Air Wars I
Howard Stern shocked his 12 million listeners again, not with raunchy banter but with news that he'll be moving to Sirius Satellite Radio, where federal indecency rules don't apply. The King of Radio will reportedly earn $50 million a year. His departure will be a blow not only to Viacom's Infinity Broadcasting, where Stern brings in $100 million a year in ad sales, but to traditional AM and FM radio, which now face the kind of challenge from paid satellite service that TV broadcasters face from cable.
Air Wars II
Ending a truce with Europe over airplane subsidies, the United States filed a formal complaint at the World Trade Organization over what it called sweetheart government loans to Airbus. Europe said it would respond in kind, accusing federal and state governments of subsidizing Boeing through tax breaks and Pentagon research contracts. The timing of the U.S. action suggested an eye toward the election, with most trade experts predicting a new truce would be negotiated before a final WTO ruling.
Tax Cuts for Business
Congress moved toward passage of a long-sought tax bill that could resolve another trade dispute with Europe. Export subsidies would be repealed, replaced by a lower tax rate for domestic "manufacturing," which covers everything from engineering services to coffee roasting. The 600-page bill also provides a tax holiday for repatriating corporate profits parked overseas, subsidies for ethanol producers and oil drillers, tax breaks for small businesses and a buyout for tobacco farmers. President Bush said he would sign it.
US Airways said its recent bankruptcy filing had caused bookings to fall more steeply than expected, putting yet more pressure on the carrier to win the 23 percent pay cut it requested from a federal bankruptcy judge. Unions called it excessive. Meanwhile, bankrupt United Airlines said it would sharply cut back domestic flights while increasing service on international and Caribbean routes, including those out of its Dulles hub. With less competition from low-cost carriers, international flights are more profitable.
The European Commission recommended that Turkey be admitted to the European Union. Political leaders have until December to accept or reject the idea. Turkey would not only be the most populous and poorest E.U. member, but the only Muslim one as well. Even the commission recommendation was hedged, warning there might need to be special restrictions on Turkish immigration, as well as guarantees that Turkey would not backslide on democratic reforms and respect for the rule of law.