November 1999

LEGISLATION
House Passes Bill Giving Weight to Digital Contracts (NYT)
House Votes to Let Satellite TV Carry Local Station Programs (NYT)
AOL Is Lobbying Congress To Carry Local TV Stations (WSJ)

INTERNET REGULATION
Gilmore Seeks To Exempt Online Sales From Taxes (WP)
School Board Uses Computer Filter To Block Student Access To Web
Sites (NYT)
Cable Chief Says "Open" Internet is Primary Goal (FCC)

INTERNET
U.S. Internet users surpass 100 mln mark - study (SJM)
Web Growth Will Help Most Media (USA)

JOURNALISM
The Know-Nothing Media (WP)

INFRASTRUCTURE
DC To Tell Fiber-optic Firms To Speed it Up (WP)

PRIVACY
Privacy Battle Over Databases at High Court (WSJ)

ANTITRUST
Breaking Up Isn't Hard to Do (WSJ)
Prosecutors Seeking to Break the Grip of Windows System (NYT)

LEGISLATION

HOUSE PASSES BILL GIVING WEIGHT TO DIGITAL CONTRACTS
Issue: E-Commerce
The House has passed legislation that will give electronic contracts the
same legal weight that pen-and-paper contracts hold. Consumers groups and
the Clinton Administration objected to the bill on the grounds that it
would weaken consumer protection laws by allowing insurance companies,
banks, and credit card companies to abandon traditional mail notification
and paper record-keeping requirements. Representative Jay Inslee (D-WA),
who co-authored an amendment to the bill that clarified the rules for
companies using e-mail to enter into contracts with customers, disagreed
with the bill's opponents. "This is a consumer freedom bill," he said. "It
gives consumers a new freedom: the freedom to be allowed to receive
information and complete transactions electronically. But only consumers
will have the prerogative to decide if they want to receive the information
electronically."
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing]
(http://www.nytimes.com/library/tech/99/11/cyber/articles/10signatures.html)

HOUSE VOTES TO LET SATELLITE TV CARRY LOCAL STATION PROGRAMS
Issue: Satellite
On Tuesday, the House passed a bill that would permit satellite television
companies to carry local television channels, allowing them to compete
better with the cable carriers. By giving subscribers the option to receive
local news and network programming from NBC, ABC, CBS and Fox, satellite
becomes a more viable alternative to cable, which controls 85 percent of the
TV viewing market. Current law only permits satellite companies to beam
network signals from distant cities to those customers who cannot receive
local stations using rooftop antennas. While the bill passed overwhelmingly
in House, the legislation faces a tougher road in the Senate on Wednesday,
where Sen. Phil Gramm (R-TX) has threatened to filibuster.
[SOURCE: New York Times (C2), AUTHOR: Lizette Alvarez]
(http://www.nytimes.com/yr/mo/day/news/financial/satellite-tv.html)

AOL IS LOBBYING CONGRESS TO CARRY LOCAL TV STATIONS
Issue: Internet/Television
AOL and the Commercial Internet Exchange, a trade group representing ISP's,
are lobbying Congress to open the way for providers to carry local
television stations. Language in a satellite-television bill opened the door
for Internet providers to beam local stations' material -- but the provision
was narrowed specifically to eliminate the idea Internet providers could
carry those same local TV signals when the bill was reconciled between the
House and Senate. The bill had stated that "other communications channels"
could apply for licenses to carry local TV signals, suggesting that Internet
services might also be included -- but the version worked out by House and
Senate conferees specifically eliminated digital online-communication
services. The Internet service companies now want the provision changed back
to the original language. "We want to compete on a level playing field,"
said a spokesman for AOL, "This ties our hands." A staffer for
Representative Howard Coble (R-NC) said the bill was never meant to apply
to the Internet. "Eventually we'll need to create a licensing process for
the Internet," he said. "But it will need provisions on the alteration of
content" and other capabilities that are available on the Internet but not
cable- or satellite-TV. The ISP's must persuade House members on the
conference committee to make the change before approving the compromise
legislation.
[SOURCE: Wall Street Journal, (B9A), AUTHOR: Kathy Chen]
(http://interactive.wsj.com/articles/SB942190745326206596.htm)

INTERNET REGULATION

GILMORE SEEKS TO EXEMPT ONLINE SALES FROM TAXES
Issue: Ecommerce
Although electronic commerce represents only a fraction of retail activity,
industry analysts expect it to mushroom in coming years and policy makers
are split over whether the state government should be able to tax online
transactions. Virginia Gov. James S. Gilmore III (R), the chairman of a
congressionally appointed commission trying to negotiate a tax policy for
the booming and largely unregulated world of online commerce, has urged the
group to recommend that Internet purchases be exempt from sales taxes. Gov.
Gilmore's proposal calls for the repeal of a federal excise tax on local and
long-distance telephone service -- which he said would save consumers more
than $3.3 billion a year -- and for states to be free to spend welfare money
on computers and Internet access for poor people. Previously, the commission
had been leaning toward ways to impose levies on electronic purchases
similar to those placed on goods bought from traditional retailers. Those
who support taxing Internet commerce include many state and local government
officials, who site the proliferation of tax-free online shopping sites that
put local merchants at a disadvantage and deprive localities of revenue.
Business leaders and politicians who represent states with a high
concentration of Internet merchants argue that the lack of aggressive tax
collection on electronic commerce has encouraged online shopping. The
National Governors' Association plans to unveil an Internet tax proposal
next week and submit it to the commission. Under its plan, existing sales
taxes would be applied to electronic commerce but participation by merchants
would be voluntary. The states would arrange for third-party clearinghouses,
who would be compensated with a fraction of the tax revenue, which would
collect the taxes and then distribute the payments to the state treasuries.
[SOURCE: Washington Post (E1), AUTHOR: Ravij Chandrasekaran]
(http://washingtonpost.com/wp-dyn/business/A43030-1999Nov9.html)
See Also:
2 Governors Propose Opposing Internet Tax Plans
[SOURCE: USA Today (3A), AUTHOR: Richard Wolf]
(http://www.usatoday.com)

SCHOOL BOARD USES COMPUTER FILTER TO BLOCK STUDENT ACCESS TO WEB SITES
Issue: Filtering
This week, the New York City Board of Education installed a filtering
program on its computer system that blocks students in city schools from
gaining access to many Web sites. Students, parents and teachers have
complained that the blocking program has made it almost impossible for them
to conduct advanced research projects on the Internet. "I have to tell you,
I'm not a true civil libertarian," said Jan Shakofsky, a humanities teacher
at Benjamin Cardozo High School. "I don't think they should have
pornography. But I felt they should be able to do research." Ms. Shakofsky
said her students were denied access to sites about breast cancer, anorexia
and bulimia, child labor and AIDS. Teachers say that the board purchased a
commercial filtering program, I-Gear, instead of creating it's own student
access standards. "The blocking program sweeps far too broadly," said Norman
Siegel, executive director of the New York Civil Liberties Union, in a
letter to school Chancellor Rudy Crew. "It significantly undermines
teachers' ability to conduct their lessons and students' ability to
complete their classroom assignments on the Internet."
[SOURCE: New York Times (A22), AUTHOR: Anemona Hartocollis]
(http://www.nytimes.com/library/national/regional/111099ny-web-edu.html)

CABLE CHIEF SAYS "OPEN" INTERNET IS PRIMARY GOAL
Issue: Broadband
From News Release: Federal Communications Commission Cable Services Bureau
Chief Deborah A. Lathen today emphasized that an FCC goal is to fulfill the
promise of broadband technology by encouraging the market to bring
high-speed Internet service to all American homes. Addressing the broadband
Internet access issue which is being debated in Los Angeles and other cities
around the country - Lathen explained that all parties agree that "openness"
is the ultimate goal, and the debate centers on the best course of action to
achieve that goal. In a luncheon speech to the Los Angeles public affairs
organization, "Town Hall," Lathen said that the FCC's policy of "regulatory
restraint" upholds the goals of the 1996 Telecommunications Act to promote
competition and reduce regulation. Lathen said that the FCC always considers
the consumer first in the policymaking process. Lathen also explained that
the FCC's policy of "vigilant restraint" is complemented by close monitoring
of the industry .
[SOURCE: FCC]
(http://www.fcc.gov/Bureaus/Cable/News_Releases/1999/nrcb9018.html)
See full text of speech, The Mind's Eye, online
(http://www.fcc.gov/Speeches/misc/spdal902.html)

INTERNET

U.S. INTERNET USERS SURPASS 100 MLN MARK - STUDY
Issue: Internet
A report by The Strategis Group, a Washington-based market research firm,
says the number of adults using the Internet in the U.S. passed 100 million.
Strategis states that now one half of all adults in the United States
use the Internet and that users are also becoming more sophisticated in
their use of the Web. Jeff Moore, an analyst with the Strategis Group, said,
"Not only is half of the population online, Internet users are more
experienced and have become significantly more sophisticated in their use of
the Internet as a tool for communication, commerce and learning." The report
said 77% of Internet users send e-mails with files or attachments every week
and the average user sends more than six e-mails each day. The portion of
total users who surf daily has risen to 60% among home users and 69% among
work users. More than 20% of those in the study have created or updated a
Web page in the last three months, the study found.
[SOURCE: San Jose Mercury, AUTHOR: Reuters]
(http://www.sjmercury.com/svtech/news/breaking/internet/docs/1065381l.htm)

WEB GROWTH WILL HELP MOST MEDIA
Issue: Internet
Traditional media won't suffer, and some will prosper, as computer users
rush to the Internet, according to a five-year forecast of the
communications industry by investment bankers Veronis, Suhler & Associates.
Broadcast television will continue to lose its audience, but cable and
satellite TV will grow dramatically and become the dominant form of
television viewing as early as 2001. With no recession in sight, Veronis,
Suhler projects that the average person will spend $814 on media in 2003, a
rise of 41% over 1998. Each person will devote 3,587 hours that year to
media, up 5%. By 2003, 6.8 million homes will get high-speed Internet
access from cable modems, and 3.5 million will have telephone digital
subscriber lines. Payments for basic cable will accelerate about 8% a year
to $40.30 a month in 2003 from $29.50 in 1999. Although rates for existing
packages of channels will grow about 5% a year, prices will rise faster
because most systems will continue to add channels. Although spending will
rise across the board, consumers will devote slightly less time to
newspapers and magazines.
[SOURCE: USA Today (1A), AUTHOR: David Lieberman]
(http://www.usatoday.com/life/cyber/tech/ctg632.htm)

JOURNALISM

THE KNOW-NOTHING MEDIA
Issue: Journalism
[Op-ed] Why does everyone loathe the media? Because they are worthy of our
loathing, Kelley says, specifically referring to a recent interview by
reporter Andy Hiller. Hiller surprised Republican presidential candidate
George W. Bush with a pop quiz on four leaders in four hot spots in the
world. "Hiller's stunt does indeed resonate, but not in quite the way we
would have it. It resonates because it demonstrates a range of the reasons
why the public increasingly regards the media -- us -- with contempt."
Public
resentment of the media stems from the fact that the media are so
relentlessly mindless. Reporters like to think of themselves as independent
thinkers although there is no group more devoted to group-think. Reporters
present the day's confusion in what appears to be order. Most journalists
"learn to see the world through a set of standard templates into which they
plug each day's events. Thus, the Hiller interview is played big because it
fits -- neatly, mindlessly -- into a template of the campaign." Secondly,
the
media is blatantly unfair. "Almost everyone knows that they could not, out
of the blue and with the cameras rolling, dredge up the answers to Hiller's
questions." Thirdly, the media are awful frauds. "Among the very many
people who could not have answered Andy Hiller's quiz is, you may be sure,
Andy Hiller."
[SOURCE: Washington Post (A39), AUTHOR: Michael Kelley, editor in chief of
National Journal]
(http://www.washingtonpost.com/wp-srv/WPlate/1999-11/10/012l-111099-idx.html
)

INFRASTRUCTURE

DC TO TELL FIBER OPTIC FIRMS TO SPEED IT UP
Issue: Infrastructure
An increase in street work throughout Washington, DC is the result of a
rush to install underground cable for new telephone, cable television and
Internet services. The disruption has been made worse by the unlimited time
that telecommunications companies have normally been given to complete
repairs to a street they had dug up to install lines. D.C. Mayor Anthony
Williams plans to implement new rules requiring telecommunications
companies to finish installing fiber-optic cable under a street within 120
days of getting a permit. However, the city will grant waivers to companies
that cannot meet the city's new 120-day timetable because their work is too
complicated. Telecommunications company Starpower Incorporated said 120
days is usually a realistic time frame. "It's a reasonable amount of time,
but it depends on the length of cable you're laying," a company official
said. Under the plan utility companies will have 60 days from the time of
permitting to install their pipe or wire, then 15 days to begin permanent
repairs and 45 more days to finish those repairs and return the street to
the condition in which it was found.
[SOURCE: Washington Post, AUTHOR: Lyndsey Layton]
(http://washingtonpost.com/wp-dyn/articles/A43981-1999Nov9.html)

PRIVACY

PRIVACY BATTLE OVER DATABASES AT HIGH COURT
Issue: Privacy
Today, the Supreme Court is expected to hear arguments on a subject that
centers on issues of states' rights and personal privacy. Because of an
actress being stalked by a man who obtained her address through California
motor vehicle records, Congress passed the 1994 Driver's Privacy Protection
Act, which restricts the sale of information from state motor vehicle
records. In September 1997, shortly before the federal law went into effect,
a U.S. District Court in South Carolina blocked the law from going into
effect, and the U.S. Appeals Court for the Fourth Circuit, in Richmond,
Virginia, affirmed that ruling. Charlie Condon, South Carolina's attorney
general, says the statute is a nightmare to administer because it has 14
exceptions, which include use of that personal information by government
agencies and private companies for certain research activities and reports.
Condon says in a brief that he "would need to review each specific request
in order to make a judgment whether the requested disclosure is mandated by
the act, prohibited by the act, or permitted [in whole or in part] by one of
the many exceptions." He believes Congress had no authority to make states
comply with the law, and he is seeking to have it declared unconstitutional.
The Clinton administration said in its Supreme Court brief that in one-year
New York's Motor Vehicle department earned $17 million from sales of the
personal information from driver's licenses. The U.S. government argued that
Supreme Court review of the matter was necessary in view of the "exercise of
the grave power of annulling an act of Congress." The government warns that
Fourth Circuit's decision "may have far-reaching implications for other
congressional efforts to regulate commercial activity in which states
engage."
[SOURCE: Wall Street Journal, (B1), AUTHOR: Robert S. Greenberger]
(http://interactive.wsj.com/articles/SB942191354150702568.htm)

ANTITRUST

BREAKING UP ISN'T HARD TO DO
Issue: Anti-Trust
[OP-ED] Peter Huber takes a sarcastic look at the Microsoft case. He says
Bill Gates owes it to his shareholders to start the break up of Microsoft
now, on its own terms, not the judge's. Huber suggests selling or giving the
source code for Windows to its competitors. He believes that even if Judge
Jackson goes too far with respect to the remedies in this case and it is
overturned on appeal, the judge will get a second chance to get Microsoft on
the remand. Huber points out that if Microsoft's position in the market were
attributed to bundling its products then it would only weaken the parts that
would be divided up in the end of this case if divestiture occurs. But since
that is not the case, Huber says, skills and talent will replicate and
Windows will continue to grow. "The government might hope to see the
separate Micro and Soft go for each other's throats, but they won't," he
said. He concludes that the government tried to do that by creating such
spin-off companies like AT&T, Lucent, SBC, Bell Atlantic, Bell South, US
West and Air Touch, but the smart investor went along with them.
[SOURCE: Wall Street Journal, (A22), AUTHOR: Peter Huber, a senior fellow of
the Manhattan Institute and author of "Law and Disorder in Cyberspace"]
(http://interactive.wsj.com/articles/SB942188375831614087.htm)
See Also:
PROSECUTORS SEEKING TO BREAK THE GRIP OF WINDOWS SYSTEM
[SOURCE: New York Times (C4), AUTHOR: ]
(http://www.nytimes.com/library/tech/99/11/biztech/articles/10soft.html)

--------------------------------------------------------------

INTERNET
E-Privacy: FTC Studies 'Profiling' by Web Sites (USA)
Online Companies Squander Public

BROADCASTING
The V-Chip Arrives, With a Thud (NYT)
Investment Fund to Boost Women & Minority Ownership (FCC)
Citing 'Whitewash,' NAACP Reaffirms Plan To Boycott Major Network
(USA)
Sparks Fly Over Changes to TV Bill (USA)
News Corp. Plan To Expand Pay-Television, Internet Units (WSJ)

COMPETITION/TELEPHONY
Wise Advice on Bell Atlantic (NYT)
Sprint To Offer Local Phone Service To New York Residential
Customers (WSJ)
Promotions For Cut-Rate Long Distance Draw Fire (WSJ)
Mergers and Consolidation in Communications Industry (Senate)
Fairness in Telecommunications License Transfers Act of 1999 (House)

ECOMMERCE
Van Gogh Print or Original Oil: The Web Has It (NYT)
A Chilly Welcome for Digital Wallets (NYT)
America Online To Invest $30 Million In Blockbuster's
Internet Operations (WSJ)

INTERNET REGULATION
Agreement to End Registrar's Monopoly Meets Resistance (CyberTimes)
Public Workshop on Online Profiling (NTIA)
Spamming: The E-Mail You Want To Can (House)
Barriers Online for Those With Disabilities (CyberTimes)

ANTITRUST
Why Microsoft Should Lose (WP)

BROADCASTING/TELEVISION

THE V-CHIP ARRIVES, WITH A THUD
Issue: V-chip
Since July 1, v-chip technology has been included in new televisions sold in
the US. The technology allows parents to block broadcasts according to a
rating system. But are parents using it? "We're very supportive of it, but
there's very little real media information about it," said Ginny Markell,
president of the National PTA. "There's a huge percentage of the population
that's unaware that it's even available, and unless a family's in the market
for a new TV, it's not on their radar." [Oh, yeah, what % of parents have
purchased new sets since July 1, Ms Greenman?] FCC Commissioner Gloria
Tristani, chairwoman of the V-Chip Task Force, which was put together in
May, acknowledged that lack of awareness was a problem. "It's hard to get
people to use something if they don't know it exists," she said, "so the
major problem is getting information out there." A poll of 1,000 parents
conducted this year by the Henry J. Kaiser Family Foundation, an independent
national health care philanthropy, found that 77 percent said they would use
the V-chip if they had one. "Parents are going to have to get used to this
alphabet soup of guides telling them what's in the content," said Jeff
Chester, executive director of the Center for Media Education, "as we enter
the digital age and Internet content becomes available on TV. The V-chip is
the first formal development in what will be a heavily rated media world."
CME publishes a guide to the V-chip (www.vchipeducation.org).
[SOURCE: New York Times (D1), AUTHOR: Catherine Greenman]
(http://www.nytimes.com/library/tech/99/11/circuits/articles/04vchi.html)
See Also:
BOXED IN: THE TELEVISION V-CHIP PUTS UP ELECTRONIC FENCES
[SOURCE: New York Times (D13), AUTHOR: Matt Lake]
(http://www.nytimes.com/library/tech/99/11/circuits/articles/04howw.html)

INVESTMENT FUND TO BOOST WOMEN & MINORITY OWNERSHIP
Issue: Ownership/Broadcasting
Speech From News Release: All too often women and minorities run into a
glass
ceiling when it comes to ownership and management opportunities in the
broadcast industry. Last year, I challenged the broadcast industry to
shatter these barriers and to make equal opportunity a reality in their
businesses. Today, the industry is taking a first critical step to meet that
challenge. The Prism Fund will give women and minorities access to badly
needed capital. At a time of rising prices for radio and TV stations, the
fund will help women and minorities purchase and run their own radio and
television stations, giving them the opportunity to participate more fully
in one of our nation's most important communications mediums. I applaud the
broadcasters for their vision -- and for helping make the communications
industry accessible to all Americans.
[The $175 million fund will provide equity for minorities and women to buy
broadcast properties. It is expected to be "financially rewarding deal, and
also socially responsible."]
[SOURCE: FCC]
(http://www.fcc.gov/Speeches/Kennard/Statements/stwek965.html)

CITING 'WHITEWASH,' NAACP REAFFIRMS PLAN TO BOYCOTT MAJOR NETWORK
Issue: Television/Minorities
In an effort to promote greater diversity on network TV, NAACP leader Kweisi

Mfume reaffirmed his organization's plan to boycott a major network from
Jan. 1 to the end of February sweeps. The civil rights group said that the
major networks have not done enough to improve diversity since complaints
were first made about the lack of minorities on this fall's prime-time
line-up. Mfume is not satisfied with the networks' "knee-jerk" response to
add minorities to the casts of several shows. "While we appreciate their
apparent genuine concern about this issue, only real results, in the form
of real change, will demonstrate their commitment," he said. The NAACP has
not yet identified which network will be targeted for the boycott.
[SOURCE: USAToday (3D), AUTHOR: Gary Levin]
(http://www.usatoday.com/hphoto.htm)

SPARKS FLY OVER CHANGES TO TV BILL
Issue: Satellite
The House and Senate are negotiating a compromise version of a long-awaited
bill that would allow satellite companies to provide subscribers with local
stations. Although satellite broadcasters have been fighting for such
legislation, they are livid about recent conditions added to the bill. The
provisions that most upset satellite providers include: a requirement that
they agree on rights fees before carrying a local station, a measure that
forces them to carry weak stations, and a limit of only being able to
provide
distant signals to 3% of homes in a market, even if additional homes cannot
get clear local signals. The National Association of Broadcasters and the
National Cable Association support the changes to the bill, while satellite
companies say they will "scale back" their plans to offer local TV signals
if this version of the bill is passed.
[SOURCE: USAToday (3B), AUTHOR: David Lieberman]
(http://www.usatoday.com/)

NEWS CORP PLAN TO EXPAND PAY-TELEVISION, INTERNET UNITS
Issue: Television/International
News Corp. Chairman Rupert Murdoch has sketched his plans to develop
Internet-related operations and expand the company's pay-television business
in Europe in the upcoming year. Murdoch described News Corp. as two
companies: one that is developing and extending its established and
profitable businesses, and the other investing in the new technology-driven
media. In light of recent mergers in the media industry, such as the one
proposed between CBS and Viacom, making competitors much bigger, Murdoch
said that "if we found great opportunities which wouldn't be dilutive, we
might make them if we felt they would give us extra strength." One potential
transaction involving News Corp.'s 40%-owned satellite-TV operator, British
Sky Broadcasting Group PLC, would expand its pay-TV interests in Europe by
purchasing a 25% stake in Premier World, a unit of Germany's Kirch Group AG.
Such a move would represent an investment of more than $1 billion. The talks
have been under way for several months and people familiar with the
situation said the conclusion of a deal isn't imminent although no major
obstacles remain. Asked what other markets News Corp. has its eye on,
Murdoch said the best business climate for expansion in the world today is
in the US, particularly for television.
[SOURCE: Wall Street Journal (A25), AUTHOR: S. Karene Witcher]
(http://interactive.wsj.com/articles/SB941656383745630741.htm)

COMPETITION/TELEPHONY

WISE ADVICE ON BELL ATLANTIC
Issue: Long Distance/Competition
[Editorial] The Department of Justice made the right call when it advised
the FCC to reject Bell Atlantic's bid to start providing long distance
service within its own region. Although Bell Atlantic has made great strides
in opening its local markets to competitors, the company continues to fail
in three areas: 1) It makes repeated mistakes switching customer wires from
its network to that of competitors, 2) it also makes repeated errors in
processing orders by competitors to rent its entire network rather than just
its wires, and 3) it often fails to provide competitors the equipment they
need to provide high-speed Internet access. The DOJ says that Bell companies
should be granted entry into long distance when they "cross the finish
line, not merely come within sight of it."
[SOURCE: New York Times (A26), AUTHOR: Editorial Staff]
(http://www.nytimes.com/yr/mo/day/editorial/04thu4.html)

SPRINT TO OFFER LOCAL PHONE SERVICE TO NEW YORK RESIDENTIAL CUSTOMERS
Issue: Telephony/Competition
Sprint, the nation's third-largest long-distance carrier, announced it will
offer local telephone service to residential customers in New York state
beginning this Sunday. The plan will involve Sprint leasing Bell Atlantic'
network to deliver local-calling services throughout much of the state. This
strategy will allow Sprint to reach millions of potential customers and
eventually provide a bundle of local, long-distance, wireless and Internet
services. Initially, Sprint will offer a new plan to be called Sprint Local
Unlimited. The plan will package unlimited local calls with Sprint's
nickel-a-minute regional toll and long-distance calls from 7 p.m. to 7 a.m.,
for a monthly rate of $35 a month. The plan also includes nickel-a-minute
calling cards to be used from 7 p.m. to 7 a.m. Customers may also choose
calling features, such as call waiting, caller ID and call forwarding as
part of their bundled package. Sprint's entrance into New York's local phone
market follows AT&T's and MCI WorldCom's. Sprint recently agreed to be
acquired by MCI WorldCom, the No. 2 long-distance company.
[SOURCE: Wall Street Journal]
http://interactive.wsj.com/articles/SB941667776370002050.htm)

PROMOTIONS FOR CUT-RATE LONG DISTANCE DRAW FIRE
Issue: Telephony/Competition
Long distance phone companies are facing scrutiny for what some customers
view as misleading or confusing promotions of discounted long-distance
services. The Federal Communications Commission has received nearly 3,000
complaints since January 1998 concerning the promotions of discounted
long-distance services from companies such as MCI and AT&T. The
FCC has launched an investigation into such practices, to culminate in a
joint hearing with the Federal Trade Commission on Thursday.
The hearing will consider new services including 10-10 numbers that let
callers "dial around" their regular carriers for cheaper rates and deeply
discounted calling plans. Regulators say that in the battle to sign up
customers, some phone companies employ ads that don't paint a clear or
complete picture of the offers. "Information that matters to consumers
needs to be disclosed in a clear and conspicuous way," says Eileen
Harrington, the FTC's director of marketing practices. "What we've found is
the ads are all wanting." One source of confusion is that big carriers like
MCI and AT&T, which enjoy a big share of the dial-around market, often
offer these long distance services under different brand names. The goal of
Thursday's forum is to bring industry and regulators together to improve
long-distance advertising. However, regulators say they are prepared to
take enforcement action if needed.
[SOURCE: Wall Street Journal (B1), AUTHOR: Kathy Chen]
(http://interactive.wsj.com/articles/SB941675215346352012.htm)
See Also:
PHONEY IMPRESSIONS? FEDERAL FORUM WILL SPOTLIGHT 'DIAL-AROUND' ADS
[SOURCE: Washington Post (E1), AUTHOR: Peter S. Goodman]
(http://www.washingtonpost.com/wp-srv/business/feed/a20295-1999nov4.htm)

MERGERS AND CONSOLIDATION IN COMMUNICATIONS INDUSTRY
Issue: Mergers
Senator John McCain (R-AZ), Chairman of the Committee on Commerce, Science,
and Transportation, today announced a hearing on mergers and consolidation
in the communications industry. The Full Committee hearing is scheduled for
Monday, November 8, at 9:30 a.m. in room 253 of the Russell Senate Office
Building. Senator McCain will preside. Witnesses will be announced later
this week.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/106-121.htm)

FAIRNESS IN TELECOMMUNICATIONS LICENSE TRANSFERS ACT OF 1999
Issue: Mergers
In testimony to House Judiciary Committee, FCC Chairman William Kennard said
the Commission has done good job evaluating "megamergers" with which it has
been deluged in recent months. FCC has responsibility to protect public
interest as part of its deliberations on licenses, he said, particularly in
mergers of "breathtaking size and scope" such as SBC-Ameritech. Chairman
Kennard indicated that without any conditions, that merger would have been
rejected. He views his job as advancing competition, goal that's different
from that of Department of Justice, adding: "I don't want my legacy at the
FCC to be that I presided over the reintegration of the Bell System."
[SOURCE: House of Representatives]
(http://www.house.gov/judiciary/1.htm)

ECOMMERCE

VAN GOGH PRINT OR ORIGINAL OIL: THE WEB HAS IT
Issue: Arts Online
A dozen or so Web sites now offer visitors the chance to buy art online.
Many of the sites have just started in the last few months.
PaintingsDirect.com allows users to search for paintings in ten different
ways including price, size, color and keyword like "flowers", "vase" or
"bouquet. Mandell writes: The sudden proliferation of these sites alarms
some people in the art world, who question not just what protections buyers
have, but whether what is offered by some of the sites can even be called
art. The sites can be divided into three categories: 1) mass-produced
posters, prints and reproductions, 2) sites trying to put the established
art world online, and 3) sites offering lower-priced original works by
unknown or emerging artists.
[SOURCE: New York Times (D1), AUTHOR: Jonathon Mandell]
(http://www.nytimes.com/library/tech/99/11/circuits/articles/04artt.html)

A CHILLY WELCOME FOR DIGITAL WALLETS
Issue: Ecommerce
You'd think a product that reduced the hassle of buying stuff online would
be a big hit. Not so for digital wallets, software that can automate
the act of payment. Jupiter Communications released a study earlier this
year that said 27% of Web shoppers give up on purchases when faced with
filling out online forms. So why don't shoppers and retailers love the idea
of digital wallets? For shoppers, there's the security issue. The biggest
impediment, however, has been a lack of a commonly accepted standard. Last
spring Microsoft, International Business Machines, Sun Microsystems, Compaq
and America Online (and through it, Netscape) joined with MasterCard, Visa
and American Express as well as several smaller companies to come up with
Electronic Commerce Modeling Language. ECML is not itself a wallet, nor is
it a credit account. It is computer coding -- invisible to ordinary users --
that tags the information typed by consumers into specific boxes at the time
they set up their "wallets." But still, e-retailers are not busting down the
door to use it: "Amazon has eight million customers and so far, to the best
of my knowledge, we've had minimal to no demand for wallets," said Ren

DIGITAL DIVIDE
Digital Divide Summit (NTIA)

INTERNET
AT&T Fights to Push to Open Cable Lines To Its Rivals (NYT)
US West to Invade Rival SBC's Territory with Internet Services (WSJ)
Online Contracts Fail In House (WP)
Capital Dispatch: Government Has More Questions for
Internet Board (CyberTimes)

TELEPHONY
U.S. Deals Potential Setback to Bell Atlantic Bid (WSJ)
Global Wireless Groups Move to Ease Travel Calling for Users (WSJ)
Motorola Chip to Connect Markets (ChiTrib)
Local Phone Competition (Senate)

ADVERTISING
How MTV Came to Be James Bond's Latest Ally (NYT)
Web Retailers Empty Wallets On Advertising (NYT)
Shopping for Presence Online (WP)

DIGITAL DIVIDE

DIGITAL DIVIDE SUMMIT
Issue: Digital Divide
On December 9, 1999, the Secretary of Commerce will host a Digital Divide
Summit, focused on expanding access to information technologies for
underserved populations and areas. Secretary Daley will lead the dialogue
among participants from the Federal Government, technology industry, civil
rights and non-profit communities, grassroot community organizations, and
the general public. Participants will examine existing public and
private initiatives aimed at closing the technology gap and will discuss how
to expand upon and coordinate these efforts. Closing the digital divide is
an essential part of President Clinton's New Markets Initiative, which seeks
to bring America's prosperity to economically-underserved areas.
The summit will be held at the Department of Commerce and will include an
address by Secretary Daley; a roundtable discussion with representatives
from the public and private sectors; and six breakout sessions. The topics
of these smaller sessions include Technology and Economic Development in
Underserved Areas; Sustainable Public Access Points; Lowering Barriers to
Access through New Product Development; Marketing to and Content for
Underserved Populations; Rural Communities -- Targeted Solutions; and
Workforce Development -- Training and Education.
For further information, contact Jeffrey Joyner, National Telecommunications
and Information Administration, U.S. Department of Commerce, 1401
Constitution Avenue, NW, Room 4713, Washington DC 20230; telephone (202)
482-1816; facsimile (202) 501-8013; or electronic mail
digitaldivide( at )ntia.doc.gov.
[SOURCE: NTIA]
(http://www.ntia.doc.gov/ntiahome/digitaldivide/summit/)
Register online at
(http://www.ntia.doc.gov/ntiahome/digitaldivide/summit/register.html)

INTERNET
AT&T FIGHTS TO PUSH TO OPEN CABLE LINES TO ITS RIVALS
Issue: Broadband
AT&T argued before a Federal appeals court yesterday that Portland exceeded
its authority when it tried to force the cable company to open its cable
systems to rival Internet service providers. The city and county are arguing
that high-speed Internet access over cable lines should be opened to
competition -- as long distance service is over telephone lines. Under
Portland's plan, AT&T would be compensated by the competitors. The judges
surprised both sides by asking whether the lines were a cable service
anymore. "If we decide that this is a telecommunications service or
facility, either one, this case is over, is it not?" asked one judge on the
three judge panel. The systems would be regulated federally then.
[SOURCE: New York Times (A20), AUTHOR: Sam Howe Verhovek]
(http://www.nytimes.com/)
See Also
ARGUMENTS HEARD IN CASE ON AT&T, INTERNET ACCESS
[SOURCE: Wall Street Journal, (B8), AUTHOR: Kathy Chen]
(http://interactive.wsj.com/articles/SB941484574788891939.htm)

US WEST TO INVADE RIVAL SBC'S TERRITORY WITH INTERNET SERVICES
Issue: Internet/Competition
Today, US West is expected to unveil plans to begin to compete with rival
SBC Communications' early next year with its high-speed Internet services.
US West is expected to begin offering digital subscriber line (DSL) services
to business customers in Sacramento. DSL technology boosts the capacity of
traditional copper telephone lines and US West said it plans initially to
provide high-speed Internet service, Internet access, e-commerce solutions
and long-distance calling. Joseph Zell, president of US West's
data-networking unit, said the company plans to use the existing facilities
of proposed merger partner Qwest Communications, a long-distance operator
that has fiber-optic networks and other operations in California. Qwest and
US West have said they will begin offering high-speed Internet services in
25 markets outside US West territory.
[SOURCE: Wall Street Journal, (B8), AUTHOR: Staff Reporter]
(http://interactive.wsj.com/articles/SB941500017382013163.htm)

ONLINE CONTRACTS FAIL IN HOUSE
Issue: Internet Regulation
A controversial bill that would have given electronic signatures the same
legal weight as their pen-and paper counter parts was narrowly defeated in
the House yesterday. Rep. Thomas J. Bliley (R-VA), sponsor of the
legislation, described it as "one of the most important high-technology
votes that this Congress will undertake." Consumer advocates feared the
bill would undercut federal and state consumer protections by allowing
banks and insurance companies to deliver important legal notices
electronically. Margot Saunders, of the National Consumer Law Center, said
the legislation could permit business to trick consumers into "clicking
away their rights" to receive important information. A similar bill is
currently pending action in the Senate.
[SOURCE: Washington Post (E4), AUTHOR: Joh Schwartz]
(http://www.washingtonpost.com/wp-srv/business/feed/a8417-1999nov2.htm)

CAPITAL DISPATCH: GOVERNMENT HAS MORE QUESTIONS FOR INTERNET BOARD
Issue: Internet Regulation
A strongly worded letter from the Small Business Administration (SBA) to
Esther Dyson, interim chairman of the Internet Corporation for Assigned
Names and Numbers (ICANN) raises concerns that de facto barriers are being
erected to the participation of small businesses and individuals in the
ICANN decision-making process. SBA has asked ICANN to adopt procedures
mandating better public notification of its proposed policies and longer
periods for public comment on those proposals before they are voted on by
the board.
In related news, the Markle Foundation is expected to announce a $200,000
grant to ICANN to help build an international membership base of individual
Internet users, which will then elect half of ICANN's 18 board members.
[SOURCE: CyberTimes, AUTHOR: Jeri Clausing (jeri( at )nytimes.com)]
(http://www.nytimes.com/library/tech/99/11/cyber/capital/02capital.html)

TELEPHONY

U.S. DEALS POTENTIAL SETBACK TO BELL ATLANTIC BID
Issue: Long Distance
Many analysts believed that the Justice Department was going to endorse the
application of Bell Atlantic to offer long distance in New York, but that
did not happen. Baby Bell companies have been prohibited from offering long
distance for many years and the only way the companies can provide the
service is if they prove to the Justice Department and the Federal
Communications Commission that they have opened up their local lines to
competition. The Justice Department says Bell Atlantic needs to further
open its network to local rivals. In yesterday's filing, the Justice
Department said Bell Atlantic should show that it is providing adequate
access to the "local loop" lines that connect consumers to the Bell
Atlantic network. It also said Bell Atlantic's system for handling orders
from rivals is excessively prone to error and delay. Joel Klein, assistant
attorney general for antitrust, said, "These problems cannot be ignored and
must be resolved if we want consumers to receive the full
benefits of competition." Bell Atlantic was quick to point out that the
Justice Department did not reject the application and a spokesman says Bell
Atlantic will address the Justice Department's concerns.
[SOURCE: Wall Street Journal, (B23), AUTHOR: Stephanie Mehta & John Wilke]
(www.wsj.com)
See Also:
SETBACK FOR BELL ATLANTIC IN DRIVE FOR LONG DISTANCE
[SOURCE: New York Times (C2), AUTHOR: Seth Schiesel]
(http://www.nytimes.com/yr/mo/day/news/financial/bell-longdistance.html)

GLOBAL WIRELESS GROUPS MOVE TO EASE TRAVEL CALLING FOR USERS
Issue: Wireless
The two largest wireless telephone consortiums, GSM Association and the
Universal Wireless Communications (UWCC), have agreed on an international
pact that eventually could allow about 290 million cellular phone
subscribers to use their phones almost anywhere they travel. The consortiums
represent two of the three incompatible digital-wireless standards used in
the U.S. Members of the GSM Association use the global standard for mobile
communications (GSM), which is the single standard in Europe and has an
estimated 220 million cellular customers worldwide. The UWCC represents
companies such as AT&T that use the time division multiple access standard
(TDMA) and those operators serve about 70 million users. The third standard
in wireless, code division multiple access (CDMA), is used by companies such
as Sprint and has 35 million users worldwide -- but is not part of the pact.
This new pact will allow customers whose phones are based on the GSM or TDMA
standards to make and receive calls from country to country. Customers will
need a new multinetwork phone to take advantage of the agreement and phone
networks will need to reach roaming agreements to enable billing of these
calls. The pact will eventually enable travelers to use one phone -- and
one phone number just about everywhere.
[SOURCE: Wall Street Journal, AUTHOR: Nicole Harris]
(http://interactive.wsj.com/articles/SB941499320902000891.htm)

MOTOROLA CHIP TO CONNECT MARKETS
Issue: Wireless
Yesterday Motorola announced a technological breakthrough that will allow a
single computer chip to handle a variety of operating technologies working
on disparate radio frequencies. Wireless service providers expect the
development to spawn new services and drive down prices. "I've already
called over to Motorola to get more information," said US Cellular's chief
executive Donald Nelson. "With the capability they're talking about, I can
offer customers new packages for regional calling, nationwide calling and
even international roaming. When you put all these things into a single
phone, it drives down the costs for everyone."
[SOURCE: Chicago Tribune (Sec 3, p.1), AUTHOR: Jon Van & Rob Kaiser]
(http://chicagotribune.com/business/printedition/article/0,2669,SAV-99110202
66,FF.html)

LOCAL PHONE COMPETITION
Issue: Competition
Senator John McCain (R-AZ), Chairman of the Committee on Commerce, Science,
and Transportation, and Senator Conrad Burns (R-MT), Chairman of the
Communications Subcommittee, announced a hearing on local phone competition.
Members will examine how best to increase consumer choice in local telephone
markets. The Full Committee hearing will be on Thursday, November 4, at 9:30
a.m. in room 253 of the Russell Senate Office Building. Senator Burns will
preside. Witnesses will be announced at a later time.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/106-119.htm)

ADVERTISING

HOW MTV CAME TO BE JAMES BOND'S LATEST ALLY
Issue: Advertising
MTV viewers are going to see a lot of James Bond over the next few weeks.
Through an arrangement by Metro-Goldwyn-Mayer and MTV's parent, Viacom,
"The World is Not Enough" will be the centerpiece of some 100 hours of
programming on MTV channels worldwide. The alliance and the programming are
aimed at building a more youthful audience for the Bond movie franchise. MCM
will pay much of the programming costs for the MTV programming. The film
will open worldwide within a two week window (Nov 19 at a theater near you).
[SOURCE: New York Times (C1), AUTHOR: Bill Carter]
(http://www.nytimes.com/yr/mo/day/news/financial/mtv-mgm-adcol.html)

WEB RETAILERS EMPTY WALLETS ON ADVERTISING
Issue: Internet Economy
Some ".com" companies are betting the farm on the next eight weeks. "Not
every company is going to survive this Christmas," said Send.com chief
executive Michael Lannon. "We are treating the next eight weeks like an
election campaign. Both we and our investors believe that customers are
going to vote on who the leading gift site is, and only one candidate wins."
Send.com, for example, has committed $20 million for television advertising
even though the Internet gift site has raised on $10 million in venture
capital financing. Send.com has no profits and negligible revenue. For all
of 1998, Amazon.com spent $17 million on TV ads; it will triple holiday
marketing to more than $100 million. Analysts think that in a crowded
market, these companies will not be best served by their expensive race to
get their names in front of consumers.
[SOURCE: New York Times (A1), AUTHOR: Leslie Kaufman]
(http://www.nytimes.com/library/tech/99/11/biztech/articles/02net.html)

SHOPPING FOR PRESENCE ONLINE
Issue: E-Commerce
Jack Staff, chief economist for Zona Research, predicts that this
"Christmas season is going to be the year of the woman." Staff is referring
to the explosive growth of women shoppers on the Internet that is expected
to be especially prominent this holiday season. While white males made up
over 75% percent of Internet users just three years ago, Jupiter
Communications expects that the number of women will equal the number of
men online by next year. "We are in this huge transition in which women are
becoming the dominant force on the Web," explains Edward LaHood, chairman
of Beautyjungle.com. As more women bring their buying power online, Web
retailers are increasingly conscious of the need of female buyers.
[SOURCE: Washington Post (A1), AUTHOR: Stephanie Stoughton and Leslie Walker]
(http://www.washingtonpost.com/wp-dyn/politics/A7109-1999Nov1.html)

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Goodnight, Sweetness.