On-Line

AT&T, TCI Combine Services AT&T announced plans to merge with Tele-Communications, Inc. (TCI) in an all-stock transaction valued at approximately $48 billion. The deal gives AT&T the "last-mile" access to more than 20 million cable-ready homes and the potential to reach 13 million others, estimated to be nearly a third of U.S. residences.

AT&T will create a subsidiary called AT&T Consumer Services to consolidate the consumer communications services into a single bill. Planned offerings include local and long distance, wireless and international communications, cable television and high-speed Internet access services.

"Through its own systems and in partnership with affiliates, AT&T Consumer Services will bring to people's homes the first fully integrated package of communications, electronic commerce and video entertainment services," Michael Armstrong, AT&T chairman & CEO, said.

Industry analysts said if AT&T can somehow make the merger succeed, the expected drop in prices for bundled services potentially could shake up the entire telecommunications industry as other carriers are forced to respond to remain competitive.

"This is a huge opportunity for AT&T," said Gary Miller, Aragon Consulting Group chairman & CEO. "Anytime you can offer local loop, long distance, wireless and Internet access at a bundled price, two things will occur: Usage will be stimulated, and the amount of time spent on-line and wireless will explode."

Nortel Unveils Integrity Lab Nortel used the excitement of The Calgary Stampede as the backdrop for its announcement of expanded and new facilities in Canada. Company and city officials cut the ribbon for Nortel's Wireless Systems Integrity Laboratory. The 10,000-square-foot facility will verify that Nortel's products meet mandatory regulatory standards from a variety of government and industry bodies.

Matt Desch, Nortel Wireless Networks president, called the various electromagnetic compatibility and susceptibility chambers "very special rooms." The labs can detect unintentional interference with radio, TV or other communications signals as well as high levels of RF emissions and static. According to Desch, Nortel now can measure in hours what it used to take weeks to collect. The facility also features a room to measure test products from a physical and electrical safety point of view. In a separate chamber, the company stresses products by varying the temperatures.

"This will provide us with cost and time savings," said Paul Rubin, Nortel manager of media relations. "Having this testing facility on site means we don't have to ship the equipment off-site to another facility for testing and certification by the FCC and other government or industry bodies."

Nortel also is expanding its Westwinds facility to meet the increased global demand for wireless network products. It is moving its production of Reunion broadband wireless products from Winnipeg to Calgary and plans to build a new broadband wireless R&D facility in Winnipeg.

Carriers File Suit Against C-Block Ruling Sprint and several other carriers filed suit against the FCC, alleging the commission extended special considerations to C-block auction winners that proved unfair to competitors and losing bidders. They requested that the courts order the FCC to collect the spectrum from defaulted companies for sale in a second auction.

Sprint took exception to the increasingly generous concessions offered by the FCC to carriers, particularly an option to allow carriers to return 50% of theirC-block winnings for credit and re-auction.

"It should be all or nothing ... you either pay what you intended to pay or you turn them back in under certain amnesty," said Tom Murphy, Sprint spokesman. "Changing the rules after the fact is not fair to competitors that had a firm business plan and calls into question the validity of this auction process."

Other carriers, including failed C-block bidder U.S. AirWaves, protested the FCC giving the C-block licensees any special treatment and said the commission should follow the rules outlined at the start of the auction process.

"The rules were very clear," said John DeFeo, U.S. AirWaves chairman & CEO. "When the money was due 60 days after the auction and they couldn't pay, the FCC was supposed to take the licenses back. [Not doing that] puts all future auctions in question, for if you can change the rules after the auction, then how can you have any trust in what the rules are?"

Defeo said the courts likely would take 6 to 12 months before reviewing the case. Any favorable ruling could change the C-block landscape considerably.

Vendors Get Behind Open Data Standard Hoping to take a leadership role in the future market for wireless information devices, Ericsson, Nokia and Psion have entered into a joint venture called Symbian.

The group formed the alliance in anticipation that consumers eventually will migrate from PCs toward more mobile products, such as smart phones, palmtop computers and other wireless devices. Symbian will develop a new industry standard to increase interoperability and flexibility between these products and EPOC, Psion's application programming interface that will serve as the operating system.

"We think it is time for this market to grow, but it will take off a lot faster if we have an open standard," said Anders Waesterlid, Ericsson director for software development and strategy.

Waesterlid said new products will be available late next year and will be compatible with other technologies such as Java, Bluetooth and Wireless Application Protocol.

Survey Shows Small Business Potential The nation's 12 million small businesses offer both wireless and wireline industries potential for sales in the upcoming years, according to a survey commissioned by the Telecommunications Industry Association (TIA) and the United States Telephone Association.

Highlights of the survey, conducted by the Verity Group, indicated that 48% of small businesses used mobile phones and 31% possessed paging devices. Few respondents, however, indicated awareness of the optional services available for either device.

"Most large companies have discovered the many advantages of (these systems) ... it is just a matter of time before small businesses follow the trend," said Matthew Flanigan, TIA president.

Other findings demonstrated a growing presence of voice mail (33%), e-mail (44%) and Internet access (46%), but many respondents admitted to making scant use of the technology available.

CALEA Generates Mixed Views Representatives from the telecommunications industry and federal law enforcement agencies continue to contest the intended scope of obligations outlined in CALEA. In the latest round of debate, CTIA, PCIA and TIA jointly filed an amendment to an April lawsuit requesting relief from wiretap requirements and FBI audits of carriers' records.

"We feel the additions the FBI has asked for exceed the scope of the law, and [we] are asking the FCC to adopt the standards that have been agreed to by the wireless and wireline industry," said Tim Ayers, CTIA spokesman.

Though Ayers remained uncertain when the courts would act on the lawsuit, the House of Representatives voted June 22 to extend the CALEA eligibility and compliance deadlines until Oct. 1, 2000. If final legislation is not passed within the next two months, however, carriers that do not have the CALEA service in place still may face $10,000-a-day fines.

Although CALEA requirements are under debate, ADC NewNet presented its CALEAserver software, which collects call information for law enforcement.

CDMA Data Rates Increase Nortel and Bell Mobility achieved wireless data transmission speeds of up to 57.6kb/s over a commercial CDMA network, exceeding the 14.4kb/s rate reached previously on a cdmaOne infrastructure. Though still slower than other competing technologies, officials said the improvement showed continued progress by new CDMA technology toward higher speeds and greater network efficiency.

"GSM networks have been at higher speeds, but you have to keep in mind that it has been around longer and is to be expected," said Paul Rubin, Nortel spokesperson.

Nortel plans to improve CDMA technology to the second-generation standards of 384kb/s and eventually to much higher third-generation expectations. Such advances are necessary, according to Rubin, who expects between 50% and 70% of wireless users to demand Internet access in the near future.

"A lot of what people have come to expect on their desktop they are going to ultimately come to expect from their wireless devices," Rubin said. "People expect to be able to use their wireless voice communications anywhere, anytime."

Metrocall Acquires AT&T Paging Service Metrocall announced plans to purchase the advanced messaging division of AT&T Wireless Services in a cash and stock transaction valued at approximately $205 million. The deal gives Metrocall 1.2 million new customers, access to a narrowband PCS license and additional coverage in the west.

"We are pretty well rounded out now," said Steve Jacoby, Metrocall COO. "This deal really fills in the missing pieces ... and solidifies our position as the number two paging company in the United States."

The two companies also agreed to a 5-year national distribution agreement in which AT&T's retail stores exclusively sell Metrocall paging products.

Groups Continue USF Debate The FCC faces an uphill battle if it intends for the Universal Service Fund (USF) to connect the rest of the nation's schools, libraries and hospitals to the information superhighway anytime soon.

Opponents in the telecommunications industry continue to argue that the USF has placed an unreasonable financial burden on carriers and has led to higher rates for consumers. Many demand that it be brought under tighter control, if not scrapped altogether.

Several members of Congress expressed similar sentiments. Although supportive of the intent behind the USF, they said the FCC could achieve the task at a lower price. Sen. Conrad Burns (R-MT), chairman of the Senate Commerce subcommittee on communications, and Rep. Billy Tauzin (R-LA) plan to introduce legislation to reduce the excise tax that funds the program from 3% to 1.5%.

In an effort to avoid such measures, the FCC recently scaled down the program from $2.25 billion to its current $1.3 billion level.

"We must not ignore the serious concerns that have been expressed," said FCC Commissioner Susan Ness in a speech to the Computer and Communications Industry Association's 1998 Washington Caucus. "The dilemma, however, is that it would be unconscionable to cut off funding for a program on which 30,000 schools and libraries across the nation are counting ... ."

In Other News ... * Sprint PCS temporarily stopped sales of the Qualcomm "Q" flip-phone due to cracks developing in a small number of units. Qualcomm announced it would replace damaged units and plans to release a redesigned dual-mode version this fall.

* Bosch Telecom and Cisco Systems formed a strategic alliance to develop and market multi-service, broadband wireless networking solutions. Potential solutions will help service providers to deliver integrated voice, data and video services faster and more cost-effectively.

* Omnipoint expanded its New York coverage area and became the first carrier to provide GSM coverage in the tri-city area including Albany, Schenectady and Troy. The service drops the traditional "packaged minute" concept in favor of prepay plans.

* Alltel and 360 degrees Communications received a green light from shareholders to proceed with their planned merger. The FCC already had approved the merger, which became effective last month.

* BAP Acquisition announced plans to purchase the paging assets and operations of Bell Atlantic. Terms of the agreement, which affects 240,000 mid-Atlantic customers, have not been disclosed.

* World Wireless Communications announced plans to install a $3 million wireless automatic meter-reading system throughout the city of Eagle Mountain, UT. The system replaces human meter readers and allows the utility company to monitor gas, water, and electric consumption in as many as 20,000 service meters.

* GoAmerica Communications and Zsigo Wireless Data Consultants have teamed up to offer a comprehensive sales training and fulfillment program for wireless carriers to introduce and sell wireless data solutions.