Universal Service
TelecomAM: GAO Says FCC Exceeded Its Legal Authority on Universal Service
TelecomAM: Bill Requiring Blocking For Universal Service Funds Wins Praise
Competition
TelecomAM: Bell Atlantic Says Wholesaling Is 'Critical' To Its Growth
WSJ: Judge Postpones Long-Distance Clearance for Bell
NYT: Judge Postpones Telecom Order
FCC: Telecom Act is Destined to be a Great Success
Internet/Online Services
WSJ: A Web Pioneer Does a Delicate Dance With Microsoft
WSJ: PolyGram Establishes Panel to Focus On Internet Effects
WSJ: Kodak to Buy Stake in PictureVision In Bid to Lift Internet Photo
Business
WSJ: Apple Technology Picked by Panel To Be a Standard
NYT: Standard Group to Adopt QuickTime Format
WSJ: AOL and Hong Kong Firm Form On-Line Venture
Television
WP: Top Cable Firm to Raise Its Rates
FCC: Protect Children From Harmful TV Violence
Spectrum
WP: In Next FCC Auction, the Wealthy Will Get the Discount
NTIA: Spectrum Reallocation Report
Merger
NYT: Software Maker Seeks Services Concern in $8.4 Billion Bid
WP: Software Giant Makes Bid To Expand Into Services
** Universal Service **
Title: GAO Says FCC Exceeded Its Legal Authority on Universal Service
Source: Telecom AM -- 2/12/98
http://www.telecommunications.com/am/
Issue: Universal Service
Description: The General Accounting Office (GAO) says that the Federal
Communications Commission exceeded its legal authority when it ordered the
National Exchange Carriers Association (NECA) to create the corporations
that administer new universal service benefits for schools and libraries
(Schools and Libraries Corp http://www.slcfund) and rural health care
providers (Rural Health Care Corp). GAO responded to a November 28 inquiry
by Sen Ted Stevens (R-AK). The Government Corporation Control Act (GCCA)
requires a federal agency to have "specific statutory authority" to
establish a corporation. Section 254 of the Telecommunications Act of 1996
created the new universal service programs, but it was silent on how they
should be administered. Sen Stevens said that Congress supported the concept
of universal service, but the FCC took "general support" and created a much
larger program than Congress had envisioned. A FCC spokeswoman said the GAO
report is a "legal issue" that "will ultimately be resolved." [Related sites
-- GAO http://www.gao.gov, NECA http://www.neca.org, The New Definition
of Universal Service http://www.benton.org/Updates/summary.html]
Title: Bill Requiring Blocking For Universal Service Funds Wins Praise
Source: Telecom AM---feb. 12, 1998
http://www.telecommunications.com/am/
Issue: Universal Service/Legislation
Description: Legislation requiring schools and libraries that receive
universal service support to use Internet blocking programs won support from
Senators of both parties and industry reps. At a Commerce Committee hearing,
Assoc. for Interactive Media President Andrew Sernovitz said he was
"testifying for the Internet industry" in endorsing the bill.
** Competition **
Title: Bell Atlantic Says Wholesaling Is 'Critical' To Its Growth
Source: Telecom AM---feb. 12, 1998
http://www.telecommunications.com/am/
Issue: Competition
Description: Bell Atlantic is committed to being a "carrier's carrier,"
Chairman-CEO Ray Smith said. Smith also said wholesaling services to
competitive local carriers generated $6 billion in revenue last year. Bell
Atlantic wholesales its lines "not just because the Telecom Act requires it,
but because it's critical to our growth," Smith said. He said the company
has 500 wholesale customers --- "our best customers." The company's creation
of this separate unit and its volume of wholesale business demonstrates that
Bell Atlantic is "exceeding" its requirements for opening local markets to
competition, according to Smith. He predicted the FCC would let BA into long
distance in New York this year.
Title: Judge Postpones Long-Distance Clearance for Bell
Source: Wall Street Journal (B10)
http://wsj.com/
Author: Stephanie N. Mehta
Issue: Competition/Long Distance
Description: U.S. District Court Judge Joe Kendall, stayed his New Year's
Eve ruling, which tore down key parts of the Telecom Act. That ruling said
the Baby Bells were being unconstitutionally prohibited from entering the
long-distance business. Judge Kendall's latest move comes on the eve of
expected action by the
Oklahoma Corporation Commission, where commissioners are expected to
evaluate SBC Comm. plans to get into the long-distance business. The Bell
filed the lawsuit questioning the Telecom Act's constitutionality, and had
hoped that Judge Kendall's original decision would have allowed SBC to begin
offering long distance services early this year.
Title: Judge Postpones Telecom Order
Source: New York Times (Business Index From the Associated Press)
http://www.nytimes.com/aponline/f/AP-Telecom-Ruling.html
Author: Associated Press
Issue: Competition/Long Distance
Description: U.S. District Court Judge Joe Kendall, of Wichita Falls, TX,
has decided to postpone implementing his Dec.31 ruling, which struck down
key elements of a 1996 telecommunications law, that would have given at
least three regional Bell companies a clear path to compete in the
long-distance business. SBC took the case to court with Bell Atlantic and US
West joining the suit. They have not decided what their next legal step will
be. FCC Chairman William Kennard said that Kendall's action means that
the 1996 telecommunications law governing entry into the long-distance
business and his agency's enforcement of it remain "in full force."
Title: Telecom Act is Destined to be a Great Success
Source: FCC
http://www.fcc.gov/Speeches/Tristani/spgt802.html
Author: Commissioner Tristani
Issue: TelecomAct of 1996
Description: In delivering an "inside the beltway" perspective on
telecommunications in Washington to a Joint Session of the Puerto Rico
Legislature, FCC Commissioner Gloria Tristani today noted that "Any
discussion of telecommunications in Washington begins with the
Telecommunications Act of 1996." She said that, measured against realistic
expectations, "I would say...[the Act] has been a modest success so far, and
it is destined to be a great success." She said this was because of the
Act's commitment to competition and universal service. [Remarks available in
Spanish http://www.fcc.gov/Speeches/Tristani/spgts802.html]
** Internet/Online Services **
Title: A Web Pioneer Does a Delicate Dance With Microsoft
Source: Wall Street Journal (B1)
http://wsj.com/
Author: Kara Swisher
Issue: Merger/Antitrust
Description: RealNetworks, who has popularized the use of real-time audio
and video on the Web, now stands squarely in the path of the strategy that
has drawn Microsoft into trouble with antitrust regulators: emulating
innovative products, integrating them into its operating systems and then
giving them away free. RealNetworks' daunting task is to prove it can do a
better job of outmaneuvering Microsoft than Netscape. Rob Glaser, owner of
RealNetworks, insists he and the software giant can coexist. "I learned an
amazing amount from Bill. We knew we could either compete head-on like
Netscape or do something a lot more interesting." His strategy is known
internally as "coopetition." He sold a nonvoting 10% stake to Microsoft for
$30 million, and licensed RealNetworks' technology to Microsoft for another
$30 million. Microsoft also agreed to bundle RealNetworks' software with
Internet Explorer.
Title: PolyGram Establishes Panel to Focus On Internet Effects
Source: Wall Street Journal (B6)
http://wsj.com/
Author: Charles Goldsmith
Issue: Internet Commerce
Description: PolyGram named a board-level panel to devise a strategy for
dealing with the Internet's nascent but potentially sweeping effects on the
entertainment industry. PolyGram's move to formulate a comprehensive
Internet strategy underscores a new Internet focus for the world's $40
billion recorded music industry. The major record labels initially adopted
an arms-length approach to on-line technology but are now analyzing both the
promise of Internet-based sales and the dangers of people skirting
copyrights by downloading music off the 'Net as digital compression
technology rapidly improves. "We take it as a very, very serious matter,"
PolyGram President and CEO Alan Levy said. While he expressed doubts that
consumers would abandon traditional record stores in favor of the Internet,
"I wouldn't like to be wrong, because it could have very dire consequences
for the company."
Title: Kodak to Buy Stake in PictureVision In Bid to Lift Internet Photo
Business
Source: Wall Street Journal (B10)
http://wsj.com/
Author: Jon G. Auerbach
Issue: Merger
Description: Eastman Kodak, trying to energize its Internet-based
photography business, has agreed to purchase a majority stake in its biggest
online competitor. Kodak said it plans to announce an agreement to acquire
a 51% stake in closely held PictureVision Inc. The move signals Kodak's
determination to stick with a strategy of developing a significant
Internet-based business. Mr. Gustin, Kodak's chief marketing officer said
that the service is "very appealing...to people who get really involved
with their pictures." Kodak's Internet strategy isn't without risks, as it
is widely believed that as computer printers grow better and cheaper,
customers will eschew the photo shop altogether and print Internet pictures
at home. The company is betting that enough consumers will lack the
scanners, the printers, or the time, and would prefer to let someone else do
the work.
Title: Apple Technology Picked by Panel To Be a Standard
Source: Wall Street Journal (B10)
http://wsj.com/
Author: Jim Carlton
Issue: Standards
Description: An industry panel selected Apple Computer's QuickTime
technology as a standard in a new multimedia specification for the Internet,
providing a psychological boost to the beleaguered computer maker as well as
a rare victory over rival Microsoft. The International Standards
Organization adopted a proposal to use the QuickTime File Format by a group
of companies, comprised of Apple, IBM, Netscape, Oracle, Silicon Graphics,
and Sun. In doing so, the panel rejected a proposal by Microsoft to base the
so-called MPEG-4 specification on that company's own Advanced Streaming
Format technology.
Title: Standard Group to Adopt QuickTime Format
Source: New York Times (D5)
http://www.nytimes.com/library/cyber/week/021298apple.html
Author: Reuters
Issue: Standards
Description: Apple announced yesterday that The International Standards
Organization will use Apple Computer Inc.'s QuickTime File Format as the
starting point for developing a format for transmitting digital, audio and
video signals. The international standards body made this decision by
adopting a proposal by Apple, IBM, Netscape, Oracle, Silicon Graphics and
Sun Microsystems to use QuickTime for the MPEG-4 specification. "MPEG-4 is
an emerging digital media standard being defined by the standards body's
Moving Picture Experts Group that will enable users to view and manipulated
audio, video and other forms of digital content. The adoption of the
QuickTime file format as the starting point for the MPEG-4 standard means
that users are assured that all digital media content can be created in a
common file format that also supports real-time video and audio streaming."
Title: AOL and Hong Kong Firm Form On-Line Venture
Source: Wall Street Journal (B10)
http://wsj.com/
Issue: International/Merger
Description: AOL announced a new partnership with China Internet Corp. to
provide online services in Hong Kong, one of Asia's fastest-growing
Internet markets. The deal gives the American dial-up service provider its
third foothold in the Asia region, after Japan and Australia. AOL's Hong
Kong service will be built around its U.S. service, but will provide
additional original local content in English and Chinese. The service is
expected to be launched within a year.
** Television **
Title: Top Cable Firm to Raise Its Rates
Source: Washington Post (D3)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/12/127l-021298-idx.html
Author: Paul Farhi
Issue: Cable
Description: Tel-Communications Inc., the nation's largest cable TV
operator, said yesterday that it will raise its customers monthly bills by
between 5 and 5.5 percent starting in June. One of the reasons it cited for
this rate hike is the National Football League' huge new television
contracts. TCI's rate increase is three times the rate of consumer price
inflation and comes at a time when industry critics are calling for more
regulation of cable providers due to a string of similar rate hikes.
"Leading Republicans in Congress oppose new rate regulations. But FCC
Chairman William Kennard, has said some adjustments of the FCC-administered
cable price rules may be necessary."
Title: Protect Children From Harmful TV Violence
Source: FCC
http://www.fcc.gov/Speeches/Tristani/spgt803.html
Author: Commissioner Tristani
Issue: Children's Television/V-chip
Description: FCC Commissioner Gloria Tristani, in a speech to the Puerto
Rican Congress on Television Violence in San Juan, PR, said it is "First and
most clearly...the obligation of the parents to protect their children from
television and the tools to protect their children from material that they
believe is inappropriate...[and] can help make sure that parents have a good
alternative to violent programming." While parents have the primary
responsibility to protect children from inappropriate programming,
Commissioner Tristani also noted the responsibilities of the entertainment
industry to acknowledge the importance of reducing the level of violence on
programs that children watch, and of society to convey to the industry, to
children and to each other that harmful violence in such programming will
not be tolerated. [Remarks available in Spanish
http://www.fcc.gov/Speeches/Tristani/spgts803.html]
** Spectrum **
Title: In Next FCC Auction, the Wealthy Will Get the Discount
Source: Washington Post (D1,D4)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/12/126l-021298-idx.html
Author: Mike Mills
Issue: Spectrum
Description: Next Wednesday the Federal Communications Commission will
auction hundreds of the biggest chunks of radio spectrum ever sold. "The
licenses will allow owners to beam high-speed Internet, telephone and video
services into homes and offices nationwide. The FCC tried to ensure that
small businesses and entrepreneurs get an advantage in the bidding, through
rules that allow qualified winners big discounts off their winning bids. But
an analysis of the list of bidders shows that the discounts will mostly
benefit wealthy venture capitalists, as well as companies that are already
well established in their business. Most of the small entrepreneurial
companies that pushed hardest for a place at the auctions were shut out of
the bidding because they could not borrow money to bid for licenses."
Title: Spectrum Reallocation Report
Source: NTIA
http://www.ntia.doc.gov/osmhome/reports/bba97.html
Issue: Spectrum
Description: The Commerce Department's National Telecommunications and
Information
Administration released the Spectrum Reallocation Report. The report, which
identifies 20 megahertz of radio frequency spectrum below 3 gigahertz for
reallocation from Federal to non-Federal use, was mandated by Title III of
the Balanced Budget Act of 1997. The 20 megahertz identified for
reallocation is to be assigned by the Federal Communications Commission
(FCC) to non-Federal users through the process of competitive bidding prior
to 2002. Secretary of Commerce Daley signed the report on February 9, 1998,
in accordance with the statuatory requirements in the legislation.
** Merger **
Title: Software Maker Seeks Services Concern in $8.4 Billion Bid
http://www.nytimes.com/library/cyber/week/021298merger.html
Author: Allen R. Myerson
Issue: Merger
Description: Computer Associates International Inc., a leading maker of
business software, made an uninvited bid yesterday for Computer Sciences
Corp., a major provider of technology services. Their merger would
accelerate the consolidation of an industry where size is now equated with
survival. Charles B. Wang, Computer Associates' chief executive, said that
the addition of Computer Sciences' work force could become his ultimate
marketing tool. He said, "The 40,000-plus employees of CSC would become a
built-in channel for Computer Associates to push new product growth. There
are a lot of deals where we could take it to the next level if we had a
service arm." Computer Sciences issued a cool response to the bid last
night. Outside of two brief meetings at the request of CAI, said Van B.
Honeycutt, Computer Sciences chief executive, "Any suggestion that there
have been negotiations or agreements between the two companies is absolutely
false."
Title: Software Giant Makes Bid To Expand Into Services
Source: Washington Post (D1,D4)
http://www.washingtonpost.com/wp-srv/WPlate/1998-02/12/140l-021298-idx.html
Author: Elizabeth Corcoran
Issue: Merger
Description: Yesterday, Computer Associates International Inc.,
headquartered in Islandia, NY, made a bid to purchase Computer Sciences
Corp., a California company with a major Washington DC area presence, for
$8.3 billion in cash. If accepted, the merger would make Computer Associates
one of the world's largest software and services companies and would create
an information technology giant with annual revenue of more than $10 billion
and an estimated 8,000 employees in the Washington area alone. By purchasing
CSC, CAI would move into services as CSC is a consulting firm that advises
its clients on how to use technology. "If it can work, it's a great
combination," said Tony Scott, a vice president at A.T. Kearney Inc., a
management recruiting firm in Redwood Shores, CA. "The question is whether
CAI can change its focus from a 'products' company to a 'solutions'
company." Steve Dube, an analyst with Wasserstein Peralla Securities Inc. in
NY, was less enthusiastic saying that customers are more wary about a
company advising them about the "best" technology solution when they build
technology products themselves. "It's an inherent conflict," he said.
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