Cisco Government Affairs E-Update

Volume 2, Issue 15

05 April 2002

Brought to you by Cisco Government Affairs Online: http://www.cisco.com/gov

This Week@Cisco in Government Affairs

Cisco's E-Update keeps you up to date on the major policy news of the week. Focusing on broadband, education and e-government areas, but covering high-tech and telecom in general, the E-Update is a great source of information for state, federal and international policymakers. To subscribe, send a message with “subscribe” in the subject line to “Subscribe-eUpdate@cisco.com

This Week@WASHINGTON, DC

TECH GROUPS BACK BABY BELLS ON MANDATORY HIGH-SPEED NETWORK SHARING - Six leading trade organizations have formed the High Tech Broadband Coalition to support the Baby Bell telephone companies fight regulations forcing them to share their high-speed networks with competitors.  Many groups are lobbying to make high-speed Internet access a national priority, but this is the first group to support the Baby Bells in their quest to ease existing regulations. The coalition believes that removing the restrictions would encourage the phone companies to build more high-speed networks resulting in increased sales of networking gear and software. Grant Seiffert, vice president of external affairs and global policy at the Telecommunications Industry Association, a member of the new coalition said, "We are the value chain of the broadband space-the arms merchants...and right now we're not selling any product."  Many other industry associations such as the Information Technology Association of America are supporting the local exchange carriers and argue that lifting the regulations would create an anti-competitive environment. http://www.siliconvalley.com/mld/siliconvalley/news/local/2993942.htm
Newsbytes story: http://www.newsbytes.com/news/02/175612.html

ITAA Press release: http://www.itaa.org/news/pr/PressRelease.cfm?ReleaseID=1017863611

REMARKS BY COMMERCE SECRETARY AT NTIA SPECTRUM SUMMIT - About 50% of long-term economic growth in the United States since World War II resulted from technology innovations. Roughly two-thirds of the productivity growth we were blessed with in the late 1990s came from the communications and information technology sector alone.  Spectrum-related products and services have been an important part of this growth.  Wireless phones and data devices have spurred business efficiency and productivity.  Broadcast television and radio have kept people better-informed and entertained.  Wireless links provide critical communications support to national infrastructures like telephone and cable systems, electrical and water supply systems.  And today, more than ever, we are conscious of the importance of spectrum-related technology to our national defense and homeland security.  But the spectrum that allows us to enjoy these and other technologies is a finite and already fairly crowded resource.  Take a look at this chart behind me: 96% of spectrum use is in less than 10% of the spectrum (the spectrum below 3 GHz).  That 10% is so popular because of its superior technical quality.  http://osecnt13.osec.doc.gov/public.nsf/docs/Evans-Spectrum-remarks

SPEECH: TECHNOLOGY-LED ECONOMIC DEVELOPMENT in the Post-Bubble, Post-9/11, Post-Enron America - Remarks by Bruce P. Mehlman, Assistant Secretary for Technology Policy, United States Department of Commerce - As we enter the 21st century, America leads the world in developing and commercializing new technologies. One reason why so many observers identified the 20th Century as "the American Century" is because the United States pioneered so many scientific discoveries and research breakthroughs during the last 100 years. This progress continues all around our nation every day. From information technology to biotechnology to nanotechnology and so many things in between, U.S. scientists and high tech workers are generating new products and trailblazing revolutionary discoveries every day. Technological innovation is critical to our nation for many reasons. First and foremost, technology fuels sustainable economic expansion - creating high-wage jobs, world-class exports and productivity growth so critical to our long-term global competitiveness. Innovations also improve our quality of life... from new drugs and cures that help people live longer and healthier lives, to agricultural advances that permit more bountiful harvests with less herbicides and pesticides. Advances in technology are vital to our efforts to protect our homeland, hardening our infrastructure, detecting dangers and empowering our defenders.

http://www.ta.doc.gov/Speeches/BPM_020404_EconDev.htm

RETHINKING ACCESS TO PUBLIC LANDS AND RIGHTS-OF-WAY - At the end of March, NTIA Assistant Secretary Nancy J. Victory gave an address at the third annual James H. Quello Communications Policy and Law Symposium. She discusses the various issues the Administration has been focused on in their desire to increase broadband access. Four areas were identified as places where rights-of-way regulation could impede the construction of broadband facilities. They included lengthy application processes, unreasonable fees, duplicative regulations, and discriminatory treatment. It was also pointed out that local officials have voiced concern that decreasing regulation could create an anticompetitive environment.  Victory calls for a collaborative effort amongst federal, state, and local officials to remove impediments to delivering competitive voice, two-way, high-speed data and video services. She states that the FCC is working with its Local State Government Advisory Committee to find solutions for rights-of way access issues. Additionally, the National Association of Regulatory Utility Commissioners (NARUC) has established a committee to provide recommendations on the rights-of-way issue. http://www.ntia.doc.gov/ntiahome/speeches/2002/quello32602.htm

LEAVE OPTIONS ALONE – OP-ED by Kleiner Perkins Partner John Doerr and FedEx CEO Frederick W. Smith - Political leaders in Washington are casting about for measures to ensure that the Enron debacle will never be repeated. Unfortunately, one of the main ideas being considered — requiring companies to treat stock options as expenses on financial statements — addresses an issue that not only had nothing to do with Enron's failure but is, in fact, not a problem at all.  The proper purpose of any reform should be a clearer, more accurate picture of a company's financial health. Instead, counting options as expenses — "expensing" them — would actually distort and confuse that picture considerably. It could also prevent millions of workers from sharing in the success of their firms through employee ownership. http://www.nytimes.com/2002/04/05/opinion/05DOER.html

STOCK OPTIONS AND THE LEVIN-MCCAIN DOUBLE STANDARD - Senator Carl Levin (D-MI) has revived a bill he introduced (as S.576) in 1997 when it died from lack of support. The last time the bill's key issue—tax deductibility of stock options—came up for a vote was in May 1994, when a Senate resolution rejected Senator Levin's position by 88 to 9. Today, as in 1997, Senator Levin's "Ending the Double Standards for Stock Options" bill (S.1940) is co-sponsored by John McCain (R-AZ) and a couple of other Senators.  On June 20,1997, Senator Joe Lieberman wrote to Treasury Secretary Rubin, "the McCain/Levin bill could have the double effect of asphyxiating individual drive and undermining innovation." Michael Mares of The American Institute of Certified Public Accounts (www.aicpa.org/) put his finger on the fundamental flaw of the original Levin-McCain bill. He said it would destroy "the parity between the income inclusion and deduction that ensures income is taxed only once."  http://www.ipi.org/ipi/IPIPublications.nsf/PublicationLookupFullText/CC9D804CEC67524386256B91005B9A45


COMMENTARY - STOCK OPTIONS KEEP THE ECONOMY AFLOAT By BURTON G. MALKIEL and WILLIAM J. BAUMOL - Mr. Malkiel is a professor of economics at Princeton University. Mr. Baumol is a professor of economics at New York University. - The fallout from the Enron accounting scandal includes an invigorated crusade against the use of employee stock options as a method of compensation. Critics see such options as a device to enable managements to cheat their stockholders. Yet, if properly managed and adequately reported, their role is precisely the opposite. They are the prime incentive for management to dedicate itself to the promotion of stockholder interests.  The opposition is growing stronger. Sen. Carl Levin (D., Mich.) has now joined with Sen. John McCain (R., Ariz.) and others to introduce a bill that would require firms to charge the "expense" of stock options against reported earnings. This legislation may erase millions of dollars of corporate profits and push many high-tech companies into the red. That's fine with Warren Buffett, another consistent critic. He puts it this way: "If options aren't a form of compensation, what are they? If compensation isn't an expense, what is it? And, if expenses shouldn't go into the calculation of earnings, where in the world should they go?" http://online.wsj.com/article/0,,SB101788696771580240,00.html?mod=opinion%5Fmain%5Ffeatured%5Fstories%5Fhs (paid subscription required)

ABERNATHY AFFIRMS SUPPORT FOR ACCESS PARITY - Federal Communications Commission member Kathleen Abernathy -- a critical vote in deciding whether cable operators are forced to carry competing Internet-service providers -- affirmed her support Wednesday for Internet-access rules that apply equally to cable operators and phone companies. 'It would be hard to justify significant difference in the regulatory treatment when you categorize both of them as information services,' Abernathy told reporters in her office. The FCC has classified cable-modem service as an information service and tentatively concluded that digital-subscriber-line service provided by phone companies is also an information service. Traditionally, information-service providers have not been regulated under Title I of the Telecommunications Act. http://www.tvinsite.com/multichannelnews/index.asp?layout=story&doc_id=79612&display=breakingNews

FCC’S POWELL WANTS DIGITAL TV - Federal Communications Commission Chairman Michael K. Powell yesterday exerted new pressure on the television industry to speed the rollout of digital television, challenging it to meet a set of comprehensive deadlines.  In 1997, Congress mandated that most broadcasters convert to digital signals by 2006 and granted them an estimated $70 billion worth of new television spectrum to do so. But the promise of digital TV -- sharper pictures, better sound, more channels and interactive capability -- has been slow to materialize, with broadcasters and TV makers blaming each other for the sluggish pace of the changeover. http://www.washingtonpost.com/wp-dyn/articles/A63600-2002Apr4.html

AMERICANS LOVE E-GOVERNMENT - More than a quarter of Americans use government Web sites to gather information, mostly on popular tourist sites, school projects, and health or safety information, according to a study released today by the Pew Internet & American Life Project.  The study - based upon the responses of nearly 2,400 Internet users who visited government Web sites in the past six months - found that roughly 77 percent used the online resources to gather information about popular tourist attractions.  Almost as many - 70 percent - said they used government Web sites to gather information for school projects, while nearly half of those who visited e-government Web sites did so to glean health or safety information, the survey found. http://www.newsbytes.com/news/02/175615.html

Full Pew Report: http://www.pewinternet.org/reports/pdfs/PIP_Govt_Website_Rpt.pdf (Adobe document)

PLUG AND PLAY – BUSH ADMINISTRATION APPROACH TO E-GOV - The Bush administration has proposed an intriguing approach to e-government: Rather than leaving each agency to develop its own applications, why not have some agencies develop basic components that can be used by others? This concept of plug-and-play e-government, called component-based architecture, is the latest effort by the Office of Management and Budget to shape a more cohesive, cross- government approach to technology management. Last month, OMB released component-based architectural models for the 24 cross-agency e-government initiatives. The models will help agencies decide what technology they need to complete their e-government projects and will also help agencies work better together. The models reflect the idea of build once, use many — in other words, capitalizing on what one agency has done to serve many agencies' needs. For example, software that handles online payments or manages online grant applications could be applied to more than one e-government initiative. http://www.fcw.com/fcw/articles/2002/0401/cov-arch-04-01-02.asp

GOVNET PROVIDES HARSH LESSONS FOR FEDERAL-CONTRACT 'NEWBIES'- In the wake of last September's terrorist attacks, the Bush administration unveiled an idea called Govnet. It would be a new, secure communications channel for the federal government itself. Almost immediately, 167 companies responded with ideas for building this next-generation system for a post-terrorist world. Some executives at Level 3 Communications Inc. saw a bonanza of as much as $1 billion in business in the next year; the new two-man government sales force of the Broomfield, Colo., fiber-optic network operator had to try to calm headquarters executives down. Six months later, Govnet is still a fuzzy idea with no budget; even senior government tech officers say they aren't sure what it is supposed to do. The one Govnet contract released so far is for $5 million -- to keep track of the staggering volume of proposals. Govnet's lesson is a harsh one for tech companies hoping that homeland-security needs would become their post-recession savior: They have found even the U.S. government is capable of producing something that looks a bit like "vaporware."  http://online.wsj.com/article/0,,SB1017611654474629840,00.html?mod=technology%5Ffeatured%5Fstories%5Fhs (Paid subscription required)

BUSH HOPES TO TEMPER STEEL TARIFFS WITH FREE-TRADE MEASURES - A month after infuriating many conservatives by imposing stiff tariffs on imported steel, President Bush will begin trying to reestablish his free-trade credentials today. Bush will ask the Senate to follow the House's lead and give him new power to negotiate international trade agreements. The authority would allow the administration to negotiate deals that could not be changed -- only approved or rejected -- by Congress.  Senate Democratic leaders say they support the measure, but only if it is coupled with a plan to provide assistance to workers who have lost their jobs because of global trade.  http://www.washingtonpost.com/wp-dyn/articles/A58183-2002Apr3.html

WORLDCOM GETS NETWORK CONTRACT FROM D.O.D. - Nine months after the Defense Department rescinded a high-profile fiber optic network contract awarded to now-bankrupt telecommunications firm Global Crossing, the department announced Thursday that telecom giant WorldCom has been awarded the work, which is valued at up to $450 million.  The contract, known as the Defense Research and Engineering Network (DREN), is for a high-speed Internet link for more than 5,000 Defense scientists and engineers across the country. Controversy has surrounded competition for the contract ever since some of the nation’s biggest telecom firms alleged that Defense had unfairly awarded the contract to Global Crossing in July. The losing bidders, AT&T, Sprint, WorldCom and Qwest Communications, charged that the department relaxed the contract’s terms so that Global, a relative newcomer to the government market, had a winning advantage. http://www.govexec.com/dailyfed/0402/040502h1.htm

GAO REPORT: ELECTRONIC GOVERNMENT - Challenges to Effective Adoption of the Extensible Markup Language - This report responds to your request that we review the status of Extensible Markup Language (XML) technology and the challenges the federal government faces in implementing it. XML is a flexible, nonproprietary set of standards designed to facilitate the exchange of information among disparate computer systems, using the Internet’s protocols. Specifically, we agreed to assess (1) the overall development status of XML standards to determine whether they are ready for governmentwide use and (2) challenges faced by the federal government in optimizing its adoption of XML technology to promote broad information sharing and systems interoperability. The report recommends that the director of the Office of Management and Budget (OMB) take steps to improve the federal government’s planning for adoption of XML. http://www.gao.gov/new.items/d02327.pdf (Adobe document)

This Week@INTERNATIONAL

ITALY PUSHES E-GOVERNMENT - Since the wealthy Group of Seven nations and Russia made the "digital divide" between rich and poor countries a priority at the group's summit meeting in Genoa last year, there has been much talk but little action. Now, if a former IBM executive turned government minister has his way, that is about to change. Lucio Stanca, 61, spent 33 years at International Business Machines Corp., finishing his career a year ago as the Paris-based chairman of IBM Europe, Middle East and Africa. Since last summer, he has been the Italian minister for technology and innovation, charged with digitalizing the government's paper-heavy bureaucracy and using the tools of e-government - a system of online procurement and electronic databases aimed at bringing more transparency to the public sector - to send a wake-up call to the country's notoriously lethargic public administration.  At the Genoa meeting, Prime Minister Silvio Berlusconi persuaded his partners to let Italy spearhead the G-7's e-government initiative as a way of creating new forms of aid for developing countries. Stanca since then has pushed hard with fewer than a hundred staffers to launch a global "e-government for development" initiative that next week could yield its first results.  On Tuesday in Palermo, Sicily, Stanca will bring together delegates from 76 countries along with King Abdullah II of Jordan; Berlusconi; prime ministers from several developing countries; James Wolfensohn, the president of the World Bank; officials of the G-7 Digital Opportunities Task Force; top-level officials from the United Nations; ministers from two dozen countries; Erkki Liikanen, the European commissioner for the information society, and top executives from Cisco Systems Inc., Sun Microsystems Inc., IBM and McKinsey Co.  http://www.iht.com/articles/53307.html
 
E-BUSINESS BOOSTS PRODUCTIVITY - E-business doesn't mean using the Internet to sell stuff, rather it's the primary technology tool to increase productivity and profitability, says the co-chair of the Canadian E-Business Initiative. Too many people confuse E-business with E-commerce -- using the Internet to sell goods and services, says Pierre-Paul Allard, president of Cisco Systems Canada, who was named co-chair of EBI last week by Industry Minister Allan Rock.  "Using the Internet as a technology to get to customers, whether they're businesses or consumers, ... that's only a small element, actually a by-product, of how we implemented E-business systems at Cisco,'' Allard said in an interview Wednesday. Allard, who co-chairs the private-public partnership to promote E-business, with Canadian Chamber of Commerce president Nancy Hughes Anthony, says increasing productivity -- not sales -- is the main goal of EBI. "It's not about E-sales and how you move product through the Internet. It's about how you take a business apart and look at what it does -- customer service, manufacturing, managing your finances -- and then reconstructing all those processes in a Web-centric fashion.'' http://www.canada.com/regina/leaderpost/info/markets/

COULD TECHNOLOGY SPENDING SPUR RAPID RECOVERY FOR EU'S ECONOMY? - With the U.S. economy poised once again to come out of recession quicker and stronger than Europe, politicians here are once again wondering what it will take for Europe to catch up. Could more spending on technology be the cure? Even as technology companies in the U.S. continue to struggle after last year's downturn, there's little doubt that many products developed by those companies continue to keep the U.S. in the forefront of innovation. Some economists even believe that technological innovations introduced in the past decade made the U.S. more flexible, enabling the economy to escape with only a mild recession last year.  In the early 1990s, Washington fretted that the U.S. was losing the technology race to Japan, which prompted the Clinton administration to boost spending somewhat on commercial technology. More importantly, industry made massive investments in research and development. The results were legendary. Europe's problems run deeper and require sweeping changes. "For Europe to advance technologically, the problem is more political than technological," says European Union research chief Philippe Busquin. Fundamentally, the U.S. is a single market; Europe, for all its hype, isn't. The EU is a collection of 15 nations that trade freely with each other, but regard each other as competitors technologically. http://online.wsj.com/article/0,,SB1017615869896445040,00.html?mod=Page+One (Paid subscription required)

SLOVENIA - IDENTIFICATION OF COMMON GOALS - The State Secretary responsible for applications at the Ministry of Information Society, dr. József Györkös gave a speech titled Current Developments and Challenges in the Republic of Slovenia on 21 March at the Conference & Exhibition titled "Információs Magyarország" (Hungary in the Infomation Society) organised by Government Commission for Informatics and under the aegis of dr. I. Stumpf, Minister.  http://www2.gov.si/mid/mideng.nsf

AUSTRALIAN BROADBAND ADVISORY GROUP - The membership and terms of reference for the Federal Government’s premier advisory body on broadband – the Broadband Advisory Group - were recently announced by the Minister for Communications, Information Technology and the Arts, Senator Richard Alston.  ‘The Federal Government is examining the way ahead for broadband in Australia, including possible policy solutions to current and future challenges and the opportunities presented by emerging technologies and new business models,’ Senator Alston said.  ‘The Group will provide high level advice to the Government on broadband development in Australia, and provide a vehicle for fostering communication between stakeholders on both the supply-side and demand-side of the broadband issue.’  The Membership of the Group is: Bronte Adams, Ros Hill, Tom Kennedy, George McLaughlin, Mike Miller, Rosemary Sinclair, Phil Singleton, Ziggy Switkowski, Jeffrey Tobias and Terry Walsh (Cisco Systems).  ‘The Government has already laid the foundations to capitalise on the opportunities presented by broadband through the open and competitive telecommunications regime and specific initiatives such as the $52.2 million National Communications Fund, the $37 million Advanced Networks Program and the $2.1 million Digital Content Fund,’ Senator Alston said.  ‘This Group brings together leading thinkers in the broadband arena in Australia who will consult with experts overseas to gain further perspective and experience in this area.’ – Release from Office of Minister Alston.

WIRELESS BROADBAND TERMS OF REFERENCE - The Minister for Communications, Information Technology (IT) and the Arts, Senator Richard Alston, today released draft terms of reference for consideration by the House of Representatives Standing Committee on Communications, Information Technology and the Arts in its inquiry into wireless broadband technologies.  The Standing Committee, chaired by MHR Christopher Pyne, has been asked to conduct an inquiry into the current and potential use of wireless technologies (including wireless LAN, 3G, Bluetooth, LMDS and Wireless Local Loop) to provide broadband communications in Australia.  Broadband technology is widely considered to be a crucial driver in ensuring that Australia derives maximum economic and social benefit from the information economy.   http://www.dcita.gov.au/nsapi-graphics/?MIval=dca_dispdoc&ID=6326 

DEAF KAZAKH PUPILS GO ONLINE - Across Central Asia, an ambitious program to introduce the online world to the deaf and hearing impaired is taking hold. Organized through the US State Department's Internet Access and Training Program (IATP), the program is in operation in all of the former Soviet Union and other regions. Most recent to the program is the Almaty School for the Deaf in Kazakhstan. IATP sent a deaf trainer to the Almaty School for the Deaf in November 2000. Since then, faculty and students have been diligently pursuing grants and donations to set up a computer lab for deaf students. Teachers from the school are impressed with how the Internet has increased the children's vocabulary, made them more curious about the world and given them career aspirations far and above what they had before. Several of the school's students are participating in an Internet training course for deaf teenagers and adults. "The whole training was fascinating, exciting, amazing, I cannot even express it in words," said one of the students, Elena Pegina. http://news.bbc.co.uk/hi/english/sci/tech/newsid_1879000/1879158.stm

SETBACK FOR HONG KONG HIGH-TECH DEVELOPMENT - Hong Kong's dream of becoming a regional technology hub has suffered an early setback with fewer tenants than expected signing up for the first phase of the government's flagship Cyberport development, an office and residential complex pitched at high-technology companies.  Only three companies, General Electric Information Services, a unit of General Electric, Finnish telecommunications company Sonera, and the developer Pacific Century Cyberworks (PCCW) have committed to lease space in the project.  Of 15 companies that originally signed letters of intent to become anchor tenants, none had yet signed leases, the government said. They included Cisco, CMGI, Hewlett-Packard, IBM, Microsoft and Oracle.  http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT396T0XMZC&live=true&tagid=ZZZC00L1B0C

This Week@US STATES

INDIANA GOVERNOR O'BANNON SIGNS E-COMMERCE BILL - Governor Frank O'Bannon signed Senate Enrolled Act 329 recently that essentially keeps certain state services open 24 hours a day - thanks to the Internet.  SEA 329 allows each state agency to accept online electronic payments for services through accessIndiana, the official web site of the State of Indiana. Previously, only a handful of state agencies were authorized to accept electronic payments.  Online vehicle registrations, for example, are an outstanding example of how citizens can step out of line at their local license branch, and purchase their renewals when it's convenient for them.  "The ability to accept online electronic payments will further help all of state government participate in e-commerce and enhance the ways state agencies make services available to all Hoosiers," O'Bannon said.  http://www.ai.org/serv/presscal?PF=gov&Clist=4&Elist=51303

CISCO PARTICIPATES IN SACRAMENTO ADVOCACY TRIP - On Tuesday April 2 and Wednesday April 3 Cisco Systems participated in the Silicon Valley Manufacturing Group's Sacramento legislative advocacy trip.  The trip brought together Silicon Valley companies and members of the Santa Clara County Board of Supervisors and Santa Clara County Cities Association to meet with members of the California State Senate and Assembly to advocate for quality of life issues facing Silicon Valley.  Issues that were discussed this year were education, housing, transportation, and the environment.  Cisco would like to thank the staff at the Silicon Valley Manufacturing Group for organizing such a successful event.

N.C.: STATE TECHNOLOGY CHIEF TO STEP DOWN - The state's top technology official is retiring from his post after less than two years on the job.  Ronald P. Hawley will step down as chief information officer for the Office of Information Technology Services on May 1 to take a job with SEARCH, a nonprofit organization based in Sacramento, Calif. SEARCH helps law-enforcement organizations across the country with technology and statistics.  Gov. Mike Easley has not determined yet who will replace Hawley, spokeswoman Cari Boyce said. http://www.newsobserver.com/tuesday/news/Story/1108526p-1106546c.html

VERIZON EXPANDS WIRELESS NETWORK - Verizon Wireless, the nation's largest wireless operator, said Monday it will launch its advanced wireless service, capable of high-speed Internet connections, in Chicago, Pittsburgh and St. Louis on Tuesday. The company, which also plans to announce Tuesday the launch of the service in 10 more cities, which it did not name, first rolled it out in January in areas from Boston to Virginia on the East Coast, and the Silicon Valley, Salt Lake City and San Francisco Bay area in the West.  http://story.news.yahoo.com/news?tmpl=story&cid=581&u=/nm/20020401/tc_nm/telecoms_verizonwireless_dc_5

SURVEY: SILICON VALLY “MOST WIRED” - Silicon Valley still rules the wired world, but Boston and Salt Lake City made huge strides in an annual survey of America's most Internet-savvy cities.Boston jumped 12 places to No. 4 on this year's list, published in the May edition of Yahoo! Internet Life magazine. Salt Lake City jumped 23 places to sixth, though the magazine said it could be a one-time spike caused by the recent Winter Olympics.  San Francisco, San Jose, Calif., and Austin, Texas, maintained their grip on the top three spots, which they've held in all but one of the five surveys. The issue hits newsstands April 16.  Don Willmott, the magazine's technology editor, said the biggest news may be the fact that numbers were up almost everywhere, despite the recession. It took a score of 36 out of 40 to win this year, up from 33.3. http://story.news.yahoo.com/news?tmpl=story&cid=528&u=/ap/20020402/ap_on_hi_te/wired_cities_3

WIRING IOWA FOR THE FUTURE - Iowa lawmakers are following an age-old model to boost Internet use in Iowa.  Early in the last century Iowa decided to get "out of the mud" and authorized the farm-to-market road system to ensure their economy. Today, state officials see high-speed Internet access as a new farm-to-market  system. "Iowa's long-term competitiveness in the new economy will be driven  in part by how well we can provide access to affordable high-speed telecommunications to all businesses in the state," said Governor Tom Vilsack. "Access means capacity for Iowans to work from anywhere [in the state] with anyone in the world." A recent study commissioned by the Iowa Alliance for Advanced Communications Services determined that 70 percent of Iowans have Internet access at home or at work. More than 60 percent of households are connected and more than half of Iowa businesses are connected. The problem now is in deploying a high-speed network. It's expensive and, according to Mike Eggley, CEO of net INS, that cost is generally passed on to the consumer. The Iowa Department of Economic Development is responding by committing marketing dollars to educate Iowans about the benefits of high-speed access, conducting workshops, and talking to chambers of commerce and economic development groups. http://www.businessrecord.com/businessrecord/myarticles.asp?P=504629&S=584&PubID=8859&EC=0

CALIFORNIA TO REGULATE DSL - Dissatisfied DSL customers in California now have a state authority to turn to.  The California Public Utilities Commission announced last week that it will take regulatory oversight for high-speed DSL (digital subscriber line) Internet services in the state. The decision is seen as a small win for consumers who have suffered through service failures, high prices and other frustrations from companies including BellSouth and Verizon Communications.  Some consumer advocates see California's decision paving the way for other state PUCs to step in and fill the regulatory gap.  http://zdnet.com.com/2100-1105-873091.html

CYBER SCHOOLS DRAW FLAK OVER FUNDING AND METHODS - Though outwardly peaceful, Bonnie Oliphint's pale-green bedroom is part of an educational battlefield. The reason: the computer in the corner. Bonnie received the machine from the publicly funded Einstein Academy, one of a growing number of "cyber schools" that aim to bypass traditional classrooms and take teaching directly into the home.  After home-schooling their daughter for years, Bonnie's parents, a housewife and a seminary professor, signed up with Einstein last fall hoping to get their 12-year-old additional contact with other students and more-sophisticated instruction. Now, the outgoing seventh-grader studies from virtual books and joins classmates and teachers in online chats that can involve anything from swapping Indian-tribe trivia to questioning Cleopatra, in Latin, with an Einstein teacher logging on as the ancient Egyptian queen.  "I can't get over the amount of material she has been exposed to," says Peggy Oliphint, Bonnie's mother.  But administrators at the suburban Cheltenham Township School District can't get over the $8,000-a-year that Einstein wants them to pony up for Bonnie. She lives within Cheltenham's boundaries -- but Einstein belongs to another school district. Under state laws set up to encourage competition, a district that loses a student to a school chartered by another district is mandated to make payments for the child's education. http://online.wsj.com/article/0,,SB1017956771773469560,00.html?mod=Page+One (Paid subscription required)

NEW TOOLS FOR SCHOOL: EDUCATORS DREAM OF LAPTOPS FOR ALL STUDENTS - After years of debate, many educators have become advocates for the benefits of using laptops and handheld computers in the classroom. In Silicon Valley, students use handheld devices to graph math problems, learn economics and map out science experiments.  Bill Richter, principal of Lynbrook High School said, "The curriculum is the same...It's just a different way of access that allows kids to be more creative and more in control of how they learn." Around 15 percent of school districts nationwide have some type of laptop initiative and proponents of the programs say that it is the next step in giving students essential technical skills for future success in the workforce.  Critics of the laptop programs have said schools are not discussing the hazards of handheld devices and laptops.  Distribution of the equipment and teacher training can be very expensive for schools and students must be taught about privacy and using the tools responsibly.  The largest laptop program is San Jose's East Side high school district.  Superintendent Joe Coto is planning on giving every student in the district a laptop to bring technology into the homes of about 100,000 people who would not normally be able to afford it.  "The digital divide has been around a long time, and we think our kids deserve this.  We believe it will improve academic performance, increase understanding of future careers in technology, and bring greater involvement and communication with parents. And we think it will be an important step for our students who don't speak English." http://www.siliconvalley.com/mld/siliconvalley/news/2994121.htm

TECHNOLOGY JONES - An ex-AT&T executive, Alicia Jones, has founded Youthlinks USA, a nonprofit computer training center in Detroit targeted at teaching computer skills to the working poor, school dropouts, senior citizens, and the learning disabled. Jones is hoping to provide the training and support these groups need to increase their earning potential and succeed in today's workplace.  While several computer programs teach similar skills in the Detroit area, none are as large as Youthlinks USA.  Jones hopes to partner with other organizations around the country to bring the program to community centers, churches, and after-school programs.  In describing the structure of the program Jones said, "We demystify technology for them. It doesn't make sense to sit a child in front of a computer and teach him technology and they can't read.  This isn't just a technology program, we target the whole child." http://www.detnews.com/2002/detroit/0204/03/s04-454614.htm

OTHER TECH STORIES OF THE WEEK

BROADBAND SLOWED BY HIGH PRICES - Cable modems will continue to dominate the high-speed Internet access market for the next few years, beating out telephone companies in delivering broadband services to residential customers, according to new research. But unless cable operators narrow the price gap between dial-up Internet and high-speed access, broadband will have a tough time cracking the mainstream market. IN AN UPCOMING report on the residential broadband market, the Yankee Group is projecting that high-speed Internet access will grow from 10.3 million subscribers in 2001, or about 15 percent of the current total online population, to 41.4 million subscribers in 2007. By the end of 2002, only about 15 million to 16 million U.S. households will be using a broadband connection — out of roughly 66 million homes with Internet access. http://www.msnbc.com/news/732945.asp

AT&T, COMCAST TO STOP HIGH-SPEED CABLE INTERNET FEE - Many subscribers of high-speed Internet service via cable will see their bill decrease slightly starting this month, because two operators said on Monday they will stop charging a local franchise fee. Companies like AT&T Broadband, Comcast Corp. and AOL Time Warner Inc. pay local governments up to 5 percent of their gross revenue, or about $2.5 billion annually, for access to public rights-of-way to offer service. Many have paid the fees on revenue from the Internet service as well and the law allows companies to pass along the fees to their customers.  However, last month the Federal Communications Commission concluded revenue from that service should not be included in calculating the maximum franchise fee cable operators can be required to pay.  http://story.news.yahoo.com/news?tmpl=story&cid=581&u=/nm/20020401/tc_nm/media_cableinternet_fee_dc_2

INTERNET MAKING STEADY ROADS INTO HEALTHCARE - When Internet pioneer Jim Clark took his third brainchild public in 1999, he boldly pronounced that Healtheon would fast become the world's biggest company and "fix the U.S. health-care industry" in the process. While he may have helped launch the Internet revolution with Netscape, Clark's grandiose design to gain control of the $1.5 trillion health-care industry via the Internet proved a pipe dream and his former firm, now WebMD , has yet to show a profit. "We were probably a little naive in how quickly we expected to inject ourselves into the process ... thinking we could come in and be a bull in a china shop and alter the whole terrain in short order," admits "Kittu" Kolluri, a key member of Clark's team at both Silicon Graphics and Healtheon.  http://story.news.yahoo.com/news?tmpl=story&cid=581&u=/nm/20020331/tc_nm/health_internet_dc_4

AN END TO DIGITAL PIRACY? - Jack Valenti is the Hollywood blockbuster of Washington lobbyists. As the chief executive of the Motion Picture Association of America, he talks in apocalyptic terms unmatched by lesser lights in Hollywood's executive suites. Belying his genteel drawl, his pronouncements are the equivalents of celluloid fireballs, warning of catastrophe for the industry.  A former aide to U.S. Presidents Kennedy and Johnson, he joined the movie industry's trade association in 1966 and has led the group ever since, turning it into one of the most powerful forces on Capitol Hill.  For the last several years, Valenti has increasingly focused on the dangers of Internet piracy, offering dire predictions that Hollywood's products--America's most visible export--are at risk of being cannibalized. He pulls no rhetorical punches, saying that file swappers are "terrorizing" his industry.  But the stakes have been raised. After studio heads complained about a lack of support from the technology industry, a bill was introduced in the Senate last month that would force Hollywood, tech companies and consumer-electronics companies to figure out a universal way to protect digital content against piracy. If the three groups can't figure it out on their own, federal regulators would step in to mandate an anti-piracy plan.  http://news.com.com/2008-1082-875394.html

FILM STUDIOS JOIN TO PROMOTE DIGITAL STANDARDS - Seven major U.S. film studios said Tuesday that they have joined forces to promote standards for digital cinema technology.  The core members of the new venture include Walt Disney, 20th Century Fox, Metro-Goldwyn-Mayer, Paramount Pictures, Sony Pictures Entertainment, Universal Studios and Warner Bros. The studios said they aim to improve the digital movie experience through various initiatives, including adopting open technical standards that would help make competing digital formats compatible and interoperable. The studios said they also hope to spur the use of digital projection equipment in movie theaters. "It's a necessary step in the evolution of filmmaking," said Jarvis Mak, a senior analyst at Nielsen/NetRatings. "When these movie studios come together, it's not like they're competing against one another...Their interests in coming together to form a standard are all to benefit the whole industry."  http://news.com.com/2100-1023-874267.html

ROYALTIES PROPOSAL CASTS SHADOW OVER WEBCASTERS - Earlier this year, Onion River Radio, an Internet radio station that describes itself as "classic rock, singer-songwriter, with slightly granola leanings," was optimistic about its chances of surviving as an alternative to the usual broadcasting available in its home market of Montpelier, Vt. Its audience was growing fast, and advertisers were slowly beginning to take an interest. Then in February, a panel appointed by the United States Copyright Office recommended music licensing rates that would compel Onion River, along with thousands of other fledgling Webcasters, to pay more than half its revenue in royalty fees to the recording industry.  http://www.nytimes.com/2002/04/01/technology/ebusiness/01RADI.html (free registration required)

NEW HOTLINE CONNECTS CEOs TO WHITE HOUSE - A high-security communications network linking government leaders to some of technology's biggest names in the event of a national disaster will be unveiled early next month, officials say.  Inspired by the breakdown in communication on Sept. 11, when frantic calls overwhelmed phone lines, the so-called CEO Link will be used to shuttle high-priority news between government officials and executives.  "We would discuss recovery and response efforts first," said Ila Brown, director of Interagency Communications at the Office of Homeland Security.  http://news.com.com/2100-1033-875176.html

COMPUMENTOR HELPS NON-PROFITS GET WIRED - CompuMentor, a nonprofit created 15 years ago to bring together tech volunteers and charities has since grown to 54 employees, a $5 million budget, and status as a leading national technology broker for non-profits.  The San Francisco organization's services include face-to-face consulting and TechSoup.org, an online resource portal filled with technology advice, resource lists and articles.  CompuMentor's newest endeavor is DiscounTech, an online store offering computers and software to non-profits at 10 percent of the products' retail value.  Microsoft, CompuMentor's largest corporate supporter, will be donating $25 million of software in fiscal year 2002 to be offered through the store. CompuMentor executive director Phil Ferrante-Roseberry said, "Non-profits are desperately in need of technology

but they can't afford it...Tech companies see their philanthropic opportunities as donating products. Its what they do, its what they know, and frankly, it's cheaper for them than giving cash." http://www.siliconvalley.com/mld/siliconvalley/news/2986805.htm

AN OPTIMISTS VIEW OF TOMORROW’S TECHNOLOGY - By 2007, 70 per cent of the world's computer programming activity will be in developing countries. Companies such as Accenture, EDS and International Business Machines will go out of business unless they adapt, by farming out their programming to countries such as India and China and concentrating on high-value project management work.  George Colony, chairman and chief executive of Forrester Research, delights in such challenging predictions. He founded Forrester in 1983, with a brief to examine new aspects of computer technology and how they would affect business. "Our main quality is courage, not being afraid of making decisive statements, as long as we can back them up," he says.  http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT3DCH7HIZC&live=true&tagid=ZZZC00L1B0C

MICROSOFT PRESIDENT TO STEP DOWN - Richard Belluzzo, who has been the president and chief operating officer of Microsoft for little more than a year, will step down next month and leave Microsoft in September, the company said yesterday.  The departure of Mr. Belluzzo, 48, is part of a reorganization that is intended to give the heads of Microsoft's business divisions greater independence. http://www.nytimes.com/2002/04/04/technology/04REDM.html
Microsoft release: http://www.microsoft.com/presspass/press/2002/apr02/04-03BelluzzoPR.asp


FACTS AND STATS:

MAJORITY OF SWEDES ONLINE - Europemedia reports that 70 percent of Swedes now have access to the Internet.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357786&rel=true

US CANDIDATES NOT USING THE NET - Newsbytes reports that the majority of political candidates in the US aren't using the Internet as a campaign tool.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357785&rel=true

UK SENIORS TAKE TO THE NET - The number of older people going online in the UK has increased by nearly 90 percent since 2001, according to a new report from NetValue.  http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357796&rel=true

For Facts and Stats on the New Economy, visit our Facts and Stats page.  Also, see our special State of the Internet report on this page. For daily, topical Facts and Stats visit our Hot In Tech page.

CISCO GOVERNMENT AFFAIRS@2001

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