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Date: Tuesday, May 16, 2000, 2:29 PM -0400
From: Faulkner Mail Server <mailserver@faulknerinfo.com>
To: ???
Subject: Faulkner Com Flash 05/16/00 - (Part 2 of 2)

Mergers/Acquisitions/Divestitures 
	 Alcatel plans to float an IPO for part of its cable operations by the end
of the year. The company's chairman, Serge Tchuruk, said that floating the
cable division will free it from being buried within the rest of Alcatel's
telecommunications businesses, where it is stifled from exploiting growth
opportunities. The company also said that listing the unit will allow it to
focus on its faster-growing Internet and telecom equipment divisions.
	 Cisco Systems agreed to purchase Qeyton Systems, a Swedish metropolitan
DWDM technology developer, for approximately $800 million in stock. This
latest Qeyton's technology is used to augment the capacity of fiber optic
telecom networks. The acquisition enhances the range of Cisco's optical
networking offerings for metropolitan networks. The deal is expected to be
completed by the end of the year.
	 France Telecom and Kulcyzk Holding are reportedly close to securing a 25
percent to 35 percent stake in state-owned Polish telco TPSA. France Telecom
and Telecom Italia are the two firms bidding on the stake. 
	 Global Crossing is considering divesting the local telephone operations
acquired when it bought Frontier last year. Although Global Crossing already
retained financial advisors to help examine its options, CEO Leo Hindery
said that the company is not sure of the path it will take with its ILEC. 
	 KPN Telecom is reportedly close to signing a deal with NTT DoCoMo. KPN was
left looking for an international ally after talks with Telefonica crumbled
when the Spanish government refused to back the deal. NTT DoCoMo was rumored
to be involved with those talks, and the wireless operator is looking to
make its first foray into the European continent.
	 MCI WorldCom and Telefonica</a> are dismantling their two-year partnership
due to a failure to achieve its goals. Neither company is commenting on the
botched partnership that was begun to target markets in Europe and the
Americas, but sources close to the companies noted cultural and corporate
clashes. Although WorldCom and Telefonica compete against each other in
Brazil, the two hoped to jointly explore business opportunities in other
countries. MCI WorldCom Chairmen Bert Roberts is expected to step down from
Telefonica's board next month. Telefonica Chairman Juan Villalonga will
retire from MCI WorldCom's board at the long distance company's annual
shareholders meeting on June 1. 
	 Metromedia Fiber Network (MMFN) agreed to acquire capacity and ownership
stakes in two submarine cable consortia--the TAT-14 submarine cable network,
which connects the US and Europe, and the Japan-US Cable Network--from
Pacific Gateway Exchange (PGE). MMFN will use these new assets to complete
its strategy of operating a global fiber-optic network end to end. The
company will pay $52 million to Pacific Gateway, and it will assume all of
PGE's future financial obligations to the other members of the consortia.
The company also acquired two of Pacific Gateway Exchange's Japanese
subsidiaries.
	 NTT agreed to divest its 49-percent stake in Photonic Integration
Research,</a> a venture between the incumbent telco, Mitsubishi, and a
US-based research firm, to SDL in a deal that will rake in a profit of $730
million. NTT also will receive $310 million from a licensing fee associated
with the deal. Mitsubishi also agreed to divest its 41-percent stake in
Photonic to SDL for $611 million.
	 Also, NTT Communications, the international and long distance telephony
	 arm of NTT, agreed to acquire Verio, an e-commerce and Web hosting firm,
for $5.5 billion, or $60 per share. The move gives NTT a strong foothold in
the US market since Verio operates a Tier-one Internet backbone. The move
also expands NTT's presence in Australia, as Verio holds a 4.9 percent
stake in Melbourne IT, an e-commerce company. Verio hosts is the world's
largest Web hosting firm with more than 525,000 domain names.
	 RateXChange said it will sell 2.5G bps worth of bandwidth between
	 Brussels, Paris, Amsterdam, Frankfurt, and London through an auction for
an anonymous carrier. The wavelength is upgradeable to 10G bps.
	 The Finnish government began discussing a proposal to fully divest its
stake in Sonera. The state currently owns 53.3 percent in the company, and
there are plans on the table to further lower its stake to 34 percent.
	 In a huge setback for Telefonica Chairman Juan Villalonga Navarro, talks
between Telefonica and KPN were called off after Spanish banking firms La
Caixa and Banco Bilbao Vizcaya Argentaria, which together hold 14 percent of
Telefonica, took the side of the Spanish government against the merger,
which would have received Spanish approval if the Dutch government divested
its 43 percent stake in KPN. The Dutch government offered to divest its
stake in KPN within 18 months, but apparently this was not quick enough.
Also, nine of Telefonica's 20-member board voted against the deal, and KPN
said it only wanted to move forward with a deal if it had the unanimous
support of the Spanish company's board. KPN said it is not ruling out the
possibility that merger talks could be revived or the possibility that the
two companies could forge an alliance.
	 Teleglobe agreed to acquire bandwidth on KPNQwest's network for $100
million. The Canadian company will acquire capacity on 14,000 km of fiber
for 20 years.
	 Teligent agreed to purchase up to 10G bps of capacity on Level 3
Communications' 16,000-mile fiber-optic backbone. Once the deal is
completed, Teligent will use this capacity to connect its 40 local markets
via seven fiber rings. The company will also gain the rights to dark fiber
along Level 3's network in Dallas, Chicago, Los Angeles, and the San
Francisco Bay Area.
	 Time Engineering said it broke off talks with SingTel about possibly
selling a stake to the telco. A number of politicians in Malaysia, where
Time Engineering is located, expressed their opposition to a piece of Time
being sold to a company in Singapore. The government would rather see a
stake sold to Sapura Group, a Malaysian company that has recently placed an
opposing bid on the table for Time.

Personnel and Organizational Changes 
	 AOL and Time Warner outlined the chain of command for the pending
combination of the world's largest Internet and media companies. AOL Chief
Executive Steve Case will become chairman of the board for AOL Time Warner,
while Time Warner chief executive Gerald Levin will become chief executive.
Case will focus primarily on strategic issues involving the company's policy
initiatives, global expansion and investments. Levin will focus more on
day-to-day operations. These are the first concrete indications of a new
organizational structure for the merging companies. Expected appointments
also included AOL president Bob Pittman and Time Warner president Richard
Parsons as co-chief operating officers, reporting to Levin. Ted Turner,
current vice chairman of Time Warner, will become vice chairman and senior
adviser to the merged company.
	 BT said it may split its network operations division from its network
construction business, called Networkbuild. The company said it may divest
the division, float it on the stock market, or involve it in a joint
venture. Comcast Cable added 1.3 million new customers in Pennsylvania, New
	 Jersey, Delaware, and Maryland as the company changed Suburban Cable and
Garden State Cable to Comcast Cable. In order to provide the new customers
with advanced cable technology and TV viewing experience, Comcast is
investing $700 million to upgrade more than 23,000 miles of cable. The
upgrade is designed to create a world-class, fiber-optic digital network
capable of delivering digital cable TV, high-speed Internet access and
future benefits such as telephone service and video on demand.
	 Ericsson is changing its organizational structure to coincide with market
changes. The company will have six business units instead of three. They
include Mobile Systems, Multi-Service Networks, Consumer Products, Data
Backbone and Optical Networks, Internet Applications and Solutions, and
Pietersma Division System Services. This restructuring is part of Ericsson's
strategy to focus on Mobile Internet.
	 Gary Cohen will replace Global Crossing's co-founder David Lee as COO of
the communications carrier when Lee leaves the company later this year. In
addition, Global Crossing named Joseph Perrone senior vice president of
finance. Lockheed Martin named Louis Hughes president and COO. He succeeds
	 Peter Teets and will join the board of directors, and as president and
COO, will manage daily operations.
	 Lucent Technologies named Janet Davidson as president of its entire
InterNetworking Systems (INS) Group. Davidson was previously president of
the company's INS Access Networks group. She succeeds Curt Sanford, who
stepped down from the post for personal reasons.
	 Qwest Communications appointed Christopher B. Coles executive vice
president and COO of the company's Internet and multimedia markets. Prior to
joining Qwest, Coles was the leader of a group at AT&T that developed and
managed voice, data, and video services to the business market and also was
the senior vice president of sales and marketing at AT&T Broadband and
Internet Services.
	 Telstra consolidated a number of business units and operations into two
	 new divisions in an attempt to increase profitability, reduce overlapping
operations, and streamline service delivery. The company formed
Infrastructure Services (IS), which consists of the Network and Technologies
Group; the Olympic Unit, which is overseeing the provision of
telecommunications services to the upcoming Olympic Games in Sydney; and the
field access services of Telstra Business Solutions and the Commercial and
Consumer unit. Telstra appointed Gerry Moriarty as Group Managing Director
for IS. The other new unit is the Retail Services Group, which comprises the
Consumer and Commercial Group, Telstra Business Solutions, and Convergent
Business Groups. This new unit, which will be overseen by Ted Pretty, is
expected to generate more than 70 percent of Telstra's total revenues.

Regulatory News 
	 Italy's antitrust regulators submitted a proposal to conduct the country's
upcoming UMTS license sale through a two-step hybrid of an auction and what
is called a beauty contest. If the government follows this suggested format,
it will first evaluate each company's bid and where each firm stands
technologically and financially. Once that step is completed, the licenses
will be auctioned off to the highest bidder among the companies the
government allows to participate. 
	 The FCC is delaying its auction of spectrum channels 60 to 690 until the
fall of 2000. Congress originally ordered the agency to conduct the auction
in July, but broadcasters are using channels 60 to 69, the channels up for
auction, and are allowed by Congress to provide analog television service.
The FCC will attempt to resolve this issue before it begins the auction.
	 In other news, the FCC's auction of 2173 licenses for 39GHz spectrum ended
on May 8 with total revenue reaching over $410 million. The licenses will
allow companies to offer fixed wireless services such as local and long
distance calling and high-speed data and Internet. WinStar Communications
was the highest bidder, paying $161 million for 931 licenses. The next five
highest bidders were Hyperion Communications, Advanced Radio Telecom,
NEXTBAND Communications, Atlantis Bidding, and ZEPHYR Communications.
	 The House Commerce Committee will be voting on H.R. 1291, the Internet
Access Charge Prohibition Act, which would ban the FCC from assessing access
charges to ISPs even though the FCC stated that it would not place
per-minute charges on Internet traffic. In addition, the Committee's
Telecommunications, Trade, and Consumer Protection Subcommittee will be
voting on H.R. 3489, the Wireless Telecommunications Sourcing and Privacy
Act, which would allow taxes on mobile phone use only in the area where the
user lives.
	 The FCC approved a proposal for the operation of ultra-wideband technology
without licenses. Regulators did not totally approve the use of the
technology since they are concerned it could interfere with GPRS, but they
will allow companies wishing to develop ultra-wideband to submit test
results by October 31. Ultra-wideband can support a range of applications,
including imaging and high-speed data.
	 In an escalating corporate dispute, ABC was blacked out in over 3.5
	 million homes of Time Warner cable customers around the country. The
blackout stems from a dispute initiated by Disney, ABC's corporate owner,
over how much money Time Warner must compensate Disney for the right to
carry some of its cable channels. Each side blamed the other for the
blackout saying that FCC laws were on their side. Time Warner said it was
against the law to carry a station without a transmission deal, while ABC
said that a cable operator cannot stop airing a broadcast station during a
sweeps period, a period when ratings are used to set local advertising
rates. The FCC's cable bureau staff met with representatives from both
sides urging them to work out differences within 24 hours.
	 An agreement to keep negotiations going with Disney, ABC's parent company,
was extended until July 15th, getting ABC back on the air after two days.
The FCC ruled that Time Warner violated a communications law when it dropped
ABC from its network. If the FCC rules on enforcement action, it could
assess forfeitures of $7,500 per violation per day, up to a maximum of
$250,000. Time Warner is seeking further review of the ruling and in the
meantime, Disney is offering $200 to any household wanting satellite cable
services in their home rather than the service of Time Warner. 
	 The Association for Local Telecommunications (ALTS) called upon the FCC to
reject a Bell Atlantic-GTE proposal and to require the full divestiture of
GTE's long distance assets before approving the proposed merger. ALTS
contends that the merged companies, to be known as Verizon, would in fact
retain de facto control over the newly created spin-off Genuity, comprised
of GTE's internet backbone and other assets. Also, ALTS contended that
Genuity cannot legally offer in-region interLATA services in all its
targeted markets because Verizon does not have the necessary permission.
	 The FCC is expected to approve AT&T's acquisition of MediaOne. FCC
	 Chairman William Kennard said it is only a matter of days before the
agency rules on the merger. The deal is also pending clearance from the
Department of Justice. The agency is still determining how to approve the
merger without violating the 30-percent cable ownership cap.
	 Apparently, the FCC will formally approve the merger of Bell Atlantic and
GTE next month after accepting the companies' proposal to spin off 90
percent of Genuity, GTE's Internet backbone unit. There is a clause in the
proposal that allows the merged company to re-acquire up to 80 percent of
Genuity after it is approved to offer long distance in those markets. At the
close of the merger, the new company, Verizon Communications, will control
more than 64 million telephone lines in 31 states and Washington, DC. The
deal will add four million customers to Verizon Wireless' subscriber base,
already the largest in the nation. If the companies do not secure approval
by June 30, either company is free to walk away without incurring
significant penalties.
	 In light of problems related to MCI's merger with WorldCom in 1998, the
European Commission said it is going to take a close look at MCI WorldCom's
proposed $115 billion merger with Sprint. MCI WorldCom shelled out $200
million earlier this year to settle Cable & Wireless' claim that the company
did not deliver as promised when it sold C&W its Internet backbone business
as a condition of the WorldCom deal. Last week, the EU issued the companies
a list of competitive concerns the agency is reviewing. WorldCom and Sprint
have until the beginning of June to address the concerns and suggest
solutions. The companies have said that they are willing to divest Sprint's
Internet backbone to secure regulatory approval. EU sources, however,
reported that the sale of UUNET, WorldCom's Internet unit, would remedy the
agencies concerns. According the MCI WorldCom sources, the company would
call off the merger before letting the lucrative UUNET slip through its
fingers. The EU will rule on the case by July 12.
	 In other merger news, the shareholders of Sprint and MCI WorldCom approved
the planned $115 merger of the long distance companies. Of the MCI WorldCom
shareholders that voted, 98 percent approved the merger, while 96 percent of
Sprint shareholders backed the deal. The companies have yet to secure
regulatory approval from the Justice Department, the FCC, and various state
government bodies. The European Union may be the toughest hurdle to clear
since the commission may add the condition that WorldCom shed UUNET Internet
unit before it approves the deal. The companies said that divesting Sprint's
Internet backbone is a possibility, however, WorldCom is not going to let
UUNET slip through its fingers. Spokesman for the company hinted that if the
EU hands down orders to divest the unit, the merger may be off.
	 Time Warner Telecom unveiled telecom services in five new markets: Denver,
Atlanta, Chicago, Minneapolis and Columbia, SC. The services are expected to
be operational in 2001, the Company said. The expansion comes as a result of
customer demand for capacity and speed that the optical network offers. Now,
these markets will receive Time Warner Telecom's suite of services that
includes local and long-distance voice, private line, dedicated transport,
high-speed data networks, and broadband Internet access.
	 The Montana Public Service Commission approved the merger of Qwest
Communications and US WEST with conditions. To secure the approval the
companies agreed to continue investing in the state's network, establish a
process for regulators to review the investment, and deploy broadband
services throughout the state. In addition, telecommunications rates will
not be increased to absorb merger-related expenses. Regulators in Arizona,
Minnesota, Washington, Wyoming, and Utah have yet to clear the deal.

Satellite Communications 
	 Inmarsat awarded Astrium a $700 million contract to build three satellites
for its network. Inmarsat's I-4 fourth generation satellite network, called
the Broadband Global Area Network, will deliver Internet and intranet,
video-on-demand, videoconferencing, fax, e-mail, voice, and LAN services to
notebooks of palm computers.

Security 
	 AXENT Technologies introduced Defender 4.0, which offers an improved
management interface that integrates with the company's Raptor Firewall and
PowerVPN. Other features include smart card support and electronic
distribution and registration of software tokens.
	 Network ICE released BlackICE Agent for Linux, which the company claims is
the first intrusion detection system for Linux. The product detects attacks,
determines an intruder's identity, and reports to Network ICE's ICEcap
centralized management console in real time. Features include remote updates
of attack signatures and seven-layer protocol decode technology.

Storage 
	 EMC unveiled optical networking capabilities that enhance the management
capabilities of ESNs. Following interoperability testing, the Nortel
Networks OPTera Metro DWDM platform is compatible with EMC's Symmetrix
Enterprise Storage systems, extending the capabilities of Fibre Channel from
the data center to geographically dispersed metropolitan areas.
	 Lucent Technologies and SAN product supplier Gadzoox Networks joined
	 forces to develop a specification that will allow for the transmission of
Fibre Channel SAN traffic over IP networks. The specification enables LANs,
WANs, and MANs to connect SAN islands over long distances. The companies
have presented their IPFC specification to the Internet Engineering Task
Force. They hope to have it finalized by the end of 2000.

Network/Systems Management 
	 AT&T unveiled the AT&T Web Performance Management Service, which
incorporates AT&T's networking management services and Candle's CandleNet
e-Business Assurance technology. The service monitors Web site performance
such as round-trip response times, browse times for each URL, and navigation
and exit routes.
	 BMC introduced PATROL 2000, a service that enables the rapid deployment of
advanced service level management. The continuous improvement process
enables businesses to allow for automated diagnosis of the root cause of
failures and prediction of the impact of business change on the quality of
service delivered. Backed by BMC's SureStart program, PATROL 2000 means less
downtime, better service and low administrative costs.
	 Tivoli Systems released the Tivoli NetView 6.0. The product traps data
	 that solves network problems, ensuring rapid problem resolution and
availability of critical business systems. NetView 6.0 contains a more
flexible, scalable, and intuitive Java-based Web client console that
supports multiple views of node status, object collection, and events
information. The console allows network administrators access to Tivoli
NetView data from anywhere on the network.

Wireless Communications 
	 DDI, the Japanese long distance carrier that is merging with KDD and IDO,
said it will use QUALCOMM's cdma2000 technology when it makes its foray into
the third-generation wireless arena in September 2002. DDI says adopting
this format will keeps costs down because the company can leverage its
existing cdma technology. NTT DoCoMo and Japan Telecom's J-Phone group are
both using W-CDMA technology in their 3G phones.
	 In Nashville, Baton Rouge, New Orleans, LaFayette, and Chattanooga,
Ericsson replaced BellSouth Mobility's TDMA infrastructure. BellSouth
Mobility is upgrading its infrastructure with Ericsson's switches, base
stations, software, and other equipment to prepare for third generation and
mobile Internet. Ericsson will upgrade 17 total markets for BellSouth
Mobility as part of a $750 million agreement.
	 In addition, Ericsson introduced its Packet Backbone Network, which
supports both circuit-to-packet wireline and wireless solutions. The PBN is
a model for carrier class IP and ATM infrastructure solutions and offers
bandwidth for Internet, business-class, and multimedia services. All of the
company's PBN solutions are available commercially.
	 Using KG Telecom's public network and Nokia's infrastructure, the two
companies completed the first GPRS call in Asia. GPRS will allow KG Telecom
to move from second to third generation technologies and to offer mobile
Internet services.
	 German telecom regulators announced that 12 firms have placed bids in a
third-generation (3G) wireless license auction. By comparison, the UK 3G
auction opened with 13 players. Six German companies are involved in the
bidding: Mobilcom, Deutsche Telekom, Mannesmann, E-Plus, Viag Interkom, and
Debitel. Other firms involved include MCI WorldCom, Vivendi, Talkline, Nets,
Auditorium Investments, and Group3G, a consortium comprising Telefonica,
Sonera, and Orange. The German auction is structured similarly to the
recently completed UK auction, which raised more than $35 billion. There
will be between four and six licenses sold, depending on how the bidding
progresses.
	 Motorola is changing its cellular phone strategy to compete with Nokia.
	 The company is shipping low-cost cellular phone with prepaid minutes to
areas in Europe where cellular phones are not used. In addition, Motorola is
developing five new solutions including Web-enabled phones, interactive
communications, and Web-enabled wireless systems for automobiles. Telstra
	 turned on its commercial GPRS wireless network. This network boosts the
bandwidth that data can be transferred wirelessly to 24K bps. Standard GSM
technology allows data to be sent at only 9.6K bps.
	 VoiceStream Wireless awarded Ericsson a $350 million contract to provide a
GSM network upgrade in the eastern region of the US. The network upgrade
will allow VoiceStream to offer WAP and GPRS for mobile Internet services.
	 




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Missy Harvey
Computer Science Librarian
Engineering & Science Library
Carnegie Mellon University
Pittsburgh, PA  15213

http://www.library.cmu.edu/usr/missy/

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