June 24, 1998
By Mary Beth Regan
and Kristin Balleisen

Welcome to Beltway Bootup.

AT&T's DEAL: Telecom giant AT&T Corp. announced a deal today to buy the nation's second-largest cable company, Tele-Communications Inc. of Inglewood, Colo., for $32 billion in stock and assumption of $16 billion in debt. The acquisition would create a company with $60 billion in sales offering one-stop shopping for customers in virtually every electronic telecom service: long-distance and cellular phone calls, cable TV and high-speed Internet access. It also would give AT&T an entree into the rapidly growing Internet market. Interviewed at a 1998 World Congress on Information Technology session in Fairfax, Daniel H. Schulman, president of AT&T WorldNet Service, told Bootup: "That market is absolutely essential to us." The deal is certain to face close regulatory scrutiny because of the powerful market positions held by C. Michael Armstrong's AT&T and by TCI under its chief, John C. Malone.

VIRTUAL FUTURE: Two IT industry giants, Michael Dell and Larry Ellison, told attendees at the World Congress at George Mason University that the Internet will dramatically change the landscape of business and society. Dell, for example, said the Internet had "turbo-charged" his company, changing it into a virtually integrated corporation. Dell Computer Corp.'s online sales went from $1 million a day during the first quarter of 1997 to $5 million a day for the first quarter of 1998. Customers, such as Ford Motor Company, say they can save as much as $2 million annually in procurement costs by ordering over the Internet. Bootup tip: Check today's WashTech's live Q&A session with Dell.

Photo by Reginald A. Pearman Jr. washingtonpost.com

World Congress CEO Jim Poisant with Mikhail Gorbachev.

WORLDVIEW: Former U.S.S.R. President Mikhail Gorbachev received a standing ovation from a sedate IT crowd at the World Congress Tuesday after delivering a moving speech about the dangers of "electronic colonialism." He urged U.S. corporations to partner with Russian companies rather than lure foreign-born programmers with promises of higher salaries. That, he concluded, adds to the foreign "brain drain." And former British Prime Minister Margaret Thatcher and presidential wannabe Steve Forbes both warned against Net taxation. The House agreed, voting yesterday for a three-year moratorium on new Net taxes. However, local and state governments that had Internet access taxes in place on or before March 1 can continue to collect fees, The Post reports.

TECH STARS: The World Congress wraps up today with Virginia officials continuing to try to nail down possible deals before the IT execs leave town Thursday. One possible matchup from the Congress: Valerie Perlowitz, CEO of Reliable Integration Services of Dunn Loring, says she expects to line up a new partner, France's Synersoft, which runs help services for tech firms. Perlowitz says that's a good match for her outfit, whose software enables companies to evaluate the effectiveness of their IT systems. "It looks like a good fit," she says.

DISNEY TOUCH: It's a small world after all – especially when World Congress CEO James Poisant is throwing the party. The former Disney exec oversaw last night's three elaborate World Congress galas, each designed to represent a different region of the world. Poisant will leave his current post at EDS to run the 2000 World Congress in Taipei, after directing this week's $6.5 million show at GMU.

INTEL'S IRE: Even stuffy government agencies have crafty spin doctors. A mere four hours after announcing its suit against chip giant Intel Corp., the FTC reportedly faxed a 10-page backgrounder on the case to some of the country's most learned antitrust experts. While some experts contend the agency's PR move was a good one, Intel reps say the document is a violation of confidentiality, since it contains paraphrased statements by the company to FTC staffers during private negotiations. To add to Intel's woes, Reuters is reporting that Intel's forthcoming Xeon chip contains a bug, or errata, that will likely delay its shipment, scheduled for Monday. Intel apparently disclosed the bug to its OEMs, the original equipment manufacturers who are expected to use the powerful, 350 and 400 megahertz chip sets in large, complex servers. "We always have errata in every complex semiconductor product," an Intel spokesman said. Well, that's a relief.

ORBITAL'S EXPANSION: Loudoun County is apparently the place to be if you're a tech company. The hangar-like headquarters of AOL boasts its own street name in Sterling, and WorldCom recently received approval to build a new compound that would employ some 3,000 people. Today, The Post's Stephanie Stoughton reports that Orbital Sciences Corp. plans to expand its Dulles headquarters building to include a new, state-of-the-art satellite factory as well as beefed-up research and office space. Orbital, which makes low-flying satellites, has seen explosive growth in recent years and says the additions are necessary to keep up with customer demand; in addition, the company also plans to add 1,000 new workers to the payroll over the next three years. Bootup says: Time to put in a Starbucks.

MICROSOFT WINS A ROUND: Yesterday's federal court ruling in favor of Microsoft was a welcomed but perhaps limited victory for the legally besieged software giant. The Court of Appeals decision, which states that Microsoft did not violate a 1995 consent decree by bundling its Internet Explorer with Win95, strikes down the earlier ruling by U.S. District Judge Thomas Penfield Jackson and will force Justice to adjust its legal arguments, says The Post's Elizabeth Corcoran. Jackson will hear the Justice/Microsoft antitrust case in September. Here's the catch: Yesterday's ruling pertains to Windows 95, which is three years old now, according to Bootup's calculations. The crux of the DOJ suit is about Win98 and its exclusive inclusion of Internet Explorer. Win98 is due out on store shelves tomorrow.

CEASE FIRE: Fairfax-based UUNet Technologies Inc. has announced that it will begin an immediate rollout of its 56 kilobit-per-second dial-up service today, embracing the technical standard of the International Telecommunications Union. UUNet's announcement effectively ends the war between two powerful modem manufacturers, U.S. Robotics and the combined team of Lucent Technologies Inc. and Ascend Communications Inc. – who each backed different 56k standards. But that battle is moot now that UUNet, the largest Internet access provider, has aligned itself with the ITU. UUNet will continue to support users of Lucent and Ascend's K56Flex technology, while offering free upgrades to the new standard.

If you have questions, complaints, tips or opinions, you can also call The Beltway Bootup Hotline at 703-741-3833.