Cisco Government Affairs E-Update

Volume 2, Issue 4

21 January 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

The Cisco Government Affairs E-Update is generally published on Friday.

This Week@WASHINGTON, DC

SUPREME COURT ENDS INTERNET DISPUTE - A federal agency can control rates that cable companies pay to install their high-speed Internet lines, the Supreme Court ruled Wednesday. The decision, a victory for the cable industry, could affect the availability and cost of online services. Cable television companies pay utilities to attach wires for high-speed Internet service to the utilities' poles. A federal appeals panel had ruled that the Federal Communications Commission did not have the authority to regulate pole rental fees for Internet service. The Supreme Court reversed that decision. FCC Chairman Michael K. Powell said the court rejected an argument that ``could have raised the rates that consumers pay for high-speed Internet access services and derailed the broadband revolution.''
Story: http://dailynews.yahoo.com/h/ap/20020116/tc/scotus_internet_6.html,
The Opinion of the Court: http://a257.g.akamaitech.net/7/257/2422/16jan20021040/www.supremecourtus.gov/opinions/01pdf/00-832.pdf (Adobe file)

NO BROAD CONSENSUS - EVERYBODY AGREES HIGH-SPEED ACCESS IS CRUCIAL TO THE WEB'S FUTURE. BUT HOW DO WE GET THERE? - Technology and Internet companies believe they've found the engine that will pull the industry from its current doldrums: speedier deployment of broadband Net access. Now, if only they could agree on how. There's no question that expanding broadband Internet access is on a lot of agendas. High-speed access to the Net is being touted as a way to boost lagging Internet services, ease traffic congestion on the roads (through more widespread telecommuting) and kick-start the economy. Technology companies insist that whatever the cause, the slow adoption of broadband -- whether cable-modem service, DSL, satellite or wireless -- is depressing the market for telecommunications network equipment, such as routers, switches and optical-fiber cable. http://interactive.wsj.com/archive/retrieve.cgi?id=SB1010518925804449080.djm (Paid Subscription only)

TECH INDUSTRY LOBBYISTS SEEK WINDFALL FROM WHITE HOUSE BROADBAND STRATEGY - For months, the high-tech industry has been working behind the scenes here to push its remedy for the nation's economic ills: a national policy to promote high-speed Internet access. Now the lobbying is paying off. Both President Bush and Senate Majority Leader Tom Daschle are preparing ambitious programs to give more Americans fast Web connections -- raising the prospect of a government-supported gusher of sales for computer and telecom companies. But the programs also raise questions about how the spoils will be divided, and whether the government can revive a sector that has already failed key tests in the market. Earlier this month, Mr. Daschle declared that one of his top economic priorities will be making "broadband service as universal tomorrow as telephone access is today." Mr. Daschle wants a mix of government grants, loans and tax credits devoted to spreading the technology. And President Bush, who agrees with Mr. Daschle on little else these days, will outline his own plans to boost broadband in coming weeks, in what aides are touting as the most significant high-tech policy announcement of his administration. http://interactive.wsj.com/archive/retrieve.cgi?id=SB1011304124710986640.djm (paid subscription only)

WOULD YOU LIKE TO SAY GOODBYE TO THOSE WEB DOWNLOADS THAT TAKE FOREVER? - Forget about your DSL headaches or dial-up service, with its staccato video and finger-tapping delays. Imagine the Internet coming at you 2,000 times faster than through a standard 56K modem. You could download DVDs on demand or trade photos in a flash. From your home, you could view charts with specialists at the Mayo Clinic or attend lectures at the University of Vermont. This brave, new world of broadband, with its high speed, continuous connectivity, could transform work, entertainment and social interaction. For Silicon Valley, which would make the faster chips, routers and software for uses not yet envisioned, there would be a perpetual motion machine for products. http://www0.mercurycenter.com/premium/opinion/edit/017816.htm

BROADBAND E-BRIEF - A key Commerce Department official in the Bush administration recently said the administration is focused on both the supply and demand sides of deploying high-speed Internet access services. Phil Bond, Commerce's undersecretary for the Technology Administration, made the comments in a conference call to reporters from SAS Institute in the North Carolina Research Triangle. Bond said the FCC and Commerce's National Telecommunications and Information Administration are working toward increasing the supply of broadband services he said. But he also said, "We need to get more demand for cutting-edge technologies" like broadband. Also at the event, Bruce Mehlman, the assistant Commerce secretary for technology policy, said that "content is a critical element of the broadband puzzle" and is being considered in an ongoing administration review of the issue. (National Journal’s Tech Daily – www.nationaljournal.com)

HOUSE MEMBERS TO FCC: “ENFORCE ’96 ACT” - Six Members of the House of Representatives wrote a letter to Federal Communications Commission (FCC) Chairman Michael Powell requesting better enforcement of the provisions of the Telecom Act of 1996 regarding nondiscriminatory provisioning of unbundled network elements and special access services. The six signatories are Rep. Steve Largent (R-OK), Rep. Bart Stupak (D-MI), Rep. Chris Cannon (R-UT), Rep. Karen McCarthy (D-MO), Rep. Anna Eshoo (D-CA), and Rep. Joe Pitts (R-PA). Story: http://www.washtech.com/news/regulation/14741-1.html, Letter: http://www.comptel.org/filings/jan16_2001_nprmletter.pdf (Adobe File)

VERIZON ON DE-REGULATION - Verizon President and Co-CEO Ivan Seidenberg gave a speech to the U.S. Chamber of Commerce in Washington DC in which he argued for less regulation of services provided by Verizon. http://newscenter.verizon.com/proactive/newsroom/release.vtml?id=69334

BELLSOUTH ON DE-REGULATION - BellSouth Chairman & CEO Duane Ackerman gave a speech in Amelia Island, Florida, in which he advocated changes to the regulatory environment in which phone companies and other communications companies operate. He wants deregulation of DSL service. He also discussed a regulatory model in which competition would be facilities based, rather than based on the requirement that the incumbent phone companies, such as BellSouth, provide unbundled networks elements to competitors. http://bellsouthcorp.com/proactive/newsroom/release.vtml?id=38823

ISPs FORM NEW LOBBYING GROUP - A clutch of the nation's largest Internet service providers (ISPs) today announced that they had joined forces to form a new lobbying group that will address the growing number of high-tech policy matters that directly concern ISP operators. America Online, Verizon Online, WorldCom Inc., Earthlink and a handful of other ISP giants have signed on as founding members of the United States Internet Service Provider Association (US ISPA). http://www.newsbytes.com/news/02/173633.html

WHITE HOUSE HIRES CTO - Former U.S. Postal Service official Norman Lorentz began work this month as the Office of Management and Budget's first chief technology officer. Lorentz, who was hired last month, will work under Mark Forman, OMB's associate director for information technology and e-government. In November, Forman told Federal Computer Week that he wanted a CTO to help oversee the integration and implementation of new commercial technologies into the overall e-government agenda. http://www.fcw.com/fcw/articles/2002/0107/web-cto-01-11-02.asp

This Week@INTERNATIONAL

FRANCE TAKES TO THE INFORMATION HIGHWAY - France may have been slow on the broadband uptake, but by last year high-speed internet use had grown 500 per cent. Now one in eight French homes use either cable of ADSL connections. http://www.europemedia.net/shownews.asp?ArticleID=7785

Mr Erkki Liikanen Member of the European Commission, responsible for Enterprise and the Information Society "The eEurope 2002 Action Plan" - http://www.europa.eu.int/rapid/start/cgi/guesten.ksh?p_action.gettxt=gt&doc=SPEECH/02/9|0|RAPID&lg=EN

Europeans will spend more on content for mobiles than for PCs - Europeans are willing to spend more money on content for their mobile devices than on the web, a new study says. - http://www.europemedia.net/shownews.asp?ArticleID=7761

DEUTSCHE TELEKOM INCREASES ACCESS PRICES - Deutsche Telekom said it would lift prices on standard broadband internet connection rates by about 30 per cent next month to meet competition concerns from industry regulators. http://tm0.com/sbct.cgi?s=166389374&i=451934&m=1&d=2213348

GERMAN ISP TO BUY MOBILCOM'S FIXED LINE ASSETS - Freenet, Germany's second-biggest internet service provider, is planning to buy the fixed lines business of its majority shareholder Mobilcom, the German telecoms group. The deal would create Germany's third biggest provider of telephone and online services. http://tm0.com/sbct.cgi?s=166389374&i=448500&d=2193313

ALCATEL BACK IN THE 3G RACE - Alcatel, the French telecommunications equipment maker, believes in the

fable of the hare and the tortoise, at least when it comes to third-generation mobile phone networks.

http://tm0.com/sbct.cgi?s=166389374&i=450467&m=1&d=2207956

CHINA TO FOSTER BROADBAND USAGE - China must upgrade its communications networks but also do all it can to encourage uptake of broadband services, said Wu Jichuan, minister of information industry at the Pacific Telecommunications Council's annual meeting in Honolulu, Hawaii. In his keynote address, Wu stressed the importance for China to upgrade its networks to high-speed broadband to deliver voice, data and video services, as well as the necessity to foster a competitive environment. "3G and broadband will speed economic development, but this must be accompanied by a powerful consumption market," said Wu. "China is a developing country where consumption is not high," he added, implying that new services must be affordable to the mass market. (www.usito.org)

CHINA TIGHTENS WEB CONTROLS - China has issued its most intrusive Internet controls to date, ordering service providers to screen private e-mail for political content and holding them responsible for subversive postings on their websites. The new rules, posted earlier this week on the website of the Ministry of Information Industry, represent Beijing's latest efforts to tighten its grip on the only major medium in China not already under state control. The regulations also create new difficulties for a competitive industry trying to attract more overseas investment. http://www.wired.com/news/politics/0,1283,49855,00.html

NEW ZEALAND SMALL FIRMS WARY OF NET - Newsbytes reports that only 39 percent of smaller manufacturers in New Zealand use PCs to send business emails and use the Internet. http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357547&rel=true

REINVENTING RECIFE AS TECH HARBOR - Thirty years ago, the sugar business was Recife's biggest source of income. That was until São Paulo started processing its own sugar, and Recife was forced to diversify. Recife, situated on the northeastern coast of Brazil, went through another economic boost with expanded use of its local harbor, but the recent opening of a new deepwater harbor, 40 kilometers (28.4 miles) to the south, is putting the once thriving port in jeopardy. Now, Recife is being given a technology makeover to make it a sort of Brazilian Silicon Valley surrounded by the sea. Its goal is to lure both international and Brazilian IT companies and startups to this digital port, or DP. http://www.wired.com/news/business/0,1367,49649,00.html

This Week@US STATES

ENGLER'S BROADBAND PLAN GAINS SUPPORT - Hoping to make technology the centerpiece of his final year in office, Gov. John Engler is close to a deal that would give state government new powers to make broadband Internet access widely available throughout Michigan. Engler's plan to assert more state control over foot-dragging municipalities was opposed by telecommunications providers and other business interests. Over the past several days, however, Engler has assembled a package that won over former opponents like Ameritech and Comcast cable, the state's largest broadband provider. Engler has also lined up more than 30 organizations and businesses to support his three-bill plan, including the Michigan Municipal League, the Small Business Association of Michigan, the presidents of the state's major universities, libraries and major employers like the Whirlpool Corp. http://www.freep.com/money/tech/bband17_20020117.htm

$1.5 MILLION FOR TECHNOLOGY AT BALTIMORE CITY SCHOOLS - Sen. Barbara A. Mikulski announced yesterday $1.5 million in federal funds for Baltimore schools as part of an effort to bridge the "digital divide." The Maryland Democrat said the funding would be used to buy and upgrade computers, wire school buildings and make other technological improvements, including faster Internet access. http://www.sunspot.net/technology/bal-md.schools18jan18.story?coll=bal%2Dtechnology%2Dheadlines

STATES SEEK NATIONAL ID FUNDS - State motor vehicle officials today plan to ask Congress for up to $100 million to create a national identification system that would include high-tech driver's licenses and a network of tightly linked databases of driver information. The appeal by the American Association of Motor Vehicle Administrators represents the most concerted push for a national identification system since authorities determined that some Sept. 11 hijackers used false identities and obtained driver's licenses illegally. http://www.washingtonpost.com/wp-dyn/articles/A41032-2002Jan13.html

PAY TAXES ONLINE IN D.C. - The District of Columbia is urging its citizens to use the Internet to file their city taxes this year. The eTaxpayer Service Center will be free and available to any city resident who filed city taxes in 2001. The move makes the District the first U.S. city to offer real-time access to a full set of tax services 24 hours a day, seven days a week, said Herbert Huff, deputy chief financial officer of the Office of Tax and Revenue. If money is owed, the taxpayer can pay online using a credit card or mail his or her check to the office. (National Journal’s Tech Daily – www.nationaljournal.com)

TECHNET LAUDS NEW CALIFORNIA SPEAKER - The high-tech lobbying group TechNet last week congratulated Herb Wesson on his election as California Assembly Speaker. "The entire tech community, both in Silicon Valley and across the state, look forward to working with Herb Wesson," John Doerr, a TechNet cofounder and partner at Kleiner, Perkins, Caulfield, and Byers, said in a statement. TechNet officials said Wesson has shown "great interest" in getting to know the high-tech and biotech communities. (National Journal’s Tech Daily – www.nationaljournal.com)

CHICAGO SEEKS PROPOSALS FOR BUILDING PUBLIC/PRIVATE MAN - The city of Chicago has issued a formal request for proposals (RFP) on a groundbreaking metropolitan-area network (MAN) project to a shortlist of 22 vendors and service providers. It expects to get responses by late March. The project, called CivicNet, is aimed at bringing a Broadband network with integrated data, voice and video capabilities to every nook and cranny of Chicago during the next 10 years. But most of the cost isn't expected to land on the Windy City's shoulders. City officials are looking for private-sector companies to build and manage the network. The city government, which has an annual telecommunications budget of more than $30 million, would be the anchor tenant. News: http://www.computerworld.com/itresources/rcstory/0,4167,STO67133_KEY18,00.html

CivicNet: http://www.chicagocivicnet.net/civicnet/SilverStream/Pages/civicnet.html

USING THE WEB TO WATCH THE GEORGIA LEGISLATURE - How to best follow the antics of the Legislature? The official state Web site has a wealth of information. It's the best jumping-off point for getting a handle on the General Assembly. Many other sites can help Web users unravel the mysteries of Georgia lawmaking. http://www.accessatlanta.com/ajc/metro/legislature/0113links.html

GA State Website: http://www.state.ga.us/

Other TechNet Broadband stories:

Reuters - http://dailynews.yahoo.com/h/nm/20020115/wr/tech_broadband_dc_1.html

ZDNet News: http://dailynews.yahoo.com/h/zd/20020115/tc/technet_to_uncle_sam_back_broadband_1.html

Bloomberg: http://quote.bloomberg.com/fgcgi.cgi?ptitle=Technology%20News&s1=blk&tp=ad_topright_tech&T=markets_bfgcgi_content99.ht&s2=ad_right1_technology&bt=ad_position1_technology&middle=ad_frame2_technology&s=APESE8xQXQ2lzY28s

CNET - http://news.cnet.com/news/0-1004-200-8490792.html

FIXED WIRELESS: CLEAR WEB ACCESS IN SIGHT? - With airborne Net access, if a neighbor grows a rooftop garden that blocks the antenna's line of sight, users lose connectivity. Fixed wireless is looking for a way around that. People who get Internet access delivered through the air instead of through a cable or telephone line know the problem well: They lose the service if their rooftop's antenna isn't in the line of sight of a main antenna miles away. But a new generation of equipment is taking the "line of sight" requirement out of the equation. Foliage, stucco walls, not even a cookie sheet can stand in the way of Net access now, says one provider of the new technology. This news is piquing interest in what is known as fixed wireless, a little-used method to deliver high-speed Internet access to homes. The service is available for about $45 a month and is mostly used by people living in rural areas where DSL (digital subscriber line) and cable-modem Internet access is unavailable. http://dailynews.yahoo.com/h/zd/20020116/tc/fixed_wireless_clear_web_access_in_sight__1.html

CEI OP-ED ON TECHNET BROADBAND PRINCIPLES: “On the whole, it is a good program.” - Normally fractious tech executives agree: The nation needs broadband – 100 million connections by 2010 – and not at a piddling 0.5 or 1.5 Mbs, such as provided by most current technologies, but at blistering speed of 100 Mbs, such as can be provided by advanced fiberoptics. Furthermore, and more surprising, the companies agree that the basic method for achieving this goal should be less regulation and more reliance on market processes. There is no call for a “national broadband authority” or a new “broadband science institute.” http://www.cei.org/gencon/016,02297.cfm

A NEW PUSH FOR BROADBAND - As policymakers consider how to re-ignite the technology-led economic boom of the 1990s, it's clear there is at least one sizeable infrastructure project that could pay off massively: the rapid spread of broadband telecommunications, which could significantly boost productivity and bring a whole host of new products and services into the homes of American consumers. Today, around 10 percent of American households have broadband (either through cable, satellite or DSL), but the speeds offered are actually too low for many advanced applications like robust video-conferencing and full length, high quality video. http://www.ndol.org/ndol_ci.cfm?kaid=131&subid=192&contentid=250021

STUDY: BROADBAND FEES CLIMBED IN 2001 - Customers paid more for high-speed Internet access in 2001, reaching record levels by the end of the year, according to a report released. A study by La Jolla, Calif.-based ARS shows that cable broadband Internet prices rose 12 percent in 2001, from an average of $39.40 per month in January to $44.22 per month in December. Consumer DSL (digital subscriber line) prices rose 10 percent during the same time frame from $47.18 in January to $51.67 in December. A slowing economy caused service providers to shift their focus toward making money instead of gaining market share. The anemic economy also made it easier to raise prices because many Internet access providers failed, which diminished competition in the marketplace. http://news.com.com/2100-1033-818013.html

PPI: MORE I.T. NEEDED IN FIGHT ON TERRORISM: The Progressive Policy Institute (PPI) released a paper that calls on government to increase the use of information technology to prevent terrorist attacks, and to facilitate coordination between local, state, and national law enforcement authorities. The paper is “Using Technology to Detect and Prevent Terrrorism,” by Shane Ham and Robert Atkinson. The paper: http://www.ppionline.org/documents/IT_terrorism.pdf (Adobe File). For more information, go to: http://www.ppionline.org/

FRB VICE CHAIR ADDRESSES AFFECT OF TECH ON ECONOMY - Federal Reserve Board Vice Chairman Roger Ferguson gave a speech in Denver, Colorado, to the Economic Club of Colorado titled "Developments in the U.S. Economy: Review and Outlook". He stated that "Booming investment in the 1990s owed importantly to steep declines in prices of high-tech equipment, which largely reflected rapid technical progress. About half a percentage point of the increase in productivity growth in the 1995-99 period can be attributed to this so-called capital deepening. I believe that technological progress will continue to drive down information technology costs in the coming years. Moreover, businesses have reaffirmed their intentions to improve productivity by substituting cost-saving high-tech capital for labor." The speech: http://www.federalreserve.gov/boarddocs/speeches/2002/20020116/default.htm

REMARKS BY FEDERAL RESERVE CHAIRMAN ALAN GREENSPAN ON THE ECONOMY - http://www.federalreserve.gov/boarddocs/speeches/2002/20020111/default.htm

SPRINT-ING TOWARDS 3G - The only cellular phone operator prepared to deliver next-generation wireless services in the United States is Sprint PCS, analysts say. The company, which plans to offer such services as full-motion video on cell phones in the next couple of years, has the money and the airwaves to do the job. The other major wireless carriers -- AT&T, Cingular, VoiceStream and Verizon -- have the funds but not the airwaves to offer customers cell-phone services that run at data rates of up to 2 megabits per second, analysts say. http://www.wired.com/news/wireless/0,1382,49806,00.html

INTEL NAMES PAUL OTELLINI CHIEF OPERATING OFFICER - Intel named Paul Otellini president and chief operating officer, vaulting the former head of its microprocessor business, a $20bn group, to becoming the potential successor to Craig Barrett, the chief executive.
Story: http://tm0.com/sbct.cgi?s=166389374&i=450464&m=1&d=2207846,
Intel Release: http://www.intel.com/pressroom/archive/releases/20020116corp_b.htm

GOING TO THE A.T.M. FOR MORE THAN A FISTFUL OF TWENTIES - Twenty years ago, the PC industry was just getting started and looking desperately for a killer app. Automated teller machines, introduced a few years earlier, had already found one: dispensing cash. Today, while personal computers have become multimedia network-connected devices offering an endless bounty of services, most A.T.M.'s still just give out cash. That is about to change, and fast. Thanks to the "Web-enabling" of A.T.M.'s — their retrofitting with Internet-based technologies — the corner machine may soon offer a wider array of services and much more personalization. http://www.nytimes.com/2002/01/17/technology/circuits/17NEXT.html

FACTS AND STATS:

TOTAL U.S. ONLINE CONSUMER SALES, including travel, topped $53 billion in 2001, with a record $15.8 billion spent in the fourth-quarter, Comscore found. The two-year-old Reston, Va., research firm uses technology that tracks the actual buying activity of about 1.5 million online consumers. http://www.msnbc.com/news/688761.asp

A QUARTER OF CANADIANS BANK ONLINE - Twenty-four percent of Canadian adults use online banking, reports eMarketer. http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357531&rel=true

EARLY ADOPTERS TAKE TO BROADBAND IN EUROPE - Almost 4 percent of Internet users in Europe have broadband connections, according to Forrester. http://www.nua.com/surveys/index.cgi?f=VS&art_id=905357520&rel=true

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

CISCO GOVERNMENT AFFAIRS@2001

Cisco’s top policy focuses for 2001 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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