Communications-related Headlines for 2/11/98

Universal Service
TelecomAM: Senate Communications Subcommittee To Examine SLC Administration
TelecomAM: California Align School Telecom Support Fund To FCC E-Rate
For 95% Discounts
TelecomAM: Iowa Network Asks FCC To Rule That It Can Receive
'E-Rate' Payments
TelecomAM: Missouri PSC Establishes State Universal Service Fund

Competition
TelecomAM: AT&T Loses $3 On Every Local Customer, Armstrong Says
FCC: Status of Local Telephone Competition

Internet
NYT: Senators Again Take Up Internet Restrictions
TelecomAM: FTC Plans Net Sweep To Check On Industry Self-Regulation
NYT: E-Mail Sender Convicted of Civil Rights Violation
NYT: This Is your Brain. This Is Your Brain as A Computer Interface

Mergers
WP: Foes See Lawyer's Civil Rights Agenda in Attack on MCI
WSJ: Sprint Plans Accord With EarthLink To Combine Internet-Access
Businesses

** Universal Service **

Title: Senate Communications Subcommittee To Examine SLC Administration
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Senate Comm. Subcommittee will hold hearings on the
"excessive" administrative overhead of the Schools and Libraries Committee [sic]
and the "unpredictability" of the Section 271 application process, Chairman
Conrad Burns said. He said another hearing will feature Wall Street
representatives on whether phone companies who complain about legislation
and regulation really are suffering financially. [For more information on
the Schools and Libraries *Corporation* see http://www.slcfund.org/]

Title: California Align School Telecom Support Fund To FCC E-Rate For 95%
Discounts
Source: Telecom AM---feb.11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Calif. Public Utilities Commission has approved changes to
the Calif. Teleconnect Fund (CTF) so that schools and libraries can use it to
supplement the federal universal service fund's E-Rate discounts to produce
discounts of 60% to 95% on educational telecom services. The PUC has aligned
the CTF's guidelines with those of the federal E-Rate program. A school that
qualifies for, say, a 40% discount using the E-Rate program now can also
apply for a CTF discount equal to half the remaining charge, producing a
total 70% discount from the combined federal and state support. [For more on
the CPUC decision see ftp://ftp.cpuc.ca.gov/gopher-data/telecom/T16118.doc]

Title: Iowa Network Asks FCC To Rule That It Can Receive 'E-Rate' Payments
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Iowa agency that runs the state's telecom network wants the
FCC to give expedited consideration to a petition that would declare the
state-owned Iowa Communications Network to be a common carrier eligible to
receive federal universal service subsidiaries for discounted telecom
services to the schools and public rural health centers it serves. The FCC
concluded that state communications networks in general don't meet the
definition of an eligible telecom carrier for universal service subsidies
because they are not common carriers providing services to the public. [For
more on the Iowa Communications Network see http://www.icn.state.ia.us/]

Title: Missouri PSC Establishes State Universal Service Fund
Source: Telecom AM---feb. 10, 1998
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The Missouri Public Service Commission has adopted rules
establishing a Missouri Universal Service Fund to ensure affordable basic
local telephone service, pursuant to a mandate of a 1996 state universal
service law. The Missouri fund is to be used to ensure provision of
essential telecom services at rates in high-cost areas, and assist poor and
disabled customers in obtaining affordable phone services. Initial estimates
show the fund will need about $16.1 million a year.[For more info see
http://www.ecodev.state.mo.us/]

** Competition **

Title: AT&T Loses $3 On Every Local Customer, Armstrong Says
Source: Telecom AM---feb. 11, 1998
http://www.telecommunications.com/am/
Issue: Competition
Description: AT&T has stopped marketing local phone service to consumers
because it loses money on ever customer, CEO Michael Armstrong said. He said
that because court battles have blocked the leasing of unbundled network
elements, the only immediate way to enter the local market is through
resale, and incumbents' discounts are too low for competitors to make money.
Armstrong also said that AT&T spent $3.5 billion to enter the local market
over the last two years and signed up more than 300,000 customers but is
losing $3 per month on every customer. "AT&T is not going to spend money on
this fool's errand and that's what [resale] is today," he said.

Title: Status of Local Telephone Competition
Source: FCC
http://www.fcc.gov/enbanc/012998/eb012998.html
Issue: Competition
Description: FCC Releases Transcript of February 29 En Banc Presentations on
the Status of Local Telephone Competition.Includes: Heather Gold, President,
Association for Local Telecommunication Services; Roy Neel, President,
United States Telephone Association; Michael Mahoney, President & COO, RCN
Corp., Princeton, NJ; Alex Netchvolodoff, Vice-President, Cox Enterprises,
Washington DC; and Jack Reich, President & CEO, ACSI, Annapolis Junction, MD.

** Internet **

Title: Senators Again Take Up Internet Restrictions
Source: New York Times
http://www.nytimes.com/library/cyber/week/021198porn.html
Author: Jeri Clausing
Issue: Internet Regulation
Description: The censorship debate reopened in Congress on Tuesday with
committee consideration of two bills designed to restrict children's access
to Internet material deemed to be indecent. Most of the hearing focused on
the bill introduced by Senator John McCain (R-AZ) on Monday that would
require all schools and libraries receiving federal Internet funding to
install screening software. The other bill discussed is known as CDA 2, a
bill filed late last year by Senator Dan Coats (R-IN) that would require
commercial Web site operators that distribute material "harmful to minors"
to restrict access to adults with personal identification numbers or credit
cards. McCain said, "I am very concerned about censorship, but I think we
need to act to try and provide some rules, otherwise we may find ourselves
in a situation where Americans say, 'Look, this has got to stop; we are
willing to sacrifice some of our civil liberties to protect our children.'"
Free speech and civil liberties groups have vowed to fight against any
mandates on Internet access or content.

Title: FTC Plans Net Sweep To Check On Industry Self-Regulation
Source: Telecom AM---feb. 10, 1998
http://www.telecommunications.com/am/
Issue: Internet Regulation
Description: The Federal Trade Commission plans to survey more than 1,200
Web sites next month to
determine whether industry self-regulation is working, a top Commission
official said. Lee Peeler, FTC associate director of advertising practices,
said that Commission staffers will examine the 100 most-visited Web sites
and 200 sites aimed at children. Peeler said the FTC sweep will be a way to
determine the extent to which the online industry has kept promises it has
made over the last three years to develop policies on privacy and
information distribution. [See the FTC's website at http://www.ftc.gov/]

Title: E-Mail Sender Convicted of Civil Rights Violation
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/week/021198hate.html
Author: Rebecca Fairly Raney
Issue: Legal Issues/Internet
Description: Richard Machado, a 20-year-old Los Angeles man who sent
threatening email to students with Asian sounding names at the Univ. of
Calif. at Irvine in September 1996, was convicted yesterday of interfering
with the civil rights of those Asian university students. Assistant U.S.
Attorney Mavis Lee said, "[the conviction] sends a message out there that
hate crimes are serious and hate crimes on the
Internet are no different."

Title: This Is Your Brain. This Is Your Brain as A Computer Interface
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/cyber/surf/021198mind.html
Author: Ashley Dunn
Issue: InfoTech
Description: "The Brain," developed by Natrificial, based in Santa Monica,
CA, is the latest interface entry created to help us process through the
mass amounts of information on the Internet. The program is a
two-dimensional interface that gives users the ability to link pieces of
information to what Natrificial calls "thoughts." The thought can be a word
processing document, a Web page or a topic point. When a group of thoughts
are connected, they make up the structure of your personal "brain." When you
click on a thought, it moves to the center of your screen so all of its
immediate links are displayed. This design was created to be similar to the
human mind. Vannevar Bush, Director of the Office of Scientific Research and
Development in 1945 and who wrote the ground breaking essay "As We May
Think", described the human brain as one which "operates by association.
With one item in its grasp, it snaps instantly to the next that is suggested
by the association of thoughts, in accordance with some intricate web of
trails carried by the cells of the brain." One of difficulties we encounter
today is that our modern interfaces force a linear vision of information
instead of a true associative process for organizing information. "The idea
behind The Brain is that the user constructs the organization of their
information as they work. Thus all the data on your computer and the Net are
not lumped together by category or function, but rather by how you use it."

** Mergers **

Title: Foes See Lawyer's Civil Rights Agenda in Attack on MCI
Source: Washington Post (A1,A18)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/11/103l-021198-idx.html
Author: Paul Farhi and Mike Mills
Issue: Merger
Description: David Honig, a communications lawyer, civil rights advocate and
person who is known for challenging dozens of TV and radio station deals in
the past, is arguing that Worldcom's acquisition of MCI Communications Corp.
would fail the FCC's requirement of being in the "public interest" because
the newly merged company would mostly serve "big-ticket business" and ignore
the needs of lower-income customers. Honig and Jesse Jackson point to
Worldcom's all-male, all-white board of directors and say that the merger
would go against the FCC's goals of fostering minority involvement in the
telecommunications industry. A Honig foe, who asked not to be identified,
said: "The system is set up in a way that rewards people for making these
filings. The only people who would spend the time and effort to proceed are
those who see a payoff at the end of the line." Honig also has orchestrated
an advertising campaign, underwritten by the Rainbow/PUSH Coalition and MCI
rivals the Bell Atlantic Corp. and GTE Corp., that in one draft print ad
compares Worldcom and MCI to Bonnie and Clyde, where it says, "America needs
public hearings and more time to examine the real impact of this merger."

Title: Sprint Plans Accord With EarthLink To Combine Internet-Access
Businesses
Source: Wall Street Journal (B11)
http://wsj.com/
Author: Thomas E. Weber
Issue: Merger
Description: Sprint plans to combine its consumer Internet-access business
with that of EarthLink Network and take a 30% stake in a deal valued at $180
million. Under the arrangement EarthLink will add 130,000 subscribers of
Sprint's Internet Passport service to its own member base of about 445,000.
For Sprint, the move is a tacit admission that its consumer Internet
service, launched in '96, never took off. Sprint will make a $24 million
investment in EarthLink and provide a $100 million line of credit in
exchange for 4.1 million convertible preferred shares of EarthLink.
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