ACCESS
Getting a Grip on Who Uses the Net (SJM)
Closing the Tech Gap (SJM)
INFRASTRUCTURE
Why It's Slow Going on the Net (WP)
Streets No Match for Info Highway (USA Today)
ECOMMERCE
A Behind-the-Screens Glimpse of an Internet Retailer (NYT)
Digital Commerce: Success Stories From Ebay
ENCRYPTION
Digital Millennium Copyright Act (NTIA)
Security And Freedom through Encryption Act (House)
TELEVISION/RADIO
TV Networks Win More Concessions from the Studios (WSJ)
As Asia's MTV And Channel V Compete For Viewers, They
Lose Money, Partners (WSJ)
Additional DBS Capacity for EchoStar (FCC)
Low Power FM Proposal (FCC)
MERGERS
Olivetti's Win May Reshape Telecom Industry (WSJ)
FCC
FCC Open Meeting (NECA)
ACCESS
GETTING A GRIP ON WHO USES THE NET
Issue: Internet Demographics
Cyber Dialogue, a market-research firm, has new numbers for Internet users:
31% of American adults were online as of the end of 1998. Counting both home
and work access, the firm found the states with the highest rates of Net use
were: Alaska (52%), Colorado (47%), Maryland and Utah (both 46%), Washington
(DC) (counted as a state) (43%), and Washington state (41%). The bottom
five: Mississippi (17%), Arkansas (19%), West Virginia (20%), Louisiana
(21%), and Kentucky (23%). California, not surprisingly, has the most Net
users. Among the largest 50 metropolitan areas, the company found Austin to
be the most wired, with 59% of the population connected -- and half of all
homes. Denver was second at 52% of the population. The combined DC/Baltimore
area was third, with 50%. Nashville was fourth, with 49%. The Bay Area
(Cyber Dialogue lumped San Jose and San Francisco together under a "San
Francisco '' label) was fifth, with 48%. By sheer numbers, the Bay Area
(2,355,000 adults online) trailed New York (4,488,000), Los Angeles
(3,568,000) and the combined DC/Baltimore area (2,700,000).
[SOURCE: San Jose Mercury News, AUTHOR:David Plotnikoff]
(http://www.mercurycenter.com/business/top/042639.htm)
CLOSING THE TECH GAP
Issue: Access
A look at the Digital Clubhouse Network, based in Sunnyvale (CA), a finalist
for a Computerworld Smithsonian award. The DCN aims to close the gap in
high-tech access. With volunteer instructors, DCN has programs for children,
World War II veterans, and women with breast cancer. Most of the equipment
and software at the clubhouses was donated by companies like Mitsubishi,
Cisco Systems and Adobe Systems. Although DCN want to expand to other
states, it will need a dramatic increase in funding to do so.
[SOURCE: San Jose Mercury News, AUTHOR: James Mitchell]
(http://www.mercurycenter.com/business/top/080132.htm)
INFRASTRUCTURE
WHY IT'S SLOW GOING ON THE NET
Issue: Internet
A study written by the Washington-based research firm TeleGeorgraphy,
TeleGeorgraphy 1999, reveals the technology, the complexity and the costs that
go into network communications like the Internet. Among other things, it says
that connecting to the Internet can be slow because of the small number of
"root name servers," 13, compared to the large number of Internet users, 150
million people worldwide. It says that ten out of the thirteen root servers are
located in the United States, making foreign access slow and costly. Root name
servers are computers that must be accessed because they "[hold] routing
information for the Internet's naming system" and serve as an "electronic
directory" of web page names. It says that the Washington (DC) area is fortunate
to have four name servers, but the capacity of the "pipes" [bandwidth] -- not
distance between name servers -- is what makes information travel faster.
Bandwidth is difficult for consumers to measure but the study provides a list
of the worldwide distribution of Internet host computers and the 100
most-visited Web sites.
[SOURCE: Washington Post (F20), AUTHOR: Victoria Shannon]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-05/24/104l-052499-idx.html)
STREETS NO MATCH FOR INFO HIGHWAY
Issue: Telecommunications Act of 1996
Streets and sidewalks are being dug up in various cities throughout the nation
so that telecommunications companies can install fiber-optic cable underground
to meet the higher consumer demands in telephone, cable TV and Internet
services. "The burst of activity was unleashed by the Telecommunications Act of
1996," which meant to increase competitiveness among companies but now it is
proving to be a hassle to city officials and residents. Cities are becoming
overburdened with applications and traffic-control issues as well as with
disgruntled drivers and pedestrians. "The traveling public, whether they're
walking or driving, take it out on city officials," says Leonard Krumm,
director of field services in Minneapolis, where there are 22 different phone
companies. Older downtown areas with small streets, high amounts of traffic,
and "big concentrations of corporate towers for state-of-the-art
telecommunication services" are facing greater challenges to installing the new
cables. In order to make the construction work bearable for citizens, cities
like Denver (CO), Richmond (VA) and Chicago (IL) [to name a few] say they are
asking companies to work away from busy streets, at early or late hours of the
day, and to try working as quickly and efficiently as possible. Paul Devaney, a
senior consultant with New Jersey-based Telecordia Technologies is also
reviewing guidelines for national standards regarding public works such as
these but says that consumers pay for it in the end; either the city [ie. tax
payers] pays for the repairs, or companies raise their consumer rates. Despite
possible tax or rate increases, one Chicago resident was eager, nevertheless,
for better cable services, "traffic is terrible, but so is our cable...This will
be good."
[SOURCE: USA Today (3A), AUTHOR: Haya El Nasser]
(http://www.usatoday.com/news/ndsmon02.htm)
ECOMMERCE
A BEHIND-THE-SCREENS GLIMPSE OF AN INTERNET RETAILER
Issue: E-Commerce
Although rei.com is not as big as Amazon.com ($50 million in annual sales vs
$610 million), it is doing something Amazon isn't -- turning a profit.
rei.com is the online companion to Recreational Equipment Inc -- better
known as REI. Kaufman's article dispels some myths about online commerce:
REI has found that having brick-and-mortar stores is a huge advantage, not a
liability and the operating costs for the Web site are continually going up.
A major factor in Web operations is cost -- technical people command larger
salaries than part-time salesclerks. The average salary for a skilled
technical position is ~$80,000 and REI reviews the field every 3-4 months
and automatically offers raises if it is lagging behind.
[SOURCE: New York Times (C1), AUTHOR: Leslie Kaufman]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/24web.html)
DIGITAL COMMERCE: SUCCESS STORIES FROM EBAY
Issue: E-Commerce
From an e-retailer success story above to a look at what's driving up the
value of the online auction site, Ebay. The site is a platform for anyone to
buy or sell just about anything and has given rise to e-entrepreneurs: "If
the trend in the next century is working for yourself," one user asserted,
"Ebay is going to do more for that than any other interface. It's easy and
it's comfortable, and when you do it once you aren't afraid of it anymore."
[SOURCE: New York Times (C4), AUTHOR: Denise Caruso]
(http://www.nytimes.com/library/tech/99/05/biztech/articles/24digi.html)
ENCRYPTION
DIGITAL MILLENNIUM COPYRIGHT ACT
Issue: Intellectual Property/Encryption
The National Telecommunications and Information Administration of the United
States Department of
Commerce and the United States Copyright Office invite interested parties to
submit comments on the effects of Section 1201(g) of Title 17, United States
Code, as adopted in the Digital Millennium Copyright Act, Pub. L. No.
105-304, 112 Stat. 2860 (Oct. 28, 1998) ("DMCA") on encryption research and
the development of encryption technology; the adequacy and effectiveness of
technological measures designed to protect copyrighted works; and the
protection of copyright owners against unauthorized access to their
encrypted copyrighted works. The DMCA, enacted on October 28, 1998, directs
the Register of Copyrights and the Assistant Secretary for Communications
and Information of the Department of Commerce to prepare a report for the
Congress examining the impact of Section 1201(g) on encryption research and
including legislative recommendations - if any - no later than one year
after enactment of the DMCA. This Federal Register Notice is intended to
solicit comments from interested parties on the effects of section 1201(g)
of the DMCA. More specifically, how will the provisions of section 1201(g)
of the DMCA affect encryption research?
[SOURCE: NTIA]
(http://www.ntia.doc.gov/ntiahome/occ/dmca/dmca.htm)
SECURITY AND FREEDOM THROUGH ENCRYPTION ACT
Issue: Encryption
Tuesday, May 25, 1999. 10:00 a.m. in 2322 Rayburn House Office Building
Subcommittee on Telecommunications, Trade, and Consumer Protection hearing
on H.R. 850, the Security And Freedom through Encryption Act. The hearing
will also focus on the Administration's policy on encryption products.
[SOURCE: House of Representatives]
(http://www.house.gov/commerce/schedule.htm)
TELEVISION/RADIO
TV NETWORKS WIN MORE CONCESSIONS FROM THE STUDIOS
Issue: Broadcasting
Networks made high demands on Hollywood studios in exchange for putting their
shows onto the fall schedule last week. Walt Disney's ABC threatened to move
shows in the schedule if they didn't receive a 10% stake in the profits and CBS
obtained ownership positions in all six of its new fall programs. "A lot of the
shows this year got on not just because they were good shows, but because there
were deals behind them," said an executive at International Creative
Management. Network's ownership over programs has been made possible by the
loosening of federal restrictions on networks owning their own shows. ABC
demanded the right to run each of its new shows four times instead of the usual
two. NBC won a six-year license for ER, locking in the show, regardless of how
well it does. CBS won stake of all six of its new shows -- the first time ever
a network has owned stake in an entire schedule.
[SOURCE: Wall Street Journal (B10), AUTHOR: Kyle Pope]
(http://wsj.com/)
MEDIA TALK: TV NETWORKS USING STRONG-ARM TACTICS
Issue: Television Economics
Under pressure to cut costs and increase profits, the television broadcast
networks sought concessions from program suppliers in exchange for choice
time slots. The concessions were primarily ownership stakes, but also
included rights to multiple showings of programs on TV and on new windows of
distribution like digital channels and the Internet.
[SOURCE: New York Times (C12), AUTHOR: Bill Carter]
(http://www.nytimes.com/yr/mo/day/news/financial/media-talk.html)
AS ASIA'S MTV AND CHANNEL V COMPETE FOR VIEWERS, THEY LOSE MONEY, PARTNERS
Issue: International
While Viacom's MTV says it reaches 100 million homes in Asia and Star TV's
Channel V says it reaches 146 million homes, neither know how many are watching
as Asian audience research is in its infancy. Since 1994, when Star TV had a
falling out with MTV and started its own company -- Channel V -- it has lost
$100 million. MTV Asia told the US Securities and Exchange Commission that it
lost $22 million last year. Meanwhile partners in the two companies are
downgrading their stake. The British record company, Polygram, has dropped its
stake in MTV Asia from 50% to 26%. BMG and Turner Broadcasting have declined
their stake in Channel V to 9% each. While some question if there is a market
for two music channels in Asia, it isn't likely to happen soon. "What has to
happen," says Steve Smith of Channel V, "is that Rupert [CEO of StarTV] and
Sumner Redstone [CEO of Viacom] persisted in holding on to get MTV Asia and
Channel V on their radar screen for the same 10 minutes or so." MTV Asia's
Frank Brown says there hasn't been talk of a merger for months and it is a
"dead issue."
[SOURCE: Wall Street Journal (B3E, AUTHOR: Michael Flagg]
(http://wsj.com/)
ADDITIONAL DBS CAPACITY FOR ECHOSTAR
Issue: Satellite/Competition
From FCC News Release: The Commission cleared the way for Direct Broadcast
Satellite (DBS) to compete more effectively with cable television providers
by approving the transfer of authorizations to provide DBS programming from
MCI Telecommunications Corporation (MCI) to EchoStar North America Corp.
(Echostar). Despite increases in the number of subscribers to DBS systems,
cable TV systems remain the dominant supplier in what is called the
multichannel video program distribution (MVPD) market, and this transaction
will allow EchoStar to become a stronger competitor. As a result, consumers
should benefit from the increased competition that should lead to increased
program offerings and options and/or lower prices in the marketplace for
multichannel video programming. Specifically, the FCC approved the transfer
of an authorization to construct, launch and operate a high-powered direct
broadcast satellite (DBS) service on 28 channels at 110 degrees W.L. The
Commission found that acquisition of this additional satellite capacity by
EchoStar is in the public interest because it enables EchoStar to increase
substantially its number of program offerings, and to compete more
effectively with cable in the multichannel video program distribution (MVPD)
market.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/International/News_Releases/1999/nrin9019.html)
LOW POWER FM PROPOSAL
Issue: Radio
Commission Grants 60 Day Extension of Time to File Comments on Low Power FM
Proposal. Comments Due August 2, 1999. Reply Comments Due September 1, 1999.
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Mass_Media/Orders/1999/fcc99112.txt)
MERGERS
OLIVETTI'S WIN MAY RESHAPE TELECOM INDUSTRY
Issue: International/Mergers
Telecom Italia shareholders defected on the last day of Olivetti's offer,
giving Olivetti the go ahead to takeover the company. Olivetti will sell off
its shares in Infostrada, a fixed-line operator, Omnitel Pronto Italia, and
Germany's Mannesmann to pay the $33 million it will cost to acquire 51.2% stake
in Telecom Italia. Olivetti will also go into debt, making the deal a gamble to
shift the company away from monopoly culture. By winning this hostile
takeover, Olivetti is sending a message to other European companies, that the
seamless market created by the Euro, "the traditional clubby way of doing
business" in Europe is over: "The process of European integration will
encourage such operations, making it more like the US," said Olivetti Chief
Executive Roberto Colannino. The merger between Deutsche Telekom and Telecom
Italia seems unlikely to go through, analysts say. State-controlled Deutsche
Telekom was in merger talks with Telecom Italia in order to stop the Olivetti
takeover. The merger will strengthen Deutsche Telekom's rival Mannesman, by
acquiring Olivetti's assets. Big telecommunications companies will now be under
more pressure to find alliances in the rapidly consolidating industry.
Mannesmann has offered an additional 2% stake to Bell Atlantic, increasing Bell
Atlantic's stake to 21%.
[SOURCE: Wall Street Journal (A22), AUTHOR: Deborah Ball]
(http://wsj.com/)
See also
THE EXECUTIVE WHO CAPTURED TELECOM ITALIA (NYT)
[SOURCE: New York Times (C1), AUTHOR: John Tagliabue]
(http://www.nytimes.com/yr/mo/day/news/financial/telecom-olivetti.html)
FCC
FCC OPEN MEETING
Issue: FCC
The Federal Communications Commission will hold an Open Meeting on the
subjects listed below on Thursday, May 27, 1999, which is scheduled to
commence at 9:30 a.m. in Room TW-C305, at 445 12th Street, S.W., Washington,
D.C. Items include 1) funding of erate program, 2) high-cost support for
non-rural carriers, 3) the forward-looking economic cost model (I know your
heart is racing, but remember, this isn't until Thursday), and 4) the
efficiency with which telecommunications carriers use telephone
numbering resources.
[SOURCE: NECA]
Info should be available at URL below soon.
(http://www.fcc.gov/Bureaus/Miscellaneous/Public_Notices/Agenda/1999/agenda.
html)
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