass, this trend of
censoring unwanted speech will no doubt accelerate in the future, because
almost every conceivable 'trespass' in cyberspace carries a message," said
William M. McSwain, editor of the Harvard Law Review in his article, "The Long
Arm of Cyber-Reach." McSwain says that courts should not seek to block Hamidi
or others like him from sending e-mails unless they first balance the competing
rights of the speaker against those of the property owner [whether the messages
of discontent were of substantial harm to Intel's systems, which McSwain
doubts] and find that the balance tips in favor of the latter. Nevertheless,
lawyers for both sides say the judge will soon sign a legal order barring
Hamidi from sending any more e-mail to Intel.
[SOURCE: CyberTimes, AUTHOR: Carl S. Kaplan]
(http://www.nytimes.com/library/tech/99/05/cyber/cyberlaw/28law.html)
POST-IT DIGITALLY
Issue: Internet/Free Speech
A product launched last week by a Californian company, Third Voice, has the
potential to turn the Internet into a more truly interactive medium. "The Web
has promised full, open expression by all, but today that ability to freely and
openly express yourself is really in the hands of those with access to a
printing press, access to a server," said Eng-Siong Tan, CEO of Third Voice.
The company has created a platform that allows users to post virtual "post-its"
to any Web site they visit. Comments, which are denoted by tiny markers, can be
only be viewed others who have installed the software. The product allow users
to post questions or leave messages, but not to add to or change original
content on a site. Mark Radcliffe, a Palo Alto lawyer who specializes in
intellectual property says that the software does raise some copyright
questions. "You are, in a way, modifying the look of the site. It's one of
these cutting-edge questions that the Internet brings up on a regular basis.''
[SOURCE: San Jose Mercury News, AUTHOR: Stephen Buel]
(http://www.mercurycenter.com/svtech/news/indepth/docs/notes052899.htm)
INTERNET
LOUISIANA MULLS INTERNET VOTING
Issue: Voting
The Louisiana Republican Party is considering whether or not to use an Internet
voting system in its next party primary election scheduled for Jan. 29. Though
details have not been worked out, VoteHere.net is currently working on a
proposal for the party, and the party is preparing for a vote on the issue June
12. Though Internet voting could reduce long lines and hours of waiting, other
prefer the 'old fashioned' way of voting and are concerned that not all
Republicans will have access to the Internet. If the Internet voting system is
approved, however, Louisiana could be the first in the nation to cast primary
vote by Internet.
[SOURCE: San Jose Mercury News, AUTHOR: Kevin McGill, Associated Press]
(http://www.mercurycenter.com/svtech/news/breaking/ap/docs/487991l.htm)
INTERNET BOARD BACKS RULES TO LIMIT CYBERSQUATTERS
Issue: Internet
The Internet Corporation for Assigned Names and Numbers (ICANN) has endorsed a
controversial set of recommendations for cracking down on so-called
cybersquatters, companies and individuals who register trademarks that don't
belong to them as Internet addresses. ICANN's board affirmed the principles
contained in the recommendations issued last month by the United Nation's World
Intellectual Property Organization (WIPO). The board's action was criticized by
many who felt that the WIPO recommendations should have been reviewed by a
supporting organizations before being endorsed. Some feel that the WIPO
proposal favors trademark holders and corporations over small businesses and
individuals.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/28domain.html)
ONLINE COMPANIES TRY TO WALK LINE BETWEEN VOLUNTEERS AND STAFF
Issue: Employment
The recent class action lawsuit filed against AOL by former volunteers seeking
back pay has raised questions about employment practices in the Internet
industry. Phil Warms, founder of a company who provides "community leaders" to
clients who need help managing their online communities, estimates that the
number of people who perform community management task on the Web will increase
from several thousand to 30,000 within the next three years. "I think
fundamentally, it's going to have to change. The laws as they exist today say
AOL is in a bit of trouble." According to many employment lawyers, AOL may have
violated employment laws by having volunteers perform duties that were
necessary to the company. AOL, who is not alone in this practice, currently
uses more than 10,000 volunteers to moderate chat sessions and manage bulletin
boards.
[SOURCE: CyberTimes, AUTHOR: Lisa Napoli]
(http://www.nytimes.com/library/tech/99/05/cyber/articles/28workers.html)
FOR AT HOME, NOW COMES THE REAL EXCITEMENT
Issue: Internet/ Broadband
Shareholders are expected to approve At Home's purchase of Excite today. The
popular portal has 28 million registered users, while At Home only has about
500,000 current subscribers. There is great pressure for At Home, the country's
largest high-speed cable Internet service, to grow rapidly. With Excite at is
side, AT Home has big plans. "We will be acquisitive," says Gorge Bell, CEO of
Excite. "We would be irresponsible not to take advantage of the growth
opportunities ahead."
[SOURCE: Wall Street Journal (B1), AUTHOR: Kara Swisher]
(http://wsj.com/)
TELEVISION
COMPANY ABADONS PLAN FOR RIVAL TV RATINGS
Issue: Television
Statistical Research will not try to use its Smart system to compete with
Nielsen Media Research. Network executives had identified Smart (systems for
measuring and reporting television) as the best potential alternative to
Nielsen. The decision means that Nielsen may never face serious competition
in the audience measurement field. Statistical Research had estimated
start-up costs of $100 million and had asked for up-front contributions of
$12 million each from the networks. A CBS executive said the networks were
unlikely to see a return on their investment until 2005 and by that time
"the whole industry is likely to be unrecognizable" because of the
convergence of the TV and the computer.
[SOURCE: New York Times (C6), AUTHOR: Bill Carter]
(http://www.nytimes.com/)
FOX NETWORK AND AFFILIATES IN FINANCIAL ACCORD
Issue: Television Economics
Fox affiliates will pay the network in a reverse of the financial agreement
that has existed between networks and affiliates since the days of radio.
"I'm sure CBS and NBC and ABC are sitting and watching this," said the
chairman of Fox's affiliate board. A Fox executive estimated that the
network will receive $200 million from affiliates over the next three years.
[SOURCE: New York Times (C17), AUTHOR: Bill Carter]
(http://www.nytimes.com/yr/mo/day/news/financial/fox-affiliates.html)
MERGERS
BERTELSMANN IS REORGANIZING RANDOM HOUSE
Issue: Publishing
Bertelsmann AG will consolidate several long-established publishing units of
Random House which it purchased less that a year ago. "I am deeply
distressed," said Jean V. Naggar, a literary agent in New York who is the
president of the Association of Authors' Representatives. "I think that once
again the market for authors has shrunk. I think diversity has been
diminished. And I think that all of the fears that we had when this merger
was announced have come home to roost." Random House is home for some 50
imprints that are organized in groups. Each group has an editor with the
power to bid for books -- sometimes competing with publishers that are part
of the same company. The reorganization will combine a number of imprints.
"I think there's a natural concern about shrinkage and loss of freedom,"
said one executive. "But here at Bantam we're going to define freedom in a
manageable form. And to me that means nurturing the most interesting books
that we can publish. The consumer doesn't care whatever imprint is on a book."
[SOURCE: New York Times (C1), AUTHOR: Doreen Carvajal]
(http://www.nytimes.com/library/books/052899bert-random.html)
DEUTSCHE TELEKOM TO KEEP SEEKING FOREIGN MERGERS
Issue: Antimergers
With the collapse of the deal to buy Telecom Italia, Deutsche Telekom is now
trying to rescue Global One, its partnership with France Telecom and Sprint.
Global One provides networking services for multinational companies, but it
has lost hundreds of millions of dollars and sales are stagnant. DT's
biggest rival, Mannesmann AG is also consolidating its position by joining
forces with Olivetti, which won the battle for TI, and Arcor, another DT
compeitior.
[SOURCE: New York Times (C3), AUTHOR: Edmund Andrews]
(http://www.nytimes.com/yr/mo/day/news/financial/deutsche-telekom.html)
ADVERTISING
RADIO PLUS BILLBOARDS EQUALS AD POWERHOUSE
Issue: Advertising
The radio programming company Infinity Broadcasting (an offspring of CBS
Broadcasting) will buy Outdoor Systems, the largest billboard company in the
US, for $8.3 billion in stock and debt. Like rival Clear Channel, Infinity is
seeking to acquire billboards, which are limited in number and 'hot
commodities', because it believes the two are effective ways to reach consumers
who are spending more time commuting. The billboard empire (Outdoor Systems
boasts 112,000 billboards in the U.S., Canada and Mexico and 125,000 displays
in New York City) is expected to help CBS promote its broadcasting and new
Internet venture, as well as Infinity's radio programming. (Infinity owns 160
radio stations nationwide and TDI, a subsidiary that specializes in transit
advertising). Though there is concern that CBS might raise prices for what are
currently two of the least expensive ways to advertise -- radio and outdoor
billboards-- CBS declined to comment.
[SOURCE: USA Today (2B), AUTHOR: Greg Farrell]
(www.usatoday.com)
See also:
IF SEEKING INFINITY, TRY OUTDOORS
Issue: Advertising
Ifinity Broadcasting, the radio and billboard giant controlled by CBS, will
purchase Outdoor Systems for about $6.5 billion in stock and assuming $1.8
billion in debt. "I really do believe, and we've said this a lot, that
reaching the consumer when he or she is closest to the purchase is very
desirable," Mel Karmazin, chief executive of Infinity and CBS, said. Ifinity
had been the fourth largest outdoor advertising company and now will be even
more powerful -- concentrated in the major metropolitan areas of North
America. "The deal is a plus, a big plus," said Alan Gottesman, who follows
the advertising and media industries as managing director of West End
Communications/Consulting in New York. "The more points of contact you have
with a client," he added, referring to the advertisers that buy commercial
time and ad space from media companies, "the more you understand where a
client's business is going."
[SOURCE: New York Times (C1), AUTHOR: Stuart Elliott]
(http://www.nytimes.com/yr/mo/day/news/financial/outdoor-ad-column.html)
ANTITRUST
IBM: MICROSOFT PLAYED HARDBALL TO PUSH WINDOWS
Issue: Antitrust
Garry Norris, an IBM manager, testified yesterday at a deposition in Raleigh
(NC) that Microsoft quintupled the royalties it charged IBM after it refused to
drop its rival operating-system software, OS/2. Norris said Microsoft urged IBM
to reduce shipments of its OS/2 operating-system in favor of Microsoft's
Windows and, when IBM refused, threatened to end talks just weeks before
Window's 95 hit the market. After the talks, IBM says its bill for Windows 95
soared and that its prices were higher than what other makers were paying.
"Microsoft told us repeatedly, 'Because you compete with use, you're going to
get unfavorable terms and conditions'," Norris testified. While Norris said
other PC makers were afraid to buy IBM's OS/2 because they feared Microsoft's
threats, Microsoft says PC makers simply lost interest in OS/2. Norris is
expected to be a key government witness in the antitrust trial, which is
expected to resume next week.
[SOURCE: USA Today (2B), AUTHOR: Paul Davidson]
(www.usatoday.com)
See Also: RETALIATION BY MICROSOFT ALLEGED
[SOURCE: Washington Post (E1), AUTHOR: Rajiv Chandrasekaran]
(http://washingtonpost.com/wp-srv/WPlate/1999-05/28/018l-052899-idx.html)
--------------------------------------------------------------
...and we're outta here. Sorry for the delay today -- have a great weekend.