UNIVERSAL SERVICE
Schools and Libraries Wary of Filtering-for-Funds Legislation
(CyberTimes)
MERGERS
Telephone Mergers: A Heated Game of Musical Chairs (NYT)
Industry Awaits Toll as Telecom Giants Join (ChiTrib)
Bell Atlantic and GTE Won't Comment on Merger Rumors
(TelecomAM)
Two Phone Giants Reported Merging in $52 Billion Deal (NYT)
Bell Atlantic and GTE Agree on a Merger (WSJ)
GTE to be Acquired by Bell Atlantic (WP)
COMPETITION
Kennard Says FCC Won't Curb Local Competition for Sec. 706
(TelecomAM)
LEGISLATION
House to Take Up Commerce Appropriations Bill This Week
(TelecomAM)
DIGITAL TV
Fees Weighed for High-Definition Television
ENCRYPTION
Harry and Louise Have a New Worry: Encryption (WP)
ADVERTISING
An Ounce Or Two of Suspicion (WP)
==================
UNIVERSAL SERVICE
==================
SCHOOLS AND LIBRARIES WARY OF FILTERING-FOR-FUNDS LEGISLATION
ISSUE: Universal Service
Last week the Senate approved legislation called the Internet School
Filtering Act. If this legislation becomes law, schools and libraries that
accept federal "E-Rate" subsidies would be required to install filtering
software on computers linked to the Internet. The aim of the bill,
introduced by Senator Ernest Hollings (D-SC) and Senator John McCain (R-AZ),
is to keep minors away from pornography and other inappropriate material
online. But critics of the legislation argue that decisions of this type
should be left in local hands and not be required by the federal government.
This is especially important, they say, because of the controversial
elements surrounding filtering software programs.
[SOURCE: New York Times (CyberTimes), AUTHOR: Pamela Mendels]
http://www.nytimes.com/library/tech/98/07/cyber/articles/28filters.html
========
MERGERS
========
TELEPHONE MERGERS: A HEATED GAME OF MUSICAL CHAIRS
ISSUE: Mergers
The Bell Atlantic/GTE merger announcement is just the latest in a torrent of
multibillion-dollar mergers taking place in the telecommunications industry.
Companies are scrambling for scale as they work to offer bundles of voice,
data and video services to customers that will allow them to remain at the
"top tier of communications carriers in the next millennium." It isn't
difficult to understand this competitive anxiety when you look at the
numbers. Since 1996, the nation's eight largest local phone companies have
become four. And the nation's four largest long-distance companies have
become three, with one of the three, AT&T, planning to acquire
Tele-Communications Inc. and engage in an international joint venture with
British Telecommunications. What's next? The next stage may well be big
international alliances for local phone companies. "Phone companies like SBC
and Bell Atlantic have their eyes on the next round, which is when they ask
permission to link to foreign carriers," said Dwight Allen, a
telecommunications consultant for Deloitte & Touch. "They are trying to
educate the regulators that what in unthinkably large today might not be
adequate tomorrow."
[SOURCE: New York Times (C1), AUTHOR: Seth Schiesel]
http://www.nytimes.com/library/tech/98/07/biztech/articles/28impact.html
INDUSTRY AWAITS TOLL AS TELECOM GIANTS JOIN
ISSUE: Mergers
At the same time SBC and Ameritech are filing formal merger applications
with state and federal regulators, AT&T and British Telecom announce a joint
deal, and reports indicate that Bell Atlantic and GTE are talking deal. Are
these telecom giants gearing up for competition or they trying to get big
enough so no one can compete with them? "The answer is, nobody knows," Van
writes. America's $170 billion phone industry is headed into unchartered
territory. "There's a basic fallacy in the law," said Jim Freeze, a senior
analyst with Forrester Research based in Cambridge, Mass. "These mergers do
nothing to facilitate competition, and nothing will, until Congress
addresses this fallacy. The monopolies must be split into a regulated
wholesale business and unregulated retail business to make competition occur."
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: Jon Van]
http://chicagotribune.com/textversion/article/0,1492,SAV-9807280077,00.html
BELL ATLANTIC AND GTE WON'T COMMENT ON MERGER RUMORS
ISSUE: Mergers
Bell Atlantic and GTE declined to answer rumors about reported merger talks
between the two companies. House Telecom Subcommittee Chairman Billy Tauzin
(R-LA) said that if true, "it
raises the stakes in the consolidation poker game." Rep Tauzin said the
merger will
win regulatory approval if the two companies can demonstrate that being bigger
provides more consumer choice. "A combined GTE and Bell Atlantic would, in my
opinion, give the long distance carriers a run for their money," Rep Tauzin
said.
"This only points out what I have been saying all along: If the FCC won't
allow the regional Bell companies into the long distance market, they are
going to merge their way into it instead." Bell Atlantic is the dominant
local telephone carrier on the East Coast in 13 states and Washington, D.C.
from Maine to Virginia. GTE has operations in 28 states, including in Bell
Atlantic's states of Pennsylvania and Virginia.
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/
TWO PHONE GIANTS REPORTED MERGING IN $52 BILLION DEAL
ISSUE: Mergers
Bell Atlantic Corp., the primary provider of local phone services from Maine
to Virginia, has agreed to acquire GTE Corp., the nation's largest
independent local and long-distance company, for $52.8 billion in stock,
said executives close to the negotiations yesterday. The merger would mean
little in the short run for most of Bell Atlantic's residential customers.
"But the companies are likely to assert that their combined financial muscle
will allow them to accelerate the deployment of expensive high-speed
Internet services and to compete in local phone markets dominated by other
Bells." Most analysts say that within the next few years they expect the
global telecommunications market to be dominated by a handful of
international giants.
[SOURCE: New York Times (C6), AUTHOR: Seth Schiesel & Laura M. Holson]
http://www.nytimes.com/library/tech/98/07/biztech/articles/28phone.html
BELL ATLANTIC AND GTE AGREE ON A MERGER
ISSUE: Merger
The boards of GTE Corp. and Bell Atlantic Corp. approved a $55 billion stock
swap yesterday that will bring together GTE's local, long-distance, wireless
and Internet "offerings" with Bell Atlantic's local and wireless service.
The partners are hoping to create a telecommunications giant for the 21st
century. They may however, get caught in regulations that restrict the Baby
Bells from offering long-distance phone service. The planned deal could
raise calls for the new company to divest itself of assets, such as some of
its wireless or long-distance operations.
[SOURCE: Wall Street Journal (A3), AUTHOR: Jared Sandberg & Steven Lipin]
http://wsj.com/
GTE TO BE Acquired BY BELL ATLANTIC
ISSUE: Telephony/Mergers
Local phone giant, Bell Atlantic Corp., will today announce plans to buy GTE
Corp. in a record $52 billion deal. This merger is one of the largest in a
recent wave of telecommunications consolidation spawned by the 1996
Telecommunications Act. While industry executives claim that larger firms
will be able to offer services at a lower cost, consumer advocates worry
about the impact of the dozen-plus telecom mergers announced in the two
years since the law was past. According to Mark Cooper, research director
for the Consumer Federation of America, "There comes a point where too big
is bad, and this is it." He suggests that local phone mergers are creating
"regional giants that ultimately control Internet access as well as phone
service."
[SOURCE: Washington Post A1, A8 AUTHOR: Mike Mills]
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/28/035l-072898-idx.html
============
COMPETITION
============
KENNARD SAYS FCC WON'T CURB LOCAL COMPETITION GOALS FOR SEC. 706
ISSUE: Competition/Infrastructure
FCC Chairman Bill Kennard told state regulators at a National Association of
Regulatory Utility Commissioners (NARUC) meeting July 27 that the Commission
will not stop enforcing Telecom Act sections that call for local phone
competition in order to meet the Section 706 mandate that the agency
encourage the deployment of high-speed networks: "I have never
departed from these bedrock requirements of the Act and I would not propose
that we depart from them in the future....I find no exception in the Act for
data as opposed to voice or for equipment investments made after the Act's
passage as opposed to before the Act." Chairman Kennard said that local
competition is vital to deployment of broadband technology to the home. [See
full text of speech at http://www.fcc.gov/Speeches/Kennard/spwek822.html]
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/
============
LEGISLATION
============
HOUSE TO TAKE UP COMMERCE APPROPRIATIONS BILL THIS WEEK
ISSUE: Legislation
The House agenda this week includes the Commerce Appropriations bill
(HR-4276) which proposes reductions of $5 million for the FCC and $4 million
for the National Telecom and Information Administration's (NTIA) information
infrastructure grant program (TIIAP). The Senate version of the bill
(S-2260) would restore $9 million to the NTIA program and give the FCC a
slight budget increase. The Senate bill lifted restrictions on TIIAP that
would have prevented schools and libraries receiving e-rate funding from
being eligible to receive a TIIAP grant.
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/
===========
DIGITAL TV
===========
FEES WEIGHTED FOR HIGH-DEFINITION TELEVISION
ISSUE: DTV
The major broadcast networks and TCI cable are discussing a deal that would
make digital broadcast stations a "premium" service that subscribers would
have to pay $10-$12 a month to receive. While some critics say that
broadcasters have be given free slices of airwaves which they should not be
allowed to turn around and sell to the public, other say that this type of
pay-per-view system might be useful in the early stages of transition to
digital. Gigi Sohn of the Media Access Project says that the digital
transition brings up some difficult questions, "Should cable operators have
to carry two signals [the existing signal plus a the digital one]? My take
in the early years is no, certainly not if it means bumping CSPAN off the
cable system."
[SOURCE: Washington Post E3, AUTHOR: Paul Farhi ]
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/28/156l-072898-idx.html
===========
ENCRYPTION
===========
HARRY AND LOUISE HAVE A NEW WORRY: ENCRYPTION
ISSUE: Encryption
The computer industry is concerned that they will lose out on business to
foreign customers because of U.S. government regulations limiting export of
encryption technology. To date, the tech industry has not had much success
in convincing Congress to pass legislation relaxing such regulations. So
now, a coalition of about 90 companies called Americans for Computer Privacy
(ACP) is working towards making encryption a consumer issue. Over the next
two weeks, the coalition is spending $1 million on print ads and television
spots to air on Washington stations, as well as CNN and CNBC. The ads will
feature a middle-aged couple sitting in their living room discussing the
issue of encryption. "The challenge is to bring this issue home," said Ed
Gillespie, ACP's executive director and former communications director for
the Republican National Committee. "We want to make sure policymakers and
consumers understand the importance of encryption and how it matters to them
in their everyday lives." ACP hopes the ads will spur Congress to pass
legislation that would loosen export restrictions.
[SOURCE: Washington Post (E1,E2), AUTHOR: Rajiv Chandrasekaran]
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/28/108l-072898-idx.html
============
ADVERTISING
============
AN OUNCE OF TWO OR SUSPICION
ISSUE: Advertising
The Distilled Spirits Council of the United States began airing ads last
week that more closely resemble public service announcements than liquor
commercials. The advertisements shows a glass beer, wine, and cocktail being
served to bar patrons, while a voice-over explains that "part of drinking
responsibly is knowing that alcohol is alcohol" regardless of what form it
comes in. A close up of easily identified premium-brand liquor bottles is
the ad's closing shot. Critics claim that the commercial is bold attempt of
the liquor industry to re-introduce hard alcohol ads on T.V. "The impact of
the ad is an endorsement of drinking in general. Their goal is to open up the
opportunity to get more liquor advertising on TV," says Laurie Leiber,
director on the nonprofit group, Center on Alcohol Advertising.
[SOURCE: Washington Post E1,E4 AUTHOR: Paul Farhi]
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/28/123l-072898-idx.html
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