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Date: Friday, October 06, 2000, 3:51 PM -0400
From: Faulkner Information Services <mailserver@faulknerinfo.com>
To: ???
Subject: Faulkner Com Flash 10/06/00 - (Part 3 of 3)


Storage
Computer Associates released the Snapshot Upgrade to its ARCserve 2000
Serverless Backup Option. The upgrade provides a data protection service
that backs up data in SAN environments while files are open and active. 

Seagate Technology launched the TapeStor DAT 240, based on its DDS-4
technology. This offering features the Scorpion 240 DDS-4 autoloader with
free Veritas Backup Exec server software for WIN NT/2000 and Novell
NetWare. Other features include DDS-4 media, a six-cartridge magazine,
cleaning cartridge, software utilities, and easy-to-follow multi-language
instructions. 

StorageTek launched the StorageTek L20 Tape Library, the latest addition to
its L-Series tape libraries. The L-20 is designed for Windows NT, Novell,
Linux and Unix environments, and its market focus is on SMBs in enterprise
environments. The L20 will be sold primarily through channel partners. 





Regulatory News
According to the Washington Post, the AOL and Time Warner used the FCC's
decisions in previous mergers to quell regulatory criticism. In particular,
the companies cited AT&T's acquisition of TCI and MediaOne in which the FCC
ruled that "the merger context is not the appropriate forum in which to
debate an open-access requirement." Nevertheless, conditions in the FCC's
approval draft require AOL and Time Warner to make legally binding
agreements to allow competitors access to their network. The FCC insists
that the draft is not the final word and that it could still block the deal
if the companies did not comply with certain conditions. 

AOL and Time Warner answered questions regarding their planned merger in a
hearing before the House Telecommunications Subcommittee. The hearing was
meant to address the future of interactive TV, but focused instead on open
access policies and the interoperability of AOL's instant messaging
service. The committee does not have a direct role in approving the merger,
but is advising the FCC and FTC in their reviews. 

Telecom companies anxious to begin offering local services in Florida
accused BellSouth of inflating prices to stifle competition. A coalition of
long distance carriers, namely AT&T and WorldCom, and upstart companies
petitioned the Florida Public Service Commission to intervene and cut
access charges by as much as 50 percent. The FPSC is expected to
restructure rates in the state in the first quarter 2001. BellSouth
contends that the charges are justified and that it should be reimbursed
for its investments. 

The Indian government converted it fixed-line telephone service provider
into a new company that will compete with private enterprises. With equity
capital of $1.09 billion and 400,000 employees, Bharat Sanchar Nigam, or
BSN, will be India's largest state-owned company, in which the government
will continue to have 100 percent equity. 

The German government pledged to eliminate its direct interest in Deutsche
Telecom, a stake that has drawn criticism from US lawmakers who are
concerned about the company's proposed purchase of VoiceStream Wireless.
Currently, the German government holds a 43.2 percent direct stake in DT,
but that share will fall to 33 percent after DT purchases VoiceStream. The
deal has already won US Justice Department approval but still needs
clearance from the FCC and a task force that examines mergers of this kind
for national security implications. 

As arguments on the issue were being aired before a federal appeals court,
the FCC issued a Notice of Inquiry indicating that they would seek
information and testimony to promulgate the correct policies and
regulations for high-speed service over various platforms and whether
high-speed providers should be required to open their systems to
independent ISPs. Clarification of these drawn-out, contentious issues has
been long awaited by the telecom industry. 

Racing to beat a government drive to loosen its virtual monopoly, NTT said
it would allow rival carriers to use it fiber-optic network but made
demands to ensure that it will not lose out in the broadband business.. NTT
will discontinue its practice of leasing only fiber-optic lines and
switchboards as a package even though clients may not need the latter. The
Ministry of Posts and Telecommunications said it would require NTT's
regional carriers to open their fiber-optic networks to competitors as
early as this year. 

The Wireless Telecommunications and International Bureaus of the FCC
approved the wireless joint venture between SBC and BellSouth. With the
approval in hand, the two companies are clear to transfer their US wireless
licenses and their international authorizations to the legal entity now
termed Alloy LLC. The new company, which should be named in the next week,
consists of most of the wireless operations from SBC and BellSouth,
including wireless Internet and interactive messaging services. Before
approving the venture, the FCC asked that cellular operations in Louisiana
be divested in compliance with the Commission's cellular cross-ownership
rule, and that interests in Indianapolis and Los Angeles be divested in
compliance with the CMRS spectrum aggregation limit. 

The Oklahoma Corporate Commission voted unanimously to recommend to the FCC
that Southwestern Bell, a unit of SBC Communications be allowed to offer
long-distance service in Oklahoma. Southwestern Bell will file its
application with the FCC and will present its data indicating compliance
with the 14-point checklist mandated by federal law. 

Mexican telecom regulator, Cofetel, delayed a long awaited announcement to
reduce access fees that Telmex charges long-distance rivals to connect into
its network. The FTC (Cofetel) is expected to lower fees from the current
three cents a minute, forcing the company to charge fees related to its
actual cost. In other news, Telmex said it was willing to negotiate with
Cofetel rather than go to court over new rules that seek to break up its
dominant hold over the Mexican telephone market. 

Mexico's Cofetel authorized an average 6.13 percent increase in local
telephone rates charged by Telmex. This was the first rate increase for
Telmex in more than a year. 

In other Time Warner merger news, concessions were made to the European
Commission concerning its pending partnership with the EMI Group. Sources
reported that the two companies offered to sell four record labels and four
publishing catalogs. Marconi (France), CMC (Denmark), Mimos (Greece), and
Dro (Spain) would be sold to ensure regulators that the companies would not
dominate the music market. In addition, they agreed to divest all physical
distribution facilities and to dissolve all joint distribution agreements
in Europe. The European Commission will rule on the $20-billion joint
venture by October 18. 

Verizon filed for FCC approval of a possible long-distance service in
Massachusetts. Although Verizon avers that it is in compliance with the
14-point checklist that must be met before an RBOC can offer long-distance
within its territory, Massachusetts Attorney General Tom Reilly issued a
statement that expressed doubts about Verizon's compliance with the
checklist. Spokespersons for LD rivals AT&T and WorldCom also voiced their
doubts and characterized the application as premature. A Verizon move into
long-distance in the state would require both state and federal level
regulatory approval. 

The New Jersey Board of Public Utilities began a series of hearings on
Verizon Communications' petition to increase its basic rate from $8.19 a
month to as much as $17.50. Verizon, which provides about 98 percent of the
local telephone service in the state, wants to begin offering packages with
built-in services such as caller ID and call waiting, forcing consumers to
pay for services that they might not want. Opponents of the service
packages in question argue that some telephone lines are strictly used for
Internet service and never carry voice traffic and therefore do not require
premium services. In addition, Verizon is asking the BPU to declare New
Jersey a competitive market so the company can charge deregulated rates. 

In a largely symbolic move, WorldCom filed an appeal with the EU to
overturn this summer's ruling blocking the Sprint/WorldCom merger. WorldCom
contends that the commission failed to take into account new realities in
the worldwide telecom market. Although WorldCom affirmed that there were no
intentions of reviving the deal with Sprint, the company hopes to clear the
way for consideration of other possible mergers in the future. 


Financial News
British Telecom expects its BT Wireless unit to report turnover of $9.56
billion in 2000/01 after taking control of Germany's Viag Interkom. BT
Wireless would have a proportional EBITDA of 900 million pounds once it
adds a further 45 percent stake in Viag to its existing 45 percent stake in
January 2001. These are the first figures for BT Wireless, a new division
created in April as part of a restructuring. The unit is dominated by BT
Cellnet, the British mobile phone unit whose value has been put by some
analysts at around $35 billion. 

Cabletron and its subsidiary companies, Aprisma Management Technologies,
Enterasys Networks, GlobalNetwork Technology Services, and Riverstone
Networks, reported financial results for the second quarter of fiscal year
2001. Cabletron's consolidated net sales were $261.4 million. The revenues
of the four operating companies results include revenues from Cabletron's
non-continuing segment. On a consolidated pro forma basis, Cabletron had
net income in the second quarter of $1.1 million, or $0.01 per diluted
share. In addition, Cabletron reported that it completed the sale of the
Digital Network Products Group (DNPG), as well as the exclusive right to
manufacture and distribute certain Cabletron legacy product lines, to DNPG,
LLC, an affiliate of Vnetek Communications. 

Five of the founding companies of Globalstar are purchasing common stock
and investing a total of $56 million into Globalstar Telecommunications.
Loral Space &Communications, Vodafone Group, QUALCOMM, Elsacom, and France
Telecom/Alcatel are purchasing 5.2 million shares of common stock, and a
sixth partner, ChinaSat, may purchase $12 million of Globalstar stock. 

Nextel Communications' Nextel International announced that it will sell
45.5 million Class A shares for $16 to $18 per share when it holds its
initial public offering. The company, with operations in Mexico and South
America, plans to raise nearly $735 million from the IPO and will use the
money to expand its network, acquire other companies, and repay debts. 

The soon-to-be-merged Teledesic and New ICO have collectively lost
approximately $1 billion in an attempt to create a satellite
telecommunications system. The losses come before either company has
launched a single satellite. The merger between the two is expected to be
closed in November, but New ICO still needs to raise $2.8 billion before it
can begin launching. 

Telstra plans to consolidate its call center operations and to cut roughly
4000 jobs over the next three years for an estimated cost savings of about
$223 million. Telstra aims to reduce the current 280 call centers to
between 20 and 35. The company reported a net profit of $1.99 billion for
the fiscal year ended June 30, up 5.5 percent from $1.89 billion in the
previous year. 

Vodafone is within days of completing the sale of Infostrada, its Italian
Internet and fixed phone business, for $10.55 billion in cash and loan
notes. Vodafone is reported to have agreed to sell Infrostrada to Enel, the
Italian electricity generator, but it remains unclear whether Enel will be
joined by France Telecom. 

Shares of VoiceStream Wireless rose four percent after the German
government pledged to eliminate its direct stake in Deutsche Telekom, a
move that may ease US lawmakers concern about DT's proposed acquisition of
VoiceStream. 



Legal News
Claiming that British Telecom is denying its competitors a level playing
field for competing on DSL, a group of BT's rivals have filed a formal
complaint against the company with industry regulator Oftel. BT is accused
of discriminatory behavior in its unbundling of the local loop. 

Deutsche Telekom's planned acquisition of VoiceStream Wireless and Powertel
has come under fire from Sen. Ernest Hollings (D., S.C.) who is concerned
about its potential impact on US national security. While US law prohibits
American telecoms from being acquired by a foreign company that is more
than 25 percent government owned, the acquisition would reportedly dilute
the government's direct stake in DT from 44 percent to 33 percent. 

Direct Broadcast Satellite (DBS) firms DIRECTV and EchoStar filed suit
challenging a federal law which requires them to carry all local broadcast
stations seeking carriage in a market where they offer one local station.
The companies argued that the must-carry provision, which was created to
preserve local broadcasting in cable monopolies, was unconstitutional and
should not apply to their service because they do not possess concentrated
local market power. Furthermore, they argued that under the must-carry
provision, only the largest TV markets can be serviced with local channels,
limiting consumer choice. 

The Security and Exchange Commission launched a formal investigation of
accounting practices at Lernout &Hauspie Speech Products. Information the
SEC seeks includes L&H's transaction with related parties and recent large
increases in their sales in Korea and Singapore. Last year, the company
recorded $143.2 million in revenue from customers in the two Asian nations,
up from less than $300,000 the prior year. L&H reported full-year 1999
revenue of $344.2 million. 

TCW Technology, a Digex shareholder, is suing Intermedia Communications and
Digex to stop the merger between WorldCom and Intermedia. Through the
merger, WorldCom will receive Intermedia's 55 percent equity interest in
Digex and 94 percent of its voting stock. WorldCom plans to acquire
Intermedia in a $3 billion stock deal. The transaction is expected to close
in early 2001 after receiving the necessary approvals. 

Attorneys for Henrico County, VA and Verizon Communications argued for open
access to high-speed cable lines. In arguments heard before the Fourth
Circuit Court of Appeals in Richmond, VA, Henrico County defended its
Ordinance mandating open access to high-speed Internet access via cable.
Also, arguing before the court were representatives of Verizon who argued
that the judges of the Fourth Circuit should affirm the finding of the
Ninth Circuit earlier this year which held that Internet access via cable
is a form of telecommunications and subject to the same regulations. 

Verizon Wireless broke with the rest of the cell phone industry to back
restrictions on phone use while driving. Verizon will back state
initiatives, though not local or federal ones, that would require the use
of hands-free equipment while driving. Other wireless companies oppose such
regulations by insisting that existing laws against distracted driving are
sufficient. 

Xircom filed a patent infringement suit against 3Com in the U.S. District
Court for the Central District of California. Xircom charges that 3Com's
forthcoming Type III PC Card products infringe patents for Xircom's
RealPort PC Cards and should be barred from sale. 



Personnel and Organizational Changes
ADC opened its manufacturing facility in Nanjing, China, which will serve
as the technology development and product manufacturing center for ADC's
Broadband Connectivity Group. The site will be used to manufacture a range
of fiber optic distribution systems, fiber optic components, and RF
components and subsystems for the Chinese and Far East regional markets.

Aprisma Management Technologies appointed Michael Luetkemeyer chief
financial officer (CFO). Luetkemeyer joins Aprisma's senior management and
will be responsible for the financial management of the organization. Prior
to joining Aprisma, Luetkemeyer served as CFO for Rawlings Sporting Goods. 

In line with its new strategy to focus on two-way wireless Internet
messaging and wireless information, Arch Communications is changing its
name to Arch Wireless, and it is also offering its products and services
under a new logo, Net@Hand. The company's stock ticker symbol on the Nasdaq
is now ARCH instead of APGR. 

AT&T Broadband CTO Tony Werner announced plans to leave the company. AT&T
began looking for a new CTO soon after the announcement. 

Avici Systems announced the appointment of Steve Kaufman to the position of
chief operating officer and director. Avici also formally announced the
appointments of James Graham as vice president of worldwide customer
service and support, and of Catherine Hapka and James Mongiello to its
Board of Directors. The appointments aim to strengthen the operational
management structure for the newly public company. 

Boca Research appointed Eduard Will as the company's CEO, effective Nov. 1.
Will replaces Robert W. Ferguson, who will continue to serve as the
company's chairman of the board. In addition, Boca's shareholders
officially approved the company's name change to Inprimis. 

Pierre Danon, previous president of Xerox's general market operations for
Europe and North America agents, will leave Xerox to join British Telecom.
Jean-Noel Machon replaces Danon. 

In the third high-level defection from Deutsche Telekom's T-Online unit in
one month, Christian Hoenning, chief financial officer for the German ISP,
left the company citing personal reasons. Rainer Beaujaen has been proposed
as Hoenning's successor. 

Ralf Eck, a board member at Deutsche Telekom's T-Online unit, resigned on
Wednesday, less than one month after the ISP's chief executive, Wolfgang
Keuntje, quit on August 25. Eck was responsible for product marketing. The
head of corporate communications at DT, Burkhard Grassman, will replace
Eck. 

France Telecom appointed Morgan Stanley to handle the floatation of its
mobile phone unit, Orange, which it priced at $88.31 billion. FT, which
bought Orange from Vodafone for $31 billion this year, wants the floatation
under way by Christmas. 

Hewlett-Packard reported that Carleton (Carly) S. Fiorina was named as a
chairman of the board. She remains president and chief executive officer
and succeeds Richard (Dick) A. Hackborn, a former HP executive and current
member of the board of directors, who was serving as non-executive
chairman. 

Hitachi transferred its Fiber Optic Components Unit into OpNext Japan, a
subsidiary of its US counterpart. OpNext is focused on becoming a world
leader in the fiber optic components market for data and telecommunications
applications. 

ICG Communications received the resignation of Carl E. Vogel as CEO and
Chairman of the Board of Directors. Vogal was named to the positions less
than a month ago. In addition, both Gary Howard and Thomas Hicks also
resigned from the Board. 

ICG Communications appointed Randall E. Curran as CEO of ICG. Curran
succeeds Carl E. Vogel. Curran most recently served as chairman, president,
and CEO of Thermadyne Holdings Corporation. 

In anticipation for the consortium's privatization scheduled to occur in
April 2001, INTELSAT announced changes in its organizational structure.
Part of the restructuring plan includes creating a Strategy and Business
Development Division and a Global Operations center controlling all of
INTELSAT's technical operations. 

The leader of the antitrust division and of the case against Microsoft is
resigning from the Department of Justice at the end of September. In a
statement released by the DOJ, Klein, an Assistant Attorney General to
Janet Reno, said that he is leaving to seek "new challenges." Since he was
appointed by President Clinton, Klein would most likely have been replaced
after the election in November. Doug Melamed, who served as Klein's
Principal Deputy during his five and a half years, will serve in Klein's
place until a new appointment is made. Klein's battle with Microsoft led to
a decision from US District Judge Thomas Jackson to breakup the company,
which the court found to be using its monopoly to hurt rivals and slow
competition. 

NTT regional carriers, NTT East and NTT West, plan to cut a combined 6500
jobs in the 2000/01 and 2001/02 business years. NTT West would seek 3500
voluntary retirements during the two-year period, while NTT East would seek
3000 voluntary retirements during the same period. The cuts would add to
NTT's plans, announced last November, to slash 21,000 jobs by March 2003. 

On September 18, 2000, Riverstone Networks, formerly a subsisdiary of
Cabletron, filed to go public. The company reported that it is looking to
raise $200 million in an IPO of common stock and plans to use the net
proceeds for working capital and general corporate purposes. The company
applied for a Nasdaq listing under the symbol "RSTN". Cabletron plans to
distribute all of the shares it holds in Riverstone to holders of
Cabletron's common stock following the IPO. 

Siemens set the planned IPO for its Unisphere Solutions unit at 8.5 million
shares in an estimated range of $20 to $25 per share. Unisphere, which
provides data and voice networking products to communications service
providers, expects to raise $163.8 million in net proceed from the
offering. Siemens' stake in the Unisphere unit will be reduced from 95.5
percent to 87 percent. 

Mr. Raj Raithatha has been appointed CEO at Versatel. Mr. Raithatha's
former position as CFO will be filled by Mr. Phillippe Santin on November
1. 


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