July 1998

MERGERS
WAVE OF TELECOM MERGERS PUTS REGULATORS TO THE TEST (WSJ)
MCI Wins Brazil Long Distance Carrier with $2.3-Billion Bid
(TelecomAM)
Brazil Sells Phone Giant (WP)
Brazil Sells Most of State Phone Utility (NYT)
Brazil's Telebras Sell off is a Rigging Success (WSJ)

EDU-TECH/E-RATE
Education Secretary Defends Technology in Schools (CyberTimes)

MINORITIES
Broadcasters Vow to Keep Affirmative Action (NYT)
African-American Encyclopedia Has Rich Roots (NYT)

INTERNET
Flaw in Email Programs Points to an Industrywide Problem (NYT)
Politicians Woo Voters on the Web (NYT)
New 'Combo' Meal: Dine and Surf (NYT)

REGULATION
Tristani Says Section 706 Doesn't Allow Blanket Waiver for Bells
(TelecomAM)

PRIVACY
Daley Says EU Moving Toward US Internet Privacy Standards
(TelecomAM)

ADVERTISING
City's Billboard Law Ruled Invalid (ChiTrib)
Canada Seeks to Protect its Magazines from Losing Ad Revenue to
Foreigners (WSJ)

=======
MERGERS
=======

WAVE OF TELECOM MERGERS PUTS REGULATORS TO THE TEST
Issue: Mergers/ Telephony
After the announcement of two more mega-mergers this week, lawmakers have
finally begun to notice that the Telecommunications Act of 1996 has done
more to encourage consolidation than competition. Concerned by raising
cable rates and continued lack of local phone competition, Congress plans to
hold hearings in September to explore the recent telecom merger trend.
Because of the unlikeliness of any telecommunication legislation resulting
from the remaining weeks of this legislative session, many people are
looking to the Federal Communications Commission, and Chairman William
Kennard, to use it's regulatory power in blocking proposed mergers. In an
interview, Chairman Kennard was reported as saying: "Folks that are proposing
consolidation have a heavy burden to bear. The one overriding principle: How
are consumers going to be benefited from this combination?"
[SOURCE: Wall Street Journal (B4), AUTHOR: John Simons]
http://wsj.com/

MCI WINS BRAZIL LONG DISTANCE CARRIER WITH $2.3-BILLION BID
Issue: MergerS
MCI outbid Sprint and will pay $2.3 billion for Brazilian long distance
carrier Embratel. Brazil has sold three wireline carriers and eight
cellular companies in its breakup of Telebras, raising more than $20
billion. Communications Minister Luiz Carlos Mendonca
de Barros told Reuters TV that the sale was a "huge success." But during the
auction police used tear gas and fired guns to quell angry anti-sale protesters.
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/

BRAZIL SELLS PHONE GIANT (WP)
BRAZIL SELLS MOST OF STATE PHONE UTILITY (NYT)
BRAZIL'S TELALBARS SELL-OFF IS A RINGING SUCCESS (WSJ)
Issue: International/Telephony
In the largest privatization deal in Latin American history, Brazil sold its
remaining stake in the national phone giant Telebras for $18.85 billion. The
auction, which drew doubled expected value, was dominated by Telecfonica of
Spain, Potugal Telecom, and MCI Corp. While most Brazilians -- desperate for
better service -- eagerly await privatization, many opponents protested the
sale of the national patrimony to foreign interest. They worry that the new
private companies will focus on lucrative business customers and ignore the
dire need for basic infrastructure rollout in poorer areas. Police armed
with tear gas, batons and a water cannon quelled thousands of angry
demonstrators.
[SOURCE: Washington Post (A1,A27), AUTHOR: Anthony Faiola]
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/30/147l-073098-idx.html
[SOURCE: New York Times (D1,D4), AUTHOR: Seth Schiesel]
http://www.nytimes.com/library/tech/98/07/biztech/articles/30telephone-braz
il.html
[SOURCE: Wall Street Journal (A13,A15), AUTHOR: Peter Fritsch, Gautam Naik,
Carlta Vitzthum]
http://wsj.com/

===============
EDU-TECH/E-RATE
===============

EDUCATION SECRETARY DEFENDS TECHNOLOGY IN SCHOOLS
Issue: Edu-Tech/E-rate
U.S. Secretary of Education Richard R. Riley said yesterday that technology
in schools is essential to enhancing student learning, preparing young
people for the 21st century workforce and bridging the divide between those
students whose families can afford to have computers at home and those who
cannot. Secretary Riley's comments were meant chiefly as a counterattack to
an assault by members of Congress and other critics on the Administration's
"E-rate" project, designed to subsidize the Internet and other
telecommunications services in schools and libraries. Sec Riley pointed at a
recent Commerce Dept. study that found a huge disparity in home computer
ownership between the rich and the poor as well as whites and minorities.
Among the reports findings: about 76 percent of American households with an
annual income of $75,000 or more own computers, compared to 32 percent of
households with an income of $35,000 or less. Meanwhile, 41 percent of white
households own computers compared to 19 percent of black and Hispanic
households. In his speech, Riley called on the nation "to break the cycle of
technological inequity," and said the E-rate program was "critically
important" to this effort.
[SOURCE: New York Times (CyberTimes), AUTHOR: Pamela Mendels]
http://www.nytimes.com/library/tech/98/07/cyber/articles/30schools.html

===========
MINORITIES
===========

BROADCASTERS VOW TO KEEP AFFIRMATIVE ACTION
Issue: Minorities
The largest broadcasters in the nation -- including four major networks and
several of the biggest owners of radio stations -- have agreed to continue
following the Federal Communications Commission's affirmative action
guidelines, even though they are no longer required to do so under a recent
federal court decision, said FCC Chairman, William E. Kennard.
The court decision was made this past spring when the judges rules that the
FCC's affirmative action program did not serve a compelling public interest.
The FCC has petitioned for a review of the three-judge panel's decision by the
full Court of Appeals. "We know our rules work. And we know how important
they are in giving minorities a start. Employment is not just an end unto
itself. For some it can also be
a path to ownership.," Chairman Kennard wrote. Among the companies that have
agreed to continue following the F.C.C. guidelines are ABC, CBS, NBC, the
Fox network, Time Warner Inc., which includes CNN, the Tribune Company and
Clear Channel Communications Inc., the owner of 183 radio stations and 18
television stations. Kennard also received commitments from cable companies
Cox Communications, the Cablevision Systems Corporation, the TCI Group and
the Comcast Corporation. In all, the companies agreeing to follow the
guidelines earn roughly one-third of the annual advertising revenue in the
broadcast industry, said BIA, an independent company that monitors revenues
in the broadcast industry.
[SOURCE: New York Times (A12), AUTHOR: Steven A. Holmes]
http://www.nytimes.com/yr/mo/day/news/national/fcc-affirm-action.html

AFRICAN-AMERICAN ENCYCLOPEDIA HAS RICH ROOTS
Issue: Minorities/Computer Use
Henry Louis Gates Jr., chairman of Harvard Univ.'s African-American studies
department, received inspiration for his latest two-year project -- a
comprehensive reference work on Africa and people of African descent -- from
W.E.B. Du Bois, who first came up with the notion of an "Encyclopedia
Africana" is 1909. Du Bois saw the project as an
act of progressive scholarship. "He believed that you could help defeat
racism if you could codify the knowledge of the black experience,
undermining all sorts of stupid myths and prejudices," said Gates. The
multimedia encyclopedia, called Encarta Africana, is a collaboration between
Gates, Kwame Anthony Appiah, a Harvard professor of African-American studies
and philosophy, and the Microsoft Corporation. Gates hopes that this
multimedia encyclopedia will help draw more African-Americans into the
computer age. Several studies have shown that African-American children are
less likely to use computers or have access to the Internet than other
American children. The main reason being that a higher percentage of
African-Americans, compared to whites, live in low-income families and
neighborhoods. Gates said he hopes that Encarta Africana will help stir
technological enthusiasm within the black community and efforts to put more
computers into schools and libraries into predominately black neighborhoods.
"I want Encarta Africana to seduce our people further into using computers
and help them become computer literate," Gates said.
[SOURCE: New York Times (E3), AUTHOR: Steve Lohr]
http://www.nytimes.com/library/tech/98/07/circuits/articles/30ugee.html

=========
INTERNET
=========

FLAW IN EMAIL PROGRAMS POINTS TO AN INDUSTRYWIDE PROBLEM
Issue: Security
"The security flaw reported this week in email programs produced by two
highly respected software companies points to an industrywide problem -- the
danger of programming languages whose greatest strength is also their
greatest weakness." The computer languages most commonly used to build
commercial software, C and C++, derive much of their power and flexibility
from the fact that they give professional programmers the ability to write
very complex programs quickly and efficiently. But, in part, they do this by
allowing short cuts that can also lead to disaster. "As a result of these
short cuts, even the best commercial programs today are riddled with bugs
that range from merely annoying to catastrophic." More modern programs, like
Sun Microsystems's Java language, have built-in safeguards that prevent
programmers from making common errors that could result in security
loopholes. But these safeguards cause Java to run more slowly then the
closely related C and C++. For those reasons it has met with resistance from
programmers that are hungry for speed. Robert Morris, a veteran security
researcher who was once the chief scientist of the National Security Agency,
said that is part the problem was a result of "the emergence of a commercial
culture that is careless and counts on customers to find bugs once they are
in the marketplace." In closing, Markoff writes: "Microsoft and Netscape,
rushing software to the public in a fierce battle to dominate the Internet,
were well aware of the danger and the consequences."
[SOURCE: New York Times (D7), AUTHOR: John Markoff]
http://www.nytimes.com/library/tech/98/07/biztech/articles/30email-flaw....

POLITICIANS WOO VOTERS ON THE WEB
Issue: Campaigns
Political consultants say that this election year will be the first in which
the Internet can be considered a mass medium. Phil Noble, president of
Politics Online, a Charleston SC company that provides Internet tools for
politics, compares 1998 on the Internet to 1964 on television. "It's going
to be some 32-year-old first-time candidate in a statehouse or city council
race who unseats an old white guy who's been sitting there for 20 years and
hasn't even heard of the Internet -- and he'll never see it coming," Noble
said. "Every newspaper in the county is going to do a story, and every
politician in the country is going to say, 'I want to get me some of that.'"
Many others however, say the Internet has not matured enough to be
considered an effective medium for conveying a political message. They say
the problem is twofold: 1) the Internet is not yet universally available,
like television, and 2) online information reaches only the most highly
interested voters. "The truth is," says Mark Mellman, a Washington political
consultant, "as a tool of political communications, the Internet today is of
marginal value, but increasing value."
[SOURCE: New York Times (E1,E10), AUTHOR: Rebecca Fairley Raney]
http://www.nytimes.com/library/tech/98/07/circuits/articles/30poli.html

NEW 'COMBO' MEAL: DINE AND SURF
Issue: Lifestyles!
A Burger King in Manhattan's financial district began to offer Internet
access to its customers last week. The fast-food restaurant is providing 20
minutes of Internet time with each minimum purchase of $4.99 ($3.29 for
breakfast) on one of its 20 countertop-mounted computers. "I thought it
could be something different to allow then to 'have it your way,' in terms
of seeing the world and do whatever they want to do," said the store owner,
Peter Allen Abramson, as many of the lunchtime crowd shook his hand and
congratulated him on what many called a brilliant idea. (Now you can eat
your burger and learn about it too! Who knows, maybe this will start a new
trend in how we define a "Value Meal.")
[SOURCE: New York Times (E3), AUTHOR: Michel Marriott]
http://www.nytimes.com/library/tech/98/07/circuits/articles/30geek.html

==========
REGULATION
==========

TRISTANI SAYS SECTION 706 DOESN'T ALLOW BLANKET WAIVER FOR BELLS
Issue: Regulation
The Federal Communications Commission is required by Section 706 of the
Telecommunications Act of 1996 to assess the development of advanced
networks by issuing a notice of inquiry by August 8. Speaking on a panel at
the meeting of the National Association of Regulatory Utility Commissioners
(NARUC), FCC Commissioner Gloria Tristani said she doesn't believe Section
706 of the Telecom Act allows a blanket waiver of interLATA restrictions on
broadband data services, as some Bell companies contend, but said "not all
LATA relief is off the table." The Bells want the Commission to ease rules
that require them to let competitors lease their new broadband networks, as
is required for older network elements, and bar
them from extending their networks beyond LATA lines. "I think it may be
that the incumbent LECs will be the most likely providers for rural areas in
the near term," Commissioner Tristani said. The Commission has scheduled an
August 6 meeting and it is expected to propose new rules including allowing
some lessened regulation if the Bells offer higher speed data networks
through separate subsidiaries.
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/

=======
PRIVACY
=======

DALEY SAYS EU MOVING TOWARD U.S. INTERNET PRIVACY STANDARDS
Issue: Privacy
Sec of Commerce William Daley told the House Commerce Committee that the
European Union (EU) is likely to accept U.S. Internet privacy standards
being crafted by the Online Privacy Alliance, an industry group. Sec Daley
said most European countries think the government should mandate standards,
"which I think is wrong," so the Dept of Commerce "has spent a lot of time
convincing them of the need for an industry-led" process. By October 25, 15
EU member countries must implement comprehensive privacy legislation
requiring them to bar the transfer of personal information to other
countries if those nations don't provide "adequate" privacy protection.
[Yeah, so just trust the companies that want to make money off of that
information; they are sure to protect you.]
[SOURCE: Telecom AM]
http://www.telecommunications.com/am/

==========
ADVERTISING
==========

CITY'S BILLBOARD LAW RULED INVALID
Issue: Advertising
In September 1997, the Chicago City Council passed an ordinance banning
billboard advertising of alcohol and tobacco products. Proponents said the
ads targeted children and minorities in the inner city. The ban is similar
to one in Baltimore which has withstood legal challenge. But Senior U.S.
District Judge Milton I. Shadur found the city ordinance to be invalid under
a federal preemption statute. Judge Shadur concluded that "state and local
legislatures may not make laws in relation to the cigarette advertising
because that area has been occupied by the federal government" through
passage of the Federal Cigarette Labeling and Advertising Act three decades ago.
[SOURCE: Chicago Tribune (Sec 2, p.1), AUTHOR: Maria Donate]
http://chicagotribune.com/textversion/article/0,1492,SAV-9807300155,00.html

CANADA SEEKS TO PROTECT IT"S MAGAZINES FROM LOSING AD REVENUE TO FOREIGNERS
Issue: International/ Magazines
As part of an ongoing effort to protect and foster Canadian publishing,
television, radio, and movie industries, The Canadian government says it
intends to introduce legislation that would prevent foreign magazines from
selling advertisements specifically aimed at the Canadian market. The new
law would force advertisers wishing to reach Canadians to only advertise in
Canadian owned publications. A government official explained that
advertising revenue should be limited to Canadian publishers will because
they "produce Canadian stories for Canadians."
[SOURCE: Wall Street Journal (B12), AUTHOR: John Urquhart]
http://wsj.com/

*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*
OK readers. You should know its review time and if you think Betsy and
Rachel should get anything more than the minimum slave-level wages they get
now, you should tell me what you think of the new format they worked so hard
on. They said that if the came up with a format that was more "digestible"
then I'd have to pay them enough so they can afford lunch. What d'ya think?

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

*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*=*
So, this is different. We'd like your comments on the new Headlines format.
Thanks for your help as we try to improve this service and make it more
readable ('cause we're all about reading here at Headlines). Please send
comments to kevint( at )benton.org.

Meetings
Meeting: Advisory Committee on Public Interest
Obligations of Digital Television Broadcasters (NTIA)
Meeting of Federal-State Joint Board on Universal Service (FCC)

Telephony
Bell Atlantic Asks FCC for Special Approval of Interstate
Data Links (WP)
Privacy
Bill Would Allow Sale of Patient Data

Copyright
Protecting Digital Copyrights (NYT)

Internet
Children and the Net (WP)
Senate votes to ban gambling on Internet (ChiTrib)
Senate Approves Ban on Internet Gambling (WP)

Mergers
Approval of AT&T-Teleport Merger (FCC)
AT&T Completes Takeover of Teleport (NYT)

** Meetings **

Title: Meeting: Advisory Committee on Public Interest
Obligations of Digital Television Broadcasters
Source: NTIA
http://www.ntia.doc.gov/pubintadvcom/augmtg/fedregister.htm
Issue: Digital Television
Description: The next meeting of the Advisory Committee on Public Interest
Obligations of Digital Television Broadcasters is scheduled for August 10,
1998, in Washington DC; the Federal Register notice
http://www.ntia.doc.gov/pubintadvcom/augmtg/fedregister.htm has additional
information.

Title: Meeting of Federal-State Joint Board on Universal Service
Source: FCC
http://www.fcc.gov/Bureaus/Common_Carrier/Public_Notices/1998/da981394.html
Issue: Universal Service
Description: The Federal-State Joint Board on Universal Service will hold an
open meeting on Wednesday, July 29, 1998, from 12:30 to 3:00 pm, at the
Westin Seattle Hotel, 1900 Fifth Ave., Seattle, Washington 98101. At the
meeting, the Federal-State Joint Board will address issues contained in the
Commission's Joint Board Referral Order.(1) In the Joint Board Referral
Order, the Commission requests that the Joint Board provide a recommended
decision on issues pertaining to the appropriate methodology for determining
high cost support for non-rural local exchange carriers. This meeting will
be open to the public.

** Telephony **

Title: Bell Atlantic Asks FCC for Special Approval of Interstate Data Links
Source: Washington Post (F3)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/24/048l-072498-idx.html
Author: Mike Mills
Issue: Telephony/DSL Services
Description: Bell Atlantic has filed a request for the FCC to make an
exception to the rules prohibiting Bells from carrying voice or data traffic
across state lines. Bell Atlantic claims that they have heavily wired West
Virginia with high-speed DSL service but are prevented from further
development because their digital links must stop at the border. "What we
have here are six-lane superhighways in West Virginia leading into two-lane
country roads leading in and out of the state," describes Dennis Bone,
President and chief executive of Bell Atlantic-West Virginia. Critics of the
Bells argue that they should be required to sell of their data service
affiliates, including any DSL services, before they can enter the long
distance the market.

** Privacy **

Title: Bill Would Allow Sale of Patient Data
Source: Washington Post (F1)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/24/174l-072498-idx.html
Author: John Schwartz
Issue: Health/Privacy
Description: The Patient Protection Act of 1998 will likely reach the House
floor as soon as today. The Republican sponsored measure would allow
hospitals, insurance companies, HMOs, doctors, and pharmacies to sell or
disclose patient data. Privacy advocates are worried that the bill would
result in patients' reluctance to speak openly with their health care
providers. The Director of the Health Privacy Project at Georgetown
University Medical Center, Janlori Gold, says: "It's a serious interference
with the doctor-patient relationship."

** Copyright **

Title: Protecting Digital Copyrights
Source: New York Times (A24)
http://www.nytimes.com/yr/mo/day/editorial/24fri1.html
Author: NYT Editorial Staff
Issue: Copyright
Description: "Traditional copyright concepts that have served this nation
well for centuries should guide the debate on copyright in the digital
universe." This past spring, digital copyright legislation passed the Senate
and House Judiciary Committee that would protect movies, music and other
intellectual property from piracy. But there continues to be controversy
surrounding a provision in the legislation that would make it a crime to
"circumvent encryption used to control access to digital material or to
manufacture or sell devices that could be used to circumvent protection
measures." Music and movie producers argue that making circumvention illegal
is the only way to prevent consumer theft of their products. But libraries
and schools fear that the prohibition is so broad that their access to
electronic information would be greatly limited in comparison to what the
copyright law would otherwise allow. The existing law ensures producers of
artistic material the right to profit from their creative works, but it does
not allow a creator to control who looks at the material or prevent it from
being lent or circulated to others. Thus a library can purchase a book
patrons can borrow it or a teacher can copy material from it for classroom
use. "Preserving these user rights is important in the digital world where
copyright owners, with the right technology, could limit or prevent access
to information. The content producers dismiss fears that the Internet could
become a strictly pay-for-use world as unrealistic, but neither they nor
Congress can predict how the Internet will develop. That is why legislation
needs to be flexible enough to deal with rapid evolution in technology and
electronic commerce."

** Internet **

Title: Children and the Net
Source: Washington Post (A18)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/24/179l-072498-idx.html
Author: WP Editorial Staff
Issue: Internet/Free Speech
Description: While both of the Internet measures passed by the Senate this
week are intended to protect children, they also possess a "threat to free
speech and to the Net's potential as an educational tool." One measure will
require schools and libraries to install filtering software in order to
receive the 'e-rate' subsidy for Internet access. The existing commercial
software has the potential to "use key words and/or political bias to screen
out innumerable sites, often without indication which or why." In addition,
the Senate passed a revised form of the Communications Decency act which
will require commercial sites to block access to sites containing material
deemed to be harmful to minors. "Both show how easy it is to erode the once
unquestioned claims that the Internet would open up the world to kids and
adults alike."

Title: Senate votes to ban gambling on Internet
Source: Chicago Tribune (Sec 1, p.6)
http://chicago.tribune.com
Author: Associated Press
Issue: Internet Regulation
Description: In a 90-10 vote, the Senate passed a bill that would shut down
the billion-dollar Internet gambling business. Said Sen Jon Kyl (R-AZ),
"More than a billion dollars will be gambled over the Internet. Internet
gambling is unregulated, accessible to minors, addictive, subject to abuse
for fraudulent purposes like money laundering, evasive of state gambling
laws -- and already illegal at the federal level in many cases." The bill
will extend to the Internet -- and other emerging technologies -- the
current federal ban on interstate gambling on sports by telephone or wire.

Title: Senate Approves Ban on Internet Gambling
Source: Washington Post (A5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/24/084l-072498-idx.html
Author: News Services
Issue: Internet/Gambling
Description: Yesterday, the Senate overwhelmingly approved a law to prohibit
gambling on the Internet. The measure is an extension of an existing ban on
gambling by telephone or wire. States will still be allowed to use the
Internet for lotteries and off-track-betting. A similar measure is pending
in the House.

** Mergers **

Title: Approval of AT&T-Teleport Merger
Source: FCC
http://www.fcc.gov/Bureaus/Common_Carrier/News_Releases/1998/nrcc8051.html
Issue: Mergers
Description: The Commission has approved the transfer of communications
licenses and authorizations from Teleport Communications Group, Inc. to AT&T
Corp., thereby granting the companies' merger application. In so doing, the
Commission noted that the merger will likely produce a competitor that can
more quickly provide business and residential consumers with a choice of
local telephone service providers.

Title: AT&T Completes Takeover of Teleport
Source: New York Times (AP-Business Index)
http://www.nytimes.com/aponline/f/AP-ATT-Teleport.html
Author: The Associated Press
Issue: Mergers
Description: The Federal Communications Commission yesterday approved AT&T's
takeover of Teleport Communications valued at $11.3 billion. "The commission
concluded that the merger is unlikely to have any anti competitive effects,"
the FCC said in a statement. AT&T has said that the merger will allow it to
participate in the most lucrative part of the telecommunications industry by
selling all-in-one packages of long-distance, local and data communications
services to businesses. "We're giving customers simplicity, convenience and
choice," said AT&T Chairman Michael Armstrong. "It's one-stop shopping for
local and long-distance services, just for starters." In addition to its
focus on business customers, AT&T says it still plans to expand into the
residential side of local service.

******************************************
...and we're outta here. Have a great weekend; we'll be back Monday.

Universal Service
Senate Adopts Internet Legislation to Appropriations Bill
(TelecomAM)
Western Wireless Asks FCC to Change Kansas Universal Service Fund
(TelecomAM)

Internet
2 Bills Target Minors' Internet Access (WP)
Senate Adds Internet Proposals to Spending Bill (CyberTimes)
Bulk E-Mail Become Politicians Tools (CyberTimes)
Internet Companies Move to Safeguard Computer Users' Privacy (WP)

Education
Home Computer Study Leaves Questions (CyberTimes)

Radio
FCC might legitimize radio 'pirates' it now punishes (ChiTrib)

Arts
In Election Year House Authorizes Financing of Arts (NYT)

Telephone/Ownership
Puerto Rico Accepts GTE Group's Bid To Buy Control of Telephone
Company (WSJ)

Advertising
House GOP Plans Major Ad Campaign (WP)

Lifestyles/Internet Use
Hello Mudda, Hello Fadda...E-Mail Quickly, Yadda, Yadda (WSJ)

** Universal Service **

Title: Senate Adopts Internet Legislation to Appropriations Bill
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Internet Regulation/Universal Service
Description: The Senate July 21 adopted without debate two Internet
content-related amendments to an appropriations bill for the Commerce
Department, TelecomAM reports. S-1482, introduced by Senator Dan Coats
(R-IN), would restrict access to Internet content "harmful to minors."
S-1619, introduced by Senate Commerce Committee Chairman John McCain (R-AZ),
would require the use of Internet blocking and filtering software by schools
and libraries that receive universal service discounts know as the erate.

Title: Western Wireless Asks FCC to Change Kansas Universal Service Fund
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Universal Service
Description: Western Wireless has petitioned the Federal Communications
Commission to preempt Kansas laws and regulatory rules that prevent wireless
carriers from using the state's universal service fund to serve rural and
high-cost consumers. Western Wireless contends that Kansas law and
regulation violate the Telecom Act of 1996 because it is not competitively
neutral and is not based on the actual cost of providing service. On a
statewide basis, only incumbent phone companies can receive universal
service support -- competitors are only eligible to receive support while
serving selected areas of the state. State courts upheld the law setting up
the fund, and related litigation is pending before a U.S. District Court in
Kansas.

** Internet **

Title: 2 Bills Target Minors' Internet Access
Source: Washington Post (A5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/22/097l-072298-idx.html
Author: Juliet Eilperin, John Schwartz, Helen Dewar
Issue: Internet Regulation/Universal Service
Description: Yesterday, the Senate passed two bills that will restrict
minors access to adult materials on the Internet. One measure would make the
granting of "E-Rate" subsidies to public schools and libraries contingent
on the installation of software that blocks minors access to indecent WWW
sites. The second bill is a revised version of the 1996 Communications
Decency Act (CDA) that would make companies responsible for preventing
children from accessing sites that contain material "harmful to minors."

Title: Senate Adds Internet Proposals to Spending Bill
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/tech/98/07/cyber/articles/22filter.html
Author: Jeri Clausing
Issue: Internet Regulation
Description: On Tuesday, the Senate added two proposals for controlling
children's access to the Internet to a spending bill, "approving without
debate a measure that would make it illegal for commercial Web sites to
distribute adult material to minors and another that would require software
filters on computers in libraries that receive federal Internet subsidies."
The measures, which had been introduced as separate bills by Senator John
McCain (R-AZ) and Senator Dan Coats (R-IN), were added on voice votes to the
appropriations bill for the Commerce, Justice and State dept.s in a
"controversial but common tactic for pushing through legislation on
contentious issues." Civil liberties groups were upset with the action, but
not surprised. A similar filtering proposal has been added to a House
appropriations bill.

Title: Bulk E-Mail Become Politicians Tools
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/tech/98/07/cyber/articles/22politics.html
Author: Rebecca Fairly Raney
Issue: Political Campaigns
Description: A new campaign concept is becoming commonplace among
Net-literate political candidates and officeholders this year. "Mass email
lists -- once the exclusive domain of techno-activists -- have hit the
mainstream of politics." Campaigns across the nation this summer are using
these lists to contact reporters, stir up supporters and send updates to
contributors. "Mass emailing to a limited but extremely interested audience
makes everyone feel a part of the family," said Andy Brack, an Internet
political consultant and president of Brack Network Strategies in Charlston,
S.C. "If you don't do it, you're not using the medium properly...People get
addicted to good email like they get addicted to good chocolate," he said.
This trend shows more than a change in the way campaigns are run, it also
offers a chance to return to grass-roots campaigning. Kim Alexander,
president of the nonpartisan, nonprofit Calif. Voter Foundation, points out
that campaigns in Calif. have come to rely on television advertising, but
that inexpensive organization by email may change the current equation.
"Maybe we are seeing a return to a different style of campaigning that uses
technology to engage people instead of turning them off," she said. "The
public has a role again in these campaigns. I think that's incredibly
healthy for the process."

Title: Internet Companies Move to Safeguard Computer Users' Privacy
Source: Washington Post (A13)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/22/088l-072298-idx.html
Author: Robert O'Harrow
Issue: Privacy
Description: In response to yesterday's Federal Trade Commission
recommendation that Congress should pass privacy legislation if online
companies fail to implement self-regulation by the end of the year, the
Online Privacy Alliance, a coalition of Internet merchants, announced that
it would use an electronic stamp of approval to assure consumers of
information safety. Both the Council of Better Business Bureaus and a
nonprofit group called TRUSTe have developed privacy seal systems. Marc
Rotenburg of the Electronic Privacy Information Center questions the
effectiveness of the seal programs, "There's no assurance that the privacy
policy is any good." First, he argues, "You need a baseline standard."

** Education **

Title: Home Computer Study Leaves Questions
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/tech/98/07/cyber/education/22education.html
Author: Pamela Mendels
Issue: Education
Description: Eight years ago, a group of researchers in New York City set
out to see if equipping low-income homes with computers that had online
access would influence the chance of academic success for poor, minority
sixth graders that were at risk for dropping out of school. A group of
children who fit the requirements received computers and modems. As these
children were finishing the eighth grade, they were showing modest but
noticeable gains in reading over a comparison group. Given these results,
the researchers decided to continue the project, known as Project TELL,
which stands for Telecommunications for Learning. Last year, as the test
group approached the end of high school, 46 percent of the students who had
remained in the project were able to graduate on time, in comparison to 41
percent of minority students overall in New York City. To the researchers,
who published their findings earlier this year and are issuing another
report for a UNESCO publication to be released this fall, the results
indicate that technology at home can help under-privileged children learn.
"Our work shows that to some extent, you can expand the school day by
putting that learning window in the home," said William Kornblum, principal
investigator of Project TELL. But the project raises another question: What
really helped these children? Was it the computers of the extra attention of
caring adults? Edward Miller, an education research and policy analyst
working on a book about schools and computers, notes that it is a common
occurrence in education studies for children that are being examined to show
an improvement simply because they are receiving special attention. Kornblum
does not dismiss the "spotlight effect," but he points out that those kids
that showed the most marked improvement in test scores where also those that
spent the most time on their computers. Kornblum also said that computers
alone are not necessarily solely responsible for the impressive high school
graduation rates. The participants, that had previously received no formal
outside help with academics, in addition to the benefits of being online,
received face-to-face tutoring and the promise of scholarships if they met
college entrance requirements. While the Project TELL study is definitely
notable as one of the few long-term looks at the effects computers can have
on kids when placed in the home. There were so many possible influences on
the student's performance that there was no way for researchers to examine
the effects of the computers alone on student achievement.

** Radio **

Title: FCC might legitimize radio 'pirates' it now punishes
Source: Chicago Tribune (Sec 1, p.1)
http://chicagotribune.com/textversion/article/0,1492,ART-12198,00.html
Author: Frank James
Issue: Radio
Description: The Federal Communications Commission is considering legalizing
low-power radio stations around the country. The relatively inexpensive
radio outlets could revive local programming while giving just about anyone
the chance to be a broadcaster. Opponents include the powerful lobbying arm
of the broadcast industry -- the National Association of Broadcasters. The
NAB, in official comments filed at the FCC, argues that the airwaves are
already too cluttered and the introduction of microradio could interfere with
plans for broadcasters to switch to digital systems.

** Arts **

Title: In Election Year House Authorizes Financing of Arts
Source: New York Times (A1,A14)
http://www.nytimes.com/yr/mo/day/news/washpol/congress-arts.html
Author: Katharine Q. Seelye
Issue: Arts
Description: Yesterday, the House overwhelmingly approved money for the
National Endowment for the Arts. The vote of 253-173 basically guarantees
that the arts agency, in one way or another, will receive $98 million, the
same amount it received this fiscal year. The Senate and President Clinton
also have indicated support for the approved amount. "The old debate over
the existence of the NEA finally has given way to a more thoughtful dialogue
about the appropriate level of federal arts funding in America," William
Ivey, the new chairman of the endowment, said in a statement.

Title: Funding for arts agency survives House vote
Source: Chicago Tribune (Sec 1, p.3)
http://chicagotribune.com/textversion/article/0,1492,SAV-9807220096,00.html
Author: Michael Kilian
Issue: Arts
Description: In a 253-172 vote, the House voted to approve $98 million in
funding for the National Endowment for the Arts despite a last minute fight
by conservatives. The funding victory may be a farewell tribute to the NEA's
main sponsor, Rep Sidney Yates (D-IL) of Chicago. Rep Yates, 88, is retiring
after this term.

** Telephone/Ownership **

Title: Puerto Rico Accepts GTE Group's Bid To Buy Control of Telephone Company
Source: Wall Street Journal (B7)
http://wsj.com/
Author: Stephanie N. Mehta
Issue: Telephone/Ownership
Description: "State officials in Puerto Rico yesterday accepted an enhanced
offer by a GTE Corp.-led group to acquire a controlling stake in the
government-owned telephone company amid protests over the privatizations
effort. In addition to its $444 million cash offer, GTE and its partner,
Popular Inc. a bank holding company, outlined a set of concessions aimed at
appeasing employees of Puerto Rico Telephone Co. Workers, who walked off the
job over a month ago in protest of the sale. "We certainly are more than
willing to understand the concerns of the union leaders and be responsive to
those concerns," said Michael T. Masin, GTE's vice chairman, in an interview
yesterday.

** Advertising **

Title: House GOP Plans Major Ad Campaign
Source: Washington Post (A5)
http://www.washingtonpost.com/wp-srv/WPlate/1998-07/22/097l-072298-idx.html
Author: Juliet Eilperin, John Schwartz, Helen Dewar
Issue: Advertising
Description: House Republican Leadership has disclosed plans to launch a $37
million media campaign in support of GOP congressional candidates. Party
leaders plan to raise up to $16 million in soft money for the "issue
advertisements" that will air in contested districts.

** Lifestyles/Internet Use **

Title: Hello Mudda, Hello Fadda...E-Mail Quickly, Yadda, Yadda
Source: Wall Street Journal (B1)
http://wsj.com/
Author: Jane Costello
Issue: Lifestyles/Internet Use
Description: Summer camp sure isn't what it used to be, at least not at the
second annual CyberCamp, an indoor/outdoors experience funded by the U.S.
Department of Agriculture. The camp is coordinated by Trudy Dunham for the
University of Minnesota. This year, the camp is expecting more than 500
campers, between the ages of 8 and 12, to sign up for the two-week session
beginning on August 10. This summer's curriculum will focus on the
environment of lakes and streams. Daily activities include everything from
being responsible for a virtual fish "with a life span equivalent to the
camp session," to creating on-line arts and crafts or logging on for a hike
in the woods. While campers can sleep soundly in their own beds at the end
of the day, programmers continue to work on future CyberCamp offerings.
"We're working on food fight graphics right now," says Dunham. "Ideally,
we'd like to get a huge tomato to splash all over the screen."

**************************