🚀 go-pugleaf

This subscription service is available to you courtesy of Carnegie Mellon
University Libraries. It is intended for use by current faculty, staff and
students.  For further information about this service, contact
harvey@andrew.cmu.edu or adele@andrew.cmu.edu.

---------- Forwarded Message ----------
Date: Monday, June 26, 2000, 8:53 AM -0400
From: Faulkner Telecom Weekly <telweekly@faulknerinfo.com>
To: ???
Subject: Faulkner Telecom Weekly June 23, 2000


Telecom Weekly 

June 19, - June 23, 2000 

__________________________________________________

Top Story of the Week 

WorldCom-Sprint Merger Approval on Shaky Ground (06/22/2000) 
Earlier this week, the Wall Street Journal reported that the  US Department
of Justice is expected to decide in the next few days whether or not to
block the $115 billion merger of MCI WorldCom and Sprint. The paper
reported that although negotiations between company officials and
regulators have intensified, the tenor of the talks has shifted from
optimistic to uncertain. The regulators were focusing on concerns
surrounding the merged company's concentration in the long distance market,
not its influence over the market for Internet backbone traffic as
previously reported. Also, the European Union's Competition Commissioner
Mario Monti met with the US Attorney General and members of the FCC and FTC
this week to discuss the merger. According to Washington Post reports,
Monti was expected to tell US antitrust officials that the commission is
going to oppose the deal; Monti responded to the report saying that it is
too soon to speculate what the agency will decide. Monti did, however, tell
US senators that Europe and the US will "act in harmony" on major mergers
-- without referring directly to WorldCom and Sprint. The EU has until July
12 to rule on the case, but a decision is expected at the commission's July
5 meeting. WorldCom is ready to divest all of Sprint's long distance and
Internet operations, valued at about $45 billion, to close the deal. Such a
sale would mark the biggest concession made to resolve anti-trust issues.
If Sprint's Internet backbone and long distance operations are put on the
auction block, look for Deutsche Telekom to make a play for the assets. DT
has money to spend to expand into the US market, and Sprint's assets will
provide it with a well-known brand name and a nationwide network.
BellSouth, which made a last-ditch bid to acquire Sprint last year, is also
rumored to be interested in Sprint's long distance network. Any dealings
between the RBOC and the IXC are unlikely though due to federal rules the
prohibit regional operators from owning more than 10 percent of a long
distance carrier. The only other option is calling off the merger because
WorldCom still refuses to negotiate the possibility of selling its UUNET
unit. If the companies and regulators bag the deal, look for MCI WorldCom
to pony-up to acquire a different wireless provider or wireless spectrum. 


Acquisitions, Mergers, and Divestitures
Sierra Buying QUALCOMM Business (06/23/2000) 
QUALCOMM is in a deal with Sierra Wireless to sell its CDMA module business
to Sierra and integrate the company's modems into QUALCOMM OmniExpress
two-way mobile communications. 

Motorola Acquires WaveMark (06/23/2000) 
Motorola closed its acquisition of WaveMark Technologies for $30 million.
Motorola is using this acquisition to combine its core processing and
communications solutions with WaveMark's imaging solutions, which include
DigitalDNA technology, to develop new imaging solutions for consumers and
business customers. 

DT Considering Unisys (06/23/2000) 
Deutsche Telecom, the German communications company that announced earlier
this week its intentions to enter the US market, is rumored to be
interested in acquiring information technology firm Unisys, according to
Forbes. The companies are already working together to provide packages of
information technology and telecom services for DT's international
corporations. 

AOL and Time Warner Merger Update (06/23/2000) 
Regulators in the US and Europe are taking a close look at the proposed
merger of AOL and Time Warner. Regulators want to ensure that the company's
distribution channels remain open to other content providers. In addition,
competitors want any links between AT&T and AOL Time Warner to be
prohibited. The merger will create the world's largest media company,
delivering high-speed Internet access over Time Warner cable lines and
marketing Time Warner magazines, music, and TV shows to AOL's customers. 

Pegasus Announces 12 DBC Acquisitions (06/22/2000) 
Pegasus Communications declared an acquisition of a dozen DIRECTV rural
affiliates in the Upper Midwest, Texas, and Central Plains. The
acquisitions serve approximately 52,000 DBS subscribers and reach nearly
307,000 households. Pegasus will acquire these properties for nearly $100.6
million in cash and stocks. 

Infonet Acquires Network Capacity From Williams (06/22/2000) 
Infonet Services acquired capacity on the fiber-optic network of Williams
Communications for $27 million. The capacity acquired includes more than 60
MSAs across the US. This deal is part of Infonet's $850-million network
expansion initiative. 

Telefonica: No Deal for CRT Yet (06/22/2000) 
Telefonica said it was unable to come to amicable terms with Cia concerning
a sale of the Spanish company's stake in Riogradense de Telecomunicacoes
(CRT). Telefonica is being forced to divest its holding in CRT because it
owns a stake in another fixed-line carrier in Brazil. Earlier in the week,
Brasil Telecom Participacoes offered to acquire a 32 percent stake in Cia
Riograndense de Telecomunicacoes (CRT) from Telefonica for $730 million.
Brasil Telecom Participacoes is owned by Telecom Italia. 

Centigram Filed Preliminary Proxy Statement (06/21/2000) 
Centigram Communications filed a preliminary proxy statement with the SEC
regarding a special meeting of Centigram's stockholders. The stockholders
need to approve the acquisition of Centigram by a subsidiary of ADC
Telecommunications, a move that would make Centigram a wholly owned
subsidiary of ADC. The merger is subject to the approval by Centigram's
stockholders and federal regulators. 

Deutsche Telekom Wants to Ring Baby Bell (06/20/2000) 
Deutsche Telekom is not coy about wanting to break into the US market with
a major acquisition. Although the company failed in its bid to acquire US
WEST and Qwest Communications, the company is still interested in acquiring
one or more of the RBOCs. DT said, as reported in the Wall Street Journal,
that it is looking for a deal with the Baby Bells because their customer
bases and infrastructures offer the potential for the expanded fixed-line
and mobile services that DT hopes to deploy. Deutsche Telekom recently
announced that it has 100 billion euros in its coffers for an acquisition. 

Covad Buys BlueStar Communications (06/20/2000) 
Covad Communications agreed to acquire BlueStar Communications, a fellow
DSL service provider that services small- and mid-sized businesses in the
Southeastern US, for about $217 million. Covad will issue eight million
shares of common stock to BlueStar, and it will hand over an additional
five million shares if BlueStar meets specific performance criteria in
2001. But all is not well for the CLEC. Covad said it will begin marketing
services under its own brand name rather than through reseller agreements
because it will not meet its subscription goals for the year. 

Vivendi, Seagram, Canal Plus in Three-Way Merger (06/20/2000) 
Vivendi and Seagram agreed to a merger that will create Vivendi Universal,
the second-largest media company in the world behind the merging AOL/Time
Warner. Seagram stockholders will receive 0.62 shares in Vivendi for each
share they own as long as Vivendi's stock is traded at more than $124.30
per share at the conclusion of the deal. If the stock falls below $96.69
per share, a collar placed on the deal will allow Seagram shareholders to
receive 0.8 shares in Vivendi in exchange for each of their own. Vivendi
also agreed to acquire the 51 percent of Canal Plus it does not already
own. Canal Plus shareholders will receive two shares of Vivendi stock in
return for each one of their own. In order to focus on its media
operations, the newly combined company is expected to divest a number of
assets, including Seagram's alcohol operations--which manufactures Absolute
Vodka and Crown Royal--and part of Vivendi's water utility business. 

BCE Slashes Teleglobe Purchase Offer (06/20/2000) 
Canadian telecom conglomerate BCE, seeking to acquire the 77 percent of
Teleglobe it does not already own, trimmed its offer by as much as six
percent. The new deal is worth C$6.4 billion, while the original deal was
for C$6.8 billion. Now, BCE will hand over 0.91 shares of its own stock in
exchange for each share in Teleglobe. The original deal would have
exchanged 0.97 shares of BCE common stock for each Teleglobe share. As a
condition of this new offer, BCE will provide Teleglobe with $100 million
in immediate financing to help alleviate the international carrier's
financial struggles. Additionally, BCE will provide further financial
assistance before the deal is completed if Teleglobe should need it. 

Global Crossing Closes IXnet and IPC Deal (06/19/2000) 
Global Crossing completed the $2.1 billion acquisition of IXnet and its
parent company IPC Communications. The deal arms Global Crossing with a
customer base of over 2000 financial services firms, a global extranet with
a presence in 38 countries, and over 1500 customer access nodes. Under
terms of the agreement, 1.184 Global Crossing shares will be exchanged for
each share of IXnet not owned by IPC and 5.417 Global Crossing shares will
be exchanged for each share of IPC. David Walsh, CEO of IXnet and IPC, was
appointed Executive vice president of Sales and Marketing at Global
Crossing. Jim Demitrieus will remain president of IXnet and IPC. IPC
executive William F. Adiletta was named CIO of Global Crossing. 

Equant, Global Crossing End Talks (06/19/2000) 
Merger talks between Equant and Global Crossing were called off because the
companies could not agree on the potential purchase price. Equant also
ended merger talks with France Telecom last week. 

AT&T Wireless Buying Wireless Markets (06/19/2000) 
AT&T Wireless is paying $3.3 billion for wireless markets owned by Vodafone
AirTouch, GTE, and PrimeCo PCS, all of which are part of Verizon Wireless.
The company is buying the remaining interest of a Vodafone AirTouch
wireless partnership in San Francisco, 100 percent of GTE's wireless assets
in San Diego, and PrimeCo's system in Houston. The purchases will eliminate
overlapping wireless markets that will be created when GTE's wireless
operations become part of Verizon Wireless. This move is the second step in
combining GTE with Verizon. The first step was the Wireless
Telecommunications Bureau's allowing Bell Atlantic and GTE to transfer
control of cellular, microwave, and telecommunications licenses to ALLTEL. 


Alliances and Joint Ventures
ITXC Moves Further into China (06/23/2000) 
ITXC is forming new relationships in China with China Telecom's
subsidiaries, the Provincial Telecommunications Authorities, to expand its
service in the country. Through its relationships with China Telecom and
the PTAs, ITXC will route phone-to-phone and Web-to-phone traffic using
ITXC.net. 

Vodafone Opening Vizzavi (06/23/2000) 
Vodafone AirTouch and Vivendi are launching their joint Internet venture,
Vizzavi, in Britain. The Internet portal will be launched as the default
portal for Vodafone's mobile phones and Vivendi's television stations. 

EU Clears CP/Lagardere/Liberty TV Deal (06/23/2000) 
The European Commission approved the proposed TV alliance between Canal
Plus and Lagardere. Lagardere will buy 34 percent of Canal Plus' satellite
unit CanalSatellite and 27.4 percent of its theme channel unit
Multithematiques, in which Liberty Media will also take a stake. 

SBC Continues Expansion Beyond Traditional Territory (06/23/2000) 
SBC Communications contracted with Williams Communications to lease space
for its switches in Miami, New York, and Seattle. Also, Williams will
supply transport services in Atlanta, Boston, Denver, New York, Phoenix,
and Seattle. An earlier SBC/MMFN agreement provides dark fiber for SBC's
expansion beyond its traditional territory. The Williams agreement covers
20 years, with an estimated value of approximately $64 million in the first
five years. 

New Edge Inks Line Sharing Deals (06/22/2000) 
New Edge Networks signed separate line sharing agreements with Sprint and
GTE. The contracts will allow New Edge to offer line sharing in 30 states
served by the local telephone operations of Sprint and GTE. Under terms of
the agreement with Sprint, New Edge will not pay any monthly line use fees
for offering DSL service over existing line connections in any of Sprint's
serving areas in 18 states. The GTE agreement stipulates that New Edge will
not pay the local operator any monthly line sharing fees in any state,
except California. 

AT&T Wireless Marketing Discounts (06/22/2000) 
AT&T Wireless and InfoSpace are working together to market AT&T PocketNet
promotions and discounts. InfoSpace is using its infrastructure technology
to provide promotions and discounts to customers according to their needs. 

Lucent in Trial with Sprint PCS (06/22/2000) 
Sprint PCS and Lucent Technologies are working together on a trial of
third-generation wireless solutions using CDMA technology. The two
companies will conduct the trial of 1xEVolution over the Sprint PCS
network, using Lucent's 3G-ready Flexent platform. At the Sprint PCS
Technology Integration Center, the tests will demonstrate the
third-generation data capabilities at speeds of 2.4M bps. The companies
plan to use the results of the trials to develop applications for the
mobile Internet. 

Yack Signs on to Provide Content to BT Sites (06/22/2000) 
Yack signed an agreement with BT that will bring Yack's Internet event
listings to BT's Internet platforms. The schedules will be posted on BT's
dial-up and broadband offerings. 

BT, Anderson Consulting Form Joint Venture (06/22/2000) 
BT and Anderson Consulting agreed to join forces in e-peopleserve, a joint
venture that will offer human resources services to global organizations.
BT's Human Resources and Development Services division will serve as the
backbone to the venture. 

Teligent Teams With Mannesmann Arcor (06/22/2000) 
Teligent and Mannesmann Arcor announced the formation of a joint venture
called ArcTel. The JV will offer high-speed data, Internet, and voice
services to businesses in Germany. ArcTel will use Teligent's fixed
wireless technology to deploy networks in 44 German cities by November
2000. 

Cable TV Operators Invest $87 Million in ICTV (06/21/2000) 
ACTV, Adelphia Communications, Lauder Partners, Liberty Digital, Motorola,
OpenTV, Shaw Communications, and TV Guide invested $87 million in broadcast
Internet TV leader ICTV. This investment marks a strong commitment to
broadband interactive TV as a major growth sector in the US economy and
drives ICTV to the foreground among competitors seeking to provide
broadband infrastructure to the cable industry. 

Industry's First Call Center Reporting (06/21/2000) 
Mitel Communications Systems announced an agreement with PrairieFyre
Software to deliver the industry's first Internet-based call center
reporting solution. The new Automatic Call Distribution solution offers
unlimited mobility and flexibility in processing and managing call center
information. With Cyber ACD software, managers can log onto any PC with
Internet access to run reports, monitor real time activities, chat online
with agents, or perform any other managerial tasks. 

Telia and Colt Telecom in Network Deal (06/20/2000) 
Telia and Colt Telecom agreed to purchase fiber-optic networks from each
other. Colt will acquire 2200 route miles of fiber between Austria and the
Scandinavian region, and Telia's capacity along a submarine network that
connects the Netherlands and Britain. Telia agreed to acquire 1860 route
miles of duct network in Germany. 


Broadband/Cable Networking
ANTEC and Nortel Provide Solution for Telephony Trial (06/22/2000) 
ANTEC and Nortel announced that they are providing the Cornerstone CMTS
1000 and Packet Port for an IP telephony trial with 

  

Should you have any questions, concerns or problems with your Telecom
Weekly Flash, please contact us at: mailto:flash@faulkner.com

---------- End Forwarded Message ----------