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---------- Forwarded Message ----------
Date: Monday, July 24, 2000, 2:15 PM -0400
From: Faulkner Telecom Weekly <telweekly@faulknerinfo.com>
To: ???
Subject: Faulkner's Telecom Weekly July 21, 2000



Scroll down for complete coverage of the telecom week in review. 

Telecom Weekly 

July 17, - July 21, 2000 

Top Story of the Week

DT Sweetens Bid for VoiceStream Wireless (07/20/2000) 
Deutsche Telekom increased its bid for VoiceStream Wireless to
approximately $53 billion. DT is offering to hand over 3.2 shares of its
common stock and $30 cash for each share in VoiceStream, valuing
VoiceStream stock at $205.60 per share. Earlier reports estimated Deutsche
Telekom's first bid for the company at $30 billion. The companies' Boards
approved the deal on Sunday, July 23. 



Acquisitions, Mergers, and Divestitures
NTT Out of Telekom Malaysia Talks (07/21/2000) 
NTT Communications and NTT DoCoMo are calling off talks with Telekom
Malaysia. Both NTT subsidiaries were talking with the Malaysian
government's investment arm, Khazana National Berhad, about acquiring an
equity stake in the company but withdrew from negotiations because of
unsatisfactory agreement terms.

Disney Wants a Split (07/20/2000) 
Concerned that the combined AOL/Time Warner will wield too much media
power, Walt Disney announced that it will file a statement with the FCC
next week to suggest that the resulting company be split into two separate
entities. Under Disney's proposal, AOL Time Warner would have one company
that handles content and another that handles distribution. That provision
would effectively mean that Time Warner would have to spin off its cable TV
networks. The Washington Post quoted Time Warner spokesperson Ed Adler as
saying there was "no basis for any conditions on the merger." Time Warner
and Disney have been at odds since TW dropped the Disney-owned ABC network
from its cable system during a pricing dispute in May. The $183-billion
deal between TW and AOL is expected to close this year, pending regulatory
approval. 

Chello to Merge With Excite@Home (07/20/2000) 
Chello Broadband, the ISP division of United Pan-Europe Communications
(UPC), agreed to merge with the international operations of Excite@Home .
The combined company will be called Excite Chello, and it will provide
service to more than 300,000 subscribers in 15 countries across Asia and
Europe. Excite and UPC will each hold 43 percent of the combined company,
with Liberty Media owning four percent and management owning the remaining
10 percent. This "corporate marriage" gives Chello an immediate presence in
the Asia/Pacific Rim, since Excite has operations in Australia and Europe.
Excite gains access to Europe via UPC's continent-wide fiber networks. This
merger also presents a huge opportunity in the European marketplace. Less
than one percent of homes there have broadband access, but that number is
expected to skyrocket to 18 percent over the next five years. In
conjunction with the deal, Liberty Media, which is owned by AT&T, and
UnitedGlobalCom, the parent for UPC, agreed to invest $187 million and
$93.8 million, respectively. Liberty Media owns a controlling interest in
UnitedGlobalCom. 

DT's Qwest for US Acquisition Continues (07/20/2000) 
Deutsche Telekom has, according to Die Welt, sat down at the negotiating
table once again with Qwest Communications. The German incumbent is
interested in pulling off a three-way deal that would give it control of
Qwest, which recently completed its merger with US WEST, and VoiceStream
Wireless, for which DT is making a $53-billion offer. DT also is reportedly
in talks with Cable &Wireless, Global Crossing, and BellSouth. Deutsche
Telekom was involved in talks to acquire Qwest back in March, but its
courtship caused a rift in relations between the merging US companies that
almost scuttled the impending merger. 

DT Divests Wind in a Breeze (07/20/2000) 
Deutsche Telekom agreed to sell its 24.5 percent stake in Italian telecom
consortium Wind to France Telecom and Enel, an Italian utility, for a total
of 2.7 billion euros. France Telecom will acquire an additional 18.9
percent chunk of Wind, bringing its holding to 43.4 percent, for 2.08
billion euros. Enel will increase its stake from 51 percent to 56.6 percent
for 620 million euros. Telekom's relationship with Wind has been
problematic since DT tried to acquire Telecom Italia. DT could be selling
its stake in Wind to France Telecom as a stepping stone toward acquiring
FT's 10 percent stake in Sprint, a DT acquisition target that is 10-percent
owned by France Telecom. 

Cable &Wireless Lands Five European ISPs (07/20/2000) 
Cable &

Wireless vaulted itself into the position of the third largest Internet
services company in Europe by agreeing to acquire five ISPs for a combined
price of $100 million. C&W will acquire Eaisa (Spain), Pictime (France),
POP Point of Presence (Germany), Impact Group (Netherlands), and Widexs
(Netherlands). Combined, these companies have annual revenues of
approximately $40 million and have about 30,000 customers. These moves mark
the 22nd ISP acquired by C&W since January 1999, and the company plans
additional purchases. 

France Telecom Bids for VoiceStream Wireless (07/20/2000) 
France Telecom, according to USA Today, placed a cash and stock bid for
VoiceStream Wireless worth more than $50 billion. The specific amount being
offered was not reported, but the French telco is offering more than $200
per share. 

Telefonica and Portugal Telecom to Swap Interests (07/20/2000) 
Telefonica Internacional, a subsidiary of Telefonica, and Portugal Telecom
agreed to swap shares in Brazilian telecommunications companies. Portugal
Telecom will receive a 35.8 percent stake in Porelcom Participacoes, which
controls Telesp Celular Participacoes, and $59.9 million. In return,
Telefonica will receive a 23 percent indirect stake in SP Telecomunicacoes,
which controls Telesp Participacoes. 

Motorola Acquiring Zenith Division (07/19/2000) 
Motorola agreed to acquire the Network Systems Division of Zenith
Electronics. After the acquisition is closed, the company will integrate
Zenith's division into its Satellite and Broadcast Network Systems unit.  

Metrocall Wants PageNet (07/19/2000) 
Believing it has a more attractive deal than Arch Communications, Metrocall
submitted a merger proposal to PageNet's board of directors. Under the
proposal, Metrocall is offering $100 million to holders of PageNet senior
notes and 13.0 million shares of its new common stock to PageNet
shareholders. 

Sprint Still Shedding Intelig Stake (07/19/2000) 
Sprint announced that it is still divesting its 25-percent stake in Intelig
even though the MCI WorldCom merger is off. Sprint was ordered to shed the
stake in January because WorldCom controls its Brazilian rival Embratel.
Company officials said Sprint would pursue other opportunities in the
country. 

Global Crossing Ceases Talks with Exodus (07/19/2000) 
Global Crossing purportedly rejected Exodus Communications' $6.5 billion
bid to acquire the Bermuda-based company's Internet hosting services,
according to the Los Angeles Times. The Web-hosting business, GlobalCenter,
expects to raise at least that much through a pending public offering of
tracking shares. Last week, Global Crossing agreed to sell its local
telephone business to Citizens Communications for $3.65 billion in cash. 

Telefonica Divests Stake in CRT (07/18/2000) 
Telefonica agreed to divest its 85-percent stake in Companhia Riograndense
de Telecomunicacoes (CRT) to Brasil Telecom for $800 million, bringing to
an end a bitter dispute between the Spanish company and the Brazilian
government. Brazilian regulators ordered Telefonica to divest itself of CRT
as a condition of its purchase of Telecomunicacoes de Sao Paulo, another
Brazilian telecom company. Telefonica was at the negotiating table with
Brasil Telecom over a sale, but the two companies could not settle on a
price. The deadline for the divestiture passed, and the Brazilian
government seized control of CRT. Brasil Telecom is owned by Telecom Italia
and Opportunity, a Brazilian investment firm. Telefonica initially wanted
$850 million for the stake, while Brasil Telecom was offering $730 million. 

BSkyB Takes Control of Open (07/18/2000) 
Rupert Murdoch's British Sky Broadcasting (BSkyB) boosted its stake in
Open, a joint venture that provides interactive television services, to a
controlling 80.1 percent for $788 million. The company made this move by
buying out two of its partners in Open. It acquired a 20-percent slice in
Open from HSBC Holdings, an investment bank, and a 15-percent stake from
Matsushita. BSkyB also agreed to buy a number of newly created Open shares.
British Telecom, which is the other partner in Open, has the right to
divest its 19.9-percent stake to BSkyB in 2001. 

Vodafone Agrees with Airtel Shareholders (07/17/2000) 
A group including Banco Santander Central Hispano accepted Vodafone
AirTouch's offer to acquire a 43.5 percent stake in Airtel. Vodafone
offered to issue between 2.4 and 3.2 billion shares for the stake. 


Alliances and Joint Ventures
Global Crossing, 360 Ink Deals (07/21/2000) 
Global Crossing and 360networks signed multiple agreements valued at $180
million. Under the agreements, 360 acquired a bundle of high-bandwidth
capacity on more that 8000 miles from Global Crossing and multiple OC-48
channels enabling it to offer up to 10G bps capacity on selected routes
connecting major US markets. Additionally, Global Crossing agreed to
purchase more than 2300 miles of dark fiber from 360 on five routes in the
western US and Canada. 

Avaya To Help Bell Atlantic at Republican Convention (07/20/2000) 
Avaya announced that they will support Bell Atlantic with strategic
Telecommunications Services for the 2000 Republican National Convention
held in Philadelphia, PA. The company will provide its DEFINITY Enterprise
Communications Servers that are designed to provide convention staff,
nominees, and delegates with more than 1000 connections to the custom
network built for the convention. 

Blockbuster Offers Streaming Video on Demand (07/20/2000) 
Blockbuster and Enron Broadband Services inked a 20-year partnership that
will allow Blockbuster to offer streaming movies on demand to customers via
a computer or television with a broadband connection. Customers will need
to purchase a set-top box in addition to a cable or DSL connection to
receive the transmissions. This service will offer approximately 500 movie
titles and is expected to be rolled out in select markets by the end of the
year. By comparison, DirecTV offers about 55 pay-per-view movie titles at
any one time. 

Telefonica Moviles and Terra Form JV (07/20/2000) 
Telefonica Moviles and Terra Networks formed a joint venture called Terra
Mobile that will oversee Telefonica's wireless Internet operations. The new
company, which is 51 percent-owned by Telefonica Moviles and 49
percent-held by Terra, will operate Telefonica's wireless Internet portal. 

AT&T Wireless Allies with CreSenda (07/20/2000) 
AT&T Wireless formed an alliance with CreSenda Wireless to provide national
wireless data service and Internet access to mobile professionals. AT&T
Wireless' IP network will carry CreSenda's Wireless Professional Series,
which delivers industry-specific content. 

SCM Microsystems Working on Bluetooth (07/20/2000) 
Under a memorandum of understanding, SCM Microsystems and Ericsson are
developing wireless mobile smart card readers with Bluetooth and WAP
technology. Using the technology and Ericsson's Wireless Wallet, customers
will be able to make secure mobile commerce transactions. 

Ericsson Offering BroadVision Solutions (07/19/2000) 
Ericsson entered into an agreement to offer application software from
BroadVision integrated into Ericsson's WISE mobile portals. Ericsson will
include the software in a bundle of 3G-network equipment to allow WISE
customers to create m-commerce content and transaction services. 

Lucent, Fujitsu, NTT Offer IP Core to DoCoMo (07/19/2000) 
Lucent, Fujitsu, and NTT Communicationware will supply an experimental IP
core network system for NTT DoCoMo's mobile communications development
plans. DoCoMo will use the system to evaluate an all-IP core network for
use in mobile communications. The trial system includes Fujitsu's EA1000 IP
router platform for IP core networks and mobile IP platform for managing
voice and data mobility using IP technology. It also uses Lucent's
Softswitch-based call agent platform and APX 8000 multiservice access
switch. NTT Communicationware will provide service applications. 

360networks in Joint Venture with SingTel (07/18/2000) 
360networks announced plans to invest $800 million in a joint venture with
C2C, a subsidiary of SingTel, to develop a submarine cable network in the
Asia/Pacific region. In return, 360networks will receive back-haul capacity
on the network The network will connect China, Singapore, Hong Kong,
Taiwan, the Philippines, South Korea, and Japan. 

Telefonica and Microsoft in Joint Services Agreement (07/18/2000) 
Telefonica and Microsoft announced a joint services agreement in which
Telefonica will use Microsoft software designed for call centers, wireless
telephony, and Internet services. In exchange, Microsoft will gain access
to fixed and wireless telephony services and call centers in countries
serviced by the Spanish telco. The two also will work together to develop
applications and technologies for clients. 

Go2 Signs with Verizon Wireless (07/17/2000) 
Go2 and Verizon Wireless signed an agreement to offer Go2's location and
mobile information services to Verizon Wireless' Mobile Web customers.
Go2's service provides directions, directories, and information on local
establishments and events. 

QUALCOMM Expands 3G License (07/17/2000) 
QUALCOMM expanded a 3G-subscriber unit license agreement for Toshiba.
QUALCOMM amended the original agreement to include a license allowing
Toshiba to develop and manufacture units for all 3G modes, including
cdma2000 and WCDMA. 




Broadband/Cable Networking
Comcast Introduces Cable Convention News (07/21/2000) 
Comcast Cable will begin airing Cable Convention News when the Republican
National Convention arrives in Philadelphia on July 31, 2000. Live
convention floor coverage, as well as in-studio commentary, will be aired
via Comcast's nightly three-hour telecast. Coverage is expected to reach
over 65 million homes across the nation and will be made available to all
Comcast subscribers. Other cable companies, including Adelphia, AT&T,
CableVision, Charter Communications, Cox, Insight Communications, and Time
Warner Cable, will run the broadcast on their networks as well. 

CableLabs Certifies Internal Cable Modem Cards (07/21/2000) 
As a result of a CableLabs certification, PC makers may now install cable
modem cards manufactured by GVC and Zoom directly in computers. The cards
will allow consumers to purchase their PCs with cable modems already
built-in. The certification is expected to cut the costs of cable modems
and increase the momentum of cable Internet business.

TRICOM Acquires Capacity on Global Crossing Network (07/21/2000) 
TRICOM acquired capacity on Global Crossing's Mid-Atlantic Crossing
fiber-optic network, which connects the eastern US and the Caribbean. The
transaction completes TRICOM's US eastern seaboard network and enables the
company to establish a point-of-presence in South Florida. 

Pace Micro to Provide Digital Boxes for BellSouth (07/20/2000) 
Pace Micro Technology struck a deal with BellSouth to provide
digital-set-top boxes for the satellite unit of BellSouth. The initial
order is for 200,000 boxes over a one-year period. 

Covad Continues DSL Expansion (07/20/2000) 
Covad Communications began providing service to customers in Santa Barbara
and Ventura, California; Birmingham, Alabama; and Orlando, Florida. 

Lucent Wins Contract from AT&T Wireless (07/20/2000) 
AT&T Wireless awarded Lucent Technologies with a $250 million contract to
build a high-speed voice and data infrastructure, which will be used to
offer high-speed Internet and digital broadband access to residential
consumers. 

Scientific-Atlanta Makes Strategic Investment (07/20/2000) 
Scientific-Atlanta is investing $6.8 million in equity in Broadband
Innovations, which is using the investment to increase the development of
video-on-demand, high-speed Internet, and cable telephony services using a
hybrid fiber-coax network.

Broadwing Forges Agreement with El Paso Energy (07/19/2000) 
In order to expand its network capacity into the southwest US, Broadwing
signed an agreement with El Paso Energy. Under the agreement, Broadwing
will build a multiple-duct and fiber-optic system between Los Angeles and
Houston. To begin the implementation of its telecommunication strategy, El
Paso Global Networks is utilizing two multiple ducts that Broadwing is
providing. Broadwing and El Paso Energy will share in any profits from this
expansion. 

AT&T Wireless Offers Broadband in Four Cities (07/19/2000) 
AT&T Wireless is offering its Digital Broadband service in four new
markets, following the launch of the service in Dallas-Fort Worth. The
high-speed Internet and local telephone service is being offered to
customers in Anchorage, Houston, Los Angeles, and San Diego. The company
plans to expand its service to 40 markets by 2002. 

Ericsson Wins ADSL Contract (07/19/2000) 
Ericsson won an ADSL contract for the provision of its ENGINE Access Ramp
to Telefonica's Brazilian network. The contract is the first of its kind
for Ericsson and includes the installation of 20,000 ADSL lines in Sao
Paulo. Telefonica is upgrading its Brazilian network to meet the need for
bandwidth and to provide services such as high-speed Internet. 

Sprint Expands ION Market (07/19/2000) 
Sprint is expanding its ION services to Los Angeles, Orange County, San
Diego, and Phoenix. The company's ION technology allows consumers the
simultaneous use of multiple telephone lines, videoconferencing, Internet,
and local and long distance service over a single connection to the home.
The service plan costs about $159 per month and includes unlimited Internet
access and local calling and 750 minutes of domestic long distance.
Additional long distance is $0.07 per minute and calls to other ION
customers are free. 

Too Hot Comes Under Fire (07/19/2000) 
A group of AT&T investors controlling over 2.8 million shares has asked the
company to reconsider distributing the pornographic Hot Network over its
cable systems. In a letter to AT&T officials, the religious coalition
called for the telecom and cable giant "to return to its traditions of
responsible corporate behavior." Cable rivals Time Warner and Comcast both
passed on the opportunity to offer the network. 

WorldCom Expanding International Data Services (07/19/2000) 
MCI WorldCom unveiled its initiative to expand its international data
services offering and broaden its global footprint. By year-end, the
company will extend frame relay service to 45 countries, broaden its ATM
geographic footprint to reach 23 countries, and continue private line
services in Europe and Asia in 26 countries. 

DDI to Enter Local Calling Market (07/20/2000) 
DDI announced its intentions to enter the local telephony market in Japan,
adding yet another name to the list of companies preparing to compete
against NTT. DDI plans on rolling out service in May 2001, and it
attributes its decision to the Carrier Selection Service, which allows
consumers to select their service provider without having to dial a prefix
number to use a company other than the incumbent NTT. DDI said its will
charge about nine yen per three minutes of local calling. Japan Telecom
also is planning to begin providing local telephone services. 

Equant Unveils Global IP Telephony Offering (07/18/2000) 
Equant launched an IP telephony service that allows customers to make calls
from 54 countries around the globe. 




Financial News
MediaOne Shareholders Cashing In Shares (07/21/2000) 
Within the next two weeks, MediaOne shareholders will receive either cash
or stock as a result of the completed merger with AT&T. Shareowners
requesting the cash option will receive a combination of approximately $39
in cash plus .8955 shares of AT&T common stock for each MediaOne share
owned. Those requesting the stock option will receive 1.4912 shares of AT&T
stock plus $8.50 in cash for each share of MediaOne stock they hold. In
all, AT&T is issuing 606 million shares of common stock, paying $23 billion
in cash. The company expects to have about five million shareholders in
total when the transaction is completed.

Rogers' Revenues Increase  (07/21/2000) 
The Rogers AT&T
Wireless Group reported second quarter 2000 revenues of $378.4 million, a
16.4 percent increase from $325.1 million for the same quarter in 1999. Net
loss was $1.2 million, compared to $13.2 million, and loss per share was
$0.01 per share, compared to $0.14 per share. 

Ericsson Reports Big Profits (07/21/2000) 
Ericsson's first-half pre-tax profits rose to 18.6 billion Swedish crowns,
or $2.05 billion. Sales for the half were 124.1 billion crowns, a 34
percent increase.

QUALCOMM Net Income up 40% (07/21/2000) 
QUALCOMM's  pro forma revenues for the third quarter were $714 million, an
11 percent increase over last year's results of $645 million. Pro forma
earnings were $0.27 per share compared to $0.22 per share in the same
quarter last year, a 23 percent increase. Pro forma earnings before taxes
were $352 million, a 47 percent increase, and pro forma net income was up
40 percent to $218 million. 

Deutsche Telekom Looking for Loan (07/21/2000) 
Deutsche Telekom is in talks with German banks concerning a possible
syndicated loan. It is not clear what the monies will be used for, but
bankers believe that the funds will contribute to the company's bid for
VoiceStream Wireless. 

Sprint Reports Strong Quarterly Results (07/21/2000) 
For the second quarter ended June 30, Sprint reported consolidated net
operating revenues of $5.79 billion, a 19 percent increase from $4.89
billion in the same quarter last year. Sprint FON Group revenues increased
five percent in the quarter to $4.43 billion from $4.20 billion. FON
operating income was $926 million compared to $821 million. Diluted
earnings per share increased 20 percent to $0.67 from $0.56, excluding a
one-time $0.03 gain related to the sale of a directory publishing
operation. Sprint PCS reported net customer additions of 883,000, a 43
percent increase over the second quarter of 1999. PCS revenue was up 23
percent from the previous quarter to $1.2 billion. The unit reported a
$0.46 loss per share, compared to a $0.62 per share loss a year ago. Sprint
ION's after tax losses were $0.12 per share for the quarter compared with a
loss of $0.06 per share. 

Global Crossing Files Amendment for Tracking Stock (07/21/2000) 
Global Crossing filed an amendment to its registration statement with the
SEC to cover the IPO of its GlobalCenter group stock. Net proceeds from the
offering will go to the GlobalCenter group to finance its planned domestic
and international expansion. 

Lucent Reports 3rd Q 2000 Results (07/20/2000) 
Lucent Technologies posted third quarter 2000 revenues of $8.7 billion,
compared to $7.2 billion last year. Net income was $1 billion, or $0.30 per
share, compared to $732 million, or $0.23 per share, a year ago. Lucent
pointed to strong growth in its data networking, optoelectronics, and
wireless businesses as a factor in its success for the quarter. 

Mitel Reports Increased EPS (07/20/2000) 
For the first quarter ended June 30, 2000, Mitel's revenues reached $328.8
million, a six-percent increase from $311.2 million for the same period
last year. Net income for the quarter was $21.5 million, or $0.18 per
share, compared to a net loss of $4.6 million, or $0.05 per share in the
first quarter fiscal 2000. The increase in revenue stems from Mitel's
Semiconductor business in broadband, subscriber access, and optical
components. 

Globalstar Revenues Nearly Triple (07/20/2000) 
Globalstar's services revenues for the second quarter 2000 were $483,000,
compared to $177,000 for the first quarter 2000. Net loss was $217 million,
or $0.98 per share of Globalstar Telecommunications. During the quarter,
the company recorded over 1.1 million minutes of billable service.

Lockheed's EPS Unchanged (07/20/2000) 
Lockheed Martin's earnings per share for the second quarter 2000 were $0.11
per share, compared to $0.11 per share for the second quarter 1999. The
company reported $1 billion of free cash flow and recorded $16.7 billion in
new orders.

Symantec Revenues on the Increase (07/20/2000) 
Symantec reported first quarter 2001 revenues of $191.4 million, compared
to $162.7 million a year ago. Net income was $38.4 million, or $0.63 per
share, compared to $22.6 million, or $0.40 per share, last year. Strong
enterprise market sales and continued international growth were touted as
factors in Symantec's success this quarter.

ALLTEL Revenues Near $2 Bln (07/19/2000) 
ALLTEL reported that its revenues for the second quarter 2000 increased
nine percent to $1.8 billion, including a 13-percent increase in
communications revenues. Earnings per share also increased nine percent to
$0.74 per share, and operating income from wireline businesses was $168
million. The company reported that its total wireless subscriber base
increased to 5.9 million.

Nextel Revenues up 59 Percent (07/19/2000) 
Nextel reported revenues of $1.26 billion for the second quarter 2000, an
increase of 59 percent from $793 million for the same period a year ago.
Loss dropped to $292 million from a loss of $325 million, and loss per
share decreased to $0.38 per share from $0.52 per share. 

PanAmSat Revenues Soar (07/19/2000) 
PanAmSat's revenues for the second quarter 2000 increased 61 percent to
$322.2 million, which includes high revenues from lease transactions. Net
income jumped from $30.5 million, or $0.20 per share, to $59.2 million, or
$0.39 per share.

US Cellular Releases Financials (07/19/2000) 
Service revenues for the second quarter 2000 for United States Cellular
increased to $383.4 million. In addition, net income was $56.8 million, or
$0.66 per share. 

Qwest's Profits Double (07/19/2000) 
For the second quarter, Qwest Communications' revenues were up 47 percent
to $1.28 billion. Data and Internet growth fueled the increase and
accounted for about 33 percent of the company's total revenues. Profits for
the quarter, excluding costs related to the US WEST merger, were $39.7
million, or $0.05 per diluted share, compared to profits of $18.5 million,
or $0.02 per share, for the same quarter last year. The results are
independent of US WEST's earnings because the merger was completed on the
last day of the quarter. Qwest will report consolidated results for the
third quarter. US WEST generated second-quarter revenues of $3.45 billion,
a 6.9-percent increase over last year's results. Profits increased to $447
million, or $0.87 per share, compared to $406 million, or $0.80 per share.

Network Associates 2Q Revenues Skyrocket (07/19/2000) 
Network Associates reported second quarter 2000 revenues, including
McAfee.com, of $233.7 million, compared to $25.2 million last year. Net
income was $11.4 million, or $0.08 per share, compared to a loss of $195.8
million, or $1.41 per share, a year ago. 

Entrust's Net Income Increases (07/19/2000) 
Entrust Technologies reported second quarter 2000 revenues of $29.3
million, compared to $19.8 million a year ago. Net income was $1.8 million,
or $0.03 per share. Including acquisition-related costs, the company
recorded a loss of $28.9 million, or $0.54 per share. These figures compare
to net income of $871,000 or $0.02 per share last year. 

Time Warner Cable Reports Revenue Growth (07/18/2000) 
Time Warner reported that consolidated revenues for the second quarter were
$7.08 billion, a seven-percent increase from $6.53 billion in the same
quarter of the previous year. Net income was $75 million, or $0.05 per
share, compared to $593 million, or $0.43 per share in 1999. 




Internet/Intranet
Prodigy to Feature SBC Online Directories (07/21/2000) 
To strengthen the recent SBC/Prodigy alliance, all Prodigy sites, including
the corporate Web site, Prodigy's dial-up, and the DSL member homepage,
will feature SMARTpages.com, SBC's Web-based yellow and white pages
directory. SBC will become the exclusive provider of online directories for
Prodigy. 

AT&T Introduces Low-Cost Internet (07/21/2000) 
AT&T introduced its WorldNet Service i495. The Internet service features
150 hours of free access, six e-mail addresses, and up to 60 MB of Web
space for $4.95 per month. In exchange for the discounted service,
customers will see a multi-function toolbar that delivers customized
advertising and customer service messages. During registration, users are
assigned an anonymous ID number that is used to track URLs that are
visited. Participating companies target appropriate audiences based on the
sites consumers visit. 

ITXC Carrying Traffic from RBOCs (07/19/2000) 
ITXC is carrying phone-to-phone calls over the Internet from customers of
RBOCs. The company claims that it is the first Internet telephone carrier
to serve RBOC market. In previous announcements, ITXC agreed to terminate
calls from Bell Atlantic and Ameritech customers. 

Aspect Unveils E-mail (07/18/2000) 
Aspect Communications recently released Aspect Customer E-Mail v.3.0. The
e-mail response management system (ERMS) works to improve customer
satisfaction and reduce costs. Businesses can now respond to e-mail
inquiries more quickly and more accurately. 

ITXC Signs Interconnection Agreement (07/17/2000) 
ITXC signed an interconnection agreement with the Dominican Republic's
TRICOM, which agreed to terminate Internet telephony traffic, including
voice and fax, from ITXC.net. The agreement expands ITXC's footprint. 




IXCs
AT&T Files to Compete in Western Pennsylvania (07/21/2000) 
AT&T petitioned the Pennsylvania Public Utility Commission to allow it to
offer cable telephone services in rural western Pennsylvania communities
served by ALLTEL North Pittsburgh and other independent phone companies.
AT&T is investing $300 million to upgrade its cable networks in the region
and intends to initially offer cable telephone service to residential
customers. Eventually the company plans to eventually offer cable telephone
service to small businesses in the area. An administrative law judge will
rule on the request by September. 

AT&T Dropping Rates in Vermont (07/19/2000) 
AT&T is lowering its rates in Vermont in response to a Vermont Public
Service Board order mandating that Verizon Communications, formerly Bell
Atlantic and GTE, reduce intrastate access charges. AT&T is reducing its
daytime rate from $0.30 per minute to $0.20 per minute, evening rates will
drop to $0.15 per minute from $0.21 per minute, and weekend rates will fall
$0.02 to $0.12 per minute. AT&T's One Rate plan has also been reduced by as
much as 20 percent. 




Legal News
IXCs Come Under Fire for Advertising Tactics (07/21/2000) 
WorldCom, Sprint, and AT&T are being sued by several states for running ads
that the states claim are false and misleading. Connecticut filed suit
against Sprint. WorldCom is being sued by California, Connecticut, Maine,
Minnesota, Missouri, and New Jersey. Connecticut, Idaho, and Maine are
suing AT&T. Connecticut Attorney General Richard Blumenthal is seeking
civil penalties and an injunction barring the broadcast of the "deceptive"
ads within in the state. The California complaint against WorldCom is
seeking $20 million in restitution for unfair business practices, which
also includes slamming. The FCC slapped WorldCom with a $3.5 million fine
just five weeks ago for illegally switching customers. In the suits, the
state attorneys general claim that the companies' long distance rates are
much higher than advertised due to hidden costs or regulations not
disclosed to consumers. 

Dates for GST Asset Auction Pushed Back (07/18/2000) 
The bidding date for an auction of GST Telecommunications' assets was
extended to August 22; the original date was August 4. 




Personnel and Organizational Changes
UUNET CEO Leaving WorldCom (07/21/2000) 
Mark Spagnolo, the CEO of WorldCom's Internet backbone and data services
division UUNET, is leaving the company to take the helm of SiteSmith.
SiteSmith, operational since last October, manages other companies' Web
sites. 

Dutch Gov't Expected to Lower Stake in KPN (07/20/2000) 
The Dutch government is considering lowering its stake in KPN Telecom from
43.5 percent to about 20 percent through a stock offering. KPN expects to
raise $14 billion from the offering when it is launched in the fourth
quarter. The government is looking to divest part of its stake in the telco
now that it looks as if the auction for third-generation wireless licenses
will rake in only about three billion euros, instead of the nine billion
euros originally expected. Government ownership of KPN was the sticking
point that prevented the company from hammering out a merger agreement with
Telefonica, but with the government preparing to lower its stake sooner
than the originally expected date of 2004, it is possible that talks
between the two companies could be reopened. 

EchoStar Appoints New CFO (07/19/2000) 
PricewaterhouseCoopers partner Michael McDonnel was named CFO of EchoStar
Communications. McDonnell succeeds Steven Schaver who was promoted to
President of EchoStar International. 

Inmarsat Changes Name (07/19/2000) 
To reflect its strategy to focus on broader operations and technology for
fixed satellite services, Inmarsat Holdings changed its name to Inmarsat
Ventures. 

Telefonica CEO in Danger of Being Ousted (07/18/2000) 
Telefonica CEO and chairman Juan Villalonga is in danger of being forced to
step down amid reports that he was involved in insider trading in 1988.
While Telefonica denies that the man who played such a critical role in
transforming it into a major international player is on his way out the
door, an investigation by Spanish market regulator CNMV has Telefonica's
major shareholders, namely La Caixa and BBVA concerned. Telefonica is
holding a board meeting on July 26, and the companies directors may ask him
to do the honorable thing and resign before they force him out. Additional
pressure to step down may come from Spanish Prime Minister Jose Aznar, a
former friend and schoolmate who has seen his relationship with Villalonga
altered in recent years. 

Cox Expands its Service Area (07/17/2000) 
SciCare Broadband Services completed the installation of headends that will
provide over 400,000 Cox Communications cable subscribers in Louisiana and
Ohio with expanded access to cable modem and interactive services. SciCare
integrated, installed, and activated analog headends at five hub locations
for Cox Communications New Orleans and a master analog and digital headend
in Parma, Ohio, which serves the metropolitan Cleveland area. 

Motorola Changes IP Unit (07/17/2000) 
Motorola 's Broadband Communications Sector reorganized the IP Network
Systems unit to allow the company to focus more on cable modems and on its
increasing voice and network operations business. The five new units
created by Motorola will focus on cable modems, IP telephony, international
telephony, infrastructure, and network operation solutions. 

Nextel Partners Expands Territory (07/17/2000) 
Nextel Partners is exercising its option to expand its licensed territory
into Sioux City/Sioux Falls and into Central Pennsylvania. In addition,
Nextel Partners also has optioned territories in Idaho, Iowa, Kentucky,
Minnesota, Nebraska, New York, North Dakota, Texas, Vermont, Virginia, West
Virginia, and Wisconsin. 

BellSouth and SBC Name CEO (07/17/2000) 
BellSouth and SBC named Stephen Carter president and CEO of the planned
joint wireless venture between the companies. The company also named Mark
Feidler COO and Rick Lindner CFO. The new wireless company will place
behind Verizon Wireless as the second largest wireless company in the US,
ousting current number-two AT&T Wireless. 




Regulatory News
FCC to Issue Mandates for the Disabled (07/21/2000) 
At its July 21 meeting, the FCC, led by Chairman William Kennard, will call
for a nationwide implementation of a 711 phone service to provide access to
telecommunications relay services (TRS), new requirements for the major TV
networks and cable companies to provide video-descriptive programming
(VDT), and updated standards for closed caption displays. The 711 service
would replace dozens of toll-free numbers currently used by hearing
consumers to contact deaf persons. Fifteen states and the District of
Columbia are expected to have the service up and running by year-end.
Sprint also has already installed 711 services and Verizon Communications
rolled-out 711 services in Bell Atlantic's 13-state region. The second
initiative would require broadcasters affiliated with NBC, ABC, CBS, FOX,
large cable operators, and satellite companies to provide voice-over
narrations of the settings and actions that appear on screen. The National
Cable Television Association issued a statement arguing that VDT
implementation "is best left to the industry efforts, not government
regulation," citing the cost involved to implement the plan. The last order
would set standards to ensure that closed captioning for the deaf is
available to people using digital TVs. The industry will have one year to
comply with the FCC's mandates. 

Court Shoots Down TELRIC Pricing Model for CLECs (07/20/2000) 
The 8th Circuit Court of Appeals in St. Louis shot down the FCC's Total
Element Long-Run Incremental Cost (TELRIC) model, which set the prices that
RBOCs may charge CLECs for network elements. TELRIC priced the network
elements based on a hypothetical telecom carrier operating a state-of-the
art network at maximum efficiency. The Court ruled that the
Telecommunications Act of 1996 was passed with the intention of being based
on the actual cost of providing these network elements, and not on a
hypothetical model. This ruling could force the RBOCs and CLECs to have to
sit down and hammer out new interconnection agreements, a process which
might drive up prices for consumers. However, the Court said that the RBOCs
cannot include the costs associated with building out their network when
they determine charges for the CLECs. 

US and Japan Settle NTT Dispute...Finally (07/20/2000) 
The US and Japanese governments came to an agreement over NTT's
interconnection rates after months of disagreement and nine days of intense
negotiations. NTT will reduce rates in a two-part process. Over two years,
the regional interconnection rates will be lowered by 50 percent, and its
local interconnection rates by 20 percent. During the third year, the
regional charges will be dropped an additional 16 percent, and the local
charges will be reduced a further 2.5 percent. Both moves are expected to
bolster competition and to save interconnecting carriers $2 billion. 

CTIA Orders Radiation Information Revealed (07/19/2000) 
The Cellular Telecommunications Industry Association will be imposing new
health and safety guidelines for mobile phones beginning next month. The
organization will require its members that produce mobile phones to reveal
information concerning radiation levels produced by their products. Despite
the lack of evidence that radiation from mobile phones causes health
problems, the CTIA, along with the FCC, is requiring full disclosure
because of growing concerns that the radiation may be unhealthy. Before
receiving product approval from the FCC, companies must report the phone's
SAR, or specific absorption rate, which measures the amount of radiation
absorbed by the body. Then the phone manufacturer may be required to print
the figure on the cell phone or to provide the purchase with information on
how to obtain that figure from the FCC. 

AT&T Asks PUCO to Review Ruling (07/19/2000) 
AT&T filed a motion with the Public Utilities Commission of Ohio requesting
that the agency reconsider its mandate ordering Ameritech Ohio, Cincinnati
Bell, GTE, and Sprint to suspend their price ceiling for intrastate access
charges. In its ruling, the PUC suspended the mirroring policy that would
have resulted in reduced access charges and froze the access rates of the
local phone companies at their current level. AT&T said that the order
effectively denies Ohio consumers about $17 million in lower in-state long
distance rates this year. The commission will rehear the case by December. 

California Company Fined for Slamming (07/19/2000) 
The FCC fined Business Discount Plan of Long Beach, California $2.4 million
for illegally switching consumers' long distance service and for deceptive
marketing tactics. The company, formerly known as Trans National Telephone,
was found guilty of advertising that it offered a discount plan that
combined local and long distance charges onto one bill. The company did not
deny substituting itself as the preferred carrier for 30 consumers in 13
states. The FCC threatened to revoke the company's license to offer long
distance services if it continues to practice slamming. 

AOL/Time Warner Respond to the FCC (07/18/2000) 
As a result of a series of questions posed by the FCC, both Time Warner and
AOL responded to regulators stating that the merged firm would continue to
seek ways to provide service over as many distribution platforms as
possible. These platforms include DSL and satellite, as well as cable. AOL
stated that the merger would not threaten alternative broadband
technologies, such as DSL, that compete with the cable industry. The letter
also read that AOL and Time Warner are eager to form pacts with video
programmers to customize AOLTV, a service aimed at bundling the Internet
with television. AOL and Time Warner made it clear that the combined
company will not require prioritized placement or promotion of its content
on the customer's homepage if it carried an unaffiliated ISP. The response
to the FCC's inquiry comes as an expected part of the merger review
process. 

Three QUALCOMM Patents Upheld (07/17/2000) 
Patent offices in Europe and Japan upheld three of QUALCOMM's patents for
features of its CDMA technology. The Japanese office confirmed a patent
granted in Japan in 1998, and the European Patent Office upheld a patent
for technology that increases capacity, and a patent for a feature that
monitors fax and modem connections. 




Satellite Communications
Globalstar Expands Coverage (07/19/2000) 
Globalstar USA expanded its coverage areas to include Alaska and the North
Atlantic. The company's expanded satellite service also covers portions of
the northern Pacific, parts of Greenland, and Iceland. Through agreements
with Globalstar service providers in North America and Europe, its service
provides calls along the main shipping line in the North Atlantic. In order
to expand the coverage areas, Globalstar upgraded its gateway earth
stations in North American and Europe. 

Pegasus and Hughes in Internet Partnership (07/19/2000) 
Hughes Network Systems entered into an agreement with Pegasus
Communications under which the two will offer high-speed Internet services
via satellite using Hughes' DirecPC. The service is named Pegasus Broadband
Powered by DirecPC and will target rural areas and households that have
been underserved. 

PanAmSat Begins Galaxy IVR Service (07/19/2000) 
PanAmSat began services using its new Galaxy IVR satellite, the latest
launched into space. The satellite provides video, radio, and Internet
services to customers such as NPR and Hughes Network Systems. 

BSkyB Could go Global With Open (07/18/2000) 
British Sky Broadcasting said that it will consider rolling out Open, an
interactive television service being acquired by BSkyB, on a global level.
The service could be leveraged against Sky's Sky Digital platform. 

BellSouth Signs Agreement With Pace (07/18/2000) 
BellSouth Entertainment (BLS) chose Pace Micro Technology to provide
advanced DVB digital satellite boxes for BellSouth's rollout into the
satellite business. The digital satellite box includes an integrated chip
with an embedded 175 mips processor, 16-bit graphics capability, and a
software telco modem. According to the agreement, Pace will provide an
initial amount of 200,000 digital set-top boxes for the first year. 

Globalstar Cuts Prices (07/17/2000) 
As part of a promotional campaign to combat its struggling business,
Globalstar cut the prices for Globalstar-compatible phones from $1499 to
$1199. Customers subscribing to the company's Freedom 20 or 120 monthly
plans can buy the phone for $699. Per-minute pricing was slashed to $1 per
minute for 500 minutes from $1.39 per minute for 250 minutes. 




Security
RSA Security Unveils RSA Online (07/19/2000) 
RSA Security launched RSA Online, an e-commerce system that gives users the
ability to connect with RSA via a range of Web-based services. RSA Online
is part of RSA's e-business strategy to provide its customers and partners
with interactive, personalized support over the Web. The service uses the
same database used by RSA's staff to allow users to retrieve information
such as order detail, order history, invoice detail, license information,
and maintenance renewals. 

AXENT ESM Added to Nokia WAP Server (07/19/2000) 
AXENT Technologies agreed to add its Enterprise Security Manager to the
Nokia WAP server. With ESM, companies can find and secure Nokia WAP server
operating system vulnerabilities. ESM's centralized management console
customers can assess and manage the security of Nokia's WAP server. 

Verizon Approves mPhase POTS Splitter Shelf (07/18/2000) 
Verizon Communications approved mPhase Technologies' central office POTS
Splitter Shelf for deployment. The company reports that the POTS Splitter
Shelf is designed to separate voice signals from data signals thereby
eliminating the interference between telephone services and data
frequencies. 




Wireless Communications
US Cellular Using Sema Solution (07/21/2000) 
United States Cellular is including the Over-the-Air activation and roaming
data base solution from the Sema Group in its CDMA and TDMA networks. The
solution will be installed on the Compaq XC Integrity platform and will
allow US Cellular to offer its services to customers served by both types
of networks. 

First WAP Browser Launched in India (07/21/2000) 
Integra Micro Systems created the first WAP browser in India by porting its
WAP Stack on Palm OS. Customers in India can access Internet information or
services by using a WAP-enabled mobile device. The creation of the
country's first WAP browser is part of Integra's plan for full WAP
compliance. The company is also meeting this goal by developing the Jataayu
WAP client, which can be used by applications developers without the
restrictions of a mobile device. 

Japanese Telcos to Allow International Roaming to US (07/20/2000) 
Japanese telcos DDI and IDO, which are merging with KDD, announced an
international roaming agreement with Verizon Wireless that allows wireless
customers will be able to use their handsets in 12 cities in the US by the
end of July. 

Ericsson Signs with Turkcell (07/20/2000) 
Turkcell signed a contract for Ericsson's GPRS solution, which includes
core network equipment, a transmission backbone, and interfaces as well as
implementation and support from Ericsson. Turkcell will be using the
solution to provide mobile Internet services. 

Motorola Expanding China Unicom's Network (07/20/2000) 
China Unicom is paying Motorola $190 million to expand its cellular network
in the Shandong, Jiangsu, and Hunan provinces. Through the expansion, China
Unicom will add 2.3 million customers to its subscriber base and will
implement seven new GSM networks in additional regions. 

Verizon Wireless Launches Mobile Web (07/19/2000) 
Verizon Wireless entered the wireless Internet market with the launch of
Mobile Web, which allows customers across the nation to access Web-based
content through a wireless handset. Mobile Web is a customizable service
that allows users to access only the information they need. InfoSpace
supplied the wireless platform and integrated services for Mobile Web. 

Nokia Delivering GPRS System (07/19/2000) 
Nokia announced that it is delivering a GPRS system to Italy's Blu. Blu
will use the equipment to offer WAP-based services and GPRS technologies to
its customers. In addition, Nokia is supplying WAP phones and its gateway
solution. 

Sprint PCS Licenses Phone.com Software (07/19/2000) 
Sprint PCS announced that Phone.com's MyPhone software will be used with
its Wireless Web e-mail service. Sprint PCS' solution allows e-mail
messaging to wireless handsets. In other news, Sprint PCS agreed to offer
E*TRADE Internet content to its Wireless Web customers. E*TRADE's service
includes financial news, stock quotes, and trading capabilities. 

Qwest to Expand Wireless Offerings (07/19/2000) 
The wireless division of Qwest Communications launched its all-digital
wireless voice and data service in Boise, including Ada and Canyon
counties, and Spokane and surrounding communities in eastern Washington.
The company will also launch service in western Montana, including Butte,
Helena, Great Falls, and Missoula in early August, with plans to expand to
eight additional markets by the end of the year. The company currently has
650,000 wireless customers in eight western and mid-western states. 

Baja Now Accessible to Verizon Customers (07/18/2000) 
Responding to a stream of requests from Verizon Wireless customers in
Southern California, Verizon Wireless added Baja California to its
customers' roaming services. Verizon Wireless signed a roaming agreement
with a Mexico-based wireless provider so the service can be offered at a
competitive rate of 60 cents per minute, plus long distance charges. Now
customers can make and receive calls in major cities in Baja California
such as Tijuana and Cabo San Lucas. 

Strategy.com To Send Customized Info to Verizon Users (07/18/2000) 
Through Strategy.com, Verizon Wireless customers will be able to access
personalized finance, news, weather, sports and entertainment with their
Mobile Web service. In addition to being able to search for information
through Strategy.com, customers can receive personalized alerts for
important events from stock drops to weather changes on their Web-enabled
wireless phones. 

Verizon Wireless Introduces Home Calling Area (07/17/2000) 
Verizon Wireless introduced a five-state calling plan in the Southwest that
allows wireless customers to make calls without roaming charges while
traveling through Nevada, California, Arizona, New Mexico, and Hawaii. The
five-state Home Calling Area is part of the company's Digital Plus bundled
calling plans. 

AT&T Wireless Teams with AOL (07/17/2000) 
AOL agreed to offer its content through AT&T Wireless Services. As part of
its AOL Anywhere plan, the Internet company will allow AT&T's Digital
PocketNet users to have access to AOL's e-mail, instant messaging, and
other Internet content. 

Verizon Wireless Delivers Travel Info (07/17/2000) 
Verizon Wireless agreed to offer real-time travel information to motorists
through an agreement with eXitSource. Mobile Web customers will be given
eXitSource's Web applications, which provide information about directions,
gas, food, and lodging free-of-charge. Verizon Wireless also agreed to
provide sales and promotional services to retailers, e-tailers, and service
providers through SalesMountain.com, which lists the sales in an area by
brand, topic, and store. 

Comments or suggestions about Telecom Weekly may be sent to Tammy Boyle. 
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