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					Kim H. Veltman
American Visions of the Internet: A Crisis of Trust
Maastricht, December 2004.

1. Introduction
2. Background of the Internet
3. AT&T
4. MCI/Worldcom
5. Verizon and the Baby Bells
6. Bellcore and SAIC
7. Energy
8. Military
9. Private Equity
10. Telco Pseudo-Crisis
11. Financial Sector
12. Other Sectors
13. Law and Trust
14. Conclusions

According to the news media, the history of the Internet is straightforward. In the 1950s the
idea was opposed by the telephone companies, notably AT&T. In the 1960s, sponsored by
the US military, the Internet started as an experiment to link scientists. This idea gained a
wider audience. The breakup of AT&T in 1984 helped the process and the Internet was
becoming a great success. All was well until 2000-2001 when there two great setbacks: 1)
the bust and 2) a crisis in the telecommunications and specifically the telephone
industry. Some link these events largely or even exclusively to the events of September 11,
2001. Since then, our safety has been jeopardized by terrorism and Internet developments
have been correspondingly shaky.

This essay challenges the received wisdom concerning the Internet. There is strong
evidence that there was support from telephone companies from the outset; that the breakup
of AT&T did not fundamentally change the situation. Since 2000, there was no
fundamental decline in the telecom markets, but there have been other important changes.
Energy companies have returned to the media domain with avengeance. The military is
extending its activities in the civil sphere. Private investment firms are systematically
buying up sections of the entire telecommunications infrastructure from cables to satellites.
There is a case to be made that the myriad bankruptcies in the field are being planned. This
plan extends far beyond new media and includes education, finance, health, law and other
sectors. And while the surface transactions are legitimate, these developments are leading
to a crisis of trust, which endangers all the noble values of liberty and freedom for which
the United States has rightly become famous.


Since its beginnings in the 1960s there have been many stories about the Internet. One is
that the Internet was a US invention. The story that officials in AT&T were once adamantly
opposed to the Internet1 led to a received wisdom that telephone or telecommunications
companies (telcos or telecoms) and the Internet were unrelated. The telephone companies
(telcos), we are told, were big monopolies, blind to innovation and the Internet was started
on the sly by a few scientists and academics. The Federal Communications Commission
(FCC) version is more subtle:2 The telcos did infrastructure, while those who developed the
Internet did applications.3

When one looks more closely at the evidence, a very different story emerges (§ 2). The
Internet began in Europe. In the United States, which is the focus of this essay, the
development of the Internet has been dominated by the major telcos. While received
wisdom tells us that AT&T was disbanded in 1984, AT&T remains one of the leading
players in the field (§ 3). Also important until recently have been the competitors,
MCI/Worldcom (§ 4); AT&T‘s Baby Bells, especially Bell Atlantic in its new guise as
Verizon (§ 5) and AT&T‘s BellCore in its new guise as Telcordia (§ 6). In theory these are
four sets of players. With the bankruptcy of MCI/Worldcom, there was effectively only one
major player: AT&T in the various guises as itself, the Baby Bells, and its research labs
(Lucent, Telcordia and SAIC). There is significantly more cohesion between the parts of
AT&T than would at first sight appear. AT&T was a telecommunications company with
Internet interests. Through its various subsidiaries AT&T became intimately involved in
education; Next Generation Internet (NGI); Electronic Numbering: to achieve Internet
Telephony4 and Domain Name Systems (Appendix 1).

AT&T‘s links with carrier equipment companies, computer companies, content holders and
home entertainment firms have led to a much more comprehensive vision that includes the
entire information/knowledge production and life-cycle. An understanding of this vision
gives insight into factors behind some of the bankruptcies among those who are not part of
this plan.

Since 2000, there have been considerable changes. Energy companies, notably General
Electric, have come back into the forefront (§ 7). The military is becoming ever more
involved in civilian information systems (§ 8). Private (equity) firms are systematically
buying up large portions of the telecommunications infrastructure (§ 9). Officially much
has been written of both a bust and a burst of the telecommunications bubble in the
period since 2000-2001. The statistics of the International Telecommunications Union
(ITU) reveal a very different picture: one of continuous growth in the fixed telephone,
mobile telephone and Internet sectors. According to the ITU, the very big players remain
NTT, ATT as well as Deutsche Telekom, France Telekom, and British Telecom.

According to Forbes all this changed sometime in 2003 and now the leading telephone
companies of the world are Verizon and SBC Communications. According to this view the
Baby Bells are now repositioning themselves to be the leading telcos in the world (§ 10).
These changes affect much more than the telcos. They entail the financial sector (§ 11) and
other sectors such as energy and health (§ 12). From this emerges a much bigger picture

where the whole legal system is being undermined and the very fabric of trust as a
cornerstone of democracy is being threatened (§ 13).

In this big picture, new media, investment, energy, the military and the secret services are
inseparable. Hence the rise of new technologies is becoming is intimately linked with key
events of the past years: the Afghan war, September 11, 2001, the so-called ―wars‖ on
drugs and terrorism; the spectre of a new oil crisis; the war with Iraq and possibly other
―evil‖ states. This vision is prepared to use military force to attain its ends. The Internet,
which is supposedly for everyone all over the world, is in danger of becoming the tool of a
small elite linked with the highest echelons of the US government. While posing as
representatives of the people, this elite appears to have agendas, whereby recent economic
crises are overshadowed by more fundamental crises in the legal framework, and the very
fabric of trust, and integrity. When statesmen such as Henry Kissinger insist that this is
linked with the challenge of creating ―a new world order…to rebuild fundamental
principles of world order to replace the traditional ones that went up in the smoke of the
World Trade Center and the Pentagon,‖5 they would do well to remember the great
suffering that phrase has brought in the past. The short term greed of this elite undermines
the international reputation of the United States on the world stage; threatens the future of
freedom and democracy and indeed poses dangers for the future of civilization.

2. Background of the Internet

We are almost always told that the Internet began solely in America. This is not really true.
The earliest pioneers included a Frenchman, Louis Pouzin,6 who introduced the idea of data
grams and an Englishman, Donald W. Davies,7 who was one of the inventors of packet-
switching. Another of the great pioneers in Britain was Peter T. Kirstein,8 who went to
America at the beginning of the Arpanet in 1969 when it was decided that Davies could not
go for reasons of national security.9 According to Bruce Sterling:

         The National Physical Laboratory in Great Britain set up the first test network on
         these principles [of packet switching] in 1968. Shortly afterward, the Pentagon's
         Advanced Research Projects Agency decided to fund a larger, more ambitious
         project in the USA.10

Hence an English project11 of 1968 inspired the beginnings of the US Internet in 1969. It
seems false to claim that America invented the Internet and is simply misleading to argue
that because America invented the Internet, it is their right to control its governance
through organizations such as the Internet Assigned Names Authority (IANA) and more
recently the Internet Corporation for Assigned Names and Numbers (ICANN).

3. AT&T

Long before the Internet began, AT&T founded Bell Labs in 1925. In the 1930s, Vannevar
Bush was a professor at the Massachussets Institute of technology (MIT) working on a
Differential Analyser machine that led to the Electronic Numerical Integrator and
Computer (ENIAC).12 In 1945, Bush went on to write As we may Think, which was one of
the first published visions of what the Internet might become. Vannevar Bush‘s13 student at

MIT in the 1930s was Claude Shannon who recognized a close similarity between the
Boolean algebra that he had learned as an undergraduate and an electric current. ―The next
obvious step would be to lay out circuitry according to Boolean principles, allowing the
circuits to binary-test propositions as well as calculate problems.‖14 Claude Shannon,
Vannevar Bush and Norbert Wiener, the father of cybernetics all knew each other well.15

Shannon graduated from MIT in 1940, and in 1941 joined the Bell Telephone Laboratories,
where he was ―charged with the tasks of developing more efficient information transmitting
methods and improving the reliability of long-distance telephone and telegraph lines.‖16
Information was taken in its widest possible sense to include messages occurring in any
communications medium - television, radio, telephone, data-processing devices such as
computers and servomechanisms, even neural networks. This led Shannon to develop
information theory (1948)17, which is the cornerstone for the digital, electronic
communication of information. Wiener‘s book on Cybernetics was published in the same
year. Hence the context for the internet was prepared at AT&T‘s Bell Labs.

The same Bell labs did some of the first digital transmission and switching in 1962, seven
years before the US Internet began. When the Department of Defense (DoD) commissioned
the Advanced Research Project Agency‘s Network (ARPANET) to do research into
networking, it was AT&T that provided 50kbps lines. In 1969, the year that the Internet
began, AT&T‘s Bell Labs developed Unix which was ―the operating system behind the
early Internet, and was one of the key operating systems in the middle and late

John Quarterman has noted that Ken Thompson and Dennis M. Ritchie ―originally
managed to develop [the] UNIX [software], starting on a machine in an attic, largely by
convincing AT&T Bell Labs that they were really working on a text-processing system for
handling patents.‖18 This led later to RFC 681, ―Network Unix,‖ (May 1975),19 the
operating system behind Usenet. Quarterman noted that ―AT&T itself often didn't seem to
know half of what its own people were doing. For several significant years, a sizeable
proportion of USENET was supported for free by AT&T.‖20 In Quarterman‘s version,
AT&T had a few bright visionaries working away while the management was blind.

There are reasons to believe that management must have been aware of something.
Between 1969 and 1972, Bell Labs developed the C programming language basic to much
of Internet software. In 1970, AT&T installed the first cross-country link between the
University of California at Los Angeles (UCLA) and Bolt, Beranek and Newman (BBN) in
Boston. In 1976, AT&T‘s Bell Labs developed (Unix-to-Unix CoPy (UUCP), which was
distributed with UNIX one year later. A more recent survey of AT&Ts achievements
reminds us that it: ―It launched commercial radio-telephony services across the Atlantic
(with what is now British Telecom) in 1927. AT&T commissioned the first commercial
communications satellite, Telstar I, in 1962 and was active in development of the

In the 1960's, Michael Lesk ―worked for the SMART project, wrote much of their retrieval
code and did many of the retrieval experiments, as well as obtaining a PhD in Chemical
Physics.‖ He joined Bell Core and in the 1970s he ―worked in the group that built Unix.‖

He wrote Unix tools for word processing (tbl, refer), compiling (lex), and networking
(uucp). In the 1980s, he ―worked on specific information systems applications, mostly with
geography (a system for driving directions) and dictionaries (a system for disambiguating
words in context).22 He went on to become Chief Scientist of Bellcore23 and later became
the Division Director, Information and Intelligent Systems at the National Science
Foundation (NSF).24

At the time of the divestiture of in 1984, AT&T changed its Central Services Organisation
(CSO) into Bell Communications Research (BCR) ―to serve the Bell operating companies
providing a center for technological expertise and innovation.‖ That same year, AT&T
introduced the North American Numbering Plan.

Another scientist, Dr. Bruce R. Schatz, also ―spent ten years in industrial R&D at Bellcore
and Bell Labs, where he built prototypes of networked digital libraries which served as a
foundation of current Internet services through the Telesophy project.25 It has been claimed
that this project on multimedia information retrieval across networks ―showed the
feasibility of what became the World-Wide Web 10 years later.‖26 In an e-mail of 1
February 1985 18:52, Dr. Schatz described his vision of the Telesophy project as a
―worldwide information community, a greatly generalized USENET.‖27 At the time, the
Telesophy project was not seen as a priority at Bell Labs. Accordingly, William Y. Arms,
then the Vice President, Academic, of Carnegie Mellon University wrote a letter of
support.28 Professor Arms went on to become the Director of Library Systems (1995-1997)
and later the Vice-President of the Corporation for National Research Initiatives (CNRI,
Reston VA). Meanwhile, Dr. Schatz went on to develop the WCS [the Worm Community
System]. 29

Dr Schatz went on to become scientific advisor for digital libraries and information systems
at NCSA when they developed the Mosaic browser. He also became Principal Investigator
of the NSF/DARPA/ NASA Digital Libraries Initiative project and subsequently developed
the Interspace project, which plays a role in visions for a Next Generation Internet (figure
3a . Cf. below section 10). More recently NASA has also been exploring an interplanetary
Internet which may potentially replace the idea of packet switching (figure 3b).

In 1986, when New England was cut off from the net, it turned out that all seven of the
ARPA trunk lines were in one large AT&T cable. According to their own website, from
1984 until 1996, ―AT&T was an integrated provider of communications services and
products, network equipment and computer systems.‖30 Could all of this have been allowed
to evolve without any knowledge and endorsement by the management?

In 1991, AT&T merged with National Cash Register (NCR) ―in a $7.3 billion deal that
gave AT&T the ability to better meet customers' needs for networked computing,
globally.‖31 It is striking, that when InterNic was established by the National Science
Foundation (NSF) in 1993, the directory and database services were given to AT&T. (cf.
Appendix 1-2). In 1994, AT&T became one of the first companies to experiment with
Internet banner ads. AT&T‘s Worldnet – also the name of Schatz‘s vision outlined above--
was one of the early Internet Service Providers (ISPs). In 1996, the corporation voluntarily
split into three companies:

       1. AT&T                                            communication services
       2. Lucent                                          communications products
       3. National Cash Register (NCR) Corp.              computer business.

In theory, there was now a clear distinction between telephony interests (AT&T and
Lucent) and computer/Internet interests (NCR). In practice, the situation remains more
complex for at least three reasons. First, AT&T itself today has three Internet related
research laboratories: 1) Research Internet and Network Systems Research 32; 2) Voice
Enabled Services Research33 and 3) Information and Software Systems Research.34

Second, Lucent, a spinoff from the old Bell Labs, in addition to its work on data
networking and integrated circuits, has no less than eight sets of products related to the
Internet.35 Third, and perhaps most significantly, AT&T‘s Central Services Organisation
(CSO), which became Bell Communications Research (BCR or Bellcore) was officially
sold to Science Applications International Corporation (SAIC, cf. below section 4), but
continues to have goals very close to those of AT&T, particularly in fields such as ENUM
(see below section 7). After 1997, AT&T was officially only a ―communications services‖
company. Nonetheless, it continued to expand its interests beyond the narrow confines of
telephony. For instance, in 1998 AT&T bought the cable company, MediaOne. According,
to Clay Shirky, the motivation for this move came from AT&T‘s plans to become ―the sole
provider for high-speed internet access for a sizable chunk of the country.36

In the past five years, there has been enormous activity to extend networks beyond
computers to include all information appliances. Here the Home Audio Visual Information
(HAVI)37 consortium, which includes Philips, was a pioneer. Others such as the Universal
Plug and Play Forum38 want to extend this concept to smart objects and intelligent devices
– especially attractive under an IPv6 architecture where the slogan ―IP Everywhere‖ is no
exaggeration with the possibility of several billion IP numbers per mm² of the Earth‘s
surface. Low-level artificial intelligence systems ―currently monitor military systems,
optimize the water level in dishwashers, control the actions of simulated pets, and help
predict natural disasters.‖39 This is an area on which the research labs of AT&T have been
working on for decades under the title of telemetry.40 For instance, in 1999, Lucent's Kenan
Systems and Whisper Communications entered into a global marketing agreement for
utilities and energy service providers to:

       answer the specific billing, customer care, order management, decision-support and
       usage mediation requirements of leading service providers in the communications
       and utility industries world-wide, including gas, electric, water, mobile and wireline
       voice and data services, broadband, Internet, and value-added services.41

If these developments are considered from a global level there are five sets of players in the
global ICT game: 1) the telcos (AT&T, Sprint, British Telecom, Deutsche Telecom, France
Telecom, Cable and Wireless etc.); 2) the computer companies (IBM, Compaq/HP, Sun,
Microsoft, Apple); 3) the carrier equipment companies (Cisco, Lucent, Nortel, Alcatel,
Ericsson); 4) the content holders (Reed/Elsevier, Thomson, Murdoch, Bertelsmann, and
AOL/Time Warner and Vivendi/Universal, which looked doomed and is making a

comeback) and 5) the home entertainment companies (Sony, Philips, Samsung etc.)
Together these players represent different aspects of the digital knowledge production chain
or knowledge life-cycle.

Theoretically these sets of players are all in competition with one another. In practice
AT&T has links with all parts of this knowledge life-cycle. For instance, with respect to
computer companies, AT&T has links with Microsoft42 and long-standing links with IBM.
Already in 1991 IBM and AT&T Paradyne announced that they would develop mainframe
network technology together.43

       On December 8, 1998 AT&T and IBM announced a series of strategic agreements
       under which AT&T will acquire IBM's Global Network business for $5 billion in
       cash, and the two companies will enter into outsourcing contracts with each other.
       The contract for AT&T to acquire IBM's network was completed in the US on April
       30, 1999.44

In 1999, AT&T and IBM made an E-Commerce alliance.45 In 2000, AT&T and IBM
announced that they would work together in providing wireless solutions.46 In September of
2000 IBM and AT&T signed a $450 million web hosting deal. 47 In 2001, IBM, AT&T and
Lotus (owned by IBM) announced an Application Service Provider (ASP) Enablement
Suite.48 In 2002, IBM and AT&T released free privacy tools together.49 In addition, there
are a series of further links through IBM. In 2002, IBM acquired PriceWaterhouse-
Coopers in order that, among other things, their educational solutions will be aligned.

With respect to carrier equipment, both AT&T, and IBM have close links with Cisco. With
respect to content holders AT&T and AOL are poised to launch an IPO together. 50 AOL
has made links with Legend Computers in China. With respect to home entertainment IBM
has links with Toshiba and Sony for making Playstation 3.51 In this constellation, pipelines
and content are integrated. IBM is theoretically in competition with EDS and SAP but is
also partnered with them.52 Hence through a nexus of AT&T, IBM, Cisco, AOL, and Sony
all five sets of players are linked.

From all this53 it is clear that a) AT&T‘s interests in networked computing existed well
before the Internet; b) AT&T‘s interests played a significant role in the development of the
Internet and c) neither the forced split up in 1984, nor the voluntary partitioning into
communications services (AT&T), communications products (Lucent) and computers
(NCR) in 1996 changed this fundamentally. In short, AT&T54 has been and remains
centrally active in the development of the Internet.55

In 1997, C. Michael Armstrong, CEO of GM Hughes Electronics, ―led a great new product
launch--DirecTV, a satellite-to-home television service that beams crystal-clear
programming to rooftop dishes.‖56 In 1998, AT&T bought IBM‘s global network for 5
billion. It bought Teleport Communications Group, Inc. (TCG), for $11 billion.57 It went on
to make a $10 billion dollar joint venture with British Telecom for one stop shopping for
big businesses.


Telecommunications Inc. (TCI) began in the 1950s. Liberty Media was founded in 1990 as
TCI‘s programming arm. Like Comcast, in 1998, TCI/Liberty also bought a part of Storer
from KRR. In 1999, AT&T bought John Malone‘s Telecommunications Inc. (TCI) for $48
billion (some say $54 billion). This provided AT&T with Liberty Media and ―with a
substantial stake in Murdoch-controlled News Corporation, a 25% share of Time Warner
Cable and 39% of cable ISP @Home.‖58

In 2001, AT&T spun off Liberty Media. In 2001, Liberty also took a 1.4 billion stake in
UnitedGlobalCom/United PanEurope Communications cable group and 2004 it gained
control of same. Meanwhile in 2001, it bought ―nine German regional cable networks from
Deutsche Telekom for $5 billion and Deutsche Bank's Tele Columbus and SMATcom AG
cable subsidiaries for $1 billion. In 2003 it bought the remaining 57% of QVC from
Qualcomm. By 2004 it had increased its stakes in New Corp to 17% and there were
rumours that Liberty was trying to take over News Corp.59

       Media One

Charles Lillis was serving as president and CEO of US West Media Group. In 1998,
MediaOne split from US West to become the nation‘s fourth cable company. Lillis became
the CEO of Media One, which employed 16,000 people, operated in ten countries and
generated more than $7 billion in annual revenues through domestic and international cable
as well as telephone communications, international wireless and interactive multimedia
services. 60 .In late 1999-early 2000 AT&T is said to have paid $44 billion to buy the
Media-One Group.61 Others claim that ―AT&T acquired the Media-One Group for $62.5
billion.‖ 62 The deal gave AT&T:

       ownership of all or part of the cables reaching into 60 percent of American homes.
       Through its ownership of Liberty Media, AT&T is an owner of MacNeil-Lehrer
       Productions, the co-producer of this program. As as result of that deal, Microsoft
       announced it was investing $5 billion in AT&T, a move that gave the software
       manufacturer a strong position in the market for operating systems used in set-top
       boxes for cable television. 63

AT&T was now a very significant player in the cable world. Within two years it seemed to
have thrown away what it had acquired.


In November 2002, Comcast officially acquired AT&T Broadband (i.e. its cable assets) for
$70 billion.64 A lawsuit ―accused the company and its top officers of keeping the share
price up‖ while these two deals were made. AT&T and Comcast removed this hurdle with a
$100 million settlement.65

The American Cable Systems began in 1963 and was renamed Comcast in 1969. In 1986, it
doubled in size by a 26% stake of Westinghouse's Group W Cable operations. In 1988, it

bought 50% of Storer Communications from KKR, making it the fifth largest cable
operator in the US. In 1997 Comcast took a 40% stake in E! Entertainment along with
Disney. The same year Microsoft invested $1 billion in Comcast. In 1999, Comcast sold
Comcast cellular to SBC Communications. It also announced a $60 billion merger with
MediaOne, did not go ahead and received instead a $1.5 billion settlement and 2 million
AT&T customers.

As noted above in 1999 AT&T also bought MediaOne. In 2000, Comcast did cable system
swaps with Adelphia and AT&T. In 2001, Comcast bought AT&T‘s broadband arm (i.e. its
cable TV) for $44.5 billion. By co-incidence the man who had been CEO of AT&T (1997-
2002), became the chairman of AT&T Comcast66 and became CEO of Comcast in 2002. To
some the deal between AT&T and Comcast was not a surprise: ―The two companies are no
strangers. Most recently, on July 2 they closed a deal under which Comcast purchased an
AT&T-owned cable TV system in Baltimore for $518 million in cash. The system had
115,000 subscribers. At the beginning of this year, Comcast sold its stake in cable Internet
provider Excite@Home to AT&T in exchange for AT&T stock.‖67 On the surface AT&T
had sold its jewels to Comcast. Even so, the deal gave AT&T shareholders a majority of the
economic and voting interests in the combined company.

On 17 February 2004, Comcast offered to buy Disney for $54 billion to create the world‘s
largest media company.68 Disney rejected the offer. On 21 August, Comcast ―announced a
deal to acquire TV and Internet content as part of a licensing agreement that will create a
new suite of programming for Comcast's broadband subscribers. The new package will be
dubbed Disney Connection.”69 In 13 September 2004, while attention was focused on
Sony‘s takeover of MGM, Comcast made agreements with Sony to distribute their videos
in the US.70 On 18 October 2004, ―Comcast and Walt Disney Co. launched broadband
portal Comcast Kids Channel on Monday, part of the cabler's broader effort to cater to tots,
which will include a 24/7 children's cable network‖71

In November 2004, ―Comcast Cable (formerly AT&T Broadband, Media One and Time
Warner Cable)‖ described itself as providing public access by contract‖ and insisting that
―Public Access is an extension of the First Amendment to the U.S. Constitution.‖72

       Warner Bros. later Time-Warner-AOL

To begin to understand AT&T and Comcast‘s connections with what some have described
as the world‘s largest media company requires a brief historical detour. In 1923, Henry
Luce and Britton Haddon founded Time. Also in 1923, the Warner brothers founded their

       AT&T research into communications technology was reflected in partnership
       between Western Electric and Warner Bros subsidiary Vitaphone about sound
       recording and speakers for motion films. That was used for the landmark 1926 Don
       Juan and 1927 Jazz Singer, with AT&T's Electrical Research Products Inc (ERPI)
       being established in 1927 to service and distribute Western Electric sound

       By the end of the following year over 1,000 cinemas used that gear and most
       Hollywood studios were leaning to Western Electric as a supplier in the transition to
       sound production. That drove RCA's acquisition of a stake in FBO during 1927 and
       creation with Joseph Kennedy of the Radio Keith Orpheum (RKO) film production,
       distribution and exhibition group. AT&T in turn financed studios and cinema chain
       purchases of its equipment through loans from ERPI or taking a stake in the film

Very simply AT&T and Warner have been working together seriously since the 1920s. In
1957, Warner Brothers merged to become Warner-Seven Arts. In 1969 this was acquired
by Kinney National and in 1971 was renamed Warner Communications and, in 1990,
merged with Time to become Time-Warner.

In 1969, Compuserv was founded, the same year as the Internet began in the US. In 1978n
the Source was founded. This aimed to send ―airline reservations, restaurant reviews,
banking information‖ into persons homes.74 In 1989, Compuserv bought the Source. In
1982 the Control Video Corporation (CVC) set out to start the new GameLine. In 1984,
BellSouth loaned CVC $5 million to try a home subscription service called Masterline. In
1985, CVC became Quantum Computer Services. Meanwhile, Apple was using General
Electric Information Services for their AppleLink. They wanted an inhouse system. Steve
Case working with Quantum began this new Applelink in 1988. In 1989, Quantum left
Apple, and AppleLink was renamed America Online through Quantum. In 1991 there was a
DOS version of AOL and Quantum becomes America Online Inc. On 11 March 1996, AOL
announced an alliance with Netscape and the next day announced that Microsoft Windows
would be the official AOL browser. In 1998, AOL bought ICQ messenger and Netscape75.
In 2000, when AOL merged with Time-Warner: ―the conglomerate had a market value of
US$300 billion in January 2000 but had slumped to US$105 billion two years later.‖ By
now, AT&T had a 27% stake in TimeWarnerEntertainment (TWE). In August 2002 AOL
was prepared to buy AT&T‘s stake for $9 billion:76

       Under the agreement, for its 27.64 percent stake in TWE, AT&T Broadband will
       receive $2.1 billion in cash, $1.5 billion in common stock of AOL Time Warner
       Inc., valued as of the time of closing, and a 21 percent equity interest (with less than
       five percent voting power in the election of directors) in a new cable company
       serving about 10.8 million subscribers.77
In September 2003, dissatisfaction with AOL‘s role was manifested through the Board's
decision to remove 'AOL' from the AOL Time Warner corporate title.78 This did not
resolve the company‘s problems. In November 2004, Time-Warner announced that it had
set aside $500 million to deal with ―regulatory and legal action over accounting practices at
its America Online division‖79

Comcast still owns a 21% stake in Time-Warner which it may reduce to 17% in order to
make a deal with Time Warner re: Adelphia. In November 2004, Comcast and Time
Warner were planning to buy Adelphia Communications, which is also the fifth largest
Cable TV company in the country but faced with creditors claiming $3 trillion.80 The head
of Adelphia's management team, William T. Schleyer, who formerly ran AT&T's cable

business,81 is rumoured to favour a buyout by private equity firms such as Thomas H. Lee
Partners; Providence Equity Partners; and Kohlberg Kravis Roberts (KRR).

On 8 November 2004, Comcast, as the largest cable TV provider, announced a deal with
Microsoft to work together.82 Meanwhile on the wireless front, by 1 November 2004
federal regulators allowed LCC‘s Cingular to buy AT&T‘s wireless services for $41
billion.83 Conveniently, Michael Powell, the head of the FCC, is Colin Powell‘s son. In July
2004 AT&T announced that it was no longer seeking residential customers.

       Twentieth Century Fox and Newscorp

Twentieth Century Fox was another of the original Hollywood studios. William Fox
founded Fox Studios in 1913. In 1935 it merged with Twentieth Century Studios and
became Twentieth Century Fox. In 1998, Rupert Murdoch‘s News Corp floated an 18%
stake in Fox.84 As noted above, AT&T‘s acquisition of John Malone‘s TCI gave it a
substantial stake in Murdoch-controlled News Corporation. News Corp is one of ―the three
largest international media groups, operating in most sectors and most continents.‖85 In July
2003 News Corp. ―signed a seven-year, $150 million deal with the telecom carrier [AT&T]
for voice and international data services.‖86

Meanwhile, in 2001, Newscorp sold its 49.5% stake in Fox Family Worldwide to Disney
for $5.3 billion. In 2003, it bought a 34% controlling stake in Hughes Electronics (satellite
broadcaster DirectTV) for $6.6 billion.87 Hence, the attempts of Comcast to acquire Disney
and of Liberty to acquire Newscorp may be part of a bigger picture, which aims to get back
DirectTV that initially belonged to Hughes, a subsidiary of General Motors, another of the
very big players behind the scenes.


The history of one of the other major film studios began fully independently of AT&T amd
Comcast. Metro-Goldwyn Mayer (MGM) began as a merger of three companies in 1924.
By the mid-1930s they were a leading Hollywood studio (although based in Culver City)
and by the late 1930s were into animation. The studios were sold to Kirk Kerkorian in 1969
and to Ted Turner in 1986, to Giancarlo Parretti in 1990, back to Kerkorian as part of a
group in 1996. ―In 1997, MGM purchased Metromedia International's studio properties
(Orion Pictures, Goldwyn Entertainment, and the Motion Picture Corporation of
America).‖88 In 2004, MGM was sold to Sony. Comcast played a significant role in this $5
billion buyout of the Metro-Goldwyn-Mayer studios announced in the fall of 2004.
Comcast invested $300 million in the bid led by Sony Corp. ―The deal gives the cable
operator the right to buy a 20 percent stake in MGM. Plus, it allows Comcast to distribute
MGM's content through its new video-on-demand, or VOD, service.‖ 89

From the above it is clear that AT&T remains a very major player. In an article on the top
25 digital economy companies in 1999, Business Week, basing its claims on Morgan
Stanley Capital International ranked AT&T in third place (after Microsoft and IBM), with a
market value of $186.14 billion.90 In 1999, the International Telecommunications Union
(ITU) ranked AT&T as number 2 (after NTT) of the top 20 public telecom operators:

Telephone Companies                 Millions of customers
1. Verizon                         28.2
2. SBC                             24.3
3. Bellsouth                       12.7
4. Qwest                           8.8
5. Sprint                          7.8
6. Century Tel                     3
7. Comcast                         1.3
8. Cox                             0.9
9. Adelphia                        0.9

Cable Companies                     Millions of customers
1. Comcast                          21.5
2. Time Warner                      10.5
3. Cox                               6.6
4. Charter                           6.5
5. Adelphia                          5.2
6. Cablevision                       3.0

Wireless Company                    Millions of customers
1. Cingular-AT&T                    46
2. Verizon                          40
3. Sprint                           22
4. T-Mobile USA                     15.4
5. Nextel                           15.3
6. Alltell                          12

Figure 1a) Largest telephone companies;91 b) cable companies92 and c) wireless
companies93 in the US in 2004;94 d) Another view of Televison, Internet and Telephone in
the US in 2004.95

as number 1 of the top 20 international telecom operators; and number 9 of the top 20
mobile telecom operators with net incomes of $147.8 billion; $3.489 billion and $7.627
billion respectively.

By contrast, according to the Forbes list of the top 2000 global companies in 2004, AT&T
ranks number 439 (although in terms of sales it is number 85 in the world) while Verizon,
SBC Communications and Bell South are now the top telecoms in the world arena and
appear in positions 11, 12 and 74 respectively.96 Perhaps as a consolation, in the period
2001-2003 AT&T received $4.6 billion in tax rebates, while Verizon received 4.3 billion.97
Meanwhile in 2004 Lucent is due to receive a $816 million tax refund.98

If we stand back to assess these developments several interpretations are possible. A
negative view would be that the former monopoly holder in telephony has seen its markets
fragmented into a thousand fiefdoms and is desperately hanging on by making alliances
with all the big players in the field. A more positive interpretation would note that AT&T
has serious stakes in all the big media conglomerates in the US. It may not own them 100%
but then no global player today does that. Meanwhile, the former telephony company has
now expanded into cable, televison and Internet, or as one observer put it, Ma Bell is
becoming Ma Bel, Ma Cable and Ma Internet.99

At a superficial level AT&T was a monopoly telecom operator until 1984 and then faced
increasing competition from MCI, Worldcom, Sprint and others. There is clearly some truth
to this as becomes evident if one looks at basic statistics concerning telephone, cable and
mobile telephone operators (figures 1a-c). Of course, some look at these same statistics to
suggest that Comcast is now the central company and that AT&T is effectively a thing of
the past (figure 1d). We are told that in an effort to regain some of its lost ground, AT&T
made bold moves into both the cable and the wireless sectors in the period 1999-2001.
Having made this immense leap, they then sold off their assets in these two vitally
important sectors between 2002-2004. If this be true then the image of AT&T as a
monolithic mastodon incapable of adapting to new developments is well deserved.

From one point of view there are a bewildering number of deals going on between many
competing partners. But as we stand back to take a long term view another picture emerges.
There are only a handful of giants, AT&T, General Electric, Westinghouse, IBM and more
recently Microsoft. Two things are notable. First, the number of close links among this
inner circle of the very big players continues undiminished. Second, and even more
fascinating, is how these companies ―lose‖ assets and then regain them. For instance, as we
shall see presently (§ 7), General Electric helped to found NBC, lost it in 1932 and gained it
back in 1985. By 2004 it owns not only NBC but also Vivendi-Universal. In the past
decades the time frame may have accelerated but the basic approach remains the same:
divide and conquer using ever new company names responsible to the same old

As noted earlier, according to Morgan Stanley‘s ranking of the top 25 digital economy
companies, the top three were Microsoft, IBM and AT&T respectively. We have noted that
AT&T has made various partnerships with Microsoft and IBM. Is it likely that it would
simply hand over its crown jewels to Comcast and Verizon if they were outright

competitors? Or is it more than a co-incidence that the head of AT&T went on to become
the head of Comcast at the critical moment this handover occurred? Is there an entente
between Ma Bell (AT&T) and her not so baby Bells? Whichever interpretation one favours
AT&T remains one of the largest telecoms of the world with stakes in telephony, cable,
wireless, Internet, internet telephony in the form of Voice over Internet Protocol (VOIP)
and even satellites, something which they began with Telstar in 1962.

4. MCI/Worldcom

Until June 2002, MCI/Worldcom was one of the only serious competitors to AT&T in the
US scene. Microwave Communications of America, Inc. (MCI) was founded in 1968 to
help truckers communicate via two-way radios. In 1969, the FCC approved MCI's
application to provide private microwave service between Chicago and St. Louis. MCI
went public in 1972 and in 1973 became ―the first telecommunications company to market
specialized services to the public.‖ In 1974, MCI began a series of lawsuits against AT&T,
which led to the latter‘s divestiture in 1984.

In 1975, MCI activated its first computer switch. This became the cornerstone of MCI‘s
network. In 1983, MCI made the largest order of fiber optic cable ever placed thus far of
more than 150,000 miles. By 1987, MCI‘s new coast-to-coast fiber optic network began
operations (Appendix 3). In 1997, World Com announced plans to acquire MCI.

During the 1960s and 1970s, Worldcom itself had pioneered packet services and the use of
international X.25 standards for public packet services for point of sale and credit card
transactions. In 1977, Worldcom introduced the first internal e-mail service (INFOPLEX);
in 1979, the first online consumer service; in 1983, the first e-commerce application with an
e-mall of 100 stores, where orders could be placed and in 1988 the first Internet access
service and first commercial connection to the Internet.

In the decade that followed, WorldCom became involved in a number of pioneering
experiments leading to higher bandwidth such as the National Science Foundation Network
(NSFNET linked with Compuserve, 1989); a long-haul Synchronous Optical Network
(SONET, 1990); a public Frame Relay service (1991); a commercial version of frame relay
on a cell-based network platform (1992); a dedicated, multipoint Internet Protocol Virtual
Private Network (IP VPN, 1994); integrated service for voice, data and video transmission
over an ATM network (1994); combined Synchronous Optical Network (SONET) and
Asynchronous Transfer Mode (ATM) technologies and the first 10 Gbps data transmission
on an enterprise network (1995) and high-speed Frame Relay service (1996, Appendix 4).

UUNet, founded in 1987, became the first business Internet Service Provider (ISP) with a
backbone network.100 They too claimed to have introduced a number of firsts: a first
commercial connection to the Internet (1988); commercial application-layer firewall
services for Internet Protocol (IP) Networks (1992); significantly higher Internet backbone
access speed level, from a T-1 (1.544 Mbps) in 1993 up to the current 10 Gbps OC-192c
level (1993); designed and installed the first dedicated multi-point Internet Protocol Virtual
Private Network (IP VPN) Service (1994); the first profitable ISP (1995) and the first ISP

to offer Extranet VPNs and Web Hosting services (1996). That same year WorldCom
bought Uunet (Appendix 5).

MCI/Worldcom introduced commercial Internet traffic on a backbone network at OC-192
speed of 10 Gbps (2000) and initiated an all optical network (Terabit Challenge) to
optimize use of available bandwidth (2001).101 In the past five years, Worldcom also
focussed increasingly on infrastructure. In 1997, they had the first undersea (Gemini) cable
system network to carry production traffic, connecting city centres in New York and
London. In 1999, it began building the Southern Cross Cable Network, the first undersea
cable network system primarily for Internet and data use between the United States, New
Zealand and Australia.

In 1998, MCI acquired the ailing Cable and Wireless company ―for $1.8 billion dollars‖
and subsequently ―acquired Exodus Communications and Digital Island for a total outlay of
$1.19 billion dollars.‖102 In order to help the MCI/Wordcom merger MCI sold its backbone
to Cable and Wireless for $625 million.103 By 2003, Cable and Wireless were bankrupt and
sold ―their USA based operations to private investment firm Gores104 Technology Group
for $125 million dollars.‖ 105 This deal was due to be concluded in March 2004. 106 The
Gores Group like the Carlyle Group have both profited from the Iraq war (cf. § 9 below).
More interesting for our purposes by November 2004 Cable and Wireless claims to have
developed a new webMethods software with Deloitte107 and Touche and describes itself as
       yearly revenues in excess of £8 billion (US$11 billion) and customers in 70
       countries. Its focus for future growth is on providing business customers with
       seamless IP (Internet Protocol) and data services and solutions on a global scale. …
       To position itself as a one-stop provider of global telecommunications services,
       Cable & Wireless has aggressively acquired operations in the U.S., U.K., and Asia
       and built out its existing network to offer high performance products and
       applications. The company has committed $3.5 billion towards building the most
       advanced single-hop Internet infrastructure in the world and has spent more than
       $650 million acquiring Internet service providers and network integrators in
       Europe….. Cable & Wireless acquired 11 ISPs in Europe alone, each bringing its
       own internal systems and applications to the table.108
It is amazing to trace how an ailing near bankrupt company can be bought for a low price;
make acquisitions many times this said price; go bankrupt at a much lower price and then
be able to make investments of over $4 billion within little more than a year.109

To return to MCI/Worldcom, a more comprehensive study of international developments
would reveal that a number of Worldcom‘s claims about being first are open to question.
For instance, already in 1994, Deutsche Telecom produced a T3 ATM connection between
Berlin and Osaka using a satellite connection. During the G7 Exhibition and Conference on
the Information Society (Brussels 1995), there were Canadian ATM demonstrations with a
27MB throughput linking Ottawa, Vancouver and St John with Brussels via Berlin using
the Canadian Advanced Network for Academic Research for Industry and Education
(CANARIE). Similarly there have been important Japanese demonstrations on the Asian
Network of Centres of Excellence for Digital Silk Roads led by the National Institute for

Informatics (Tokyo). Europe‘s TERENA and GEANT networks have introduced a number
of firsts.

A full account of such parallel developments would take us far beyond the concerns of this
essay. The point that concerns us here is that, like AT&T, MCI/Worldcom was extremely
active in the development of the Internet as we know it today. It is also noteworthy that two
weeks after Worldcom‘s bankruptcy, its customer base was taken over by Verizon
(formerly Bell Atlantic). On 25 November 2003, MCI, the company formerly known as
WorldCom, ―won a 10-year contract, potentially worth $250 million, to provide advanced voice, data and
Internet communications for the Commonwealth of Virginia Network initiative. COVANET, one of the most
technologically advanced statewide networks in the country.‖ 110 MCI, formerly known as Worldcom,
emerged from Chapter 11 in April 2004, after 21 months of restructuring. The day after the
elections MCI ―reported net losses of $3.4bn for Q3, due to falling revenues and a write
down of the value of its network.‖111 In 8 December 2003, MCI, Sprint and Time Warner
Cable entered a Voice over IP deal.112 In November 2004, MCI boasts the ―industry's
farthest-reaching global Internet backbone,113 spanning six continents, over 140 countries,
over 2,800 cities and over 4,500 Points of Presence (PoPs).‖114

5. Baby Bells and Verizon

After the ―breakup‖ of AT&T, seven Regional Bell Operating Companies (RBOCS) were
formed. After the Telecommunications Act of 1996, regional Bell companies had to open
their local markets to competition.115 By 22 May 1997, NYNEX announced that it reached
an agreement with AT&T, allowing the nation's largest long-distance company to offer
local telephone service in NYNEX's local market.116 In short, what had become the territory
of the Baby Bells was becoming anew the territory of AT&T. As noted by Clay Shirky, and
cited above, a similar motivation led AT&T to buy Media One.

 Meanwhile, in the course of the past two decades the seven Baby Bells became four (figure
2). Southwestern Bell acquired Ameritech and Pacific Telesis.117 US West118 sold its
wireless operations to Air Touch Communications. Airtouch, subsequently joined with
parts of Primeco, General Telephone and Electronics Corporation (GTE), and Bell Atlantic
to form a Code Division Multiple Access (CDMA) network, in conjunction with Vodafone,
called Verizon Wireless Company ―the largest nationwide wireless voice and data network
and approximately 30 million customers.‖119 Another of the Baby Bells, Bell Atlantic Corp.
acquired NYNEX (1997) and merged with GTE Corp. to form Verizon (2000), which now
represents a major force with approximately 248,000 employees.120 In May 2004,Verizon
announced plans for selling video over fibre optic lines.121 In November 2004, SBC
announced plans to develop IP based TV.122

The bankruptcy of KPNQWest in 2002 and accounting problems analogous to Enron123 at
Qwest (formerly US West) are striking. When the old AT&T was divested into the seven
Baby Bells, US West (now Qwest) had the largest area of land of any of the RBOCs. On 9
March 1998 Qwest announced a merger with LCI International making it the 4th largest
long distance company in the U.S.124 Qwest joined with KPN in the Netherlands to create
KPN/Qwest, with the largest optical network in Europe. The Denver based Qwest had one

significant rival in the area: Level 3 Communications, a fast rising company125 with close
connections to Enron126 and the blessing of Warren Buffett.127

        1984                 2000                    01.2002               06.2002
   1.   Ameritech128]        =6
   2.   Bell Atlantic       Bell Atlantic            Verizon              Verizon
   3.   Bell South130       Bell South               Bell South           Bell South
   4.   Nynex                =2
   5.   Pacific Telesis      =6
   6.   Southwestern Bell132 SBC133                 SBC                  SBC
   7.   US West              Qwest134               QWest135             =2 ?

Figure 2. A history of the Regional Bell Operating Companies or Baby Bells (RBOCs).

Until recently, Global Crossing also was considered a serious company. Its ―fiber optic
network is unmatched in reach and breadth. Nearly 100,000 route miles join more than 200
cities around the globe.‖136In 2002 it was bankrupt and interestingly enough both Level 3
and Verizon were among those to bid for Global Crossing.137 Richard Perle, a defense
advisor to the National Security Agency (NSA) and on the board of Autonomy,138 played a
profitable role in selling Global Crossing. In light of criticism, he resigned his post as
security advisor.139 The same Richard Perle headed Hollinger Digital the investment
division of Hollinger International which until recently belonged to Conrad Black. Richard
Perle is also:

        on the Pentagon's Defense Policy Board, which is essentially an industry liaison
        office (Perle was chairman until questions of propriety forced him to another seat).
        He also heads Trireme Partners, which is aggressively investing in "homeland
        security" projects, and steered $2.5 million from Hollinger to Trireme. Gerald
        Hillman, also on the Defense Policy Board, invested $14 million in Trireme and
        became a partner. Henry Kissinger is a director at Hollinger and a Trireme advisor.
        Another Hollinger director is Richard Burt, a former arms negotiator. The Carlyle
        Group (see below) is considering bailing out Black.140

To return to our story, on August 18 2002, Hutchinson Telecommunications and Singapore
Technologies Telemedia acquired 61% of Global Crossing for a bargain.141 In March 2003,
Global Crossing appeared as if it might re-emerge out of the ashes.142 In 2004, both Global
Crossing and QWest were active in Voice over IP.

As discussed above (§4), MCI/Worldcom was also considered a serious company. On 4
April, 2002 it was awarded a $450 million Defense Research and Engineering Network
(DREN) contract.143 Worldcom also bid for a 3.5 billion Federal Aviation Authority (FAA)
contract to upgrade the country‘s air traffic control communication. However, on 16 July,
2002, the FAA awarded the contract instead to Harris Corporation (of Melbourne, Fla.,
which has links with Jeb Bush),144 which led a team of brand name telecom firms,
including the ―Baby Bells‖ Verizon, SBC and BellSouth Corp (which also has links with
Governor Jeb Bush),145 as well as Defense contractor Raytheon Technical Services

Company.146 On 21 July, Worldcom filed for bankruptcy.147 On 26 July, 2002, Verizon
Wireless Inc.148, the largest U.S. mobile-phone company, announced it would ―take over
the accounts of customers now billed by bankrupt WorldCom Inc.‖149

In 1984, the year that AT&T was divested, Arun Sarin began his telecommunications
career at Pacific Telesis Group, working in particular on cellular business acquisitions. This
led to AirTouch Communications, where he became CEO before Airtouch merged with
Vodafone in 1999.150 In April 2000, Mr Sarin became CEO of Infospace ―a leading global
provider of infrastructure services for wireless devices, merchants and Web sites,‖151 with
links to Verizon and VeriSign.152 In 2000, Arun Sarin also outlined his vision of how the
Internet and telcos could link together in the future. Not surprisingly his firm, Infospace has
a serious role in that vision. Significantly the carriers in that vision are former Baby Bells
(Verizon) and AT&T (figure 2).

Is it just coincidence to note that Arun Sarin remained on the board of Vodafone and went
on to replace Sir Christopher Gent as the head of Vodafone in July 2003? 153 Is it just
coincidence that Vodafone was bidding for CEGETEL to capture control from Vivendi
Universal? Is it just coincidence that CEGETEL‘s other shareholders, notably SBC
Communications, complied so swiftly with Vodafone‘s takeover offer – especially as SBC
has the following interfaces: SBC Southwestern Bell, SBC Ameritech, SBC Pacific Bell,
SBC Nevada Bell and Cingular (Bell South)?154 Does the CEGETEL takeover ring a
(baby) bell for A.T.T.? For memory it was SBC, which acquired Prodigy and holds a small
stake in Yahoo. Meanwhile, Vivendi Universal has quietly merged with General Electric‘s
NBC in a deal worth $43 billion.155

In January of 2001, Sarin left Infospace. In February 2001 the Venture Capital firm Accel
Partners, based in Menlo Park, California, and leveraged-buyout (LBO) giant Kohlberg
Kravis Roberts (KRR), based in New York, ―announced a new joint venture called Accel-
KKR Internet. Its goal is to create companies with integrated online and offline assets,
especially in the burgeoning business-to-business arena.‖ Arun Sarin became the CEO of
the new venture.156

Accel-KKR is one of the few firms which is reportedly happy with the enormous
bankruptcy woes among the telecoms. On the surface this is because these impoverished
telcos represent a bargain for enterprising investors, bankers and leveraged buyout
persons.157 . In the spring of 2004, for instance, KKR quietly acquired PanAmSat for $4.1
billion.158 We shall see later that this is part of a much bigger picture whereby formerly
state owned satellite systems are being taken over by the private sector.

Is it not curious, however, that one of the protagonists in this game should be someone who
began with one of the Baby Bells? It almost looks as if the disbanded group is
reconfiguring. One forces the competition into bankruptcy, or preferably leveraged
buyouts, then takes them over at a bargain price.159 Just after one has raised considerable
money on the argument that they are the cash cows of the future, one spreads the word that
the telcos are in desperate straits and complains that they cannot survive without subsidy.
Such complaining is effective. In 1996, it led to the Telecommunications Act, which helped
AT&T return to former markets. Some believed that the Internet Freedom and Broadband

Deployment Act (2001)160 would solve these problems. Others feared that this was another
subtle step of the major telco(s) to regain the position they once had. Indeed, some expect
that it will accelerate that process. Between 1984 (when AT&T was divested) and 2000, the
seven Baby Bells reconfigured into four.

With the possible bankruptcy of Qwest, the number of Baby Bells will have dwindled to 3.
At the same time Qwest is conveniently looked after by Verizon (= 3 former Baby Bells in
one: Bell Atlantic + Nynex +Qwest). A futurist could predict that the number of Baby Bells
will decrease. One can almost see coming the argument that because the telco situation is so
desperate and utterly hopeless, the only hope is to allow the Baby Bells and AT&T to save
the day using the entirely modern and novel idea of a monopoly.161 In any case, in
November 2004 the Bell Operating Companies (BOCS) were actively filing to gain
permanent control of their broadband lines.162 In November 2004 it was also announced
that ―within the next several months, Verizon Communications Inc. will be asking
consumers to start thinking of Verizon as a television brand, alongside Comcast, NBC,
DirecTV, and Fox.‖ 163

6. BellCore and Science Applications International Corporation (SAIC)

A fourth essential player in these developments linking telephony and the Internet is
perhaps less known but not less important. The same year that the Internet began in the
United States, a former member of Los Alamos Laboratories founded the Science
Applications International Corporation (SAIC, 1969, cf. Appendix 6). Within a year they
were using computers to identify two branches of computer-related growth: large-scale
systems analysis and modeling; 2) development of integrated software, including provision
of data-processing services and training based on the latest in computer technology.164
During the next decade their concerns were increasingly linked to diverse military
applications with one common thread: the use of computers and the development of
advanced specialized software.165

By 1987, SAIC was a national leader in Computer-Aided Logistic Support (CALS).166 By
1997, SAIC had become ‖one of the world‘s top systems integrators, one of the leading
research and development firms in the U.S., and a major builder of the country‘s defense
information infrastructure. SAIC also was one of the largest providers of solutions in
information technology, data security, electronic commerce, Internet and Intranet services,
and one of the largest and most successful government contractors.‖ National security
services remained SAIC‘s largest business area.167

To understand how these developments become crucial for our story a short excursus is
necessary. Formal naming of the Internet came under the auspices of Network Solutions
when it was founded in 1991. In 1993:

       Network Solutions was awarded, through a competitive bidding process, a 5-year
       Cooperative Agreement with the National Science Foundation to continue this
       work…Network Solutions managed both the front-end registration services (now
       known as registrar services) and the back-end addressing, resolution, and
       distribution services (registry services) for .com, .net, and .org, domain names,

       through an agreement with the Defense Data Network-Network Information Center

In 1994, the official body for Internet naming became the Internet Assigned Names
Authority (IANA).169 In 1996, the Science Applications International Corporation (SAIC)
bought Network Solutions. This soon led to complex developments linking Network
Solutions, SAIC, and Verity (Appendix 7). In 1997, the same Science Applications
International Corporation (SAIC) bought AT&T‘s BellCore and soon after renamed it
Telcordia Technologies.170 SAIC now employed some 30,000 professionals and had
official sales of $4 billion. (cf. Appendix 5).

With respect to operations and business support systems (OSS/BSS), SAIC teamed up with
web Methods to create a RapidApps™ integration platform for companies with critical
time-to-market needs and/or limited budgets.171 In April 2001, SAIC and webMethods,
were among the partners along with VeriSign, Microsoft, Baltimore Technologies, HP,
IBM, IONA, PureEdge and Reuters, to announce a second-generation Public Key
Infrastructure (PKI) Standard known as XML key management specification (XKMS).172
Hence, SAIC, working with the RSA and Verisign, is deeply into security.

During the fiscal year 2000, SAIC launched new initiatives and expanded its business in
information technology (IT), e-commerce, and next generation networks. Mergers
expanded SAIC‘s scope considerably,173 although these initiatives remained small
compared to its military contracts. In 2002, SAIC won – or pre-negotiated - major contracts
in three commercial growth areas including: application hosting, wireless technologies, and
health. Already in February 1999, Bellcore (now SAIC‘s Telcordia) announced with the
Toshiba Corporation a project to create: ―technologies necessary for the integration of
wireless and Internet communications,‖174

Also in 1999, the same Bellcore, now as, SAIC's Telcordia Technologies, signed ―an
agreement with Sprint to develop the core software for a visionary new direction in
networking that enables the integration of telephone calls and data service over Sprint's
Integrated On-Demand Network.‖175 By 2002, Telcordia Technologies was ―providing
mobility solutions and won contracts to provide OSS software components and intelligent
network platforms.‖176

Telcordia Technologies, owned by SAIC, is a serious player. It holds key patents for
broadband data communications technologies like Asynchronous Digital Subscriber Line
(ADSL), Asynchronous Integrated Network (AIN), Asynchronous Transfer Mode (ATM),
Integrated Subscriber Digital Network (ISDN), Frame Relay, Switched Multimegabit Data
Service (SMDS), Synchronous Optical NETwork (SONET), and Video-On-Demand
(VOD). It has invented, developed, implemented or maintains software on which 80% of
the U.S. telecommunications network depends177 and its vision is to be ―THE major enabler
- worldwide -of tomorrow's Next Generation, packet-based, data centric network model and
information-based, e-commerce economic model.‖178 AT&T in its various guises, and its
partners are extending well beyond telephony and the Internet into four further areas,
namely, a) telephone number mapping, b) domain name systems, c) education and d) Next
Generation Internet. In 2004 SAIC is very active in Homeland Security179 and has

developed an Automated Exercise and Assessment System (AEAS).180 SAIC is working
with Juniper Networks for new military networks.181

In November 2004, there were plans by SAIC to sell Telcordia for 1.3 billion (i.e. a profit
of 600 million) to the buyout firms Warburg Pincus and Providence Equity. 182 This
development is again open to a number of interpretations. Some will say that the increasing
presence of for profit firms in area that were traditionally linked with a public telecoms
sector, inevitably means a greater turnaround of ownership purely in terms of which
companies are most lucrative at the moment. Others will be inclined to ask whether it is co-
incidental that these deals are being made by a surprisingly small number of private equity
firms such as Carlyle, Providence, Gores, Cinven, and Apax (cf. § 9). Still others will
wonder if the turnarounds themselves might not be a façade to hide a set of closer links
among a select group of partners. Four interconnected examples will serve to explore this
suggestion: ENUM, DNS, Education and Next Generation Internet.

         Telephone Number Mapping or Electronic NUMbering (ENUM)

In 2000, Telcordia and Verisign committed themselves to Telephone Number Mapping or
Electronic NUMbering (ENUM).183 By coincidence, Lucent, which continued to see itself
as an AT&T lab, also saw ENUM as their solution for internet telephony problems.
Sometimes it seemed as if AT&T and SAIC/Telcordia were two faces of a same strategy.
The Telephone Number Mapping (enum) initiative entails other players such as the Internet
Engineering Task Force (IETF) and the International Telecommunications Union (ITU):184

       ENUM is the name adopted by the telephone numbering working group of the
       Internet Engineering Task Force (IETF) to describe a mechanism using the Internet
       Domain Name System (DNS) to map E.164 numbers to Uniform Resource Locators
       (URLs). E.164 is an International Telecommunication Union (ITU) standard that
       describes the format of telephone numbers used around the world.

       The proliferation of communications devices at our disposal has created a problem:
       A multitude of devices that access different networks (PSTN and IP) through
       different address conventions (phone number, SIP address, email address, etc.) and
       input capabilities (telephone, computer, PDA). This problem has created the need
       for a method which allows easy accessing of the growing list of emerging devices,
       regardless of the platform to which they are connected or which device is being
       used to access the information. ENUM is a solution to this growing problem: a
       convergence enabler that bridges the PSTN and IP worlds.

       There are many service applications that will be facilitated by the ENUM standard.
       One of the more prominent ideas is the establishment of a single contact number for
       individuals. This would, for example, allow the business card of the future to
       contain a single number rather than a long list of addresses for home phone, office
       phone, fax, cell phone, and email. Various services will use the Internet to translate
       that one number into service specific addresses. Some experts believe that ENUM
       has even broader potential. A recent article in Communications Week International
       described ENUM in these terms.

       ENUM seems destined ultimately to emerge as the most important new
       Internet platform since the World Wide Web - perhaps even eclipsing it in
       long-range importance. A measure of its broad significance was the Internet
       standards speed record recently set by the initial adoption of the ENUM
       specification on the road to an Internet standard.185

On the surface this promises to be a magnificent development. The ENUM standard could
establish the framework for a global numbering system, which can ultimately enable
persons to use only one number to access all of their communication devices including cell
phone, fax, phone, and e-mail. But who precisely is in charge? We are told that:

       The Internet Architecture Board (IAB) and ITU-T Study Group 2 are discussing
       collaboration on the operational, administration and delegation issues related to
       deployment of ENUM protocol-based services. This requires extensive consultation
       with administrators of resources derived from the international E.164 numbering
       plan including national and integrated numbering plan administrators.186

At a practical level, it is the IETF, which is in control. But the situation is more complex. In
North America, the ENUM initiative arose from an agreement between Telcordia 187 and
Verisign. If the plan of Telcordia and Verisign succeeds, it looks as if the traditional
naming activities of organizations such as the International Telecommunications Union
(ITU) and the International Standards Organisation (ISO) could come exclusively under US
jurisdiction. Some have seen the conclusions of the ITU meeting in Marrakech, September
2002 as a new basis for a continuing European role.188 Meanwhile the ENUM Forum is
dominated by Telcordia, AT&T, Illuminet (now owned by Verisign)189 and Neustar (which
has an alliance with Telcordia)190 and includes Worldcom and the International Internet
Telephone Organization (IITO).191

         Domain Name Systems (DNS)

Officially and formally the question of Domain Names has been under the jurisdiction of
the Internet Assigned Names Authority (IANA) since 1994. When IANA was being
reformed in 1998, among the players in this field were the Policy Oversight Committee and
the Council of Registrars (POC/CORE) ,192 who suggested the development of a global
―whois‖ search by name. There were many debates. President Clinton appointed Ira
Magaziner to advance U.S. interests but his approach did not work in Europe and especially
in Geneva.193 Objections were made on the basis of privacy issues,194 but interestingly
enough the idea of a universal Whois or Uwho is now part of Verisign‘s official plan. There
are also other players. When Dr. Robert Kahn, one of the founders of the Internet, was
asked in 1998 about the possibility of unified network directories he noted that:

       One possible way to accommodate this is to use the existing Handle System
       technology that was supported by DARPA and has been operating on the Internet
       for the past several years. This could be incorporated with essentially no change in
       the way the existing DNS system operates. A major feature of this System is that it
       provides the necessary coordination mechanisms for a unified directory system and
       can easily support multiple registrars for a given TLD [Top Level Domain].195

Dr. Kahn, who is also the President and CEO of the Corporation for National Research
Initiatives (CNRI, see below), is also a protagonist in the development of Digital Object
Identifiers (DOIs):

       CNRI has been providing both registry and directory manager services for an
       alternative identifier system (known as Digital Object Identifiers or DOIs) on the
       Internet in conjunction with publishers in the U.S. and Europe. The technology was
       developed with support from DARPA and is being used by other groups such as the
       Department of Defense and the Library of Congress, and in various digital library
       research efforts. The registry is a single logical entity that is distributed in multiple
       locations and supports open interfaces. Multiple directory managers will likely be
       added by the publishers in the coming year, but the basic identifier system can be
       used by others as well.196

In short, the naming game is not only about telephony and computers. In July 2001, the
Korean company Enpia applied the Digital Object Identifier (DOI) to commercial e-
business solutions. By co-incidence, the CEO of Enpia, is also the vice-chairman of the
Digital Content Forum, vice chairman of the Korean E-Book Industry Association and vice
chairman of the Digital Music Standard Group.197 The DOI via Content Directions has also
made deals with Microsoft‘s Corbis.198 Meanwhile the CEO of Content Direction.com199
claims that

        As the DOI spreads from publishing to other industries and becomes (over time)
       the primary mechanism by which people find and access structured information on
       the Internet, I believe that every company in every industry will want to assign
       DOIs to their objects. This represents a tremendous opportunity for CMS [Content
       Management Systems] and DAM [Digital Asset Management] vendors.200[

This will be especially true in a MPEG 21 environment with its multi-media meta-data
DRM abilities.201[ Some see the DOI as replacing earlier visions of an Universal Resource
Name (URN).202 Not surprisingly, DOI extends to the library world also. As will be shown
presently this explains why the Dublin Core Metadata Initiative of the Ohio Library
Computer Center (OCLC) is part of a much bigger picture. Full consideration of the names
and naming debate is beyond the scope of this paper and will be considered elsewhere. 203
Even so, in the present context, it is important to consider briefly the realm of education.


One dimension of the naming discussions has been that the .gov domain should go to the
government, the .org to ISOC and that the .edu domain should come under the auspices of
Educom which is connected with Educause. A former head of Educom, Mike Roberts, has
also been a head of ICANN. It can hardly be a co-incidence that in this same period,
Educom, in conjunction with the IEEE, has been working on a National Learning
Infrastructure Initiative204 (NLII) to create an Instructional Management System (IMS) "to
enable an open architecture for online learning."205 This entails the use of a Learning Object

Model (LOM), which is used by the Global Learning Consortium. 206[ By co-incidence the
US Army also uses a Learning Object Model (LOM).207

In January of 2001 the American Society for Training and Development (ASTD) in its
Learning Circuits had a simple newsbyte about Standards Movement Gains Support: ―The
agreement between a committee under the IEEE [Learning Object Metadata Working
Group ] and the Dublin Core Metadata Initiative (DCMI), pledges coordination of their
efforts to create a set of metadata specifications.‖

       The standards drive has also picked up some significant endorsements from learning
       management technology providers. Three makers of LMS [learning management
       systems] technologies, including category-leading Saba208, said they are at various
       phases of incorporating the Sharable Courseware Object Reference Model
       (SCORM) into their systems. SCORM is a methodology developed by the federal
       government's Advanced Distributed Learning (ADL) initiative under which learning
       content can be designed and described to allow it to interoperate with different LMS

The same Learning Circuits of January 2001 contained a seemingly unrelated newsbyte
that: ―PricewaterhouseCoopers…and its team beat out rival groups for the $453 million
contract, including the team of and SAIC, as well as Arthur Andersen,
EDS, and IBM.‖210

One of the rival groups mentioned, SAIC, is the developer of the Sharable Courseware
Object Reference Model (SCORM) mentioned in the preceding newsbyte. SAIC is the
corporation that bought Network Solutions, owns its spinoff Verisign, Bell Labs and via
Telcordia is leading the Electronic NUMbering (ENUM) initiative in North America. SAIC
lost the contract in January 2001. But the US Army has since become more involved with
SAIC‘s SCORM211 as has the training company THINQ,212 which works closely with the
Department of Defense in their Advanced Distributed Learning (ADL) programme.

The scope of the game becomes clearer when it is realized that the same SAIC is also
involved with business objects where they are working with IBM, with SAP –which was
started by former IBM employees—and entails bodies such as the Object Management
Group (OMG), Open Applications Group (OAG), Workflow Management Coalition
(WfMC), E-business eXtensibe Markup Language (ebXML) and Universal Description,
Discovery and Integration of Business for the Web (UDDI).213

Five years ago, Blackboard was a relatively unknown method for the delivery of electronic
learning materials. In 2001 ―the company more than tripled its installations, from 1,800 to
5,500.‖ In 2002, ―The company booked over $80 million in sales.‖ In 2001, Blackboard
also partnered with Bantu Inc, a ―leading provider of secure, business-grade Instant
Messaging and Presence solutions,‖214 which has amongst its partners SAIC, Sprint,
SRA/Assentor, Verisign and the US Army. Blackboard also became a portfolio company
of the Carlyle Group215 with close links to the White House. It is fully natural that senior
members of the government are concerned with the future of education in their country. Is
it also fully to be expected that they also invest in specific technologies with which they

themselves are implicated through private firms? We shall see presently (§ 9) that these
links involve not only electronic blackboards but also e-voting machines. Here the circle
includes SAIC, Carlyle and Northrop Grumman.

         Next Generation Internet and the Grid

In 1998, SAIC made an alliance with Cisco Systems in support of Next Generation
Networks. In 1999, Telcordia and General Electric (GE) Information Services activated
―the telecom industry's first Internet-based interconnection clearinghouse to facilitate
critical business transactions between telecom carriers and to facilitate national
telecommunication interconnection,‖ and launched the Next Generation Network Initiative.

There are also network dimensions to this vision. As noted earlier, MCI introduced the first
commercial connection to Internet. In 1989, the National Science Foundation Network
(NSFNET) launched a high-speed digital network capable of transmitting large volumes of
data among academic computing centers throughout the country, forming the foundation of
today‘s Internet. MCI played a leading role in this cooperative effort. CompuServe e-mail
service was the first to be connected to NSFNET.

In 1996, Worldcom bought Uunet the largest ISP at the time (cf. Appendix 4-5). In 1997,
Worldcom bought MCI and helped to create an undersea cable system network linking the
US and Europe. In 1999, Worldcom began an undersea cable network system linking the
United States, New Zealand and Australia. In 2001, Worldcom created the Terabit
Challenge to optimize available bandwidth on a complete optical network. 216 Not
surprisingly Worldcom was also one of the initiators of the Internet2 project also known as
the Next Generation Internet (NGI) initiative which, beginning in April 1998, linked 115
universities and research institutes – a number which has since grown to 202 in June 2003.
The Next Generation Internet entails organizations such as Internet2 and the University
Corporation for Advanced Internet Development (UCAID) whose advisory groups reads
like a Who‘s Who of the Internet.217

The NGI network is based on Very High Performance Backbone Network Service (vBNS)-
Net which was originally established to link the five civilian supercomputers, namely, the
Cornell Theory Center (CTC), the National Center for Atmospheric Research (NCAR),
National Center for Supercomputing Applications (NCSA), Pittsburgh Supercomputing
Center (PSC), and the San Diego Supercomputer Center (SDSC).218 It will be recalled that
the other key proponent of Next Generation Internet is Telcordia, or rather its mother
company, SAIC.219 In 2000, Worldcom planned a merger with Sprint, which was blocked
by the EU.220

 To understand the global dimensions of the scheme it is useful to recognize that those
involved in the NGI are also the proponents of new forms of parallel computing called
grids.221 As with the Internet, this is an idea which began in Europe. The Large Hadron
Collidor at the European Organization for Nuclear Research (CERN), which begins
operations in 2005, will generate petabyte/sec amounts of information which no single
computer in the world today can hope to handle properly. Physicists at CERN thus mapped
out a vision for a new level of parallel, distributed computing to address the challenge. The

NGI222 and the Grid Project are linked with the European GEANT223 project and the
Eurogrid project.224

Ian Foster, an immensely charming physicist at the Argonne National Laboratories (ANL)
and his colleague Dr. Kesselmann at the University of Southern California (USC/
Information Sciences Institute) made this idea accessible in a very useful book.225 Ever
since the idea of the grid has become popular on the hype charts. Major corporations such
as IBM and HP are now fully committed to making both the Next Generation Internet
(NGI) and the grid vision a reality especially in the context of e-science

At INET 2002 (Arlington, June 2002) a very senior scientist from Caltech, Harvey
Newman, modestly pointed out that it would really require investments of $1 billion per
year to make this work. The big vision is ―big bucks,‖ though doubtless this will be seen to
be modest compared to the total costs related to full IPv6 mandated Internet Protocol
Security (IPSec) and Domain Name System Security (DNSsec).

All this is closer to telephony, computers and naming than it may seem. The Next
Generation Internet (NGI) is leading to a Next Generation Information Networks (NGIN)
which entails, as Gregory Pankauski, has recently explained in The Next Next Generation in
Learning,“ a virtual field trip that takes 200,000 students to the Louvre…. The network's
Web-based tools will include videoconferencing, which will allow students in the district‘s
more than 11,000 classrooms to share information.‖226 The latest version of this vision
entails the National Lambda Rail where a number of private bodies are systematically
buying fibre optic lines to produce their own educational solution. The rhetoric surrounding
this project is magnificent. But the project is ultimately aimed at a privileged few who can
afford to pay for the resources. Very little is said about the great majority of persons whose
finances will not allow them access to this next generation internet. Ultimately this new
vision extends the American notion of gated communities into the corridors of education.

To be sure, all this is happening in the context of wonderfully politically correct sounding
bodies such as the Internet Educational Equal Access Foundation (IEEAF).227 Meanwhile,
the same conquest of names, which brings a few hundred millions to Network Solutions in
its new guise as Verisign; more hundreds of millions to SAIC‘s Business Objects; more
hundreds of millions for a Learning Object Model applied to military training especially in
the army, could now, via global networks bring many more billions through a Learning
Object Model (LOM) applied to education around the world. In this context, European
alternatives such as Educational Modelling Languages (EML), appear like minor

As was suggested earlier, the Next Generation Internet (NGI) plan is connected with the
Dublin Core Metadata Initiative owned by OCLC, which has similar goals of universal
application in the library world. Already today, the OCLC Dewey Decimal Classification
system is used in more than 26,000 libraries around the world. If this plan succeeds the
applications to science, business, and military training will be applied to all of education.

Over the past few years, the United Nations Educational Scientific and Cultural Association
(UNESCO) has been working on a global portal for Culture and E-learning. Meanwhile, the

World Bank has been creating a (Global) Development Gateway ―where worlds of
knowledge meet‖229 which also has an e-learning portal that focuses largely on distance
learning solutions from the United States. UNESCO and the World Bank offer two
alternative visions of the world: one multilingual and multi-cultural: the other uni-lingual
and uni-cultural.

One might be tempted to believe that the plans for a Next Generation Internet are yet
another example of the hype that so often accompanies the high tech field. On closer study
there is serious evidence to the contrary. In the early 1990s, the Japanese Nippon Telegraph
and Telephone (NTT) developed a prototype multimedia Multi-User Dungeon (MUD)-like
service, Interspace, which allowed people:

       to navigate through a graphically rendered space and communicate with other
       people by text, telephone or video. The system is designed to enable distance
       education, as participants "attend" lectures and discussions, or catalog shopping, as
       participants wander through a virtual shop and talk to sales people. The system is
       implemented as a client running on a PC that downloads scene renderings from a
       central server over an ISDN link. Narrow bank ISDN is also used to support voice
       and visual communication….NTT is prototyping a network service in collaboration
       with several Japanese universities and with retailers.230

This was reported by US observers in 1994.231 Now futurists such as Oliver Sparrow are
predicting the advent of an interspace in the context of telecommunications.232 Nor is this
just a vague prediction. It is being worked on by the Defense Advanced Research Projects
Agency (DARPA), which is concerned with creating the net of the 21st century. This
effectively entails redesigning the whole of the Internet as we now know it today. This
project also explains increased top-level military and political U.S. understanding and their
new making IPv6 implementation and migration a priority. DARPA describes the Arpanet
as a first wave, the Internet as a second wave and foresees the Interspace as a third wave for
which a first prototype was developed in 1998 (figure 3a). The Interspace:

       will bring the level of analysis, of correlation of knowledge. It will move past search
       of individual repositories, beyond federation across repositories, to analysis of
       diverse groups of information across sources and subjects. To develop the new
       technology needed for this new wave 10 years hence, one needs to begin now so
       that widespread research prototypes can be available for the new millennium
       supporting global semantics. In this third wave, the Interspace, there will be
       distributed services to manipulate concepts across domains just as the ARPANET
       had distributed services to transfer files across machines and the Internet is having
       distributed services to transfer objects across repositories. The Interspace
       environment supports fundamental manipulation of concept spaces: indexing and
       retrieval, grouping and sharing.233

Describing the Interspace234 project in 1995 at the ASIS (American Society for Information
Science and Technology) annual meeting, Dr. Bruce R. Schatz, who also developed the
Telesophy project (see above p. 3), spoke of ―building the WorldNet, every community big
and small living in the interspace of all the world‘s knowledge.‖235 By co-incidence, there

is now an AT&T WorldNet service.236 More recently the Interspace vision has led to
Medical Interspace Projects (Medspace) which foresees systematic changes in medicine
including virtual town doctors.237 Medspace ―is developing research technology for
semantic federation of community repositories and deploying that technology in a large-
scale testbed for clinical medicine.‖ For starters Medspace will make a semantic index of
all of MEDLINE and BIOSIS. Semantic, in this case, has little to do with personal
meaning. It entails mainly formal, subsumptive relationships such as whole/part.

If one looks more closely at the Interspace conceptual diagrams one finds interesting
parallels with the Spatial Paradigm for Information Retrieval and Exploration (SPIRE)
project238 at the Pacific Northwestern Labs, particularly their ThemeView method and the
methods being developed at Sandia Labs.239 It is almost as if the advanced military labs of
the Department of Energy are working on another stage of prototypes for the Interspace.
As so often there are competing visions of the future. The National Aeronautics and Space
Administration (NASA) is working on the idea of an Interplanetary Internet which would
combine terrestrial and space systems in a new system which would no longer be IP based.

More recently, problems of terrorism have come to play an important role in plans for the
future of the Internet. On September 19, 2001, a week after September 11, there was an
article asking: ―Can Cyber-Intelligence Prevent Real-World Terrorism?‖240 The author of
the article acknowledged the Federal Bureau of Investigation's (FBI) Carnivore system
(now called DCS1000), but noted that perhaps the most promising development was
DARPA‘s Genoa Project, which ―employs a combination of a cutting-edge search engine,
sophisticated information harvesting programs, and P2P computing methods.‖

The article did not point out that the Genoa project, was developed jointly between DARPA
and Syntek Technologies.241 In 2001, Syntek was one of the companies to receive a Naval
Sea Systems Command (NAVSEA) Multiple Award Contract (MAC) for 15-years, with a
total ceiling of $14.5 billion.242 At the time, the Vice President of Syntek243 was John M.
Poindexter, of Iran-Contra fame.244 On February 13, 2002, Americans were warned that the
nation was facing the threat of danger to homeland security. That same day, John M.
Poindexter.245 was appointed Director of the Pentagon's Information Awareness Office
(IAO).246 The IAO works jointly with the Information Exploitation Office (IEO). These two
organizations will receive ―a big chunk of the $48bn of the taxpayers' money George Bush
is pumping into his war on the evildoers.‖247 The IAO is already very active. Until recently
it included eleven programs and one project (figure 4). A cursory look at their goals
suggests an emphasis on military dimensions rather than information for the public good.

 On 21 March 2002 the IAO made a Broad Agency Announcement (BAA) about a new
Total Information Awareness (TIA) programme.248 The deadline for the first round of
submissions was 22 April although the call is supposedly open for one year.249 On 7 August
2002, the Defense Advanced Research Projects Agency announced publicly that it would
begin awarding contracts for the design and implementation of a Total Information
Awareness (TIA) system (figure 5).250 TIA had as its motto the phrase Scientia est Potentia
(Knowledge is Power) and its symbol was the Masonic pyramid and eye which is well
known from the American dollar bill.251 The only difference was that the rays of the eye
stretch out specifically over EurAsia and Africa and effectively to the whole world. TIA is

the latest program[me] within the IAO. The Program Manager of the TIA system is John
M. Poindexter:252 ―Grant applicants are warned that no money will be invested in "research
that primarily results in evolutionary improvements to existing technology"; officials are
committed to a fundamental redesign of technology.‖253

In simple terms, the plan is to replace the Internet as it now exists with what some see as a
thinly disguised spy machine. All this is happening with effectively no consultation at all
outside America. A small group within the United States is treating the rest of the world as
insignificant. The plan has met with opposition from within the US. On 23 January the

       voted in favor of the Wyden-Feinstein amendment to the current omnibus
       appropriations bill (Senate Amendment No. 59) which would block the deployment
       of any TIA program until it has specifically authorized and appropriated funds.
       Exceptions in the amendment allow a TIA program to be used to support a lawful
       military operation or a lawful foreign intelligence activity conducted wholly
       overseas or wholly against non-U.S. persons, it should effectively preclude the use
       of TIA inside the United States against citizens.254

On 24 January 2003, it was reported that the Senate officially voted to stop funding the TIA
project.255 On 27 January Share Me technologies The Mobile future Weblog reported: ―As
you may know the Senate killed the Total Awareness Inititative. However, the big Brother
aspect of control and invasion of your privacy is still alive and now taking new roots at
OASIS in the form of a new XMl format intitative called LegalXML Lawful Intercept
XML (LI-XML).‖256

Similarly a report on 29 January stated that TIA was not yet dead. 257 On 7 February the
Electronic Frontier Foundation (EFF) urged support of the Wyden-Feinstein Amendment258
and the same day Amercian Forces Press Service announced that TIA would go ahead
under the supervision of two boards.259 On 12 Febraury, 2003, the House and Senate of the
US decided that TIA could not be used to spy on American citizens.260 Nonetheless, on 3
May, 2003, DARPA ―awarded a $3.5 million contract to Xerox Corp.'s Palo Alto Research
Center (PARC) to create a privacy-protection system as part of DARPA's controversial
Total Information Awareness program.―261 On 17 July it was announced that the Senate
was blocking funds for TIA,262 which launched a new series of reports that TIA was killed.
But on 22 July there was a new note urging that that the TIA should be stopped and that it
still required the decision of a joint House-Senate Conference committee.263 A note on 23
July pointed to the ongoing threat to privacy posed by TIA 264 and on 24 July a note from
the Department of Defense pointed out that TIA was too broad but intimated that it was
necessary nonetheless.

In 2004, the idea has re-emerged with a consortium founded on 28 September 2004 to
create a war net or Internet in the sky to provide the military with a ―God‘s eye view of the
battle.‖ The consortium includes ―Boeing; Cisco Systems; Factiva, a joint venture of Dow
Jones and Reuters; General Dynamics; Hewlett-Packard; Honeywell; I.B.M.; Lockheed
Martin; Microsoft; Northrop Grumman; Oracle; Raytheon; and Sun Microsystems.‖ 265 The
proposed pricetag of the new system is in the range of $200 billion. Observers have noted that

the Pentagon has made two previous attempts: ―Its Worldwide Military Command and
Control System, built in the 1960's, often failed in crises. A $25 billion successor, Milstar,
was completed in 2003 after two decades of work.266 The new vision is being championed
by Donald Rumsfeld‘s advisor, Bill Owen who now also heads SAIC and Nortel Networks.
This is the same Admiral Bill Owen who is Chairman of Vote Here a company which is
producing new electronic voting software (§ 9).

         Only English or Multilingualism?

Ten years ago the Internet was overwhelmingly English. Today the Internet is approx-
imately 35% English, has Chinese as its second most important language; Japanese in third
place, Spanish in fourth, German in fifth, Korean in sixth and French in seventh place.267
The Internet as envisaged by the United States remains effectively a uni-lingual, uni-
cultural phenomenon.

To be sure there are multilingual projects in the United States. But their purpose is very
different. In the military, there is a quest to develop new tools, which allow communication
with knowledge only of English. A ―Translingual Information Detection, Extraction and
Summarization (TIDES) program is developing advanced language processing technology
to enable English speakers to find and interpret critical information in multiple languages
without requiring knowledge of those languages.‖268 In the American vision, the worlds of
e-business and e-science require global, standardized solutions in which variations of
culture and language at the national, regional and local level play no significant role. In
their high industry, there is a quest for tools, which are independent of language and

       A major task will be to create tools independent of language and culture that can be
       instantly used by anyone, regardless of location or national origin. Tools will have
       to be developed that allow for effective remote interaction. Collaboration
       technologies will require models of the dynamics of human interactions that can
       simulate behaviors, characteristics, and appearances to simulate physical

The US is perfectly free to develop a comprehensive vision of the Internet that affects the
whole of telephony, libraries, publishing and education within their own country. The
problem is that this US vision foresees controlling not only their own education but the edu.
domain for the entire world, assumes that the future of education and e-learning will be in
the image of their own uni-lingual, uni-cultural ―melting pot‖ model of reality. Indeed to
assume that a vision of 4.5% of the world, or rather the vision of a few thousand individuals
in that great nation, should determine the future of world learning is at odds with the US‘s
own quest for democracy. Much more than money and profits are at stake. Here a lack of
vision could destroy trust and cultural diversity, which are a basis of culture and civilization
everywhere in this global village.

In these developments there are serious contradictions between 1) a rhetoric of a universal
Internet for everyone; 2) a plan whereby the US version of the Internet is exported globally

and 3) the realities of the today‘s Internet, which includes well over 70 of the world‘s 6,500
languages. When the Internet Society tells us that the Internet is for everyone, does it
perhaps believe that a US version of the Internet should serve as a model for everyone?270 If
so which of the three alternatives will win: NASA‘s Interplanetary Internet, ARPA‘s
Interspace or the new Total Information Awareness or Terrorist Information Awareness
(TIA) system?

All this poses important challenges for Europe, Asia and the rest of the world. When the
United States painted a vision of an Information Highway, Europe insisted on the need for
an Information Society271 and some even spoke of a Knowledge Society. While the United
States continues to assume that the Internet is to all intents and purposes in and for English,
Europe has been very conscientious in making the key documents of the European Union
available in at least 11 languages. Faced with this new vision it again has a choice. It could
blindly follow the American solution, or it could remember its roots and insist on a multi-
lingual, multi-cultural, open source model for the future of the Internet, which is becoming
intimately linked with the future of knowledge and culture.

7. Energy

There are important links between energy companies and new media. We shall focus on
links between electricity and new media and mention in passing links between oil and new


The obvious connections between electricity and new media take us back to the 1920s
when AT&T owned Western Electric and the two were so obviously dominant that they
were forced to divest some of their holdings in 1932. Less well known are other
connections. In the United States, the two largest electricity firms have been General
Electric and Westinghouse Electric. These very large corporations are active in a whole
range of fields from aircraft production to wired and wireless communication, and are again
links them with AT&T. These firms have played and are playing a central role in the
American media industries. For our purposes a few highlights of these connections will

       Film Studios: Universal

Universal Pictures was begun by Charles Laemmle in 1912. In 1946 it merged with
International Pictures to become Universal-International. In 1952, Universal-International
became a part of Decca records. In 1962, the Music Corporation of America (MCA,
founded 1924), bought Universal. In 1990, MCA was acquired by Matsushita, a counterpart
of General Electric and Westinghouse. In 1995, a controlling stake in MCA was acquired
by Seagrams. In 2000, Vivendi acquired Seagrams and Universal and renamed itself
Vivendi-Universal.272 In 2003, General Electric acquired Vivendi-Universal. In so doing it
simultaneously acquired one of America‘s major film studios and what had been one of
Europe‘s largest media conglomerates.

         Radio Networks

The Radio Corporation of America (RCA) was founded ―in 1919 to control the US patents
of GE, AT&T, Westinghouse and United Fruit.‖273 In 1929, RCA purchased the Victor
Talking Machine Company for $154 million and began manufacturing radios and
phonographs as RCA/Victor. In 1932, concerns of a growing monopoly forced GE and
Westinghouse sell off their stake in RCA which became linked with RKO, which in turn
was sold to Howard Hughes in 1948. In 1985, General Electric (GE) re-acquired RCA.

         Television Networks

RCA formed the National Broadcasting Company in 1926. As noted above, GE and
Westinghouse were forced to divest RCA and NBC in 1932 for regulatory reasons. In 1985,
when GE re-acquired RCA it also re-acquired NBC. In 2003, GE formed NBC-Universal
that included:

       the US film studio, theme park and cable tv interests of Vivendi Universal. At that
       time GE had revenue of around US$135 billion and assets of US$575bn, with
       around 315,000 employees in over 100 nations. It ranked as the 5th largest US
       company by sales and the 8th largest in the world.274

Similarly the American Broadcasting Company (ABC) began as the second network in the
US in the 1920s as a joint venture between General Electric and Westinghouse, was
acquired by Capital Cities Communications in 1986 which, in turn, was acquired by Disney
in 1995 for $19.5 billion.275 Originally the third network, the Columbia Broadcasting
Service (CBS) had a different origin. It was founded by the Paley family in 1927. In 1962,
CBS-Sony records was founded in Japan. But in 1995, Westinghouse Electric acquired
CBS and renamed itself CBS. In 1999, Viacom acquired (Westinghouse Electric renamed
as) CBS for $50 billion. By 2004, Viacom ―CBS, MTV, Nickelodeon, VH1, BET,
Paramount Pictures, Infinity, Viacom Outdoor, UPN, Spike, Country Music Television,
Comedy Central, Showtime, Blockbuster and Simon & Schuster.‖

Hence all three of the major television networks in the United States are intimately
connected with energy in the form of electricity. These energy companies, under the guise
of different names are beginning to make serious inroads into the European media markets.
In 2002 and 2003, General Electric quietly bought Telemundo and Vivendi Universal
respectively. On 24 August 2004, Viacom acquired a 75.83% stake in Viva Media AG in

       Cable Television Networks

Just before re-acquiring its radio and television networks in 1985, GE began to explore
cable networks. In 1982, General Electric (GE) was thwarted in an attempt to acquire Ted
Turner‘s CNN network.277 In 1989, GE founded CNBC (Consumer News and Business
Channel), a cable and satellite television news channel, which subsequently spread to Asia
and Europe in 1997. Meanwhile, in 1996, GE partnered with Microsoft, to launch the cable
news network MSNBC. In 2002, GE acquired Telemundo Communications Group ―for

$2.7 billion in a deal with an investment group that includes Sony and Liberty Media.‖ GE
also acquired the Bravo Network from a deal with Cablevision and MGM for $1.25

       Williams [Energy] Company and Williams Communication Services (WCS)

In 1985, Williams became the first energy company to harness its core competency as a
builder of networks to enable competition in the communications industry when it founded
a subsidiary, Williams Communications Services WCS), of which it owned a. It owned
approximately 86 % of the stock.279 In 1999, there was an IPO. For the next two years it
was one of the most interesting pioneers and seemed to have every chance of being a
triumphant success. On 29 January 2001, Williams sold its interest in Houston-based
enterprise services business unit to Platinum Equity.280 On 3 April, Platinum Equity
acquired all of Williams Communications. Also on 3 April three new members were added
to the board: retired Nortel Executive John A. (Ian) Craig;; Nextel Co-Founder, Morgan
O‘Brien and High Profile Sports Executive, Julius W. Erving281 On 22 April 2002,
Williams filed for bankruptcy because it had $6 -- some say $7 – billion in debt. On 16
October 2002, it emerged from its chapter 11 proceedings as WilTel Communications
Group, Inc.282 By October 2003, Leucadia National had acquired its entire assets for $420

The Williams story deserves closer attention because it is instructive in offering insights
into the so-called telecom bubble burst or meltdown. Williams Communications had all the
right contacts. For instance, on 14 November 2000, Williams Communications teamed with
Boeing to deliver a first-run major motion picture from Miramax Films in Los Angeles to
AMC Theatre in New York in Digital Format283 On 1 November 2001, it signed a 20-year
telecommunications agreement with The Boeing Company valued at $267 million.284

Williams had two unique features. First it developed many international agreements. To
appreciate their extent it is worth listing them in some detail. On 1 March, 2000, Williams
acquired ―dark fibers on Telia's 28,000-mile fiber-optic network throughout Europe.285 On
3 May, 2000, Williams extended its international reach as one of the largest stakeholders in
the new $1.06 billion Asia-Pacific Cable Network (APCN-2.), ―an intra-Asia 19,000-
kilometer submarine cable project that will connect China, Hong Kong, Japan, South
Korea, Malaysia, the Philippines, Singapore and Taiwan.286 On 14 May 2000, an agreement
between 2000 Williams Communications and PowerTel Ltd. gained significant capacity on
the Southern Cross Cable Network, an undersea fiber-optic cable linking Australia and
New Zealand with Hawaii and the West Coast of the United States.287

On 22 May 2000, National Grid Group ( London); Chilean carrier Telefonica Manquehue;
and Williams Communications invested $ 220 million to found the Southern Cone
Communications Company, S.A., a major new broadband fiber-optic network linking
Argentina and Chile.288 On 19 February 2001, Williams obtained a facilities-based Type I
license allowing it to establish a base of operations in Japan and transport traffic from Japan
to its U.S. backbone network in a full-circuit configuration via an undersea fiber-optic cable
linking the two countries. By now Williams‘ U.S . network had more than 33,000 miles in
operation, making it the largest next-generation network in the United States.289

On 18 March, 2001, Williams announced it was ―providing New Skies Satellites teleport
facilities for New Skies' Asia Pacific satellite, giving customers a combined fiber and
satellite connection between North America and the Pacific Rim.‖290 On 26 March, 2001,
two of its satellite teleports received Loral Skynet Satellite Services' Uplinker Awards. On
29 August, 2001 the Japan-US (J-US) cable consortium, comprising a group of 44 leading
telecommunications companies, activated the J-US Cable Network providing direct
connectivity between the US and Japan.291 On 20 September 2001 Williams ―signed a letter
of intent to enter a three-year commercial business transaction to purchase network
capacity.―292 On 20 December, 2001, Williams ‖closed on its asset purchase agreement to
obtain the fiber-optic network, intellectual property, and Internet protocol capabilities of
CoreExpress.‖ On 10 February, 2002, Williams expanded its network's international reach
through acquisition of long-term capacity on Canadian and Pan-European network
segments operated by Teleglobe, a leading supplier of global broadband and data
services.293 On 20 February it expanded its relationship ―with KDDI America, Inc., a
wholly owned subsidiary of KDDI Corporation, the largest international telecom-
munications company in Japan.‖294 In short, Williams developed the best connections
between US local networks and the emerging global networks.

Williams second unique feature was a special relation with the Baby Bells. Already on 8
February, 1999, Williams Communications formed a unique alliance with SBC to transport
long distance voice, data traffic and SBC‘s Equity Investment underscored Williams
Communications' network and solutions strategy.295 On 29 February, 2000, it was
announced that Williams would acquire the ―long distance network assets of Ameritech
Communications Inc., a subsidiary of SBC.296 On 1 August 2001, Williams was ―selected
by SBC to provide long distance service to Cingular Wireless in the traditional SBC13-state
region.‖ By this time Cingular Wireless, a joint venture between SBC Communications Inc.
and Bell South, was the nation's second largest wireless carrier.297 On 20 November 2001,
Williams became ― the preferred provider for long distance voice and data traffic for SBC
in Missouri and Arkansas.‖298 On 5 Febraury, 2002 Williams ―signed an agreement to
provide long-distance services to Verizon Global Networks Inc., a subsidiary of Verizon
Communications.299 Interestingly enough, on 31 October 2002, the day Williams emerged
from bankrupty as the newly formed, WilTel Communications, Keith W, Storey became
President300 and Chief Executive Officer (CEO). Storey had 20 years of industry experience
including management positions at Cox Communications, Southwestern Bell, and Bell
Communications Research. In short, the special relationships with the Baby Bells, meant
ultimately that someone with 20 years of experience in their network could take over

We noted earlier that after floating its initial IPO in 1999, Williams was sold to the
Platinum equity firm on 3 April 2001 and less than three weeks later declared bankruptcy.
It is noteworthy that the special agreements with SBC, and Verizon continued to develop.
It helps to know that in 1998, before Williams even came onto the horizon of public
attention, it formed a ―formal working relationship‖ with the Blackstone [equity] Group,
which served as their ― financial and strategic advisor ― and specifically advised the ―sale
of Williams Communications Solutions to Platinum Equity and Williams Communications

Canada to TELUS Corporation in transactions valued at over $400 million.‖301 We shall see
later that Blackstone prides itself on its links with major firms such as AT&T (§ 9).

Williams Communications remains of interest as an example of energy firms becoming
interested in new media. At the same time the story of its short lived success is open to
many interpretations. Some would say that Williams simply had very bad luck making
deals with Teleglobe and Global Crossing months before these impressive firms went
bankrupt. Others might ask whether Williams‘ amazing ability to create links between
national and international networks was precisely what made it so important to the Baby
Bells. Federal jurisdiction laws prevented the RBOCS from making these links on their
own. But with Williams as a front much more was possible. Some would be tempted to
suggest that Global Crossing and some of the other international ventures served the same
purpose They were effectively Trojan horses to enter into walled markets that had been
closed to them.

On 10 July 2001 the President of Williams commented on the health of the company: ―It's
unfortunate that the telecom industry is being painted with the same broad brush, causing
our stock and bond prices to be undervalued.‘302 In this view the burst of the telecom bubble
dragged Williams down with it. But is it not possible that the so-called telecom bubble
burst was itself a diversionary tactic a) to hide some all too quick deals and more
significantly b) to ensure that a lot of new companies with unknown names could serve as
pawns for the really big players to enter markets which were legally beyond their reach?
This would help to explain a paradox that the ITU statistics record no slump or even
slowdown in the IT and telecom sectors (§10). It might also explain why the buyouts equity
firms seem less a passive response to unfortunate bankruptcies and more an active search
for fortunate companies (§11).


At a much smaller scale than the some of the networks listed above is Anschutz ―holding
company for Anschutz's portfolio of companies with holdings in energy, transportation,
media, communications, professional sports, agriculture, entertainment and real estate,‖
which is now the largest stockholder in Qwest. Since 2002, the chairman and Chief
Executive officer of Qwest has been Richard C. Notebaert, who stepped down as chairman
of the board of Ameritech Corporation [cf. figure 1] in December 1999. His 30-year career
with that organization included appointments as president of Ameritech Mobile
Communications (1986), president of Indiana Bell (1989) and president of Ameritech
Services (1992).



Amidst the various scandals of the Enron which is both an energy and an oil company, very
little has been said of the 200 former Enron employees who now work in the Bush
administration, and even less is heard of Enron Broadband which ―owns 18,000 miles of
fiber network that deliver high-quality, efficient bandwidth solutions. Enron has also

established pooling points in 25 key cities around the world, including cities in Europe and
Asia that provide an interconnection and switching platform for providers and consumer of
bandwidth capacity.‖303 Enron also offers four new businesses: Global Semiconductor
Services; Media Services; Global Voice Minutes Services; Digital Content Services

       Film Studios: Paramount

Initially Paramount had nothing to do with oil. In 1912, Adolph Zukor founded the Famous
Players Film Company. In 1916 it merged with the Jesse L. Lasky Company, and the new
combined company was renamed Paramount. In 1966, Gulf+Western (oil) Industries
gained control of Paramount. Hence an oil company owned one of the major film studios
and in 1989 renamed it Paramount Communications before merging with Viacom in

Further connections between the oil industry and new media have been studied by others:
e.g. links between, Clear channel, ―the Texas-based owner of more than 1200 radio and 36
television stations in the USA, with its own syndication and tour management divisions,‖
the Carlyle Group and the Bush family. Many other connections have been noted, e.g.:

       Secretary of State Colin Powell was on the corporate board of America Online, now
       merged with Time-Warner, which owns CNN. A member of AOL/Time-Warner's
       board of directors, Carla Hills, also sits on the board of directors of Chevron. She
       was the first President Bush's trade representative. On the board of directors of
       Exxon-Mobil sits J. Richard Munro, former chairman and CEO of Time-Warner.
       Secretary of Defense Donald Rumsfeld was on the board of the Tribune Company,
       owner of the Chicago Tribune, the Los Angeles Times, Newsday, and many other
       newspapers as well as TV stations….The director of Texaco (recently merged with
       Chevron), former senator Sam Nunn, is also on the board of directors of GE/NBC
       (GE is the nation's sixth largest defense contractor). Texaco board of directors
       member Charles Price sits on the New York Times/Boston Globe board of directors.
       Corporate board member William Steere is on the board of directors of Dow
       Jones/Wall Street Journal. A member of the Dow Jones/Wall Street Journal
       corporate board, Rand Araskog, also sits on the board of directors of Shell
       Oil.…The connections of the current White House administration with big oil
       hardly need mentioning. Most notably, National Security Advisor Condoleezza Rice
       comes from the board of directors of Chevron -- which has a tanker named for her --
       and Vice President Dick Cheney (secretary of defense during the first Bush
       presidency) was chairman and CEO of Halliburton, which provides construction
       and maintenance services to the oil and other energy industries as well as field
       support to the military.306

This quote comes from an article in 2001 that lists many more such connections which,
incidentally have not diminished after the 2004 election. Any attempt at a comprehensive
list thereof connections would lead to a long study far beyond the scope of this paper. For
our purposes it is the big picture that is of interest. Two points stand out:

1) The rise of new media in the United States are intimately connected with the energy,
especially in the form of electricity and oil. Almost without exception, the greatest film
studios, radio networks, television networks, cable networks, and media conglomerates are
intimately connected with the energy sector.

2) these media –energy connections inevitably take us back a) to a handful of very large
companies; b) to a handful of persons in the highest echelons of the administration; c) to a
handful of companies with close military connections (§ 8) and d) to a handful of private
equity firms (§ 9) .

8. Military

All over the world the military plays a significant role in the development of new media
and as is to be expected many of the details of their activities in this domain are secret. The
details of such activities in the United States are not of concern in this paper. As noted
earlier there are trends for individuals and organizations with close military connections to
be become involved in new security systems such as TIA (cf. § 6). The details thereof are
again beyond the scope of this paper. Our concern rather is with another trend whereby the
military, or more specifically the chief companies that work with the military, are
increasingly becoming involved in security and information systems for the public sector
and for civilian life. One example was just cited: GE which was intimately connected with
the rise of the film studios, radio, television and cable networks, is also the nation's sixth
largest defense contractor.

But this is only the surface. Traditionally, we tend to think of Boeing, Lockheed Martin and
Northrop Grumman as aircraft companies with strong ties to the military and space. In
2002, these three companies received $42 billion in Pentagon contracts. 307 The past decade
has also seen major growth in their involvement in information systems, particularly
government information systems.

Boeing had a government information systems company which it sold to SAIC in 1999. In
April 2000, it founded ―Boeing Government Information & Communications Systems,
which concentrates on global positioning navigation systems; airborne early warning and
control systems; integrated command, control and communications systems; and integrated
battle management systems.‖308

―Lockheed Martin is the leading provider of information technology to the federal
government--and has been for the past ten years.‖309 ―For the sixth year running, Bethesda,
Md.-based Lockheed Martin retained its crown with about $2.4 billion in information
technology contract obligations during fiscal 1999…‖ ―Lockheed Martin also made the first
cut on the $1.8 billion, 10-year Air Force Integrated Space Command and Control contract.
Lockheed Martin and TRW Inc. of Cleveland each passed the down-select phase and now
are competing head to head for the lucrative contract…‖310 Lockheed and Boeing together
have formed United Space Alliance a company to which NASA outsources much of its
back office needs. Raytheon is active and foresees large growth in information technology
estimating that the ―tasking, processing exploitation and dissemination‖ of information
offers a market of $6 billion to $12 billion over the next five years.‖311 Lockheed Martin

also runs Sandia Labs.312 The Honourable E.C. ―Pete‖ Aldridge Junior, is on the board of
directors of both Lockheed Martin and Global Crossing.313 Another member of the board
of directors of Global Crossing is Lt. General Donald L. Cromer, the former president of
Hughes Space and Communications Company.314
On October 4, 2004 the US government awarded a contract potentially worth ―$3 billion to
Lockheed Martin and its partners, which include AT&T, Qwest, BellSouth, and Verizon.
The service will involve the integration of all postal data communication networks into a
single network service that will provide enterprise data transport, voice, wireless, remote
access, network management, and managed security services.‖315
Northrop Grumman is also active in this field. In 2001, it bought Litton Systems, another
strong player in the government information technology market.316 In 2002, it bought TRW
Systems.317 TRW owns Vinnell which works closely together with Kellogg Brown and
Root (KBR also known as Halliburton). ―The Vinnell-Brown&Root joint venture had at
least six contracts worth nearly $200 million from 1998 to 2002. In addition to the United
States, Vinnell and VBR performed work in Egypt, Oman, Saudi Arabia and Turkey. They
were also one of three major beneficiaries of the ―rebuilding‖ of Iraq. Their bill alone
amounts to over $20 billion (figure 3). A full list has been made by the Center for Public
Vinnell Kellogg Brown and Root (Halliburton)          $11,431,000,000
Parsons Corp.                                         $5,286,136,252
Fluor Corp                                            $3,754,964,295
Figure 3. The three biggest beneficiaries in the rebuilding of Iraq.318
Northrop Grumman, the current parent company, had nearly 4,000 contracts worth close to
$42.5 billion from 1990 through 2002.‖319 Kent Kresa the CEO of Northrop Grumman is
aware of the big picture. His company, along with Lockheed has its eyes on the contract for
the Joint Strike Fighter worth $200 billion – although some have mentioned an amount near
$1 trillion320:
       Having completed all 21 of the B-2 stealth bombers ordered by America's air force,
       Northrop Grumman has contacted the Bush administration, offering to build 40
       more for a mere $545m apiece. If the Lockheed Martin team wins the contract to
       build the JSF, then Mr Kresa's company, as a Lockheed partner, would end up with
       a 17% stake in America's manned fighter for the 21st century. The military
       revolution championed by Mr Kresa, in which wars will be fought with information
       rather than pilots and bullets, continues.321

Another person aware of the big picture is C.Michael Armstrong who was an officer IBM
(1961-1991); was chairman and CEO of Hughes (1992-1997), chairman and CEO of
AT&T (1997-2002), chairman of the board at Comcast (2002-2004) and is now a director
of Parsons Corp. and Citigroup Inc. We noted earlier how a small group of companies were
becoming ever more closely linked. Could this have something to do with how a handful of
individuals move as heads of these same companies almost as if in a game of musical
chairs? Or is this simply further evidence of American competitiveness at work where one
company after another captures their competitor‘s best men?

       Information Security Management

George Washington University now has a programme on Information Security
Management which is certified by the National Security Agency (NSA).322 The
corresponding site also has a section on employment opportunities. Seven companies are
listed.323 Striking is the extent to which this has military connections. Not surprisingly there
is SAIC. Another company is Symantec. The CEO of SAIC is Bill Owens, who is also a
director of Symantec, and incidentally now also president of Nortel Networks. ―Between
1988 and 1991, Owens served as senior military assistant to Secretaries of Defense Frank
Carlucci and Dick Cheney, the senior military position in the Office of the Secretary of
Defense.‖324 A third company is Cisco, which has agreements with SAIC. A fourth
company is TRW, now owned by Northrop Grumman discussed above. A fifth is Veridian
owned by General Dynamics. A sixth is Booz, Allen Hamilton which has on its board a
former head of the CIA. Finally there is BAE Systems also active in both the defence and
space industries.

9. Private Equity

Successful companies make money. In order to begin they require money. This was
traditionally the role of banks and more recently the role of venture capitalists, private
investment firms and private equity firms. One of the best known of such firms is
Kohlberg, Kravis, Roberts (KKR) which began in 1977 by acquiring A.J. Industries Inc.
($26 million). In 1984 it acquired Pace Industries, Inc. ($1.6 billion); in 1985, Storer
Communications ($2.4 billion) and it continued to grow. In the past three decades, KKR
―completed more than 110 transactions involving in excess of $118 billion of total
financing.‖325 The story of how this firm began as a brash, aggressive company that slowly
shed ―its hostile takeover for a kinder, gentler, buy-and-build strategy,‖ with its new motto
of ―proactive, patient, creative has been told by others.326 A realistic businessman will
rightly note that such transactions are a necessary dimension of a healthy business
environment, where buyouts and takeovers are a natural part of the business world.

For our story, KKR is of a certain interest because, as we seen on several occasions, it
frequently re-appears in complex media transactions. Our real concern lies not in such
individual transactions, but rather in a trend whereby a small group of equity firms are ever
more consciously and systematically investing in whole sectors of the economy on a scale
that has global implications. This could easily sound like an exaggeration. A few concrete
examples will enable readers to judge for themselves whether the choice of language is

By way of introduction, a slight detour is necessary to explain the underlying ambitions of
the new investors. It is important to note that the United States, which traditionally had a
frontier mentality -- epitomized by the phrase ―Go West young man‖ until stopped by the
Pacific Ocean --, now sees the world as its new frontier. Some of those frontier spirits still
live in the American West. One is Ted Turner who is the largest individual landowner in
the United States with over 1.7 million acres in Montana, New Mexico, South Dakota,
Alaska and Florida.327 Another is John Malone,328 who headed Liberty Media. In 2001,

there were reports that ―Liberty Media is investing more than $5 billion in European cable-
TV.‖ On June 21, 2001, for instance, Liberty Media ―announced that it would acquire six
cable-TV companies in Germany from Deutsche Telekom for terms that haven't yet been
In 2001, Liberty Media also invested an additional $543 million in cash330 in another
company with the modest title of UnitedGlobalCom,331 the European operations332 of
which were run by a firm with the equally modest name of United Pan-European
Communications (UPCOY or simply UPC) in Amsterdam. Its CEO, Mark Schneider had a
clear ambition: ―To build a European AT&T, owning high-speed pipes that go into homes
and businesses and using them to sell everything from Web content to phone service:‖
       It's the ultimate digital convergence play.…Schneider is running far more than a
       branch operation. UPC is not only providing Internet access but is also coming up
       with content, from TV programming in 22 languages to an Internet portal called
       chello. And by taking advantage of the thick cables, he's offering phone service,
       too…. For his assault on the communications giants, Schneider has a powerful
       partner: Last winter, as part of an initial public offering, he sold 7.8% of the
       company for $333 million to Microsoft Corp….The buying spree has tripled
       Schneider's TV subscription base, to 6 million. And UPC, listed in Amsterdam and
       on the Nasdaq, has skyrocketed to a market cap of $18 billion, even though its
       revenues were just $419 million last year….No matter who wins, though, much of
       the credit for wiring Europe will belong to the onetime Washington lawyer working
       out of Amsterdam.333

One observer described UPC ―as a central part in Mr Malone's strategy to build a pan-
European cable empire after making billions in the US industry.‖ In light of Mr Malone‘s
other investments this is clearly not true. Very briefly, the company seemed wildly
successful. ―In the U.S., the company's American depositary receipts soared as high as $79
in March 2000 before crashing to the current $1 level.‖ 334 On 30 September, 2002, ―UPC,
Europe's largest cable television company…filed for bankruptcy protection in the US and
Netherlands. The move is part of a restructuring that is expected see United Global
Com…emerge with 65.5% of the company in return for erasing two thirds of its €10bn
(£63bn [clearly a typo for £6.3bn]) debt.‖335

There are two reasons for looking more closely at this case. First, on closer inspection,
however, the case is more complex than it looks. It was not simply a case of an investment
that went wrong, went bankrupt, whereby many innocent investors collectively lost 10
billion euros. It was a company fronted by the man whom Senator Al Gore once called the
Darth Vader of media and of the information highway.336 When the UPC company went
bankrupt, many innocent investors did lose their money, but the mother company, United
GlobalCom, and John Malone increased their influence.
Second, if this were an isolated case, it would simply be yet another example of the bust and the burst of the telecommunications bubble that saw KPNQwest, also
based in the Netherlands, shut in 2002 and brought difficulties to Carrier1 and Level3
Communications ―after spending billions building pan-European networks.‖337 There is
serious evidence that it was not an isolated case which brings us back to the main topic of

this section, the role of private equity firms. We shall look first at the Carlyle Group, then
turn briefly to global developments in one specific field, satellite communications. A brief
outline of some of the other main private equity firms will suffice to indicate the
dimensions of the changes that are underway.

Aerospace & Defense             Automotive & Trans              Consumer & Retail
Energy & Power                  Healthcare                      Industrial
Opportunistic                   Real Estate                     Tech & Business Sys
Telecom and Media

Year       Acquistion by Carlyle Group and others
1992       Military electronics group from General Dynamics338
1995       Federal Data Corporation (FDC)339
2002, 08   QwestDex publishing business from Qwest Communications340
2002, 04   Healthcare and business publishing from Vivendi Universal 341
2003, 02   Casema, 3rd Dutch Cable company with Providence from France Telecom342
2003, 04   Retevision Audiovisual TV and signals section from Auna343
2004, 04   Kingston Inmedia from Kingston Communications344
2004, 05   Hawaii wireline from Verizon Communications345
2004, 06   60% of DDI pocket from KDDI346
2004, 06    27%, KKR 44% of Panamsat347
2004, 06   Loews Cineplex348

Figure 4 a) Focus industries of the Carlyle Group;349 b) Media companies acquired by
Carlyle between 1992-2004. 350


Much has been already been said by others about the Carlyle Group. Connections between
the Carlyle Group, Halliburton (Kellogg, Brown, Root or KBR) and the Bush family have
been made by many persons.351 Halliburton's prime contracts with the Pentagon jumped
from $483 million in Fiscal Year 2002 to $3.9 billion in Fiscal year 2003, an increase of
almost 700%.352 The Wikipedia has an entry.353 Dan Briody has written a book on these
connections.354 Alfred Mendes has warned of the dangers of this group355 as has Sherman
H. Skolnick (Citizen's Committee to Clean Up the Courts).356 In November 2004, Henry A.
Waxman, called for a Congressional hearings into the VBR‘s role in Iraq alleging
overcharging of $61 million. As we have intimated earlier (figure 3) this is but the tip of an
iceberg.357 There are, of course, also conspiracy theorists, who link this group with a quest
for a new world order.

It is striking that the Carlyle Group has as its chairman, Lou Gerstner, who used to be head
of IBM; that Carlyle is closely linked with Halliburton (Vinnell, Brown and Root or VBR);
that the Parsons Group, the second major beneficiary of the Iraq war now has as a director,
C. Michael Armstrong, who was the CEO of Comcast, AT&T and before that the CEO of
Hughes; that one of Vinnell‘s heads is the same Kent Kresa, who led the military efforts of
Northrop Grumman, has become a director of General Motors and is also linked with the

third group that has most profited from the Iraq war: Fluor. That some of the greatest
corporations in the US, IBM, AT&T, General Motors, Northrop Grumman, and Comcast,
are linked through their executives to private equity firms which also have close links to the
military events in Afghanistan and Iraq is noteworthy. All this says little of the scope of
Carlyle which has 10 focus industries (figure 4a). The activities of Carlyle are global. For
instance, along with J. P. Morgan they were involved in selling the Korean Koram Bank.358

One needs only to consider a few of the key acquisitions of Carlyle in the communications
field to recognize that a carefully orchestrated plan is underway (figure 4b). Around the
world, they are buying significant bits of infrastructure which were hit by the pseudo dot-
com bust and the pseudo-telecom bubble burst (cf. §10). These include the DDI pocket
from DDI which entails mobile, wireless technologies from Japan in an area where
America is lagging far behind the rest of the world. NTT‘s recent announcement to invest
$40 billion in fibre to the home infrastructure suggests that there is at least one company
who is responding to these acts of hubris in a serious way.

A full analysis of the ten focus areas of Carlyle would lead far beyond the scope of this
essay. It is striking, however, that Carlyle is also involved in firms such as Vaxgen, which
have been involved in searching for new AIDS vaccines, although it has not yet produced
an effective treatment. Meanwhile, the World Health Organization has ordered India to stop
producing cheaper alternatives. In November 2004, the same Vaxgen Corporation, in which
Carlyle and others have invested, received a contract of $877 million for Anthrax vaccines,
while critics have noted that Fort Dettrick, the national facility has long ago developed
more effective means.359

Similarly, the Carlyle Group apparently has stocks in the parent company of Bioport, ―the
recently FDA approved monopoly holder of an anthrax vaccine.‖ The chief stock holder of
this parent company of Bioport is Admiral William Crowe, Jr., who was Chairman of the
Joint Chiefs of Staff and worked closely with the then Secretary of Defense, Frank
Carlucci, who is Chairman Emeritus of the Carlyle Group360 and incidentally also the Chair
of the Advisory board of the Center for Middle East Public Policy (CMEPP).361 On all
sides, there is evidence of using public monies to subsidize private firms, in which the
politicians have considerable investments of their own. We begin to appreciate the
enormous range of the Carlyle Group‘s interests when we realize that it is also active in the
domain of e-voting.

         E-Voting Software

E-voting is a hot topic in every sense. We depend on new technologies for e-voting to be
assured that the counts of votes at polls have been done correctly. One of the pioneers in
this domain is Diebold, which has created an elections software. One of the competitors in
this field is the company Vote Here which, according to their website, will be partnering
with Sequoia Voting Systems, "to provide a new level of electronic ballot verification to
customers of the AVC Edge touch screen voting system."
All this sounds unproblematic until we examine the details. The Chairman of the Board of
VoteHere is Admiral Bill Owens, who is also former president, chief operating officer, and

vice chairman of SAIC. Hence, SAIC, which is supposed to vet Diebold's elections
software, is itself in the elections business.362 Another former SAIC board member, also on
the board of VoteHere, is ex-CIA Director Robert Gates, a veteran of the Iran-Contra
scandal. Meanwhile, Admiral Bill Owens, who is also head of Nortel, ―served as Vice
Chairman of the Joint Chiefs of Staff and was a senior military assistant to Secretaries of
Defense Frank Carlucci and Dick Cheney. Carlucci's company is Carlyle Group, while
Vice President Dick Cheney's former employer is Halliburton.363 Some would see in all this
the potentials of a conflict of interests. The present administration clearly sees no such
conflicts and seems impervious to the irony of taking the high ground with respect to voting
problems in the Ukraine, just after entering a second term under conditions where their own
counting procedures were questioned by many.
A diplomat of the old school would insist that countries such as the United States, which
are seen as pillars of freedom and democracy, have every right to govern themselves as
they best see fit. This would be a perfectly reasonable stance were it not for very serious
evidence that implications of their activities stretch far beyond internal matters (innere
Angelegenheiten as the East Germans used to say). By way of example, it is instructive to
turn to the global satellite industry over the past five years.


Satellites have traditionally been a domain requiring such large investments that they were
typically funded by governments.364 The past five years have seen major changes. If we
accept KKR‘s365 remarks cited earlier, the strategy would be simple. Make valuable assets
look worthless. Push them into bankruptcy and then buy their undervalued assets for a
fraction of their true worth. There is serious reason to believe that this is happening with
too much consistency to be co-incidental.

On 9 July 1999, Teledesic LLC, the broadband satellite venture backed by Bill Gates, Craig
McCaw, Boeing and others, completed a major launch contract with Lockheed Martin and
signed a system agreement with Motorola to build its satellite communications network.366
The only operating satellite phone company at the time was Motorola‘s Iridium satellite
       During 1998, the last satellites of the 66+ satellite IRIDIUM constellation were
       launched into orbit. These LEO communications satellites are the backbone of the
       Motorola and Iridium LLC satellite project boasting voice, data, fax, and pager
       transmission capabilities from any point on the planet to any other point. The
       satellites all reside in circular polar orbits and are spaced around the planet in order
       to provide full Earth coverage at all times.367

Within a month of Gates‘ Teledesic-Boeing agreement, in the first week of August 1999,
Iridium filed for and in 2000 it went bankrupt.368 On 1 October 2001, Iridium was bought
by General Dynamics. Two weeks after the Iridium filing, on 27 August 1999, ICO Global
Communications went bankrupt.369 Teledesic then merged with ICO. At the time it seemed
that Globalstar, a Loral-backed company, was in better shape.370 By 18 February 2002,

Globalstar had announced it was bankrupt.371 By April 2004, Thermo Capital bought the
bankrupt Globalstar satellite phone service.

Meanwhile, in July 2001 Eutelsat was privatized. By February 2003, Eutelsat‘s largest
investor was Lehman Private equity with 20.48%; Eurazeo at 19%, BT at 17.5% and De
Agostini at 10.8 %.372 In December 2003,373 both Intelsat and Panamsat were offering to
buy Eutelsat. 374

Teleglobe was a major Canadian player. On 15 May 2002 it went bankrupt. By February
2003, there was a new private company run by Mr Liam Strong. From 1997 through mid-
2001, he served as the President and Chief Executive Officer of MCI Worldcom
International (global voice communications carrier).375 New Skies Satellites was one of the
four fixed satellite companies with a truly global reach. On 18 July 2004, they were
acquired by the Blackstone Group.376 On a smaller scale SES Americom acquired the
bankrupt Verestar satellites in April 2004.377

On July 15, 2003, it was announced that ―Loral Space & Communications Ltd. filed for
Chapter 11 bankruptcy protection while Boeing Co. took a $1.1 billion charge on
operations and said it would exit the commercial space business. Loral said it is preparing
to sell its commercial satellites to Intelsat as part if its Chapter 11 filing.‖378 That same day
Loral agreed to sell its six North American Satellites to Intelsat.379

In 2002, Inmarsat and Globalstar also faced bankruptcy. In December 2003, Apax Partners
and Permira Advisers acquired Inmarsat.380 In Febraury 2002 Intelsat decided to merge
with Loral.381 In August 2004, Zeus Holdings advised by Apax Partners and Permira
Advisers acquired Intelsat. 382

General Motors acquired Hughes Electronics (1985). which merged with Raytheon
(1997).383 In 2002, General Motors Corporation, Hughes Electronic Corporation, EchoStar
Communications Corporation attempted a $25.8 billion merger which was blocked for
regulatory reasons.384 On 22 December 2003, the News Corporation (Murdoch) paid 6.6
billion for a 37% stake purchase in Hughes Electronic Corporation, General Motors
Corporation, United States Trust Company of New York.385 As a result, DirecTV,
previously known as Hughes Electronics, became a division of Fox Entertainment Group in
2003.386 Hughes now had an 11 member board which consisted of:

       Mr. Murdoch, Mr. Carey, News Corp. and Fox Entertainment Group President and
       Chief Operating Officer Peter Chernin, News Corp. and Fox Entertainment Group
       Chief Financial Officer David DeVoe, Mr. Hartenstein and six independent
       directors, including Neil Austrian, former President and COO of the National
       Football League; James Cornelius, Chairman of Guidant Corp.; Charles Lee,
       Chairman of Verizon Communications Inc.; Peter Lund, former President and CEO
       of CBS; and John Thornton, Co-President of Goldman Sachs.

What is noteworthy is how the ―independent‖ directors also reflect the interests of direct
competitors: e.g. CBS, the new name for Westinghouse Electric now officially part of

Viacom and Verizon, as a Baby Bell, linked with AT&T. By this time DirecTV owned
Panamsat. Soon after Panamsat went bankrupt. On 20 August 2004, a 4.1 billion
acquisition gave Kohlberg Kravis Roberts & Co a 44% stake and the Carlyle Group a 27%
stake in Panamsat.387 Eutelsat has not gone bankrupt as such but it has become a private
firm. Its nine member board includes two senior partners from the American Equity firm,
Lehman Brothers.

Hence, five years after the bankruptcy an interesting pattern emerges. Although Boeing had
stated that it was leaving the commercial satellite field (while quietly juggling for the spy
satellite market) and while Lockheed had stated that they were leaving the telecom sector,
their arrangements with Teledesic continued. In retrospect, it is not very surprising that
major aviation and space companies remain interested in satellites and communication.
Notable, however, is the rise of private equity firms in this field. Projects with hundreds of
billions of dollars largely from public funds are being taken over by small groups of firms
and individuals.

         Related Equity Firms

We noted that Carlyle played an important part in the satellite acquisitions. But they were
by no means alone. In the case of Panamsat, Carlyle worked directly with KKR and ―split‖
the results 27% and 44% respectively. There are other firms with whom Carlyle has done a
number of acquisitions. A number of these appear at events such as The 2004 European
Private Equity Funds Conference in New York. Once again, we are not interested in
exhaustive lists. Rather our concern is to draw attention to some significant trends and

A first matter of interest is the scale of these activities, KKR, founded in 1977, claims that
―The total financing raised by KKR (including the $18 billion of equity) for management
buyouts and other investments exceeds $118 billion.‖ Cinven which, like KKR was
founded in 1977, has focused on larger European buyouts which entailed transactions ―in
excess of 23 billion euros.‖388 Cinven is active in Europe with Gores.389 In the past two
years Cinven has become very active in the media field390 (cf. below under Vivendi). On 1
november 2004, there was a discrete announcement of a merger between
Apax/Cinven/World Directories.391

The Blackstone Group entails transactions of over $80 billion. The official website of the
Carlyle describes it as ―one of the world‘s largest private equity firms, with more than
$18.4 billion under management.‖ Candover made investments of 25 billion euros. Apax
has invested over 12 billion euros. This includes 39 media companies of which 9 were in
the US and 30 were in Europe. These investments extended to some 379 companies
―around the world at all stages of development‖392 in six major sectors: IT, Media,
Telecoms, Healthcare, Financial Services, Retail and Consumer. Thomas H. Lee manages
$14 billion; CVC Capital Manages $9 billion; Terra Firma manages $4.7 billion;
Providence a modest $2.8 billion; Oak Hill $1.6 billion, Platinum Equity founded by Tom
Gores is valued at $1.4 billion, his brother (Alec) Gores Technology a ‗mere‖ $400 million.

Apax                                 Candover, Taylor & Francis
Blackstone                           CVC
Carlyle                              Apax, Cinven, KRR
Cinven                               Candover
KRR                                  Axel Springer
Lehman Private Equity                J.P. Morgan
Providence Equity                    Thomas H. Lee; Warburg Pincus

Figure 5. Examples of equity firms and their partners in major bids

A second interesting phenomenon is that these equity firms typically partner with each
other or some other major corporation in order to make bids as consortia (figure 5). In rare
cases as in the bids to take over the bankrupt Adelphia Communications major
corporations, such as AT&T and Warner are planning to compete with other equity firms
(e.g. Thomas H. Lee Partners; Providence Equity Partners; and Kohlberg Kravis Roberts
(KRR). In most cases, however, the equity firms appear to play the role of go-betweens.

A third noteworthy point is that the large banks also have their own private equity funds,
with considerable funds as we learn form their websites. For instance Goldman Sachs
managed ―$11 billion aggregate capital commitments as of September 2002.‖ The Lehman
Brothers Private Equity has a ―total committed capital of approximately $9.5 billion.‖ JP
Morgan has ―over $19 billion under management.‖ Together the investments of the equity
firms mentioned in the previous three paragraphs amount to over $350 billion. By way of
comparison it is instructive to note that in 2003 the Gross National Product (GNP) of
Switzerland, ranked as number 17 of the world‘s richest countries, was 309.465 billion.393
Given that the equity firms have links with the highest echelons of government, the leading
corporations and the major banks, they are potentially poised to wield enormous power.

         Private Equity and New Media
The major equity firms make no secret of their interest in (new) media, telecoms and
information technology (IT). As we have noted firms such as Carlyle and Cinven have
specific departments devoted to these sectors. The site of the Blackstone Group tells us that
it ―has partnered with leading corporations around the world, including AOL Time Warner
(Six Flags transaction), AT&T (Bresnan transaction), Northrop Grumman, Sony, Union
Carbide, Union Pacific (CNW transaction), USX, and Vivendi.‖394 There is considerable
reason for concern, however, when we realize that these same firms have been in the thick
of the enormous deals associated with the bust and the telecom bubble burst. A
brief look at five examples will serve to make this clear.
In January 1998, Cinven acquired IPC from Reed International for 1.376395 billion euros:
       At the time of acquisition, IPC, the leading publisher of consumer magazines in the
       UK, published 67 titles in 26 market sectors including women's weeklies, home
       interest, fashion and TV weeklies. Its subsequent merger with LH Media, another
       Cinven investment, in October of the same year, added 26 specialist consumer
       magazines in 8 market sectors.396

In 2001, Cinven sold IPC Media to AOL for $1.67 billion.397 This signified a gain of
approximately $300 million over the original purchase price. In 2003, when AOL-Time
Warner recorded a $54.24 billion quarterly loss, the board decided to remove the AOL
name and to sell Time Warner‘s music business. EMI Group Plc made a bid and lost. On 20
November, 2003, a private equity consortium bid $2.55 billion. The offer included
provisions for Time Warner to retain a 20 per cent stake in the business.398 The consortium
included Edgar Bronfman, Jr. Thomas H. Lee Partners, Bain Capital and Providence Equity
Partners.399 On March 2 2004 Time Warner sold to Warner Music Group (including its
record labels Warner Brothers, Atlantic, Elektra and music publishing division Warner
Chappell) to this consortium for $2.6 billion in cash.400 On 18 July 2003, Time Warner
finalized deal to sell its music distribution arm WEA (CD and DVD manufacturing division
to Cinram International for approximately $1 billion.401
At the time there were plans for a merger between Warner Music and Bertelsmann. Instead
Bertelsmann‘s BMG group merged with Sony, a move that was approved by the European
Commission in July 2004, by which time there were strong rumors that ―Warner Music
(12%) and EMI (13%) will have to merge to keep up with the new conglomerate and
Universal Music Group (23%).‖402

Vivendi-Universal was one of the world‘s largest media firms with investments in many
sectors. In 2002 it spun off its engineering and services arm as Veolia Environment which
had revenues of €30.079 billion (57% from outside France). In June 2002, Vivendi sold its
business and health publishing arms, Aporia and Medimedia for 523 million euros to a
consortium led by Cinven resulting in Cinven 37.5%, Carlyle 28%, Vivendi Universal 25%
and Apax Partners 9.5%.403 In October 2002, Vivendi sold its US publishing business
(Houghton Mifflin) to the Blackstone Equity group for 1.7 billion euros.404 As noted earlier (§ 3),
in October 2003, Vivendi Universal and GE formed NBC Universal: 80% owned by GE,
20% by Vivendi. In addition to music and theme parks Vivendi held 26.8 million shares in
Time-Warner). GE claims they paid $18 billion. Some claim $7 billion.405

One might have imagined that the Vivendi saga might have ended there but this was not the
case. On 11 August, 2004 there was a discrete note that Cinven and the Altice One Group
(Luxembourg) were in exclusive talks to buy Vivendi‘s cable television rights, namely,
Canal+ in conjunction with France Telecom for about 500 million euros.406 This was hardly
the whole story. The idea had been floated on 19 March in an article with the innocent title:
―Canal Plus, France Telecom cable divisions to merge,‖ The headline explained that the companies
―want a new majority shareholder in the operation, with Canal Plus and France Telecom
each retaining a 20 per cent share. ― The article pointed out that ― Together, the two units
have 1.7m subscribers, with connections to 4.3m households and sales of around €400m for
2003.‖ It casually added that ―Liberty Media, whose international division,
UnitedGlobalCom, offered €660m for Noos, the country‘s largest cable operator, a few
days ago, is thought by analysts to be a likely purchaser of the new operation.‖407

Attentive observers have pointed out that if no objections are made within a few months the
whole of the French cable television domain will be in foreign hands, and more specifically

those of John Malone of Liberty Media via United GlobalCom. It is hardly surprising to
find the man whom Al Gore called the Darth Varder of media trying to gobble sections of
European infrastructure as if this were another bit of the Wild West especially since, as we
have noted earlier, both he, and his henchman, Mark Schneider -- who is also the son of
Gene Schneider who founded Liberty Media-- have stated their aims so clearly. What is
highly troubling, however, is to find a London based equity firm playing a key role in
helping to achieve this American scheme, rather than protecting Europe‘s interests.

This is all the more important because it appears to be a part of a larger movement. On 10
April. 2002 ―Platinum Equity, LLC, a leading private buyout firm focused on acquiring and
growing technology companies, acquired the €1.5 billion (US$1.3 billion) European
operations of Alcatel's (Paris: CGEP.PA, NYSE: ALA) enterprise distribution and services
business.‖ The new firm will be called Nextira.408 Platinum‘s website reveals that the
company: ―has acquired more than 25 technology-driven companies and several billion
dollars of revenue from leading Fortune 500 Corporations including WorldCom, AT&T,
Viacom, Dow Jones & Company and IBM. Platinum has an established infrastructure in
North America, Europe, Asia and South America and a workforce of more than 10,000
employees serving tens of thousands of customers throughout the world.409 It would appear
that major corporations are using seemingly minor equity firms to acquire pieces of a
bigger puzzle which only they see, understand and increasingly control. Ultimately the
danger lies not so much in the Mark Schneiders (UnitedGlobalCom) or evenly the
supremely ambitious John Malones (Liberty Media) of this world. Individuals retire and
their companies often fade with them. The deeper danger lies with the great corporations
which will then buy their mini-empires and make them part of a scheme that undermines
the powers of free companies and free nations.

The Bavarian, Leo Kirch, developed one of the largest media empires in the world with
assets including TV rights to World Cup and other sports, ProSiebenSat 1 (Sat 1; Pro
Sieben, Kabel 1; N24 cable channels), DSF sports channel; Taurus Produktion (Film and
TV production units); Taurus Lizens and others (film and media rights); and Kirch Sport.
On 8 April, 2002, when the firm declared bankuptcy on 8 April, 2002, it marked
―Germany's biggest corporate collapse since World War II.‖410 The Kirch empire was so
complex that a full account of its holdings and their fate is beyond the scope of this essay.
Our concern, simply is to highlight how, as in the Vivendi case, the extent to which equity
firms, especially American equity firms played a role in the breakup of a media empire.
 A month after the bankruptcy announcement, on 10 May 2002 it was announced that
BayernLB ―would team up with Lehman Brothers and J.P. Morgan to purchase Kirch's 40-
percent holding in Axel Springer, a family controlled company that publishes Germany's
top selling newspaper Bild Zeitung.‖411 On 9 October, 2002, the Deutsche Bank old a stake
―of 10.4 % of the equity capital of Axel Springer Verlag AG to Mrs. Friede Springer.‖ This
reduced the stake of Deutsche Bank to below 30 per cent.412 Exactly on year later, on
October 9 2003, the American investment firm, Hellman & Friedman LLC ―signed a
definitive agreement to acquire a 19.4% stake in Axel Springer Verlag AG from Deutsche
Bank AG for €350 million. After the sale, Deutsche Bank will only hold 10% of Axel

Springer shares. This made the Amrerican firm the largest partner and as a result Axel
Springer, which produced the notorious BildZeitung, Germany‘s version of the Daily
Mirror moved into American hands.413 In this case it was two American equity firms that
set the process in motion. In 2003, Axel Springer agreed to sell Ullstein-Heyne-List book
publishing interests to Bertelsmann subsidiary Random House. This was another one of the
mainstays of the Kirch empire which became associated with an American name, albeit via
a German holding.

       Bertelsmann (Springer Verlag) and Kluwer
Bertelsmann is by any standards one of the greatest media conglomerates of the world.
Rumours that it was in financial difficulties and possibly a candidate for bankruptcy seem
absurd. In retrospect it is possible to recognize that there were ulterior motives this time
coming from two London based equity firms. The background to this attack came from an
unexpected quarter. The Dutch multinational, Kluwer Academic Publishers was a
successful publishing company. On 18 October 2002, Candover and Equity announced that
they had agreed in principle to acquire Kluwer for 500 million euros. In fact they each
agreed ―to invest E107.5m in the business, with senior debt and mezzanine facilities
arranged and underwritten by Barclays Capital.‖414
Next began attempts to acquire Bertelmann‘s Springer Verlag, a high level scientific
publisher – that had no relation at all with the Axel Springer/Bildzeitung debacle. Three
fronts emerged: 1) was led by former Springer CEO Jurgen Richter, and backed by the
venture capital (VC) firms Blackstone and CVC Capital Partners; 2) was a joint approach
by U.K. academic publisher Taylor & Francis and VC company Apax Partners and 3) was a
bid by Candover and Cinven. On 27 May 2003, Bertelsmann highly prestigious Springer
Verlag was sold to Candover and Cinven for €1.05 billion (about $1.23 billion).415 Thereby
two of the greatest names of academic publishing, which were not in a crisis state, moved
into the hands of two English private equity firms. In the process, Bertelsmann, Europe‘s
greatest media corporation, had lost a choice piece of its holdings even if, ultimately, it was
not shaken and perhaps not even stirred by the threats of its demise.

The case of the former empire of Conrad Black is very different, is undecided as of
November 2004, and yet it invites comparison with respect to the tactics being used. As
might be expected there were bidders for individual portions of the company. But again
there were two sets of partners interested in controlling the whole. A consortium of U.K.
private equity companies Candover and Apax Partners & Co. Ltd (APX.YY) put in a bid
for the papers. Reports said that:
       U.S. private-equity firm Kohlberg Kravis Roberts & Co. (KKR.XX) and German
       publishing company Axel Springer (SPR.XE) are interested in bidding for the
       whole of Hollinger, which also owns the Chicago Sun-Times and the Jerusalem
       Post. The company, which has its headquarters in Chicago, is currently trading at
       $18.44 a share, which values the company at $1.6 billion.416

There are many bankruptcies. Very important bankruptcies are rare. The presence of equity
firms at effectively all the grand bankruptcies of the past years, and their presence even at
intended bankruptcies points to something more than coincidence. Equity firms, especially
in the United States and the United Kingdom, are implicated in the so-called bust
and the telcom crisis. More precisely their focus on short term profits has undermined
confidence in the new media industries, which is all the more regrettable because from
another point of view these crises were imaginary or perhaps even deliberately planned.

10. Telco Pseudo-Crisis

The official story is so well known that it seems almost superfluous to state it once again.
All was well in the new media industries until 2000-2001 when there two great setbacks: 1)
the bust and 2) a crisis in the telecommunications and specifically the telephone
industry. Some link these events largely or even exclusively to the events of September 11,
2001 and the received wisdom is that since then Internet developments have been as shaky
as our safety has been jeopardized by terrorism.

There is almost universal consensus that the impact of these setbacks was huge. With
respect to the burst, according to the San Francisco Chronicle: ―the top 200
companies in the San Francisco Bay Area alone lost $409 billion in market value during
2002.‖417 Between 2001 and 2003, AOL-Time Warner lost $200 billion in market value.
The telecom debacle was depicted as even worse. In 2002, in the US alone: ―The telecom
and cable sectors produced $40.2 billion of defaults, or 70 per cent of the first-half total.‖418
In 2004, ―With over 60 bankruptcies to date, it's now clear that the sector sank under too
much capacity and debt. Telecoms have now shed half a million jobs and about $2 trillion
in market capitalization.‖419 Nor was this limited to the United States. For over a year it
seemed as if Deutsche Telekom, France Telecom, British Telecom, Telecom Italia, KPN,
indeed almost all the national telecoms were in imminent danger of bankruptcy. Some of
the greatest media conglomerates of the world, Vivendi, and Kirch were bankrupt within
months and even the titans, Bertelsmann, and now Murdoch have felt more than tremors.
Or so the story.


Some of these troubles arose from irregularities -- gone rampant some would add. In June
2001, Worldcom filed for bankruptcy with a $30 billion debt burden, amid allegations it hid
billions of dollars in expenses. Many lawsuits ensued.420 In May 2003, the Securities and
Exchange Commission Civil penalty of $1,510,000,000.421 By 8 August 2001 it was
reported that, the European arm of Worldcom, Worldcom International, and Global
Crossing UK were facing problems.422 Such irregularities have also occurred in a number
of other companies that went bankrupt including Enron, and Adelphia.

       New Companies

Meanwhile, there have been many new companies, some more favoured than others. speaks of three firms in particular as a telecom trinity: XO, ―controlled by
vulture investor, Carl Icahn; 360Networks Inc. supported by investor Wilbur Ross and

Level3 Communications, supported by Warren Buffett.423 We have already mentioned
Level 3 in passing earlier (§ 5). At this point it will be useful to outline in more detail the
history of this company to throw some light on other dimensions of the so-called telecom
bubble burst.

       Level 3 Communications

The company was founded in 1985 as Kiewit Diversified Group Inc. (KDG), a wholly-
owned subsidiary of Peter Kiewit Sons', Inc. (PKS), a 114-year-old construction, mining,
information services and communications company headquartered in Omaha, Nebraska.424
On 19 January 1998 KDG announced it was changing its name to Level 3
Communications, Inc. and on 31 March 1998 Level 3 became an independent corporation
traded on Nasdaq. The company had direct links with Warburg Pincus Co-President,
Joseph Landy.425 By 2000 money was not really a problem:

       Through the third quarter of this year, our capital expenditures have been $4.5
       billion. We expect to spend $6.3 billion on capital goods through the end of 2000.
       These figures both represent increases in the amounts we expected to spend at the
       beginning of the year. We have raised almost $14 billion and invested in people,
       network infrastructure and operational capability very different from those of our
       competitors. Important parts of our US, European, Asian and undersea
       infrastructure will be completed in the very near term, on or ahead of schedule.426

An announcement on 26 April 2001 by XO made it clear that it was working with Level 3.
XO stared that it would ―reduce capital spending by roughly $2 billion over the next five
years by canceling its European buildout and delaying expansion and activation of parts of
its U.S. fiber-optic network. In addition, the company will take payments made to Level 3
Communications related to its European network and apply them to amounts due Level 3
for XO's North American networks.‖427 On 22 July 2001, Warren Buffet invested $ 100
million personally and his partners invested $400 million in level 3428

Meanwhile, Viatel, an American company founded in 1991 had acquired a 7,700-route
kilometer pan-European fiber-optic network and a trans-Atlantic cable system. On 12 April
2000, Level 3 Communications and Viatel made an agreement to collaborate on the trans-
atlantic system.429 In May 2001, Viatel made use of chapter 11 bankruptcy protection in
2001 as it struggled with debts of $2.1bn. On 23 August, 2001 Level 3 Communications
acquired the transatlantic network assets of Viatel.430 On 10 September 2001 ―Level 3
Communications Inc. bought back transatlantic network it sold to bankrupt carrier Viatel
last year. Level 3 released Viatel from its $9-million debt; Viatel will pay Level 3 $500,000
for a one year lease of two 2.5-gigabit wavelengths for existing customers. Level 3 will
retain cash payments it has already received from Viatel, including $94 million paid at the
end of 2000. At the time of the original sale, Viatel's 25% stake in the network was valued
at over $150 million.‖431 On 14 September 2001, Level three received another $750 million
underwritten by Goldman, Sachs & Co. (in conjunction with Salomon Smith Barney Inc.;
Chase Securities Inc.; Credit Suisse First Boston Corporation; J. P. Morgan Securities Inc.
and Morgan Stanley & Co. Incorporated).432

Figure 5. Level 3 networks in 2004.433

Good connections with the financial world continued. On 17 December 2001, Level 3
announced ―that it has signed a 15-year lease agreement to provide data center space to
Lehman Brothers, the global investment banking firm.‖434

At Viatel, Lucy Woods, who had been the head of Worldcom International, went on to
become the new head. Meanwhile, creditors swapped their loans for 97% of the company's
shares and on 10 February, 2002, four investors including Morgan Stanley raised $60 to
keep the firm afloat.435 On 2 March 2002, Viatel was bankrupt. Level 3 acquired the whole
Viatel network (figure 5).

In 1969, the year that the American Internet began, a small firm with strong ties to the
military called BBN (Bolt, Beranek, and Newman) was also founded. BBN helped to build
the original Internet, invented the e-mail protocol and "@" symbol, and in 1971, sent the
world's first e-mail message.436 It was subsequently taken over by Verizon, then dumped,
changed its name to Genuity, went bankrupt and was then acquired by Level 3 in February
2003 (although the intention was announced on 27 October 2002), Level 3 acquired
Genuity for $242 million.437 Since then Genuity has expanded and owns Software
Spectrum, ―one of the world‘s largest resellers of business software‖ and Structure LLC, ―a

leading IT infrastructure outsourcing company.‖ On 18 October 2004, Level 3
Communications announced that it had ―signed a five-year, $337 million deal to provide
Northrop Grumman with IP VPN services. This deal stems from a contract that Northrop
Grumman signed with the U.S. Department of Homeland Security earlier this year.‖438

The success story of Level 3 raises more questions than it answers. On the surface, Level
3‘s venture into Europe via Viatel which was linked with WorldCom International could
have been a co-incidence. It could be entirely independent of John Malone, Gene Schneider
(père) and Mark Schneider (fils), who see Europe as another version of the Wild West, and
have been acquiring infrastructures by buying Noos and Canal+ France. It could also be
independent of Platinum Equity‘s acquisition of Alcatel‘s network. There is reason to
believe, however, that they might all be connected for at least three reasons.

First, Warren Buffett, who supports Level 3 has also recommended United GlobalCom as a
worthwhile stock.439 So he must be aware of their basic plans. Significantly he has not
invested in them directly. Second, Warren Buffett, in addition to leading a team to invest
$500 million in Level3, ―now owns 879,000 shares of Level3 (LVLT), as well as 1.6
million shares of fellow broadband network WilTel (WTEL).440

To appreciate the third reason we need to return for a moment to the investment history of
Platinum Equity. In 1998, Platinum ―bought the networking operations of Racal
Electronics, on which Racal had lost $300 million the previous year. [Tom] Gores paid
$12.5 million in cash for the business, giving Racal a ten-year note for the $35 million
balance of the purchase price. Under Gores the Racal sub became Milgo Solutions….
Milgo built up its service business, advising clients before they built their data and voice
networks, as well as servicing those systems when they were up and running.‖441 As we
noted earlier Platinum Technology also bought Williams Communications three weeks
before it announced bankruptcy. Platinum then combined Milgo and Williams (which was
soon renamed Wiltel) to form Nextira:. As we learn from Platinum‘s website:

       ―Nextira competes head-on with Equant, a publicly traded company being acquired
       by France Telecom. Equant has $1.6 billion in sales, $350 million in debt and $111
       million in losses over the last 12 months. Equant's market cap: $5 billion.‖ 442

Warren Buffett thus had good reason to recommend UnitedGlobalCom. It represented
essentially the same vision as his own: to insist that the and the telecom meltdown
were very serious; to drive down prices of some key players; to buy these and then to enter
the European market using these as back doors. This support of GlobalWorldCom also
served as a convenient distraction for investors. Meanwhile, he himself invested in both
Level 3 and in Wiltel, while it seemed to be only a bankrupt telco, and before the outside
world realized that in its new form as Nextira it would be able to start competing with
France Telecom. To make this a reality required undermining the French giant‘s
infrastructure. Here Platinum‘s acquisition of Alcatel‘s French network was one ingredient.
UnitedGlobalCom‘s acquisition of Noos and Canal + was a second ingredient and his
―own‖ Level‘s 3‘s acquisition of the Viatel (WorldCom) legacy constituted a third
ingredient. A small group of individuals must have seen this plan. Else why would they

have invested in bankrupt ugly ducklings just months before they emerged as beautiful

On reflection it becomes clear that much more was involved than having or not having
money. One of KKR‘s competitor‘s in New York Forstmann Little led by Ted Forstmann.
Since 1978, Forstmann Little has bought eighteen companies, including General
Instruments443 and computer-magazine empire Ziff-Davis (1994), for $1.4 billion.444 In
January 2000, Forstmann Little invested approximately $1.5 billion in XO
Communications. In April 2001, Forstmann Little invested an additional $250 million in
XO. Each of these investments included funds that Connecticut had committed to the two
Forstmann Little partnerships. Both McLeod and XO subsequently filed for bankruptcy
protection, effectively wiping out Forstmann Little‘s equity investments. 445 OX, originally
supported by Craig McCaw and subsequently under the aegis of Carl Icahn, also had plans
in Europe, which it ―voluntarily‖ abandoned. Hence although OX has been dubbed one of
the telecom trinity it clearly was not part of the vision that supported Level 3.

Similarly, Viatel had real networks in Europe but after its initial financial troubles had
difficulties raising $60 million at a time while its competitor had raised over $14 billion.
One would almost be tempted to think that the whole dot telecom meltdown was a
diversionary tactic: paint an overly rosy picture, get people to invest billions; have a
handful of persons sell at the right moment and gain billions; get everyone worried about
the economy and meanwhile use the confusion to make inroads protected by legal
frameworks. To aid this programme one spreads the word that monopolies are bad; that
they competition is the way forward and thus one allows small firms with unfamiliar names
to make inroads. Conveniently, the head of Europe Online, the charming daughter of an
American General, has championed this view for ears. Viewed from this perspective the
seeming tragic collapses of Worldcom, Global Crossing, Cable and Wireless, and the silent
takeover of Vodafone were all little pieces of a conscious puzzle.

Level 3 then took over both Viatel and Genuity, BBN (Bolt, Baranek and Newman) in its
new form and within a year that firm also was again thriving.

       Ignorance or Distraction?

       World Scene

As a result of the above, there should have been a world wide slump in both the Internet
and the telecommunications industries. According to the statistics of the International
Telecommuncations Union (IYU) this was not the case. Between 1989 and 1999, the
Internet grew from 100,000 users to over 100 million. Between 2000 and 2004 the Internet
grew from 100 million to 800 million. Between 1991 and 2003 the telecommunications
industry grew from $523 billion annually to $1.37 trillion annually. The mobile Markey
grew from a mere 16 million in 1991 to 1.329 billion in 2003. There was no slump. There
was only growth.

Year          1991    1992      1993     1994   1995   1996    1997     1998     1999        2000 2001 2002          2000
Services      403     448       470      517    596    672     712      767      854         920    968     1'020    1'070
Equipment     120     132       135      158    183    213     234      248      269         290    264     275      300

  Total       523     580       605      675    779    885     946      1'015    1'123       1'210 1'232 1'295 1'370

Main telephone lines (millions)                               546     572     604      643     689        738     792       846   905   983   1'053   1'129
Mobile cellular subscribers (millions)                        16      23        34      56         91     145     215       318   490   740    955    1'155
International telephone traffic minutes (billions)5           38      43        49      57         63     71        79       89   100   118    127     135
Personal computers (millions)                                 130     155      175     200     235        275     325       375   435   500    555     615
Internet users (millions)                                     4.4     7.0       10      21         40     74      117       183   277   399    502     580

Figure 6a. Growth of the telecom industry from 1991-2003 and b) related statistics
according to the ITU (International Telecommunications Union).446

Meanwhile, the world is changing. A decade ago the G7 seemed a comfortable club and
there were polite discussions whether Russia should be included as an additional member to
form a G8. Today, in terms of GDP, six of the original members hold their place, China is
number 7; Spain is 8, Canada is 9 and Russia is 16. For the past years China has had the
largest telephone company in the world. It has produced more than 500 milllion mobile
telephones .

Rather it is a quest to understand and provide answers for two sets of problems and
questions. Is the so-called Internet ra paradox

11. Financial

It was noted that American telcos such as AT&T are linked with carrier equipment
companies, computer companies, content holders and home entertainment companies
through a nexus of connections to achieve a uni-lingual, uni-cultural vision, which entails
trillions of dollars. These are clearly enormous stakes. It is important to recognize,
however, that there are two further dimensions which involve even larger stakes, namely, a)
consultancy, accountancy, auditing, banking, insurance and b) energy. As will be shown,
these entail a second vision, which threatens to jeopardize the first, is closely linked with
the political events of the day, and is potentially a danger for the future of civilization.

 Accountancy Firm                          Company                                                1999 income
1. Andersen (Accenture)                    Enron, Qwest                                Merrill Lynch447 16.2

2. Deloitte & Touche       Adelphia448                                        10.8
3. Ernst and Young         Cedant, Computer Associates Intl.                  12.5
4. KPMG                    Xerox                                              12.2
5. Price Waterhouse (now IBM)                        Allied Irish Banks       17.5
Total                                                                         69.00

Figure 7. The Big Five Accountancy Firms in 2002, companies concerning which they are
being investigated for malpractice and related banks.449

Connections between the two visions are not immediately obvious. The first vision is about
communications through the telcos, especially via the Internet and implications for
education and e-learning. When telcos expand they need investment. When they engage in
takeovers, mergers or bankruptcies they invariably require the advice of consultancy firms,
which are typically also accountancy and auditing firms and they require the support of the
bank and insurance companies.

In the past decades there has been a great consolidation in these consultancy firms such that
one spoke of the big five (now the big 4): Andersen (Accenture); Deloitte & Touche; Ernst
and Young; KPMG and Price Waterhouse Coopers (now IBM). As might be expected these
have been closely involved with telcos, computers and the Internet. They have also been
involved directly in irregularities concerning accounting. Andersen is linked with Qwest
concerning discrepancies; Deloitte and Touche with Adelphia;450 Ernst and Young with
Computer Associates International and KPMG with Xerox. All of the big five are now
being examined for irregularities and questionable practices.451 Though conflict of interest
within the Big 5 has in part stemmed from ‗in house‘ temptations, recent revelations are
less neutral than they might at first sight appear.

In 1999, the combined earnings of the big five amounted to some $69 billion (figure 7). 452
In 2003, these have become the big 4, (with consulting branches, cf. Accenture, Bearing
Point, Deloitte Consulting and CapGeminiErnst and Young), with earnings of some $62
billion.453 From a global viewpoint these are modest sums of money. Striking, however, is
how the activities of the major consulting/ accountancy/auditing firms extend far beyond
bookkeeping. We noted, for instance, that PriceWaterhouseCoopers was one of the
competitors of SAIC in winning a $543 million military contract for e-learning. It is
important to recognize also that the irregularities of the big five extend beyond telcos and
media firms to other fields.

For instance, there are similar irregularities in the pharmaceutical field: a $1 billion error
with Bristol Myers Squibb and a $12.4 billion error with Merck. 454 If this applies equally to
other key investment areas such as biotechnology and nano-technology then the game is
much bigger than it at first appears.455

Even more disturbing is the government itself. On the surface the cases of companies
overcharging the government are in the millions. For instance on 13 March 2001 Lockheed
Martin agreed to pay back $10.5 million in an overcharge case. 456 On 27 August 2003
Lockheed Martin agreed to pay back the air force $37.9 million.457 On 9 June 2003
Northrop agreed to pay back $111 million in an overcharge case. 458 The top 100 false

claims settlements since 1986 amount to $12 billion.459 In the year 2000, the ―the federal
government could not account for $1.3 trillion at the Department of Defense (DoD), as well
as hundreds of billions of dollars at other government departments and agencies.‖460 Some
claim that these sums are much higher: that there are over $6 trillion missing.461

The telco crisis and problems with the Internet are part of something much larger. The 201
mergers in US insurance companies in the first nine months of 2001 is another indication of
major change as is the trend for traditionally solid mutual companies such as John Hancock
to convert to publicly held stock companies.462

Meanwhile, consulting companies such as Andersen in their new guise as Accenture are
engaged in providing visions of e-government.463 There have even been cases where
consulting firms, which have audited government accounts, have claimed that these were
no longer open to regular auditing checks, thus raising to a new level the age-old problem
of who inspects the inspectors. There is a growing sense that the law applies to everyday
citizens but that high politics and high finance are above the law (cf. section 16).


These problems extend to and also implicate other financial institutions (e.g. insurance
companies and banks) in the whole process. For instance, in the case of Enron, in addition
to Andersen, at least eight US banks are directly implicated: 1) JP Morgan Chase; 2)
Citigroup; 3) Merrill Lynch; 4) CSFB; 5) Lehman Brothers; 6) Bank of America; 7) Vinson
& Elkins and 8) Kirkland & Ellis.464 Serious evidence that Citigroup‘s Salomon Smith
Barney and Grubman deliberately misled investors and profited therefrom has been
discussed in the news.465 Enron, is a particularly complex case. Companies such as Level 3,
linked with Verizon (and Verisign) had close connections with Enron as did SAIC, via

As with consulting firms there have been many mergers such as Citi Bank and Travelers. 466
To make matters worse there is a nexus of links between telcos (e.g. Qwest), carriers
(Global Crossing), energy companies (Enron), accountancy firms (Andersen), investment
firms (Carlyle Group).467 One example is Gemplus, one of the leading companies on smart
cards specifically with respect to mobile access to Internet. Gemplus, which has the Texas
Pacific Group as chief investor, appointed Alex Mandl to a leading position but omitted to
report that he had also been working for the CIA.468 Mandl was also a director of
Viasystems,469 a ―leading worldwide independent provider of electronics manufacturing
services, or EMS, primarily in the telecommunications and networking industries.‖

Another example of the complexities involved is Cambridge Display Technologies (CDT),
a British firm, which received investments from Esther Dyson and was subsequently
bought up by Hillman Capital Corp. Gerald Paul Hillman, managing director of that
company wrote about President Musharraf on September 11 2001. 470 He is also a member
of the Defense Policy Board, which advises the secretary of defense of the United States.

Such links between high finance and military interests are evident elsewhere. For instance,
Marsh Inc. Now claims to be the largest re- insurance company in the world.471 In 2001,

Paul Bremer left his position with Kissinger Associates to become the chief executive of
the Crisis Consulting Practice of Marsh. He has since been appointed as the US ―governor‖
of Iraq.472 Some claim that this is mainly to assure the interests of companies such as
Halliburton and groups such as Carlyle.473

Reports of irregularities throughout this system point to a crisis in consulting, bookkeeping,
accountancy, auditing, investing, consulting, banking, insurance, indeed the entire financial
infrastructure. The deeper crisis is ultimately one of integrity and trust.

12. Other Sectors

The pipelines of communication in the telco and computer field are becoming inextricably
linked with the pipelines of energy. The largest computers in the world (Sandia, Los
Alamos, Lawrence Livermore), are supported by the Department of Energy (DOE). Oil, gas
and other energy sources are fueling the new frontiers of communications in more senses
than one.474 In this context nanotechnology is something much more than a general trend
towards miniaturization. It is part of a conscious plan to control the future of production
especially in the domain of energy.

Rather than accepting that the US depends on other countries for oil, there is a belief that it
can simply ―go in‖475 and arrange the destiny of other nations in the name of fighting
terrorism. Indeed there is a growing sense that America believes that its laws apply globally
and that others‘ laws leave America unaffected.476 Those who agree with America are
allies. Those who disagree are potentially enemies.

In the James Bond film the World is Not Enough, the plot involved a competing Russian
and American oil pipeline. In the film, the US pipeline won the day. In real life, the Russian
pipeline exists and the American one is unfinished. Meanwhile a gas pipeline from
Turkmenistan through Afghanistan was planned by Bridas (now BP Amoco) and then
found competition by Unocal from Texas.477 In this context SAIC‘s increasing interest in
BP may also be more than a co-incidence.478 So one of the overt reasons for the war on
terrorism is to permit oil and gas pipelines to work. A more covert reason is to gain control
of the world‘s energy sources. In 2003, the Yukos Oil Company was valued by U.S.
investors at $40 billion. In 26 November 2004, CNN reported that it was now worth $3
billion and explicitly suggested that it could be run from abroad since its daily operations
have already been outsourced to companies such as Schlumberger and Carlyle.

In light of the bankruptcies in the media field it is almost easy to see the pattern. Insist
publicly that a valuable asset is really worthless and then buy up that asset to make
priceless profits. By coincidence, Yukos is also being privatized. One can almost predict
that there will be buyers with American interests in the audience.

         A Bigger Picture

The war in terrorism in Afghanistan entails other curious paradoxes. By ousting the Taliban
(who were supported by the CIA479), the US has re-instated Afghanistan as the producer of
70% of the world‘s heroine production and as such has increased the sources for the

funding of terrorism.480 We are told about the need for free discourse. Ironically, the
National Science Foundation (NSF) is now sponsoring a Virtual Agora Project via
Carnegie Mellon University ―to develop and test software that would enable large numbers
of citizens to use the Internet more effectively to learn about, deliberate and act upon
community issues.‖481 The same NSF is involved in the kinds of technologies that point to
a future sketched in films such as Minority Report.

Meanwhile, the communications media are directing our attention elsewhere. They tell us
of a new corporate fraud bill in Congress and of an office for global communication to
enhance the US image. They tell us about accountancy problems in a few hundreds of
millions (Enron, Qwest) or bankruptcies of $10-50 billion here and there. They say little of
an ever expanding military budget in which, as we have seen, over 40 billion dollars of
taxpayers money are being used to redesign the Internet to meet the needs of the secret
services rather than the everyday user.

The so-called economic slump and potential crisis is not about media firms or telephone
companies. It entails the key accountancy firms, the banks and it involves energy. The new
great game is about media, investment and energy. Or as the insightful Shaykh Dr.
Abdalqadir as-Sufi has noted:

       …Consider groupings of power barons divided into three camps: Commodities (of
       which the primary is oil), Finance, and Media. These are the imperialist forces and
       national governments have no greater importance than their role as focal command
       points. This can be clearly observed in the current tragedy where the issue is
       uniquely petrol, and the role of the media is to underline it as a military response to
       a terrorist outrage, while the end result is to hand over a country to the bankers in a
       world where Aid is itself a militant form of invasion.482

Yet, for all the importance of oil, finance and media, the true crisis lies elsewhere: not so
much with material goods or companies, but with the problem of trust and integrity. This
crise de conscience from the country of reality checks threatens to affect the future of the
world. As George Soros noted recently:

       Foreign capital is fleeing the United States in the wake of as yet not fully realized
       scandals that will according to Fox News on July 6, take an estimated $600 billion
       out of the U.S. stock market this year. One of the many smoke alarms triggered by
       this is the fact that the US economy needs an estimated 1.5 trillion per year in new
       foreign investment to remain solvent.483

The media are still full of discussions about the symbolic event on 11 September, 2001.484
There is little discussion about the possibility that the US government had prior
knowledge485 and that it possibly welcomed the event.486 There were attempts to link this
event with a number of anthrax487 incidents (attacks) until it became clear that the source
was a military lab (probably in the US) and that recipients such as Senator Tom Daschle488
were at odds with the government in power.

A war on terrorists was launched. According to the rhetoric, the enemy entails terrorists,
who are assumed to be foreign. But like the American cartoon figure, Pogo, there is a
growing realization that: ―We have come upon the enemy and we are they.‖ The enemy is
not outside but within. And like the war on drugs, there are attempts to fight with weapons
and flag waving what are ultimately matters of the spirit and the soul.

The world still looks to the US and Europe as champions of democracy and of universal
rights of the majority.489 By its own actions the US is in danger of destroying its own
credibility and others‘ faith in America. In the past, any intimation that a politician had lied
typically forced them to resign. Today presidents and prime ministers are being accused of
lying on multiple fronts and yet they do not consider resignation. At stake is much more
than the future of the Internet, corporate shakeouts or even the future of free business. At
stake is the future of democracy, freedom and the continuity of civilized life.490 Ultimately
there is something much more important than enormous sums of money, namely, the really
important things that money cannot buy.

13. Law and Trust

These developments entail another fundamental dimension that requires closer attention. At
least since the time of Moses, there has been a close link in Western culture between
civilization and law. Plato‘s Laws was one of his most important books. Rome‘s empire
evolved with an assumption that no individual was above the law. In the course of the
centuries, Europe has seen the rise of alternative legal systems, notably the French
(Napoleonic) and the Anglo-Saxon (cf. Teutonic and Celt) codes. Even so the basic idea of
law as supreme has remained paramount. These assumptions lie at the basis of national law,
transnational law, international law and of the World Court in The Hague.

The re-emergence of a might is right491 attitude, which recalls the semi-lawless days of the
Wild West, is apparent in subtle forms in television programmes such as Knight Rider and
Airwolf where individuals, claiming to work for the right, take the law into their own hands
and sometimes blatantly destroy and kill without regard for local authorities and
jurisdictions. A recent study at Harvard suggests that countries with the most money make
the most progress and hence implies that might might be right.492

When such maverick actions become part of national policy as witnessed by events in
Afghanistan and Iraq, the implicit assumption is that certain key individuals and indeed
whole nations are or pretend to be above the law. This is an international phenomenon as is
witnessed by recent actions of Silvio Berlusconi.493 The US trend is, however, the more
remarkable and worrying because it undermines much more than the habits of a single
country. It tries captured soldiers on a base in Guantanamo Bay as enemy combatants to
circumvent the Geneva Convention re: prisoners of war and to avoid constitutional rights
which those individuals would have if tried on US soil. It puts pressure on Belgium to
abandon its internationally binding laws for those who commit acts against humanity or
refuses to be subject to the world court in The Hague. It goes further by blocking aid to the
35 countries, which have refused to guarantee US citizens abroad immunity from the
international laws of the world court.494 Implicitly the US claims to be above the law,
which is also the title of a Hollywood film (1988), a book by David Burnham (1996),495 a

television series (2000)496 and more recently a music CD. Explicit allegations of acting
above the law have been leveled at the President,497 the Vice-President,498 the US
Treasury,499 bounty hunters500 and extend to organizations such as

On 11 November 2004, the President of the United States nominated Alberto Gonzales to
become the next Attorney General of the United States. This legal counsel worked in Texas
for the legal firm, Vinson and Elkins, that defended the Enron Corporation‘s scandals. The
same man is said to have advised the President on means of circumventing the Geneva
Convention.502 If one of the chief legal figures of the country undermines the basis of law
and decency, this a threat to more than law and decency.

In this context, the economic crisis of the past few years is something much more profound
than another dip in the ever fluctuating markets which led from a dot.boom to a dot.bust.
The losses in financial terms are linked with a crisis in trust, honesty and integrity, whereby
the primary institutions of capitalism are called into question: banks, insurance companies,
consultancy firms and even the legal profession. If we call into question the basis of trust
and law, then we call into doubt the future of civilization.503

14. Conclusions

As with all important developments, there are many myths and stories concerning the
Internet. One myth states that the United States invented the Internet. Another story claims
that telcos had almost nothing to do with the early history and development of the Internet.
This essay has offered evidence to show that the story is considerably more complex on
both counts: 1) that the Internet began in the United Kingdom, and involved other countries
such as France from the outset; 2) that telcos have played a central role in the evolution of
the Internet and continue to do so. It was shown that these links extend far beyond the
realms of telephony and Internet. They entail plans to control the field of naming and
extend to the realms of e-science, e-military and e-business as well as e-education and e-

It was noted that what began as the Arpanet and became the Internet is now at a crossroads
with three trends within the United States all heavily linked with the military, namely,
          1) ARPA‘s move towards an Interspace (figure 3a);
          2) NASA‘s move towards an Interplanetary Internet (figures 3b) and
          3) the Pentagon‘s trend towards a Total Information Awareness (TIA, figure 5)
              system, more recently an Internet for war.

         Six Trends

In all these developments, is it is possible to discern six important trends, before turning to
consider the very big picture. First, the telcos, computer companies and carrier equipment
companies at least in America are working together with new intensity, as if the carriers
were shutting out or taking over the roles played by the content owners and home
entertainment companies.

Second, it is striking also how computer companies (IBM, Compaq/HP, Sun, Microsoft)
and the carrier equipment companies (Cisco), have a disproportionate visible representation
in organisations such as IETF, ISOC and W3C. On closer inspection, telcos such as AT&T
also in their guise as Lucent and Telcordia, play a major role. John Klensin (ATT) was also
head of the IETF.504 Now, Leslie Daigle (Verisign) is head of IETF. Pipelines seem to be
triumphing over content and creativity.

Third, these links between telcos, computer companies and carrier equipment companies
are becoming ever more linked with accountancy firms, notably the big five. The
acquisition of PriceWaterhouseCoopers by IBM is merely the latest development in this

A fourth trend involves the bankruptcies. It is striking how many competitors of AT&T are
all going bankrupt or are supposedly on the verge thereof: British Telecom, Deutsche
Telecom, France Telecom, KPN Telecom, more recently MCI/Worldcom, Adelphia,
Winstar Communications, Williams Communications and Metromedia Networks, XO, the
ousting of Vodafone‘s head,506 with rumors about Qwest and Sprint?507 By co-incidence
Vodafone‘s competition for third generation (3G) networks in Britain is Hutchinson (linked
to AT&T). In 2004, Vodaphone with the help of UBS Warburg and Goldman Sachs
Internationa, bought AT&T‘s Japan telecom stake.508

The extent of the bankruptcies is not generally appreciated. In 2002 in the US alone: ―The
telecom and cable sectors produced US$40.2 billion of defaults, or 70 per cent of the first-
half total.‖509 In 2004, ―With over 60 bankruptcies to date, it's now clear that the sector
sank under too much capacity and debt. Telecoms have now shed half a million jobs and
about $2 trillion in market capitalization.‖510 The so-called burst of 2000-2001 is
related. ―According to the San Francisco Chronicle, the top 200 companies in the San
Francisco Bay Area alone lost $409 billion in market value during 2002.‖511

These bankruptcies are spreading to other players outside the inner club amongst carriers
(Global Crossing and rumors about Alcatel) and content holders (e.g. Kirch, Vivendi/
Universal, and recent leadership changes at Bertelsmann)? It is instructive that industry
observers assure us that the string of bankruptcies, the shakeout, as they say in America, is
by no means over. For instance, in June 2002, Red Herring, commenting on the recent
demise of PSINet and 360Networks, reported that ―More should follow‘ and lead to ―A
massive wave of consolidation.512

In the meantime, as already noted, Williams is bankrupt and Level 3 has generously offered
to take it over. An article in Business Week helps us to understand some aspects of the
dimensions in play:

       Banks issued more than $320 billion in loans to the telecom industry between 1999
       and 2001…The trouble began after the Telecommunications Act of 1996, which
       started a $1.3 trillion avalanche of lending by investors and bankers eager to finance
       a host of upstarts that would supposedly take on Verizon Communications (VZ ),
       AT&T (T), and other established carriers.513

A fifth point is how relatively little media coverage there is concerning this trillion dollar
game and how much attention is focused on the shakeouts in the media which are relatively
small games of $20-100 billion? Meanwhile, there are major developments about which we
hear very little: How many are aware that the combined corporate and consumer debt in the
US rose from 5 to over 12 trillion dollars in the 12 years from 1989 to 2001? 514

Sixth, it is surprising to note that military contracts play a serious role in the survival of
what is theoretically a public telecommunications company. In the 1960s, the hippies used
to complain of the dangers of the military/industrial complex.515 Most of us assume that
these fears are as outdated as the hippies themselves. Yet there is serious evidence to the
contrary. SAIC/Telcordia, have become major telco players while at the same time entering
into $25 billion contracts with the military (Appendix 6).

Although the Internet has grown from c. 200 million to over 800 million users (a majority
outside the US) in the past four years, it is striking that decisions concerning these three
directions are being made without consulting ordinary citizens in the USA itself let alone
the rest of the world.

In the realm of telcos, four major players in the United States were discussed. It was shown
that: 1) AT&T has been active in development of the Internet; 2) that MCI/Worldcom was
equally active until its ―bankruptcy‖ in June 2002; 3) the Baby Bells and especially Verizon
continue to have links with AT&T and remain active in the Internet; 4) Bellcore (Bell
Communications Laboratories) in its new guise as Telcordia under Science Applications
International Corporation (SAIC) also plays a significant role in these developments. From
this emerges a larger picture whereby AT&T, its Baby Bells and its former laboratories
(BellCore, Lucent) remain closely related. The Chairman of Telcordia, Michael J. Desch, is
also the chairman of Airspan Wireless.516

It was suggested that this mainly invisible connection between the parts helps to explain
why AT&T‘s greatest rival, Worldcom, suddenly went ―bankrupt‖517 and why Worldcom‘s
prospective $3.5 billion contract went to the Baby Bells, while its customer base was taken
over by Verizon (Bell Atlantic, a former Baby Bell in a new guise). This could also help to
explain why competitors such as Adelphia, Winstar Communications, Williams
Communications, Metromedia Networks, and XO, are now bankrupt, while others such as
Sprint have faced bankruptcy. Some are tempted to link this emerging pattern with
bankruptcies in fixed wireless.518

It was claimed that while the news media focus our attention on accountancy problems and
the bankruptcy of the week, we are in danger of being distracted. Such events have their
significance: they affect hundreds and sometimes thousands of jobs. But we are also in
world of six billion persons. In a world where the global markets entail well more than one
trillion dollars in transactions daily it is vital that we look to a much bigger picture.

On the surface, this bigger picture entails irregularities in investment via both the consult-
ing/accountancy firms, banks and insurance companies, which are posing problems. It was
shown that these irregularities extend far beyond the realm of individual media companies

or telcos. They include all the major areas of investment including pharmaceuticals, nano-
technology519 and energy. At a deeper level, the big picture is about other things.

At a material level, there is an attempt to control the markets as a means of gaining control
of energy. At first sight this is about making war on countries such as Iraq, and controlling
their oil. This boosts the military industry. In the process, one destroys much of the
architectural and other infrastructure, which thus boosts the building industry especially
when one controls who gets the contracts. But this goes far beyond the interests of big
industry or even what General Eisenhower once called the military industrial complex:
where those who govern are also those to decide on trends; where military actions are
intertwined with business and investment; where they decide on the future of whole
countries without attention to the many innocent civilian lives that are killed in the process
and where everyone who is worried by that picture is observed as if they were terrorists.

This small group acts as if their own rules were more important than the combined wisdom
of three millennia of legal frameworks. Amidst a rhetoric of governance, they ignore all the
rules of governments and legal bodies and bide only by their own decisions. Some would
conclude that there is serious evidence that the highest levels of an elected government in
tandem with the secret services and the military are working on agendas contrary to the
public interests of those who elected them. Some would argue that this small group
manifests itself in the White House, Congress, in large corporations, in the Internet Society
and ICANN. Others would argue that the influence of this small group this has spread
much more widely. Still others would argue that the small group influences an enormous
number of not so small groups, large groups and even the fates of billions.

In any case, at a non-material level this is leading to a crisis in trust, and a potential crisis in
concepts of democracy and freedom everywhere. At this level, the crisis is one of faith, in a
secular520 sense of basic honesty and integrity, which are a basis of law and ordered society.
If we are not careful there may no longer be a world within which to build our open and
sustainable structures. The big picture is ultimately about there being a future picture. That
picture must offer equality of access to information and knowledge for all, guaranteeing
their integrity and free circulation. There is a challenge for the older civilizations such as
Europe and Asia to show the way to a more balanced future.

Maastricht 01 12 2004


This essay has grown slowly over the past three years. I am grateful to a number of
individuals who have kindly read this paper and suggested improvements and references
among whom: Nik Baerten, John Beckers, Hans Koolmees, Dominic Pinto, Chris Zielinski
and the alias David Evans. I am particularly grateful to Jonathan Robin who read several
versions of the paper, provided several references and improvements. I thank also a number
of others whose discretion leaves them not named directly.

Appendix 1: Forbes Statistics about the top telecommunications companies of the
World 1997- 2004.

rank   company                            country            industry               revenues ($mil)
9      Nippon Telegraph & Telephone       Japan              telecommunications     78,321
31     Deutsche Telekom AG                Germany            telecommunications     41,916
70     STET-Soc Finanziaria Telefonica    Italy              telecommunications     26,263
78     British Telecommunications         UK                 telecommunications     23,695
95     BCE                                Canada             telecommunications     20,658
138    Telefonica                         Spain              telecommunications     15,838
192    TELEBRAS-                          Brazil             telecommunications     12,426
198    KPN-Royal PTT Nederlands NV        Netherlands        telecommunications     12,163
254    Cable & Wireless                   UK                 telecommunications     9,599
278    DDI                                Japan              telecommunications     9,024
348    Telefonos de Mexico                --                 telecommunications     6,935

rank   company                            country              industry              revenues ($mil)
9      Nippon Telegraph & Telephone       Japan                telecommunications    77,019
35     Deutsche Telekom AG                Germany              telecommunications    38,956
64     France Telecom                     France               telecommunications    26,853
73     British Telecommunications         United Kingdom       telecommunications    25,671
76     Telecom Italia S,p,A.              Italy                telecommunications    25,140
81     BCE                                Canada               telecommunications    23,971
88     Mannesmann Group                   Germany              telecommunications    22,546
125    Telefonica                         Spain                telecommunications    16,140
137    Royal KPN NV                       Netherlands          telecommunications    15,285
148    TELEBRAS                           Brazil               telecommunications    14,661
212    Cable & Wireless                   United Kingdom       telecommunications    11,491
252    DDI                                Japan                telecommunications    9,604
320    Telifonos de Mtxico                --                   telecommunications    7,673
524    Tele Danmark AS                    --                   telecommunications    4,624
618    Olivetti Group                     Italy                telecommunications    3,882
645    SK Telecom                         South Korea          telecommunications    3,692
691    Japan Telecom                      Japan                telecommunications    3,356
723    Singapore Telecommunications Ltd   --                   telecommunications    3,191
742    Portugal Telecom                   --                   telecommunications    3,083
753    Telefonica de Argentina            --                   telecommunications    2,997
755    Hellenic Telecommunication Org     --                   telecommunications    2,976
759    Kokusai Denshin Denwa              Japan                telecommunications    2,974

       industry                            revenues ($mil)
11     Nippon Telegraph & Telephone        Japan                  telecommunications        75,997
35     Deutsche Telekom AG                 Germany                telecommunications        39,701

66     British Telecommunications           United Kingdom       telecommunications          28,030
69     France Telecom                       France               telecommunications          27,405
75     Telecom Italia S.P.A.                Italy                telecommunications          26,186
85     Alcatel                              France               telecommunications          23,637
98     Mannesmann Group                     Germany              telecommunications          21,190
105    Telefonica                           Spain                telecommunications          19,452
110    BCE                                  Canada               telecommunications          18,507
178    Cable & Wireless                     United Kingdom       telecommunications          13,135
210    Telstra Corporation Ltd              Australia            telecommunications          11,452
245    DDI                                  Japan                telecommunications          9,737
269    Telefonos de Mexico                  --                   telecommunications          8,564
280    Royal KPN NV                         Netherlands          telecommunications          8,308
324    Korea Telecom                        --                   telecommunications          7,261
329    Swisscom AG                          Switzerland          telecommunications          7,215
423    Vodafone Group Plc                   United Kingdom       telecommunications          5,555
455    Tele Danmark Group                   --                   telecommunications          5,072
523    Tele Norte Leste Participacoes       Brazil               telecommunications          4,445
568    Olivetti Group                       Italy                telecommunications          4,139
662    Embratel Participacoes SA            Brazil               telecommunications          3,447
665    Telefonica de Argentina              --                   telecommunications          3,436
675    China Telecom                        --                   telecommunications          3,401
677    Teleglobe                            Canada               telecommunications          3,389
688    Japan Telecom                        Japan                telecommunications          3,344

rank   company                     country          industry   revenues ($mil)   enterprise multiple
8      Nippon Tel & Tel            Japan            telecom    97,658            7
48     Deutsche Telekom            Germany          telecom    35,859            18
64     British Telecom             United Kingdom   telecom    29,566            12
66     Olivetti Group              Italy            telecom    28,517            --
70     France Telecom              France           telecom    27,532            17
90     Alcatel                     France           telecom    23,276            23
91     Telefonica                  Spain            telecom    23,209            9
160    DDI                         Japan            telecom    14,300            13
200    Vodafone AirTouch           United Kingdom   telecom    12,438            --
232    Telstra                     Australia        telecom    11,023            10
248    Korea Telecom               South Korea      telecom    10,365            8
250    Telefonos de Mexico         Mexico           telecom    10,232            7
262    Cable & Wireless            United Kingdom   telecom    9,831             21
264    BCE                         Canada           telecom    9,648             6
284    Royal KPN                   Netherlands      telecom    9,232             15
362    Swisscom                    Switzerland      telecom    7,049             10
446    Kdd                         Japan            telecom    5,597             --
479    Tele Danmark                Denmark          telecom    5,195             11
506    China Telecom               China            telecom    4,970             38
573    Japan Telecom               Japan            telecom    4,395             38
622    Telus                       Canada           telecom    3,986             4

655    SK Telecom                   South Korea         telecom   3,768                36
713    Telefonica de Argentina      Argentina           telecom   3,401                6
718    Tele Norte Leste             Brazil              telecom   3,376                6
719    Hellenic Telecom             Greece              telecom   3,364                9

rank   company                country             industry           revenues ($mil)    enterprise multiple
9      Nippon Tel & Tel       Japan               telecom services   103,276            6
52     Deutsche Telekom       Germany             telecom services   37,718             16
69     France Telecom         France              telecom services   31,025             12
72     British Telecom        United Kingdom      telecom services   30,214             25
83     Olivetti Group         Italy               telecom services   27,746             5
92     Telefonica             Spain               telecom services   26,244             10
197    Japan Telecom          Japan               telecom services   13,259             9
214    BCE                    Canada              telecom services   12,184             8
222    Korea Telecom          South Korea         telecom services   11,970             6
232    Telstra                Australia           telecom services   11,708             9
254    Telefonos de Mexico    Mexico              telecom services   10,833             5
262    Cable & Wireless       United Kingdom      telecom services   10,509             9
283    Royal KPN              Netherlands         telecom services   9,724              6
331    Swisscom               Switzerland         telecom services   8,345              8
441    Telia Group            Sweden              telecom services   5,901              15
474    TDC Group              Denmark             telecom services   5,512              7

rank   company                   country          industry           revenues ($mil)    enterprise multiple
8      Nippon Tel & Tel          Japan            telecom services   93,360             5
41     Deutsche Telekom          Germany          telecom services   43,229             7
51     France Telecom            France           telecom services   38,502             8
76     Olivetti Group            Italy            telecom services   28,649             5
80     Telefonica                Spain            telecom services   27,787             8
84     BT Group                  United Kingdom   telecom services   26,409             9
178    BCE                       Canada           telecom services   14,018             7
188    Japan Telecom             Japan            telecom services   13,619             7
209    KT                        South Korea      telecom services   12,351             5
228    Carso Global Telecom      Mexico           telecom services   11,181             3
246    Royal KPN                 Netherlands      telecom services   10,500             8
249    Telstra                   Australia        telecom services   10,469             9
307    Swisscom                  Switzerland      telecom services   8,578              9
359    Cable & Wireless          United Kingdom   telecom services   7,369              14
416    TDC Group                 Denmark          telecom services   6,195              7
425    mmO2                      United Kingdom   telecom services   6,122              12
458    Telia Group               Sweden           telecom services   5,537              9
468    Chunghwa Telecom          Taiwan           telecom services   5,389              6

484 Portugal Telecom          Portugal         telecom services 5,124            8


                                                   Sales   Profits      Assets       Market   Value
Rank Name                          Country         Rank    Rank         Rank         Rank
11 Verizon Communications          United States   27      15           72           22
26 SBC Communications              United States   73      9            115          26
28 Nippon Tel & Tel                Japan           16      85           87           57
74 BellSouth                       United States   175     66           212          64
76     BT Group                                    127     35           238          129
162    BCE                         Canada          351     121          442          176
167    Sprint FON                  United States   295     64           432          311
168    Telstra                     Australia       421     96           503          85
185    China Telecom               China           490     89           435          241
206    KT                          South Korea     340     123          452          443
255    Alltel                      United States   559     199          619          255
285                                Singapore       741     244          572          247
296    Swisscom                    Switzerland     479     378          812          179
324    Chunghwa Telecom            Taiwan          821     155          740          274
363    Deutsche Telekom            Germany         51      --           94           49
376    France Telecom              France          65      --           111          56
403    Telefonica                  Spain           146     --           176          55
409    TDC Group                   Denmark         671     345          766          628
426    Carso Global Telecom        Mexico          374     626          608          869
427    Portugal Telecom            Portugal        794     538          736          411
439    AT&T                        United States   85      --           210          245
452    Olivetti Group              Italy           122     --           142          346
548    Royal KPN                   Netherlands     399     --           406          212
568    Qwest Communications        United States   277     --           345          520
586    OTE                         Greece          936     526          992          752

  Lawrence Lessig, ―Innovation, Regulation, and the Internet,‖ The American Prospect,
Issue Date: 0.0.00.
  See: John Naughton, A Brief History
of the Future: From Radio Days to Internet Years in a Lifetime, New York: Overlook
Press, 2001.
  Robert Cannon, ―FCC and the Internet. Thirty Five Years of Unregulation,‖ INET 2002,
Arlington, June 2002.
  If one thinks in terms of the seven layers of the International Standards Organisation
(OSI/ISO) then the telcos focussed on layers 1 and 2 with some activities in layers 3-4,
whereas the Internet community focussed on higher levels (5-7).
  See: Cf. Igor Faynberg and Hui-Lan Yu, ―Internet Telephony,‖
INET 2002 Tutorial, Arlington, VA, June 18 2002.
  Henry Kissinger, ―Now, back to defining a new world order,‖ International Herald
Tribune, 6 November 2004. See:
  Among the earliest pioneers of the Internet was a Frenchman, Louis Pouzin, who is:
          best known for his work as the inventor and advocate of "Datagrams", later
          extended and renamed connectionless communication, as the basic mode for the
          transmission of packets in a network. His ideas in this area paved the way for a
          new thread of thought on how to manage resources in networks, resulting in
          several major innovations, including today's ATM networks.
Pouzin introduced the Cyclades computer network project and was honoured with Jon
Postel as a joint winner of the 1997 SIGCOMM Award. Cf. Pouzin, Louis,ed., The
Cyclades Computer Network: Towards Layered Network Architectures, North Holland
Publishing Company, New York, 1982. This book is Volume 2 of a monograph series of
the international council for computer communications. For an Annotated Bibliography [re:
Cyclades Network].
esBibliography.htm. Cf. Louis Pouzin. Le "père" du réseau Cyclades, Autrans ‘98
Interviews, Autrans, 10/01/98 :
―Louis Pouzin…a été Directeur des Projets Pilotes à l'INRIA, où il a conçu et dirigé le
développement du réseau d'ordinateurs CYCLADES, comprenant le premier réseau de
commutation de datagrammes.‖
For Pouzin‘s recent work
   See: The Internet: Jesper Vissing
Laursen, Past, Present and Future - Internet & WWW History.
8 Peter T. Kirstein, ―Early Experiences with the ARPANET and INTERNET in the UK.‖

  Peter Kirstein, personal communication.
    Bruce Sterling, ―Short History of the Internet,‖ The Magazine of Fantasy and Science
Fiction, February 1993, Cornwall, CT, Science Column #5: "Internet."
   Dominic Pinto has kindly noted: ―it was the (wartime related ?) impetus in Bell Labs as
much as anything else which drove development of semi-conductors, by way of transistors,
and all the people involved in Colossus........ A lot out of PO labs at Dollis Hill, and
Tommy Flowers..Martlesham Labs inherited that legacy…. There's still a sense of not
invented here syndrome, and stuff has to be redone (as it was in the past) to meet BT
(formerly BPO) requirements. Prestel may have been a world first, and an antecedent for
graphic interfaces, if not hypertext, and there was considerable development of optical
switching and optical components, following on from the fiber optic research, exploited in
conjunction with duPont - but not on any sufficient scale.‖
   Vannevar Bush would seem to be related to the current president of the US.
   Cf. Norbert Wiener, The Human use of Human Beings, 1950. Reprint London: Eyre and
Spottiswoode, 1954. Reprint, New York: Da Capo, 1988 etc.
   Claude Shannon's ―A mathematical theory of communication'' was first published in two
parts in the July and October 1948 editions of the Bell System Technical Journal.
   John S. Quarterman, ―Revisionist Internet History,‖ Matrix News, 9(4), April 1999,
     See: In the 1990s he worked on a large chemical
information system, the CORE project, with Cornell, OCLC, ACS and CAS.
            See:         The       site is no longer available.
   In 1993, AT&T also acquired McCaw Cellular for $11.5 billion, to place it ―squarely in
the fast-growing cellular services market.‖
    See: .

         Lucent‘s 8 key internet products are:
         1. Bell Labs ICAP Client Library
         2. Bell Labs Internet Service Engine (ISE)
         3. Safe file transport tools for the Internet (Cget, Cput, and Stage)
         4. Lucent Personalized Web Assistant
         5. NSBD (Not-So-Bad Distribution)
         6. RMTP (Reliable Multicast Transport Protocol)
         7. Tardis
         8. VENUS (Virtual-circuit Enhanced Network Usage Simulator)
    Clay Shirky's Writings About the Internet, Economics and Culture, Media and
Community, Open Source: ATT and Cable Internet Access, 11/4/1999.
   Yukari Iwatani, Reed Stevenson, ―Une alliance avec AT&T renforce la stratégie mobile
de Microsoft,‖ Boursama, le 01, 08, 2002.
   Dean Takahashi, ―The Accelerator,‖ Red Herring, July 2002, pp. 37-40.
   The full story of AT&T is much more complex than this introductory sketch. It would
include how AT&T took over John Malone‘s TCI in 1999 or $54 billion, then disbanded it
in 2001 after which it became Liberty Media with the second largest number of shares in
Murdoch‘s Newscorp (18%), 4% in AOL and its hands in numerous German media
   Some see more difficulties with AT&T. Cf. Robert Metcalfe, The Unauthorized
   Biography of the Baby Bells & Info-Scandal, New Networks Institute, 1999.

   Some observers feel that this extends to positioning towards an Ipv6 environment and IP
everywhere – even though the U.S. appears playing a low profile game on this at present,
watching the Chinese watching the Japanese watching the European Union search for
sustainable development projects on the back of IPv6 as a priority.
   ―C. Michael Armstrong,‖ Business Week, 14 June 1997. See:
   For further speculation : John M. Higgins, What Does John Malone Want? Liberty
chairman‘s News Corp. ambition is anything but a takeover,‖ Broadcasting & Cable,
11/22/2004. See:
   Media One . See:
   Mike Ricciuti, ―AT&T, MediaOne merger a done deal,‖ CNET, Published:
June 15, 2000, 7:55 AM PDT.
   Media One . See:
   Media One . See:
   John Borland, ―Comcast, AT&T cable deal to create Net giant,‖, December
20, 2001, 2:30 PM PST. See:,+AT&T+cable+deal+to+create+Net+giant/2100-1033_3-
   ―AT&T, Comcast to pay $100M to settle suit,‖ Big News, Thursday 28th
October, 2004. See:
   Jennifer Jones and Martyn Williams, ―Proposed Comcast-AT&T Broadband deal may
herald trend.‖ Info World, July 9, 2001 8:30 am PT See:
           Under the proposal, Comcast would issue $44.5 billion worth of stock and assume $13.5
           billion of debt. This would value the deal at $58 billion, although the final value could be
           pushed higher with further acquisitions. Comcast said it is prepared to acquire AT&T's
           interests in Time Warner Entertainment, Cablevision, and Rainbow Media and would issue
           more stock and assume more debt.
    Michael Learmonth, ―Infoimaging. Comcast, Disney pact for kids net,‖ Forbes,
10.19.04, 11:22 AM ET, See:
   ―Why local access exists,‖ Medford Transcript, 23 November 2004.

        ―By contract they provide access on three separate channels: TV 3 (a non-profit
        operation), Channel 15 (educational access) and Channel 16 (governmental or
        municipal access).‖
   In 1982 the Control Video Corporation (CVC) set out to start the new GameLine. In
1984 BellSouth loaned CVC $5 million to try a home subscription service called
Cf. Since the historic merger of America Online and Time Warner two years ago, the
company's stock has declined 70 percent, wiping out some $200 billion in market value.
  Andrew Ross Sorkin, ―Firms Said to Explore a Giant Offer for Adelphia,‖ New York
Times, November 12, 2004. See:
   Ina Fried,―Microsoft braces for crucial TV test,‖ CNET, Monday, November 8
2004 12:02 PM. See:,39037051,39200338,00.htm
    Shelley Solheim , ―Cingular's Acquisition of AT&T Wireless OK'd,‖ - eWEEK, 1
November 2004. See:
   Colin C. Haley, “AT&T Expands News Corp. Deal,‖, July 14, 2003.
    Comcast Dream of Merging Media Comes into Focus, Red Nova, 21 November 2004,
INC. See:

Rank Overall Rank/Name                                              Country     Market Value ($Bil.)
1       1 MICROSOFT                                                 U.S.        $407.22
2       3 IBM                                                       U.S.        214.81
3       7 AT&T                                                      U.S.        186.14
4       8 INTEL                                                     U.S.        180.24
5       9 CISCO SYSTEMS                                             U.S.        174.09
6       13 NIPPON TELEGRAPH & TELEPHONE                             Japan       156.77
7       14 MCI WORLDCOM                                             U.S.        152.24
8       16 LUCENT TECHNOLOGIES                                      U.S.        150.34
9       20 AMERICA ONLINE                                           U.S.        129.07
10      23 DEUTSCHE TELEKOM                                         Germany     115.02
11      26 BRITISH TELECOM                                          Britain     107.14
12      27 NTT DOCOMO                                               Japan       106.14
13      31 SBC COMMUNICATIONS                                       U.S.        100.32
14      33 HEWLETT-PACKARD                                          U.S.        95.73
15      36 BELLSOUTH                                                U.S.        89.38
16      37 DELL COMPUTER                                            U.S.        87.34
17      38 NOKIA                                                    Finland     87.20
18      40 BELL ATLANTIC                                            U.S.        84.99
19      43 FRANCE TELECOM                                           France      79.93
20      49 AMERITECH                                                U.S.        72.33
21      58 TELECOM ITALIA                                           Italy       66.45
22      62 TELSTRA                                                  Australia   63.89
23      66 GTE                                                      U.S.        61.11
24      70 VODAFONE GROUP                                           Britain     58.97
25      71 AIRTOUCH COMMUNICATIONS                                  U.S.        57.80

   Verizon. See:
SBC .See:

Bell South. See:
Century Tel. See:
  ―Top cable companies mull joint Adelphia bid,‖ Buffalo Business First, September 28,
2004, See:
For Cox See:
Charter. See:
  Cf. another list from February 2004 by the Yankee group.

      1. Verizon Wireless: 37.5 mil, 24.3%
      2. Cingular Wireless: 24.0 mil, 15.6%
      3. AT&T Wireless: 22.0 mil, 14.2%
      4. Sprint : 20.4 mil, 13.2%
      5. T-Mobile: 13.1 mil, 8.5%
      6. Nextel : 12.3 mil, 8.0%
      7. Alltel: 7.9 mil, 5.1%
      8. U.S. Cellular: 4.4 mil, 2.9%
   Verizon. See:
SBC .See:
Bell South. See:
Century Tel. See:
Cf a website that specifically urges Alltell customers to go to Verizon Services. See:
   Forbes. See:
   Bob McIntyre, ―Firms Double-Dipping with State and Federal Tax Breaks,‖ New Jersey
Policy Perspective, 22 September 2004. See:
   Associated Press, ―Lucent to Receive $816 Million Tax Refund,‖ Wednesday November
10, 6:39 pm ET See:
  ―Ma Cable?,‖ Online Newshour, May 6 1999. See:
    IT Vibes. See:
    Denise Pappalardo and David Rohde, ―Cable & Wireless nabs MCI's 'Net backbone for
$625 million,‖ Network World Fusion, 6/1/98.
    Gores. See:
    IT Vibes. See:
    IT Vibes. See:
    For a further link with Deloitte see:
    Cable &Wireless. See:

   For an overview of some of the complex buyouts, cf. Telecom Chronicle Mergers and
acquisitions:1995 – 2001. See:
   MCI Wins $250 Million COVANET Contract, 26 November 2003. See:
    Ciaran Buckley, ―MCI upbeat despite $3.4bn loss,‖ Electric News, Published Friday 5th
November 2004 12:37 GMT. See:
    Grant Gross , ―Time Warner partners with MCI, Sprint on IP telephony,‖ IDG News
Service. 08 December 2003. See:
       Based on number of company-owned global PoPs.
      MCI. See:
Meanwhile, NYNEX Cablecomms merged Along with Bell Cablemedia, Mercury
Communications and Videotron to form Cable & Wireless Communications whose parent
company of Cable and Wireless owns 460,000 km of undersea fibre optic cable around the
world, making them the world's second largest owner of cable capacity.
   See: ?ID=gn_index.
Cable and Wireless is also one of the leading telcos in the world:
         John Pender was an ambitious entrepreneur whose enterprise and foresight led to
         the creation of the world's largest telecommunications network. In 1852, he invested
         in the Anglo-Irish Magnetic Telegraph Company, the first step in a life-long
         involvement with international telecommunications. In 1856, Pender became a
         director of the Atlantic Telegraph Company, and between 1864 and 1872 founded
         or co-founded four major companies: the Telegraph Construction and Maintenance
         Company, the Anglo-American Telegraph Company, the British Indian Submarine
         Telegraph Company, and the Eastern Telegraph Company, of which he was
         chairman until his death in 1896.
   See: ?ID=us_01_02
    This merger also entailed Nevada Bell, Cellular One, Tele-TV and Americast.
    US West merged its Media One Express with Time Warner‘s Road Runner. There was
also a US West Media Group and a US West New Vector Group.
    Justin Hyde, ―Verizon ventures into cable‘s turf with plans to sell video services,‖ USA
Today, 21 May 2004, p. 8A.
     ―SBC Offers IP-Based Advanced TV,‖ Teelcom Web, 13 November 2004. See:
    Jeff Clabaugh, “Qwest's accounting qualms trigger stock shock,‖ Washington Business
Journal, June 26, 2002.
For the connections with Andersen‘s accounting

    Level 3‘s shares rose quickly in June 2001 when the company signed ―an agreement
with Microsoft to provide broadband access for the software maker's MSN Internet
services.‖Melanie Austria Farmer, ―Microsoft deal boosts Level 3 shares,‖ CNET, June 26, 2001 2:55 PM.
There are also links between MSN and Verizon. These links with Microsoft are developing.
On 22 July 2002 it was announced that Level 3 would help power Xbox Live. David
Becker       ―Level    3    to     help    power      Xbox     Live,‖CNET
July 22, 2002, 12:05 PM PT, See:
In the past months Level 3 has also been buying companies such as (i)Structure, Corporate
Software and Software Spectrum Inc. Jim Wagner, ―Another Software Company for Level
3,‖ ISP, May 2, 2002.
In January 2002 when Williams Communcations was still a thriving company, Level 3 tried
to buy it. In April, Williams was bankrupt. In July 2002, Level 3 is again trying to buy
There are also links between Enron and Jeb Bush
 There are links between the Bush Family and Iran Contras
  There are also links between the Bush administration and Enron:
    The former is no longer extant and is now under
    The former is now under
    See: formerly
    Ibid. (+Ameritech+ Pacific Telesis).
    This merger also included Continental Television.
     See: 03-07-00%20Infrastructure.ppt. In 2003 Qwest
received a long-term $1 billion dollar loan from Merrill Lynch, Credit Suisse First Boston
and Deutsche Bank.
    ―Verizon, Level 3 Reported Among Global Crossing Bidders,‖ XCHANGE News,
Posted on: 05/09/2002.

    Walter Pincus and Christopher Lee, Dense Adviser Perle resigns, Washington Post
Staff                                                                          Writers
Thursday, March 27, 2003; 6:45 PM.
dyn/articles/A38829-2003Mar27.html. Mr Perle was also found to have made deals for post
war Iraq via a British intelligence contracting company.
  Cf. Patience Wait, ―WorldCom bankruptcy filing freezes DREN,‖ Washington
  Technology, By 07/22/02,
    Jeb Bush, the Governor of Florida, is also linked with Katherine Harris who played a
role in counting the votes concerning the election of his brother, George, with repect to the
presidency of the United States.
        Shane Harris, ―WorldCom loses multi-billion dollar FAA contract,‖,
   July 16, 2002.
    One reason for this, it is said, was to ensure that the DREN contract remained part of
   their assets.
     Worldcom bought its wireless services from ―the top four U.S. providers: Verizon
Wireless, Cingular Wireless, Redmond's AT&T Wireless Services Inc. and Sprint PCS
    See: There are many more such
connections. NCCW is the leading provider of business-class Web hosting to small and
medium businesses. Through companies such as NCCW, Level 3 is further connected to
connected Alliance partners such as Cisco, Compaq, Microsoft, Hewlett-Packard, Verizon,
and VeriSign and backbone partners including Sprint, Cable & Wireless, WorldCom,
McLeodUSA, Level 3, AT&T, and XO.
     ―Sarin to succeed Gent at Vodafone,‖ PMN, 19 December 2002.
    Press Release 8 October 2003. See:

     Cf. Emily Nelson et al., ―US Cable Giant Renews its European Offensive,‖ Wall Street
Journal Europe, vol. XX, no. 127, August 2-4 2002, p. 1. Re: Malone‘s Liberty Media. Cf.
    Cf. Intelsat renonce à la bourse et veut négocier son rachat,‖ Le Figaro, Paris, 24 May
2004, p. VI.
     Questions are being raised whether some of the sudden stock market drops and
subsequent buying at bargain prices have not been orchestrated.
   See: ?news=901144
    Pulver Com‘s Telecom Antitrust Intelligence Report. Broken Trust 1: BELL CEO‘s
   ―FISPA Warns ISPs About BOC Filings,‖ FISPA has joined the chorus of organizations
warning ISPs that petitions submitted by the Bells could permanently drive ISPs out of
broadband. by ISP-Planet Staff , [November 23, 2004]. See: http://isp-
    ―Verizon Wants to Compete for TV Subscribers,‖ Red Nova, 23 November 2004. See:
    See: which now contains only the second part of
this      quote      which      was     previously       available
    In 2000, SAIC acquired:
        a) Broadway & Seymour, Inc.'s financial services customer relationship
management business to improve ―processes and manage information;‖
        b) Boeing Information Services, to deal with systems integration in the aerospace
and military IT business
        c) assets and operations of the Automotive Network eXchange® (ANX®), …‖to
provide a secure, reliable, multi-provider virtual private network service for business-to-
business internetworking.‖ SAIC also initiated a joint venture with Rolls-Royce, called
Data Systems & Solutions, ―to provide integrated control and knowledge management
systems to energy, aerospace, and marine companies using gas turbines.‖
    Krista Wald, Peter Dobbin, ―Toshiba and Bellcore Team Up to Create the Future of
    Wireless Internet Communications,‖ February 17, 1999, New York, NY.

By co-incidence Toshiba, Sony and IBM also have an arrangement to produce Play Station
3 together.
     SAIC. See:
    See: http://www.pc-
     ―Warburg, Providence may buy Telcordia for $1.3 bln,‖ Reuters, Thu Nov 11, 2004
 01:18 PM ET. See:
    See: Concerning the privacy issues
raised by ENUM see: re: submission
    See: to the ACA
    See: expressing concerns that the ENUM protocol
    See: -
Cf. <> no longer available which
claims that ENUM does not seem capable of delivering adequate privacy protection for
telephone and Internet users. Cf. EFA's ENUM page
and other submissions
    See: in response to the ACA discussion paper, 7th
October 2002 Alert report.
    The site is no longer extant.
    It is instructive to note that the ENUM experiments in the UK entail among others,
Telcordia, Vodaphone, BT, ICB, MCI, Nominet (of which Verisign is a member), Neustar
and Afilias ―the first new registry operator selected by ICANN in November of 2000 to
launch a new registry system using a thick registry model based on the new EPP (extensible
provisioning protocol) standard.‖
Neustar and Afilias are under Domain Bank. Re: Nominet and Verisign:

     ―In anticipation of the stepping out of the US government from domain name policy, the
Council of Registers (CORE) was formed to register domain names. The Policy Oversight
Committee (POC) is an eleven-member committee formed by representatives from CORE,
IAB, IANA, WIPO, INTA, ISOC and ITU. The POC defines policy and oversees its policy
in implementation. These policies are developed in cooperation with the IANA.‖ In:
Democratic Structures in Cyberspace, 6.805-10.
     Written Statement of Ira C. Magaziner. Subcommittee On Basic Research, March 31,
1998. See:
 Elizabeth Wasserman,“The Internet After Ira Magaziner‖, The Industry Standard, Nov 16
    ―Doing a "whois" search by name would raise considerable privacy issues. That's why
the POC/CORE idea of aggregating it with all, other TLD data in one central database is so
frightening. Not to mention that the revenue value of being able to e-spam or telephone
solicit that community is enormous."
(7.01), pp. 1 – 8.
     From:        International DOI Foundation
     Sent:        Monday, July 29, 2002 16:12 PM
     Subject: Corbis and Content Directions partner to implement DOIs for images
     David Sidman, ―Digital Object Identifiers: Not Just for Publishers,‖ CMS Watch, 2002-
     See: ?feature_id=66
       See the author‘s ―Standard and Variant Names and Classifications: Cross-Cultural
Challenges for Europe in a Global Context,‖ European Association of Directory and
Database Publishers (EADP) Conference, Rey Juan Carlos Hotel, 19 September, 2002,
Barcelona 2002 (in press).

    Saba is also a leader in Human Capital Development and Management Solutions.
     This was available at but
is now in the archives of
    As in note 50 above:
PwC's was the lowest bid of the lot, according to sources. The contract is somewhat less
than the original $600 million earmarked by the Army for its Army University Access
Online program, which was announced in July. Analysts familiar with the deal report that
the Army elected to phase in only the degree program components of its original plan; still
unclear is whether or when other components including IT training will be awarded.
    THINQ. See:
   Blackboard Offers Bantu IM & Presence Platform As Building Block For e-Education
Suite. Enhancement Enables Blackboard 5.5 Customers To Add Real-Time
Communication And Collaboration. See:
    Carlyle. See:
    See: http://www.i- c0sx (Homepage).
B-WiN; G-WiN, Abilene, vBNS
    By Tim McDonald, ―EU To Block WorldCom/Sprint Merger,― E-Commerce Times,
June 21, 2000. See:
     Ian Foster, Carl Kesselman, eds., The Grid: Blueprint for a New Computing
Infrastructure, San Francisco: Morgan Kaufmann Publishers, 1999.
    See: One of the key persons in this organization is Don Riley
     Cf. who is also a proponent of the next
generation networks being developed by SAIC.
    Dr. David K. Kahaner, US Office of Naval Research Asia, reported on the development
in 1994.

people/199407/msg00046.html. It used to be available also at:
     See: under scenarios for 2025.
      According to Bruce Schatz we are moving from Arpanet and Internet towards
      IBM also has a software called Interspace.
     See: There is also a WorldNet Daily
     See: a WorldNet Television.
        Robyn Weisman, ―Can Cyber-Intelligence prevent Real-World Terrorism?,‖
NewsFactor Network, September 19, 2001.
      Syntek is also working with DARPA to create Peer to Peer applications which can be
extended to create virtual supercomputers and also fit into the vision of a data grid.
     Susan Breidenbach, ―Feature: Peer to Peer Potential,‖ Network World, 07/30/01,
Syntek has been involved with frigates for the Canadian and the Chilean navy, and has
taken over the construction of one of the largest oil rigs for South America.
On 9 May 2002 Syntek was bought by British Maritime Technology Limited (BMT),which
is also very active in software for the oil industry. New York dance club Madisons and
Syntek Technology Inc. in Arlington have joined not-for-profit organizations like the
Guggenheim Museum and The Associated Press in using .org addresses.
There is alos a Syntek Capital which deals with Media, Telecoms and IT Software.
      See: The first diagram has now been
replaced by the second on this site. The Electronic Privacy Information Centre (EPIC) has a
series of references to developments. See:
      See: Meanwhile Oliver North is writing
columns to support the idea of war in Iraq.
     See: It is striking that
another of the figures implicated in the Iran story is John Negroponte, (brother of MIT

Professor Nicholas Negroponte) who now is US Ambassador to the UN and active in Iraq
     See: For criticism cf: ―Military intelligence
system draws controversy‖,, Thursday, November 21, 2002 Posted: 8:26 AM
HKT (0026 GMT).
    See: This has since been
complemented by a new plan for a LifeLog system.
    See:,1294,58909,00.html. For recent criticism see:
Declan McCullagh, ―Senator presses Pentagon on spy plan,‖ CNET, June 24,
2003, 5:07 PM PT. See: Cf.
also the Talon initiative Brian McWilliams, ―DoD Logging Unverified Tips,‖ Wired News,
25 June 2003, at:,1283,59365,00.html. For other
recent developements which include lie detecting dogs see: ―Anti Terror agency Turns
Heads,            Wired           News,            24         June         2003,          at:,1283,59241,00.html. The most recent development
in this context is an Urban Surveillance System. Michael J Sniffen, ―U.S. Develops Urban
Surveillance System‖, Associated Press, Tuesday, July 1, 2003; 9:35 PM .
One of the reactions to TIA has been the Government Information Awareness Project.
    See: which also draws attention to related
    work such as: Open Secrets
                    Project Vote Smart
                    The Center for Public Integrity
                    Columbia Journalism Review
    Eliot Borin, ―Feds Open 'Total' Tech Spy System,‖ Wired News, 7 August 2002.
    This logo has since been abandoned.
His deputy is Dr Robert Popp.
    ―Civil liberties groups including the Electronic Frontier Foundation find the prospect of
such a system very worrisome without strict rules to prevent it from becoming a powerful
secret spy machine.‖ Cf. Wired News, 7 August 2002.
    Dan Rosenbaum, ―TIA Funding Snuffed, But…,‖ Over the edge, 24 January 2003.
Even so the trend continues. Cf. Bruce Schneier, ―Total Surveillance becoming Reality,‖
Special to ZDNet, January 30, 2004, 5:01 AM PT.

Cf. that author‘s recent book: ―Beyond Fear: Thinking Sensibly About Security in an
Uncertain World," New York: Copernicus Books, 2003.
      See: (2003-01-27 07:31:58.0 category: XML-SemanticWeb) # Comments [0]
TrackBackURL                                for                    this                  post:
     EFFector, Vol. 16, No. 4; February 7, 2003, as in note above.
    Association of Former Intelligence Officers (AIFO), Weekly Intelligence Notes #17-03,
3 May 2003. section III.
    ―Pentagon envisioning a costly Internet for war, New York Times, Published:
November 13, 2004, 5:19 AM
    ―Pentagon envisioning a costly Internet for war, New York Times, Published:
November 13, 2004, 5:19 AM
       See: Recently there have been times when it
appeared that those leading the discussions concerning the Internet were speaking of the
Internet as it was back in 1969 or during the 1970s or 1980s and to an extent this is no
surprise. Stephen Crocker, who helped write the original Arpanet code is now ICANN‘s
security chairman.
Important pioneers such as Robert Kahn, and Vint Cerf, who were there on day one, are
still very much in the center of action.
      Visionary Manufacturing Challenges for 2020, ed. Committee on Visionary
Manufacturing Challenges, Board on Manufacturing and Engineering Design; Commission
on Engineering and Technical Systems; National Research Council Washington: National
Academy Press, 1998.
    It is disturbing to realize that when the Internet Society had a chance to become formally
linked with certain international non-governmental organizations, or with the ICANN at
Large membership, the idea was rejected because the numbers of ISOC‘s standards based
and at the same time often US based membership could have been overshadowed by those
in other countries, and its role "potentially distorted".
In Salt Lake City in December 2001, the Internet Society's Board of Trustees "revamped"
itself from a democratically elected Board of 15 individual members, to a constituency
cooptation with no direct representation from membership, and de-chartered the Internet
Societal Task Force it had established early 1999. Some fear this may lead to

marginalisation of independent non-standard voices in the formulation of ISOC policies,
andsee a link between Verisign's .org divestiture, and ISOC's candidacy to run the .org
registry which recently received provisional official support.
    For an interesting analysis on the complexities of this development cf. Alvaro de
Miranda and Morten Kristiansen, Technological Determinism and Ideology: The European
Union and the Information Society, Public Agendas for Sustainable Technological
Innovation. 3rd POSTI Conference, London, 1-3 December 2000.
    See: I am grateful to Suzanne
keene for this reference.
    For a History of Universal Music See:
275 media profiles. American broadcasting company. See:
    Who Owns What. Time Warner Corporate Timeline. See:
    Who Owns What. General Electric Corporate Timeline. See:

         SBC was granted unanimous approval from the Federal Communications Commission to offer long distance service to
         business and residential customers in the two states last week, and is now authorized by the FCC to offer long distance
         service throughout all five SBC Southwestern Bell states. SBC is seeking approval to offer long-distance service in
         California and Nevada.
   Howard E. Janzen who stepped down from that position went on in May 2003 to
become President-Sprint Business Solutions at the Sprint Corporation.
   The Well Oiled Media., September 16, 2001 See:
   William D. Hartung, ―Making Money on Terrorism,‖ February 5, 2004. This article is
adapted from William D. Hartung'sHow Much Are You Making on the War, Daddy? A
Quick and Dirty Guide to War Profiteering in the Bush Administration (Nation Books).
    Washington Technology. See:
    Companies 1-10. 2. Northrop Grumman Corp.. Washington Technology, 05/07/01; Vol.
16 No. 3. See:
    John Moore ―Northrop makes deal with TRW,‖‗July 8, 2002.

    KKR. See:
See also:
    Bill Mundy, ―Trophy Property evaluation: A Ranch Case Study.‖ See:
    It is interesting to note that in the 1870s there was a John Malone and Company that
made large sums of money in helping open up that frontier in the West.
    Kathryn Harris, “Liberty Media's Aggressive Malone Isn't One to Cross - John Malone -
Brief Article,‖ Los Angeles Business Journal, August 20, 2001. See:
     These transactions were to give Liberty an economic interest in UnitedGlobalCom
ranging from 44 percent to 51 percent.
    UnitedGlobalCom has a 51% stake in United Pan-European Communications.
           The European operations are held through the 52.6 percent-owned United Pan-
           Europe Communications NY, which sold shares to the public in 1999.
   ―Mark Schneider: United Pan-European Communications,‖ BUSINESS WEEK E.BIZ --
SPECIAL REPORT – LEADERS, 7 February 2000. See:
      John Cassy ―UPC bankrupt,‖ The Guardian, Tuesday October 1, 2002.,3604,802216,00.html
    John Cassy ―UPC bankrupt,‖ The Guardian, Tuesday October 1, 2002.
    Sold to a new company formed by private equity firms The Carlyle Group and Welsh,
Carson, Anderson & Stowe. 7 billion. See:,%2020
   Relizon parent buys satellite operator, June 30, 2004. See:

PanAmSat, which is majority owned by DirecTV, would be acquired by Carlyle and
partners Providence Equity Partners and Kohlberg Kravis Roberts. KKR agreed to buy
PanAmSat from DirecTV in April. Under the terms of this transaction, KKR would hold a
44 percent stake in the company, with Carlyle and Providence each getting a 27 percent
stake. Carlyle is a privately held equity firm that bought the Information Solutions Group
from Reynolds and Reynolds Co. and recast it as Relizon Co. The Dayton-based company
supplies document management services, with 4,500 employees in the United States and
    See: Carlyle and Bain bought this from Onex
and Oaktree who acquired it after a financial crisis in 2001.
    Carlyle Group. See:

    ―9/11 Report, Bush-Bin Laden Money Connection, Carlyle Group,‖
    Dan Briody, The Iron Triangle: Inside the Secret World of the Carlyle Group, John
Wiley & Sons, 2003
      CMEPP. See:
    Lynn Landes, ―E-Voting. Voting machine fiasco: SAIC, VoteHere and Diebold
 . . . Scam to vet software?,‖ Online Journal, 20 August 2003. See:
    Lynn Landes, ―E-Voting. Voting machine fiasco: SAIC, VoteHere and Diebold
 . . . Scam to vet software?,‖ Online Journal, 20 August 2003. See:
    For a brief history see:
    On KKR: Connie Bruck, The Predators' Ball: The Inside Story of Drexel Burnham &
the Rise of the Junk Bond Raiders, New York: Penguin, 1989); Bryan Burrough, John
Helyar, Barbarians at the Gate: The Fall of RJR Nabisco, New York: HarperBusiness
1991; George Baker, George Smith, The New Financial Capitalists: Kohlberg Kravis
Roberts and the Creation of Corporate Value, Cambridge: Cambridge University Press
1998; George Anders, Merchants of Debt: KKR and the Mortgaging of American Business,
New York: Basic Books 1992; Sarah Bartlett, The Money Machine: How KKR
Manufactured Power & Profits, New York: Warner, 1991.
    Teledesic, July 9 1999. See:

     02 08 2002, "Old" Iridium (subsidiaries and affiliates of Motorola, Inc.) to Iridium
 Constellation LLC, Iridium Satellite LLC, and Iridium Carrier Services LLC
 (assignments out of bankruptcy). See:
    ―Globalstar, a Loral-backed company, says its finances are in order, having already
raised the $3.8 billion it needs for the development, construction, and deployment of its
    Loring Wirbel, ―Loral bankrupt, Boeing exits commercial satellites,‖ EE Times, July 16,
2003 (8:20 a.m. EST)
    Cf. note above and see:
         ―On July 15, 2003, Loral Space & Communications announced that it had reached
         an agreement to sell its six North American telecommunications satellites to Intelsat
         for up to $1.1 billion in cash. In conjunction with and as a precondition to this sale,
         Loral Space & Communications and certain of its subsidiaries filed voluntary
         petitions under Chapter 11 of the United States Bankruptcy Code (view press
         release). Since then, Loral Space & Communications has continued normal business
         operations and customer service, with the same management team and organization.
         The Intelsat transaction closed on March 17, 2004 and the company intends to
         reorganize around its remaining fleet of five satellites serving growing markets in
         South America.‖
    Anna Sulisz, Intelsat-Loral merge approved by FCC, Intelsat, 2004-02-12
20:10:49 Source: Intelsat. See:
    August 2004, Zeus Holdings Limited ("Zeus"), a company formed by a consortium of
funds advised by Apax Partners, Apollo Management, Madison Dearborn Partners and
Permira. At closing, Zeus. See:

    On January 16, 1997, Hughes Electronics defense operations (Hughes Aircraft)
announced a merger with Raytheon, creating a $21 Billion entity. The deal was completed
in the Fall of 1997
For more details on this complex proposed merger see:
Cf. also the connections with HEC holdings. See:
         There are two principal purposes of the Transactions. First, the Transactions are
         expected to better position the businesses of Hughes and EchoStar to compete in the
         multi-channel video programming distribution market and, overall, in the
         telecommunications industry. Second, the Transactions are expected to provide
         significant liquidity and value to GM and its common stockholders.
Relizon parent buys satellite operator, June 30, 2004. See:
PanAmSat, which is majority owned by DirecTV, would be acquired by Carlyle and
partners Providence Equity Partners and Kohlberg Kravis Roberts.
KKR agreed to buy PanAmSat from DirecTV in April. Under the terms of this transaction,
KKR would hold a 44 percent stake in the company, with Carlyle and Providence each
getting a 27 percent stake.
Carlyle is a privately held equity firm that bought the Information Solutions Group from
Reynolds and Reynolds Co. and recast it as Relizon Co. The Dayton-based company
supplies document management services, with 4,500 employees in the United States and
      Cinven. See:
          In January 2000 Rank named Cinven as its preferred bidder for the Odeon Cinema chain. At the
          time, Odeon had 470 screens at 75 UK locations. In February 2000 Rank Group sold the Odeon
          Cinemas chain to Cinven for £280m. Cinven merged the ABC Cinemas chain with the business.
          Odeon had 464 screens on 75 sites and ABC screens on 57. 36 cinemas were closed. In January
          2003 it was reported that Cinven was going to conduct a securitisation of Odeon Cinemas. In
          February 2003 it was reported that Cinven was selling Odeon Cinemas to WestLB for £450m. In
          March 2003 Cinven sold Odeon to WestLB-led consortium for £431m. At the time, the chain had
          600 screens at 97 sites. In addition to closing a lot of cinemas Cinven sold Odeon for £151 million
          more than the price for which they bought them three years earlier
    Apax. See:
    World Bank. GDP 2003. See:
    Blackstone. See:
    This was at a time when the euro was worth less than the dollar.

    Almeida Capital. Alt Assets. See:
    Leigh Phillips, ―Canal Plus, France Telecom cable divisions to merge,‖ DMEurope,
19/03/2004. See:
Why a very successful company with sales of 400 million a year should be worth only 500
million euros as not explained.
  ―Sale of Kirch's Springer stake near,‖ Europe, May 10, 2002 Posted: 6:27 AM
EDT (1027 GMT). See:
    „Deutsche Bank Reduces Stake in Axel Springer Verlag                Frankfurt am
Main―, 09.10.2002.                                           See:http://www.deutsche-
   ―Candover and Cinven team up to acquire Kluwer Academic Publishers for E600m,”
18/10/2002. European buy-out giants Candover and Cinven have agreed ‗in principle' to
acquire Kluwer Academic Publishers from Dutch multinational Wolters Kluwer for a total
enterprise value of E600m. See:

   Richard Poynder, “BertelsmannSpringer Is Sold to Private Equity Firms,‖
27 May 2003. See:
   Jack Grone and Marietta Cauchi, ―UK Buyers Submit Bids For Hollinger Intl's Telegraph Grp,
   Frank Levinson, “Reflections on the Day the Bubble Burst,‖ May 10 2003. Note: An
abbreviated version of this edition of Frank's News is being published in the July, 2003
issue of Fiberoptic Product News.
    Catherine Ong, ―US telcos, cable firms defaulting on bonds. Sector accounts for large
chunk of US$11.2b defaults in June: survey,‖ Business Times, 19 Jul 2002. See:
    Dennis K. Berman, ―Before Telecom Bubble Burst,
Some Insiders Sold Out Stakes‖, Wall Street Journal, 11 August 2002, See:

   Stephen Lawson, “Level 3 to buy bankrupt Genuity's assets,‖ IDG News
Service, 11/27/02. See:
      ―In brief: Level 3 inks $337 IP VPN deal,‖Network World, 10/18/04
          Buffett's buy of some common stock in WTEL, which we just wrote about two
          nights ago (saying that, even post-bankruptcy, WTEL's business model still looks
          challenging!), is particularly interesting, given that investment firm Leucadia (LUK)
          just made an offer to WTEL's board earlier today to acquire the rest of the firm it
          doesn't already own. It's likely not a coincidence that Buffett and LUK are turning
          up in WTEL together, as LUK is also a "deep value" holding company and has done
          some deals with BRK in the past.

    See: Firms such as EDS are in many Internet
activities particularly with respect to education.
    This was available at but since then the big five has
become the big 4. See:

    See: For a discussion that these are not a co-
incidence See:       ?printcontent=/aheadofthecurve/index.cfm
Dan Gillmor, ―Insiders want us to believe it's all just coincidence,‖ Mercury News
Technology, Posted on Tue, Jul. 30, 2002.
    Cf. Ien Cheng, ―Survivors who laughed all the way to the bank,‖ Financial Times, July
31, 2002, p. 7.
    Space War incorporating, WAR.WIRE, ―Lockheed Martin to
pay 38 million dollars for overbilling air force, 27 August 2003. See:
    August Cole, “Northrop in $111 million settlement,‖
Last Update: 4:49 PM ET Jun 9, 2003 .
      The top 100 false claim act settlements. See:
    Kelly Patricia O Meara, ―What Does It Take To Lose a Contract?‖The Liberty
Committee, Posted Feb. 25, 2001. See:
         That Dick Cheney's wife sits on Lockheed Martin's board of directors and that he
         and she personally profit from weapons contracts he initiates is evidence
         enough….Your position is that Lockheed Martin is just good at everything they do,
         and that's why they get so many government and corporate contracts, including the
         kind service of providing computer programs for the IRS accounting department
         which has over $2 trillion of public funds missing. There's also over $2 trillion
         missing from the Pentagon budget and the Housing and Urban Development budget
         - these three departments have contracts with the world's largest weapons
         manufacturer, and each department has over $2 trillion missing from its funds.‖
     For instance, Andersen, in its new guise as Accenture, has just produced a
comprehensive report on e-government.
ing.xml. Recently there have also been cases where the accountancy firms are auditing
government departments which they then claim to be exempt from further examination.
This is posing new challenges for the traditional question: who inspects the inspectors?
     Stephen Rosenbush and Heather Timmons, ―Inside the Telecom Game,‖ Business
Week, August 5-12 2002, pp. 64-70.
     See: For more stats concerning banks and
money companies

    See: Cf. the recent book by Dan Brody
on: The Iron Triangle: Inside the Secret World of the Carlyle Group. These connections
have continued in the 2003 Iraq war. Jamie Doward, ―'Ex-presidents club' gets fat on
conflict,‖ The Observer, 23 March 2003.
?news=938061. Here one of the interesting developments has been a move by Sagem. Cf.
―Sagem s'invite par surprise dans le capital de Gemplus,‖ Le Monde, Paris, 04.12.02 |
    This was at site Interestingly enough it is now to be found
under October 11:
     Meanwhile, in 2000, a European firm, Gerling Global was one of the six largest
insurance and re-insurance companies in the world. Two years later it is near bankrupt.
    For past examples see: Sheila McNutty,
―Chevron reports 80% fall in earnings,‖ Financial Times, 31 July 2002, p. 18.
See: ?story=20020801084928&afl=yahoo
Cf. Ahmed Rashid, Taliban: Militant Islam, Oil, and Fundamentalism in Central Asia
(Yale               UP,            2000).This           was           available           at: and is now available at
FLASH 36: Is US Arms Buildup In Response to Crisis in Saudi Arabia ? (8/3/02)
This link is no longer available:
edpkelly02080202aug02.story ?coll=orl-opinion-headlines
By: Lee Siu Hin, ―Oil Wars. Palestine, Iraq, Cuba and Venezuela - The Oil Connection.
The politics of the covert oil war in 2002.‖
Cf. ―Het nieuwe grote spel, De groene Amsterdamer, 6-10-2001.
    James Woolsey, Tenemos que demantelar el poder del arma petrolifera Saudi, El Pais, 3
August 2002, p. 4. FLASH 36: Is US Arms Buildup In Response to Crisis in Saudi Arabia?

    Michael Geist,‖ US extends its hegemony over the Net,‖ Toronto Star, 3 June 2003.
     Timeline of Competition between Unocal and Bridas for the Afghanistan Pipeline.
    "CIA worked in tandem with Pak to create Taliban" Times of India, 7 March 2001.
     See: Cf. ―The Taliban, CIA and
Oil.‖ World Press review Online, 18 October 2001.
    A related article at is no longer extant.
     Peter Dale Scott, Poppy Paradox - U.S. War in Afghanistan Boosts Terror Funds,
Pacific News Service, Aug 01, 2002.
    See: ?article_id=824.
    Shaykh Dr. Abdalqadir as-Sufi, ―Now it is Clear! A Ramadan Review.‖
Cf. The Kuffar move to the Endgame,
     See: and the Battle of the
Oil Barons.
       See: cited by Michel Bauwens in Global
Governance, July 2002.
    Some insist that the real story involves the US quest for oil.
    The following two references are no longer extant:
1) See:
2) See: ?msg_id=007uDJ
      See: There are many
unexplained aspects of the event. For instance, some claim that it was actually a military
missile rather than a passenger jet which hit the Pentagon.
―The attack on the World Trade Center gave Bush an excuse to launch an undeclared war
on Afghanistan, and possibly extend it to Iraq. Thus, it is not surprising that Bush and
Cheney both made calls to Senator Majority Leader Tom Daschle asking him to limit his
investigation of the WTC attack…. ( Jan.29).
Possibly they don't want Congress to ask why on Sept. 11 the National Command Authority
waited for 75 minutes before scrambling aircraft, even though it was known that four
simultaneous hijackings had occurred an event that has never happened in history. Or,
perhaps they do not want to examine reports of explosions at the base of the World Trade
Center buildings. Never before have buildings collapsed due to fire alone. Or perhaps they
don't wish to ask what happened to the five Israelis who were arrested in New Jersey
apparently celebrating the WTC collapse.‖

     Chris Mooney, The Secret War on Tom Daschle,‖ The American Prospect, Web
Exclusive: 7.2.01
    For an insightful view of how others are looking differently see: Kishore Mahburani,
Can Asians Think ? Understanding the Divide between East and West, Southrovalton,
Vermont: Steerforth Press, 2002.
    In 1976, after George Bush was appointed head of the CIA, at his confirmation hearings,
he is reported to have said: "I think we should tread very carefully on governments that are
constitutionally elected."
    Robert King, Ross Levine, ―Finance and Growth: Schumpeter Might Be Right,‖ The
Quarterly Journal of Economics, Volume 108, Issue 3, August 1993, pp. 717-37.
     Marco Travaglio e Peter Gomez, Berlusconi, Turin: Stampato in proprio ufficio
parlemantare dell On. Gianni Vattimo, 2003.
     Elisabeth Becker, ―U.S. suspends some military aid over international court,‖ The New
York Times, 2 July 2003.
     Above the Law: Secret Deals, Political Fixes and Other Misadventures of the U.S.
Department of Justice. New York: Scribner, 1996.

 Ironically, it is in the law
courts that so many American films, television series and especially soap operas are
centred: perhaps precisely because one believes the legal framework can be circumvented.
      See: This is an almost humorous
example. Less so is the book by Brian J. Karem, Above the Law, New York: Pinnacle
Books, 1999 which tells the story of Thomas Capano.
   The Gonzalez choice. The Barre Montpellier Times Argus, November 13, 2004
   Some, of course, would claim that all this needs to be seen in a wider context of
globalization. For instance, according to the theses of Michael Hardt and Antonio Negri's

         we have been living since 1989 in an imperial inside that recognizes no outside.
         This space is characterized by several tendencies: by a transition from discipline to
         control, by an increasing imperialization of work, by an internationalization of
         hegemonic politics through the G8states, transnational corporations and
         organizations such as the WTO, IMF or the World Bank.
Cited by the European institute for progressive cultural policies (eipcp), Vienna, 20 June
2003. [].
Others such as Fukayama have argued that we are entering the end of history and the
triumph of markets and liberal democracy. Along similar lines Kingworth has argued that
consumerism is leading to a clash of civilisations. Paul Kingsworth, ―The next clash of
civilizations?,‖ Open Democracy, 16 1 2002,
   Cf. Samuel Huntingdon set
out to counter Fukuyama‘s thesis claiming that the source of conflicts are not ideological or
economic, but cultural. Unfortunately, Huntingdon‘s crude maps of the world in terms of
the West and the rest either consciously distort or simply are unaware of many historical
and present complexities. Cf also Paul Thomson, Liberalism, contested communities and
the clash of civilizations, June 2002.
European discussions, especially in French with clear distinctions between (economic)
globalisation and (cultural) mondialisation deserve much more attention.
These are important discussions which will be studied at the new European University of
Culture (Strasbourg) and go far beyond the scope of this modest paper.
     Caroline Humer, “IBM to Buy Pricewaterhouse Consulting,‖ Yahoo News, Tue Jul 30,
8:15 PM ET. See:
     Sir Christopher Gent, ―Don‘t Shoot the Messenger,‖ The Guardian. Finance, August 3,
2002, p. 16.
    Scott Moritz, ―Cash Flow Worries Shadow Sprint,‖ The, 07.26.2002.
    Catherine Ong, ―US telcos, cable firms defaulting on bonds. Sector accounts for large
chunk of US$11.2b defaults in June: survey,‖ Business Times, 19 Jul 2002. See:

    Dennis K. Berman, ―Before Telecom Bubble Burst,
Some Insiders Sold Out Stakes‖, Wall Street Journal, 11 August 2002, See:
    Frank Levinson, “Reflections on the Day the Bubble Burst,‖ May 10 2003. Note: An
abbreviated version of this edition of Frank's News is being published in the July, 2003
issue of Fiberoptic Product News.
      See: It is
noteworthy that Verizon is mentioned as an established carrier in 1996 when in fact it was
not founded until 2000. Of course as a Baby Bell was an established carrier.
    This concept was introduced in a speech by Dwight Eisenhower in 1961.
     See: A Michael C. Desch is active in military
theory and international activities:
    See: . Interestingly enough
a Joseph Desch was director of Research at the NCR from 1938 onwards and was closely
linked with America‘s cryptography activities.
    SEC Chief Scorches WorldCom, WASHINGTON, July 2, 2002CBS
     See: Cf. Dan Briody,
―MEN Behaving Badly,‖ Red Herring, July 2002, pp. 43-45.
    These are also fields to which Jeremy Rifkin has drawn attention in books such as The
End of Work, The Age of Access and the Biotech Century.
    Traditionally this was linked with faith in the religious sense along with the other two
cardinal virtues of love and hope.


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