MERGER
2 Agencies Hovering Over AOL Deal (WP)
EC Regulators Raise Concerns About Time Warner-EMI Deal (WSJ)
WORKFORCE
Questioning the Labor Shortage (NYT)
EDTECH
Distance Learning Goes Niche (WSJ)
SPECTRUM
Schools' Spectrum Rights Promise A Bonanza, but Can They Cash In?
(WSJ)
F.C.C. Auctions Mobile Licenses (NYT)
MERGERS
2 AGENCIES HOVERING OVER AOL DEAL
Issue: Mergers
The FTC and FCC are reportedly moving closer in opinion in their appraisal
of the proposed AOL-Time Warner merger. The Post reports that lawyers at the
two commissions are now working closely to figure out how to apply old
antitrust law to what would be the "largest takeover in U.S. history."
Sources say that the FCC is informally supporting the FTC's recommendations
to require the merged entity to open its cable lines to rival Internet
services. The FCC also tentatively accepts the FTC opinion that AOL should
divest itself of its stake in Hughes Electronics' DirecTV product. Both
agencies agree that AOL should sever its ties to AT&T. The shared holdings
and interests of Time Warner and AT&T are of particular concern (see below).
Regulators have not resolved which agency, if either, will make the AT&T
recommendations to AOL-Time Warner. The FTC and FCC are concerned that AOL's
dominant position in Internet access will inappropriately extend to cable
Internet access with the acquisition of Time Warner's cable holdings. Time
Warner is the second-largest cable-television company in the United Sates.
To a lesser degree, the commissions are also concerned about control over
the content that flows over those cable holdings.
Breakout of Holdings:
Time Warner owns Warner Brothers studios, CNN, Time Magazine and has music
recording interests. The matter is complicated by the shared interests of
Time Warner and its cable competitor, AT&T. AT&T, the largest cable provider
in the country owns 25% of Time Warner Entertainment. But, hold on there's
more: AOL owns 5 percent of Net2Phone - AT&T owns 32 percent. AOL, in June,
signed a deal to provide Net2Phone service over AT&T's cable network. Time
Warner is a partial owner of the cable Internet provider Roadrunner with
MediaOne, which was just acquired by AT&T. (With the approval of the AT&T
ownership of MediaOne, however, the FCC has given AT&T the choice of selling
its stake in Time Warner or Liberty Media.) Finally, last year, Time Warner
and AT&T entered into a "preliminary letter of intent" to create a cable
telephony venture.
[SOURCE: Washington Post (E1), AUTHOR: Cha and Stern]
(http://www.washingtonpost.com/wp-dyn/articles/A18300-2000Sep5.html)
EC REGULATORS RAISE CONCERNS ABOUT TIME WARNER-EMI DEAL
Issue: Merger
The European Commission has raised serious objections to Time Warner's plans
to merge its music business with that of EMI Group PLC. EMI possesses the
world's largest catalog of songs, and is also the world's third-largest
music company by revenue. Together with Time Warner, it would rival
Universal Music and dominate smaller "major" labels Sony Music
Entertainment, a unit of Sony Corp., and BMG, a Bertelsmann AG unit. The
European Union's antitrust watchdog says an effective merger of two of the
world's top five recording companies would squelch competition, allowing
EMI-Time Warner to raise prices with impunity. Both competitors and
independent antitrust lawyers say EMI and Time Warner face a hard sell
because of the European commission's finding that the global music market is
dominated by an oligopoly of just five players that would shrink to four if
the deal were approved.
[SOURCE: Wall Street Journal (A18), AUTHOR: Brandon Mitchener And Philip
Shishkin]
(http://interactive.wsj.com/articles/SB968189719344594085.htm)
(Requires subscription)
WORKFORCE
QUESTIONING THE LABOR SHORTAGE
Issue: Workforce
While the high-tech industry has convinced President Clinton and Congress to
raise the quota on H-1Bs, the temporary visas for skilled foreigners, author
Richard Rothstein contends that the worker shortage the move is intended to
address is nothing more than a mirage. The annual H-1B limit will go to
200,000 next year, up from 65,000 only three years ago. High-tech companies
claim that more visas are needed to advert a potential labor crises.
However, according to Norman Matloff, a computer science professor at the
University of California, these companies have created artificial shortages
by refusing to hire experienced programmers. By age 50, fewer than half are
still in the industry. Matloff says that technology industry often rejects
older workers because they require more pay and they will not work the long
hours typical of younger workers. Rothstien suggests that raising wages to
attract those with needed skills is a better way to avoid shortages than
importing low-paid workers.
[SOURCE: New York Times, AUTHOR: Richard Rothstein]
(http://www.nytimes.com/2000/09/06/technology/06LESS.html)
(requires registration)
EDTECH
DISTANCE LEARNING GOES NICHE
Issue: EdTech
As the market for adult education continues to grow, colleges and
universities are forced to develop programs that cater to identified niches.
At new institutions such as the University of Phoenix or established schools
such as Virginia's Old Dominion University, educators are developing
initiatives that focus on specific degrees or training programs while
embracing delivery methods ranging from the Internet to satellite networks
to CD's. The Education Department's National Center for Education Statistics
(NCES) has found that 44 percent of all higher education institutions
offered distance learning courses in the 1997-1998 academic year. That
figure does not include the growing number of private, for-profit entities
that are tapping the expanding market for adult education. The center
estimated that 1.3 million students were enrolled in postsecondary
degree-granting distance learning courses in that same academic year, up
from 750,000 in 1995. However, distance learning executives say they do not
expect to supplant traditional campus-based universities. Instead, they said
they will focus on serving those people for whom a traditional educational
program does not work. "The traditional universities, to some extent, have
disenfranchised the working adult," said Steven Shank, chief executive
officer for Capella University, an online institution. "The traditional
classroom-based education does not wash well for the adult learner. The
typical student for us is aged 25-55, employed with an over full life."
[SOURCE: New York Times, AUTHOR: Rebecca S. Weiner]
(http://www.nytimes.com/2000/09/06/technology/06EDUCATION.html)
(requires registration)
SPECTRUM
SCHOOLS' SPECTRUM RIGHTS PROMISE A BONANZA, BUT CAN THEY CASH IN?
Issue: Spectrum
Schools and universities control a huge chunk of the nation's radio-spectrum
rights--donated to them decades ago by the government to enable the schools
to televise educational programs. With companies bidding billions of dollars
at public auctions for spectrum rights that will allow them to deliver
wireless Internet access and other cutting-edge services, these schools are
learning that they're sitting on a gold mine. The spectrum they control is
worth as much as $160 billion--enough cash to run all of the nation's
elementary and secondary schools for five months. Already, both Sprint and
WorldCom have indicated that they are prepared to pay a fair price to lease
the spectrum. But schools are on their guard. In the past,
telecommunications companies leased spectrum rights from schools at
rock-bottom rates, partly because the race for spectrum hadn't really heated
up yet and partly because educators were terrible negotiators. Many schools
have formed alliances to present a united front in negotiations, although it
is feared that if they are unable to strike a deal with the private
industry, the government may be tempted to take back most of the spectrum
and give it to others. "We have to protect what we have because a lot of
people want it," says Mike Kelley, who runs a wireless-cable service set up
by George Mason University, Fairfax, Va.
[SOURCE: Wall Street Journal (B1), AUTHOR: Mark Wigfield]
(http://interactive.wsj.com/articles/SB968194439903626225.htm)
(Requires subscription)
F.C.C. AUCTIONS MOBILE LICENSES
Issue: Spectrum
The Federal Communications Commission has auctioned off $319 million in
spectrum over a two-week auction that concluded Friday. More than 1,000
wireless communications licenses were sold to wireless service providers,
which will be able to use that spectrum for a variety of services, including
mobile phone and data services, two-way paging, and voice mail and fax
services. Upcoming rounds of auctions are expected to fetch billions of
dollars. The FCC just opened a major wireless auction to large bidders such
as Nextel by removing a requirement that the bidder be a small company for
some licenses, businesses,
[SOURCE: New York Times, AUTHOR: New York Times]
(http://www.nytimes.com/cnet/CNET_0_4_2702658_00.html)
(requires registration)
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