Cisco Government Affairs E-Update

Volume 2, Issue 22

31 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

STATEMENT BY LAURA IPSEN, CISCO VICE PRESIDENT OF WORLDWIDE GOVERNMENT AFFAIRS - Cisco Systems applauds the passage of Trade Promotion Authority by the United Sates Senate.  Open trade is essential to the health of the U.S. information technology industry, and to spread the benefits of information technology globally. With Trade Promotion Authority, the United States will be able to lead, rather than follow, in setting the new rules for global trade in the information economy. We would like to commend Senators Baucus and Grassley for their leadership, as well as Senator Feinstein and all other members who voted in favor of the legislation.  We look forward to a successful conference between the House and the Senate on this important legislation.    

FCC ORDERED TO REWRITE INTERNET RULE - A federal appeals court last week ordered regulators to rewrite a government rule meant to increase the number of companies offering Internet users high-speed service over their telephone lines. A three-judge panel of the U.S. Court of Appeals for the District of Columbia Circuit also told the Federal Communications Commission to reconsider another broader rule aimed at stoking competition with the four regional phone companies, which emerged from the Bell System breakup and now dominate the local phone game. The FCC Internet rule requires the former Bells to allow competitors access to their telephone lines to provide high-speed Internet service, called Digital Subscriber Line, or DSL. But the challenge by the incumbent carriers through their trade group, the United States Telecom Association, was successful before the court.  http://story.news.yahoo.com/news?tmpl=story&u=/ap/20020524/ap_on_bi_ge/fcc_broadband_2

SEN. LIEBERMAN PRESENTS BROADBAND STRATEGY - Asserting that the deployment of high-speed Internet service can help spark the next sustained surge of economic growth, Senator Joe Lieberman (D-CT) announced today that he will introduce legislation requiring a national broadband strategy to eliminate obstacles to growth and pave the way for private sector innovation.  To support this effort, Lieberman issued a report identifying the full range of issues that should be considered as part of a such a strategy - one of the most detailed reports on the subject to date. Lieberman also announced his intention to build on the national strategy bill with a string of legislative proposals to expand the reach of truly advanced high-speed Internet service.

http://www.senate.gov/~lieberman/press/white_paper/broadband.pdf (Adobe File)

News Story: http://www.siliconvalley.com/mld/siliconvalley/news/3345247.htm

FCC DELAYS SPECTRUM AUCTION AFTER CELLPHONE INDUSTRY PUSH - Bowing to the cellular-phone industry, the Federal Communications Commission agreed to postpone part of a long-delayed auction of spectrum for wireless communications for seven more months while it tries to clear uncertainty over when the airwaves will actually be available for use. The decision, which postpones half of an auction that had been scheduled for June 19 until January 2003, comes after months of lobbying and political wrangling over when to sell spectrum controlled by television broadcasters. The FCC move, a win for the wireless carriers and a defeat for broadcasters such as Paxson Communications Co., marks the sixth time that the auction has been delayed. The spectrum was to be auctioned two years ago. The other half of the auction will proceed as scheduled.  "I do not support an open-ended, indefinite delay" of the auction, FCC Chairman Michael Powell said. "But I do believe there are compelling reasons to invoke a short delay."  http://online.wsj.com/article/0,,SB1022272784326940280.djm,00.html (Paid Subscription required)

PRESIDENT BUSH CRITICIZED ON DIGITAL DIVIDE - The Bush administration is wrong to declare that the digital divide is narrowing and should focus on expanding Internet access for the poor and less educated in their homes, leading consumer groups said Thursday.  They contend the administration is misinterpreting a recent study on the topic by looking at Internet access at work and in schools, rather than concentrating in homes where most families use the Internet and the gap is greatest.  "The administration's claim that we no longer need policies to close the gap is simply wrong," said Chris Murray of the Consumers Union, which released an analysis with the Consumer Federation of America and Civil Rights Forum.  "Rather than misdefine the problem of the digital divide, the Bush administration would like to misinterpret it out of existence," Murray said.  http://story.news.yahoo.com/news?tmpl=story&cid=528&ncid=528&e=7&u=/ap/20020530/ap_on_go_pr_wh/digital_divide_1,
The report: http://www.consumerfed.org/DigitalDivideReport20020530.pdf

WORKING GROUP PUTS SECURITY INTO ENTERPRISE MODEL - The CIO Council’s enterprise architecture working group will emphasize security and accessibility when it updates the federal architecture model later this year.  Mike Tiemann, co-chairman of the working group, said the federal model must show how security fits and flows through the framework. Tiemann, the enterprise information architect at the Energy Department, last week spoke at the Secure E-Business conference in Washington about the changes to the federal architecture.  “Security and accessibility affects all parts of the model,” he said. “Most people do not understand how to integrate either one into their enterprise architecture. We want to graphically depict it so they better understand.”  http://www.gcn.com/vol1_no1/daily-updates/18801-1.html

SEC FILINGS ON WEB IN MINUTES, NOT HOURS - Investors looking for free, real-time access to corporate filings on its Web site will get them "within minutes" rather than waiting at least 24 hours, the Securities and Exchange Commission said this week.  "This latest improvement to the commission's Web site (www.sec.gov) will help meet our long-standing goal of providing investors with timely access to information they need to make investment decisions," Chairman Harvey Pitt said in a statement.  http://story.news.yahoo.com/news?tmpl=story&cid=582&ncid=582&e=5&u=/nm/20020530/wr_nm/financial_sec_filings_dc_3

AIR FORCE ON I.T. CONSOLIDATION COURSE - The Air Force is about one-third through the process of consolidating its information technology resources in the hopes of building a greater enterprise infrastructure, the service's chief information officer said May 29.  The goal is to have the process completed by fiscal 2004, said Air Force CIO John Gilligan, although the initiative has been hindered by a lack of funding necessary to buy the larger servers that are needed to replace the service's smaller ones. http://www.fcw.com/fcw/articles/2002/0527/web-gill-05-30-02.asp

E911 PHONE STANDARDS STILL DISCONNECTED - A technology decision years ago now has three U.S. carriers in hot water with federal regulators who are demanding they move faster to meet E911 requirements.  Cingular Wireless, VoiceStream Wireless and AT&T Wireless are all asking the Federal Communications Commission for more time to meet requirements that would allow rescue workers to pinpoint the location of a cell phone used to call 911 during an emergency.  The companies say they've run into a number of roadblocks, and these issues may now prevent the carriers from meeting a June deadline for E911 services, according to Joel Taubenblatt, legal adviser in the office of the Chief Wireless Bureau for the FCC. The FCC is considering a new September or October deadline, he said.  http://zdnet.com.com/2100-1105-922153.html

This Week@EMEA

OECD REPORT: BROADBAND INFRASTRUCTURE DEPLOYMENT: THE ROLE OF GOVERNMENT ASSISTANCE - The Working Paper series of the OECD Directorate for Science, Technology and Industry is designed to make available to a wider readership selected studies prepared by staff in the Directorate or by outside consultants working on OECD projects.  “The potential economic importance of electronic commerce, and the role of broadband in supporting

e-commerce, has increasingly led governments to place emphasis on facilitating access to broadband

networks. To a large extent the emphasis has been on a range of policies aimed at supporting development and diffusion of high speed network capability in the local loop. Although broadband infrastructure deployment is in the process of development and the extent to which it will cover entire populations or geographic areas is still not clear, governments appear to want to accelerate the infrastructure investment.” http://www.olis.oecd.org/olis/2002doc.nsf/43bb6130e5e86e5fc12569fa005d004c/42158ef983225772c1256bc100560c01/$FILE/JT00126526.PDF (Adobe file)

EEUROPE 2005: TAKING THE EU INFORMATION SOCIETY TO NEXT LEVEL - The European Commission has adopted a new Action Plan entitled "eEurope 2005: An information society for all". The new Action Plan aims to provide a favourable environment for private investment and for the creation of new jobs, to boost productivity, to modernise public services and notably education, and last but not least to give everyone the opportunity to participate in the global information society. This is the key message behind this action plan. "eEurope 2005 is a crucial step towards the 'Lisbon goal' of turning Europe into the world's most competitive and dynamic knowledge-based economy by 2010," said Erkki Liikanen, European Commissioner responsible for Enterprise and the Information Society. "It represents a focusing of our activities on those areas where public authorities can improve the environment for investment and ensure that the benefits of the Information Society are felt by all Europeans in the years to come. Broadband-enabled communication will bring social as well as economic benefits. It will contribute to inclusion, cohesion and cultural diversity. It offers the potential to improve and simplify the life of all Europeans and to change the way people interact, not just at work, but also with friends, family, community and institutions and the way companies operate. This is what users are interested in and this is where eEurope 2005 starts from."  http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=IP/02/768|0|RAPID&lg=EN,
The eEurope 2005 Report: http://europa.eu.int/information_society/eeurope/news_library/documents/eeurope2005/eeurope2005_en.pdf  (Adobe file)

EUROPEAN COMMISSION - Mr Erkki Liikanen Member of the European Commission, responsible for Enterprise and the Information Society "Exploiting the Broadband Potential" European Cable Communications Association (ECCA) Conference, European Broadband Communications 2002 Brussels - http://europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/02/233|0|RAPID&lg=EN

UK REGULATOR PUBLISHED ITS ANNUAL REPORT ON WEBSITE - Oftel published its annual report recently, and for the first time it is available online.  http://www.oftel.gov.uk/publications/about_oftel/annual_report/index02.htm 

UK LAGS BEHIND ON BROADBAND - The UK is still one of the worst places for broadband in the world, despite falling prices for high-speed internet access.  A report from the Organisation for Economic Co-operation and Development (OECD) puts the UK at number 22 out of the 30 richest nations for broadband take-up.  The UK has not moved position since the last OECD study in October, says the report leaked to the technology news weekly Computing.  It could prove embarrassing for the government, which has pledged to make the UK the best place in the Western world for broadband services by 2005.  http://news.bbc.co.uk/hi/english/sci/tech/newsid_2014000/2014706.stm 

EUROPEAN COMMISSION - COMMISSIONER MONTI URGED TO ISSUE INTERNET STATE AID RULES - Competition Commissioner Mario Monti should issue state aid guideline on the scope for Member States to bankroll broadband internet services in poorer regions, according to a leading Brussels lawyer who specialises in the area.  The warning follows calls this week by Commissioner Liikanen, for greater use of state aid and EU regional aid to spur take up of fast internet beyond metropolitan areas.  But Peter Alexiadis, partner with US Law Firm Squire Sanders and Dempsey, warns that the situation left firms facing uncertainty. If government dole out aid that is subsequently ruled illega by the Commission, he said, the recipients face having to pay it back.  "Companies cannot afford this risk - guidelines are necessary" said Alexiadis, who is advising the Commission on its new telecom strategy. http://www.european-voice.com/

BBC DIGITAL RECORDING TRIAL PROMPTS CALLS FOR SAFEGUARDS - MPs and consumer groups yesterday called for safeguards to prevent use of new digital recording technology to alter television viewers' habits.  The concerns were provoked by a controversial trial in which a BBC programme was sent unsolicited to 50,000 homes which have TiVo technology. Critics branded it a television version of junk mail.  The Consumers' Association and others want consumer protection against abuse of the technology to be enforced by Ofcom, the planned "super" media regulator, and the regulatory regime created by the proposed communications bill.  TiVo machines - known as personal video recorders - can be easily set automatically to tape favourite programmes by "learning" users' preferences. They are hooked up to a central database, using phone lines.  http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991191390&p=1012571727251

EU PARLIAMENT PASSES OPT-IN INTERNET PRIVACY BILL - On Thursday, the 626 members of the EU Parliament passed a new European Union Internet privacy bill. Among the bill's provisions are requirements for opt-in consent for commercial e-mail and cookies, a ban on the use of Web site cookies without consent and a highly controversial requirement requiring ISPs and telecom companies to keep detailed records of consumers' Internet, fax and pager communications for law enforcement and national security purposes.  Civil liberties groups and some Parliament members strongly oppose the data retention rules, arguing that they contradict the other privacy provisions of the bill. The bill must be approved by each of the 15 EU governments before it may pass into law. It is unclear when this vote will take place. http://www.dmnews.com/cgi-bin/artprevbot.cgi?article_id=20569

SPRINT HAS HIGH HOPES IN EUROPE - Sprint, the US long-distance telecommunications carrier, is strengthening its European operations by appointing Christian Moeller regional president for Europe. Moeller is the former regional president of Ebone, the broadband and optical networking company acquired by KPNQwest last October. He was also the European managing director of Equinix, the US internet services provider.  Moeller said the uncertainty surrounding larger rivals WorldCom and KPNQwest had provided Sprint with a "unique opportunity" rapidly to expand in Europe.  "It's [an] open game at the moment. The market is hungry for a stable service provider," he said. http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991110235&p=1012571727260

MONTI MAY BLOCK TI TAKEOVER - Mario Monti, European competition commissioner, could revoke last year's clearance of the takeover of Telecom Italia by Pirelli and the Benetton family because of their failure to sell a stake in Blu, a troubled Italian mobile phone group.  Mr Monti took the unusual step of publicly urging Edizione, the Benettons' holding group, to do more to honour a pledge to sell its controlling stake in Blu, which is the smallest of Italy's four mobile operators.  "It does not appear that until now sufficient consideration has been given to the interest expressed by several potential bidders," he said.  Last September the European Commission approved Pirelli and Edizione's purchase of a controlling stake in Olivetti, the holding company for Telecom Italia, on condition that Edizione relinquish control of Blu.  http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991040402&p=1012571727260

BRUXELLES VEUT FAVORISER L'ACCÈS À L'INTERNET HAUT-DÉBIT-  Toutes les administrations publiques et les écoles de l'Union européenne doivent se doter d'une connexion haut-débit à internet d'ici 2005 afin d'encourager l'innovation et d'augmenter la productivité, estime la Commission européenne dans son premier plan global visant à favoriser l'accès au haut-débit. "Nous voulons créer un cercle vertueux pour stimuler le déploiement d'infrastructures et développer le contenu," a déclaré Erkki Liikanen, commissaire européen chargé des politiques industrielles, suite à la publication de la stratégie de moyen terme de la Commission européenne sur le développement des technologies de l'information.  "Tous les services publics devraient disposer d'une connexion haut-débit", a-t-il précisé.  La Commission a également suggéré que les gouvernements utilisent notamment l'aide régionale pour encourager le haut-débit dans les zones éloignées et sous-développées où l'accès aux infrastructures n'est pas toujours rentable. Elle n'a cependant pas chiffré le coût pour les gouvernements de son plan de développement du haut-débit.  http://www.liberation.fr/page.php?Article=30681

INDIAN TELECOMS PRIVATISATION SPARKS ROW - India's showpiece telecommunications privatisation has run into trouble with government officials accusing Tata of "asset stripping" VSNL, the ex-monopoly provider of long-distance calls recently acquired by the Bombay-based conglomerate.  The row blew up after VSNL said that it would invest up to Rs12bn ($245m) from its cash reserves in Tata Teleservices, which provides basic telephone services and is wholly owned by the Tata group.  In March, Tata paid Rs14.39bn for a 26 per cent share and management control of VSNL, which after privatisation boasted of cash reserves of about Rs25bn.  Under stock market rules, Tata must also acquire an additional 20 per cent of VSNL via an open offer, a move that could cost in excess of Rs10bn.  Mr Pramod Mahajan, communications minister, said Tata's decision made a mockery of the disinvestment process.  http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991178837&p=1012571727260

AFRICAN DOT-COM PIONEERS FORGE A FUTURE - U.S. Treasury Secretary Paul O'Neill and U2's Bono are seeing plenty of suffering on their 12-day fact-finding trip on African aid. Camera crews zoom in on barefoot children begging by an open sewer; pundits note that the AIDS rate is soaring while per capita income stays about the same.  To many Americans, it's just Africa, the place where time has stopped and people die young.  The dismal statistics are all true. But a slightly closer look, at least in Ghana, will show something else: an extraordinary technology boom. It's not quite San Francisco in 1998, but there's something similar going on. In fact, for every child like Zakaria Turay, a 14-year-old war veteran in Sierra Leone recently profiled in Newsweek, there's a young man like Robin Kwakofi, a 24-year- old Ghanaian Web programmer with his own aspiring dot-com.  http://www.latimes.com/technology/la-000037291may27.story?coll=la%2Dheadlines%2Dtechnology (Free registration required)

This Week@Asia/Pac

CHINA MAY TAX PHONE FIRMS TO FUND UPGRADE - China may tax foreign and local telecommunications companies to pay for the upgrading of telecommunication facilities in its western provinces, Zhang Chunjiang, vice minister of the information ministry said.  Beijing wants to use the "universal service fund," to improve the mobile phone and Internet penetration rate in western provinces such as Xinjiang and Qinghai, the report said.  Mobile phone penetration in China's more prosperous eastern provinces -- such as Guangdong, Shangdong and Zhejiang -- now tops 19 percent, compared with 7 percent in the western provinces, the report said.  No details were given on the amount Beijing may charge and when the plan might be introduced.  China Telecommunications Corp., which controls more than 95 percent of China's fixed-line phones, formally divided into northern and southern companies recently paving the way for greater competition and share sales.  http://ce.cei.gov.cn/enew/new_g1/nl00geb2.htm

JAPAN TELECOM PLANS SHAKE-UP AFTER LOSS  - Japan Telecom, the Japanese telecommunications arm of Vodafone, plans to sell its high speed internet access facilities, slash capital spending and take on a holding structure for its fixed-line business in a bid to return to profitability.  Japan's third largest telecoms group on Tuesday said it would sell its high-speed ADSL service facilities to eAccess for Y5.5bn ($44m). It also plans to restructure its fixed-line operations, which helped to nudge the group into a loss, and put the business under a holding company structure. The move, which has been widely anticipated, could result in the sale of the fixed-line business and a listing for J-Phone, the mobile arm of Japan Telecom, which is jointly owned by JT and Vodafone. http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991079926&p=1012571727248

JAPANESE GOV'T REVISES E-JAPAN PROGRAM TO PROMOTE COMPETITION IN PRIVATE SECTOR  - The Japanese government drafted revisions made to the "e-Japan Priority Policy Program" to put a greater emphasis on competition in the private sector and support measures by the government. The revisions can be summarized as "more competition in the telecom sector as well as greater measures to support the building-up of high-speed networks."  The revisions of the e-Japan Priority Policy Program were made public on May 9 by the Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications Network Society (IT Strategic Headquarters) presided over by Prime Minister Junichiro Koizumi.  http://www.nikkeibp.asiabiztech.com/wcs/leaf?CID=onair/asabt/news/185742

AIMIA TOUTS GUIDE TO GET AROUND COPYRIGHT LAWS  - An Australian Government commissioned guide aims to ease the complexity of digital rights management and describe how to get around current copyright laws while still complying with them.  “Lot’s of people spend up to 50 percent of their time and budget clearing the rights on intellectual property in order to produce new multimedia content,” Lynne Spender, executive director of the Australian Interactive Multimedia Industry Association (AIMIA)told ZDNet Australia. “We will provide a guide for people so they spend less time and less money sorting out digital rights.”  http://www.zdnet.com.au/newstech/ebusiness/story/0,2000024981,20265357,00.htm

This Week@US STATES

WIRELESS NETWORK OF DREAMS - Michigan man builds broadband wireless network in the boondocks; users come. In rural Northern Michigan, we recently learned of another interesting application of Agere's ORiNOCO hardware in the "public network" space. Founded in 1999, M-33 Access (named after main highway "M-33" in Rose City, Michigan) offers high-speed wireless Internet and wide area networking (WAN) services over a 20,000 square mile area throughout Northeastern Michigan. M-33 Access has over 20 towers with Agere routing equipment that are providing the only high-speed wireless Internet access to approximately 30 cities in the coverage area. M-33 also uses the Outdoor Routers to replace direct-leased lines and to connect banks of dial-up modems to remote locations.  http://www.commweb.com/article/COM20020521S0001

SCHOOLS TO SPEND BILLIONS ON TECHNOLOGY - Public schools in the United States will spend $9.5 billion on information technology by 2006, up almost 16 percent from this year, according to a new report from market researcher IDC. The study found that computer hardware will account for just over a quarter of district technology budgets. And increasingly, school systems are turning from desktops to notebooks in this category. Analyst Stephen Webber explained that notebook computers and other portable devices are popular because they allow districts to try and give each child his or her own device. "Schools don't want to have specific

technology rooms, they'd rather the technology stays with the student or goes with the student," said Weber. http://zdnet.com.com/2100-1103-928719.html

S.J. CLOSE TO DEAL ON CABLE - Fed up after two years of haggling over the dearth of high-speed Internet access and other telecommunication services in the heart of Silicon Valley, San Jose officials say they are close to a deal that finally could nudge the city into the 21st century.  Spurred by a June 11 city council deadline to commit to offer better service, representatives of the city and its cable television provider, AT&T Broadband, have been working on a new contract to upgrade San Jose's cable system.  ``We've made significant progress in our negotiations with the city, especially in the last several months,'' AT&T spokesman Andrew Johnson said. ``We feel we're really close to an agreement.''  http://dailynews.yahoo.com/h/krsanjose/20020527/lo/s_j_close_to_deal_on_cable_1.html

OTHER TECH STORIES OF THE WEEK

NEW RULES FOR TELECOM COMPETITION - [COMMENTARY] Jeff Kagan, an Atlanta-based telecom industry analyst, believes that the next 1 to 2 years will "dramatically change the landscape in telecom." The change in regulation and the rules of competition, says Kagan, mean big changes in the way companies compete. Service providers first competed on price, now on service differences and reliability, and in the future will compete on the basis of experience in the industry. Customers will see competitors looking more and more alike as local phone, cable television and long-distance phone companies race to offer similar services, bundles and pricing. As that happens, the only way to compete, contends Kagan, will be by creating "the kind of magical experience that we normally associate with Disney or Five Star Hotels." http://www.newsbytes.com/news/02/176815.html

CONSUMER BROADBAND PRICES KEEP RISING - Consumers just keep paying more for high-speed Internet access, according to recent research.  The average monthly price for cable broadband Internet service increased 4 percent to $44.95 at the end of March 2002 from $43.21 in December 2001, according to a study by La Jolla, Calif.-based market research firm ARS.  DSL (digital subscriber line) Internet access ticked up 1.4 percent during the same time frame to $51.82 a month from $51.09.  ARS said that 91 percent of broadband companies that have been in business since the beginning of 2001 have raised their rates. The firm added that the consolidation of service providers last year will ultimately mean fewer provider choices and higher prices for consumers. http://news.com.com/2100-1033-928200.html

AT&T TO EVEN OUT BROADBAND SPEEDS - 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 who were procured through the 1998 acquisition of Tele-Communications Inc. (TCI) can now send 128 kilobits of data per second from their computers to the Internet (the upstream speed). But starting later Friday, former TCI customers will get an upstream boost to 256kbps, AT&T Broadband spokeswoman Sarah Eder said.  That means that the time it takes former TCI customers to upload a typical music file will go from a frustrating 4 minutes to a zippier 2.6 minutes, according to AT&T speed tests. http://zdnet.com.com/2100-1105-922606.html

EVIDENCE OF FALLING TECHNOLOGY BUDGETS GROWS - A survey of US and European companies by Merrill Lynch released on Thursday added further evidence of shrinking information technology budgets, which are hurting leading computer and software companies. The Merrill Lynch TechStrat Survey of 75 US and 25 European chief information officers found that IT budgets are flat this year compared with expected 2 per cent growth at the beginning of 2002.  There is also little hope for a fourth-quarter boost in spending - which many tech companies have been expecting - despite an underspend in IT budgets in the first quarter.  http://news.ft.com/servlet/ContentServer?pagename=FT.com/StoryFT/FullStory&c=StoryFT&cid=1021991181288&p=1012571727248

TED WAITT TAKES ON HOLLYWOOD - If he finds himself dining at Spago anytime soon, Gateway CEO Ted Waitt isn't likely to receive any bear hugs from the Hollywood moguls who favor this perennial Los Angeles hot spot.  That's because Gateway's chief executive officer finds himself on the other side of a bitter digital divide from the entertainment industry over the issue of digital music downloads. Throw in an opportunity for a grandstanding politician or two, and you have the makings of a grand donnybrook.  Last month, Gateway began to campaign against a proposal by Sen. Ernest "Fritz" Hollings, D-S.C., that would shift the burden for copyright protection onto the shoulders of hardware manufacturers such as Gateway. The company, which has ambitions to become a larger player in music publishing and distribution, responded with a series of tongue-in-cheek television advertisements and public statements promoting legal digital downloading.  http://news.com.com/2008-1082-923477.html

WEB SITE AIDS AFGHAN WAR EFFORTS - The war in Afghanistan is going on line.  A drab tent under the Afghan sun hides a high-tech war room that soon will become the nerve center of the campaign: Inside, tables are lined with soldiers bent over laptops. They look up at computer maps of Afghanistan projected on large screens illuminating the dim interior.  All are logged onto the Tactical Web Page, a secret, secure website being used in combat for the first time, through which American commanders at Bagram air base and in the United States can direct the fight in Afghanistan.  The system collects all information and communication in one place. Commanders confer in chatrooms and pass on orders; messages scroll across the screen, alerting developments from the field; maps show friendly and enemy positions.  http://story.news.yahoo.com/news?tmpl=story&cid=528&ncid=528&e=2&u=/ap/20020530/ap_on_hi_te/afghan_war_webpage_3

ONLINE RETAIL SALES DOWN IN FIRST QUARTER - Sales at U.S. online retailers fell 11.9 percent in the first three months of the year but were up 19.3 percent from a year earlier, the Commerce Department said this week in a report showing sales over the Web taking a bigger slice of the retail-sales pie in recent quarters. Retail e-commerce sales in the first quarter were $9.849 billion, down from $11.178 billion in the fourth quarter but above the $8.256 billion in online sales rung up in the first three months of last year. The figures are not adjusted to account for holidays or other seasonal factors. Sales over the Web in the first quarter accounted for 1.3 percent of the $743.781 billion in total retail sales, the same proportion as in the fourth quarter of last year. That proportion has been steadily marching up since the government began tracking the data in the fourth quarter of 1999, when e-commerce accounted for just 0.7 percent of total retail sales. http://story.news.yahoo.com/news?tmpl=story&cid=582&ncid=582&e=6&u=/nm/20020530/wr_nm/retail_online_dc_1

WI-FI, CELL NETWORKS BEGIN TO MELD - Wireless Internet service providers that use the 802.11b, or Wi-Fi, standard have started to let customers roam onto cellular networks.  WiFi Metro on Tuesday began letting people automatically switch to carriers that offer Internet capabilities, such as Verizon Wireless or Cingular Wireless, once they leave the range of the company's equipment. For customers to make the switch, they must be subscribers of both.  The three-month trial is among the first to couple a cellular telephone's Internet network, which covers a huge area with a weak signal, with the high-speed, but short-range, of Wi-Fi networks sprouting up in coffee shops and airport lounges.  Carriers like VoiceStream Wireless, Sprint PCS and Nextel Communications plan to launch similar services in the future, but haven't given specific timetables. VoiceStream is the most aggressive, having purchased an ailing wireless Internet service provider last year.

http://msnbc-cnet.com.com/2100-1033-923716.html, Also at: http://www.newsfactor.com/perl/story/17995.html

FACTS AND STATS:

China leads world in mobile phone subscribers - ZDNet reports that the number of mobile phone users in China reached 167 million in April, a rise of six million subscribers on March.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357980&rel=true

China admits to digital divide - China Daily reports that the number of Internet users in China stands

at 37.55 million.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357972&rel=true

Germany has the most Internet users - Germany has the highest number of Internet users in Europe, according to the latest research from NetValue.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357987&rel=true

Consumers to drive Irish broadband demand - The Irish broadband market will be worth USD89 million by the end of 2006, reports ElectricNews.Net.  http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357991&rel=true

High-speed growth for broadband in US cities - New research from Jupiter Media Metrix indicates that broadband up-take in America's largest cities has grown by 48 percent since last year. 

http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357974&rel=true

Canadians want cheaper high-speed services - Almost half of Canadians with dial-up Internet connections would switch to a high-speed service if prices were lowered. http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357984&rel=true

Broadband revenues to rise in Europe - Broadband take-up increased rapidly in most European countries during 2001, according to new research from IDC. http://www.nua.ie/surveys/index.cgi?f=VS&art_id=905357979&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

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