I feel like a courier in an old Neville Shute novel. But, here it is, the last post before taking off to the wild north. I'll be back in a week, provided Calgary doesn't capture my heart and keep me longer.
And just so these walls don't echo with too much nothingness over the week-end, here's some items you may find interesting. The FCC rulings will affect NN and anyone else providing highspeed upgrades. I don't include these articles whimsically.
Later ---
Pat
Australia privitizes Telstra:
ft.com
Its package includes the extension of untimed local calls to more rural dwellers, an upgrade of customer service guarantees and the provision of high-speed communication links to regional communities.
BellSouth request to FCC still pending:
bellsouthcorp.com
CRTC decision:
newsalert.com
Startup with exciting technology:
eet.com
Inter@ctive Week on FCC:
zdnet.com
Bells and the telecom act:
zdnet.com
Alcatel's payphones fail in Belgium:
ft.com
Alcatel declined to give details of what went wrong other than to say it was linked to the growth in the size of the network and the volume of calls carried on it.
U.K. cable companies soar:
ft.com
After three years in the doldrums, share prices in the three quoted companies have rocketed: Cable & Wireless Communications has jumped 44 per cent in three weeks, Telewest has practically doubled, and General Cable, which is under offer by Telewest, has risen a third.
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The Wall Street Journal Interactive Edition -- July 10, 1998
Telecom Italia, Cable & Wireless
Hold Talks on Closer Relationship
An INTERACTIVE JOURNAL News Roundup
Telecom Italia SpA said Friday it is involved in talks with Cable & Wireless PLC about forming a closer alliance.
Telecom Italia in the past has expressed an interest in buying a small stake in Cable & Wireless as a way to strengthen its alliance with the British phone carrier, according to people familiar with the situation.
Telecom Italia executives broached the possibility with top officials of Cable & Wireless a few months ago, just before the companies unveiled their alliance.
An investment by Telecom Italia in Cable & Wireless stock would create a stronger bond between the carriers. A stronger linkup may also make Cable & Wireless a more attractive partner for certain U.S. companies that are keen to become global players.
Cable & Wireless is in the early stages of shopping around for an American alliance partner. It has held discussions with AT&T Corp., Bell Atlantic Corp. and others.
A U.S. carrier could use the Cable & Wireless link to get access to the markets of the Asia-Pacific region, the Caribbean and Britain, while Telecom Italia has a significant presence in Latin America and Central Europe.
Analysts have noted that the two companies' alliance is of uncertain value. Under the terms, Cable & Wireless is set to receive roughly $2 billion for selling certain pieces of its global businesses to Telecom Italia.
In April, the Italian company said the two had agreed that Cable & Wireless would sell Telecom Italia its 20% stake in Bouygues Telecom of France. Cable & Wireless provides international telecommunications services in 30 countries and internal networks in 20 countries.
Telecom Italia, the world's sixth-largest phone operator, didn't give any financial details at the time, and only noted in a statement that the alliance would create the world's second-largest international calling network, after AT&T.
The deal with Cable & Wireless sank a proposed AT&T/Telecom Italia alliance, and puzzled investors, who noted that the merger shaved only a few percentage points off international carrying costs.
Veba Stake
The Italian company could also pursue another route: It could buy German utility Veba AG's 10% interest in Cable & Wireless, valued at roughly $2.5 billion.
Veba might also be more inclined now to sell its stake in Cable & Wireless. A planned partnership between the two companies fell apart more than a year ago, and Veba has no strategic reason for continuing to own a part of the British carrier. Veba acquired the shares at a low price and would stand to make a handsome profit by selling now.
In related news, Telecom Italia Mobile Chairman Vito Gamberale acknowledged that controlling shareholder Telecom Italia is pressuring him to resign.
Mr. Gamberale's comment follows Italian news agency reports Thursday that Telecom Italia Chairman Gian Mario Rossignolo last month asked Mr. Gamberale to step down.
In a letter, Mr. Gamberale said that, while he had not yet been asked to resign, the request was evident "in the facts." Mr. Gamberale had previously resigned as director general of operations at Telecom Italia.
Board Meeting Held Friday
Telecom Italia held a board meeting Friday, but no announcement had been made by late afternoon, after the close of trading.
Also Friday, Telecom Italia said consolidated revenue in the first five months of the year amounted to 17.8 trillion lire ($9.94 billion) while its gross operating margin amounted to more than 53%. Year-ago comparison figures weren't provided, but Telecom Italia said last year that consolidated revenue in the first half of 1997 amounted to 20.519 trillion lire.
In trading in Milan Friday, Telecom Italia shares fell 10 lire to 14,710 lire. On the New York Stock Exchange, Telecom Italia American depositary receipts finished at $82.125, up 50 cents.
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The Wall Street Journal Interactive Edition -- July 10, 1998
Opening Arguments Begin in Bells' Suit Challenging Telecommunications Law
By JOHN SIMONS
Staff Reporter of THE WALL STREET JOURNAL
NEW ORLEANS -- Three Baby Bells went up against the federal government in opening arguments of a lawsuit that challenges 1996's sweeping telecommunications law.
The case, originally filed by SBC Communications Inc. and joined later by U S West Inc. and Bell Atlantic Corp., is part of the local phone carriers' bid to knock down key provisions. These require that the Bells open local phone monopolies to competitors before they can obtain government approval to provide long-distance service. The Bells argue that the law is unconstitutional because it is essentially a bill of attainder: It specifically singles out and penalizes them without a trial.
But Joel Klein, the U.S. chief antitrust enforcer, sees no constitutional problem singling out companies if they aren't being punished, and considers the act "forward-thinking regulation." Thursday, he argued that the economic motive is to create a free market among local carriers and a competitive market among long-distance carriers.
Conservative Judges
The case has tread an unusual trail and ended up in Louisiana's Fifth Circuit Court of Appeals after the government appealed a ruling by U.S. District Judge Joe Kendall. In a decision released Dec. 31, he concluded that the government's stringent rules governing long-distance entry were unfair. SBC, based in San Antonio, filed the suit hundreds of miles north in Judge Kendall's Wichita Falls, Texas, district. The judge is known as a maverick conservative who is skeptical of government intervention.
The three-judge panel in New Orleans -- Judges E. Grady Jolly, Jerry E. Smith and Rhesa H. Barksdale -- were appointed during the Reagan/Bush era and are considered conservative. But they were circumspect in their questioning Thursday of Mr. Klein and Harvard Law scholar Laurence Tribe, who argued for the Bells.
All three judges questioned how it was that the Bells agreed to -- and even celebrated -- the reform measure after its passage. Judge Jolly acknowledged that the Bells suffered "severe, severe injury" simply because they weren't allowed to enter any and all markets they wished. Still, he noted that with the law's enactment the Bells entered a sort of quid pro quo relationship with government. "You gave up something; you got something," the judge told Mr. Tribe. "How can a quid pro quo be a bill of attainder?"
'A Legislative Trial'
Mr. Tribe argued that Congress held "a legislative trial" when it named the Bells in the 1996 law. "When you single them out by name, we have a problem," Mr. Tribe said. As for the Bells agreeing to the act, Mr. Tribe said "we did the best we could," he said.
The panel focused on what "bill of attainder" meant in relation to corporations -- and especially those in regulated industries. "How do you factor in that this has been a highly regulated industry?" Judge Barksdale asked Mr. Tribe. Mr. Tribe replied that it shouldn't be a factor.
Mr. Klein countered that regulation has everything to do with the law's provisions. He also noted that it provided the Bells numerous benefits: For instance, they can enter long-distance markets outside their home regions. "Insurance companies can't go into banking and vice versa," he said. "This is appropriate regulation."
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