March 1998

Universal Service
FCC: Universal Service Contribution Factors
FCC: RHCC Selects Price Waterhouse
NTIA: Progress Report: Assessing the Impact of Existing Universal
Service
Policies and Infrastructure Grants in Connecting Americans

Telephony
WP: AT&T Unveils Plans To Cut 'Slamming'
TelecomAM: MCI Tells Kennard It Has Passed On Access Savings and More
WSJ: Wireless Carriers Try New Hook to Win Customers

Regulation
TelecomAM: BellSouth Chairman Calls For 'Regulatory Moratorium' On Data
TelecomAM: Dingell Blasts Kennard On Telecom Act Implementation

Internet
NYT: Online University Set to Open Its (Virtual) Doors
WP: Ads To Target Encryption Curbs

Television
WSJ: For Texas Station, HDTV Means Hospital-Disturbing Television

Antitrust
WP: Competitors, Senators Assail Gates at Hearing
NYT: Gates, on Capitol Hill, Presents Case for an Unfettered Microsoft
WSJ: Microsoft's Chief Concedes Hardball Tactics
WSJ: A Master Programmer Updates His Code

Merger
WP: Wang Says He May Abandon Bid

** Universal Service **

Title: Universal Service Contribution Factors
Source: FCC
http://www.fcc.gov/Bureaus/Common_Carrier/Public_Notices/1998/da980413.html
Issue: Universal Service
Description: Common Carrier Bureau Announces Proposed Second Quarter 1998
Universal Service Contribution Factors.

Title: RHCC Selects Price Waterhouse
Source: FCC
http://www.fcc.gov/Bureaus/Miscellaneous/News_Releases/1998/rhcc.html
Issue: Universal Service
Description: The Rural Health Care Corporation (RHCC) announced today that
it has chosen Price Waterhouse, LLP to provide support services for the
universal service support program for rural health care providers.
Representatives of RHCC and Price Waterhouse stated that the user support
center which will answer questions and assist users in completing the
applications will be operational by March 15, 1998. The web site will become
operational by the end of March which will coincide with the date
applications can be accepted.

Title: Progress Report: Assessing the Impact of Existing Universal Service
Policies
and Infrastructure Grants in Connecting Americans
Source: NTIA
http://www.ntia.doc.gov/ntiahome/speeches/022598licam.htm
Author: Larry Irving
Issue: Universal Service
Description: "Access to a phone is a critical connection issue in its own
right -- and also links to the issue of access to advanced telecom and
information services. Economic development and personal advancement are
increasingly tied to one's ability to access the tools of the Information
Age. Clearly, information is increasingly impacting American lives, and many
will be favorably affected. However, there is a serious concern about how
others will fare -- the so-called "information poor." The Clinton
Administration has been working hard to close the digital divide between
information "haves" and "have nots." President Clinton and Vice President
Gore have spoken passionately about this, and have put their words into
action, literally pulling wires as part of NetDays as well as endorsing key
policy initiatives, such as the e-rate...."

** Telephony **

Title: AT&T Unveils Plans To Cut 'Slamming'
Source: Washington Post (C12,C22)
http://www.washingtonpost.com/wp-srv/WPlate/1998-03/04/030l-030498-idx.html
Author: Mike Mills
Issue: Long-Distance
Description: The AT&T Corp said yesterday that it has taken new measures to
curb unscrupulous marketers who will switch a consumer's long-distance
carrier without first obtaining the consumer's consent and it urged federal
regulators to clamp down even harder on this practice called "slamming." FCC
officials said that they had already planned to take action against this
practice by the end of the month. In response to growing complaints about
slamming, AT&T has pledged to: 1) increase monitoring of long-distance
companies that buy capacity on AT&T's lines and then resell it to consumers
-- and then charge those companies the cost of handling each valid customer
slamming complaint they cause; 2) stop using outside sales agents to sell AT&T
long-distance at public events -- where more than 60 percent of the slamming
complaints originate from; and 3) set up a new hotline to resolve customer
slamming complaints (1-800-538-5345).

Title: MCI Tells Kennard It Has Passed On Access Savings and More
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Long Distance
Description: MCI has passed along to consumers all access charge savings
resulting from the FCC's May orders and an extra $467 million, Senior VP
Jonathan Sallet said. In a letter to Kennard, who called on long distance
companies to prove they have passed on savings, Sallet said the company has
presented these figures in a "series of meetings" with the Commission, which
"never suggested to us that our numbers or our conclusions were in error."
Because Kennard questioned the long distance companies' compliance publicly,
MCI released financial details "for the first time in the public record."
According to his figures, MCI customers will save $1.22 billion from July
1997 to June 1998 through various price-cutting actions.

Title: Wireless Carriers Try New Hook to Win Customers
Source: Wall Street Journal (B4)
http://wsj.com/
Author: Elizabeth Jensen
Issue: Wireless/Competition
Description: As wireless competition grows with last year's aggressive entry
on PCS carriers into many markets, the scramble for customers has
intensified. With the easy targets -- large businesses and wealthy consumers
-- already picked off in the past decade, wireless companies are trolling
further downstream. To hook customers the carriers are selling prepaid
services, using slick come-ons, sophisticated technology and, in one market,
brightly colored phones aimed at children. Dennis Leibowitz, an analyst with
Donaldson, Lufkin & Jenrette, estimated that prepaid customers will make up
25% of all new wireless sign-ups in 1998. Prepaid customers can buy their
own phones or use old ones no longer linked to long-term contracts. To make
calls they purchase blocks of air time, which are activated by calling the
company.

** Regulation **

Title: BellSouth Chairman Calls For 'Regulatory Moratorium' On Data
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Regulation
Description: Telecom companies need a "regulatory moratorium" before
investing fully in broadband networks, BellSouth CEO Duane Ackerman said. He
said that phone companies, Internet companies and computer companies must
work together to convince regulators not to regulate data traffic. Of
BellSouth's $7-billion infrastructure investment this year, $3.4 billion
will be spent on local wireline networks and much less on new broadband
networks, Ackerman said. He said in addition to ceasing to regulate data,
regulators who want to see broadband investment increase should eliminate
rules that restrict carriers' ability to use their networks -- including
long distance data restrictions on Bell companies.

Title: Dingell Blasts Kennard On Telecom Act Implementation
Source: Telecom AM
http://www.telecommunications.com/am/
Issue: Long Distance/Competition/FCC
Description: The new FCC has wasted an opportunity to "unleash competition"
as it continues denying Bell company application to enter long distance,
Rep. John Dingell said. The House Commerce Committee's ranking Democrat also
slammed the Commission on its "extravagant" program to wire schools and
libraries to the Internet and its continued appeals of orders by the Eighth
U.S. Court of Appeals, St. Louis. He said the Commission "has chosen to not
only perpetuate, but actually increase bureaucracy in virtually every area
the Congress had intended to eliminate it."

** Internet **

Title: Online University Set to Open Its (Virtual) Doors
Source: New York Times (CyberTimes)
http://www.nytimes.com/library/tech/98/03/cyber/education/04education.html
Author: Pamela Mendels
Issue: Ed Tech
Description: Between 50 and 100 students are expected to enroll at Western
Governors University this spring, a school that has neither faculty or
campus. WGU is one of the boldest out of a number of distance learning
projects. The university will offer individual distance learning courses
prepared by more traditional educational ventures, its administrative
offices will be in Salt Lake City and academic offices in Denver. The people
behind the project are hoping that it will bring college-level course work,
workforce training and degrees to a wider range of people, while saving
state governments future education costs. "One of the major things is to
reach an audience that is generally unable to go to campuses to receive the
learning they seek," said Robert C. Albrecht, chief academic officer for
Western Governors Univ. "It is truly a distance learning project, to serve
those not served otherwise." The project is also raising questions as to
whether online distance learning is a sufficient replacement for the campus
variety. "There is no substitute for the student actually witnessing a mind
at work in a classroom," said Kenneth H. Ashworth, who retired last year as
commissioner of higher education in Texas after 21 years of service. "I have
a hard time seeing how that will occur over email."

Title: Ads To Target Encryption Curbs
Source: Washington Post (C15)
http://www.washingtonpost.com/wp-srv/WPlate/1998-03/04/049l-030498-idx.html
Author: Elizabeth Corcoran
Issue: Encryption
Description: An advertising campaign aimed at gathering public support for
easing federal regulations on technology that "curbs eavesdropping on
computer communications" will be announced today by a coalition of
high-technology companies and organizations. The newly formed coalition,
Americans for Computer Privacy, plans to launch print and broadcast ads to
convince people that the technology for locking up data and information,
encryption, is more than a computer industry issue. Sources said that the
Clinton administration hopes to reduce criticism of its current stance --
that is in favor of the restrictions -- by saying that it has no plans to
seek control of data-scrambling technology when it is used in the U.S. and
wants to work with the computer industry to find ways to balance privacy
concerns with the wants and needs of law enforcement.

** Television **

Title: For Texas Station, HDTV Means Hospital-Disturbing Television
Source: Wall Street Journal (B1)
http://wsj.com/
Author: Evan Ramstad
Issue: HDTV
Description: Last Friday afternoon, WFAA-TV became the nation's first TV
station to begin permanent operation of a digital transmitter, venturing
into the new world of high-definition broadcasting. But just after the
transmission began, some of the 60 wireless heart monitors at Baylor
University Medical Center stopped sending data to nurses' stations. By late
Friday night, they thought they had the problem solved. But on Saturday, the
interference started all over again. It turns out that the unlicensed,
low-power transmitters in Baylor's heart monitors use portions of the radio
spectrum equivalent to TV channels 7 and 9. Steve Juett, the senior clinical
engineer at the hospital, called the station before it turned its digital
transmitter back on. WFAA sent 10 engineers to evaluate and hasn't
transmitted a digital signal since. Though the disruptions didn't lead to
any harm, WFAA says it will wait until the hospital's new system is working
before resuming its digital broadcasts.

** Antitrust **

Title: Competitors, Senators Assail Gates at Hearing
Source: Washington Post (A1,A10)
http://www.washingtonpost.com/wp-srv/WPlate/1998-03/04/109l-030498-idx.html
Author: Rajiv Chandrasekaran
Issue: Antitrust
Description: At the end of a four-hour Judiciary Committee hearing
yesterday, the panel's chairman branded the Microsoft Corp. a monopoly and
warned that the software giant "will have to learn to live by the rules that
govern monopolies." The hearing consisted of equal parts political circus,
technology tutorial and legal interrogation, signaling a new, more public
examination of Microsoft's role in the economy. Scott McNealy, chief
executive of Sun Microsystems Inc., charged that Microsoft's Windows
operating-system software, which runs more than 90 percent of personal
computers, has a "monopoly [that] has led to fewer choices, raised costs and
stifled innovation." Microsoft Corp. Chairman, Bill Gates, maintained that
government innovation, not Microsoft's actions, threatens technological
innovation. "The software industry's success has not been driven by
government regulation but by freedom and the basic human desire to learn,
innovate and excel," said Gates. "Will the success of this industry
continue? I believe the question can be answered resoundingly 'yes' -- if
innovation is not restructured by government."

Title: Gates, on Capitol Hill, Presents Case for an Unfettered Microsoft
Source: New York Times (A1,D4)
http://www.nytimes.com/library/tech/yr/mo/biztech/articles/04microsoft.html
Author: Steve Lohr
Issue: Antitrust
Description: Yesterday, Bill Gates, chairman of the Microsoft Corp.,
delivered an energetic defense of his company's business practices before
Congress, portraying Microsoft as the standard bearer of the nation's
high-technology economy. In listing his industry's achievements, Gates cited
that "software makers had contributed $100 billion to the economy last year,
had created more than 2 million American jobs and had generated an awesome
rate of technological change." Gates did not hold back when it came to
commenting on where he thinks the real threat to the information age lies.
"Will the United States continue its breathtaking technological advances?"
Gates asked members of the Senate Judiciary Committee. "I believe the answer
is yes -- if innovation is not restricted by government." Gates made his
comments in a four-hour hearing that was established to explore, in the
words of Sen. Orrin Hatch (R-UT), the committee's chairman, "How market
power works in the software industry and whether Microsoft is abusing its
market power."

Title: Microsoft's Chief Concedes Hardball Tactics
Source: Wall Street Journal (B1)
http://wsj.com/
Author: John R. Wilke & David Bank
Issue: Antitrust
Description: Under withering grilling from Senate Judiciary Committee
Chairman Orrin Hatch, Bill Gates conceded that Microsoft restricts the
ability of its Internet partners to deal with its rivals. Mr. Hatch asked
repeatedly if his company's contracts with Internet service and content
providers excluded Netscape from working with these companies. The
exasperated billionaire finally conceded that the most prominent Web sites
featured in Microsoft's Internet software are barred from promoting Netscape
or being included in Netscape's rival listing. Such restrictions are
included in Microsoft's contracts, but they haven't been confirmed publicly
before by Microsoft.

Title: A Master Programmer Updates His Code
Source: Wall Street Journal (B1)
http://wsj.com/
Author: Don Clark
Issue: Microsoft
Description: The embattled billionaire, Bill Gates, is everywhere, firing
back at his accusers yesterday on Capitol Hill, dispensing computers to
libraries in Alabama, etc. Public-relations specialists have exploited Mr.
Gates's star power to deliver a carefully crafted message -- that Microsoft
means innovation, and policymakers shouldn't do anything to thwart it. It's
a tough sell, because any hope of creating a kinder, gentler image for
America's richest man is periodically undermined by Mr. Gates himself.

** Merger **

Title: Wang Says He May Abandon Bid
Source: Washington Post (C12,C22)
http://www.washingtonpost.com/wp-srv/WPlate/1998-03/04/026l-030498-idx.html
Author: Mark Leibovich
Issue: Merger
Description: Charles Wang, chief executive of Computer Associates
International Inc. said yesterday that he will strongly consider withdrawing
the company's hostile takeover bid for Computer Sciences Corp. "I like to
win, but I'm not going to kill myself to win," said Wang. "If I can't get
the barriers to a deal down, of course I have to seriously consider my options."
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