DIGITAL DIVIDE
Survey of 100 Community Technology Centers (NTIA)
CABLE
Dispute Centers On Control(USA)
Digital Future Up For Grabs In Cable Battle (NYT)
Don't Touch That Demographic! (WP)
MERGERS
FCC Struggles With Knotty Legal Issue In the Bell Atlantic-GTE
Merger Deal (WSJ)
Gannett Boosts Bid to $702 Million For U.K.'s
News Communications (WSJ)
Spanish Government, Shareholders Thwart Telefonica's Bid for
KPN (WSJ)
FCC's Role in Merger Reviews (NTIA)
INTELLECTUAL PROPERTY
The Digital Millennium Copyright Act (NTIA)
PHILANTHROPY
Serving Self While Serving Others (NYT)
DIGITAL DIVIDE
SURVEY OF 100 COMMUNITY TECHNOLOGY CENTERS
Issue: Digital Divide
From Press Release: Commerce Secretary William M. Daley announced the award
of a $100,450 contract to the Virginia Polytechnic Institute in Blacksburg,
Va., for a survey of 100 Community Technology Centers (CTCs), a major
component in public/private initiatives aimed at closing the nation's
digital divide. Daley said the survey will focus on the CTCs' information
technology resources, factors impeding the creation of new technology
centers, the integration of CTCs into economically distressed neighborhoods,
methods for increasing access to the CTCs, and ways for improving their
effectiveness. The Contract was awarded by the Commerce Department's
National Telecommunications and Information Administration (NTIA) under its
Technology Opportunities Program (TOP).
[SOURCE: NTIA]
(http://www.ntia.doc.gov/ntiahome/press/ctcpr50400.htm)
CABLE
DISPUTE CENTERS ON CONTROL TIME WARNER, DISNEY SPAT A TURNING POINT
Issue: Cable
Following last week's spat between Time Warner and Disney -- which left 3.5
million of Time Warner's cable subscribers with out ABC for a day and a half
-- cable executives may have more difficulty convincing the public and
regulators that they really care about consumers. The chief quarrel between
the companies involved the Disney Channel, which Disney wants to become part
of an expanded basic service tear --like MTV and CNN -- available to nearly
all subscribers. The battle was simultaneously one of the last big fights of
the cable era and the opening battle of the broadband era. While the dispute
may have been similar to previous cable skirmishes, Time Warner and Disney
were perhaps more willing to jump into the ring because of the increased
stakes presented by rise of broadband competition. The lesson from last
week, may be that that bigness does matter -- possibly more than ever -- in
the age of broadband.
[SOURCE: USAToday (B2), AUTHOR: David Lieberman]
(http://www.usatoday.com/usatonline/20000508/2238111s.htm)
DIGITAL FUTURE UP FOR GRABS IN CABLE BATTLE
Issue: Cable/Internet
"This [Disney v. Time Warner] is one of the first major battles in which the
parties are talking about what the rules of the road will be in the digital
future," said Blair Levin, a former Federal Communications Commission
official. "Broadcasting is heavily regulated, but the government has a
hands-off approach to the Internet. We don't know which will apply to
interactive television." Cable operators have been able to avoid paying for
broadcast network TV, but have given these networks a upperhand when they
launch new cable channels, a time when a producer is most vulnerable. The
structure of the new AOL Time Warner includes separate units for producing
and distributing content. Many argue that the trend of modern technology is
towards open models. But as we move towards interactive TV, who will have
the right to run the chat room that accompany's ABC's Monday Night Football
-- Disney or the cable operator [or NOW, for that matter]? Cable operators
argue that interactive television should be treated like new channels and
they should be able to decide what services they offer. Broadcast television
executives say the interactive services are just extensions of their
existing programs and should be carried by cable operators with no
additional payment. "In the old model, it was easy to know what everybody
did," said Saul Shapiro, chief executive of Gist, a company developing
interactive TV services. "The networks ran programs and inserted ads. And no
one messed with that. In the future, there will be a multiplicity of
voices."
[SOURCE: New York Times (C1), AUTHOR: Saul Hansel]
(http://www.nytimes.com/yr/mo/day/news/financial/disney-timewarner.html)
See Also:
RECONSTRUCTING THE GENESIS OF A BLUNDER
Just what was Time Warner (and Disney, for that matter) thinking during this
little exercise? Get a behind the scenes view of the battle royale.
[SOURCE: New York Times (C20), AUTHOR: Jim Rutenberg]
(http://www.nytimes.com/yr/mo/day/news/financial/timewarner-assess.html)
DON'T TOUCH THAT DEMOGRAPHIC!
Issue: Cable/Journalism
If your turned on MSNBC at 8 p.m. last week, you might have found programs
that dealt with child sexual abuse; mountain lions and coyotes that attack;
Mary Kay LeTourneau, the teacher who had sex with a teenage student; and
private eyes who catch cheating spouses. a program focused on sex violence.
A focus on sex and violence dominates "Special Edition," which airs Tuesday
through Thursday on the 8 p.m. spot, and Monday's "Crime Files". The
programming is part of an effort by the NBC-Microsoft efforts to reverse
falling prime-time ratings for all the cable news networks. Erik Sorenson,
MSNBC's vice president, says the programs deal with "real-life stories that
are compelling, fascinating and somewhat sensational--if we're choosing them
right, maybe frequently sensational... To a younger news viewer, that
generally is more appealing than institutional news that is incremental and
slow-moving." While not all viewers may be attracted to MSNBC's "celebrities
and tabloid" approach, Sorenson says MSNBC is doing well with the "more
upscale demographic" coveted by advertisers. "We care only about
25-to-54-year-olds, and we really don't care at all about households," he
says.
[SOURCE: Washington Post (C1), AUTHOR: Howard Kurtz]
(http://washingtonpost.com/wp-dyn/articles/A23857-2000May7.html)
MERGERS
FCC STRUGGLES WITH KNOTTY LEGAL ISSUE IN THE BELL ATLANTIC-GTE MERGER DEAL
Issue: Mergers
The Federal Communications Commission is fearful of setting a precedent with
the Bell Atlantic-GTE merger that will make its ownership and control rules
appear impotent. The issue with the merger is a section of the 1996
Telecommunications Act forbidding the Baby Bells to provide long-distance
voice or data service before opening their local markets to competition.
Congress hoped that the promise of long distance would provide an incentive
for the Baby Bells to loosen their monopoly grip on local markets. Bell
Atlantic has only been granted permission in New York state to provide long
distance. GTE, however, provides long-distance voice, as well as high-speed
data and Internet backbone services through its "Genuity" company. With
Genuity as a leader in the fast-growing data market, and one of the major
reasons behind the merger, Bell Atlantic is loath to sell Genuity outright
to comply with the Telecommunications Act. Instead, it has proposed keeping
only a 10% stake in Genuity, which is allowed by law. But a second part of
the proposal is that once the Bell Atlantic-GTE merged company (called
Verizon) wins long-distance approval in all its markets, its 10% stake in
Genuity would convert to 80%. The FCC isn't thrilled about approving a
proposal that appears to simply "park" Genuity stock for easy pickup later
once Verizon clears long-distance hurdles. Such a plan appears to enable
Bell Atlantic to evade regulatory controls meant to provide competition in
the market. Columbia Law School Prof. John C. Coffee, called the Genuity
plan a "sham transaction" meant to circumvent the FCC's authority, according
to a transcript of the session. The deal "is not a loophole, it's a
triumphal arch, and it's going to invite many more." As it stands now, the
FCC is ultimately expected to approve the merger, but requiring divestiture
of Genuity isn't out of the question.
[SOURCE: Wall Street Journal Interactive, AUTHOR: Mark Wigfield]
(http://interactive.wsj.com/articles/SB957736286182528759.htm)
GANNETT BOOSTS BID TO $702 MILLION FOR U.K.'S NEWS COMMUNICATIONS
Issue: Mergers
Gannett said it made a formal bid to buy British regional-newspaper
group News Communications & Media PLC for $702 million, representing its
latest step into the United Kingdom. The offer is higher than the one
Gannett made on Dec. 10, which News Communications rejected. Two British
companies, Johnston Press PLC and Trinity Mirror PLC, also have made offers
for Newscom, but a Gannett spokeswoman said the company doesn't anticipate
any hurdles for the deal. The acquisition would follow Gannett's $1.5
billion purchase in June of Newsquest PLC, another British
regional-newspaper publisher. Gannett's bid for Newscom followed the recent
approval of the U.K.'s Competition Commission allowing Gannett and the other
suitors to make formal offers. In addition to its recent U.K. newspaper
acquisitions, Gannett, through Newsquest, agreed in January to take a 10%
equity stake in the online-auction business of British Internet service
provider Freeserve PLC.
[SOURCE: Wall Street Journal Interactive, AUTHOR: Erin White and Charles
Goldsmith]
(http://interactive.wsj.com/articles/SB957554477587073054.htm)
SPANISH GOVERNMENT, SHAREHOLDERS THWART TELEFONICA'S BID FOR KPN
Issue: Mergers
The Spanish government, backed by two Spanish banks, thwarted the planned
$59.23 billion merger of Telefonica SA and KPN NV of the Netherlands. The
merger would have created Europe's fourth-largest telephone company. This is
not the first time a government has stepped in to stop a merger. Last year's
attempt by Deutsche Telekom AG to acquire Telecom Italia SpA fell apart
after the Italian government appeared to favor a rival bid from Olivetti
SpA. KPN Chairman Paul Smits claims that the deal fell apart because of
friction between Telefonica's chairman, Juan Villalonga, and the
government's Prime Minister Jose Maria Aznar. And while Mr. Smits doesn't
exclude the possibility of KPN and Telefonica reviving their merger talks
once Telefonica had sorted out its internal problems, he does warn that KPN,
which is engaged in talks with other major telecom players, including
Japan's NTT DoCoMo and BellSouth of the United States, won't wait for
Telefonica. "This was a beautiful deal yesterday, it will be a beautiful
deal tomorrow. But the world moves on. We are engaged in talks with other
strong partners and do not want to get involved in this kind of a mess."
[SOURCE: Wall Street Journal Interactive, AUTHOR: Carlta Vitzthum and James
Dorsey]
(http://interactive.wsj.com/articles/SB957543884109875423.htm)
FCC'S ROLE IN MERGER REVIEWS
Issue: Mergers
From Press Release: Commerce Secretary William M. Daley, in a May 4 letter
to congressional leaders, expressed concern about pending legislation that
would restrict the Federal Communications Commission's authority to review
mergers in the economically booming telecommunications industry. Numerous
bills pending in Congress seek to limit the FCC's role in approving mergers
either by limiting the amount of time the Commission has to approve a
merger, or by limiting the Commission's authority to impose conditions on
merger approvals. Consolidation in the telecommunications sector affect a
number of important public interest issues that are of serious concern to
the American public, Daley said. Such proposed restrictions as time limits
for merger reviews, would impinge on the FCC's ability to conduct a thorough
public interest analysis of complex issues, the Secretary said. [The letter
is available at the URL below]
[SOURCE: NTIA]
(http://www.ntia.doc.gov/ntiahome/press/merger50400.htm)
INTELLECTUAL PROPERTY
THE DIGITAL MILLENNIUM COPYRIGHT ACT
Issue: Intellectual Property
NTIA and the U.S. Copyright Office released the Joint Study of Section
1201(g) of The Digital Millennium Copyright Act. The DMCA seeks to advance
two goals: the protection of intellectual property rights in today's digital
environment and the promotion of continued growth and development of
electronic commerce. Section 1201(g) of the law implements the second
imperative by exempting from the new prohibition certain good faith
activities of circumvention when: (a) the person circumventing the
protection system lawfully obtained the encrypted copy of the work; (b)
circumvention is necessary to conduct the "encryption research;"(8) (c) the
person circumventing the protection system made a good faith effort to
obtain authorization from the copyright owner of a work protected by a
technological measure prior to the circumvention; and (d) such circumvention
does not constitute copyright infringement or a violation of any otherwise
applicable law.
[SOURCE: NTIA]
(http://www.ntia.doc.gov/reports/dmca/)
PHILANTHROPY
SERVING SELF WHILE SERVING OTHERS
Issue: Philanthropy
The Internal Revenue Service once tried to revoke the National Heritage
Foundation's tax-exempt status. Last year, Congress and the I.R.S. put a
stop to a charitable giving strategy promoted aggressively by Heritage's
J.T. Houk that critics said benefited donors more than recipients. Mr. Houk
rejects the idea that anyone ought to perform a charitable service for free
[what exactly makes it charitable then?] saying, "Volunteers give you dregs,
not dynamite. You get what you pay for." Donors who entrust money instead to
his Falls Church, Va., charity set up individual accounts that mimic
foundations at a fraction of the cost. In turn, they are eligible for
immediate tax deductions for their gifts and are encouraged to use the money
sitting in their accounts to pay salaries and expenses for themselves and
their families. Donors need not worry about the low pay charities offer,
says the pitch on the foundation's Web site, "We would strive to bring your
salary up to private industry standards." "It's like paying the Girl Scouts
to sell cookies," said Jack Shakely, president of the California Community
Foundation. "It's not illegal, but it just doesn't pass the 60-second smell
test." [See more at the URL below]
[SOURCE: New York Times (A16), AUTHOR: Reed Abelson]
(http://www.nytimes.com/yr/mo/day/news/financial/houk-controversy.html)
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