Cisco Government Affairs E-Update

Volume 2, Issue 21

24 May 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

A WEB OF DREAMS UNREALIZED: HIGH-SPEED NET ACCESS SLOW TO CATCH FIRE  - Federal Communications Commissioner Kathleen Abernathy didn't think she needed a high-speed Internet connection.  "I'm doing messages at home. Why would I need to pay more for broadband?" she asked.  But Abernathy's 6-year-old daughter showed her otherwise. A homework assignment on American presidents, involving lots of color photos, pasting and posters, required interminable waits for dial-up Internet downloads.  Value, however, was an issue. With broadband connections costing $50 or $60 a month, Abernathy wasn't completely satisfied with the return for her investment.  “I should have gone to the library," she said. Bruce Mehlman, the Commerce Department's assistant secretary for technology policy, said consumers and small businesses think broadband is too expensive.  "Many consumers fail to see the value proposition for investing in broadband, considering it a luxury or not yet worth the investment," he said.  He said his office is concentrating on helping small businesses understand how broadband could boost their productivity.  http://seattletimes.nwsource.com/html/businesstechnology/134457562_btbroadband20.html

SENATE APPROVES BILL GIVING WIDER TRADE AUTHORITY TO BUSH - The Senate passed a broad trade bill that would give President Bush the authority to reach trade agreements that are largely immune from Congressional tinkering but would greatly increase aid to workers who lose their jobs because of foreign competition.  The 66-to-30 vote brought the White House close to a top legislative priority that administration officials say will make it easier to expand trade, allowing Mr. Bush to reach trade accords that Congress could accept or reject, but not amend.  The Senate's lopsided approval followed razor-thin passage of trade authority in the House late last year, the first time in eight years that both houses of Congress have agreed to grant the White House the enhanced negotiating powers.  http://www.nytimes.com/2002/05/24/politics/24TRAD.html (Free registration required)

USERS TO FIRSTGOV: WE’LL BE BACK - Efforts to build a more user-friendly FirstGov are paying off. Visitors to the redesigned government portal are giving it much higher marks than its predecessor earned, said Web analyst Larry Freed.  A survey designed to rate customer satisfaction shows that first-time visitors to the FirstGov (www.firstgov.gov) are much more apt to return for additional visits than were first-time visitors to FirstGov before its February overhaul. Repeat visitors say it is easier to find what they want on the new site, Freed said.  http://www.fcw.com/fcw/articles/2002/0520/web-first-05-22-02.asp

LATE FINE PROPOSED FOR AT&T WIRELESS  - AT&T Wireless Services faces a $2.2 million penalty for failing to install equipment needed to pinpoint locations of customers' emergency calls. The Federal Communications Commission proposed the fine because the Redmond company missed an October deadline to upgrade part of its network so that police can find callers who dial 911. AT&T Wireless also didn't sell the type of handsets needed for the upgrade, the agency said.  http://seattletimes.nwsource.com/html/businesstechnology/134458297_attfine21.html

FTC-DOJ MERGER-REVIEW PLAN ABANDONED - Sen. Ernest Hollings (D-SC) has halted a planned swap of merger-review assignments between the Federal Trade Commission (FTC) and the Department of Justice (DoJ). After the agreement was finalized back in March, the Media Access Project, Consumers Union and Consumer Federation of American joined the Center for Digital Democracy (CDD) in seeking to reverse the agreement. According to the plan, the Department of Justice would have taken over the review of all media and Internet-related mergers. In response to the original plan, Jeff Chester, the executive director of the Center for Digital Democracy said, "The FTC has played a unique and important role in media and new media-related mergers, given its orientation as both an antitrust and consumer protection agency. Now all such mergers will be under the supervision of a presidential appointee. Given the Bush administration's apparent support for massive media deregulation, one can only surmise that today's announcement sends a strong signal to big special interests that they will get easy treatment." Sen. Hollings blocked the agreement by threatening budget cuts to the DoJ and FTC. The FTC has been restored to its former role and will be overseeing the upcoming AT&T Comcast merger. http://www.democraticmedia.org/news/washingtonwatch/ftcdojUpdate.html

ITI PRAISES FCC FOR PROMOTION OF HIGH-SPEED WIRELESS - The Information Technology Industry Council (ITI) applauds the Federal Communications Commission (FCC) for amending Part 15 of its rules in their Second Report and Order last week to promote the development of new digital transmission technologies for high-speed wireless communications. ITI filed comments on Part 15 last year, recommending that the FCC allow manufacturers more design and emission flexibility, as well as permission for new products to operate in unlicensed bands http://www.itic.org/policy/fcc_010921.htm.

ROYALTY RATES FOR INTERNET RADIO REJECTED - Librarian of Congress James H. Billington, overseer of the U.S.Copyright Office rejected proposed royalty rates and stated he would give a final

decision on June 20. Webcasters have been actively lobbying to reduce the proposed royalty rated they fear will put them out of business. The rates would be e retroactive to 1998 and could cost large webcasters hundreds of thousand of dollars annually. Webcasters currently pay royalties to composers and music publishers based on a percentage of their revenue. Traditional radio broadcasters have avoided paying royalties for each song played by arguing that they are promoting the music. After the final ruling comes down opponents can appeal within 30 days and a court can modify or set aside Billington's decision.  http://www.washingtonpost.com/wp-dyn/articles/A53422-2002May21.html

This Week@EMEA

BROADBAND COMPETITION 'A MYTH' - According to analyst firm IDC, European subscriptions to high-speed Internet services are increasing due to aggressive marketing campaigns by incumbent operators rather than true competition. "Incumbent operators have a majority share of broadband connections in most countries," said IDC research manager Jill Finger. IDC attributes the lack of a competitive broadband environment on the failure to unbundled local-loops. Says Finger, "The local-loop unbundling process is simply too complex and politically problematic to create a competitive broadband access market within a reasonable timeframe." http://news.bbc.co.uk/hi/english/sci/tech/newsid_2002000/2002160.stm

EU NEEDS TO IMPROVE PRODUCTIVITY TO MEET LISBON GOAL OF GREATER COMPETITIVENESS - The European Commission today published its 2002 Competitiveness Report. The annual competitiveness reports identify trends and key factors behind growth and productivity developments in the EU. This year's Report focuses on three special themes: human capital; productivity performance of EU services; and sustainable development in EU manufacturing.  http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/02/753|0|RAPID&lg=EN

SPEECH: Mr Erkki Liikanen Member of the European Commission, responsible for Enterprise and the Information Society "European Competitiveness Report 2002" Press Conference Brussels. http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.getfile=gf&doc=SPEECH/02/224|0|RAPID&lg=EN&type=PDF

UNITED KINGDOM - Oftel has announced the appointment of Phillip Rutnam as its new Regulatory Policy Director. The press release is at: http://www.oftel.gov.uk/press/releases/2002/pr30_02.htm

TEXT MESSAGE VOTES 'TRIVIALIZES' ELECTIONS - Earlier this month, the United Kingdom held e-voting trials at local elections in several cities. The results from this trial, along with a study led by the De Montford University, are in. The survey suggests that many people like the idea of Internet or interactive television voting, but worry about security and privacy.  Others simply found the process (like keying in personal identification numbers) unwieldy. The election trials showed mixed results in boosting voter turnout: some areas saw marked improvement, while in other wards, voter turnout fell. Dr. Laurence Pratchett, who led the research, said "There is support for e-voting in the population, even among those who won't use it." However, he cautions that "Those who don't vote are no more likely to vote" because of e-voting availability. Part of the problem is that many people felt that e-voting methods, such as Internet and text messaging from mobile phones, trivialize the voting process and disconnect the voter from the system even further. http://news.bbc.co.uk/hi/english/uk_politics/newsid_2002000/2002212.stm

L’Observatoire des télécommunications dans la ville qui a pour objectif d’accompagner les collectivités territoriales dans la société de l’information et de la communication vient de faire paraître deux études traitant des grands domaines au cœur des préoccupations des collectivités : Le panorama des réseaux haut débit initiés par les collectivités territoriales : base de travail et développement local et nouvelles technologies.

La Commission européenne a organisé à Bruxelles le 16 mai dernier une conférence de suivi de l'initiative Go Digital, initiative qui vise à encourager les PME à s'engager dans le commerce électronique. Les documents présentés lors de cette conférence sont disponibles sur le site Internet de la Direction générale société de l'information. A noter qu'il était possible de suivre cette conférence en ligne.

SWEDEN'S POST OFFICE PUSHES ONLINE MAIL - Posten, Sweden's national post office, is trying to persuade Swedes to sign up for a new Internet mail-delivery service. "Our vision," says Posten spokeswoman, Margareta Chowra, "is that the hall carpet or mailbox will never be cluttered with anything but the occasional love letter or invitation to a party." Posten, like many other national postal services around the world, has seen its revenues drop due to competition from private delivery services and e-mail. Through its new Internet service, Posten hopes to reinvent itself and recapture customers. The new service, dubbed ePostbox, will cost companies about 25 percent less than standard mail delivery. Other countries with electronic post office services, such as Canada, the U.S. and Finland, have not seen customers rush to use the service. http://www.iht.com/articles/58378.html

This Week@Asia/Pac

CHINA BREAKS UP PHONE MONOPOLY - China broke its former phone monopoly, China Telecom, into two companies Thursday in hopes that competition will build up the industry as the country's economy is opened to foreign rivals.  China Telecom had been one of the world's biggest phone companies, with 100 million lines.  The two new companies launched Thursday inherit one of the world's most modern fiber-optic networks and one of the biggest Internet markets.  One company keep the China Telecom name and operate in 21 southern and western provinces. The other has operations in 10 remaining provinces with a data communications carrier, China Netcom Corp., under the Netcom name.  China's cabinet ordered the breakup on Dec. 11, the day it joined the World Trade Organization. As a condition of membership, Beijing has promised to let foreigners own up to 50 percent of telecommunications ventures after two years and 49 percent of mobile phone companies after five years. http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020516/ap_on_bi_ge/china_phone_breakup_2

SINGAPORE TELECOM WOOS MOVIE LOVERS TO INTERNET - Singaporeans are avid cinema goers but the city state's biggest telecommunications company is banking on them having popcorn at their personal computers with its new movie-on-demand service.  Singapore Telecommunications said this week its high-speed broadband Internet customers can have unlimited viewing of 20 movies each month for a nominal fee. A promotional offer of S$4.80 ($2.66) per month for the first year ends in June, when the regular rate of S$12.80 will kick in.  May's offerings include blockbusters like "Erin Brockovich," "Charlie's Angels" and "Final Fantasy," Asia's fourth-largest telecoms player said in a statement.  Singapore, with a population of just four million people, boasts some three dozen multiplex movie theatres and other cinemas -- many of which are packed on any given day.  The island is also one of the most plugged-in Asian nations, with nearly one in two households having an Internet connection.  http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020516/wr_nm/leisure_singapore_singtel_dc_1

NONPROFIT AIMS TO WIRE RURAL ASIAN SCHOOLS - Room to Read, a nonprofit start-up dedicated to improving literacy in developing nations, will launch a new division Wednesday to wire impoverished classrooms in Asia. Eleven classrooms in Nepal and Vietnam will be the first recipients of grants under the new program, which provides each school with four computers, one printer, all related hardware and software and a dedicated dial-up connection. Room to Read founder John Wood said the group will be cautious when selecting the rural districts that receive computer grants; "There are certain communities where doing this program would be putting cart before the horse. Some places don't even have electricity." Communities that receive Room to Read computer grants must provide matching grants for teacher training and computer upgrades, repairs  and maintenance. Wood dismissed concerns that Internet access would transform rural communities by exposing them to Western commercialism. He noted that Room to Read is encouraging donations of educational software and CD-ROMs to help children learn languages, advanced mathematics and

physics--not just software that enables them to get into AOL chat groups to discuss American pop culture and trivia. http://news.com.com/2100-1017-920022.html?tag=fd_top

This Week@Americas International

CANADA’S BINDER AT FCC - The FCC held a public international symposium on broadband deployment this week, hosted by FCC Chairman Michael Powell.   The featured speaker was Industry Canada Assistant Deputy Minister Michael Binder. Please see his presentation on Canadian Broadband here:

http://smartcommunities-broadband.ic.gc.ca/binder/FCC%20Keynote%20(May22-02).pdf (Adobe file)

SURVEY BAD NEWS FOR DIAL-UP SERVICES: 48% WOULD SWITCH TO HIGH-SPEED IF PRICE WERE RIGHT  - AOL Canada, "You've got trouble." Nearly half of Canadians who use a dial-up service to access the Internet would switch to a high-speed service if the price were less than $25, a survey released yesterday has found.  The survey, based on more than 1,000 online interviews conducted recently by market research firm NFO CFgroup of Toronto, discovered that 48 per cent of dial-up users, when offered an unlimited high-speed link to the Internet for $20 to $25, would opt for the faster service.  The findings come at a time when Rogers Cable Inc. and Bell Sympatico, the two dominant high-speed service providers in Ontario, have both introduced lower-priced versions of their cable modem and digital subscriber line services.  In April, Rogers began selling a "Lite" service for $24.95 a month that downloads twice as fast as premium dial-up modems.  And earlier this month, Bell announced a DSL service with similar speeds for $29.95 a month. http://www.thestar.com/NASApp/cs/ContentServer?pagename=thestar/Layout/Article_PrintFriendly&c=Article&cid=1022104940192

This Week@US STATES

BIG-CITY BROADBAND GROWING AT HIGH SPEED - The fast pace of big-city life shows up in urbanites' movement toward high-speed Internet access at home, Nielsen//NetRatings said.  Sixty percent of the 20 largest cities in the U.S. show at-home broadband population growth of more than 50 percent for the year ending April 30, according to the audience-measurement service.  Half of those cities saw the high-speed subscriber count more than double, and broadband growth in one city - Hartford, Conn. - nearly quadrupled, Nielsen reported. "While some barriers exist to broadband expansion such as increasing costs, there is healthy room for additional growth and adoption of broadband," NetRatings analyst T.S. Kelly said in a news release. http://www.newsbytes.com/news/02/176676.html

LOCAL GOVERNMENTS SUE FCC OVER CABLE RULING LOSSES - Groups representing the nation's local governments on Tuesday said they were suing the Federal Communications Commission in federal court over a ruling they say will cost them $300 million in revenues from lost cable fees this fiscal year alone. The lawsuit concerns the FCC's March decision to insulate high-speed Internet services offered by cable companies like AOL Time Warner Inc and AT&T Broadband from extensive regulations. The FCC tentatively concluded that, under the law, local authorities are not allowed to charge a fee for the cable Internet service like the fee currently charged for video programming offered by the cable operators.  "We are calling on the court to right the FCC's wrong by tossing out that ... ruling," Larry Naake, head of the National Association of Counties, told a press briefing. http://story.news.yahoo.com/news?tmpl=story&u=/nm/20020514/pl_nm/media_cable_dc_1

SILICON VALLEY SUPPORTING THE CALIFORNIA BALDRIDGE IN EDUCATION APPROACH
Leaders throughout Silicon Valley are supporting the Baldrige in Education (BiE) approach.  The bill SB 1543 (McPherson) would require the California State Department of Education to operate pilot programs based on the Baldrige criteria and principles with twenty-seven schools throughout California.  The most important aspect of the BiE approach is that it serves to eliminate performance gaps among gender, ethnicity, economically disadvantaged, special needs and English language learners in the student population.  Schools employing the Baldrige approach have documented and reported, not only higher student achievement, but greater effectiveness in daily operations and higher satisfaction ratings from staff, parents and students. The Baldrige in Education (BiE) approach to continuous educational improvement has been highly successful in schools around the country. For more information on the BiE approach please visit their website at: http://www.biein.org/

GOV. VENTURA SIGNS INTERNET PRIVACY BILL - Governor Jesse Ventura of this week signed legislation that makes Minnesota the first state to enable Internet users to decide how ISPs handle personal data. The bill, which was overwhelmingly approved by state lawmakers, requires Internet service providers to notify subscribers that they can control whether their data is disclosed and how it is to be used. Internet giants like America Online and Yahoo remain strongly against the legislation as it imposes new liabilities on companies that are victims of online fraud or hacking. http://www.newsbytes.com/news/02/176737.html

OTHER TECH STORIES OF THE WEEK

VISIONS OF A WILD AND WIRELESS FUTURE - What does one of the founders of the Internet think about how it is being uses and where it is going? Robert Kahn, co-inventor of the TCP/IP protocols (the foundation language of the Internet) says "It's the tip of the iceberg now. Kahn believes in the future of the Internet, despite the Internet bubble burst and problems with new technologies. The creative potential for the Internet, he feels, is limitless in part because "The Internet is an architectural philosophy, rather than a technology." One of the biggest failures of the Internet, says Kahn, is the untapped potential for education. "We've made," he says, "almost no progress with regard to the Internet and education." http://www.washingtonpost.com/wp-dyn/articles/A60488-2002May22.html

AT&T TO MAKE BROADBAND SPEEDS UNIFORM - AT&T Broadband is standardizing service across its high-speed cable modem network, doubling connection speeds for some customers but forcing others to wait longer to upload information from the Internet.  AT&T customers that were acquired through the 1998 acquisition of Tele-Communications Incorporated (TCI) can now send 128 kilobits of data per second from their computer to the Internet (the upstream speed). But starting later Friday, the former TCI customers will get an upstream boost to 256 kilobits per second, AT&T Broadband spokeswoman Sarah Eder said Friday.  http://msnbc-cnet.com.com/2100-1033-922437.html

STUDY LOOKS AT HEALTH WEB SITE USE - Nearly two in three U.S. Internet users go online for health information, and many may not be applying a healthy enough dose of skepticism to the advice they find, a new study shows. The Pew Internet & American Life Project, in a study released recenly, found that only a quarter of Americans who seek health information online always follow recommended procedures for checking its source and timeliness. Another quarter did so most of the time, while half did so only sometimes, hardly ever or never.  http://www.nytimes.com/aponline/technology/AP-Internet-Health.html

SONICBLUE GETS STAY OF COURT ORDER - SONICblue Inc. received a stay of a magistrate's ruling requiring the company to monitor customer usage of its ReplayTV digital video recorder. SONICblue, based in Santa Clara, Calif., said Wednesday that the stay postpones a final determination that the company be required to develop software that monitors ReplayTV 4000 usage until at least June 3.  ReplayTV 4000 is a broadband and home network-enabled DVR that allows consumers to distribute recorded programs and share personal recordings of non-protected video content with other ReplayTV users.  The court order requires SONICBlue to gather viewing information on each viewer and log that data under a unique identification number.  Television studios and networks are attempting to force SONICBlue to keep records of customers to determine the extent of what the studios consider theft of copyrighted programming. http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020515/ap_on_hi_te/sonicblue_stay_4

BRIDGING THE DIGITAL DIVIDE - The Blacks in Technology Summit brought together more than 4,000 children and adults to discuss the digital divide between African Americans and whites. Attending the summit were Rev. Al Sharpton and Steven Ballmer, CEO and president of Microsoft. Ballmer said, "We must overcome the digital divide in which only 56 percent of African Americans work on personal computers compared to 70 percent for white Americans". He also stressed the importance of bringing African American businesswomen and men online. "With small business a key driver of American economic growth...ethnic small business must understand and embrace the new technology that can help them succeed in the digital decade ahead." Art Price of Hewlett-Packard pointed out that getting online is crucial in keeping abreast of the job market. "If you learn the basics (of computer literacy), you will get a job. There are some 7.5 million jobs online." http://athena.tbwt.com/content/article.asp?articleid=777

THE DIGITAL DIVIDE - Hollywood and Silicon Valley are at each other's throats. Both are in a slump - and each blames the other for its plight. The Valley's leading technology companies complain that the music and film industries are holding back the development of online distribution. Because of their obstructiveness, there is no compelling content on the internet to drive the adoption of broadband technology and so stimulate demand for their hardware. As Terry Semel, chairman and chief executive of Yahoo, put it recently: "Four years ago, we saw the change in [music buying] habits - and the [recording] industry still hasn't moved."  Content owners point the finger at the technology industry. Electronic distribution was supposed to fire up sales; instead, it has made copying easy. The music industry has suffered most but film will soon follow. "Many people in technology say the killer application is pirated content," said Michael Eisner, chairman and chief executive of Disney, before a Senate commerce committee in February. "It's very hard to negotiate with an industry that thinks its short-term growth is dependent on theft." http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021912568035&p=1012571727248

FACTS AND STATS:

GROWING NUMBER OF HIGH-SPEED NET USERS IN CANADA - A recent study from NFO CFgroup reports that as of April 2002, 46% of online households in Canada are making high-speed connections -- up from 34% in 2001. NFO notes that this compares to the 44% of home internet users making dial-up connections -- down from 54% in 2001. http://www.emarketer.com/estatnews/estats/edemographics/20020523_nfocf.html?ref=ed

MOBILE & WIRELESS INTERNET REVENUES TO GROW - Worldwide revenues from mobile and wireless Internet services will rise by more than USD17 billion over the next six years, reports eMarketer.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357959&rel=true

KOREAN ONLINE SALES JUMPED 89.2 PERCENT  IN Q1 - Korean online sales reached KRW1.33 trillion (USD1.04 billion) during the first quarter of 2002, reports The Korea Times. http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357947&rel=true

QUARTER OF SOUTH AFRICANS HAVE BOUGHT ONLINE - A new report from Webchek indicates that 26 percent of South African Internet users have shopped online, with the average spend per user totaling ZAR2,450 (USD238).  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357954&rel=true

EUROPEANS TO SEND 17 BILLION MOBILE MESSAGES - Forrester predicts that Europeans will send nearly 17 billion mobile messages per month in 2007.  http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357951&rel=true

GLOBAL NET POPULATION INCREASES - The worldwide Internet population reached 323.7 million users in April 2002, according to a new report from comScore.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357952&rel=true

MORE CHILEANS WENT ONLINE IN 2001 - eMarketer reports that the number of Internet users in Chile grew by 27 percent during 2001.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357953&rel=true

DSL GROWTH IN US AND CANADA - InternetNews reports that the US saw a 12 percent growth in DSL lines during the first quarter of 2002.  http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357963&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

Cisco’s top policy focuses for 2002 are the areas of Education, Broadband Deployment and eGovernment.  To read or listen to our thoughts on these issues, please visit our Government Affairs home page or our visit our multimedia section. http://www.cisco.com/gov/multimedia/index.html

E-UPDATE ARCHIVE

To view past issues of Cisco’s Government Affairs E-Update, visit our E-Update Archive page. http://www.cisco.com/gov/archive/eupdates/index.html

DISCLAIMER

Positions in articles and papers from outside sources are in no way endorsed by Cisco Systems' Office of Government Affairs.  We offer articles on topics of interest to our audience to further the debate on the issues that are important to high-tech.  To view our positions on the policy matters that we care about, please visit our Government Affairs homepage. – http://www.cisco.com/gov

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