======================================================== USIIA Bulletin April 14, 2003 Volume 03:15 ======================================================== The USIIA Bulletin is a weekly summary of legislative and Internet industry news compiled by the US Internet Industry Association and distributed as a service to its members. Information about USIIA and its programs may be found at http://www.usiia.org. ======================================================== 1. News Corp. Buys DirecTV 2. FCC Could Reverse On Line Sharing 3. Can-Spam Bill Introduced 4. AOL Time Warner and Cablevision In Merger Talks 5. Legislative and Legal Summary 6. Industry Week in Review 7. Internet Security 8. USIIA News ======================================================== "You can't have a fraudulent storefront on the Internet and have kids walk in and find themselves in the adult section -- Triple X -- when they came in looking for Hardy Boys. We're not telling you to tear down your store. What we're saying is that you can't have a storefront saying you're for kids and be for adults." -- Rep. Mike Pence (R-IN) on his "misleading domain name" legislation, which passed Congress this week ******************************************************** News Corp. Buys DirecTV ******************************************************** Rupert Murdoch's News Corp. has struck a deal to take control of Hughes Electronics Corp., the corporate parent of DirecTV. The deal, for about $6.6 billion, will give News Corp. a 41 percent ownership and control of the company. Murdoch has long sought a US-based satellite system to advance his vision of a global satellite network. He currently holds satellite systems in Britain, Italy, Latin America, Asia and Australia. General Electric has tried for two years to sell the Hughes unit. Murdoch will become Chairman of Hughes in the deal, which still must gain regulatory approval. ******************************************************** FCC Could Reverse On Line Sharing ******************************************************** A pending FCC decision that would have shifted line sharing from tariffed rates to commercial contracts may be reversed when the official order is handed down. In a confusing decision last month, the FCC ruled that line sharing -- used by many ISPs to purchase access to the high frequency portion of the local loop in order to provide broadband service over voice lines -- would be phased out over three years. As the FCC works out the final language of the 400-plus page order implementing its Triennial Review of competition, the commission is reported to be in discussions with Covad Communications and other DSL vendors to reverse its announced decision on line sharing. The decision regarding UNE-P unbundling for telephony is said to be unaffected. A reversal would likely see a court challenge to the FCC decision. The FCC has lost in court challenges to its previous two efforts to manage competition. ******************************************************** Can-Spam Bill Introduced ******************************************************** Senators Ron Wyden (D-OR) and Conrad Burns (R-MT) are hoping that the third time will be the charm as the introduced this week the third consecutive version of their "Can-Spam" Act. The bill, which has stronger support this year than in any of the previous two sessions of Congress, would cut down on unwanted email by requiring Internet marketers to provide legitimate return addresses on their messages and to honor requests to be removed from marketing lists. Violators would be sued by state attorneys general on behalf of consumers, and the Federal Trade Commission would also have the right to sue on behalf of consumers. USIIA is a supporter of the legislation, and encourages its members to support the bill for passage this year. ******************************************************** AOL Time Warner and Cablevision In Merger Talks ******************************************************** The New York Post reports that Cablevision and AOL Time Warner have reached an agreement in principle to merge the two cable systems prior to AOL Time Warner's planned cable IPO. The deal, which has not been finalized, would bring AOL Time Warner's cable holdings to 14 million subscribers, with 4.2 million in the New York area alone. The combined company would be worth and estimated $40 billion. ******************************************************** Legislative and Legal Summary ******************************************************** ** The insurance industry is battling ISPs in New York over S.O. 1680, a proposed anti-spam bill that would give ISPs immunity for blocking email ads. The National Association of Independent Insurers says the bill would allow ISPs to block "important email" about life, auto and health insurance. Anti-spam advocates are divided over whether state legislation can be effective in limiting unwanted email. ** The House and Senate overwhelming approved the "Amber Alert" bill this week, which would also make it illegal to register domain names intended to lure unsuspecting children to pornographic web sites. The misleading domain name legislation was introduced by Rep. Mike Pence (R-IN). ** A federal judge in Boston has dismissed the first major challenge to the Digital Millennium Copyright Act. The suit was brought by the American Civil Liberties Union against filtering software company N2H2, claiming the law interfered with research efforts to evaluate the effectiveness of the software. The judge pointedly disagreed with the ACLU position. ******************************************************** Industry Week In Review ******************************************************** ** It started out as a small joke among a group of friends entitled http:/www.WeLoveTheIraqiInformationMinister.com, hosted by a shared server in Alaska. But by week's end this week, the site was attracting 4,000 hits per second and sent the network to its knees. The operators hope to have the site back up by the time you read this. ** IDC says the Internet Server Provider market -- designated "xSP" -- will reach $530 billion by 2007, with a compounded annual growth rate of 17 percent. The study by IDC also says that consolidation among service providers will continue through the period as providers seek economies of scale. ** WorldCom, still reeling from accounting irregularities that are now estimated at nearly $11 billion, has decided to change its name. The company will assume the name of its parent organization, MCI. ** SBC Communications has announced a bundling of DSL and phone service that will cut the cost of DSL to $24.95 per month. The price is for one year on an annual contract. The move is intended to allow SBC to compete more effectively with cable Internet, which now has a 75 percent market share. ** AT&T has entered the fray for Internet micro-payments, introducing a prepaid "Web Cents" card that will allow consumers to make online purchases of games, music, cartoons and other low-cost content. The cards are, for now, specific to a single web site. The cards can be purchased for $9.99 to $29.99. ******************************************************** Internet Security ******************************************************** ** The FBI's Internet Fraud Complaint Center says the number of complaints and the cost of fraud to consumers tripled last year. The center referred 48,252 cases of fraud our of the 75,063 it received last year, nearly three times the 16,775 referred complaints in 2001. The monetary loss associated with the complaints tripled from $17 million in 2001 to $54 million last year. Auction fraud was the most common complaint. ** Former presidential cyber-security advisor Richard Clarke warned lawmakers this week that there is no top-level administration official that is watching over the safety of the nation's communication infrastructure. Clarke told the House Technology and Information subcommittee that the nation needs a chief information security officer. ******************************************************** USIIA News ******************************************************** ** Nominations open June 1 for the election of the USIIA Board of Directors for 2004. All members in good standing may be nominated for election. Contact USIIA for additional details on the nomination process. ** USIIA is currently implementing the new design for its web site. Among the new features will be subscription services for USIIA publications by non-members and a banner ad for corporate members on the index page of the site. View the new design at http://www.usiia.org. ** The next annual meeting of the Association has been set for September 10, 2003, in Denver, CO.