Cisco Government Affairs E-Update

Volume 2, Issue 17

19 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

NEW Cisco Government Affairs Videos -
Please visit the Cisco Government Affairs website and see these new Cisco videos on the following topics:

Ø       Copyright Protection/DRM – Jeff Campbell, Senior Telecom Policy Counsel

Ø       Broadband – Jeff Campbell

Ø       California Protective Orders Issue – Michelle Peacock, State Government Affairs Manager

Ø       U.S. State Elections – David London, State Government Affairs Representative

All these new videos and more can be viewed at our multimedia site at: http://www.cisco.com/gov/multimedia/index.html

This Week@WASHINGTON, DC

LAWMAKERS WILL MOVE TO BLOCK SPECTRUM AUCTION - A quartet of influential House lawmakers say they will attempt to block the Federal Communications Commission's (FCC) plan to auction off a valuable swath of airwave spectrum. "This auction is not ready for prime time," House Commerce Committee aide Ken Johnson said today. "The FCC has no (third-generation wireless) plan in place, they have no (high-definition television) plan in place and most importantly, they have no spectrum management plan in place."  Johnson said that Commerce Committee Chairman W.J. "Billy" Tauzin, R-La., and Ranking Democrat John Dingell, D-Mich., will join other high-ranking Commerce Committee members next week to introduce legislation that would postpone, indefinitely, the planned airwave auction. At issue are a block of airwave licenses in the 700 MHz band that have many wireless companies salivating. Broadcasters currently occupying that spectrum band are expected to vacate the airwaves as they make the transition to digital television. The FCC is scheduled to begin the auction June 19. http://www.newsbytes.com/news/02/175991.html

TESTIMONY OF FCC CHAIRMAN MICHAEL K. POWELL, CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION Before the Subcommittee on Commerce, Justice, State, and the Judiciary of the Committee on Appropriations, U.S. House of Reprentatives, on the FCC's Fiscal Year 2003 Budget Estimates, April 17, 2002 – On Broadband: “Recently, I noted that one of the FCC's central policymaking objectives is, and should be, the promotion of efficient, widespread deployment of broadband infrastructure. Recognizing the importance of broadband deployment—a topic of conversation that is extensively discussed here on Capitol Hill, as well as at the Commission, Wall Street, and Main Street—the Commission is taking a concerted, comprehensive approach to bringing regulatory clarity to what is, at best, a murky and confusing policy area. To that end, the Commission has committed significant resources to initiate and consider several proceedings that pointedly address broadband issues.  Of course, our actions in this area will be grounded first and foremost in the Act, taking into account the statutory objectives of competition, universal service, and consumer protection.  It is important to emphasize that while we have committed significant resources to initiating or completing various rulemakings, the legal and regulatory issues implicated here have yet to be resolved. But they must be resolved if we collectively intend to facilitate the ubiquitous availability of broadband to all Americans. The Commission welcomes the input of all Americans in our deliberative process—including the opinions of the Members of this Subcommittee and Congress as a whole—as we proceed in developing a regulatory framework for successful broadband deployment.” http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-221683A1.pdf (Adobe file)

SPEECH: “BROADBAND: AN INTERNATIONAL PERSPECTIVE” - David A. Gross, Deputy Assistant Secretary, U.S. Coordinator for International Communication and Information Policy - National regulatory environments that reward innovation and encourage private sector competition are essential for sustainable telecommunication development, including broadband, a senior State Department official says.  Speaking April 16 to the Media Institute in Washington, David Gross, deputy assistant secretary for international communications and information policy, said the United States is pursuing policies supporting the technology's growth in bilateral and multilateral meetings.

http://usinfo.state.gov/cgi-bin/washfile/display.pl?p=/products/washfile/topic/econ&f=02041801.cec&t=/products/washfile/newsitem.shtml

 

LARRY IRVING: DIGITAL DIVIDE LIVES, FEW PEOPLE CARE  -The digital divide still is very much alive, but U.S. corporations and the federal government have unfairly abdicated their roles in helping to bring the Internet to U.S. citizens regardless of their race or class, said former U.S. Commerce Undersecretary Clarence "Larry" Irving. Irving, who made the digital divide a front-and-center issue for the Clinton administration, said that the Bush administration's elimination or scaling back of several important programs to close the divide also reveals a basic lack of desire to make the Internet a ubiquitous tool in the U.S.  "It's one thing to say that there is a job that should be done and the government shouldn't do it," Irving said in a speech at the Computers Freedom and Privacy 2002 conference in San Francisco. "It's another to say that ... the divide is solved."  Irving said that the Bush administration's attitude of "Let's declare victory and go home ... didn't work in Vietnam and it won't work on this particular issue."  http://www.newsbytes.com/news/02/176000.html

INTERNET HOME ALLIANCE JOINS THE CONGRESSIONAL INTERNET CAUCUS ADVISORY COUNCIL - Internet Home Alliance, a non-profit association of leading high-tech and consumer companies, has become an official member of the Congressional Internet Caucus Advisory Committee (ICAC), a diverse group of public interest, non-profit and industry groups working to educate the Congress and the public about important Internet-related policy issues.  The Alliance’s detailed research resulting from live consumer pilot programs, in which new integrated solutions are installed into homes, will provide the Congressional Internet Caucus significant expertise and insights into the consumer demand for Internet technology. The Alliance will work with ICAC to promote the education of Members of Congress and their staffs about the Internet. http://www.internethomealliance.com/docs/IHAnetcaucusrelease.pdf (Adobe file)

EDITORIAL IN WASHINGTON POST ON STOCK OPTIONS – “Money Talks” - ALAN GREENSPAN, perhaps the nation's most revered economist, thinks employee stock options should be counted, like salaries, as a company expense. Warren Buffett, perhaps the nation's foremost investor, has long argued the same line. The Financial Accounting Standards Board, the expert group that writes accounting rules, reached the same conclusion eight years ago. The London-based International Accounting Standards Board recently recommended the same approach. In short, a rather unshort list of experts endorses the common-sense idea that, whether you get paid in cash or company cars or options, the expense should be recorded. Yet today's Senate Finance Committee hearing on the issue is likely to be filled with dissenting voices. The dissenters (also) include weighty figures in both parties. Sen. Joe Lieberman (D-Conn.) is the chief opponent of options sanity in the Senate, and last week President Bush himself declared that Mr. Greenspan is wrong on this issue. http://www.washingtonpost.com/wp-dyn/articles/A5269-2002Apr17.html

EDITORIAL IN BUSINESSWEEK ON STOCK OPTIONS – “Don't Blame the Stock Options” - There is a mighty storm brewing over stock options. The dot-com blowup, the tech meltdown, Enron, and much that has gone wrong with the economy is being blamed on options. Warren Buffett doesn't like them. Federal Reserve Chairman Alan Greenspan is against them. Congress is preparing legislation that might torpedo them. But before the stampede against stock options gets out of hand, it would be wise to ponder the possible cost of giving up one of the best instruments for rewarding risk in our entrepreneurial society. Some action may be necessary, but the real problem lies less with the options themselves than with those who bestow them and their reasons for doing so.  http://www.businessweek.com/@@iyDntGcQS18HpQsA/premium/content/02_15/b3778119.htm?$se (subscription required)

EDITORIAL IN USATODAY ON STOCK OPTIONS – “Reward outweighs risk” - By Rick White, President of TechNet - Bills in both houses of Congress would effectively eliminate stock options for working people by requiring firms to report them as cash expenses. It would be hard to think of a better way to undermine our technology economy.  For one thing, treating stock options like current expenses doesn't make sense. Stock options aren't cash payments like a paycheck. They are a right to buy stock in the future. They don't reduce the company's cash or other assets.  In fact, they have nothing to do with what the company owns; they have to do with who owns the company. It would be misleading to suggest that the company has fewer assets than it really has.  Even worse, expensing stock options would mean that they aren't offered to lower-level employees. Most technology companies grant options to the vast majority — and often to 100% — of their employees. http://www.usatoday.com/news/comment/2002/04/17/ncoppf.htm

USATODAY EDITORIAL  ON STOCK OPTIONS – “Firms reap tax breaks; shareholders pay price” - Last year, Microsoft managed to pull off what might look like a magical feat. The software giant inflated its per-share profits by 45%, and at the same time shaved $2 billion off its income tax bill.  But Microsoft's accounting trick wasn't even particularly novel. Any company can perform a similar act thanks to the miracle of stock options. And it's all perfectly legal.  Under existing rules, publicly traded firms that offer stock options to employees in lieu of cash don't have to count the options' costs as an expense on their balance sheets. That makes their profits look bigger.  At the same time these companies can count the options' cost as an expense when filing their tax forms. That sharply cuts their tax load, which is based on net profits. http://www.usatoday.com/news/comment/2002/04/17/nceditf.htm

WHITE HOUSE CYBER CZAR DESCRIBES NEXT PHASE OF INTERNET PLAN - Speaking before a conference of hundreds of federal technology personnel and industry officials Wednesday morning, Richard Clarke, President Bush’s point man on national cybersecurity, outlined the next phase in the controversial plan to build an impenetrable information network for the federal government, known as Govnet. Clarke said a team from the General Services Administration had completed a review of more than 167 responses from technology companies on how the network could be built, and that the reviewers had concluded that creating a stand-alone network, one not connected to the vulnerable systems of any other networks, is technologically feasible. The government can’t afford to put off major upgrades to information security, Clarke said, noting that terrorists have continued to call upon their followers to attack the nation’s critical infrastructure of power grids and information systems, many of which are connected to the Internet.  Clarke qualified the Bush administration’s commitment to Govnet, saying it is merely a “concept,” not an actual program or project. “Govnet is a question…that may lead to programs,” Clarke said.  http://www.govexec.com/dailyfed/0402/041702h1.htm

FCC AUTHORIZES VERIZON TO PROVIDE LONG DISTANCE SERVICE IN VERMONT -  The Federal Communications Commission (FCC) voted unanimously to approve Verizon’s application to provide in-region, interLATA service originating in Vermont. Approval of Verizon’s application promises substantial benefits for the state’s consumers in the form of enhanced competition in both the local and long distance markets.  With the Telecommunications Act of 1996, Congress envisioned fundamental, pro-competitive changes in the telecommunications markets by making a Bell Operating Company’s (BOC) entry into the long distance market subject to the BOC first opening its local service monopoly to competition. A BOC satisfies this contingency by demonstrating compliance with section 271 of the 1996 Act. After a BOC files a section 271 long distance application with the FCC, the Commission has 90 days to determine whether a BOC has taken the statutorily required steps to open its local telecommunications markets to competition, including compliance with the 1996 Act’s section 271 14-point “competitive checklist.”  Since the passage of the 1996 Act, the FCC has denied five long distance applications, and now has approved applications to provide in-region, long distance service in 11 states. Additionally, applications for seven states have been withdrawn.  Currently, there are applications for four states pending before the Commission. A summary of all section 271 applications can be accessed at the following FCC web page: www.fcc.gov/Bureaus/Common_Carrier/in-region_applications/; FCC Press Release: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-221698A1.pdf (Adobe file)

HOW TO FIX THE DOT-GOVERNMENT - The first chief technology officer for the Office of Management and Budget, Norman Lorentz, gave a speech last week at the InfoWorld CTO Forum. The former CTO of the Postal Service, Lorentz stated, "Government truly can be transformed using the same approaches that we take in the private sector."  Over the next two years, he is charged with designing new ways to connect the 22,000 federal Web sites to companies such as Travelocity to handle government travel or Monster.gov for federal recruitment. When asked about the privacy and security issue of letting third-party sources handle sensitive federal information, Lorentz suggested that some ventures could be designed with both private and public components. http://www.wired.com/news/print/0,1294,51782,00.html

OMB HANDS OUT E-GOV FUNDING - The Office of Management and Budget has selected five of the 24 proposed e-government initiatives for funding, shunning proposals it says duplicate existing services or re-create services that are commercially available. Those selected for funding are projects that concentrate on expanding the foundation of electronic government.  The five are to receive $4.1 million from a $5 million fund established to promote e-government. The remaining $900,000 is expected to be awarded to other projects by June, said Mark Forman, OMB's associate director for IT and E-Government.  http://www.fcw.com/fcw/articles/2002/0415/web-egov-04-18-02.asp

SPEECH: NTIA DIRECTOR Nancy J. Victory - before the Federal Communications Bar Association
Washington, D.C. – “We in the Administration continue to be focused on how to remove obstacles to broadband deployment and how to ensure the development of sustained competition in the broadband marketplace. ... We have already identified rights of way regulation reform as an important issue and are working with industry, the states and localities to underscore best practices and eliminate worst ones." http://www.ntia.doc.gov/ntiahome/speeches/2002/fcba_41202.htm

ITI NAMES NEW VICE PRESIDENT OF GOVERNMENT RELATIONS - The Information Technology Industry Council (ITI) announced today that Matt Tanielian has been promoted to Vice President of Government Relations. Tanielian joined ITI in August of 1999 as Director of Government Relations. Prior to joining ITI, Tanielian was the Chief Counsel on business and technology issues for Senator Robert Torricelli (D-NJ) and the Senate Judiciary Subcommittee on Administrative Oversight and the Courts. In that capacity, he handled issues ranging from export controls to telecommunications. http://www.itic.org/2002prs/020411.htm

This Week@EMEA

THE GREAT AFRICAN INTERNET ROBBERY - Africa is being ripped off - to the tune of some $500m a year - simply for hooking up to the World Wide Web, say Kenyan internet company chiefs. And this extra cost is partly to blame for slowing the spread of the internet in Africa and helping sustain the digital divide, they contend.  According to Kenya's Internet Service Providers (ISP) Association, the continent is being forced by Western companies to pay the full cost of connecting to worldwide networks.  Chairman Richard Bell says this has led to the unfair exploitation of the continent's young internet industry.  He says the problem is that International Telecommunications Union regulations - which ensures the costs of telephone calls between Africa and the West are split 50:50 - are not being enforced with regard to the internet.  "British Telecom doesn't spend one single penny... America Online doesn't spend one single cent in sending emails to Africa."  http://news.bbc.co.uk/hi/english/world/africa/newsid_1931000/1931120.stm

A CONNECT CALL FROM ALGERIA - Algerian ambassador Idriss Jazairy encouraged a group of Northern Virginia telecommunications and technology firms to invest in Africa's second-largest country saying, "You'd be surprised to see the amount of opportunities that are there."  He went on to say the banking and insurance industries are modernizing, the government is offering exemptions on taxes and customs, and the regulatory and legal environment is liberalizing. On average, there are 5.7 phone lines for every 1,000 people in Algeria, 20,000 Internet connections, and a total of 100,000 cell phone users. Rudy L. Baca, an analyst from the Precursor Group said that instability in the international telecommunications market has created a  "...  great, great reluctance of U.S. markets to look at the overseas markets." However, some companies such as BCE Teleglobe, Inc. are looking at developing countries. Roger Wu, sales executive with BCE Teleglobe said, "We want to work with companies looking to get into countries like Algeria...Everyone talks about bandwidth excess

[here]. As far as other regions are concerned there is not enough capacity on the international side."

http://www.washingtonpost.com/wp-dyn/articles/A62747-2002Apr16.htm

GOVERNMENTAL REPRESENTATIVES FROM 26 COUNTRIES TACKLE DIGITAL DIVIDE - The first meeting of the Intergovernmental Council for the Information for All Programme met in Paris this month to discuss ways to address digital divide issues in Sub-Saharan Africa.  In 2000, only .4 percent of people in Sub-Saharan Africa used the Internet.  The Information for All Programme will focus on promoting access to the public domain information. The meeting was held at the United Nations Educational, Scientific and Cultural Organization (UNESCO) headquarters.  UNESCO Director-General Koïchiro Matsuura said, "We must look beyond technical and gadget appeal of ICTs and the Internet. We must ensure that these powerful tools and networks are used effectively to combat poverty and foster development, to create opportunities for education for all, to ensure cultural and linguistic diversity and to empower civil society." http://www.unesco.org/bpi/eng/unescopress/2002/02-25e.shtml

NATIONS WARY OF E-DEMOCRACY - In some towns in Sweden, local government meetings are carried live on the Internet and viewers are permitted to participate by asking questions or offering comments.  Using the Internet to encourage citizen participation in civic life puts Sweden on the frontier of electronic democracy, the next step beyond e-government.  In nearby Russia, however, only about 20 percent of the population knows what the Internet is. And those who do are leery of a technology that has the potential to enable the government to monitor their online activity — which, in fact, the government does, said Anthony Jones, director of the Gorbachev Foundation of North America.  For all its promise to change government, the Internet seems to produce more Russia-like suspicion than the Swedish-style embrace when it comes to e-democracy. http://www.fcw.com/fcw/articles/2002/0415/web-gov-04-17-02.asp

FRANCE / INTERNET VOTING- Favorable decision to allow experimental internet voting on next presidential elections April 21 2002 and May 5th 2002.  http://www.csti.gouv.fr/fr/liens.htm

E-GOVERNMENT: ITALY AMONGS THE EUROPEAN ADOPTERS LEADERS - "Italy IS among the first countries in Europe for the implementation of its national e-gov plan". Giuseppe Zilioni, from the European Commission, praises Italy during the event " The event took place in Rimini (Italy) in the framework of the second edition of EURO.P.A.. Also particpating Giulio De Petra, from the Department of Innovation Technology, who illustrated the e-gov call for tender dedicated to local governments and which expires on May 31 2002. http://www.adnkronos.com/SpecialiIGN/EuroPa/index.php

ITALY AND E-GOVERNMENT - These 2 articles (In Italian) summarise the 10 strategic objectives set by the Italian Government who empowered  Minister  of Technology and Innovation Lucio Stanca to make Italy one of the leading e-government nation worldwide. Among the goals, which include electronic signature widepread implementation and electronic ID, e-local government services and e-learning, also the intention to move toward e-voting. http://www.tgcom.it/ArticoloTgCom/articoli/articolo53878.shtml

NEWSLETTER: The World Summit on the Information Society Executive Secretariat is pleased to announce the first edition of the WSIS Newsletter which will be published approximately four times per year. The English version is available at: http://www.itu.int/wsis/news/news01.htm; French and Spanish versions of the newsletter will be available soon and can be accessed directly from the WSIS website: French: http://www.itu.int/wsis/news/news02.htm; Spanish: http://www.itu.int/wsis/news/news03.htm


SPAIN'S TECNOCOM AND DS2 INK POWERLINE BROADBAND PACT -
Spanish telecommunications equipment company Tecnocomunicaciones Y Energia SA and DS2, a Spanish company that designs chips for use in telecommunications over powerlines, said Wednesday they had signed a strategic alliance to provide broadband solutions over the electricity grid.Their services would enable electricity suppliers and telecom operators to roll out broadband, high-speed telecoms services to customers' residences, using existing powerline networks, they said. Powerline communications, or PLC, would achieve a share of between 15 percent and 25 percent of the broadband access market within four years, they forecast. http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020417/ap_wo_en_bu/spain_telecom_pact_1

BT SATELLITE BROADBAND TARGETS RURAL CONSUMERS - BT Group announced trials of a new satellite quasi-broadband service allowing it to widen its high speed internet access coverage to rural areas.  The service, which will begin in May, will allow users to download information from the internet at speeds of up to 256 kilobits a second - about five times faster than most dial-up modems but still half the speed of BT's main broadband offering.  The move is designed to plug the gap in BT's UK coverage for broadband. Only two-thirds of the UK population can access broadband services via BT's mainstream "digital subscriber line" service, as the telecoms operator has upgraded just over 1,000 of its 5,000 exchanges.  BT said the satellite wholesale price, the fee it will charge companies such as internet service providers that resell the facility to consumers, will be less than £15 a month, making the cost competitive compared with its DSL wholesale product.  http://news.ft.com/ft/gx.cgi/ftc?pagename=View&c=Article&cid=FT34A6CO20D&live=true&tagid=ZZZPCGI2B0C

NETHERLANDS - GRONINGEN PLANS PROVINCE-WIDE BROADBAND NETWORK - The northern Dutch province of Groningen has announced that it plans to connect all houses, companies and institutions to broadband internet infrastructure. According to the plan, the province should reach 90 per cent coverage in eight years. In order to achieve a good coverage in rural areas, the government wants to complete a province-wide main infrastructure within three years. City districts, industrial areas, schools and other institutions should subsequently be connected to these main branches. The project is unique in the Netherlands. Groningen is said to be behind compared to other areas in the Netherlands concerning IT developments. http://www.europemedia.net/shownews.asp?ArticleID=9901

UK - BT ANNOUNCES PLANS FOR UK'S FIRST PUBLIC ACCESS WIRELESS LAN NETWORK - BT announced plans to launch a public access Wireless LAN network based on 802.11b technology. The company plans to install approximately 400 hotspots by June 2003 and as many as 4,000 sites by June 2005. The access points would be situated around key public sites such as hotels, railway stations, airports, bars and coffee shops. BT estimates that the wireless LAN will be at least three times faster and less than half the price of 3G, and will take advantage of readily available technology. Motorola and Cisco were named as partners to build the new network. Full product details will be available in June and billing options will range from an annual subscription-based charge for regular users to pre-paid vouchers sold at retail stores. BT expects its wireless LAN initiative is expected to generate new revenues of at least £30m a year by the end of 2004/05. http://www.groupbt.com/Mediacentre/Agencynewsreleases/2002/an34.htm

OPEN CONSULTATION ON PAN-EUROPEAN GOVERNMENT E-SERVICES - The purpose of this consultation is to help the Commission and the Member States to identify the needs and opportunities of EU enterprises and citizens in terms of pan-European Government e-services. That is to say, the requirements for government e-services for those enterprises and citizens that interact electronically across Europe’s borders with public administrations in other Member States. http://europa.eu.int/comm/enterprise/consultations/government_e-services/index.htm

This Week@Asia/Pac

ALMOST HALF OF WORLD'S DSL USERS IN ASIA-PACIFIC - According to industry analysts RHK, nearly one-half of the world's DSL connections and more than 7.5 million DSL subscribers reside in the Asia-Pacific region. The report highlights South Korea as a hotbed of DSL activity, with four million subscribers at the end of 2001. RHK says the trend is being repeated in Japan and other Asian countries (including China and Taiwan) are expected to follow quickly. "Just three yease ago, Asian service providers were visiting North America to learn how to deploy DSL and what services to offer," RHK's Ken Twist said in a release. "Times have changed; this region now accounts for approximately 44 percent of the world's DSL subscribers." http://www.newsbytes.com/news/02/175904.html

BRAIN DRAIN IN TECHNOLOGY FOUND USEFUL FOR BOTH SIDES - Hong Lu, born in Taiwan, raised in Japan, educated at Berkeley and made wealthy in Silicon Valley, founded a company several years ago to sell telecommunications equipment in mainland China. His intention was to take advantage of his multicultural expertise, aim at a growing market and, incidentally, spread the entrepreneurial culture in Asia. He did. He gave his employees in China stock options.  "At the beginning, people were very suspicious," said Mr. Lu, a co-founder of UTStarcom, a company with its headquarters in Alameda, Calif., and its operations in Beijing. "They said, `Don't give me paper, give me money.' After we went public, they said, `Don't give me raises, give me more options.' "  A survey to be published Friday suggests that it is common for immigrants who have become a staple of Silicon Valley's growth to export their experience — and Northern California's entrepreneurial culture — back to their homelands. http://www.nytimes.com/2002/04/19/technology/19BRAI.html

CISCO TO SUPPLY EQUIPMENT FOR CHINA RAILCOM EXPANSION -- Cisco Systems Inc. said it has signed an agreement to supply equipment to China Railway Communications Co. as the telecom operator expands its Internet backbone network. Cisco said that after the expansion, Railcom's network will connect 128 cities in China "making it one of the world's largest broadband networks."  China Railcom is a state-owned commercial operator formed from the proprietary telecom networks of China's Ministry of Railways. It mainly offers fixed-line telephone service and data communications.  The planned expansion, to be completed by the third quarter of 2002, will enable the company to offer broadband services to more users in China, Railcom President Peng Peng said in a joint statement with Cisco. http://online.wsj.com/article/0,,BT_CO_20020417_012154.djm,00.html (Paid subscription required)

SPEECH: MR ERKKI LIIKANEN Member of the European Commission, responsible for Enterprise and the Information Society "Opening speech at Telecom Regulatory Workshop" Telecom Regulatory Workshop with Ministry of Information Industry Beijing, 15 April 2002 - http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/02/154|0|RAPID&lg=EN&display=

This Week@Americas International

INTERNET CAFES' PHONE SERVICE FILLS A VOID - Tegucigalpa, Honduras -With their simple wooden desks and glowing computer screens, the Internet cafes in this capital city look much like those popping up around the rest of the world, except practically no one's typing. They're all talking.  A few inches from the door of the Multinet Cybercafe, a woman in sandals is gossiping about some acquaintances into a black phone-like receiver connected by a cord to the back of a machine. Across from her, a man is inquiring about a job.  Herman Mejilla, an accountant, is chatting with his fiancee in New Jersey, asking how her university studies are going.  "Te extraño," he says. I miss you.  In Latin America and other developing areas, Internet cafes have become this generation's equivalent of the telephone booth.  The story of Honduras offers a new perspective on the "digital divide": While the population has fallen behind in adopting older technologies such as conventional phones, they are at the leading edge of some newer technologies. "The technology is increasingly empowering people with the ability to go around the limitations and restrictions of the traditional telecommunications networks to communicate on a global scale," said William Drake, visiting senior fellow at the Center for International Development and Conflict Management at the University of Maryland. http://www.washingtonpost.com/wp-dyn/articles/A4969-2002Apr17.html

MICROSOFT AND MEXICO AIM TO PUT NATION ONLINE - Mexico and Microsoft plan to announce an agreement on Wednesday to develop digital community centers as part of a broader ``eMexico'' initiative meant to bring the entire nation online by 2006. Microsoft will contribute software, consulting and training for the centers, which are to be built in remote Mexican towns and villages to give residents free access to the Internet. Microsoft will license its Windows, Office and Encarta software on the same terms that colleges and universities use and will train 4,000 computer operators to run the centers. Eventually, the Mexican government hopes to have 10,000 free public Internet kiosks in rural areas to help bring government services to citizens and reduce what has been called the ``digital divide'' of the urban rich from the rural poor.  http://www.nytimes.com/2002/04/17/technology/17MEXI.html (Free registration required)

ARGENTINE JUDGE RULES IN FAVOR OF COMPUTER HACKERS -Computer hackers may be the scourge of the digital age, hunted down by police across borders, but in Argentina they have found an unlikely ally -- the very justice system they scorned. Warning of a "dangerous legal void" making digital crimes hard to prosecute, a judge has ruled that hacking is legal by default in Argentina. The decision came in the case of cyberpirates who defaced the Supreme Court's Web page. Arguing that the law only covered crimes on "people, things and animals" and not digital attacks, a federal court declared several Argentines known as "X-Team" innocent of charges they broke into the high court's Web page to accuse judges of covering up a human rights case.  "The judge ruled that hacking didn't harm things, people or animals and thus was not covered in the law," Antonio Mille, a lawyer for Microsoft in Argentina said.  http://story.news.yahoo.com/news?tmpl=story&cid=581&ncid=581&e=4&u=/nm/20020415/tc_nm/crime_argentina_hacking_dc_1

NET USERS AND E-MAIL MARKETING IN CANADA - A 2002 study from Ipsos-Reid finds that 79% of internet users in Canada have opted-in to certain websites to receive e-mail campaigns. The study also determined that overall, 92% of internet users in Canada use e-mail on a regular basis and 88% use it on a weekly basis.  Ipsos-Reid surveyed 1,000 Canadian internet users online and conducted 1,000 telephone interviews for the "Email Marketing: What the Future Holds" report. The online surveys were conducted between 28 December 2001 and January 2002 and the telephone surveys were conducted between 10 and 23 December 2001. The report notes that, in particular, 54% of internet users who have opted into e-mail campaigns turn to news and information websites and 38% opt-in to entertainment sites. http://www.emarketer.com/estatnews/estats/email_marketing/20020416_ipsos.html

This Week@US STATES

SMALL TOWNS BUILD THEIR OWN HIGH-SPEED INTERNET SYSTEMS - As politicians in Washington debate over the digital divide, many small towns are building their own bypasses to the information superhighway. "Some of these towns were too small to get the attention of the large incumbent providers -- the rate of return isn't there for them," said Ron Lunt, director of telecommunications services for the American Public Power Association. According to one government study, less than 5 percent of towns with fewer than 10,000 residents have both DSL and cable modem service available. Small towns are building their own systems, often providing high quality service at prices cheaper than commercial providers.  Many towns are finding benefits beyond speedy Internet access. "It's a consumer-owned system - it helps support our parks, our pools, our police," says Keith Hill, borough manager for Kutztown, Pennsylvania. "The money stays in the community."  Link Hoewing, assistant vice president for Internet and technology policy for Verizon, said that towns building their own "last mile" systems are doing a great disservice. Hoewing argues that the patchwork of local systems creates a disincentive for major providers to invest and build integrated networks. Eleven states currently bar or restrict municipalities from offering high-speed Internet service, but according to energy and telecommunications consultant Carol Heiberger, "...the cities and towns are saying, 'You're not doing anything for me now. This is about economic development.'"  http://www.miami.com/mld/miamiherald/business/technology/3054045.htm

MARYLAND BUSINESSES, CONSUMERS ESPECIALLY NET-SAVVY, STUDY FINDS - Maryland's businesses and households are significantly more tech-savvy than those in other parts of the nation, according to a state-sponsored report released yesterday.  The study, managed by the Maryland Technology Development Corp. but conducted by others, found that 89 percent of businesses in Maryland use the Internet, while only 32 percent of businesses across the country are online.  "The employers [here] require high-speed bandwidth, and there is already a base of fiber-optic infrastructure in the region," noted Phillip A. Singerman, executive director of the Maryland Technology Development Corp.  Maryland consumers are also adapting to the digital age. The study says 64 percent of the state's households have a personal computer, compared with 57 percent nationally. As other national studies have found, income and education remain the biggest determinants in computer access. http://www.washingtonpost.com/wp-dyn/articles/A12061-2002Apr18.html

STATE OFFICIALS OPTIMISTIC ABOUT E-GOVERNMENT - A survey conducted at the National Association of State Chief Information Officers' mid-year meeting revealed wide-ranging opinions concerning future investment in e-government. For government-to-citizen e-government solutions, 40% of the respondents thought spending would increase next year, 24% said it would decrease and 36% said spending would remain the same. In answering a question about spending for government-to-employee e-government solutions, 46% said spending would increase, 12% said decrease, and 42% believe it will stay the same. When asked about government-to-business solutions, 54% said spending would remain unchanged, 38% said spending would

increase, and 8% said it would decrease. http://www.usatoday.com/life/cyber/tech/fcw1.htm


DENVER PITCHES OFFICIAL WEB SITE - In an aggressive campaign beginning May 1, Denver will advertise its government Web site through community newspapers, radio spots and a city-owned cable channel. It's an unusual move within a sector unaccustomed to such marketing efforts.  "I see the need being precipitated by the competition out there," said Steve Hansen, marketing director for the city's Television and Internet Services Department.  Scores of "imposter" sites — such as news, travel or "underground" sites — bill themselves as "the official Denver Web site," he said, and then provide links to the city's site (www.denvergov.org), which was launched in 1999. "We felt like we had to do a full-blown branding to the public," Hansen said, adding that the initial marketing push will last through November. http://www.fcw.com/geb/articles/2002/0415/web-denver-04-16-02.asp

NEW ORLEANS MAYOR SEES WEB AS TOOL - The incoming mayor is employing high-tech hiring tactics in a city where old-style patronage has long ruled: People are invited to apply for the city's top jobs at popular Web sites such as Monster.com. Ray Nagin, who was a regional cable television executive and political unknown just months ago, has pledged to make New Orleans more business-friendly, and says he wants to start by creating a modern, customer-friendly City Hall.  "Ray has a whole different approach because he comes straight from the corporate world," said Flo Schornstein, a retired city parks director who has joined Nagin's transition team.  "And because he's never been a politician, he doesn't come in with individuals or groups to whom he owes anything, so the whole issue of patronage and cronyism is out the window."  Some skepticism remains over whether substantive change will come under Nagin, who officially takes over May 6. He grew up here and has personal and professional relationships with some of the people known as political insiders in Mayor Marc Morial's administration.  Nevertheless, Nagin has pledged to work to change the city, and will use the Internet to help modernize city government.  http://story.news.yahoo.com/news?tmpl=story&cid=528&ncid=528&e=3&u=/ap/20020417/ap_on_re_us/web_government_2

CALIFORNIA LAWMAKER PROPOSES REFORMS AT STATE TECH AGENCY - San Jose Assemblyman Manny Diaz, who has come under fire for championing the troubled agency that oversees California's multibillion-dollar technology systems, is proposing new restrictions on the Department of Information Technology and its embattled director.  As the state auditor prepares to release a critical review of the department's role in a $126 million no-bid contract the state signed with Oracle last year, Diaz is urging the Legislature to ban the department from participating in the negotiation of future technology contracts. http://www.siliconvalley.com/mld/siliconvalley/3071285.htm

JOINT VENTURE: SILICON VALLEY NETWORK NAMES LEADER - Marguerite Wilbur today will be named president and chief executive of Joint Venture: Silicon Valley Network, capping a long search for a new leader of the civic organization that recently has struggled to find a mission.  Wilbur, a former land-use consultant and city redevelopment official, takes the reins of Joint Venture following the early 2001 departure of Ruben Barrales, who left for a job in the Bush administration.  Founded in 1992 by then-Hewlett-Packard Chief Executive Lew Platt and Applied Materials Chairman Jim Morgan, the consortium of government, industry, education and community leaders set out to revitalize the valley's economy at the depth of the early 1990s recession. http://www.siliconvalley.com/mld/siliconvalley/news/local/3071419.htm

OTHER TECH STORIES OF THE WEEK

A PIPE-DREAM FIRES UP - Wi-Fi took off a few years ago as a way to connect local networks without having to run cables everywhere. All Wi-Fi requires is a network access point base station and receiver cards for each computer. As the cost of setting up Wi-Fi falls, more and more access points are appearing around the world - especially ones set up by idealists believing that free Internet access should be a basic human right. But neither the idealists nor the entrepreneurs have been successful in creating solid WI-Fi networks. A new company in New York, Joltage, is breathing new life into Wi-Fi networks.  Joltage charges users $2.95 per hour for access to a global network. Half of net profits are then distributed to network cells (anyone can operate a cell). The idea being that just a few Joltage users a day could offset the cost of running access points. There is a hitch though: Wi-Fi cells require a fixed-line connection to the Internet that most ISPs and telecom providers forbid the sharing or resale of. Thus far, the fixed-line providers have turned a blind eye to use of their connections for Wi-Fi cells, but it is just a matter of time before they go after Joltage and Wi-Fi in much the same way the music industry went after Napster. Fortunately, there is already a newer technology waiting to take WiFi's place - mesh networks. http://www.guardian.co.uk/online/story/0,3605,685812,00.html

'OFF-THE-SCALE' FIBER GLUT ROCKS TELECOM INDUSTRY - Expecting the growth of Internet traffic to spur an increase in bandwidth has resulted in billions of dollars in fiber networks currently going unused.  Many companies have ended up in bankruptcy court, and thousands have been laid off as telecommunications companies try to cut their losses and regroup. "It will be years before we'll need all the capacity out there," said Scott Cleland, chief executive of the telecom investment research firm the Precursor Group. "We're off-the-scale overbuilt."  The Telecommunications Act of 1996 attempted to increase competition, thus driving demand and traffic for high-bandwidth services.  The result of the last six years is a glut of fiber in the long-haul networks between cities, and the lack of high-speed connections linking homes and businesses to these long-haul networks.  Despite the current glut, many people, such as telecom consultant Jeff Kagan, believe that "...as soon we get enough homes and offices connected, we're going to suck that bandwidth right up. Unless you

believe that the Internet is going back to text rather than forward to audio and video, there is going to be an incredible demand for bandwidth." http://www.siliconvalley.com/mld/siliconvalley/news/local/3057057.htm

AOL STRUGGLES TO IMPLEMENT PLAN FOR HIGH-SPEED INTERNET ACCESS - AOL Time Warner Inc., whose online service is struggling to hold on to customers who want high-speed Internet access, is rethinking its cornerstone strategy of promoting such broadband access nationwide. The move calls into doubt one of the main goals of the merger that brought the Internet and media colossus into existence.  Co-Chief Operating Officer Robert Pittman, tagged last week to take over the America Online division, said in an interview that he has told employees the unit should focus on persuading its existing customers to retain their $23.90-a-month America Online accounts even when they sign up for $40-to-$50-a-month high-speed Internet access from rival cable companies. America Online's traditional dial-up service makes the company more money -- so what's the hurry?  http://online.wsj.com/article/0,,SB1019164145697038240.djm,00.html (Paid Subscription required)

MOTHERS WATCHING LESS TV, SURFING WEB MORE - Women with children are tuning in to less television and more Internet these days, Jupiter Media Metrix said in a report to be released Thursday. "Women with children most likely have more time constraints, and therefore a limited time budget for media consumption. Therefore, increased use of the Internet is more likely to cannibalize time that was once spent watching television for these women," said Jupiter analyst Jon Gibs in the report. About 44 percent of women with children said their usage of the Internet caused them to spend less time watching TV, the Internet research firm found in its report. Jupiter recommended that advertisers and programmers interested in reaching mothers should therefore consider increasing their online marketing efforts relative to TV advertising. The report comes at a time Internet companies are trying to woo advertisers to the Web by proving to them that the ad dollars spent online will go a long way.  http://story.news.yahoo.com/news?tmpl=story&cid=582&ncid=582&e=1&u=/nm/20020417/wr_nm/tech_women_internet_dc_1

CISCO LAUNCHES NEW LINE OF NETWORKING EQUIPMENT - Cisco Systems Inc. said it had begun offering wireless-networking equipment that transmits data five times faster than traditional products.  Cisco, San Jose, Calif., said the Aironet 1200 series Access Point and radios would transmit up to 54 million bits of data per second, compared to 11 million bits per second for older Aironet products.  The Aironet products, which use Wi-Fi, or 802.11 technology, are primarily used to create wireless office networks, so employees can stay connected to a corporate network while moving room to room with a laptop computer, for example.  Some entrepreneurs use Wi-Fi equipment to offer Internet access in airports, hotels and coffee shops. And a growing band of hobbyists use the gear to offer free Internet access in small communities or city neighborhoods.  Cisco said the new Aironet products would be compatible with the older models, and can be upgraded when new features or security software become available. http://online.wsj.com/article/0,,SB1019028170922282080,00.html?mod=technology_main_whats_news (Paid subscription required)

ECHOSTAR, SBC IN INTERNET, SATELLITE TV PACT - No. 2 U.S. local telephone company SBC Communications Inc. said it would start selling its high-speed Internet service together with EchoStar Communications Corp.'s satellite television service as it battles cable operators. Cable companies are locked in a competition with both phone and satellite TV companies to give consumers one-stop shopping for Internet, pay television and telephone services. By bundling SBC's Internet with EchoStar's satellite service, the two companies hope to take market share away from cable companies that have succeeded in selling services like digital cable and Internet services over cable lines. http://story.news.yahoo.com/news?tmpl=story&cid=582&ncid=582&e=8&u=/nm/20020417/wr_nm/media_echostar_sbc_dc_1

TELECOM FIRMS RACE TO INSTALL NEXT-GENERATION WIRELESS NETWORKS THAT WILL ENABLE 'THE NEXT BIG THING' TO FLOURISH - After several years of false starts, the grand hopes for mobile commerce in 2002 rest in no small part on the slender shoulders of Adirem Quintel.  The 25-year-old field technician for Nortel Networks Corp. is part of an army of thousands of workers who are quietly yet methodically visiting cellular towers across the nation and upgrading them for a new generation of faster wireless networks.  Quintel typically visits two or three of them a night, each time installing a sophisticated piece of digital switching equipment for Verizon Wireless Inc. that allows cell phones, two-way pagers and hand-held computers to transmit data as fast as desktop PCs with dial-up connections to the Internet. Wireless carriers expect to have their next-generation wireless networks turned on in the country's major metropolitan areas by year-end. Verizon has launched its Express Network in Salt Lake City, the San Francisco Bay Area and the Northeast corridor connecting Boston, New York and Washington. Sprint PCS Group Inc. plans to switch on its entire nationwide high-speed network this summer. Cingular Wireless, AT&T Wireless Services Inc. and others are going forward with new networks as well. http://www.latimes.com/technology/la-000027534apr18.story?coll=la%2Dheadlines%2Dtechnology

SBC CONNECTS WITH DSL SUBSCRIBERS - SBC Communications said that it has more than 1.5 million high-speed Internet access subscribers, courtesy of strong gains in the first quarter.  The company recorded a net gain of 183,000 digital subscriber lines in the first quarter, a 25 percent jump from the fourth quarter and a 59 percent rise from a year ago. SBC's DSL service now reaches more than 25 million customer locations, the company said in its quarterly results. Morgan Stanley had expected SBC to post a net gain of 150,000 DSL subscribers.  SBC attributed part of the DSL growth to an easier installation process, dropping the number of installation CD-ROMs from two to one and trimming the instruction booklet from 30 pages to a one-page brochure. http://news.com.com/2100-1033-885880.html

DEAL REACHED TO COMBAT DIGITAL PIRACY - A group of electronics makers and movie studios moved the rollout of digital TV a step ahead Tuesday with a preliminary agreement on copy protection for high-definition broadcasts and digital TV sets.  The format, called High Definition Multimedia Interface (HDMI), is a single, high-speed connection that would carry full-bandwidth digital video and audio from set-top boxes to TV sets.  Most observers note this agreement was necessary for further negotiations to continue between hardware manufacturers and studios. But they also caution that it's just one of a laundry list of issues that must be addressed before Hollywood would be willing to feed the pipeline for the new broadcast standard without fear of its products being pirated.  http://www.usatoday.com/life/cyber/tech/2002/04/17/digitaltv-usat.htm

MYOPTIC VISION: E-LEARNING A LONG WAY FROM FLUNKING - Talk to analysts on Wall Street, and they’ll tell you that e-learning is in a bit of a funk right now — most recently illustrated by the busted $284 million merger between Lexington’s Centra Software Inc. and SmartForce PLC after disappointing quarterly results for both.  Talk to organizations using the technology and you will hear something different altogether.  You can hear a lot about it next month if you choose. Vivek Pandit and other graduates from the MIT Sloan School of Management are making e-learning the focus of their third spring symposium, to be held on May 18 on the Sloan campus in Cambridge.  Speakers include Andrew Lo, a Sloan finance professor who has taught a class over long distances to businessmen in Pacific Rim nations, and Tom Kelly, vice president of the Internet learning solutions group at Cisco Systems.  Last month, Kelly gave industry analysts an update on Cisco’s e-learning initiatives. He said that the California network equipment maker is saving more than $40 million annually by using e-learning platforms to educate its work force.  Perhaps more important, in a recent survey on its program’s effect on Cisco partner companies, 72 percent said that they had decreased training costs by at least half, and 76 percent said their satisfaction with Cisco had increased by 50 percent.  Are you listening, Wall Street?  http://www.masshightech.com/displayarticledetail.asp?art_id=56497&cat_id=99

NEW YORK'S NATURAL HISTORY MUSEUM PIONEERS USE OF INTERNET2 - More than 190 universities are connected to Abilene, the backbone network operated by the Internet2 consortium of research universities. But only one independent museum -- the American Museum of Natural History in New York -- participates in the network consortium. Other museums have inquired about Internet2 but so far have not participated, says Greg Wood, a spokesman for Internet2.  In many ways, New York's natural-history museum is like a research university, with similar needs for a high-speed research network.  http://chronicle.com/free/2002/04/2002041701t.htm

DIGITAL MUSIC DOWNLOADING 'BIGGER THAN NAPSTER' - Despite the absence of the legally challenged Napster, the seminal file-sharing service that helped change the way people listen to music, digital downloads and file-swapping continue at a hefty pace.  According to a study released today by market research firm Odyssey, 31 percent of online users over the age of 16 - which translates to over 40 million U.S. consumers - have downloaded or transferred music online in the past six months. Odyssey said respondents reported an average of 11 downloads or file transfers per week. http://www.newsbytes.com/news/02/175893.html

PEDDLING ON THE WEB - DOT-COMS MAY BE DEAD, BUT SMALL BUSINESSES ARE STILL USING THE INTERNET TO EXTEND THEIR REACH - E-commerce hasn't died. It's just gone underground. At a time when acres of glassed-in offices hold the ghosts of failed dot-coms, one of New England's more successful online businesses operates from the musty basement of a West Newton bicycle shop. Downstairs at Harris Cyclery sits the computer workstation of Sheldon Brown, a bearded veteran mechanic who has generated an international following for the shop's Web site. It also brings in a third of the shop's sales. Harris Cyclery avoids competing with bigger online bicycle retailers by focusing on hard-to-find replacement parts like the fixed-gear wheels favored by bike messengers. Brown also dispenses plenty of free advice, both over the Web and with direct e-mails. Larger online bike retailers ''will have the quarter-pounder with cheese,'' Brown said. ''We'll have the replacement hamburger patties and a different kind of cheese.'' http://www.boston.com/dailyglobe2/105/business/Peddling_on_the_Web+.shtml

INTEL'S QUIXOTIC QUEST FOR NEXT BILLION USERS - UNLIKELY TEAM TRYING TO INVENT FUTURE - Humanities majors do have a future in high tech after all.  In the heart of chip giant Intel Corp.'s research and development group here in the great Northwest is a small cadre of researchers who don't want anything to do with math, physics or chemistry. They are anthropologists and psychologists who hang out with teenagers in local hostels, young families in their living rooms, fishermen on their boats in Alaska, American Indians on Navajo reservations and the poor in Brazil.  Their mission is to find out how technology can penetrate some of the unlikeliest places and spell potential future market growth for Intel. http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2002/04/19/MN240804.DTL


FACTS AND STATS:

U.S. ONLINE TRAVEL LIFTS E-COMMERCE TO ALL-TIME HIGH - Consumers spent a record $6.9 billion at travel-related Web sites in the U.S. during the first quarter of 2002. According to a new study by ComScore Networks, the online travel sector's recovery from a terrible fourth quarter helped lift total e-commerce spending to $17 billion during the first three months of the year - also a record. http://www.newsbytes.com/news/02/175928.html

KOREA SEES SIGNIFICANT RISE IN ECOMMERCE - The Korea Times reports that online sales in Korea increased by 84.9 percent in February, compared to the previous year. http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357823&rel=true

AMERICANS WANT ONLINE ACCESS TO DOCTORS - Most Americans would like to be able to contact their doctor online, reports CyberAtlas. http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357844&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@2002

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E-UPDATE ARCHIVE

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