DIGITAL DIVIDE
Significance of Digital Divide Between Whites,
Minorities May Be Zero (ChiTrib)
Cybertalk (WP)
INTERNET
FCC Releases Study On Internet (SJM)
ISPs, Cable Firms Battle Over Access (SJM)
A New Model For The Internet: Fees For Services (NYT)
US Counties Seek Sales Taxes On Goods Sold Over Net (SJM)
Ear Training: A Digital Music Primer (NYT)
Microsoft Set to Sell City Guides to Rival (CyberTimes)
Net Effect: Is Service Getting Too Personal? (WSJ)
New Service Provides Data on Internet Ads (NYT)
Can Merchants Buy Loyal Customers? (CyberTimes)
INTERNATIONAL
AOL Plans Free Net Service in Britain (WP)
Mexico's Reforma, Spanish Firm Plan Internet Venture (WSJ)
French-German Telecom Alliance Unravels, Beclouding Spring Deal (WSJ)
India's Policy Changes Are Designed to Help the Telecommunications
Sector (WSJ)
MERGERS
US West, Qwest Agree to Merge Operations (WP)
WIRELESS
Wireless Cable Carriers Finally Cash In (NYT)
As Americans Bond with Cellular Phones, More Fail to Connect (WSJ)
ON THE HILL THIS WEEK
House Commerce Agenda (House)
DIGITAL DIVIDE
SIGNIFICANCE OF DIGITAL DIVIDE BETWEEN WHITES, MINORITIES MAY BE ZERO
Issue: Digital Divide
Salkowski takes the Bob Dole -- "what health care problem?" -- approach to
the Digital Divide writing: "We blindly assume families with Internet
connections at home will produce happier, more capable children than those
forced to muddle through without one. But it's equally possible that
children who aren't surfing their evenings away have found a better way to
spend their time." He believes that a Digital Divide exists because only
white folks believe that it's a race [no pun intended]. The Internet is a
mixed blessing for families, Salkowski writes, offering kids the potential
to retrieve distant educational material -- but most of the kids he knows
are more interested in chats, playing online games and downloading music.
And the Internet brings potential problems like pornography, hate speech and
privacy concerns: "it's easy to see why parents might not want this
[policing] job themselves." The e-rate, anyway, will provide connections in
schools and libraries. Salkowski concludes: "I do know better than to assume
that people who don't share my passion for new technology are wrong -- or
worse yet, disadvantaged. The federal government would be wise to realize
that people who don't surf the Net aren't necessarily washed up."
[SOURCE: Chicago Tribune (Sec 4, p.5), AUTHOR: Joe Salkowski
(tribtech( at )tribune.com)]
(http://chicagotribune.com/business/printedition/article/0,2669,SAV-99071901
50,FF.html)
CYBERTALK
Issue: Digital Divide
[OP-ED] I was Netless in rural France for -- gasp! -- almost a week. Tiny
Lauzerte
is not an access point for any Internet service provider. But the humbling
part of the ordeal was that it put me in the category, however briefly, of
the Internet have-nots. As I was cursing the limits of fixed-line telephony,
the U.S. Commerce Department was reporting in great detail on what it calls
the "digital divide." The report, the third since 1995 to statistically
define who in the U.S. has Internet access, shows the divide for access from
home significantly widening between different racial and income groups. For
example, the gaps in Internet access between white and Hispanic households,
and between white and black households, are now more than 6 percentage
points larger than they were in 1994. Between 1997 and 1998, the access
difference between those at the highest and lowest educational levels
increased 25 percent, and the divide between those at the highest and lowest
income levels grew 29 percent. At the lowest income levels, Americans in
urban areas are more than twice as likely to have Internet access as those
earning the same income in rural areas, the report says. The Commerce
Department makes the case that "access to such tools is an important step to
ensure that our economy grows strongly and that in the future no one is left
behind. We should not only care, writes Commerce Secretary William Daley in
the report, but "we should be alarmed by this news." I believe access feeds
dreams that let us believe all is possible. And dreams and hopes for the
future are as nourishing and life-sustaining as our daily bread. "Hold fast
to dreams, for if dreams die, life is a broken-winged bird that cannot fly."
I learned that once as a child and rediscovered it, along with other poetry
by Langston Hughes, on the Internet from rural France.
[SOURCE: Washington Post (F23), AUTHOR: Victoria Shannon: vshannon( at )aol.com]
(http://www.washingtonpost.com/wp-srv/business/feed/a14408-1999jul19.htm)
INTERNET
FCC RELEASES STUDY ON INTERNET
Issue: Internet
Staff of the Federal Communication's Commission Office of Plans and Policy has
just released a study suggesting that the Internet's growth is in part due to
the FCC's hands-off approach to regulating it. As an example they say that the
FCC policy of exempting enhanced service providers from access charge has
helped to keep dial-up Internet access costs down. The working paper suggests
that the agency continue to keep regulation to a minimum, limiting regulatory
action to addressing anticompetitive behavior.
[SOURCE: San Jose Mercury News, AUTHOR: Kalpana Srinviasan]
(http://www.mercurycenter.com/svtech/news/breaking/ap/docs/656590l.htm)
ISPS, CABLE FIRMS BATTLE OVER ACCESS
Issue: Broadband
As several communities around the country consider whether or not to force
cable companies to open their high-speed networks to competitors, they are
besieged with high power lobbying efforts from both sides. The San Francisco
board of supervisors will soon decide if AT&T will have to give ISPs and phone
companies access to its cable lines once they are upgraded for high-speed
Internet connections. There is some concern that AT&T will never upgrade if
they are forced to give competitors access. Multnomah County (OR) and Broward
County (FL) are the only two communities that have passed "open access"
ordinances, both of which are being challenged in court. While FCC Chairman
William Kennard has urged local governments not too act, counties like San
Francisco will try to weed through the lobbying ploys and determine what is
best for local consumers.
[SOURCE: San Jose Mercury News, AUTHOR: Jon Healey]
(http://www.mercurycenter.com/svtech/news/indepth/docs/lobby071999.htm)
A NEW MODEL FOR THE INTERNET: FEES FOR SERVICES
Issue: Internet
Until recently, many people had a vision of the Internet in which advertising
revenue supports Web sites, and consumers pay nothing for content. This image
of the Internet is quickly changing as the number of consumers who click on
banner ads continues to decline and new software allows users to block ads
altogether. "Everybody in this medium is moving away from the ad-supported
model and toward the transaction model," says Mark Anderson, the president and
editor of the Strategic News Service Online newsletter. "People are using the
Internet for transactions -- all kinds of transactions -- and things that are
not transaction-related are not very interesting to them." Some Internet
businesses are beginning to think that subscription-based services may be
wave of future. They have realized that if advertising is the driving
revenue for the Internet economy, then most of that "revenue" comes from
profitless Internet companies trading ads on each other's sites. When Wall
Street wakes up and begins to demand profits, this model will not last for
long.
[SOURCE: New York Times (C6), AUTHOR: Denise Caruso]
(http://www.nytimes.com/library/tech/99/07/biztech/articles/19digi.html)
US COUNTIES SEEK SALES TAXES ON GOODS SOLD OVER NET
Issue: E-Commerce
The National Association of Counties (NACo) is expected to pass a resolution
that calls for the collection of taxes on merchandise sold over the Internet.
The resolution asks Congress to adopt legislation that would treat all sales
taxes the same, "whether the sale takes place over the counter, by phone, mail
order or by the Internet." NACo, which will vote on the resolution at a
meeting in St. Louis this week, estimates that local governments already lose
nearly $5 billion in sales taxes from out-of-state mail order sales each year.
The association is concerned that the growth of e-commerce will cause even
greater revenue loses.
[SOURCE: San Jose Mercury News, AUTHOR: Reuters]
(http://www.mercurycenter.com/svtech/news/breaking/merc/docs/011952.htm)
EAR TRAINING: A DIGITAL MUSIC PRIMER
Issue: Ecommerce
The current status and expected changes of digital music. From streaming,
ripping and burning to downloading playing and protecting, the article gives
a good picture of what can be done now with computers, the Internet, and music.
[SOURCE: New York Times (C6), AUTHOR: Matt Richtel & Sara Robinson]
(http://www.nytimes.com/library/tech/99/07/biztech/articles/19tune.html)
MICROSOFT SET TO SELL CITY GUIDES TO RIVAL
Issue: E-Commerce
Microsoft is selling its Sidewalk network of city guides (sidewalk.com) to
Ticketmaster Online-Citysearch for $240 million in stock, people close to
the negotiations said Sunday. The terms of the proposed deal are that
Microsoft increases their share in Ticketmaster Online-Citysearch from 9% to
13% and Ticketmaster Online-Citysearch would eventually integrate the
Sidewalk.com sites into its network of Citysearch sites. This will phase out
the Sidewalk.com brand. Sidewalk and Ticketmaster both offer online
information about local entertainment, news and shopping in dozens of
cities. They have been competitors since Sidewalk opened its first local
site in early 1997, several months after Citysearch launched. Citysearch has
stayed aligned with the entertainment industry, providing news about local
performances and the ability to purchase tickets. But Sidewalk took the
e-commerce route, linking themselves to other stores. Since Sidewalk has
been the number one cities site, according to Internet research firm Media
Metrix, this will make Ticketmaster Online-Citysearch number one.
[SOURCE: New York Times (CyberTimes), AUTHOR: Bob Tedeschi]
(http://www.nytimes.com/library/tech/99/07/cyber/articles/19sidewalk.html)
See Also:
MICROSOFT SEEMS CLOSE TO SELLING SIDEWALK
[SOURCE: Wall Street Journal (B6), AUTHOR: Kara Swisher]
NET EFFECT: IS SERVICE GETTING TOO PERSONAL?
Issue: Internet/Security
Congress is nervous about the speed and ease of transmitting personal
information via the Internet. Rep. Edward Markey (D-MA) and Rep. Joe Barton
(R-TX) became allies recently to amend the banking bill and limit a bank's
ability to sell information about its customers. "Most people think routine
transactions with their banks or electric company ought to be private," said
Barton. In the future, the Internet could be determined by policy rather than
technology choices. As companies move to offer personalized marketing and
services and actions and transactions can easily be recorded on computers
individuals are at risk of losing their privacy. The industry argues that they
are dealing with this issue and that government should stay out of the matter
or else see Internet development stunted. Robert Pitofsky, chairman of the
Federal Trade Commission, assured the industry by telling Congress that
"self-regulation" is "the least intrusive and most efficient means to ensure
fair information practices online." He said legislation to address online
privacy was not appropriate at this time. But Rep Markey says members of
Congress have their own horror stories to tell and so they will keep
revisiting the issue.
[SOURCE: Wall Street Journal (A1), AUTHOR: Alan Murray]
(www.wsj.com)
NEW SERVICE PROVIDES DATA ON INTERNET ADS
Issue: Internet
A new service called Leading Web Advertisers (LWA) will deliver reports to
subscribers that its founders say will capture and categorize ads on
hundreds of sites, offering data on which marketers are running ads, when
and where those ads appeared and what they looked like in Internet time.
This service hopes to help bring accountability to Internet advertising, as
ad spending in cyberspace continues its rapid growth. LWA has programmers in
London and New Jersey, as well as a data administration team in Montana.
Paul Ahern, president and managing partner at DDB Digital in New York, said
the one feature he particularly appreciates is the ability "for us to go
online for clients like Compaq, Amtrak or Mobil to see what competitors are
doing, whether image ads, retail ads or price ads." "You can infer the
marketing strategies of your competitors," he added. Two principals of LWA,
Leon H. Liebman and Michael Kubin said that the service would charge annual
fees that would range from $10,000 for small subscribers to "six figures"
for large ones. Among potential subscribers are agency media departments,
media buying services, companies that sell ad space on the Internet and
marketers. "The way to get that information now is to have a summer intern
or a college student go through a million sites," said Scott Schiller,
senior vice president for advertising and sponsorship sales at Buena Vista
Internet Group in New York, a unit of the Walt Disney Company. Schiller also
said they are likely to sign with LAW for the service.
[SOURCE: New York Times, AUTHOR: Stuart Elliot]
(http://www.nytimes.com/library/tech/99/07/biztech/articles/19adco.html)
CAN MERCHANTS BUY LOYAL CUSTOMERS?
Issue: E-Commerce
There are new sites cropping up daily in every category of e-commerce --
along with faster connections and technologies that enable price
comparisons. E-commerce companies are realizing they must use bribery to keep
customers from heading to the competition. Executives and analysts say
loyalty and incentive programs, like frequent flier miles may help keep
customers. In a recent study of 1,905 Internet shoppers by NFO Interactive,
an Internet research firm, nearly 53% said they would buy more online if
incentives were offered, while 47% said they would be more loyal to sites
that offered rewards. Industry estimates that roughly 57 million Americans
are enrolled in frequent flier programs alone -- and 40 million of those
people are online. The two online leaders in customer retention are Mypoints
and Netcentives. Since these programs usually collect personal information
to conduct marketing campaigns, privacy concerns might be an issue. But
according to a study released last week by Privacy and American Business and
the Opinion Research Corporation, 53% of Net users said they would
participate in an Internet program that exchanged benefits for information,
if the program fully explained how that information would be used.
[SOURCE: New York Times (CyberTimes), AUTHOR: Bob Tedeschi]
(http://www.nytimes.com/library/tech/99/07/cyber/commerce/19commerce.html)
INTERNATIONAL
AOL PLANS FREE NET SERVICE IN BRITAIN
Issue: Online Services/International
AOL has over 16 million U.S. customers, but it has been a tough ride for AOL
in Britain. Today they are going to try something their competitors' have
been doing to break that market: offering free Internet service. They plan
to announce the free service that will only be available in Britain, but the
company may extend it to the continent, where it's starting to feel heat
from other free and low-cost services. AOL will continue its regular
subscription service in Britain -- so customers who sign up for the new
service will be unable to see AOL's proprietary material. AOL has been
concerned, as Freeserve recently has become the ISP of choice in Europe.
While AOL still has a big market in the U.S., where an estimated 37% of
households are online, the potential is even higher Europe, where only 13%
of households are online. Analysts say AOL has been slow to react to the
European market and that the challenge for AOL is marketing themselves as
different from the other free services. AOL has no plans to offer free
service in the U.S.
[SOURCE: Washington Post (A1), AUTHOR: Anne Swardson]
(http://www.washingtonpost.com/wp-srv/business/daily/july99/aol19.htm)
MEXICO'S REFORMA, SPANISH FIRM PLAN INTERNET VENTURE
Issue: Mergers
The market for Internet users in Latin America is growing. Grupo Reforma,
one of Mexico's largest media groups, and Spain's Telefonica de Espana will
today announce the launching of an Internet access and service joint
venture. The merger would be among the largest in the Spanish and
Portuguese-speaking world. The companies will be competing against upstarts
StarMedia Network and Quepasa.com as well as American Online and Venezuela's
Cineros Group and Telefonos de Mexico and Prodigy Communications.
[SOURCE: Wall Street Journal (A11), AUTHOR: Jonathan Friedland]
(www.wsj.com)
FRENCH-GERMAN TELECOM ALLIANCE UNRAVELS, BECLOUDING SPRINT DEAL
Issue: Mergers
"The cooperation is dead," France Telecom Chief Financial Officer Jean-Louis
Vinciguerra said of the longstanding partnership between France Telecom and
Deutsche Telekom. France Telecom is expected to instead compete against
Deutsche Telekom, and more than 70 new phone companies, in Germany. Though a
DT spokesman declined to comment, it angered France Telecom earlier when DT
tried to merge with Telecom Italia (unsuccessfully; Olivetti took over
Telekom Italia). Last week, France Telekom decided to take a stake in
Britain's third-largest cable company, NTL, putting pressure on Deutsche
Telekom to make a major acquisition it has been [only] talking about.
Meanwhile, the Global One SA alliance formed along with Sprint is also
expected to "unwind."
[SOURCE: Wall Street Journal (A11), AUTHOR: William Boston]
(www.wsj.com)
INDIA'S POLICY CHANGES ARE DESIGNED TO HELP THE TELECOMMUNICATIONS SECTOR
Issue: Telephony
The Indian government announced earlier this month a series of policy changes
to boost the telecommunications sector. Private companies are seeing loses
after big investments and those with licenses are having a difficult time
obtaining funds. The decisions will allow private telecom firms to switch from
their current license-fee arrangement, where they pay the government license
fees regardless if they make a profit, to a revenue-sharing agreement, where a
part of the profits made is shared with the government. Licenses will also
become more valuable as they are extended from 10 to 20 years. In exchange,
companies will have to give up their duopoly status and accept competition
before opting for revenue sharing. Though the government will initially lose
money, the new policy is expected to lead to a faster rollout of the
networks and an eventual increase in revenues. "We expected the government
to give concessions because, even if they take a tough stand, they can't get
money from the industry unless there is money with the companies," said C.
Karunakaran, vice president of BPL Mobile Communications.
[SOURCE: Wall Street Journal (B7G), AUTHOR: Denny Kurien]
(www.wsj.com)
MERGERS
US WEST, QWEST AGREE TO MERGE OPERATIONS
Issue: Mergers
Ending weeks of suspense, regional Bell company US West announced yesterday
that it will merge with long-distance giant Qwest Communications
International. The deal is worth $48 billion and ends US West's prior plans
to merge with Global Crossing, an upstart telecommunications company that is
building its own international network of undersea fiber-optic lines. Qwest
will be assuming about $12 billion in US West debt and Qwest has withdrawn
its efforts to buy Frontier, of Rochester, N.Y. Frontier will be bought out
by Global Crossing. Global Crossing was supposed to receive $850 million
from US West for "break-up" fees -- but the two sides settled on $420
million to avoid litigation and win an agreement from Qwest not to increase
its bid for Frontier. These talks have been going on since June 13 and this
ends the three-way feud -- but the deal is still subject to regulatory
approval. Both US West and Qwest are based in Denver,
so the merged entity could eliminate duplicative jobs, executives said,
though the number would be small. The merged company would have a market
value of about $65 billion and combine the millions of local US West
customers in 14 states with the long-distance services offered by Qwest.
(Finally, they must have brought in Heather Locklear -- now that her Melrose
Place days are over -- to close the deal.)
[SOURCE: Washington Post (A11), AUTHOR: John Schwartz]
(http://www.washingtonpost.com/wp-srv/business/daily/july99/uswest19.htm)
See Also:
QWEST WINS US WEST FOR $35 BILLION
[SOURCE: Wall Street Journal (A3), AUTHOR: Rebecca Blumenstein]
(www.wsj.com)
WIRELESS
WIRELESS CABLE CARRIERS FINALLY CASH IN
Issue: Wireless
People's Choice TV, a so-called wireless cable television company based in
Connecticut, had been priced at as little as 15.625 cents a share, but, on
Friday, those shares closed at $9.50. Yes, that means that a $500 investment
in People's Choice last fall would be worth more than $30,000 today. That
was only one of many stories told last week at the annual convention for
Wireless Communications Association International, a trade group for
companies that provide television and high-speed data services using fixed,
ground-based (as opposed to satellite-based) wireless technology. Because of
the big players in the wireless game, the small wireless cable carriers --
like CAI Wireless Systems, CS Wireless Systems and Wireless One Inc. -- have
never really controlled their own destiny. Fixed wireless providers got
their start because the spectrum they needed was owned by educational
institutions back in the 1980's. The FCC changed its rules to permit private
companies to consolidate the licenses under certain conditions. The fixed
wireless companies were allowed to acquire some spectrum outright, but much
of the bandwidth had to be leased from the educational institutions in
exchange for up to 40 hours of educational programming each week. But just
as the 1996 Telecommunications Act was passed, cable companies began
concentrating on expanding the number of television channels as they faced a
threat from direct-broadcast satellite, like DirecTV. That was bad for the
fixed wireless cable companies and several of them filed for bankruptcy
protection. Companies like Sprint and MCI Worldcom are now acquiring these
wireless companies to find alternative ways into homes.
[SOURCE: New York Times, AUTHOR: Seth Schiesel]
(http://www.nytimes.com/library/tech/99/07/biztech/articles/19band.html)
AS AMERICANS BOND WITH CELLULAR PHONES, MORE FAIL TO CONNECT
Issue: Wireless
Are you experiencing a love-hate relationship with you cellular phone? Were you
attracted to it by flat-rate service plans and lower prices? You are not alone.
"Sometimes I just get fed up and try to find a pay phone," says Gabe Zakarian,
president of Zero Zero Technologies, a New York-based consulting firm, after
repeated attempts to make calls during peak evening and weekend hours. Cities
like New York, Washington and Atlanta especially experience traffic jams on
cellular networks. One reason for the increased use of cellular phones is
credited to AT&T's Digital One Rate plan that allows customers to use their
wireless phones to place calls to anywhere in the country for a flat fee.
Similar offers from rivals followed. Today more about 69 million American use
cellular phones, according to the Cellular Telecommunications Industry
Association. They are forming close bonds with their phones and using them more
for casual conversation. AT&T said they "underestimated how fast our Digital
One Rate would catch on." Others also conceded they were also "caught off
guard."
[SOURCE: Wall Street Journal (A1), AUTHOR: Nicole Harris]
(www.wsj.com)
ON THE HILL THIS WEEK
HOUSE COMMERCE AGENDA
Issue: Legislation
1) Tuesday, July 20, 1999, 10:00 a.m. in 2123 Rayburn House Office Building
Subcommittee on Telecommunications, Trade, and Consumer Protection will
continue its hearing on H.R. 2384, the Corporation for Public Broadcasting
Authorization Act of 1999. 2) Wednesday, July 21, 1999, 10:00 a.m. in 2123
Rayburn House Office Building Subcommittee on Finance and Hazardous
Materials markup of the following bills: a) H.R. 1714, the Electronic
Signatures in Global and National Commerce Act; and b) H.R. 1858, the
Consumer and Investor Access to Information Act. 3) Thursday, July 22, 1999,
11:00 a.m. in 2322 Rayburn House Office Building Subcommittee on Oversight
and Investigations hearing on Domain Name System Privatization: Is ICANN Out
of Control? 4) Friday, July 30, 1999, 10:00 a.m. in 2322 Rayburn House
Office Building Subcommittee on Oversight and Investigations hearing on
Drugstores on the Net: The Benefits and Risks of On-line Pharmacies.
[SOURCE: House of Representatives]
(http://www.house.gov/commerce/schedule.htm)
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Nice pitching, David.