Merger Mania
WSJ: Party Line: The Battle for MCI Takes Another Twist
WSJ: GTE Bid Leaves Street Buzzing
WSJ: Baby Bells Remain Bystanders in Phone Takeover Wars
WP: Analysts Say if Money Talks MCI Will Snub Worldcom
WP: GTE Joins Bidding War For MCI
NYT: Anatomy of a Bid: Less From GTE May Mean More
NYT: GTE Joins Bidding For MCI, Offering $28 Billion In Cash
NYT: Lucent to Buy Internet Servicer
Arts
NYT: A Towering European Addition To the Skyline of Electronic Arts
Cable
WSJ: Why Microsoft Wants to Hook Into Cable TV
Internet
NYT: BMI Develops Robot to Monitor Online Music Sales
Internet Regulations
NYT: Ban Online Gambling? Australia Would Rather Tax It
Public Television
WP: Public TV's Distress Call
Universal Service
FCC: Third Report & Order on Universal Service, Schools, and Libraries
** Merger Mania **
Title: Party Line: The Battle for MCI Takes Another Twist
Source: Wall Street Journal (A1)
http://wsj.com/
Author: John Keller & Steven Lipin
Issue: Mergers
Description: WorldCom? That's last week's news. GTE has made an all-cash $28
billion offer to purchase MCI. GTE has been saying that it could make it
alone in the telecom wars even as other big mergers were announced. CEO
Charles Lee has changed the tune: "This is a great target opportunity. MCI
jump-starts our strategy. We can still go it alone, but with MCI, we can
move to where we wanted to be four to five years sooner." Bankers and
analysts will now have to figure out what bid for MCI is best: British
Telecom, WorldCom, or GTE.
Title: GTE Bid Leaves Street Buzzing
Source: Wall Street Journal (C1)
http://wsj.com/
Author: Susan Pullman
Issue: Mergers
Description: The race is on, analysts say, for telecoms to become
"vertically integrated;" to be able to offer not just local and long
distance service to residential and business customers, but Internet access
as well. The question is: Who will get there first? Analysts think that AT&T
is falling far behind: it has no local service strategy and no Internet
strategy. They think AT&T should have paired up with GTE which is now
bidding for a takeover of MCI.
Title: Baby Bells Remain Bystanders in Phone Takeover Wars
Source: Wall Street Journal (B4)
http://wsj.com/
Author: Leslie Cauley
Issue: Mergers/Telecommunications Regulation
Description: Another major development in the $170 billion phone industry
and once again the Baby Bells are on the sidelines watching. "It's not fair.
It's not right," groused a SBC executive in response to the GTE bid for MCI.
"We would love to be able to act totally on what we believe is best for our
company and our customers, rather than being restrained by restrictions,"
another Bell executive said. The local telephone companies are upset because
the FCC will not let them into in-region long distance.
Title: GTE Joins Bidding War For MCI
Source: Washington Post (A1)
http://www.washingtonpost.com/wp-srv/WPlate/1997-10/16/
Author: Mike Mills
Issue: Mergers
Description: MCI Corp. got another buy out proposal of $28 billion dollars
from GTE Corp. GTE offered $40 in hard cash for every MCI share in hopes of
quashing Worldcom's surprise bid of $30 billion in stock-only currency. GTE
is the country's largest provider of local telephone service and also
proposed creating a new local, long distance, and online superpower.
Analysts anticipate British Telecom, who made the initial bid, to drop out
of what can be termed an "80's style hostile takeover battle." "MCI has
cream-of-the-crop consumer and business customers," said Brian Adamik, an
analyst for the Boston-based Yankee Group. "That looks very attractive to GTE."
Title: Analysts Say if Money Talks MCI Will Snub Worldcom
Source: Washington Post (A15)
http://www.washingtonpost.com/wp-srv/WPlate/1997-10/16/
Author: Jerry Knight
Issue: Mergers
Description: Investment analysts are asking this question of the bidding war
that Worldcom, BT, and now GTE, have sparked around the aquisition of MCI:
Would you rather have cash in the bank to invest any way you like or own
stock in a company you don't know much about? GTE offered $28 billion, or
$40 in cash for every MCI share, in hopes of beating Worldcom's $30 billion
stock-as-currency bid. Investors would have to pay federal capital gains
taxes on profits immediately after selling MCI stock for cash. A swap of MCI
shares for Worldcom stock would be tax-free, but investors would have to pay
taxes sooner or later upon selling their Worldcom shares. Ivan Arteaga, an
analyst at Gabelli & Co., said, "Cash is cash. From an investor's
perspective, the cash is important even though you have a tax issue." GTE is
expected to come up with the cash by selling bonds or borrowing from banks.
Worldcom's shares are worth more right now than GTE's cash offer, but what
if Worldcom's stock falls?
Title: Anatomy of a Bid: Less From GTE May Mean More
Source: New York Times (D1, D21)
http://www.nytimes.com/yr/mo/day/business/index.map?271,168
Author: Floyd Norris
Issue: Mergers
Description: GTE, the latest company to make a bid for MCI, may be offering
the best overall proposal that MCI has seen to date. While Worldcom's bid
is higher in price, their offer is in the form of stock. This raises the
question of whether Worldcom's shares are fairly priced. "If they are
overpriced, then most MCI shareholders are likely to be disappointed in the
long term." With GTE's bid being offered in the form of cash, their proposal
is possibly better for MCI's shareholders as a group.
Title: GTE Joins Bidding For MCI, Offering $28 Billion In Cash
Source: New York Times (A1, D21)
http://www.nytimes.com/index.map?441,143
Author: Seth Schiesel
Issue: Mergers
Description: Yesterday, GTE, the nations third-largest local telephone
company, made an unsolicited bid to buy MCI for $28 billion in cash.
Outside of the financial side of the three offers they have received, MCI
must weigh the different sort of telecommunications that would be created
depending on whose proposal they decide to go with. If they agree to BT's
bid, their alliance would focus on serving large multi-national
corporations. If MCI goes with Worldcom's offer, they would be assisting
Worldcom in expanding their "core constituency of small and
medium-sized American business customers for local, long-distance and
Internet services." And if they decide to accept GTE's bid, MCI would be
helping GTE to increase their consumer clientele in the long-distance
service realm. According to Bryan Van Dussen, a telecommunications analyst
for the Yankee Group, a high-technology consulting firm in Boston,
"acquiring MCI would give an even larger near-term edge to GTE. GTE wants
to be a national player again, and, strategically, this obviously positions
them to achieve that." MCI did not comment other than saying that their
board would meet again in the near future to review their options.
(WHEW!!!)
Title: Lucent to Buy Internet Servicer
Source: New York Times (D7)
http://www.nytimes.com/yr/mo/day/news/financial/lucent.html
Author: Bloomburg News
Issue: Mergers
Description: Lucent Technologies Inc. announced yesterday that it would buy
Livingston Enterprises Inc., makers of remote-access concentrators, "which
are used by Internet service providers to link telephone lines into the
global computer network," for $650 million in stock. Their purchase moves
Lucent "into one of the fastest growing segments of the computer-networking
business."
** Arts **
Title: A Towering European Addition To the Skyline of Electronic Arts
Source: New York Times, CyberTimes
http://www.nytimes.com/library/cyber/mirapaul/101697mirapaul.html
Author: Matthew Mirapaul
Issue: Arts
Description: With more artists than ever using cutting-edge technology to
create their work, the Center for Art and Media Technology, in Karlsruhe,
Germany, will open their doors on Saturday as one of the best examples to
date of art institutions working to keep up with electronic culture. Called
the ZKM, short for Zentrum fur Kunst and Medientechnologie, its 1918
structure has been "completely reconfigured, renovated, wired and equipped
to provide abundant acreage for their already substantial and still growing
collections of electronic art, multimedia displays and virtual-reality
installations." This huge facility also contains "extensive research
facilities, a design school and a multimedia library." "What is special is
that ZKM tries to put new art into a context and a history. It is a brave
and bold move, and I think it will influence many people to move in this
direction." said interactive artist Lynn Hershman.
** Cable **
Title: Why Microsoft Wants to Hook Into Cable TV
Source: Wall Street Journal
http://wsj.com/ (B1)
Author: David Bank
Issue: Cable/Infrastructure
Description: Microsoft is willing to write some pretty big checks to make
sure its software runs cable TV Internet access. The company is negotiating
investing $1 billion in TCI, the nation's largest cable operator. Microsoft
has already invested $1 billion in Comcast Cable and purchased WebTV for
$425 million. The software giant wants to dominate interactive services to
the home just as it has dominated business-based personal computers. The
cable industry is weary of a Microsoft takeover and Oracle wants to take
advantage of that and get its software onto cable boxes.
** Internet **
Title: BMI Develops Robot to Monitor Online Music Sales
Source: New York Times, CyberTimes
http://www.nytimes.com/library/cyber/week/101697music.html
Author: David Bauder
Issue: Internet
Description: Whose big brother is watching who? In an effort to monitor
transmission and sales of music on the Internet, BMI, the music licensing
agency, announced yesterday that it has developed a "Web robot". Their
invention works as a "lightening-fast Web surfer to identify sites that use
music and how often computer users visit them." Potentially, the "Web
robot" can be used to "keep track of the most popular music bought or
transmitted on the Web, sort of a cyber top 10" as well as being a possible
precursor to messy copyright battles.
** Internet Regulation **
Title: Ban Online Gambling? Australia Would Rather Tax It
Source: New York Times, CyberTimes
http://www.nytimes.com/library/cyber/week/101697gambling.html
Author: Jeri Clausing
Issue: Internet
Description: "While American politicians are struggling to find a way to ban
or at least restrict online gambling, Australian lawmakers have drafted a
plan that would introduce legislation simultaneously to tax and regulate
online gambling." Brian Farrell, manager of gambling operation and auditing
with the Victorian Casinos and Gaming Authority in Melbourne said, "Over the
years, every time we have had trouble with illegal forms of gambling --
phone book gambling, unlicensed casinos -- what we've done is provide a
well-regulated alternative for people to access. That means the unlicensed
activity drops to a relatively low level of significance. That same theory
applies to the globalization of the Internet." Australia's approach is in
direct contrast with the United State's approach to online gambling. Jim
Haney, a spokesman for the National Association of Attorneys General
lobbying to ban Internet gambling in states that outlaw gambling, pointed
out that "Gambling is a unique enterprise in the United States in that we
have really allowed each state to set its own gambling policy. Internet
gambling upsets that scheme of local control and local decision making."
Haney added: "Certainly, it is difficult to enforce state and federal laws
when indeed you are dealing with an international communications system.
However, the people in Australia, to the extent that they are targeting the
citizens of Wisconsin, must comply with Wisconsin law. If they are
distributing child pornography to this state, they cannot expect to escape
prosecution for violating our gambling laws." (place your bets now...)
** Public Television **
Title: Public TV's Distress Call
Source: Washington Post (B9)
http://www.washingtonpost.com/wp-srv/WPlate/1997-10/16/
Author: Paul Farhi
Issue: Broadcast Budget Issues
Description: Public TV broadcasters have asked the gov't for $771 million
to help cover the cost of converting the stations to new digital
broadcasting technology. The convert to digital will offer stations the
potential to transmit multiple programs simultaneously. The FCC has set a
deadline of 2003 for public stations to make the switch. If they don't, they
could risk losing their right to use the airwaves, according to Bob Coonrod,
president of the Corporation for Public Broadcasting. With digital
broadcasting, public stations could run day long programs for preschoolers,
instructional shows for elementary school students, and job training shows
for adults all at once.
** Universal Service **
Title: Third Report & Order on Universal Service, Schools, and Libraries
Source: FCC
http://www.fcc.gov/Bureaus/Common_Carrier/Orders/1997/fcc97380.html
Issue: Universal Service
Description: "In this Order, we adopt a filing window period that begins on
the date that the Schools and Libraries Corporation and the Health Care
Corporation begin to receive applications for support. We also conclude that
the administrative corporations will determine the length of the window and
resolve other administrative issues necessary to implement our decision to
adopt a window filing period consistent with our guidance set forth below.
Therefore, we amend sections 54.507(e) and 54.623(c) of our rules to
implement this change. In addition, we delegate authority to the Chief,
Common Carrier Bureau to resolve unanticipated technical and operational
issues relating to the new universal service mechanisms that may arise in
the future."
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