MERGERS/TELEPHONY
MCI-Sprint Deal Gets Scrutinized By Regulators for Potential Impact
(WSJ)
Mannesmann Rejects $106-Billion Bid From Vodafone (NYT)
Phone Companies Expect Wireless To Usher In the Telecom Future (WSJ)
INTERNET
Inner-City Residents Often More Apt To Shop Online (SJM)
Lobbyist Turns to Internet to Influence Policy Makers (NYT)
Web Programs Can Offer Insight Into Customers (USA)
Web Finally Opens Door To New Ways of Buying Ad Space (USA)
U.S. Internet Firms Must Hustle To Catch Up in European Market (WSJ)
Digital Video: Moviemaking Magic Or More Info Smog (USA)
POLICYMAKERS
Senate Clears Committee Nominations (Senate)
ANTITRUST
What to Do About Microsoft? Antitrust Experts Offer Opinions (NYT)
MERGERS/TELEPHONY
MCI-SPRINT DEAL GETS SCRUTINIZED BY REGULATORS FOR POTENTIAL IMPACT
Issue: Merger
The Federal Communications Commission and Justice Department are taking a
hard look at the possible effects on consumers of MCI's planned $115 billion
buyout of Sprint. Last month, the regulators cited the companies overlapping
Internet units as an antitrust problem, indicating that a sale of these
assets would likely be required to win approval. In statements over the
weekend, the Justice Department and FCC said they have yet to make a
decision on the deal. MCI and Sprint are expected to apply with the FCC this
week, and an FCC official said "it's too early to say" what the agency might
do. A Justice Department spokeswoman said the agency "is not leaning one way
or the other on this transaction." Complicating the review of the merger are
rapid changes in the long-distance market with hundreds of new consumer
long-distance companies in the market and the expected entry of the
Bell companies into long distance market. But despite those new players in
the long distance game, FCC Chairman William Kennard recently called the
deal a "surrender" in a price war that has brought down long-distance rates.
An FCC official said the agency will weigh such issues as the possibility of
delaying approval of the merger until the Baby Bells get entry into the
long-distance market. An MCI official says that the fast growth of new
networks, the willingness of consumers to try non-brand-name services, and
the imminent entry of the Bells all show "there will be a continuation of
competitiveness in the long-distance market." Neither agency is expected to
announce a decision on the deal until well into next year.
[SOURCE: Wall Street Journal Interactive, AUTHOR: Kathy Chen]
(http://interactive.wsj.com/articles/SB942621055479842106.htm)
MANNESMANN REJECTS $106-BILLION BID FROM VODAFONE
Issue: Mergers
Mannesmann A.G., the German telecommunications giant, rejected a $106.4
billion friendly takeover offer made on Sunday by Vodafone Airtouch of
Britain. Klaus Esser, the chief executive of Mannesmann, dismissed the
offer as too low, potentially setting into motion a battle that could
attract other suitors that have been involved in preliminary talks,
including American companies like MCI Worldcom, SBC and Bell Atlantic. "We
cannot recommend to the Mannesmann shareholders to lose the future growth
potential they own," Esser said in a statement. "I'm fairly certain that
the hostile takeover offer from Vodafone is headed for failure," he was
quoted as saying in the newspaper Die Welt. Sources close to Mannesmann
have noted that the two companies have very different strategies.
Vodafone's strategy is based in building wireless networks, while Mannesmann
has focused on a combination strategy that includes wire-line networks, data
networks and wireless networks.
[SOURCE: New York Times, AUTHOR: Andrew Ross Sorkin With Alan Cowell]
(http://www.nytimes.com/yr/mo/day/news/financial/phone-deal.html)
See also:
MOBIL PHONE RIVAL SNUBS BUYOUT BUD BY VODAPHONE
[SOURCE: Washington Post (A12), AUTHOR:Anne Swardson]
(http://washingtonpost.com/wp-srv/WPlate/1999-11/15/053l-111599-idx.html)
PHONE COMPANIES EXPECT WIRELESS TO USHER IN THE TELECOM FUTURE
Issue: Wireless
The world's largest phone companies are scooping up wireless properties in a
bid to become truly global, and position themselves for the next generation of
telecommunications. The idea that dominates the telecom environment is the
that wireless networks will someday handle all traditional voice telephone
calls, as many Europeans and some Americans already use their
wireless phones as their only telephone. As a result, telephone companies
are assembling wireless networks that allow customers to use their phones
anytime, anywhere. Bell Atlantic, for example, earlier this year forged an
$80 billion joint venture with Vodafone to combine their domestic wireless
assets, creating a near-nationwide footprint in the U.S. The venture will
allow consumers in the U.S. to take their wireless phones from city to city
without paying extra fees for "roaming" onto another network. Companies such
as AT&T are also trying to make deals to be able to roam globally. Wireless
operators are seeing monthly revenue rise as customers use their wireless
phones for more of their routine phone calls and they are winning new
customers
with flat-rate service plans. Wireless operators also have the advantage of
being able to
blanket major markets in a matter of months, instead of spending years
digging up streets.
But wireless operators will soon face bigger challenges: integrating
European and
American networks, which operate on different standards, and U.S. carriers
are far
behind Europe and Japan, as U.S. operators have just begun to introduce
wireless
e-mail and limited Internet access on a new generation on phones.
[SOURCE: Wall Street Journal, (A6), AUTHOR: Stephanie N. Mehta]
(http://interactive.wsj.com/articles/SB942620943355819772.htm)
INTERNET
INNER-CITY RESIDENTS OFTEN MORE APT TO SHOP ONLINE
Issue: E-commerce
PricewaterhouseCoopers is expected to release a study today conducted with
the Initiative for a Competitive Inner City, a Boston-based nonprofit group.
It shows inner-city residents with access to computers and the Internet use
the Web as often, and sometimes more frequently, as the general U.S.
population.
The Internet is an easy way for these shoppers to get goods and services
they can't find in their own neighborhoods. "Bricks-and-mortar retailers
have virtually ignored the inner cities, so it is natural that consumers
there would look for other places to shop," said Carl Steidtmann, chief
retail economist at PricewaterhouseCoopers. The study of 1,159 inner-city
households was done by mail in fall of 1998, and the results were compared
with an existing PricewaterhouseCoopers database of shoppers nationwide. The
study targeted urban areas where the residents have a median household
income of at least 25% less than the city average, a poverty rate at least
50% higher than the city average and/or unemployment of at least 30% above
the city average. Consumers in America's inner cities have more than $85
billion in annual retail spending power, but their demand for merchandise
and services is unmet. As a result, many inner-city shoppers turn to
catalogs. They buy on average more through catalogs than the general U.S.
population, according to ICIC. The study also found 30% of inner-city
shoppers have a personal computer at home, compared with 50% in the general
population. Twenty-four percent have access to the Internet at home, work or
school, compared with 41% of all U.S. shoppers. Those that do have Web
access on average use the Internet with the same frequency as most U.S.
shoppers. There are PCs now selling for less than $500 and many technology
companies and non-profit groups are working to get computers into urban
areas and teach residents how to use PCs and the Internet. "There is a
poverty perception in corporate America about these markets," said Darien
Dash, chief executive of DME Interactive Holdings, Inc., a multimedia and
consulting firm that helps companies target minorities on the Internet.
"People have traditionally underestimated the urban market's buying power
and made assumptions about the market, based on household incomes, etc."
[SOURCE: San Jose Mercury, AUTHOR: Associated Press]
(http://www.sjmercury.com/svtech/news/breaking/merc/docs/014269.htm)
LOBBYIST TURNS TO INTERNET TO INFLUENCE POLICY MAKERS
Issue: Political Discourse/ Internet
Washington lobbyists are begging to use the Internet as a tool for
influencing key decision-makers. The lobbyists for the satellite company
PanAmSat, for example, have created an online briefing book aimed at busy
congressional aids. The site is augmented by e-mail updates after each
congressional action that are subtly worded to reflect the perspective of
PanAmSat. Sheila Krumholz, who tracks lobbying for the Center for
Responsive Politics, a watchdog group, described the Internet lobbying
tactic as "a frugal and public-minded thing to do." Rchard Cook, who leads
PanAmSat's online lobbying campaign, said the low-cost method would "enable
some fairly small organizations to do something innovative and catch up
with the well-financed organizations."
[SOURCE: New York Times (C5), AUTHOR: Rebecca Fairley Raney]
(http://www.nytimes.com/library/tech/99/11/biztech/articles/15lobb.html)
WEB PROGRAM CAN OFFER INSIGHT INTO CUSTOMERS
Issue: Advertising
Almost everything Internet users do on a site can be used to target what
they see online later. Web sites today can morph as users surf,
reconfiguring pages and content to suit the perceived interests of the user.
An anonymous profile of a user's Web surfing built up while they are logged
online can be used to ensure they don't see the same ad several times and
that they see ads for things they're likely to buy. The big trend is going
to be translating that information gathered in cyberspace into uses in other
media. The personalization process requires that advertisers know who users
are and what they want. This requires that advertisers know something
meaningful about the user and use the knowledge for the customer's benefit
rather than the company's. Additionally, personalization is useless unless
markets are segmented enough so that they're meaningful to the individual.
One fundamental problem of personalization, according to advertisers, is
that it's difficult to link what a user did across many Web sites.
Personalization favors large companies with access to large databases over
small ones with small databases.
[SOURCE: USA Today (4E), AUTHOR: Elizabeth Weise]
(http://www.usatoday.com/life/cyber/bonus/1199/cb011.htm)
WEB FINALLY OPENS DOOR TO NEW WAYS OF BUYING AD SPACE
Issue: Advertising
Despite advances in technology the world of media advertising has not
changed much in the last 50 years. However, the Internet economy is now
starting to cause a fundamental shift in the way media are bought and sold.
Companies like Adauction.com, AdOutlet.com and BuyMedia.com are allowing
media buyers to go online and purchase ad space -- on billboards, Web sites
or in print, TV and radio -- automatically, without going through a
salesperson. The new systems that have cropped up to replicate old media
sales systems come in a variety of forms. The "pure auction format" which
Adauction pioneered for buying online media. So far, only billboards seem
to be interested in this format because billboards are unique properties
whose value fluctuates with market conditions. The "modified open-market
model" espoused by AdOutlet, differs from the auction model in that it
allows media buyers to buy time or space whenever they want to rather than
forcing them to wait until a particular auction period. The "Reverse
auction model" focuses on the media buyer instead of the seller. Using this
model, an agency figures out a media plan for a client, then fills out a
form for the type of package it wants. The agency puts the request out for
bids, and the media outlets that want the contract quote a price. A lot of
agency media buyers are rooting for the automated services to win because
clients just want the media, not the schmooze, that go with it.
[SOURCE: USA Today (12E), AUTHOR: Greg Farrell]
(http://www.usatoday.com/life/cyber/bonus/1199/cb001.htm)
U.S. INTERNET FIRMS MUST HUSTLE TO CATCH UP IN EUROPEAN MARKET
Issue: International
They may be big shots in the U.S., but Internet companies do not control
Europe, the world's second-largest Internet market. Companies including
eBay, Amazon.com, and AOL are finding themselves playing catch-up with the
locals in the early rounds. "Europe really seems to stretch the brains of
the U.S. companies," says David Clayton, head of research for Credit Suisse
First Boston in London. Many large U.S. Internet companies are little more
than start-ups in Europe, contending with huge domestic growth and
confronting plenty of domestic competition. Europe, with its wealth of
customs and cultures, is a fragmented market and will be difficult for
anyone to conquer. eBay's supposed Anglo-centric Web site offered little more
to locals than the U.S. version: few unique offerings and everything marked
in U.S. prices. While the company has since remarked its goods in local
currency, it concedes it may have alienated some British customers. eBay is
clearly being given a run by some of its competitors such as QXL.com PLC of
Britain, which began auction sales in late 1997 and now offers language and
currency specific sites in five European countries. In Britain, AOL lags far
behind upstart Freeserve PLC. AOL was clearly confused by local
telecommunication price structures, which charge users by the minute for
local calls -- very different from the flat-rate price scheme in the U.S.
Amazon
took so long to reach Europe with its musical offerings, it gave their own
local
companies time to jump into the market and establish themselves. Amazon.com
Chief Executive Jeff Bezos said, "It's a complex endeavor, setting up
operations
outside of your home country."
[SOURCE: Wall Street Journal, (A25), AUTHOR: Christopher Cooper and
Stephanie Gruner]
(http://interactive.wsj.com/articles/SB942616235571300159.htm)
DIGITAL VIDEO: MOVIEMAKING MAGIC OR MORE INFO SMOG
Issue: InfoTech
[Op-ed] The Digital Video Conference and Expo has grown into a mass
gathering of people eager to make movies cheaply - -full-length features for
$10,000 or programs good enough for television broadcast for $3,000. "The
story is familiar virtually everywhere else in the economy: Once-expensive
technology that was formally the sole province of well-capitalized
corporations has been democratized by the power of the silicon chip and
personal computer. In this case, the democratizing tools are the digital
camcorder and the editing suites that fit handily on a computer hard
drive." The digital video revolution can let anyone with a few thousand
dollars set up a movie studio and broadcast network from their home without
going through the studio distribution channels. It can be sent directly
over the Internet. In the future, cameras will continue to get better, Web
connections will get faster, digital projectors will be able to blow up
digital video movies so they are as large as theater films. All this will
serve to ignite an explosion of content and an end to the studios' existing
stranglehold on distribution. One concern remains over the quality of
material that will be produced. "The Internet already amply demonstrates
that just publishing material is no guarantee against it being nonsense or
downright bad. The new video-laden world may be even more replete with
garbage, because it is easier to press a camcorder's record button than to
create text for a Web page. We can seize films for ourselves, but unless we
learn how to tell a story with a camera, the info smog will just grow denser."
[SOURCE: USA Today (29A), AUTHOR: Ted C. Fishman, writes for Playboy and
Harper's magazines and is a member of USA TODAY's board of contributors.]
(http://www.usatoday.com/news/comment/ncguest.htm)
POLICYMAKERS
SENATE CLEARS COMMITTEE NOMINATIONS
Issue: Policymakers
Senator John McCain (R-AZ), Chairman of the Committee on Commerce, Science,
and Transportation, announced that the Senate approved the following
nominations by unanimous consent: Nomination of Thomas Leary to be a
Commissioner at the Federal Trade Commission; Nomination of Gregory Rohde to
be Assistant Secretary of Commerce for Communication and Information,
Department of Commerce; Nomination of Cheryl Shavers to be Under Secretary
of Commerce for Technology, Department of Commerce; and Nomination of Kelly
H. Carnes to be Assistant Secretary of Commerce for Technology Policy,
Department of Commerce.
[SOURCE: US Senate]
(http://www.senate.gov/~commerce/press/106-125.htm)
ANTITRUST
WHAT TO DO ABOUT MICROSOFT? ANTITRUST EXPERTS OFFER OPINIONS
Issue: Antitrust
Groups of experts from universities around the country are preparing
recommendations for the government as the Justice Department and 19 states
prepare for the penalty phase of the Microsoft antitrust trial early next
year. The group preparing recommendations for the Justice Department is
likely to call for changes that would restructure Microsoft or its products
in some way. Herbert Hovenkamp, a law professor at the University of Iowa
and a consultant working for the states has said in an interview, "If the
findings show significant abuse of monopoly power, then the appropriate
remedy is to break up the monopoly -- not to hobble the company or try to
regulate it." The New York Times interviewed five other academic
authorities or former government officials -- who are not attached to
either Microsoft or the government about what remedies they would choose,
if he were given the power to impose a solution., including: Nicholas
Economides, professor of economics, New York University; William Baer,
former director, Bureau of Compliance, Federal Trade Commission; Robert
Hall, economist, Stanford University; Robert Litan, director of economic
studies, Brookings Institution; and Steven Salop, professor of economics
and law, Georgetown University. For summaries of the recommendations see
full article.
[SOURCE: New York Times (C1), AUTHOR: Joel Brinkley]
(http://www.nytimes.com/library/tech/99/11/biztech/articles/15soft.html)
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