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Thursday, February 24, 2011

The word "Conspiracy Theory" was invented by CIA

Ripley's believe it or not ...

After the CIA released this document to its Media assets (CIA Press-titutes)
the word CONSPIRACY THEORY became part of the language.

Mark Crispin Miller did a TIME MAGAZINE and NEW YORK TIMES
"word search" and the word CONSPIRACY THEORY entered the scene just after
the following CIA Documents were released.

Mark Crispin Miller is professor of media studies at New York University and the author of the book:
Fooled Again, How the Right Stole the 2004 Elections.

Professor Miller explores conspiracies and the psyops campaign that discredits all talk--however accurate--of conspiracy. Talk delivered at the "How 9/11 Changed the World" conference in N.Y.C. on 9-12-2010.


Here is the documents...  for example page 6

CIA DOCUMENT #1035-960 RE:

Countering Criticism of the Warren Report

RIF#: 104-10404-10376   (01/04/67)   CIA#: RUSS HOLMES WORK FILE

released declassified 18 dec 1998 jfk chief 53 pages nosenko yuri

DATE 4 January 1967

"Moreover, there seems to be an increasing tendency to hint that President Johnson himself, as the one person who might be said to have benefited, was in some way responsible for the assassination."

CIA Memo to Media assets at CBS, ABC, NBC, New York Times, Item 2 CIA Document #1035-960 4 January 1967
Attachment 1

Attachment 2
Dispatch: Comments on RFK Assassination, Garrison Case; 19 July 1968

1. Our Concern. From the day of President Kennedy's assassination on, there has been speculation about the responsibility for his murder. Although this was stemmed for a time by the Warren Commission report, (which appeared at the end of September 1964), various writers have now had time to scan the Commission's published report and documents for new pretexts for questioning, and there has been a new wave of books and articles criticizing the Commission's findings. In most cases the critics have speculated as to the existence of some kind of conspiracy, and often they have implied that the Commission itself was involved. Presumably as a result of the increasing challenge to the Warren Commission's report, a public opinion poll recently indicated that 46% of the American public did not think that Oswald acted alone, while more than half of those polled thought that the Commission had left some questions unresolved. Doubtless polls abroad would show similar, or possibly more adverse results.

"Western European critics" see Kennedy's assassination as part of a subtle conspiracy attributable to "perhaps even (in rumors I have heard) Kennedy's successor [Johnson]." One Barbara Garson has made the same point in another way by her parody of Shakespeare's "Macbeth" entitled "MacBird," with what was obviously President Kennedy (Ken O Dune) in the role of Duncan, and President Johnson (MacBird) in the role of Macbeth.

2. This trend of opinion is a matter of concern to the U.S. government, including our organization. The members of the Warren Commission were naturally chosen for their integrity, experience and prominence. They represented both major parties, and they and their staff were deliberately drawn from all sections of the country. Just because of the standing of the Commissioners, efforts to impugn their rectitude and wisdom tend to cast doubt on the whole leader- ship of American society. Moreover, there seems to be an increasing tendency to hint that President Johnson himself, as the one person who might be said to have benefited, was in some way responsible for the assassination. Innuendo of such seriousness affects not only the individual concerned, but also the whole reputation of the American government. Our organization itself is directly involved: among other facts, we contributed information to the investigation. Conspiracy theories have frequently thrown suspicion on our organization, for example by falsely alleging that Lee Harvey Oswald worked for us. The aim of this dispatch is to provide material countering and discrediting the claims of the conspiracy theorists, so as to inhibit the circulation of such claims in other countries. Background information is supplied in a classified section and in a number of unclassified attachments.

3. Action. We do not recommend that discussion of the assassination question be initiated where it is not already taking place. Where discussion is active [business] addresses are requested:

    a. To discuss the publicity problem with [?] and friendly elite contacts (especially politicians and editors), pointing out that the Warren Commission made as thorough an investigation as humanly possible, that the charges of the critics are without serious foundation, and that further speculative discussion only plays into the hands of the opposition. Point out also that parts of the conspiracy talk appear to be deliberately generated by Communist propagandists. Urge them to use their influence to discourage unfounded and irresponsible speculation.

    b. To employ propaganda assets to [negate] and refute the attacks of the critics. Book reviews and feature articles are particularly appropriate for this purpose. The unclassified attachments to this guidance should pro- vide useful background material for passing to assets. Our ploy should point out, as applicable, that the critics are

        (I) wedded to theories adopted before the evidence was in,

        (II) politically interested,

        (III) financially interested,

        (IV) hasty and inaccurate in their research, or

        (V) infatuated with their own theories.

In the course of discussions of the whole phenomenon of criticism, a useful strategy may be to single out Epstein's theory for attack, using the attached Fletcher [?] article and Spectator piece for background. (Although Mark Lane's book is much less convincing that Epstein's and comes off badly where confronted by knowledgeable critics, it is also much more difficult to answer as a whole, as one becomes lost in a morass of unrelated details.

4. In private to media discussions not directed at any particular writer, or in attacking publications which may be yet forthcoming, the following arguments should be useful:

    a. No significant new evidence has emerged which the Commission did not consider. The assassination is sometimes compared (e.g., by Joachim Joesten and Bertrand Russell) with the Dreyfus case; however, unlike that case, the attacks on the Warren Commission have produced no new evidence, no new culprits have been convincingly identified, and there is no agreement among the critics. (A better parallel, though an imperfect one, might be with the Reichstag fire of 1933, which some competent historians (Fritz Tobias, A.J.P. Taylor, D.C. Watt) now believe was set by Van der Lubbe on his own initiative, without acting for either Nazis or Communists; the Nazis tried to pin the blame on the Communists, but the latter have been more successful in convincing the world that the Nazis were to blame.)

    b. Critics usually overvalue particular items and ignore others. They tend to place more emphasis on the recollections of individual witnesses (which are less reliable and more divergent Q and hence offer more hand-holds for criticism) and less on ballistics, autopsy, and photographic evidence. A close examination of the Commission's records will usually show that the conflicting eyewitness accounts are quoted out of context, or were discarded by the Commission for good and sufficient reason.

    c. Conspiracy on the large scale often suggested would be impossible to conceal in the United States, esp. since informants could expect to receive large royalties, etc. Note that Robert Kennedy, Attorney General at the time and John F. Kennedy's brother, would be the last man to overlook or conceal any conspiracy. And as one reviewer pointed out, Congressman Gerald R. Ford would hardly have held his tongue for the sake of the Democratic administration, and Senator Russell would have had every political interest in exposing any misdeeds on the part of Chief Justice Warren. A conspirator moreover would hardly choose a location for a shooting where so much depended on conditions beyond his control: the route, the speed of the cars, the moving target, the risk that the assassin would be discovered. A group of wealthy conspirators could have arranged much more secure conditions.

    d. Critics have often been enticed by a form of intellectual pride: they light on some theory and fall in love with it; they also scoff at the Commission because it did not always answer every question with a flat decision one way or the other. Actually, the make-up of the Commission and its staff was an excellent safeguard against over-commitment to any one theory, or against the illicit transformation of probabilities into certainties.

    e. Oswald would not have been any sensible person's choice for a co-conspirator. He was a "loner," mixed up, of questionable reliability and an unknown quantity to any professional intelligence service.

    f. As to charges that the Commission's report was a rush job, it emerged three months after the deadline originally set. But to the degree that the Commission tried to speed up its reporting, this was largely due to the pres- sure of irresponsible speculation already appearing, in some cases coming from the same critics who, refusing to admit their errors, are now putting out new criticism.

    g. Such vague accusations as that "more than ten people have died mysteriously" can always be explained in some natural way e.g.: the individuals concerned have for the most part died of natural causes; the Commission staff questioned 418 witnesses (the FBI interviewed far more people, conduction 25,000 interviews and reinterviews), and in such a large group, a certain number of deaths are to be expected. (When Penn Jones, one of the originators of the "ten mysterious deaths" line, appeared on television, it emerged that two of the deaths on his list were from heart attacks, one from cancer, one was from a head- on collision on a bridge, and one occurred when a driver drifted into a bridge abutment.)

5. Where possible, counter speculation by encouraging reference to the Commission's Report itself. Open-minded foreign readers should still be impressed by the care, thoroughness, objectivity and speed with which the Commission worked. Reviewers of other books might be encouraged to add to their account the idea that, checking back with the report itself, they found it far superior to the work of its critics.

Attachment 1

4 January 1967

Background Survey of Books Concerning the Assassination of President Kennedy

1. (Except where otherwise indicated, the factual data given in paragraphs 1-9 is unclassified.) Some of the authors of recent books on the assassination of President Kennedy (e.g., Joachim Joesten, Oswald: Assassin or Fall Guy; Mark Lane, Rush to Judgment [sic]; Leo Sauvage, The Oswald Affair: An Examination of the Contradictions and Omissions of the Warren Report) had publicly asserted that a conspiracy existed before the Warren Commission finished its investigation. Not surprisingly, they immediately bestirred themselves to show that they were right and that the Commission was wrong. Thanks to the mountain of material published by the Commission, some of it conflicting or misleading when read out of context, they have had little difficulty in uncovering items to substantiate their own theories. They have also in some cases obtained new and divergent testimony from witnesses. And they have usually failed to discuss the refutations of their early claims in the Commission's Report, Appendix XII ("Speculations and Rumors"). This Appendix is still a good place to look for material countering the theorists.

2. Some writers appear to have been predisposed to criticism by anti-American, far-left, or Communist sympathies. The British "Who Killed Kennedy Commit- tee" includes some of the most persistent and vocal English critics of the United States, e.g., Michael Foot, Kingsley Martin, Kenneth Tynan, and Bertrand Russell. Joachim Joesten has been publicly revealed as a onetime member of the German Communist Party (KDP); a Gestapo document of 8 November 1937 among the German Foreign Ministry files microfilmed in England and now returned to West German custody shows that his party book was numbered 532315 and dated 12 May 1932. (The originals of these files are now available at the West German Foreign Ministry in Bonn; the copy in the U.S. National Archives may be found under the reference T-120, Serial 4918, frames E256482- 4. The British Public Records Office should also have a copy.) Joesten's American publisher, Carl Marzani, was once sentence to jail by a federal jury for concealing his Communist Party (CPUSA) membership in order to hold a government job. Available information indicates that Mark Lane was elected Vice Chairman of the New York Council to Abolish the House Un-American Activities Committee on 28 May 1963; he also attended the 8th Congress of the International Association of Democratic Lawyers (an international Communist front organization) in Budapest from 31 March to 5 April 1964, where he expounded his (pre-Report) views on the Kennedy assassination. In his acknowledgments in his book, Lane expresses special thanks to Ralph Schoenman of London "who participated in and supported the work"; Schoenman is of course the expatriate American who has been influencing the aged Bertrand Russell in recent years. (See also para. 10 below on Communist efforts to replay speculation on the assassination.)

3. Another factor has been the financial reward obtainable for sensational books. Mark Lane's Rush to Judgment, published on 13 August 1966, had sold 85,000 copies by early November and the publishers had printed 140,000 copies by that date, in anticipation of sales to come. The 1 January 1967 New York Times Book Review reported the book as at the top of the General category of the best seller list, having been in top position for seven weeks and on the list for 17 weeks. Lane has reportedly appeared on about 175 television and radio programs, and has also given numerous public lectures, all of which serves for advertisement. He has also put together a TV film, and is peddling it to European telecasters; the BBC has purchased rights for a record $45,000. While neither Abraham Zapruder nor William Manchester should be classed with the critics of the Commission we are discussing here, sums paid for the Zapruder film of the assassination ($25,000) and for magazine rights to Manchester's Death of a President ($665,000) indicate the money available for material related to the assassination. Some newspapermen (e.g., Sylvan Fox, The Unanswered Questions About President Kennedy's Assassination; Leo Sauvage, The Oswald Affair) have published accounts cashing in on their journalistic expertise.

4. Aside from political and financial motives, some people have apparently published accounts simply because they were burning to give the world their theory, e.g., Harold Weisberg, in his Whitewash II, Penn Jones, Jr., in Forgive My Grief, and George C. Thomson in The Quest for Truth. Weisberg's book was first published privately, though it is now finally attaining the dignity of commercial publication. Jones' volume was published by the small-town Texas newspaper of which he is the editor, and Thomson's booklet by his own engineering firm. The impact of these books will probably be relatively slight, since their writers will appear to readers to be hysterical or paranoid.

5. A common technique among many of the writers is to raise as many questions as possible, while not bothering to work out all the consequences. Herbert Mitgang has written a parody of this approach (his questions actually refer to Lincoln's assassination) in "A New Inquiry is Needed," New York Times Magazine, 25 December 1966. Mark Lane in particular (who represents himself as Oswald's lawyer) adopts the classic defense attorney's approach of throwing in unrelated details so as to create in the jury's mind a sum of "reasonable doubt." His tendency to wander off into minor details led one observer to comment that whereas a good trial lawyer should have a sure instinct for the jugular vein, Lane's instinct was for the capillaries. His tactics and also his nerve were typified on the occasion when, after getting the Commission to pay his travel expenses back from England, he recounted to that body a sensational (and incredible) story of a Ruby plot, while refusing to name his source. Chief Justice Warren told Lane, "We have every reason to doubt the truthfulness of what you have heretofore told us" Q by the standards of legal etiquette, a very stiff rebuke for an attorney.

6. It should be recognized, however, that another kind of criticism has recently emerged, represented by Edward Jay Epstein's Inquest. Epstein adopts a scholarly tone, and to the casual reader, he presents what appears to be a more coherent, reasoned case than the writers described above. Epstein has caused people like Richard Rovere and Lord Devlin, previously backers of the Commission's Report, to change their minds. The New York Times' daily book reviewer has said that Epstein's work is a "watershed book" which has made it respectable to doubt the Commission's findings. This respectability effect has been enhanced by Life magazine's 25 November 1966 issue, which contains an assertion that there is a "reasonable doubt," as well as a republication of frames from the Zapruder film (owned by Life), and an interview with Governor Connally, who repeats his belief that he was not struck by the same bullet that struck President Kennedy. (Connally does not, however, agree that there should be another investigation.) Epstein himself has published a new article in the December 1966 issue of Esquire, in which he explains away objections to his book. A copy of an early critique of Epstein's views by Fletcher Knebel, published in Look, 12 July 1966, and an unclassified, unofficial analysis (by "Spectator") are attached to this dispatch, dealing with specific questions raised by Epstein.

7. Here it should be pointed out that Epstein's competence in research has been greatly exaggerated. Some illustrations are given in the Fletcher Knebel article. As a further specimen, Epstein's book refers (pp. 93-5) to a cropped-down picture of a heavy-set man taken in Mexico City, saying that the Central Intelligence Agency gave it to the Federal Bureau of Investigation on 18 November 1963, and that the Bureau in turn forwarded it to its Dallas office. Actually, affidavits in the published Warren material (vol. XI, pp. 468-70) show that CIA turned the picture over to the FBI on 22 November 1963. (As a matter of interest, Mark Lane's Rush to Judgment claims that the photo was furnished by CIA on the morning of 22 November; the fact is that the FBI flew the photo directly from Mexico City to Dallas immediately after Oswald's arrest, before Oswald's picture had been published, on the chance it might be Oswald. The reason the photo was cropped was that the background revealed the place where it was taken.) Another example: where Epstein reports (p. 41) that a Secret Service interview report was even withheld from the National Archives, this is untrue: an Archives staff member told one of our officers that Epstein came there and asked for the memorandum. He was told that it was there, but was classified. Indeed, the Archives then notified the Secret Service that there had been a request for the document, and the Secret Service declassified it. But by that time, Epstein (whose preface gives the impression of prolonged archival research) had chosen to finish his searches in the Archives, which had only lasted two days, and had left town. Yet Epstein charges that the Commission was over-hasty in its work.

The New York Times' daily book reviewer has said that Epstein's work is a "watershed book" which has made it respectable to doubt the Commission's findings. This respectability effect has been enhanced by Life magazine's 25 November 1966 issue, which contains an assertion that there is a "reasonable doubt," as well as a republication of frames from the Zapruder film (owned by Life), and an interview with Governor Connally, who repeats his belief that he was not struck by the same bullet that struck President Kennedy.

8. Aside from such failures in research, Epstein and other intellectual critics show symptoms of some of the love of theorizing and lack of common sense and experience displayed by Richard H. Popkin, the author of The Second Oswald. Because Oswald was reported to have been seen in different places at the same time, a phenomenon not surprising in a sensational case where thousands of real or alleged witnesses were interviewed, Popkin, a professor of philosophy, theorizes that there actually were two Oswalds. At this point, theorizing becomes sort of logico-mathematical game; an exercise in permutations and combinations; as Commission attorney Arlen Specter remarked, "Why not make it three Oswalds? Why stop at two?" Nevertheless, aside from his book, Popkin has been able to publish a summary of his views in The New York Review of Books, and there has been replay in the French Nouvel Observateur, in Moscow's New Times, and in Baku's Vyshka. Popkin makes a sensational accusation indirectly, saying that "Western European critics" see Kennedy's assassination as part of a subtle conspiracy attributable to "perhaps even (in rumors I have heard) Kennedy's successor." One Barbara Garson has made the same point in another way by her parody of Shakespeare's "Macbeth" entitled "MacBird," with what was obviously President Kennedy (Ken O Dune) in the role of Duncan, and President Johnson (MacBird) in the role of Macbeth. Miss Garson makes no effort to prove her point; she merely insinuates it. Probably the indirect form of accusation is due to fear of a libel suit.

9. Other books are yet to appear. William Manchester's not-yet-published The Death of a President is at this writing being purged of material personally objectionable to Mrs. Kennedy. There are hopeful signs: Jacob Cohen is writing a book which will appear in 1967 under the title Honest Verdict, defending the Commission report, and one of the Commission attorneys, Wesley J. Liebeler, is also reportedly writing a book, setting forth both sides. But further criticism will no doubt appear; as the Washington Post has pointed out editorially, the recent death of Jack Ruby will probably lead to speculation that he was "silenced" by a conspiracy.

10. The likelihood of further criticism is enhanced by the circumstance that Communist propagandists seem recently to have stepped up their own campaign to discredit the Warren Commission. As already noted, Moscow's New Times reprinted parts of an article by Richard Popkin (21 and 28 September 1966 issues), and it also gave the Swiss edition of Joesten's latest work an extended, laudatory review in its number for 26 October. Izvestiya has also publicized Joesten's book in articles of 18 and 21 October. (In view of this publicity and the Communist background of Joesten and his American publisher, together with Joesten's insistence on pinning the blame on such favorite Communist targets as H.L. Hunt, the FBI and CIA, there seems reason to suspect that Joesten's book and its exploitation are part of a planned Soviet propaganda operation.) Tass, reporting on 5 November on the deposit of autopsy photographs in the National Archives, said that the refusal to give wide public access to them, the disappearance of a number of documents, and the mysterious death of more than 10 people, all make many Americans believe Kennedy was killed as the result of a conspiracy. The radio transmitters of Prague and Warsaw used the anniversary of the assassination to attack the Warren report. The Bulgarian press conducted a campaign on the subject in the second half of October; a Greek Communist newspaper, Avgi, placed the blame on CIA on 20 November. Significantly, the start of this stepped-up campaign coincided with a Soviet demand that the U.S. Embassy in Moscow stop distributing the Russian-language edition of the Warren report; Newsweek commented (12 September) that the Soviets apparently "did not want mere facts to get in their way."

Attachment 2

The Theories of Mr. Epstein by Spectator

A recent critic of the Warren Commission Report, Edward Jay Epstein, has attracted widespread attention by contesting the Report's conclusion that, "although it is not necessary to any essential findings of the Commission," President Kennedy and Governor Connally were probably hit successively by the same bullet, the second of three shots fired. In his book, Inquest, Epstein maintains (1) that if the two men were not hit by the same bullet, there must have been two assassins, and (2) that there is evidence which strongly suggests that the two men were not hit by the same bullet. He suggests that the Commission's conclusions must be viewed as "expressions of political truth," implying that they are not in fact true, but are only a sort of Pablum for the public, Epstein's argument that the two men must either have been shot by one bullet or by two assassins rests on a comparison of the minimum time required to operate the bolt on Lee Harvey Oswald's rifle Q 2.3 seconds Q with the timing of the shots as deduced from a movie of the shooting taken by an amateur photographer, Abraham Zapruder. The frames of the movie serve to time the events in the shooting. The film (along with a slow-motion re-enactment of the shooting made on 24 May 1964 on the basis of the film and other pictures and evidence) tends to show that the President was probably not shot before frame 207, when he came out from beneath the cover of an oak tree, and that the Governor was hit not later than frame 240. If this is correct, then the two men would not have been hit longer than 1.8 seconds apart, since Zapruder's film was taken at a speed of 18.3 frames per second. Since Oswald's rifle could not have fired a second shot within 1.8 seconds, Epstein concludes that the victims must have been shot by separate weapons Q and hence presumably by separate assassins Q unless they were hit by the same bullet. Epstein then argues that there is evidence which contradicts the possibility of a shooting by a single bullet. In his book he refers to Federal Bureau of Investigation reports stemming from FBI men present at the Bethesda autopsy on President Kennedy, according to which there was a wound in the back with no point of exit; this means that the bullet which entered Kennedy's back could not later have hit Connally. This information, Epstein notes, flatly contradicts the official autopsy report accepted by the Commission, according to which the bullet presumably entered Kennedy's body just below the neck and exited through the throat. Epstein also publishes photographs of the backs of Kennedy's shirt and coat, showing bullet holes about six inches below the top of the collar, as well as a rough sketch made at the time of the autopsy; these pictures suggest that the entrance wound in the back was too low to be linked to an exit wound in the throat. In his book, Epstein says that if the FBI statements are correct Q and he indicates his belief that they are Q then the "autopsy findings must have been changed after January 13 [January 13, 1964: the date of the last FBI report stating that the bullet penetrated Kennedy's back for less than a finger-length .] ." In short, he implies that the Commission warped and even forged evidence so as to conceal the fact of a conspiracy. Following the appearance of Epstein's Inquest, it was pointed out that on the morning (November 23rd) after the Bethesda autopsy attended by FBI and Secret Service men, the autopsy doctors learned that a neck wound, obliterated by an emergency tracheostomy performed in Dallas, had been seen by the Dallas doctors. (The tracheostomy had been part of the effort to save Kennedy's life.) The FBI men who had only attended the autopsy on the evening of November 22 naturally did not know about this information from Dallas, which led the autopsy doctors to change their conclusions, finally signed by them on November 24. Also, the Treasury Department (which runs the Secret Service) reported that the autopsy report was only forwarded by the Secret Service to the FBI on December 23, 1963. But in a recent article in Esquire, Epstein notes that the final FBI report was still issued after the Secret Service had sent the FBI the official autopsy, and he claims that the explanation that the FBI was uninformed "begs the question of how a wound below the shoulder became a wound in the back of the neck." He presses for making the autopsy pictures available, a step which the late President's brother has so far steadfastly resisted on the grounds of taste, though they have been made available to qualified official investigators. Let us consider Epstein's arguments in the light of information now available:

1. Epstein's thesis that if the President and the Governor were not hit by the same bullet, there must have been two assassins:

    a. Feeling in the Commission was that the two men were probably hit by the same bullet; however, some members evidently felt that the evidence was not conclusive enough to exclude completely the Governor's belief that he and the President were hit separately. After all, Connally was one of the most important living witnesses. While not likely, it was possible that President Kennedy could have been hit more than 2.3 seconds before Connally. As Arlen Specter, a Commission attorney and a principal adherent of the "one-bullet theory," says, the Zapruder film is two-dimensional and one cannot say exactly when Connally, let alone the President, was hit. The film does not show the President during a crucial period (from about frames 204 to 225) when a sign blocked the view from Zapruder's camera, and before that the figures are distant and rather indistinct. (When Life magazine first published frames from the Zapruder film in its special 1963 Assassination Issue, it believed that the pictures showed Kennedy first hit 74 frames before Governor Connally was struck.) The "earliest possible time" used by Epstein is based on the belief that, for an interval before that time, the view of the car from the Book Depository window was probably blocked by the foliage of an oak tree (from frame 166 to frame 207, with a brief glimpse through the leaves at frame 186). In the words of the Commission's Report, "it is unlikely that the assassin would deliberately have shot [at President Kennedy] with a view obstructed by the oak tree when he was about to have a clear opportunity"; unlikely, but not impossible. Since Epstein is fond of logical terminology, it might be pointed out that he made an illicit transition from probability to certainty in at least one of his premises.

    b. Although Governor Connally believed that he and the President were hit separately, he did not testify that he saw the President hit before he was hit himself; he testified that he heard a first shot and started to turn to see what had happened. His testimony (as the Commission's report says) can therefore be reconciled with the supposition that the first shot missed and the second shot hit both men. However, the Commission did not pretend that the two men could not possibly have been hit separately.

    c. The Commission also concluded that all the shots were fired from the sixth floor window of the Depository. The location of the wounds is one major basis for this conclusion. In the room behind the Depository window, Oswald's rifle and three cartridge cases were found, and all of the cartridge cases were identified by experts as having been fired by that rifle; no other weapon or cartridge cases were found, and the consensus of the witnesses from the plaza was that there were three shots. If there were other assassins, what happened to their weapons and cartridge cases? How did they escape? Epstein points out that one woman, a Mrs. Walther, not an expert on weapons, thought she saw two men, one with a machine gun, in the window, and that one other witness thought he saw someone else on the sixth floor; this does not sound very convincing, especially when compared with photographs and other witnesses who saw nothing of the kind.

    d. The very fact that the Commission did not absolutely rule out the possibility that the victims were shot separately shows that its conclusions were not deter- mined by a preconceived theory. Now, Epstein's thesis is not just his own discovery; he relates that one of the Commission lawyers volunteered to him: "To say that they were hit by separate bullets is synonymous with saying that there were two assassins." This thesis was evidently considered by the Commission. If the thesis were completely valid, and if the Commissioners Q as Epstein charges Q had only been interested in finding "political truth," then the Commission should have flatly adopted the "one-bullet theory," completely rejecting any possibility that the men were hit separately. But while Epstein and the others have a weakness for theorizing, the seven experienced lawyers on the Commission were not committed beforehand to finding either a conspiracy or the absence of one, and they wisely refused to erect a whole logical structure on the slender foundation of a few debatable pieces of evidence.

2. Epstein's thesis that either the FBI's reports (that the bullet entering the President's back did not exit) were wrong, or the official autopsy report was falsified. a. Epstein prefers to believe that the FBI reports are accurate (otherwise, he says, "doubt is cast on the accuracy of the FBI's entire investigation") and that the official autopsy report was falsified. Now, as noted above, it has emerged since Inquest was written that the FBI witnesses to the autopsy did not know about the information of a throat wound, obtained from Dallas, and that the doctors' autopsy report was not forwarded to the FBI until December 23, 1963. True, this date preceded the date of the FBI's Supplemental Report, January 13, 1964, and that Supplemental Report did not refer to the doctors' report, following instead the version of the earlier FBI reports. But on November 25, 1966, FBI Director J. Edgar Hoover explained that when the FBI submitted its January 13 report, it knew that the Commission would weigh its evidence together with that of other agencies, and it was not incumbent on the FBI to argue the merits of its own version as opposed to that of the doctors. When writing reports for outside use, experienced officials are always cautious about criticizing or even discussing the products of other agencies. (If one is skeptical about this explanation, it would still be much easier to believe that the author(s) of the Supplemental Report had somehow overlooked or not received the autopsy report than to suppose that that report was falsified months after the event. Epstein thinks the Commission staff overlooked Mrs. Walther's report mentioned above, yet he does not consider the possibility that the doctors' autopsy report did not actually reach the desk of the individuals who prepared the Supplemental Report until after they had written Q perhaps well before January 13 Q the draft of page 2 of that report. Such an occurrence would by no means justify a general distrust of the FBI's "entire investigation.") b. With regard to the holes in the shirt and coat, their location can be readily explained by supposing that the President was waving to the crowd, an act which would automatically raise the back of his clothing. And in fact, photographs show the President was waving just before he was shot. c. As to the location of the hole in the President's back or shoulder, the autopsy films have recently been placed in the National Archives, and were viewed in November 1966 by two of the autopsy directors, who... [The last page released ends here.]

Dispatch To: Chiefs, Certain Stations and Bases From: Chief, Subject:

Warren Commission Report: Article on the Investigation Conducted by District Attorney Garrison

Date: 19 July 1968

1. We are forwarding herewith a reprint of the article "A Reporter At Large: Garrison", published in THE NEW YORKER, 13 July, 1968. It was written by Edward Jay Epstein, himself author of a book ("Inquest"), critical of the Warren Commission Report.

2. The wide-spread campaign of adverse criticism of the U.S., most recently again provoked by the assassination of Senator Robert Kennedy, appears to have revived foreign interest in the assassination of his brother, the late President Kennedy, too. The forthcoming trial of Sirhan, accused of the murder of Senator Kennedy, can be expected to cause a new wave of criticism and suspicion against the United States, claiming once more the existence of a sinister "political murder conspiracy". We are sending you the attached article Q based either on first-hand observation by the author or on other, identified sources Q since it deals with the continuing investigation, conducted by District Attorney Garrison of New Orleans, La. That investigation tends to keep alive speculations about the death of President Kennedy, an alleged "conspiracy", and about the possible involvement of Federal agencies, notably the FBI and CIA.

3. The article is not meant for reprinting in any media. It is forwarded primarily for your information and for the information of all Station personnel concerned. If the Garrison investigation should be cited in your area in the context of renewed anti-U.S. attacks, you may use the article to brief interested contacts, especially government and other political leaders, and to demonstrate to assets (which you may assign to counter such attacks) that there is no hard evidence of any such conspiracy. In this context, assets may have to explain to their audiences certain basic facts about the U.S. judicial system, its separation of state and federal courts and the fact that judges and district attorneys in the states are usually elected, not appointed: consequently, D.A. Garrison can continue in office as long as his constituents re-elect him. Even if your assets have to discuss this in order to refute Q or at least weaken Q anti-U.S. propaganda of sufficiently serious impact, any personal attacks upon Garrison (or any other public personality in the U.S.) must be strictly avoided.

Miller writes in his book, Fooled Again, that the 2000 U.S. Presidential election and 2004 U.S. Presidential election were stolen. Miller presents extensive documentation, backed by 56 pages of notes, supporting his contention that the outcome of both elections was altered and controlled by a small minority. He states that the American voting populace can no longer assume that their votes will be accurately assessed, and that the installation of electronic voting machines in state after state is a fundamental flaw in the U.S. electoral system. He appeared in the 2004 documentary Orwell Rolls in His Grave, which focuses on the hidden mechanics of the media, its role as it should be and what it actually is, and how it shapes (to the point of almost controlling) U.S. politics.

He is a signatory to the 9/11 Truth Statement.[1]

His latest book, Loser Take All: Election Fraud and the Subversion of Democracy 2000-2008, covers U.S. election fraud and its acceptance in those years.

He is known for his writing on American media and for his activism on behalf of democratic media reform. His books include Boxed In: The Culture of TV, Seeing Through Movies, and Mad Scientists, a study of war propaganda.

Tuesday, February 22, 2011

Ray McGovern bloodied in oppressor USA

This week, U.S. Secretary of State Hillary Clinton gave a major address calling for Internet freedom around the world. As Clinton condemned the Egyptian and Iranian governments for arresting and beating protesters, former U.S. Army and CIA officer Ray McGovern was violently ejected from the audience and arrested after he stood up and turned his back in a silent protest of America's foreign policy. Ray McGovern joins us from Washington, D.C.  


JUAN GONZALEZ: On Tuesday, Hillary Clinton gave a major address calling for Internet freedom around the world. Speaking at George-–Washington University, Clinton condemned the Egyptian and Iranian governments for arresting and beating protesters.

HILARY CLINTON: What happened in Egypt and what happened in Iran, which this week is once again using violence against protesters seeking basic freedoms, was about a great deal more than the Internet. In each case, people protested because of the frustration with the political and economic conditions of their lives. They stood and marched and chanted and the authorities tracked and blocked and arrested them.

AMY GOODMAN: Just moments before Hillary Clinton spoke those words, a 71-year-old man was violently ejected from Clinton's own event and arrested for turning his back on the Secretary of State. TV cameras caught part of what happened.

HILARY CLINTON: Than the government pulled the plug. So phone service was cut off. A TV satellite signals were jammed. Internet access was blocked for nearly the entire—

RAY McGOVERN: [Screaming]This is America! This is America! Who are you? Who are you?

JUAN GONZALEZ: The voice you heard screaming was that of Ray McGovern as he was dragged away by security guard that left him bruised and bloodied. He was then arrested. McGovern is a former Army intelligence officer and a 27-year veteran of the CIA. He was one of the daily briefers for President George H.W. Bush. He has since become a vocal critic of US foreign policy. He joins us in Washington, D.C. Ray, you were seriously hurt. Tell us what happened.

RAY McGOVERN: I was pounced upon. I was blindsided, really. I was looking straight to the back, minding my own business. The only offense was standing up when everyone else was sitting down. Without any warning, I was pounced upon by and, what I call large manhandled by a fellow that looked like an NFL football player in plain dress. I don't know who he was, that is why you hear me screaming, "Who are you? Who are you?" And I never did get the answer to that. So it was quite abrupt, quite violent. And the supreme irony, of course, sounds like something right out of Franz Kafka, four paragraphs later, Hillary Clinton is saying what you just quoted her as saying. You know, one has to keep one's sense of humor in all of this, especially when one bears these kinds of bruises. I cannot show you the ones down below. I was listening on the way in, I tuned in a little late to your show. And when I heard Clinton say, that little clip, "We strongly oppose the use of violence," this is yesterday. We have deep concern over the actions of security forces. And I'm saying, yes! She is going to apologize. Like my Veterans for Peace colleagues asked her to do. Then I realized, she is talking about Bahrain. Straight out of Kafka.

AMY GOODMAN: So, you were seriously hurt. What parts of your body? What did they do to you?

RAY McGOVERN: Well, they put two sets of handcuffs on me roughly. They were the iron or steel handcuffs. They dug into my wrists. You can see some of the stuff right here. They put them behind my back of course and I started—bleeding profusely over my pants. We have the pants, they are full of blood. When somebody said, "Is that his blood?" One of the cops said, "No, no I pricked my finger". Right. The whole back seat of the pants is surfused with blood. They throw me-–well they didn't throw me, they placed me in a patrol car—I try not to exagerate here—and I was taken up to one of the police headquarters in D.C. Mugshotted, fingerprinted to a fair thee well, and put in a cell of the size of Bradley Manning now occupies in Quantico.

AMY GOODMAN: Ray we only have a minute but why were you there? Why did-–were you standing up?

RAY McGOVERN: I was standing up in silent witness to the fact that Hillary Clinton is responsible or partly responsible for the countless thousands of Iraqis, Americans, Afghans, and God help was, Iranians—I hope not—and that she should not get the idea that everyone is going to sit down and applauded politely when there are so many of us that are usually excluded from these sessions who are feeling very, very sad and very angry at the foreign policy of our government. Very seldom do have a chance to express that. I thought that I expressed that in a most nonviolent way by simply quietly with my back to her with a T-shirt that said "Veterans for Peace."

AMY GOODMAN: Well Ray McGovern, we want to thank you for being with us, former top briefer of Vice President George H.W. Bush. Ray worked for the CIA for more than a quarter of a century.

War veteran, 71, dragged out for staging silent protest during Hilary Clinton address... on freedom of speech

By Rachel Quigley  Last updated at 2:14 PM on 22nd February 2011

A 71-year-old war veteran today claimed he was left 'bruised and bloodied' after being violently dragged out of a Hilary Clinton speech.

Ray McGovern, who was a CIA analyst for 27 years, staged a 'silent protest' during the Secretary of State's talk on the importance of freedom of speech in the internet age yesterday.

In it she referred to the uprising in Egypt and commented on how people should be allowed to protest in peace without fear of threat or violence. She also condemned governments who arrest protesters and do not allow free expression.

Ray McGovern shows off his injuries

'Bruised and bloodied':  Ray McGovern, who was a CIA analyst for 27 years, claimed he was violently dragged out of a speech by Hilary Clinton after staging a silent protest

Is This America?: This is what Ray McGovern shouted at Hilary Clinton as he was forced out of her 'Freedom of Speech' talk at George Washington University

Is This America?: This is what Ray McGovern shouted at Hilary Clinton as he was forced out of her 'Freedom of Speech' talk at George Washington University

Bruised and bloodied: Ray McGovern was manhandled by police at a Hilary Clinton speech

But during the speech at George Washington university, Mr McGovern claims his silent protest was met with just that - threats and violence.

Wearing a 'Veterans for Peace' t-shirt, the 71-year-old stood up and turned around to face the back of the room, when two men grabbed him and dragged him out.

He said he was 'roughed up' by police for his actions and needed medical attention.

Speaking to MailOnline he said: 'It was a pretty brutal attack. They left me lacerated and bruised. I have marks all over my body and some of my wounds are still oozing.

'But Hilary Clinton - who watched me be physically violated and grabbed - was condemning violence against protesters.

'I was 12 yards in front of her, she knew exactly what was happening but did not even miss a beat.'

Protest: As Secretary of State Hilary Clinton talks about a person's right to speak and protest, Ray McGovern is seen being dragged out of the room by officers (right)

Protest: As Secretary of State Hilary Clinton talks about a person's right to speak and protest, Ray McGovern is seen being dragged out of the room by officers (right)

Mr McGovern was put in two sets of handcuffs and taken to the police station where he remained in the cell for three and a half hours. He was charged with disorderly conduct.

Speaking about the charges he said: 'Standing motionless and wordless looking towards the back of the room when the Secretary of State is speaking is not what I would call disorderly conduct.

'The only disorderly conduct in that room was at the hands of the plain-clothed officer and the police man.'

Despite comparing the attack to 'being jumped in the Bronx', he said he does not regret it.

'I'm in good spirits and I'm hoping that some good will come out of this. It still hurts but it was worth it.'

The veteran said he was protesting the ongoing wars in Iraq and Afghanistan and the fact that 'these people are pursuing policies which make people suffer and die, particularly in the Middle East'.

As well as a former CIA analyst, Mr McGovern also carried out the daily intelligence briefing for Presidents Ronald Reagan and George H. W. Bush.

He also briefed the National Security Advisor, Joint Chiefs of Staff and the Cabinet on security matters. 

He has been an outspoken commentator on intelligence-related issues since the late 1990s and in during a state speech in 2006, the veteran accused the then Secretary of Defence Donald Rumsfeld of lying about Iraq pre-war intelligence.

The internet is awash with comments of how hypocritical the Secretary of State's actions - or lack of - were and an online petition has even been started to 'urge Hilary Clinton to put her words into actions'.

Mara Verheyden-Hilliard, a lawyer Partnership for Civil Justice Fund who are representing Mr McGovern, said: 'For this peaceful expression of dissent, he ended up bruised, bloodied, arrested, and jailed.

'Secretary Clinton never paused, continuing her speech lecturing other countries about the need to allow freedom of expression and dissent, while Mr McGovern was hauled out in front of her.'

The Department of State told MailOnline it was an administration issue that was being handled by George Washington University who 'enforce their own policies on their campus'.

The university had the following statement: 'The George Washington University is committed to the protection of free speech, freedom of assembly and the right of lawful protest on campus. 

'When an invited speaker is the object of protest, demonstrations may occur outside the university building, facility or space where the lecture takes place, subject to additional requirements found in the university's demonstration policy.

'A man, who is not affiliated with the George Washington University, was arrested Tuesday afternoon by the George Washington University Police Department (GWPD) and was charged with disorderly conduct after violating the university's demonstration policy during a speech by U.S. Secretary of State Hillary Rodham Clinton on campus. 

'Shortly after the Secretary began speaking, the man stood up from his seat blocking the view of guests and media. 

'When asked twice by a GWPD officer to leave, the man refused.  As a result, he was escorted by GWPD out of the building and was placed in the custody of the Metropolitan Police Department.'

USA TOTAL DOMINANCE by "convergence" - Maastricht PAPER

==== FOUND BY ===================
"auschwitz" rail gauges 1520 1435 loftus
found by google-ing dustbin kransberg loftus

Dr. Kim H. Veltman is Scientific Director of the Maastricht McLuhan
Institute and co-ordinator of a new European Network of Centres of
Excellence in Digital

Kim H. Veltman

American Visions of Convergence

Maastricht January 2005

Table of Contents

1. Introduction I. Telecommunications and New Media 2. Internet 3.
AT&T 4. Baby Bells II. Military 5. SAIC 6. Contractors 7. Government
III. Energy 8. Electricity 9. Oil IV. Finance 10. Banks 11. Private
Equity V. Nano-, Bio-, Info-, Cogno-
12. Corporations 13. New Firms VI. Implications 14. Telco
Pseudo-Crisis 15. Satellites 16. Law 17. Conclusions Appendices

1. Competitors 2. Telco Statistics 3. Sameness and Diversity 4. POAS
and PNAC 5. Vaccine, Biotechnology and Genetic Engineering Firms

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 were two great setbacks: 1) the
bust and 2) a crisis in the telecommunications and specifically the
telephone industry. Some link these setbacks largely or even
exclusively to the events of September 11, 2001.

This essay challenges the received wisdom concerning the Internet. It
claims that there was support from telephone companies from the
outset; that the breakup of AT&T did not immediately change the
situation. During the past decade there has been convergence whereby
the telephony and Internet interests of telephone companies have
become intertwined with broadband cable and television. This is linked
with trends towards convergence on several other fronts in: a) the
military; b) energy; c) finance and d) engineering and the life
sciences, which some have termed Nanoscience, Biotechnology,
Information technology and Cognitive science (NBIC). This book claims
that these trends towards convergence are all interlinked.

When we stand back to explore the implications of these trends towards
convergence, we discover that from a global viewpoint, since 2000,
there was no fundamental decline in the telecom markets. Indeed,
although some stockmarket excesses of the so-called bubble needed
correction, the unduly severe and prolonged market decline that
followed in the

U. S. may have corresponded to a diversionary tactic to draw attention
away from the real struggle: control of infrastructure. As a result,
satellites, which were essentially owned by public governments have
gone bankrupt and are now largely owned by energy companies and
military contractors. Some present these trends towards convergence
very positively as a world where

everything is becoming interconnected and intertwingled.This book
suggests that these developments are complex and pose a number of
dangers. In the United States, the military is extending its
activities in the civil sphere. Energy companies play a central role
in the media domain. Some changes are disturbing: Private investment
firms are buying up sections of the entire telecommunications
infrastructure from cables to satellites. Research into vaccines
traditionally linked with military defence and public health, is
increasingly being shifted to private, commercial interests. There is
a case to be made that acceleration of bankruptcies in the
telecommuncations and media fields were planned; that this "plan"
extends far beyond new media and includes other sectors including
energy, finance, biotechnology, nanotechnology and cognitive science.
The financial consequences and political implications of these events
are significant. Perhaps even more important are ethical and legal
implications. At a deeper level these changes point to a crisis of
trust, which compromises historical values of liberty, freedom and
privacy protection and poses dangers of the doomsday kind.


This study began as an article called American Visions of the Internet
in 2000. It had a simple purpose: to show that the major telephone
companies, notably, AT&T (American Telephone and Telegraph), the Baby
Bells, SAIC (Science Applications International Corporation), MCI
(Microwave Communications Inc)/Worldcom and Sprint had played a more
central role in the evolution of the Internet than was generally
appreciated. This formed a basis for this study (§ 2-6 and Appendix
1). The events of September 11, 2001 prompted further study and
writing. On closer inspection it proved almost impossible to determine
where facts ended and where speculation began. So by mid-2002, much of
this material was dropped and only a few notes remained (§ 16-17). The
essential point was to claim that what seemed like a material problem
of physical terrorism was in fact a spiritual problem in terms of a
crisis of trust. The article was accepted for publication and then
considered too controversial. So it was circulated by e-mail and via a
website. For well over a year nothing happened.

In the autumn of 2004, there were six new insights. First, there is a
trend whereby telecommunications companies and information systems are
becoming ever more entwined with military contractors and a government
vision for the military (§ 5-7). Second, energy companies, especially
electricity and oil, play a pivotal role both in the rise of new media
and new convergence (§ 8-9). Third, finance in the form of banks,
consulting and private equity firms are playing a significant role in
these developments (§ 10-11). Fourth, convergence in the above fields
is connected with the Nanoscience, Biotechnology, Information
technology and Cognitive Science (NBIC) convergence which is often
described as a separate phenomenon (§ 12-13). Fifth, there was an
answer to a paradox: although everyone accepted that there was a bust and a telecom bubble burst, the statistics of the
International Telecommunications Union showed that in the global
marketplace no decline had taken place (§ 14). Sixth, major satellite
systems were also being privatized only to end up bankrupt a few
months later and then re-
acquired as if nothing had happened (§ 15).

Closer study revealed that: a) the convergence in all these fields was
inter-connected; b) that the equity companies involved in the telecom
debacles were the same as those involved in the satellite sagas; c)
that the telecom and the satellite crises were intimately connected in
a number of ways; d) that underlying the obvious problems of debts and
bankruptcies, was a much more deep-rooted struggle in terms of two
competing approaches to life: one based on civilian law, the other
based on military values of a particular kind, which assumed that
might and force were paramount and claimed that these were ultimately
outside the framework of traditional law. Within two months what had
been a paper had grown into the present book.

Presenting the story posed a considerable challenge. Traditionally, a
company had a single name and typically it was owned by an individual
or clearly defined group. Today's companies are more complex for two
reasons: 1) they often have half a dozen owners each with a stake of
between 5% and 30%. Not infrequently the name of the company does not
reflect the name of the principal stakeholder. 2) a large corporation
is frequently a holding company with numerous, often dozens of
divisions, each with slightly different names and usually with more
than slightly different ambition.

With an audience of experts in any given field, especially in respect
of the information society, one could assume that such details would
be common knowledge. With a wider audience and a number of fields no
such assumptions were possible. Furthermore, to preface every new
topic with a two to three page account of all the subtleties of a
complex media conglomerate would lose readers in preliminary details
long before the real story began. Our approach therefore was to
provide only minimal context for a given dimension of a corporation's
activities, often returning to the same company when considering its
different dimensions. The advantage was a clearer story line, even if
it entailed a certain amount of repetition.

There was also the problem that the details of our story were
immensely complex. It threatened to become a history of the Internet,
of multimedia, of satellites, of the whole of telecommunications. It
also risked becoming a book of vague speculations unless we provided
enough details to make our points. A solution was to use precise dates
as if this were something between a chronicle and a diary. Attentive
readers will be able to trace how some key events happened within
weeks of each other or even on the same day.

There is a certain fashion these days in the writing of both fiction
and non-fiction to revise Shakespeare's notion of "All the world's a
stage" with the notion that every life and every book is a thriller;
that every turn and chapter reveals more tantalizing secrets until
finally the secret code is cracked. This book is not about conspiracy
theories or about "whodunits." It makes no accusations against given
individuals, special groups or specific corporations. In that sense,
it is just like the cautionary paragraph at the end of films. The
difference is that the events in this book are about real events which
have affected many thousands of persons directly and in some sense are
affecting us all, not just in terms of some incident that becomes a
news clip, but our whole way of life. The book focuses on basic facts
as concisely as possible. There are hundreds of footnotes for those
who wish to check facts, explore their sources and wish to pursue
further specific themes.

This book is an invitation to look beyond new media as simply hardware
and software and to reflect upon the bigger picture that is evolving
as various media including (mobile) telephone, radio, television, and
Internet encroach ever more on our daily lives. The technologies,
which are changing our society, implicity raise profound societal


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,
the alias David Evans and especially to Jonathan Robin. I also thank
also others whose discretion leaves them unnamed. Finally, I am
grateful to Dean Tummers for giving me the freedom to write this
little essay which goes slightly beyond the usual borders of cultural
studies. 1. Introduction Since its beginnings in the 1960s there have
been many stories about the Internet. One is that the Internet was a
U.S. invention. The story that officials in AT&T were once adamantly
opposed to the Internet2 led to a received wisdom that telephone
companies (telcos) or telecommunications companies (telecoms) and the
Internet were unrelated. The 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 interpretation of the Federal

Communications Commission (FCC) version was more subtle:The telcos did

infrastructure, while those who developed the Internet did applications.
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 was
dominated by the major telcos. While received wisdom tells us that
AT&T was disbanded in 1984, it remained one of the leading players in
the field (§ 3). Also important are the Baby Bells, especially Bell
Atlantic in its new guise as Verizon (§ 4); BellCore in its new guise
as Telcordia (§ 5) and competitors such as MCI/Worldcom (Appendix 1).
In theory, these were four sets of players. With the bankruptcy of
MCI/Worldcom, there was effectively only one major player on the home
front: AT&T in the various guises as itself, the Baby Bells, and its
research labs (Lucent, Telcordia and SAIC). There was significantly
more cohesion between the parts of AT&T than would at first sight
appear. It was a telecommunications company with Internet interests.
Through its divisions it became involved in business solutions, cable
and broadband content as well as mobile communications and satellites.
Through its various subsidiaries it became intimately involved in
education; Electronic Numbering to achieve

Internet Telephonyand Domain Name Systems. It also became involved
with Next Generation Internet (NGI).

AT&T's links with carrier equipment companies, computer companies,
content holders and home entertainment firms, and satellite systems
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

Since 2000, there have been considerable changes. The military is
becoming ever more involved in civilian information systems (§ 5-7).
Energy companies, notably General Electric, have come back into the
forefront (§ 8-9). Banks and private (equity) firms are systematically
buying up large portions of the telecommunications infrastructure (§

Officially, much has been written of both a bust and a burst
of the telecommunications bubble in the period since 2000-2001.
Meanwhile, 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 remained Nippon Telephone
and Telegraph (NTT), American Telephone and Telegraph (AT&T) as well
as Deutsche Telekom, France Telekom, and British Telecom.

On the political front, the initiatives of the ITU to create a World
Summit on the Information Society (WSIS)6 in 2003 and again in 2005
have expanded the focus on the Internet as a mono-lingual English
phenomenon, to a multi-lingual, multi-cultural challenge that is
affecting all parts of the globe. One result of these summits has been
UNESCO's increased role in identifying global access to knowledge and
information as fundamental priorities. While of the greatest
importance, and deserving of a separate study, these developments are
beyond the scope of this essay.

Our concern is to understand more closely developments especially as
seen through the prisms of the United States. According to Forbes, for
instance, the traditional order of major telecoms changed sometime in
2003 when the leading telephone companies of the world became Verizon
and SBC Communications. According to this view, the Baby Bells were
now repositioning themselves to be the leading telcos in the world.
These changes in telecommunications (§ I) affected much more than the
telcos. They entail the military (§ II), the energy sector (§ III);
the financial sector (§ IV) and the biotech sector (§ V) all of which
are involved in convergence of their own which is in turn
interconnected. These developments help us to understand in a new
light the so-called bust, telco crisis, and recent upheavals
in the satellite industry. 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 (§ V).

In this very big picture, telecommunications, new media, the military,
energy, investment, pharmaceutical/biotechnology, developments in
politics and the secret services are inseparable. Hence, the rise of
new technologies 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 new oil crises; war with Iraq and
possibly other "evil" states. This vision which has clear plans that
go back at least to 1975 is prepared to use military force to attain
its ends. The Internet, which was 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 U.S. 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,"they would do well to remember the great suffering that was
brought in the past by such quests for a new world order. The short
term greed of this elite threatens to undermine 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. I. Teleommunications and New Media 2.
Background of the Internet 8
The origins of the Internetare frequently linked with As we may think
(1945), the famous essay of Vannevar Bush in which he described his
Memex device that used microfiche and "in which an individual stores
all his books, records and communications and which is mechanized so
that it may be consulted with exceeding speed and

flexibility." More than a decade earlier, Paul Otlet (1934),who had worked with


Lafontaine in establishing a universal bibliographical organization of
intellectual work,
had envisaged a machine for reading:

Soon television will be a problem that has essentially been resolved
just as it is already from a scientific viewpoint: the image
reproduces itself at a distance, wireless. One can imagine an electric
telescope which allows one to read at home pre-ordered pages of the
books exhibited in the "teleg" room of large libraries.


This will be the telephoned book.
This led to "a machine to think/imagine the world" (la machine à
penser le monde, 1943)as part of his larger vision of a Mundaneum for
access to all human knowledge. This was a large, television-like
sphere that allowed viewers to study information literally from all
sides. Neither of these machines were developed directly as Otlet or
Bush envisaged. Nonetheless, Vannevar Bush's student, Claude Shannon,
applied the principles of Boolean logic to define bits and bytes as
they are now used in computers. Bush's essay also inspired Douglas
Engelbart, Ted Nelson and most of the pioneers of what has since been
called hypertext and hypermedia. By 1968, the Internet (though not yet
the World Wide Web as we know it today) became a reality.

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,who
introduced the


idea of data grams and an Englishman, Donald W. Davies,who was one of
the inventors of packet-switching. Indeed, Davies is credited with
renaming what had been


called data grams as packets in 1976.Another of the great pioneers in
Britain was Peter


T. Kirstein,who went to America at the beginning of the Arpanet in
1969 when it was 17

decided that Davies could not go for reasons of national
security.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."18

Hence an English project19 of 1968 inspired the ARPAnet in 1969, which
marked the beginnings of the US Internet. It is false to claim that
America invented the Internet and it is simply misleading to argue
that because America invented the Internet, it was 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).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'sstudent 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."Claude Shannon, Vannevar Bush and Norbert Wiener, the father of


cybernetics, all knew each other well.
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."24 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 quest for multi-media
avant la lettre, led Shannon and his colleague Weaver, to develop
information theory (1948), 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 ARPANET."

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

26 27

for handling patents."This led later to RFC 681, "Network Unix," (May
1975),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."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 reminded 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 internet."
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).He went on to become Chief
Scientist of


Bellcoreand later became the Division Director, Information and
Intelligent Systems at


the National Science Foundation (NSF).
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.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."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."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.36
Professor Arms went on to become the Director of Library Systems
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]. 37

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. (Cf. below § 4). More recently, NASA has also
been exploring an interplanetary Internet, which may potentially
replace the idea of packet switching.

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."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."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. 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 1) telephony
interests (AT&T); 2) related software products (Lucent) and 3)
computer/Internet interests (NCR). In practice, the situation remained
more complex for at least three reasons. First, AT&T itself had three
Internet related research laboratories: 1) Research Internet and
Network Systems


Research; 2) Voice Enabled Services Research;3) Information and
Software Systems


Research.By 2004, there was also 4) Intellectual Property Management and


Development.These four were now called research programs. In addition
there were a number of other research areas.44

Second, Lucent, a spinoff from the old Bell Labs, in addition to its
work on data networking and integrated circuits, had no less than
eight sets of products related to the


Internet.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. §5), but continued to have goals
very close to those of AT&T, particularly in fields such as ENUM.
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.In
January 1999, Lucent Technologies acquired "Ascend for a sum of $20
billion, thus obtaining products and skills in the IP, ATM and xDSL
sectors. Also in January 1999, Lucent became "the world's leading
equipment manufacturer ahead of Ericsson, with revenues of $26.845


billion, representing a 17% increase over a year."In March 1999,
Lucent acquired "Kenan Systems ($1.48 billion), a leader in billing
and customer management systems."
In the past five years, there has been enormous activity to extend
networks beyond computers to include potentially all appliances and,
eventually both physical and


biological "objects". Here, the Home Audio Visual Information
(HAVI)consortium, which includes Philips, was a pioneer. Others such
as the Universal Plug and Play


Forumwanted 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.
Coincidentally, RFID (Radio Frequency Identification) currently uses
the same number of bits as Ipv6 and, coincidentally, the DoD
(Department of Defense) follows RFID numbering closely. Low-level
artificial intelligence systems "currently monitor military systems,
optimize the water level in dishwashers, control the actions of


pets, and help predict natural disasters."This is an area in which the
research labs of


AT&T have been working for decades under the title of telemetry.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.53

If these developments are considered from a global level there are six
sets of players in the global ICT game: 1) the telcos which now
include cable interests (AT&T, Sprint, NTT, 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); 5) the home entertainment
companies (Sony, Philips, Samsung etc.) and 6) the satellite companies
(e.g. SES Global). 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 Microsoftand long-standing
links with IBM. Already in 1991, IBM and AT&T Paradyne announced that
they would develop mainframe network technology together.55 On
December 8, 1998 AT&T and IBM announced a series of strategic
agreements under which AT&T would acquire IBM's Global Network
business for $5 billion in cash, and the two companies would 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.

In 1999, AT&T and IBM also made an E-Commerce alliance.In 2000, they announced


that they would work together in providing wireless solutions.In
September of 2000


they signed a $450 million web hosting deal.In 2001, IBM, AT&T and Lotus (owned


by IBM) announced an Application Service Provider (ASP) Enablement
Suite.In 2002,


IBM and AT&T released free privacy tools together.In addition, there
were a series of further links through IBM. In 2002, IBM acquired
PriceWaterhouse-Coopers, thereby assuring, among other things,
compatibility in educational solutions. With respect to carrier
equipment, both AT&T, and IBM have close links with Cisco. With
respect to content holders AT&T and AOL were poised to launch an IPO
together.62 AOL has made links with Legend Computers in China. With
respect to home entertainment IBM has links with Toshiba and Sony for
making Playstation 3.63 In this constellation, pipelines and content
are integrated. IBM was theoretically in competition


with EDS and SAP but was also partnered with them.Through a nexus of
AT&T, IBM, Cisco, AOL, and Sony five sets of players were linked.
Hence, even the sale of MGM to Sony did not threaten this inner


From all thisit 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


(NCR) in 1996 changed this fundamentally. In short, AT&Twas and
remains centrally


active in the development of the Internet.

In 1999, Deutsche Telekom announced that it was restructuring into
four divisions. In October 2000, AT&T announced that it was (also)
restructuring into four businesses, namely, AT&T Consumer, AT&T
Business, AT&T Wireless, and AT&T Broadband. It is striking that
preparations for this separation appear to have evolved carefully over
the past decade.

AT&T Consumer


In 22 July 2004, AT&T announced that it was no longer seeking
residential customers.
This was slightly misleading. In December 2004, AT&T's Consumer
section called: At Home and on the Go claimed it was "for Voice over
IP, calling plans, Internet and


more."Meanwhile, four of the largest media mergers in the past decade
related directly to this focus on consumers, and to the quest for
Broadband (cf. below) namely, a) TCI/Liberty; b) Time-Warner-AOL; c)
Twentieth Century Fox and Newscorp and d) Metro-Goldwyn-Mayer (MGM).


Telecommunications Inc. (TCI) began in the 1950s. Liberty Media was
founded in 1990 as TCI's programming arm. In 1988, both TCI/Liberty
and Comcast bought a part of Storer Communications from Kohlberg
Kravis Roberts (KKR). In 1999, AT&T bought

John Malone's Telecommunications Inc. (TCI/Liberty) for $48 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 the cable Internet Service


Provider (ISP) @Home."It also set the stage for a new division called
AT&T Consumer Services. 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 in 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 SMARTcom 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 rumors that Liberty was trying to take over News Corp.
Time and Warner Brothers

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 Studio:

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 equipment. 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 companies.
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; in 1971 was
renamed Warner Communications and, in 1990, merged with Time to become

America OnLine (AOL)

In 1969, Compuserv was founded, the same year as the Internet began in
the US. In 1978, the Source was founded. This aimed to send "airline
reservations, restaurant reviews,


banking information" into persons homes.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 became 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 Netscape.75


In February 1999, AT&T announced an agreement with Time Warner to set
up a joint venture for providing cable operator subscribers (12.6
million in 20 States) with


telephone services. AT&T had a 75.5% stake in the new company.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:
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.78

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.79 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"80

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.As noted above, AT&T's acquisition of John Malone's TCI
gave it a substantial stake in Murdoch-controlled News Corporation,
which is one of "the three largest international media groups,
operating in most sectors and most continents."82 In July 2003, News
Corp. "signed a seven-year, $150 million deal with the telecom carrier
[AT&T] for voice and international data services."83

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.Hence, the attempts
of Comcast to acquire Disney and of Liberty to acquire Newscorp could
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.

MGM (Metro-Goldwyn-Mayer) The history of one of the other major film
studios began fully independently of AT&T and 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; 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)."In 2004, MGM was sold to Sony. As we
shall see below under AT&T Broadcast, Comcast, played a significant
role in this venture.

Meanwhile, in 1997, C. Michael Armstrong, CEO of General Motors (GM)
Hughes Electronics, "led a great new product launch--DirecTV, a
satellite-to-home television


service that beams crystal-clear programming to rooftop dishes."We
shall show later that the privatization of satellites represented
another important dimension to the struggle for communications
channels (§10). While these developments were momentous in themselves
they represented only a quarter of the complete AT&T vision.

AT&T Business

Some aspects of AT&T's business section have been mentioned above in
the discussion of links with IBM. There were a number of other
elements. In 1996, J.P. Morgan, Computer Sciences Corporation (CSC),
Andersen Consulting, AT&T Solutions and Bell Atlantic Network
Integration formed the Pinnacle Alliance to manage parts of J.P.


Morgan's global technology infrastructure.In 1998, AT&T bought IBM's
global network for $5 billion. It went on to make a $10 billion dollar
joint venture with British Telecom for one stop shopping for big

On 23 January 2002, AT&T's Enterprise Business announced a) Managed
Services Portfolio, and a Strategic Approach To Serving Business
Customers Worldwide; b) New High Availability And Security Services To
Its Business Continuity Portfolio; c) Enhanced Capabilities to its
Hosting Services Portfolio; and d) the debut of its First Two Global
Virtual Private Network Services.88 Their Enterprise business section
addressed government, wholesale, resellers, Value Added Retail Sellers
(VARS) and agents. It also had a separate site for Small and Medium

AT&T Wireless

A third division focused on wireless communications. AT&T claimed to
have invented cellular service at its Bell Labs in 1947 and to have
built the first cellular systems in Chicago and Washington in 1984. In
1994, it acquired McCaw Cellular Communications


for $11.5 billion.On 3 May 1999, AT&T acquired Vanguard Wireless for
$1.7 billion


including about $600 million in assumed debt.On November 30, 2000,
AT&T and NTT DoCoMo announced the formation of a strategic alliance to
develop the next generation of mobile multimedia services. NTT DoCoMo
invested nearly $10 billion for


a 16 percent stake in AT&T Wireless.In 2002, AT&T Wireless acquired
TeleCorp PCS. In 2002, AT&T Wireless made a strategic alliance with
Microsoft. In 2003, AT&T Wireless made a strategic alliance with IBM.
In 2004, AT&T Wireless (AWE) launched the first Universal Mobile
Telephony Service (UMTS) service in the United States.

Southern Bell Corporation (SBC) helped to develop and had a 60%
ownership of the Cingular Wireless Network. LCC International acquired
Cingular, became LCC/Cingular and then proposed to buy AT&T Wireless.
By 1 November 2004, federal regulators

93 94

allowed LCC'sCingular to buy AT&T's wireless services for $41 billion.
Conveniently, Colin Powell's son, Michael Powell, was the head of the
Federal Communications Commission (FCC). Meanwhile, on 19 May 2004,
AT&T announced that it had "taken its first step in re-entering the
wireless market by reaching an agreement with Sprint that would allow
AT&T to sell AT&T-branded wireless service to its over 30 million
business and consumer customers."95

AT&T Broadband

AT&T's fourth division focused on broadband in the form of cable. Here
AT&T's role in media conglomerates such as Time-Warner was important,
but its activities centred on three major deals with Teleport, Media
One and with Comcast respectively.


On 12 January 1998, AT&T bought Teleport Communications Group, Inc. (TCG), for


$11 billion.Under the deal, TCG's three cable owners,
Telecommunications Inc. (TCI), Comcast and Cox Communications held a
10% stake in AT&T. Within two years AT&T had also bought TCI and
Comcast. Robert Annunziata, TCG's chairman and CEO, became executive
vice president of AT&T and led the company's local services unit. The
TSG deal gave AT&T "networks that cover 66 markets and pass more than


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


multimedia services.In late 1999-early 2000, AT&T was said to have
paid $44 billion


to buy the Media-One Group.This 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 a 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. 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.


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. As noted above, that 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.

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.The
man who had


been CEO of AT&T (1997-2002), became the chairman of AT&T Comcastand
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


exchange for AT&T stock."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.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."On 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.106 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."
On 18 October 2004, Comcast and Walt Disney Co. launched a "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"In November 2004,
"Comcast Cable (formerly AT&T Broadband, Media One and Time Warner
Cable)" described itself as providing public access by contract" and
insisted that "Public Access is an extension of the First Amendment to
the U.S. Constitution."109 Comcast still owned a 21% stake in
Time-Warner which it could 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 was also the fifth
largest Cable TV company in the country, but faced with creditors
claiming $3 trillion.110 The head of Adelphia's management team,
William T. Schleyer, who formerly ran AT&T's cable business,111 was
rumoured to favour a buyout by private equity firms such as Thomas H.
Lee Partners; Providence Equity Partners; and Kohlberg Kravis Roberts
(KKR). On 8 November 2004, Comcast, as the largest cable TV provider,
announced a


deal with Microsoft to work together.
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.113 In 1999, the International Telecommunications
Union (ITU) ranked AT&T as number 2 (after NTT) of the top 20 public
telecom operators: 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

By contrast, according to the Forbes list of the top 2000 global
companies in 2004, AT&T ranked number 439 (although in terms of sales
it was number 85) in the world, while Verizon, SBC Communications and
Bell South were now said to be the top


telecoms at positions 11, 12 and 74 respectively in the world arena.
Perhaps as a consolation, in the period 2001-2003 AT&T received $4.6
billion in tax rebates, while Verizon received 4.3 billion.115
Meanwhile in 2004, Lucent was due to receive a $816 million tax

If we stand back to assess these developments several interpretations
are possible. A negative view would be that the former monopoly holder
in telephony saw its markets fragmented into a thousand fiefdoms and
was desperately hanging on by making alliances with 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. Perhaps
it does not own them 100%, but then no global player today does.
Indeed, the former telephony company has now expanded into cable,
television and Internet, or as one observer put it, Ma Bell is
becoming Ma Bel, Ma Cable and Ma Internet.117 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). 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 12 118 119

Figure 1a) Largest telephone companies;b) cable companiesand c) wireless

120 121

companiesin the US in 2004;d) Another view of Televison, Internet and
Telephone in the US in 2004.122 Of course, some looked at these same
statistics to suggest that Comcast was now the central company and
that AT&T was 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 and 2004.
If this were true, then the image of AT&T as a monolithic mastodon
incapable of adapting to new developments was well deserved. From any
point of view, there were 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, General Motors, 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 owned not only NBC but also Vivendi-Universal. It is
also a central player in SES Global, a key satellite consortium. 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 headquarters.

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 noted that AT&T made various partnerships with
Microsoft and IBM. Is it likely that AT&T would simply hand over its
crown jewels to Comcast and Verizon if they were outright competitors?
Is it a co-incidence that the head of AT&T went on to become the head
of Comcast at the critical moment when this handover occurred? Was
there an entente between 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.

From all this, a complex picture begins to emerge. AT&T, which
supposedly broke up in 1984; broke up into 3 companies in 1996 and
divided its main interests into 4 new companies in 2000. Those who
have painted it as an archaic structure, unable to shake off its old
habits, incapable of responding to the challenges of a multimedia,
digital world, have overlooked a number of things. AT&T has a serious
stake in almost every major project both at home and around the world.
Almost every company that became involved with AT&T has ended up
bankrupt, being swallowed or with its power diminished (Appendix 1).
As we shall see, these new links between telephony, cable television
and Internet are but one dimension of convergence which is affecting
almost all sectors.

An idea of the complex new environment is provided by Rick Astleford,
Principal Vice President, Bechtel Corporation and General Manager,
Europe, Africa, Middle East, Southwest Asia Region, Bechtel
Telecommunications. He worked for Walt Disney (1989-1997); then as
Director and General Manager of Vista United Telecommunications, the
Disney corporate phone company and local exchange carrier 21
(1997-1999), returned to Bechtel in 2000 as Program Director of the
AT&T Wireless Services (AWS) third generation (3G) project. For the
last two years, he has been the Program Director for all AWS work.
This is now Bechtel Telecom's largest project. Rick was elected a
Principal Vice President in September 2001.123 In simple terms, AT&T's
wireless work is now outsourced to Bechtel. We shall return to these
themes, but first we must examine the role of the Baby Bells and SAIC.
4. Baby Bells After the "breakup" of AT&T, seven Regional Bell
Operating Companies (RBOCS) or Baby Bells were formed. After the
Telecommunications Act of 1996, regional Bell companies had to open
their local markets to competition.124 By 22 May 1997, Nynex announced
that it reached an agreement with AT&T, allowing the nation's largest
longdistance company to offer local telephone service in Nynex's local
market.125 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, then three with speculation that it will soon be two
(figure 2). Southwestern Bell acquired Ameritech and Pacific
Telesis.126 US West127 sold its wireless operations to Air Touch
Communications. In January 1999, Vodaphone took control of Air Touch
for $62 billion.128 1984 2000 01.2002 2006 1. Ameritech129] =6 2. Bell
Atlantic130 Bell Atlantic Verizon Verizon +MCI 3. Bell South131 Bell
South Bell South = 6 4. Nynex132 =2 5. Pacific Telesis =6 6.
Southwestern Bell133 SBC134 SBC SBC +AT&T 7. US West Qwest135 QWest136
=2 ? Figure 2. A history of the Regional Bell Operating Companies or
Baby Bells (RBOCs). In September 1999, Bell Atlantic and Vodaphone
announced plans to "merge their US mobile phone businesses to create a
company worth between $70bn and $80bn (£44bn - £50bn), owned 55% by
Bell and 45% by Vodafone, which would be floated on the stock
market."137 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."138 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.139
Verizon's general counsel, William Barr, was attorney general under
President George H.W. Bush.140 In May 2004,
22 Verizon announced plans for selling video over fibre optic
lines.141 In November 2004, SBC announced plans to develop IP based
TV.142 In 2005, Verizon took over MCI, while SBC announced a $16
billion takeover of AT&T143 and in 2006, SBC-AT&T bought Bell
South.144 The bankruptcy of KPNQWest in 2002 and accounting problems
analogous to Enron145 at Qwest (formerly US West) were 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.146 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 company147 with close
connections to Enron148 and the blessing of Warren Buffett.149 We
shall examine Level 3 in more detail later (§9) and show that it
played a key role in US efforts to acquire European Infrastructure
(figure 7). In 1997, Global Crossing appeared on the scene and seemed
to be a competitor. Soon it had one of the best fiber optic networks:
"Nearly 100,000 route miles join more than 200 cities around the
globe."150 On 29 September 1999, Global Crossing formally merged with
the Frontier Corporation.151 In January 2002, Global Crossing "filed
for Chapter 11 bankruptcy….The fourth largest bankruptcy in U.S.
history, it listed assets of $22.4 billion and liabilities of $12.4
billion."152 We shall examine this in more detail later (§ 10). For
the moment, it is of interest that both Level 3 and Verizon were among
those to bid for Global Crossing.153 (Richard Perle, a defense advisor
to the National Security Agency (NSA) and on the board of Autonomy,154
played a profitable role in selling Global Crossing. Following
criticism, he resigned his post as security advisor.)155 On 18 August
2002, Hutchinson Telecom-munications and Singapore Technologies
Telemedia acquired 61% of Global Crossing for a bargain.156 In March
2003, Global Crossing reemerged from the ashes.157 In 2004, both
Global Crossing and QWest were active in Voice over IP. MCI/Worldcom
was a serious competitor to AT&T (Appendix 1). On 4 April, 2002, it
was awarded a $450 million Defense Research and Engineering Network
(DREN) contract.158 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 had
links with Jeb Bush),159 which led a team of brand name telecom firms,
including the "Baby Bells" Verizon, SBC and BellSouth Corp (which also
had links with Governor Jeb Bush),160 as well as Defense contractor,
Raytheon Technical Services Company.161 On 21 July, Worldcom filed for
bankruptcy.162 On 26 July, 2002, Verizon Wireless Inc.163, the largest
U.S. mobile-phone company, announced it would "take over the accounts
of customers now billed by bankrupt WorldCom Inc."164
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 1999.165 In April 2000, Mr Sarin became CEO of Infospace
"a leading global provider of infrastructure services for wireless
devices, merchants and Web sites,"166 with links to Verizon and
VeriSign.167 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 had a serious role in that vision.
Significantly the carriers in that vision were AT&T and former Baby
Bells (Verizon).


In January of 2001, Sarinleft 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 was 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.169

Accel-KKR was one of the few firms, which was reportedly happy with
the enormous bankruptcy woes among the telecoms. On the surface, this
was because these impoverished telcos represented a bargain for
enterprising investors, bankers and leveraged buyout persons.170 In
the spring of 2004, for instance, KKR quietly acquired


PanAmSat for $4.1 billion.We shall see later (§15) that this was part
of a much bigger picture, whereby formerly state owned satellite
systems are being taken over by the private sector.

It was curious that one of the protagonists in this game was someone
who began with one of the Baby Bells. It almost looked as if the
disbanded group was reconfiguring. One forced the competition into
bankruptcy, or preferably leveraged buyouts, then took them


over at a bargain price.Just after one had raised considerable money
on the argument that they were the cash cows of the future, one spread
the word that the telcos were in desperate straits and complained that
they could not survive without subsidy. Such complaining was
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)173 would solve these problems.
Others feared that this was another step of the major telco(s) to
regain the position they once had. Indeed, some expected that it would
accelerate that process. Between 1984 (when AT&T was divested)


and 2000, the seven Baby Bells reconfigured into four.By 2004, Qwest
Wireless and


the Cellco Partnership applied to the FCC to transfer 62 licences to Verizon.
One could almost see coming the argument that because the telco
situation was so desperate and utterly hopeless, the only hope was to
allow the Baby Bells and AT&T to


save the day using the entirely modern and novel idea of a monopoly.In
any case, in November 2004 the Regional Bell Operating Companies
(RBOCS) were actively filing to


gain permanent control of their broadband lines.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, 178

NBC, DirecTV, and Fox."In short, the same kind of convergence evident
in AT&T was also evident in the Baby Bells. To understand the bigger
picture we need to look to other sectors. II. 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 remain secret. The details of such activities in the
United States and elsewhere are not of concern here. Our concern in
this study is to draw attention to three significant developments in
the course of the past decades. First, there is the rise of the
Science Applications International Corporation (SAIC), which has close
links with the military and has taken over AT&T's central research
labs (§ 5). Second, there is a significant trend whereby the three
principal military contractors, Lockheed, Northrop and Boeing, are
becoming ever more concerned with information systems, especially in
the government sphere (§ 6). Third, there has been a trend in the
government towards convergence of all its military information systems
(§ 7).

As a result, the military, and especially the contractors that work
with the military, have been increasingly involved with security and
information systems for the public sector and for civilian life. At
the same time, so called civilian firms have become increasingly
linked with the military. For instance, General Electric, which has
played a central role in the rise of the film studios, radio,
television and cable networks (§ 8), is also the nation's sixth
largest defense contractor. In later sections we shall claim that
these military interests play a role in other dimensions of
convergence. For the moment, however, it is useful to explore briefly
the history of a company with close links to AT&T.

5. Science Applications International Corporation (SAIC) In addition
to AT&T and the Baby Bells another essential player in the
developments linking telephony and the Internet is less known but not
less important. The same year that the Internet began in the United
States (1969), a former member of Los Alamos Laboratories founded the
Science Applications International Corporation (SAIC). 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.179 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.180


By 1987, SAIC was a national leader in Computer-Aided Logistic Support
(CALS).By 1997, SAIC was "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.

To understand how these developments became 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

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 (DDN_NIC).
In 1994, the official body for Internet naming became the Internet
Assigned Names


Authority (IANA).In 1996, the Science Applications International
Corporation (SAIC) bought Network Solutions. This soon led to complex
developments linking Network Solutions, SAIC, and Verity. In 1997, the
same Science Applications International Corporation (SAIC) bought
AT&T's BellCore and soon after renamed it Telcordia Technologies.185
SAIC now employed some 30,000 professionals and had official sales of
$4 billion.

With respect to Operations Support Systems and Business Support
Systems (OSS/BSS), SAIC teamed up with webMethods to create a
RapidApps™ integration platform for


companies with critical time-to-market needs and/or limited budgets.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 eXtensible Markup


Language (XML) key management specification (XKMS).Hence, SAIC,
working with the RSA and Verisign, was 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,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,"
Also in 1999, 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."By 2002, Telcordia Technologies was "providing
mobility solutions and won contracts to provide OSS software
components and intelligent network



Telcordia Technologies, owned by SAIC, became a serious player. It
held 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 invented, developed, implemented or
maintains software


on which 80% of the U.S. telecommunications network dependsand its
vision was to be "THE major enabler -worldwide -of tomorrow's Next
Generation, packet-based, data centric network model and
information-based, e-commerce economic model."193

AT&T in its various guises, and its partners were 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 was very


active in Homeland Securityand had developed an Automated Exercise and


Assessment System (AEAS).SAIC was working with Juniper Networks for new


military networks.In July, 2004 Bell Labs (Lucent Technologies)
claimed to be developing "long-range, super-fast, ultra-high capacity
communications systems" needed


by the U.S. Department of Defense.

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.198 This development is again open to a
number of interpretations. Some would say that the increasing presence
of for profit firms in areas that were traditionally linked with the
public telecoms sector, inevitably means a greater turnaround of
ownership purely in terms of which companies are most lucrative at the
moment. Others would 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 would 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: Electronic Numbering (ENUM); Domain Name
Services (DNS), Education and Next Generation Internet (NGI).

Telephone Number Mapping or Electronic NUMbering (ENUM)

In 2000, Telcordia and Verisign committed themselves to Telephone
Number Mapping or Electronic NUMbering (ENUM).199 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 entailed other players such
as the Internet Engineering Task Force (IETF) and the International
Telecommunications Union


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.201

On the surface this promised to be a magnificent development. The ENUM
standard could establish the framework for a global numbering system
that could 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 was in charge? We were 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.202

At a practical level, it was the IETF, which was in control. But the
situation was more complex. In North America, the ENUM initiative
arose from an agreement between


Telcordiaand Verisign. If the plan of Telcordia and Verisign
succeeded, it looked 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 204

role.Meanwhile, the ENUM Forum was dominated by Telcordia, AT&T, Illuminet

205 206

(now owned by Verisign)and Neustar (which has an alliance with
Telcordia)and included Worldcom and the International Internet
Telephone Organization (IITO).207

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),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

209 210

especially in Geneva.Objections were made on the basis of privacy
issues,but interestingly enough the idea of a universal Whois or Uwho
is now part of Verisign's official plan. There were 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


Dr. Kahn, who was the President and CEO of the Corporation for
National Research Initiatives (CNRI, see below), was 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.
In short, the naming game was 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, was 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.The DOI via Content
Directions also made deals with Microsoft's Corbis.214 Meanwhile the
CEO of Content Direction.com215 claimed 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.
This will be especially true in a MPEG 21 environment with its
multi-media meta-data


DRM abilities.In 2004, it looked as if Radio Frequency Identification
(RFID) were becoming part of that vision. Some saw the DOI as
replacing earlier visions of an


Universal Resource Name (URN).Not surprisingly, DOI extended 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) was 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.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 could hardly be a co-incidence that in this same period,
Educom, in conjunction with the IEEE, was working on a National


Infrastructure Initiative(NLII) to create an Instructional Management
System (IMS)


"to enable an open architecture for online learning."This entailed the
use of a Learning


Object Model (LOM), used by the Global Learning Consortium.By co-incidence, the


US Army also used a Learning Object Model (LOM).
In January, 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

management systems] technologies, including category-leading Saba,
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 systems.225[ 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."226

One of the rival groups mentioned, SAIC, was the developer of the
Sharable Courseware Object Reference Model (SCORM) mentioned in the
preceding newsbyte. SAIC was the corporation that bought Network
Solutions, owned its spinoff Verisign, Bell Labs and via Telcordia was
leading the Electronic NUMbering (ENUM) initiative in North America.
SAIC lost the contract in January 2001. But since then the US Army
became more

227 228

involved with SAIC's SCORMas did the training company, THINQ,which
worked 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 was also involved with business objects where they were
working with IBM, with SAP –which was started by former IBM
employees—and entailed 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

Five years ago, Blackboard was a relatively unknown method for the
delivery of electronic learning materials. On 29 November, 2000,
Blackboard Inc. announced that it was acquiring the former AT&T
CampusWide Access Solutions and CEI SpecialTeams,


a division of iCollege.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,"which had amongst its
partners SAIC, Sprint, SRA/Assentor, Verisign and the US Army.
Blackboard also became a portfolio


company of the Carlyle Groupwith 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 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 include 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 were 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. 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.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 had grown to 202 in June 2003. The Next
Generation Internet entailed 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.234

The NGI network was 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).It will be recalled that the other key proponent of Next
Generation Internet was Telcordia,


or rather its mother company, SAIC.In 2000, Worldcom planned a merger
with Sprint,


which was blocked by the EU.Even without a formal merger, there is
every reason to believe that MCI/Worldcom and Sprint continued to

To understand the global dimensions of the scheme it is useful to
recognize that those involved in the NGI were also the proponents of
new forms of parallel computing called


grids.As with the Internet, this was 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 could hope to handle properly. Physicists at CERN thus
mapped out a vision for a new level of parallel, distributed computing
to address the

239 240

challenge. The NGIand the Grid Project weree linked with the European GEANT

project and the Eurogrid project.
Ian Foster, an immensely charming physicist at the Argonne National
Laboratories (ANL) and his colleague Dr. Kesselmann at the University
of Southern California, Information Sciences Institute (USC/ISI), made
this idea accessible in a very useful


book.The idea of the grid soon became popular on the hype charts.
Major corporations such as IBM and HP were 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 was "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 was closer to telephony, computers and naming than it may
seem. The Next Generation Internet (NGI) was leading to a Next
Generation Information Networks (NGIN) which entailed, as Gregory
Pankauski, 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."243 The latest version of this vision entailed the
National Lambda Rail where a number of private bodies were
systematically buying fibre optic lines to produce their own
educational solution. The rhetoric surrounding this project was
magnificent. But the project was ultimately aimed at a privileged few
who could afford to pay for the resources. Very little was said about
the great majority of persons whose finances would not allow them
access to this next generation internet. Ultimately this new vision
extended the American notion of gated communities into the corridors
of education.

To be sure, all this was happening in the context of wonderfully
politically correct


sounding bodies such as the Internet Educational Equal Access
Foundation (IEEAF).
Meanwhile, the same conquest of names, which brought 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),


appeared like minor distractions.
As was suggested earlier, the Next Generation Internet (NGI) plan was
connected with the Dublin Core Metadata Initiative owned by OCLC,
which had similar goals of universal application in the library world.
By 2004, the OCLC Dewey Decimal Classification system was used in more
than 26,000 libraries around the world. If this plan succeeded, the
applications to science, business, and military training would be
applied to all of education.

Over the past few years, the United Nations Educational Scientific and
Cultural Association (UNESCO) was working on a global portal for
Culture and E-learning. Meanwhile, the World Bank was creating a
(Global) Development Gateway "where


worlds of knowledge meet,"which also had an e-learning portal that
focused largely on distance learning solutions from the United States.
UNESCO and the World Bank offered 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 were 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

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


collaboration with several Japanese universities and with retailers.

This was reported by US observers in 1994.By 2002, futurists such as
Oliver Sparrow


were predicting the advent of an interspace in the context of
telecommunications.Nor was this just a vague prediction. It was being
worked on by the Defense Advanced Research Projects Agency (DARPA),
which was concerned with creating the net of the


century. This effectively entailed redesigning the whole of the
Internet as we know it today. This project also explained increased
top-level military and political U.S. understanding and their new
approach that made IPv6 implementation and migration a priority. DARPA
described the Arpanet as a first wave, the Internet as a second wave
and foresaw the Interspace as a third wave for which a first prototype
was developed in 1998. 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.

Describing the Interspaceproject 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 §3), spoke
of "building the WorldNet, every


community big and small living in the interspace of all the world's
knowledge."By co-

incidence, AT&T developed a WorldNet service.More recently the
Interspace vision led to Medical Interspace Projects (Medspace) which
foresaw systematic changes in


medicine including virtual town doctors.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 would make a semantic index of all
of MEDLINE and BIOSIS. Semantic, in this case, had little to do with
personal meaning. It entailed mainly formal, subsumptive relationships
such as whole/part.

If one looked more closely at the Interspace conceptual diagrams one
found interesting parallels with the Spatial Paradigm for Information
Retrieval and Exploration (SPIRE)


projectat the Pacific Northwestern Labs, particularly their ThemeView
method and the


methods being developed at Sandia Labs.It was almost as if the
advanced military labs of the Department of Energy were working on
another stage of prototypes for the Interspace. As so often there were
competing visions of the future. The National Aeronautics and Space
Administration (NASA) was 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 came 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?"258 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.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.At the time, the Vice
President of

261 262

Syntekwas John M. Poindexter, of Iran-Contra fame.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.was appointed Director of
the Pentagon's


Information Awareness Office (IAO).The IAO worked jointly with the
Information Exploitation Office (IEO). These two organizations would
receive "a big chunk of the $48bn of the taxpayers' money George Bush
is pumping into his war on the evildoers."265 The IAO was already very
active. Until recently it included eleven programs and one project. A
cursory look at their goals suggested 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.The deadline for the first round of


submissions was 22 April although the call was supposedly open for one
year.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.TIA had as its motto the phrase
Scientia est Potentia (Knowledge is Power) and its symbol was the
Masonic pyramid and eye which


is familiar from the American dollar bill.The only difference was that
the rays of the eye stretched out specifically over EurAsia and Africa
and effectively to the whole world. TIA was the latest program[me]
within the IAO. The Program Manager of the TIA


system was John M. Poindexter:"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."271

In simple terms, the plan was to replace the Internet as it now exists
with what some saw as a thinly disguised spy machine. All this was
happening with effectively no consultation at all outside America. A
small group within the United States was treating the rest of the
world as insignificant. The plan met with opposition from within the
US. On 23 January 2003, the Senate:

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.272

On 24 January 2003, it was reported that the Senate officially voted
to stop funding the TIA project.273 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
initiative called LegalXML


Lawful Intercept XML (LI-XML)."

Similarly a report on 29 January 2003, stated that TIA was not yet
dead.On 7 February 2003, the Electronic Frontier Foundation (EFF)
urged support of the Wyden-Feinstein


Amendmentand the same day Amercian Forces Press Service announced that TIA


would go ahead under the supervision of two boards.On 12 Febraury,
2003, the House


and Senate of the US decided that TIA could not be used to spy on
American citizens.
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."279 On 17 July 2003, it was announced
that the Senate was blocking funds for TIA,280 which launched a new
series of reports that TIA was killed. That same day Paul Rozenzweig,
Michael Scardaville and Ha Nyugen published WebMemo 315 entitled:
"Senate Should Restore TIA Funding" as part of their research on
homeland security for the Heritage Foundation.

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.A note on 23


July pointed to the ongoing threat to privacy posed by TIAand on 24
July a note from the Department of Defense pointed out that TIA was
too broad but intimated that it was necessary nonetheless. On 24
September 2003 a conference on the subject agreed with the Senate
position to eliminate funding for TIA. They concluded, however, that
research on earlier projects should continue, namely: Bio-Event
Advanced Leading Indicator Program; Rapid Analytic Wargaming;
Wargaming the Asymmetric Environment and Automated Speech and Text
Exploitation in Multiple Languages (including Babylon and Symphony.
Significantly they added: "The conference agreement does not restrict
the National Foreign Intelligence Program from using processing,
analysis and collaboration tools for counterterrorism foreign
intelligence purposes." The objections made against TIA in the US were
not against the system. The concern was simply that it should be
applied only to foreigners and not to American citizens. We shall
explore the psychological motivations for such distinctions later (§
Appendix 3).

In 2004, the idea 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
included "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."283 The proposed pricetag of the new system was in
the range of $200 billion. Observers noted that the Pentagon had 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."284 The new vision is being championed by Donald Rumsfeld's
advisor, Bill Owen, who heads Nortel Networks, is Chairman of Vote
Here, a new, electronic voting software company (§ 9) and also also
heads SAIC.

From what we have seen, SAIC clearly plays an important role. It is a
key to understanding links between AT&T, Verizon, and a number of
military initiatives. At the same time it is clearly not alone. Also
important are the three chief military contractors in the United

6. Military Contractors Traditionally, we think of Boeing, Lockheed
Martin and Northrop Grumman as aircraft companies with strong ties to
the military and space. For instance, in 2002, these three


companies received $42 billion in Pentagon contracts.Less well
publicized has been a trend, towards involvement in information
systems, particularly government information systems. For our
purposes, this trend is of particular interest because it reveals
further dimensions of convergence and also brings to light larger
dimensions of telecoms such as AT&T and the Baby Bells.


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."It is also engaged in
consortiums with other major players. Lockheed Martin

For instance, in 2001, Lockheed and Boeing together formed United
Space Alliance, a company to which NASA outsourced much of its back
office needs. Raytheon is active in this alliance and foresaw 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."
Lockheed Martin claims that it "is the leading provider of information
technology to the


federal government--and has been for the past ten years.""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

Lockheed Martin also runs Sandia Labs.The Honourable E.C. "Pete"
Aldridge Junior,


was on the board of directors of both Lockheed Martin and Global
Crossing.Another member of the board of directors of Global Crossing
was Lt. General Donald L. Cromer, the former president of Hughes Space
and Communications Company.292

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."Hence the information needs of the public postal service are
now being addressed by private telcos and a major military contractor.

Northrop Grumman

Northrop Grumman is also active in this field. In 2001, it bought
Litton Systems, another strong player in the government information
technology market.294 In 2002, it bought TRW Systems.295 TRW owns
Vinnell which worked closely together with Kellogg Brown and Root (KBR
now 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
amounted to over $20 billion (figure 4). A full list of beneficiaries
of government contracts has been made by the Center for Public
Integrity and is beyond the scope of this study.

Vinnell Kellogg Brown and Root (Halliburton) $11,431,000,000 Parsons
Corp. $5,286,136,252 Fluor Corp $3,754,964,295

Figure 4. The three biggest beneficiaries in the rebuilding of
Iraq.296 Northrop Grumman, the current parent company of Vinnell,
Brown, Root, had nearly


4,000 contracts worth close to $42.5 billion from 1990 through
2002."Kent Kresa, the CEO of Northrop Grumman, is aware of the big
picture. His company, along with Lockheed had its eyes on the contract
for the Joint Strike Fighter worth $200 billion – although some have
mentioned an amount near $1 trillion:298

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.
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 went on to become a director of
Parsons Corp. and Citigroup Inc. A small group of companies is
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 captured their competitors' best men?

Information Security Management

In 2004, George Washington University had a programme on Information Security


Management, which was certified by the National Security Agency
(NSA).The corresponding site also had a section on employment
opportunities. Seven companies


were listed.Striking was the extent to which this had military
connections. Not surprisingly there was SAIC. Another company was
Symantec, which was trying to acquire Veritas for $13 billion in
December 2004. The CEO of SAIC was Bill Owens, who was also a director
of Symantec, and incidentally 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."302 A
third company was Cisco, which had agreements with SAIC. A fourth
company was TRW, now owned by Northrop Grumman discussed above. A
fifth was Veridian owned by General Dynamics. A sixth was Booz, Allen
Hamilton which had on its board a former head of the CIA. Finally,
there was BAE Systems also active in both the defence and space

Any attempt to document all the connections between Boeing, Lockheed
Martin, Northrop-Grumman and the new media would take us far beyond
the scope of this study. Nor can we examine related companies such as
Raytheon or Hughes. We have signaled the existence of this important
dimension because a) these companies reflect trends towards
convergence within the US military (§7) and b) these same companies
are central players in the telecom troubles (§14), and the satellite
saga (§ 15). 40 7. Government Traditionally, each of the branches of
the military, i.e. the army, navy and air force have had their own
approach to communications and computers and to a certain extent that
approach contiues to this day. Even so, the Pentagon, through the
joint chiefs of staff, has been making condierable efforts to create a
more systematic approach for the military as a whole. In the military,
there has traditionally been an interest in Command and Control (C2).
Distinctions were made between C2 on land and C2 in the air.303 During
the Gulf War304 the phrase, C2, became linked with interoperability
issues of what Leonard Kleinrock called nomadic computing.
Alternatively, Computing and Communications were also sometimes
referred to as C2. Command, Control and Communications were referred
to as C3. At Oak Ridge Laboratories, C3 became associated with Cluster
Command and Control.305 During the Gulf War, C3 also acquired a
further connotation as in Coalition, Coordination, Communication, and
Integration Center (C3IC). 306 Command, Control, Communications,
Computing and Intelligence (C4I) Command, Control, Communications,
Computing became C4. This was sometimes linked with Intelligence as
C4I or C4I.307 In parallel, there were developments that led to work
on Intelligence, Surveillance, Reconnaissance (ISR). In some visions
these became integrated such that Command, Control, Communications,
Computing were linked with Intelligence, Surveillance, Reconnaissance
(C4ISR). Basic definitions308 of these key terms were provided anew in
1998. By 1995, the Annual Defense Report309 called for a new strategy
in a new era, pointing to Challenges in the New Security Environment.
Command, Control, Communications, Computing (C4) was seen to be a key
to meeting this new challenge. It was linked with a new notion of
Corporate Information Management (CIM): "In DoD [Department of
Defense], CIM is a strategic, collaborative management initiative to
guide the evolution of the DoD enterprise and capture the benefits of
the information revolution. It represents a partnership of functional
and technical management to achieve a combination of improved business
processes and effective application of information technology across
the functional areas of DoD" (our figure 5).310 While all this looks
fairly simple and straightforward, the implications of this approach
are enormous. It assumes or at least implies that military systems
will embrace the domain of business from the corporate world: that
there will ultimately be no distinction between military and civilian
needs. Meanwhile, the various sectors of the armed forces had
established their own approaches to C4. For instance, the US Navy had
Brigadier General John R Thomas,311 who was Director C4/Marine Corps
CIO [Chef Information Offficer], "responsible for planning, directing,
coordinating, and overseeing C4 and IT capabilities that support the
warfighting functions. The Department influences the combat
development process by establishing policy and standards for
developing the enterprise architecture. The intent is to achieve Joint
and combined interoperability."312
41 Figure 5. Diagram on Corporate Information Management from the 1995
US Defense report.313 The Air Force developed an Air Force Command,
Control, Communications, and Computers Association (AFC4A).314 The
Army was even more enthusiastic: "C4 is the Army's force multiplier
for the digitized battlefield of the XXI Century. Synonymous with
"information superiority" as defined by the Chairman, Joint Chiefs of
Staff, C4 is the capability to collect, process, and disseminate an
uninterrupted flow of information while exploiting or denying the
adversary's ability to do the same."315 Meanwhile, Washington
developed a Command, Control, Communications, and Computer Systems
(J-6, a section of the Joint Staff).316 On 5 January, 1998, John
Hamre, the President and CEO of CSIS (Center for Strategic and
International Studies)317 issued Department of Defense Reform
Initiative Directive #17, which called for: Appointment of the Team to
Develop a Blueprint to Merge Command, Control, Communications, and
Computing Functions and the Development and Acquisition of
Intelligence, Surveillance and Reconnaissance Systems (C4 and ISR
Systems) into the Office of the Under Secretary of Defense for
Acquisition and Technology.318 In 2002, Gary Illingworth of C3I
Associates, published "Command Control (C2) and Coalition
Interoperability post 911. Introducing the Network Centric
Infrastructure for Command Control and Intelligence (NICCI),"319 in
which he argued, predictably,
42 that 9/11 had greatly increased the urgency for such new systems.
It is striking that three weeks after 9/11, on 30 September 2001, the
Defense Department was able to includea detailed account of
implications of the event in their Quadrennial Defense Review Report.
320 As a result there have been activities on many fronts. At one
level there have been pilot projects. For instance, on 21 October
2002, Rosettex Technology & Ventures Group(TM) — a joint business
venture of SRI International and Sarnoff Corporation — were awarded "a
five-year contract from the U.S. Army Communications-Electronics
Command (CECOM) at Fort Monmouth, New Jersey to develop and prototype
advanced technologies and systems in military communications, command
and control, intelligence, surveillance, and reconnaissance
applications. The agreement has a potential value of $24 million."321
On 22 March, 2004, the Air Force Research Laboratory (AFRL)
Information Directorate awarded a $9,817,581 contract to John Beyerle
C3I Associates of Oneida for research "to increase the knowledge and
understanding of next-generation Command and Control Intelligence
weapon systems."322 At another level major defense companies claimed
that they would solve these challenges. For instance, General Dynamics
claimed that "General Dynamics C4 Systems provides secure command,
control, computing, communication and information solutions that
integrate custom-developed and commercial off-the-shelf products for
the military and commercial markets."323 At a higher level Mitre
claimed that it headed all C3 activities,324 while SAIC, as the lead
integrator for the Global Command and Control System (GCCS), claimed
the same for C4 activities: As the military's key command, control,
computing, communications, and intelligence (C4I) system, the GCCS
uses the Defense Information Infrastructure Common Operating
Environment (DII COE) to support joint warfighting needs. Helping to
ensure that C4I maintains its pace with technology, SAIC leads several
significant projects to bring leading edge DII COE-compliant
technologies to the GCCS community. These include Defense Advanced
Research Projects Agency (DARPA) efforts supporting senior levels of
command, such as the National Command Authority and Joint Staff, down
through Joint Task Force Commanders and service components, such as
the Marine Corps' Chemical/Biological Warfare Incident Response
Force.325 Meanwhile, at a less visible level, other constellations
were forming. As we shall show later, Analex, which is at the heart of
biotechnology developments is serving to cluster a number of the key
players in the field (cf. §13), ranging from the actual head of C4 in
Washington to the National Security Agency (NSA). But before we do so
it is important to consider briefly trends towards convergence in two
other areas, namely, Energy (§ 8-9) and Finance (§ 10-11).
III. Energy Our story began (§ I) by establishing that in the United
States the telephone companies, especially AT&T and the Baby Bells,
played an important role both in the development of the Internet and
in the convergence of new media. (In Appendix 1, we showed that
MCI/Worldcom and Sprint also played a significant role in these
developments). We then showed (§ II) that these developments were
linked with the military on at least three fronts: 1) AT&T's research
labs are being linked with the military through Science Applications
International Corporation (SAIC); 2) military contractors are becoming
ever-more involved in civilian information projects; 3) the Pentagon's
quest for a Command, Control, Communications, Computing and
Intelligence (C4I) infrastructure is leading to a vision of Corporate
Information Management (CIM), whereby military and commercial
information models are becoming conflated. In the big picture these
developments in telecommunications and the military are linked with
other trends towards convergence in other sectors such as energy,
where there are links between energy companies and new media, both in
terms of electricity and oil.

8. Electricity 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 (GE) and Westinghouse Electric. These very large
corporations were active in a whole range of fields from aircraft
production to wired and wireless communication, and were again linked
with AT&T. We have already noted links between General Electric and
SAIC. General Electric is the nation's sixth largest defence
contractor. We noted that in 1999, General Electric (GE) Information
Services and SAIC's Telcordia launched the Next Generation Network

General Electric Capital remains by far the largest equity investment
firm in the United States and it intervenes in unexpected ways.. For
example, in 2002, when Worldcom went bankrupt, it was "rescued" by
investments from Citibank, J. P. Morgan Chase and


General Electric Capital.In 2002, the "bankrupt" company "jumped to
eighth among


all federal technology contractors in 2002, with $772 million in
sales,"and in 2003 it was awarded a wireless deal in Iraq. In fact,
General Electric (GE) and Westinghouse have played and are playing a
central role in the American media industries. For our purposes a few
highlights of these connections will suffice.

Film Studios: Universal

In 1912, Charles Laemmle founded Universal Pictures which merged with
International Pictures in 1946 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.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

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."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."
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.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 1996, CBS bought Infinity radio and
broadcasting and outdoor advertising group for $4.7 although, Mel
Karmazin, Infinity's CEO remained the largest shareholder. Karmazin
became CEO of Viacom.

In 1999, Viacom theoretically acquired (Westinghouse Electric renamed
as) CBS for $50 billion. Others would note that Viacom and CBS merged
as partners and that the interests of CBS (or rather Westinghouse in
disguise did not go away). By 2004, Viacom included "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 making
serious inroads into the European media markets. In 2002 and 2003,
General Electric quietly bought Vivendi Universal. On 24 August 2004,


Viacom acquired a 75.83% stake in Viva Media AG in Germany.We shall
see presently (§ 11) that these were not isolated examples. At a
higher level, General Electric was playing a key role in GE Americom,
which since its merger with SES to form SES Global transformed the
satellite industry (§ 15).

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.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 billion.334

From the above, it is obvious that electrical energy companies such as
General Electric and Westinghouse play a central role in many of the
high profile media companies of the US even if their name is usually
in the background. Some have claimed that the influence goes much
further, that General Electric played a key role in the election of
George W. Bush:

Shortly after George W. Bush declared his candidacy for president in
June of 1999, General Electric Chairman and Chief Executive Officer
Jack Welch was contacted by Bush political advisor Karl Rove. Welch
later informed associates that Rove told him a Bush administration
would initiate comprehensive deregulation of the broadcast industry.
Rove guaranteed that deregulation would be implemented in a way that
would create phenomenal profits for conglomerates with significant
media holdings, like GE. Rove forcefully argued that General Electric
and the other media giants had a compelling financial interest to see


become president.

Whether or not this was the case, GE represents the highest level,
involving deals in the tens of billions. Our next two examples, WCS
and Anschutz/Qwest, are at a much lower level. On the surface, WCS was
about a small energy company that went into communications, went into
debt for $6+ billion; went bankrupt and was acquired for a "mere" $270
million. We shall examine this company more closely as a case study to
understand in more detail aspects of the bust and telecom

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


approximately 86% of the stock.On 9 February, 1999, Concentric Network


Corporation made an alliance with Williams.In July 1999, Williams
signed an agreement with "the Genesys Group, an international
teleconferencing services provider and the market leader in Europe and
Asia, which will acquire the video conferencing business unit".338 (In
2004, Genesys via the Trans company was making inroads into the
Russian telecoms market).

In 1999, Williams had an Initial Public Offering (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 its Houston-based enterprise


services business unit to Platinum Equity.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. Erving.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.By October 2003, Leucadia National had acquired its entire
assets for $420 million.

When we look more closely at Williams Communications, we see that it
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 Format.342 On 1 November 2001, it signed a 20-
year telecommunications agreement with the Boeing Company valued at
$267 million.343 Such examples show that the trend for military
contractors to enter into civilian information systems, extends into
civilian entertainment media.

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."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."On 14 May 2000, an agreement between 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.346

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.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
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.348 On 18 March, 2001,
Williams announced that 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."349 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.
On 20 September, 2001, Williams "signed a letter of intent to enter a


commercial business transaction to purchase network capacity."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
term capacity on Canadian and Pan-European network segments operated
by Teleglobe, a


leading supplier of global broadband and data services.On 20 February
2002, it expanded its relationship "with KDDI America, Inc., a wholly
owned subsidiary of


KDDI Corporation, the largest international telecommunications company
in Japan."
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. On 29
February, 2000, Wiliams announced that it would acquire the "long
distance network assets of Ameritech


Communications Inc., a subsidiary of SBC.On 1 August 2001, Williams
was "selected by SBC to provide long distance service to Cingular
Wireless in the traditional SBC 13-
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.
On 20 November 2001, Williams became "the preferred provider for long
distance voice


and data traffic for SBC in Missouri and Arkansas."On 5 Febraury, 2002
Williams "signed an agreement to provide long-distance services to
Verizon Global Networks Inc., a subsidiary of Verizon
Communications.358 Interestingly enough, on 31 October 2002, the day
Williams emerged from bankrupty as the newly formed, WilTel
Communications, Keith W, Storey became President359 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 took over Williams.

We noted earlier that after floating its initial IPO in 1999, Williams
was sold to the Platinum equity firm on 3 April 2001 and that less
than three weeks later it 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."360 We shall see later that Blackstone prides
itself on its links with major firms such as AT&T (§ 11).

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. Companies
such as Williams and Global Crossing were possibly fronts. If so, they
they effectively served as Trojan horses to enter into walled markets
that had been closed to their parents.

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."361 In this view, the burst of the telecom bubble
dragged Williams down with it. But the so-called telecom bubble burst
was itself possibly 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 real
slump or slowdown in the IT and telecom sectors (§14). It might also
explain why the buyouts equity firms seemed less a passive response to
unfortunate bankruptcies and more an active search for fortunate
companies. We shall return to this theme (§11).


Our second example, at a much smaller scale than the General Electric
and Westinghouse networks listed above, is Anschutz: "holding company
for Anschutz's portfolio of companies…in energy, transportation,
media, communications, professional sports, agriculture, entertainment
and real estate,"362 which began in 1958, and which is now the largest
stockholder in Qwest. Anschutz deals with energy, oil, railroads and

Qwest started in Dallas as a small player of no real significance. It
was acquired by Anschutz. It was catapulted into the world scene in
1996, when it partnered with Frontier Communications to build a
national fibre optic network for the United States, a story to which
we shall also return (§ 14). Soon Qwest was merged with US West. The
combined company then became partnered with the Dutch national
telephone company, KPN. As a result the company had access to some of
the best networks in both the US and Europe.

Suddenly they also had amazing talent as their managers. From
1997-2002, Joseph P. Nacchio, formerly Chief Engineer of AT&T, became
President and CEO of 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

And yet by 2002 KPN/Qwest was bankrupt. By August 2002, the Carlyle
Group had acquired its Qwest Dex online (Yellow Pages) phone book. By
2003, its amazing networks had been snapped up and, as we have
mentioned by 2004, Verizon had applied to acquire 62 of its licences.
Some observers would say that the Qwest saga epitomizes the tragic ups
and downs of the telecom bubble burst. Companies which seemed to have
all their ducks and Dex in a line suddenly found themselves sinking.

More questioning minds might consider another possibility. Qwest's
sudden links with one of the American networks served to set it up as
bait for a European partnership with KPN which owned the E-Bone and
had helped found Unisource (cf. §14). As a small mid-Western company
it posed none of the threats of one of the telecom giants. As a small
company it could also plausibly go awry. Once bankrupt those who had
bigger plans could conveniently buy up the networks which they could
not be perceived as wanting directly. To facilitate this they were
fortunate to find the co-operation of the equity companies (§ 11). If
one made enough noise about the tragedy of a little company that was
successful (not mentioning that it was vastly over-inflated); failed
and returned to being a small company, one might even hope that
persons would overlook what happened to the treasures that were
temporarily there.

This could be what happened with Williams and with Qwest. Could it be
that the whole telecom bubble burst was effectively about a number of
such cases which served elegantly to distract the public's attention
from a contemplated attempt to take over public service infrastructure
in the US, Europe and if possible around the world? We need to
consider further evidence before assessing whether this is even a
plausible scenario. We shall begin with a brief look at connections
between oil and media and then look at banks and equity firms before
examining more closely the pseudo-telecom crisis and the anything but
pseudo satellite crisis.

10. Oil 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 1994.363 Enron

The Enron Corporation was once one of the leading energy companies in
America. Amidst the various scandals surrounding Enron, which was 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."By 2004, Enron also offered four
new businesses: Global Semiconductor Services; Media Services; Global
Voice Minutes


Services; Digital Content Services (DCS).

The Unocal oil company is perhaps best known for its connections to Iraq,


Afghanistan,and other countries in the region via the present
administration. For instance, the President of Unocal became a
founding Director of the US-Azerbaijan Chamber of Commerce in 1996
along with individuals such as Richard Armitage, James Baker, Dick
Cheney, Henry Kissinger, Brent Scowcroft, John Sununu, and Richard
Perle as well as a number of other oil companies: Amoco, BP America,
Chevron, Exxon,


Mobil, Occidental, and Panalpina.A number of such connections have
been covered by the press.

Less discussed is how the directors of Unocal have diverse interests
that go considerably beyond oil. For instance, the CEO, Charles R.
Williamson, is on the board of the American Petroleum Institute, the
Weyerhaeuser Company and is chairman of the US-
ASEAN Business Council. Mr. Richard D. McCormick, who is on the board
of Unocal was also the president and CEO of US West from May 1992 to
June 1998, and Chairman for the next year until his retirement in
1999. He was also head of the International


Chamber of Commerceuntil 2002; and is a director of Wells Fargo; of United


Technologies Corporation and of Health Trio, Inc.Other members of the
Unocal board include two in the biotechnology field:

Kevin Sharer who is on the board of the U.S. Naval Academy Foundation;
3M and Northrop Grumman. Sharer is also the CEO of Amgen, one of the
high profile new biotech companies

Dr. Donald B. Rice, who was President and CEO of the RAND Corporation
from 1972-1989; Secretary of the Air Force from 1989-1993; President
and COO of Teledyne, Inc. from 1993-1996, and serves on the boards of
Wells Fargo & Company, Vulcan Materials Company, and Amgen. He is also
founder, Chairman, President and CEO, of his own bio-tech company,
Agensys. He served previously on the Commission on National
Security/21st Century, the National Science Board, and the Defense
Science Board370 Oil, Media and Government

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, the
Bush family and administration. 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….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


This quote is from an article in 2001 that listed many more such
connections which, incidentally have not diminished after the 2004
election. Any attempt at a comprehensive list of such connections
would lead far beyond the scope of this study. For our purposes it is
the big picture that is of interest. Three points stand out. First,
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. Second, the trends
towards convergence found in telecommunications and new media extend
to other areas such as the energy sector. Third, these media –energy
connections inevitably take us back to a handful of very large
corporations with close connections to the military (§ 8) and to the
financial world of banks and private equity firms (§ 11).

We shall see that the pipelines of communication in the computer,
telco, and satellite fields are becoming inextricably linked with the
pipelines of energy and finance. 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.372 Some have a conscious plan to control the future of production
especially in the domain of energy (Appendix 3). As a director at one
of the US labs put it recently: "The intellectual challenge presented
by environmental steward-ship is at least as great as that presented
by the Manhattan Project in the 1940s and the space race in the 1960s
and 1970s – and so is the potential


payoff."The trends towards convergence in telecommunications and new
media are part of a much larger phenomenon. As a next step it will be
useful to look more closely at connections with finance. IV. Finance
11. Banks and Consulting Firms Our story began (§ I) by showing that
there were intimate links between telecommunications companies, the
rise of the Internet and new media. We saw that the major American
telephone companies were linked with carrier equipment companies,
computer companies, content holders, home entertainment companies,
satellite companies and military contractors through a nexus of
connections to achieve a new approach to media. We suggested that
these connections can be seen as a move towards convergence as the
concerns of Information and Communication Technologies (ICT) shift
slowly towards Universal Convergence Technologies (UCT). Hence,
convergence, reflects a fundamental shift from analog to digital
communication that has consequences far beyond communications,
Internet and new media. We saw that convergence affects the military
(§ II) and the energy sectors (§ III). It also affects the financial

Convergence is bringing new interplay between sectors. In the past,
the worlds of oil and banking were separate. Today, Lee R. Raymond,
Chairman of the Board and CEO of Exxon Mobil Corporation, the world's
largest oil company, is also a Director since 1987 of JPMorgan Chase.

In some cases, there seems to be a nexus of links between telcos (e.g.
Qwest), carriers (Global Crossing), energy companies (Enron),
accountancy firms (Andersen), and


investment firms (Carlyle Group).One example is Gemplus, one of the
leading companies on smart cards specifically with respect to mobile
access to Internet. Gemplus, which had 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.Mandl was also a director of Viasystems, a "leading worldwide
independent provider of electronics manufacturing services, or EMS,
primarily in the telecommunications and networking


industries." To counter the influence of Verisign, in July 2004,
Gemplus joined with Sofipost, Sagem, Bull, l'Imprimerie nationale and
Euro-Information to create a new company called Infrasec.377


Convergence is also transforming the world of finance. In the realm of
consulting firms and banks it is leading to mergers on an
unprecedented scale. Different sectors are also merging. Accountancy
and consulting firms are merging with computer hardware and software
firms. Hence, IBM could also buy PriceWaterhouse and Oracle could buy
PeopleSoft. IBM, once a computer hardware firm, could even sell its
computer arm to the China in November 2004 and still continue as a
powerful firm. As a result, what were 41 firms in 1990 were 14 in 2004
(figure 6). It is noteworthy that those which were swallowed up were
not unsuccessful firms. On the contrary, in the case of Clarkson in
Gordon, it was the best firm in Canada that was acquired by forces
with a transnational and later a global vision. Instead of eliminating
incompetent firms, convergence simply collected successful firms into
much larger entities. IBM Global Services Rational Software Informix
Price Waterhouse Coopers Lybrand IBM Global Services (Lotus, Rational,
Informix, Price, Waterhouse, Coopers, Lybrand) EDS A.T. Kearney MCI
Systemshouse EDS (A.T. Kearney, MCI Systemshouse) Klynveld Peat
Marwick Goerdeler KPMG (Klynveld, Peat, Marwick, Goerdeler) Deloitte
Touche Tohmatsu Bakkenist Deloitte-Touche, Tohmatsu, Bakkenist Cap
Gemini Sogeti Ernst Young Clarkson, Gordon Cap Gemini, Sogeti, Ernst
and Young (Clarkson&Gordon) Andersen Consulting Accenture (Andersen
Consulting) Booz Allen Hamilton Booz Allen, Hamilton Oracle People
Soft J.D. Edwards Oracle (People Soft, J.D. Edwards) SSA Global Baan
SSA Global (Baan) Atos BSO Origin SEMA Atos Origin (BSO, SEMA) Logica
CMG Logica (CMG) Computer Sciences Corp Schlumberger Sema CSC
(Schlumberger Sema) CGI Group CGI Group


Figure 6. The big picture: Mergers of accounting, consultancyand
software firms in


the past decade.

As a result of such mergers caused by convergence, computer companies
such as IBM and consulting companies such as Andersen, in their new
guise as Accenture, were


engaged in providing visions of e-government.There were even cases
where consulting firms, which audited government accounts, 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. From this, there arose a sense that high finance, high
politics, and high military were somehow above or beyond the law (§
16). There were of course more subtle minds: if one could convince
everyone that these were times of emergency, then emergency actions
could be seen as lawful, even if they fell outside the usual framework
of the law. Interestingly enough these subtle minds assumed that the
regular law continued to apply to everyday citizens, in regular times
and in emergencies.

Some have cited convergence as one of the reasons for the bubble
burst: as part of a larger technological development or "shakedown."
Banks were certainly involved in the telecom debacles as an article in
Business Week explained: "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."381


Not only did the banks suffer great losses from what turned out to be
shaky investments, they were sometimes also directly implicated in the
irregularities surrounding those investments. For instance, in the
case of Enron, in addition to Andersen, at least eight US banks were
directly implicated: 1) JP Morgan Chase; 2) Citigroup; 3) Merrill
Lynch; 4)


CSFB; 5) Lehman Brothers; 6) Bank of America; 7) Vinson & Elkinsand 8) Kirkland


& Ellis.Serious evidence that Citigroup's Salomon Smith Barney and Grubman


deliberately misled investors and profited therefrom was discussed in
the news.Enron, was a particularly complex case. Companies such as
Level 3, linked with Verizon (and Verisign) had close connections with
Enron as did SAIC, via Entergy.

Accountancy Firm Company 1999 income in billions

1. Andersen (Accenture) Enron, Qwest, Global Crossing Merrill
Lynch38516.2 2. Deloitte & Touche Adelphia386 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.
As might be expected consulting firms were also closely involved with
telcos, computers and the Internet. Unfortunately, they were also
directly involved in irregularities concerning accounting. Andersen
was linked with Qwest and Global Crossing concerning


discrepancies; Deloitte and Touche with Adelphia;Ernst and Young with
Computer Associates International and KPMG with Xerox. By 2003, all of
the big five were being


examined for irregularities and questionable practices (figure
7).Though conflict of interest within the big five stemmed in part
from 'in house' temptations, subsequent revelations suggested that the
companies' roles were less neutral in their advice than they might
have appeared at first sight. In 1999, the combined earnings of the
big five amounted to some $69 billion.390 From a global viewpoint
these were modest sums of money. Striking, however, was how the
activities of the major consulting/ accountancy/auditing firms
extended 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.

Meanwhile, the financial irregularities noted with the telcos and
media firms also extend to the pharmaceutical field: a $1 billion
error with Bristol Myers Squibb and a $12.4


billion error with Merck.If this applies equally to other key
investment areas such as biotechnology and nano-technology then the
game is much bigger than is generally


suspected. As the venerable, U.S. Senator Everett Dickson put it so
eloquently: "A billion here, a billion there, sooner or later it adds
up to real money." How many citizens 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?393

Some of these irregularities involved military contractors. Perhaps
even more disturbing is that these irregularities involved government
contractors. Officially, the cases of companies overcharging the
government were in the millions. For instance, on 13 March


2001, Lockheed Martin agreed to pay back $10.5 million in an
overcharge case.On 27


August 2003, Lockheed Martin agreed to pay back the Air Force $37.9
million.On 9


June 2003, Northrop agreed to pay back $111 million in an overcharge
case.The top 100 false claims settlements since 1986 amounted to $12
billion.397 Some said that these were only the small ones that got
caught, as opposed to the big ones that got away. In the year 2000,
"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."Some claimed that these sums were much higher: that


there were over $6 trillion missing.
Whether there were merely a few billions or trillions missing is the
kind of question that was traditionally, and probably always will be,
of great interest to the Internal Revenue Service (IRS). For our
purposes, such statistics are only of interest insomuch as they
confirm that the bust of 2000 and the telco crisis of 2001
were but a small part of something vastly larger. The 201 mergers in
US insurance companies in the first nine months of 2001 were another
indication of major change as was the trend for traditionally solid
mutual companies such as John Hancock to convert to publicly held


companies.Paradoxically, as assets from public sphere (railroads,
telecoms) went increasingly into the private sphere; what had
traditionally been private companies moved increasingly to the public
sphere in the sense of the stock market, which had none of the
stability of the old public assets. To be sure, the US alone was not
alone in terms of irregularities. After all, scandals were invented in
Europe long before America was discovered. Hollywood generated
considerable entertainment, and at least as much profit, by showing
how scandals helped the fall of Rome, while the actions of a Prime
Minister in modern Rome confirmed that such abuse of power by heads of
state was much more than historical fiction.401 Even so, such
irregularities confirm that these problems extend far beyond the media
sector to areas such as energy, another crucial ingredient of an
information age (§ 9-10 above). The presence of such irregularities
throughout the system points to a crisis in consulting, book-keeping,
accountancy, auditing, investing, consulting, banking, insurance,
indeed the entire financial infrastructure. Underlying these
irregularities is a deeper crisis of integrity and trust. It is
important to look more closely at the very practical role of equity
firms in these developments (§12); at the role of nanocience and
biotechnology (§13); and at the telco and satellite crises (§-14-15),
before turning to philosophical dimensions (§16) of our story,

12. 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, it acquired 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."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.To
a certain extent such transactions, buyouts and takeovers are, of
course, a natural and necessary dimension of a healthy business

For our story, KKR is of a certain interest because, as we have seen
on several occasions, it frequently re-appears in complex media
transactions. Our 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. A few concrete
examples will help to make this point.

By way of introduction, a slight detour is necessary to explain the
underlying ambitions of the new investors. The United States, which
traditionally had a frontier mentality --
epitomized by the phrase "Go West young man" until stopped by the
Pacific Ocean –or Hawaii,--now sees the world as its new frontier.
Some of those frontier spirits still live in the American West. One is
Ted Turner, the largest individual landowner in the United States with
over 1.7 million acres in Montana, New Mexico, South Dakota, Alaska

404 405

Florida.Another is John Malone,who headed Liberty Media and also the
Eastern Management Group, which had Worldcom among its clients. In
2001, there were reports that "Liberty Media is investing more than $5
billion in European cable-TV." On June 21, 2001, Liberty Media
"announced that it would acquire six cable-TV companies in


Germany from Deutsche Telekom for terms that haven't yet been disclosed."
In 2001, Liberty Media also invested an additional $543 million in
cash407 in another company with the modest title of
UnitedGlobalCom,408 the European operations409 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.
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." As
noted earlier (§3) AT&T also invested $1.4 billion in these companies.
For a very brief period, the UPC 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."

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) debt."412

Two reasons make this case special. First, UPC 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 so-called Darth Vader of media and of the


information highway.When the UPC company went bankrupt, many innocent
investors lost 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 telecommunications bubble burst
that ruined Williams Communications and saw KPNQwest shut in 2002 and
brought difficulties to Carrier1 and Level3 Communications "after
spending billions building pan-European networks."414 They were not
isolated cases, however, 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 at some of the other private equity firms to
indicate the dimensions of the problems. We shall show that private
equity firms were closely involved in some of the most dramatic recent
crises in multimedia firms including Kirch, Bertelsmann and Hollinger.


Much has been already been said by others about the Carlyle Group.
Many persons have noted connections between the Carlyle Group,
Halliburton (Kellogg, Brown, Root or


KBR) and the Bush family.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

416 417

almost 700%.The Wikipedia has an entry.Dan Briody has written a book on these

418 419

connections.Alfred Mendes has warned of the dangers of this groupas has Sherman


H. Skolnick (Citizen's Committee to Clean Up the Courts).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.421
There were, of course, also conspiracy theorists, who linked this
group with a quest for a new world order. These have also drawn
attention to the presence of a swastika on the Radio Frequency
Identification (RFID) chips linked with Carlyle.422 Such topics are
beyond the scope of our essay. The Chairman emeritus of Carlyle is
Frank C. Carlucci, who is also Chairman Emeritus of Nortel Networks
Limited and the U.S.-Taiwan Business Council. He was Chairman of BDM
International (§ 15); is Chairman of the Neurogen Corporation Board of
Directors and serves as a member on the following corporate boards:
SunResorts, Ltd., N.V.; Encysive Pharmaceuticals Inc. (formerly Texas
Biotechnology Corporation); and United Defense Industries, Inc.423

In the case of Carlyle, we are concerned specifically with new media
connections. It is striking, for instance, that in 2004, the Carlyle
Group had as its chairman, Lou Gerstner, who used to be head of IBM;
that Carlyle was closely linked with Halliburton (Vinnell, Brown and
Root or VBR); that the Parsons Group, the second major beneficiary of
the Iraq war, had 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 was the same Kent Kresa, who led the military efforts
of Northrop Grumman, had become a director of General Motors and was
also linked with the third group that has most profited from the Iraq
war: Fluor. Hence these directors were linked with Carlyle, Parsons
and Fluor, the three main beneficiaries of the Iraq war. Aerospace &
Defense Automotive & Trans Consumer & Retail Energy & Power Healthcare
Industrial Opportunistic Real Estate Tech & Business Sys Telecom and

Year Acquistion by Carlyle Group and others


1992 Military electronics group from General Dynamics

1995 Federal Data Corporation (FDC)

2002, 04 Healthcare and business publishing from Vivendi Universal
2002, 06 Sonera Smart Trust AB427


2002, 08 QwestDex publishing business from Qwest Communications
rd 429

2003, 02 Casema, 3Dutch Cable company with Providence from France Telecom

2003, 04 Retevision Audiovisual TV and signals section from Auna

2003, 06 FiatAvio's Aerospace Business


2004, 04 Kingston Inmedia from Kingston Communications2004, 05 Hawaii
wireline from Verizon Communications433

2004, 06 60% of DDI pocket from KDDI434

2004, 06 27%, KKR 44% of Panamsat435 2004, 06 Loews Cineplex436


Figure 8 a) Focus industries of the Carlyle Group;b) Media companies
acquired by


Carlyle between 1992-2004.

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. More
significant for our purposes is the scope of Carlyle's activities
which has 10 focus industries (figure 8a). The activities of Carlyle
are global. For instance, along with J. P.


Morgan they were involved in selling the Korean Koram Bank.
In 2004, the managing Director in telecommunications and Media at
Carlyle was James

A. Attwood, Jr., who oversaw corporate strategy at GTE, helped acquire
BBN before spinning it off as a public company, was instrumental in
the GTE – Bell Atlantic merger that led to Verizon and was Verizon's
Strategy and Development Chief.440 He "committed more than $2 billion
of equity in telecom and media investments since 2001. He led the
firm's investments in Qwest Dex (now Dex Media, Inc.), eAccess Ltd.,
Telco Hawaii (pending) and DDI Pocket, Inc. (pending). Mr. Attwood is
Co-chairman of the Board of Directors of Dex Media, and was scheduled
to serve as a member of the Boards of Directors of Hawaii Telcom and
DDI Pocket."441 Attwood's predecessor was William E. Kennard, who was
on the board of Nextel; was the director of the Federal Communications
Commission (FCC), and also played a part in


AT&T's broadband strategies.It could, of course, be a complete
co-incidence but it was, nonetheless, fascinating that a single
individual, who was directly involved in a number of the bankruptcies
and mergers of telecom burst, is also the managing director in
telecommunications acquisitions in the Carlyle equity group.

If we look to some of the key acquisitions of Carlyle in the
communications field, (figure 8b), we discover that around the world,
Carlyle is buying significant bits of infrastructure, which were hit
by the pseudo dot-com bust and the pseudo-telecom bubble burst (cf.
15). These include the DDI pocket, from KDDI which entails mobile,
wireless technologies from Japan in an area where America was lagging
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, which is responding to these acts of hubris in a
serious way.

There are also complex links between Carlyle and the military:

Arlington, VA-based United Defense LP has contracts for the Army's
main fleet of armored infantry vehicles, an automated naval gun
system, and a Navy missile-
launching system. Among its potentially most lucrative contracts is
one for the next generation of high-tech Army battlefield artillery,
the gigantic Crusader gun. The Crusader plans have languished for
years, however, the gun being considered too heavy to move easily-100+
tons even after drastic re-tooling-and obsolete for the desert
battlefields of the 21st century. The year after Carlyle buys it,
United Defense loses $122 million on $1.2 billion in revenue, but the
turnaround begins in George W's inaugural year. First comes the Bush
administration's proposed 2002 defense budget. The document lands in
Congress in June, 2001 and includes an 11% hike in defense spending,
including full funding for the Crusader. Thanks to the increased stock
value bolstered by the good news and future prospects for the company,
Carlyle investors reap their first dividends from United Defense on


August 13-to the tune of $289.7 million.
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 Vaxgen, a firm which was searching for new AIDS
vaccines, although it had not yet produced an effective treatment.
Meanwhile, the World Health Organization had ordered India to stop
producing cheaper alternatives. In November 2004, the same Vaxgen
Corporation, in which Carlyle and others had invested, received a
contract of $877 million for Anthrax vaccines. Critics noted that Fort
Dettrick, the national facility, had long ago developed


more effective means (V below and Appendix 3).
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 was Diebold, which
created an elections software. The head of Diebold was also a
fundraiser for the 2004 election and gave a gala dinner on the eve
before a decision


whether Diebold systems would be chosen for the election itself.One of
the competitors in this field was the company, Vote Here, which,
according to their website, 62 was 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 was Admiral Bill Owens, who was also former president,
chief operating officer, and vice chairman of SAIC. Hence, SAIC, which
was supposed to vet Diebold's elections software, was itself in the
elections business.446 Another former SAIC board member, also on the
board of VoteHere, was ex-CIA Director Robert Gates, a veteran of the
Iran-Contra scandal. Meanwhile, as noted above, Admiral Bill Owens,
who was 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 was Carlyle
Group, while Vice President Dick Cheney's former employer was
Halliburton.447 When the 200 page SAIC report on the Diebold machines
came out on 24 September 2003 it "found 328 security weaknesses, 26 of
them being critical, and concluded 'the system, as implemented in
policy, procedure, and technology, is at high risk of compromise.'
"448 In the 2004 elections, Diebold, Seqouia and ES&S machines were
used. Some saw in all this the potentials of a conflict of interests
and predicted already in 2003 that this technology would assure
re-election of the present administration. The present administration
clearly saw no such conflicts and seemed 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. Such problems with voting
machines were compounded by allegations, already in the presidential
election of 2000, concerning the use of subliminal advertising. In
September 2000, it was reported that an: "ad aired for two weeks this
month criticized Gore's prescription drug plan. An image of Gore was
followed by fragments of the words "Bureaucrats decide," with the word
"RATS" flashing for less than one second on the screen before the
entire word "bureaucrats" appeared."449 The FCC investigated the
matter. Significantly, one Commissioner, Furchtgott Koch who helped in
the AT&T-BT joint venture (§ 11), and was one of the most eloquent
spokesmen for liberalization and deregulation, attacked the
investigation stating that the FCC had no jurisdiction in this
area.450 In 2004, there were also accusations that: "CNN has been
using subliminal advertising for Bush, flashing the word 'trust' in
ads for CNN as well as coverage of Bush."451 A diplomat of the old
school would insist that the United States, as a pillar of freedom and
democracy, has every right to govern itself as they best see fit.
However, as even the American lawyer, Lawrence Lessig, has pointed
out, there is grave concern internationally about the extent to which
a small group of Americans, acting in the name of their people, are
affecting and attempting to determine the lives of persons far beyond
their own borders without these persons' consent and sometimes very
much against their will. Lessig cited the case of some Americans who
tried to tell Canadians what programmes they were allowed to broadcast
on television stations within their own
country. He admitted that if a foreign country were to tell Washington
what regulations they should have there would rightly be a great
outcry. The reason for inventing borders was to impose some limits on
what came from outside and conversely.

The overzealous influence of some Americans tarnishes America's name
because these extensions beyond borders are effectively twofold: 1)
physical invasions into Afghanistan and Iraq which were well
publicized; 2) invisible invasions of values which affect the whole
world. We shall explore the reasons for this and the underlying
psychology that caused it later (§ Appendix 3). For the moment, we
shall begin by showing that Carlyle's activities were not in
isolation; that Carlyle worked directly with other equity firms in
pursuing larger targets and that implications of their activities
stretch far beyond internal matters (innere Angelegenheiten), as the
East Germans used to say, i.e. far beyond American borders.

As an example in passing one could mention James A. Baker, who was in
the Department of Justice as Counsel for Intelligence Policy, was a
senior counsel of the Carlyle Group; actively increasing Iraq's debts
through his government and this company while serving as the
President's personal envoy charged with restructuring Iraq's $132
billion in debt, which generated at least $5 billion in new revenue
annually. On the surface, America made a great show of forgiving
Iraq's debt. But this was conditional on Arab nations such as Kuwait
forgiving Iraq's debt to them. Hence, Baker's challenge was to
persuade Kuwait to be forgiving in this lose-lose situation for
non-Americans. This was a level of conflict of interest that proved
too much even for the press and a successor was eventually found for
this task.

To return to the bigger picture, we shall examine recent upheavals in
global multimedia conglomerates. We shall then turn to the nanoscience
and biotech fields (§ 13-14). Thereafter, a reassessment of the
telecom debacle (§ 15) and the satellite saga (§16) will reveal that
much more was involved than isolated companies in single sectors.

Related Equity Firms

Carlyle played an important part in the satellite acquisitions (§ 15).
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 completed a
series of acquisitions. A number of these appeared 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 significant trends and potential dangers.

A first matter of interest is the scale of these activities, KKR,
founded in 1977, claimed 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, focused on larger European buyouts which entailed


transactions "in excess of 23 billion euros."Cinven was active in Europe with

453 454

Gores.Beginning in 2002, Cinven became very active in the media
field(cf. below under Vivendi). On 1 November 2004, there was a merger
between Apax/Cinven/World Directories.455

The Blackstone Group entailed transactions of over $80 billion. The
official website of the Carlyle described it as "one of the world's
largest private equity firms, with more than $18.4 billion under
management." Permira advised $13 billion; Candover made investments of
25 billion euros. Apax has invested over 12 billion euros. This
included 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"in six major sectors: IT, Media, Telecoms, Healthcare,
Financial Services, Retail and Consumer. Thomas H. Lee managed $14
billion; Apollo managed $9 billion; Madison


Dearborn managed $ 9 billion;CVC Capital managed $9 billion; Clayton,
Dubiler and


Rice invested $5 billion.Terra Firma managed $4.7 billion; Providence
a modest $2.8 billion; Oak Hill, $1.6 billion; Platinum Equity founded
by Tom Gores was valued at $1.4 billion, his brother (Alec) Gores
Technology a 'mere" $400 million. In this kind of company, united we
stand took on a more weighty significance.

A second interesting phenomenon is that these equity firms typically
partnered with each other or some other major corporation in order to
make bids as consortia (figure 9). In rare cases as in the bids for
Adelphia Communications, major corporations, such as AT&T and Warner
were 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 appeared to play the
role of go-betweens.

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 9. Examples of equity firms and their partners in major bids

A third noteworthy point is that the large banks also had their own
private equity firms, with considerable funds as we learn from their
websites. For instance, Goldman Sachs managed "$11 billion aggregate
capital commitments as of September 2002." The Lehman Brothers Private
Equity had a "total committed capital of approximately $9.5 billion."
JP Morgan had "over $19 billion under management." Together the
investments of the equity firms mentioned in the previous three
paragraphs amount to over $380 billion. It is sobering to recall that
in 2004, General Electric (GE) Capital had assets of


"approximately $500 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.A combination of GE
Capital and the equity firms mentioned above was greater than the GNP
of Canada. Given that the equity firms had links with the highest
echelons of government, the leading corporations and the major banks,
they were potentially poised to wield enormous power.

Private Equity and New Media

The major equity firms made 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 states 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."There is reason for concern, however, since these same firms
were in the thick of the enormous deals which were at the centre of bust and the telecom bubble burst. A brief look at five
examples will make this clear.


In January 1998, Cinven acquired IPC (the UK's leading consumer
magazine publisher) from Reed International for 1.376462 billion

At the time of acquisition, IPC…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.

In 2001, Cinven sold IPC Media to AOL for $1.67 billion.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.465 The consortium included Edgar Bronfman, Jr.
Thomas H. Lee Partners, Bain Capital and Providence Equity
Partners.466 On March 2, 2004, Time Warner sold its Warner Music Group
(including its record labels Warner Brothers, Atlantic, Elektra and


publishing division Warner Chappell) to this consortium for $2.6
billion in cash.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.
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%)."
Vivendi 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%.470 In
October 2002, Vivendi sold its US publishing business (Houghton
Mifflin) to the Blackstone Equity group for 1.7 billion


euros. 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 claimed they paid $18 billion. Some claim $7

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.This was hardly the whole story. The idea had been
floated on 19 March, 2004, 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."On 21 December, 2004 Cinven and Altice completed the transaction as


Attentive observers have pointed out that if no objections were made
within a few months, the whole of the French cable television domain
would be in foreign hands, and more specifically those of John Malone
of Liberty Media via United GlobalCom, which in turn had large
investments from AT&T. It is hardly surprising to find the so-called
Darth Varder of media trying to gobble sections of European
infrastructure as if this were another bit of the Wild West especially
since, as noted earlier, both he, and his henchman, Mark Schneider
--who was also the son of Gene Schneider, who founded Liberty
Media--had stated their aims so clearly. What was highly troubling,
however, was to find a London based equity firm playing a key role in
helping to achieve this American scheme, rather than protecting
Europe's interests. More troubling still was that companies such as
Canal + were anything but struggling firms, whose lack of competence
had doomed them to bankruptcy. They were among the best success
stories in European new media that were being acquired, some would
say, surreptitiously snatched.

This 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 [sic!]) European operations of Alcatel's (Paris:
CGEP.PA, NYSE: ALA) enterprise distribution and services business."

The new firm would be called Nextira.Platinum's website revealed 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

The above suggests that major corporations were using seemingly minor
equity firms to acquire pieces of a bigger puzzle, which only they
saw, understood and increasingly controlled. Ultimately the danger lay
not so much in the Mark Schneiders (UnitedGlobalCom) or even in the
supremely ambitious John Malones (Liberty Media) of this world.
Individuals retire and their companies often fade with them. There is
a deeper danger that the same corporations have an hidden agenda: that
they are (re)constructing their mini-empires and integrating them in
schemes that could undermine the powers of free companies and free


The Bavarian, Leo Kirch, developed one of the largest media empires in
the world with assets including TV rights to the 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,
it marked "Germany's biggest


corporate collapse since World War II."The Kirch empire was so complex
that a full account of its holdings and their fate would be far beyond
the scope of this essay. Our concern, simply is to highlight, 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."479 On 9 October, 2002, the Deutsche Bank sold
a stake "of 10.4 % of the equity capital of Axel Springer Verlag AG to


Friede Springer." This reduced the stake of Deutsche Bank to below 30
per cent. Exactly one 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 American 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.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's
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 seemed absurd. In
retrospect, it was 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 €107.5m in the business, with senior
debt and


mezzanine facilities arranged and underwritten by Barclays Capital."
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's highly prestigious Springer Verlag was sold to Candover
and Cinven for €1.05 billion (about $1.23 billion).483 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 one of its choice holdings even if, ultimately, it was not shaken
and perhaps not even stirred by the threats of its demise. As in the
Canal+ case mentioned above, this was another disturbing example of
healthy companies being acquired in the interests of quick gain rather
than long term viability. A further consequence of such shuffles was
that the publishing industry found it increasingly difficult to make
ends meet. New media were bringing down the costs of publishing, but
the intrusions of inequitable equity companies and others were
threatening a whole trade.


The case of the former empire of Conrad Black was very different, was
undecided as of November 2004, and yet it invited 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 484

$18.44 a share, which values the company at $1.6 billion.

Was the presence of equity firms in all these major media bankruptcies
merely a coincidence? Were these crises deliberately planned? Did
their focus on short-term profits undermine confidence in the new
media industries? Some have suggested that there is a master plan for
control. For instance, Shaykh Dr. Abdalqadir as-Sufi, has claimed that
the new great game is about media, investment and energy:

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 handed
over a country to the bankers in a world where Aid is itself a
militant form of invasion.485

In the big picture, media, energy and finance are undoubtedly very
important. At a global level, there is convergence not only in but
also between each of the three sectors. Meanwhile, in the past decade,
the trends towards convergence have brought other sectors into centre
stage, namely, nanoscience and biotechnology. We shall examine some of
these developments (§ 14-15 and Appendix 4) before turning to
reconsider the so-called telecom crisis (§ 16) and the real crisis
with satellites. (§ 17). Together these sectors entail trillions of
dollars.486 IV. Nano-Bio-Info-Cogno 14. Corporations Since 2000, there
has been an increasing convergence of Nanoscience, Biotechnology,
Information technology and Cognitive science (NBIC). This is often
described as if it were an independent phenomenon. "Spearheading the
NBIC initiative is Mihail Roco of


the US government National Science Foundation (NSF), and promoting it
to industry is Newt Gingrich -previous Republican speaker of the House
of Representatives and honorary chairman of the industry research and
lobbying association the NanoBusiness Alliance." What interests us is
that the same major players whom we have encountered in the
telecoms/media, the energy and the financial fields are also involved
with these


developments.As Jim Thomas pointed out in the Ecologist in 2003:

The list of companies involved in nanotechnology includes many of the
world's most powerful multinationals. At the forefront is IBM, which
has already committed $100m to research and development on
nano-electronics. It is joined by ExxonMobil, chemicals giant Dow,
Xerox, US technology corporation 3M, Alcan Aluminum, Johnson &
Johnson, Hewlett-Packard, Lucent, Motorola, pharmaceuticals firms Eli
Lilly and Aventis, DuPont, Sony, Toyota, Hitachi Mitsubishi, NEC,
Toshiba, Philips, L'Oréal, BASF and Bayer.

The economic and legal might of these companies gives them control
over the direction that nanotechnology takes. A case in point is
nano-scale plastic catalysts. In the early phases, more than 3,000
patents were granted to a host of companies. However, when all the
bargaining and litigation had finished it was Exxon Mobil and Dow that
walked away with technological control. The interest that the giant
corporations are showing in nanotechnology is reflected in the growth
of investment in the field over recent years:

-US venture capital investment in nanotechnology has grown from a
modest $100m per annum in 1999 to $780m in 2001, and will be $1.2
billion in 2003;

-By 2015 the US National Science Foundation predicts: annual sales of
$340 billion for nanostructured materials and processes; $600 billion
in annual electronics and informatics revenues; sales of about $180
billion in pharmaceutical applications, with half of all
pharmaceutical production dependent on nanotechnology; and annual
global nanotech-related sales to exceed $1 trillion, with atom
technologies the dominant factor in the sectors of electronics (from
computers to telecommunications), pharmaceuticals, energy and


Telcos and New Media AT&T has been active in all these fields for at
least two decades. Dr Braden Allenby, a former Vice President of
Environment, Health and Safety at AT&T, in a discussion on
environmentalism and technology, gave his version of the big picture:

Positioning environmentalism against technology, however, has its
problems. For one, it misunderstands the nature of complex cultural
systems. These inevitably evolve, generally towards greater
complexity; consider, for example, how much more complex international
governance, information networks, or financial structures are now than
just a few years ago. And technologies are evolving rapidly as well,
particularly in the three areas that promise to impact environmental
systems the most: biotechnology, nanotechnology, and information
technology. The first will, over time, give us design capabilities
over life; the second will let us manipulate matter at the molecular
level; the third will change how we perceive and understand the world
within which the first two are accomplished. Moreover, developing such
capabilities will give the cultures that do so significant competitive
advantages over those that opt for stability rather than technological

Christopher Meyer and Stan Davis, the authors of It's Alive. The
Coming Convergence of Information, Biology and Business (2003) put it
slightly differently: "In the same way that researchers at PARC and
Fairchild Semiconductor and Bell Labs created technology that
established a new economy based on information, scientists in labs
today are inventing a future based on molecular technologies. These
include not just biotechnology


but nanotechnology and materials science as well."
AT&Ts information research covers five areas: 1) Data Mining; 2)
Information Services; 3) Information Systems and Analysis; 4)
Information Visualization and 5) Innovative


Services.The main site of AT&T does not list nanotechnology formally
as a research area. However, the Lucent site under Physical Sciences
has research areas on both


Nanotechnology Research and Biological Physics.In June 2000,
researchers at MIT and Bell Labs "created an electronic circuit that
mimics the biological circuitry of the cerebral cortex, the brain's
center of intelligence."494 In January 2004, Dave Bishop, vice
president of Nanotechnology Research at Bell Labs, also became
president of the New Jersey Nanotechnology Consortium based on the
Bell Labs premises.495 Members of SAIC, such as Scott McNeill,
attended the first NBIC conference. Former AT&T executives are also
executives in Analex (see below). Hence, AT&T in its widest sense is
one of the pioneers in the new convergence between life sciences,
physical sciences and information sciences linked with the


Oil Companies are also active in this domain. Exxon used biotechnology
in cleaning up


the infamous Exxon Valdez oil spill.AEF Global, Aventis, Boojum,
DowAgroSciences and the Imperial Oil Resources/Exxon Research and
Engineering Company, are partnered with the National research Council
of Canada's Biotechnology Research Institute focussed on Environmental
Genetics.497 Michael Heller who was a Supervisor of DNA Technology and
Molecular Biology for Standard Oil Company went on to become President
and CEO of Integrated DNA technologies and then VP of Nanotronics and
CTO of Nanogen.498 Shell Biotechnology Inc. has been applying for


patents,including those for changing the shapes of eyes and face
lifts.500 Dick Love, a former Shell executive is now the head of
Translational Genomics, the largest biotech


company in Arizona.Similar trends can be seen in the large
pharmaceutical firms which often have their own research labs devoted
to biotechnology.

15. New Firms More typical, however, is the rise of new firms which
are not infrequently sponsored by large corporations and have the
advantage of being able to work on new developments without attracting
public attention in the same way as the multi-nationals. In these new
firms, there is an increasing interplay between computer science and
biotechnology. For instance, Van B. Honeycutt, the CEO of Computer
Systems Corp (CSC) is on the board of the biotech companies, Beckman
Coulter Inc.502 and Tenet Healthcare Corporation. On 7 March, 2003 CSC
acquired Dyncorp, one of the biggest players in biotechnology and the
22nd largest defense contractor in 1998. On 30 September, 2004,
Computer Sciences Corp. "won a five-year, $74.8 million contract from
the Centers for Medicare and


Medicaid Services to provide hospital data abstraction and data
validation services."
Meanwhile, Arthur D. Levinson, the Chairman and CEO of Genentech, a
biotech firm, also serves on the boards of Apple Computer, Inc.,
Google Inc., and the Technology Network.504

Much more is involved than the rise of a new industry. Traditionally
there was a concept of public health. The prevention of regular
diseases is becoming intertwined with fears of bio-terrorism. As
Howard Koh, Commissioner, Massachussetts Department of Public Health
put it:

After September 11 when people ask me about public health is about, I
tell them that's easy. Public health protects people from threats. And
some of those threats are proven like cancer, heart disease, HIV,
substance abuse. And some of the threats are potential like
bioterrorism and more recently West Nile Virus. But when threats come
the public expects, the public demands and the public deserves
protection.And when protection works we have the power of prevention
at its


very best.
In the process, questions of prevention, which were traditionally a
task for national research labs such as National Vaccines Inc., have
become increasingly linked with private firms. This is one of the
reasons why there has been such an enormous growth of companies in the
bio-tech sector. In some cases, these can be linked with remarkable
individuals. For instance, the Chairman of Abgenix, said to be the
largest biotech public offering in US history, is L. Scott Greer, who
is managing director of Numenor Ventures; Chairman and CEO of Izalex;
CFO and VP of Cell Genesys and a Director of Illumina, 506

Sirna Therapeutics,Affymax (created through the acquisition of assets
from GlaxoSmithKline in August 2001); Molecular Dynamics, CV
Therapeutics, and Acologix. Larry Ellberger, a Director at Avant, had
been a Senior Vice President of Powderject Pharmaceuticals, which has
since been sold to Chiron. Ellberger also became the Founder and
Principal, Healthcare Ventures Associates,507 which provided initial
funding for a series of other companies including Human Genome
Sciences, MedImmune and Advancis.

A complete survey of all these companies would take us far beyond the
scope of this study. For our purposes, it will suffice to outline
briefly the clusters that are forming around MedIMmmune, Gilead, and
Avant Immunotherapeutics. We shall then examine three companies linked
with government contracts for vaccines prior to 2000, namely, Oravax,
Dynport Vaccine Company and Bioport. Our study of Bioport will reveal
that at least four other companies were involved in the early attempts
at an anthrax vaccine. While a number of thes links point to British
firms, we shall discover that the key company is Analex, which is at
the centre of American developments. This company will help us to
understand how efforts for vaccines, homeland security, biometrics and
efforts of the provisional government in Iraq are all inter-connected.

1988 Chiron Corp. (U. S.) (PowderJect Pharmaceuticals) 1995 Human
Genome Sciences 1995 BioTransplant 1997, 2003 Protein Design Labs,
Inc. 1999 Applied Molecular Evolution, Inc. 1999 Washington University
1999 U. S. Bioscience (acquired) 2000 Alkermes (linked with Amylin)
2000 GlaxoSmithKline plc (U. K.) 2000 Medarex, Inc. 2000 MGI Pharma,
Inc. 2001 Targesome 2001 Genaera Corp. 2004 GenPat77 Pharmacogenetics
AG (Germany)

Figure 14. MedImmune List of Cooperation, Licensing and/or Other Agreements.


As inndcated above, MedImmune began with funding from Larry
Ellberger's Healthcare Ventures Inc. in 1988 and is "focused on using
biotechnology to produce innovative


products to impact patient health."Almost immediately it began developing co-
operation, licensing and other agreements. A decade later it began
acquiring companies. In November 1999, MedImmune acquired U. S.
Bioscience, Inc. in a transaction valued at $580 million. In July
2000, MedImmune launched MedImmune Ventures, a venture capital
subsidiary with around $100m to invest.509 In January 2002, MedImmune
acquired Aviron, Inc. through an exchange offer and merger transaction
valued at $1.6 billion, and changed its name to MedImmune Vaccines, a
new business unit of


MedImmuneIn the spring of 2004, MedImmune gained full ownership of
FluMist after Wyeth Pharmaceuticals of Collegeville, Pa., dissolved
its partnership with the company to market the vaccine (figure 14).511

MedImmune thus offers a brilliant example of how a new firm can use
alliances to position itself as a serious player globally within just
over a decade. Networking is one key. The Chairman of Medimmune, Wayne
T Hockmeyer, is also on the boards of Advancis Pharmaceutical Corp.,
Diversa Corporation, GenVec, InterMune Pharmaceuticals, Inc., Idenix
Pharmaceuticals, Inc., Tercica, Inc. and TolerRx Inc.512


Medimmune is linked with the legal firm Cooley, Godward,which also
handles accounts of the Carlyle Group. More specifically, a key to
such success is that the small company has direct links with global
players such as Glaxo.


Equally impressive in this respect is Gilead Inc., which was founded
in 1997 by Michael

L. Riordan. Their program was "organized around three kinds of
experimental compounds of increasing size: the small molecules for the
AIDS514 virus, medium-sized strands for heart disease, and long
strands that would block a gene that triggers cancerous 515

growth. Gilead's cancer work is being done under a pact with Glaxo
Inc."Gilead Sciences is a leader in the discovery and development of a
new class of human therapeutics based on nucleotides, the building
blocks of DNA and RNA. "In 1996, Gilead's first product, VISTIDE
(cidofovir injection), was cleared by the U.S. Food & Drug
Administration for the treatment of cytomegalovirus (CMV) retinitis in
patients with AIDS. Gilead has other nucleotide product candidates in
human testing for the potential treatment of viral diseases caused by
CMV, human immunodeficiency virus


(HIV), hepatitis B virus, herpes simplex virus and human papillomavirus."
Within a year of its being founded, Donald H. Rumsfeld517 became a
director. From 3 January, 1997, through to January 2001 he was
Chairman of the Board. His presence helped attract a number of other
important members to the board including: a) Gordon E. Moore, the
founder of Intel; b) George P. Schultz, the former Secretary of
Defense, a director of Bechtel Group, chairman of the International
Council of J. P. Morgan Chase and chairman of the Accenture Energy
Advisory Board;518 and d) Dr. Paul Berg, Director of the Stanford
University Beckman Center for Molecular and Genetic Medicine; head of
the National Institutes of Health's Human Genome Project Scientific
Advisory Committee and a Nobel Prize winner in chemistry in 1980 for
his studies of the biochemistry of nucleic acids, particularly
recombinant DNA. John C. Martin the President and CEO of Gilead, was
also President of the International Society of Antiviral Research from
1998 through 2000, Chairman of the Board of Directors of the Bay Area
Bioscience Center from 1999 through 2001 and served on the National
Institute of Allergy & Infectious Diseases Council from 2000 through
2003.519 These powerful directors, in combination with strong
political, financial and intellectual support led the company to make
a striking number of agreements with other firms and position itself
as a major player within a decade (figure 15). 75 Mr Rumsfeld is not
alone in exploring this military connection with biotechnology. When
one of his predecessors, William J. Perry, retired from his position
as Secretary of Defense (1994-1997), he returned to Hambrecht and
Quist Capital management HQCM, which is currently the investment
adviser for two closed-end equity funds, H&Q Healthcare Investors and
H&Q Life Sciences Investors.520 Henri A. Termeer, a trustee of that
company, has been Chairman, CEO and President of Genzyme, and is a
director of AutoImmune; Genzyme Transgenics and Diacrin.521 1988
Donald Rumsfeld, Director522 January 1991 Gordon Moore (Business
Advisory Council July 1991-Jan.1996) George P. Schultz (Bechtel,
Committee for Liberation of Iraq) 7 August 1996 Pharmacia & Upjohn SA
3 January 1997 Donald Rumsfeld, Chairman of the Board 12, 27 September
1997 Roche Laboratories 22 December 1997 Glaxo Wellcome Inc. 28 April
1998 Paul Berg, Director 18 December 1998 Isis Pharmaceuticals 27
December 2000 Institute of Organic Chemistry and Biochemistry of the
Academy of Sciences of the Czech Republic, and Rega Institute for
Medical Research (Louvain) 6 January 2001 Cubist Pharmaceuticals 21
October 2001 ChaseMellon Shareholder Services LLC 26 November 2001 OSI
Pharmaceuticals Acquires Oncology Assets 523 28 February 1999 NeXstar
23 January 2003 Triangle Pharmaceuticals (Avid Corp) Figure 15. Key
moments in the rise of Gilead.524 Gilead is one of a series of biotech
companies sponsored by J. P. Morgan, including Genzyme, Amgen, Biogen
Idec and Genentech.525 In 1980, Amgen (Applied Molecular Genetics)
Inc.526 was founded. In 2000, Amgen acquired Kinetix; in 2002 it
acquired Immunex for $10 billion. Amgen has links via its board of
directors with Los Alamos, Northrop Grumman, Unocal, Merck and Glaxo
Wellcome.527 The President and CEO of Amgen is Kevin Sharer, who was
in the Navy as chief engineer on a nuclear submarine, worked with
General Electric, and as a Vice President at MCI before heading "the
world's largest biotech company. Amgen makes three leading drugs, two
of which are used to treat the debilitating effects of cancer therapy
and dialysis."528 Kevin Young, Executive Vice President, Commercial
Operations at Gilead spent 12 years at Amgen and played a role in
their acquisition of Immunex. Hence, firms such as Gilead and Amgen
confirm the value of powerful alliances especially with global players
such as Glaxo. They also confirm a strong link ith the military and
point to connections with telecommunications (MCI) and energy (General
Electric), one of the leit-motifs of this study. Avant
Yet another company with the Glaxo connection is Avant
(Immuno)Therapeutics. In 1997, Avant licensed their oral rotavirus
vaccine to GlaxoSmithKline. In 1999, after a Phase II study
demonstrated 89% protection in a study involving 215 infants, Glaxo
Glaxo paid "an additional license fee and assumed full responsibility
for funding and performing all remaining clinical development."529 On
13 January, 2000, Avant received a $6 million payment form
Novartis.530 In December 2000, Avant partnered with Pfizer Inc, which
applied their vaccine technologies to animal health and human food
safety markets.

In 10 October, 2001, Avant granted DynPort Vaccine Company LLC (DVC) a
license for


exclusive rights to use certain components of Avant's vaccine
technology."In October 2002, DVC announced the initiation of a Phase I
clinical trial of a new injectable recombinant anthrax vaccine in
approximately 70 volunteers. Further, in January and June 2003 and
April 2004, Avant was awarded subcontracts to develop for the U.S.
Department of Defense an oral combination vaccine against anthrax and
plague using Avant's proprietary vaccine technologies. Avant executed
these subcontracts with DVC."

In September 2002, Avant "appointed Lohmann Animal Health
International (LAHI) as the exclusive distributor of Avant's Megan
Health poultry vaccines in North America. In December 2002, the
International Vaccine Institute (IVI), in collaboration with the
International Centre for Diarrhoel Disease Research, Bangladesh,
initiated a Phase II clinical trial of Avant's cholera vaccine….The
National Institute of Allergy and Infectious Disease (NIAID) of the
National Institutes of Health (NIH) and Avant…"agreed for the NIAID to
conduct a Phase I in-patient dose-ranging clinical trial aimed at
demonstrating the safety and immunogenicity of the Ty800 typhoid fever

On 5 February, 2003, the US Department of Defense requested and
co-funded a project focused on:

new drugs that could potentially combat the smallpox virus post
infection. The project will be powered through a massive computing
"Grid" that will enable millions of computer owners worldwide to
contribute idle computing resources


with the goal of developing a wide collection of potential anti-smallpox drugs.
The project was co-funded by IBM, working with United Devices and
Accelrys (a subsidiary of Pharmacopeia). The new grid approach was
seen as an example "of the kind


of thing we might expect from Project Bioshield." The announcement
pointed out that companies such as VaxGen and Avant Therapeutics
"could be buoyed by government


contracts."By 2004, more than 70,000 infants were enrolled in the
global clinical


development program to evaluate the efficacy of Avant's Rotarix(R) vaccine.
Avant also suggests that the connections with big companies may serve
another purpose. Small, unknown companies can carry out delicate
research away from the public eye in a way that is difficult for the
pharmaceutical giants themselves. In this context, it is instructive
to note that the SmithKline Beecham Clinical Laboratories were
acquired by Quest Technologies. One of the heads of this company in
turn became the head of SR


One, an investment company with close links to Glaxo.Similarly,
Avant's CEO, Una

S. Ryan, formerly worked with Monsanto. Oravax (Peptide, Acambis)

In the period prior to 2000, three vaccine companies benefited most
visibly from government contracts, namely, Oravax, Dyncorp, and
Bioport. We shall examine each of these separately before looking at
Analex, by which time it will become clear that these companes are
connected in more ways than one.

On 23 August, 1999, a physician reported the first case of an outbreak
of West Nile-Like


Viral Encephalitis.Since then:

the West Nile virus has swept through 45 US states, causing disease in
more than 12,000 people and resulting in the deaths of several hundred
individuals. In 2003 alone, it has affected more than 8,200 people and
caused 182 deaths. The virus has also spread south to Central America
and the Caribbean, and north into Canada where it has been identified
in seven provinces.538

The official story is that it all began with this outbreak in 1999 but
the story is more complex. The key person in working on a virus
against the disease is Dr Thomas Monath. Between 1974 and 1988, he was
the Medical Director of the Division of Vector-Borne Infectious
Diseases at the Centers for Disease Control in Fort Collins, Colorado.
From 1988 onwards he was the Chief of the Virology Division, U.S. Army
Medical Research Institute of Infectious Diseases at Fort Detrick in
Maryland. In this position he was responsible for the development of
genetically engineered vaccines against arthropod-
borne and hemorrhagic fever viruses.

In 1990, Thomas Monath became the lead scientist and VP of Oravax
Company (Cambridge, Mass.) with "three principal product development
programs which target diseases that have high rates of incidence,
compelling pharmaco-economic profiles and no existing therapeutic or
preventive antibody products or vaccines."539 In December, 1990, the
US government "called for an immediate development of West Nile


vaccine."On 22 March, 1996, the US Army via Gregory D. Showalter, the
Army Federal Register Liaison Officer, granted Oravax an exclusive
licence to use Fort


Detrick's patented genetically engineered Japanese Encephalitis Virus.The same

542 543

officer was responsible for related licences on 21 June 1995,3 May 1996,29 July

544 545

1999 to Bontexand on 26 January 2000 to the US government.When it
received the licence, Oravax originally intended to employ a

"chimerivax process" using Yellow Fever vaccine to develop a vaccine
for Japanese Encephalitis, Dengue Fever, and the other flaviviruses
like West Nile, Kunjin and St. Louis Encephalitis. In 1998, Oravax was
delt a setback and almost financially ruined when a children's vaccine
for rotovirus did not work. Their stock plummited from $75.00 down to
25 cents a share. The company was almost


delisted from Nasdaq.
Some accused Oravax of shady dealings.547 In 1998, a British company,
Peptide Therapeutic bought Oravax. "Oravax needed a vaccine that would
work and a large market to sell it to. Its hope was on the chimerivax
JE that would work on other flavivirus


encephalitis as well."Peptide continued development of the vaccine in
collaboration with Aventis Pasteur. On 1 August 2000, Peptide received
a Fast-Track Small Business Innovative Research grant by the US
National Institutes of Health to develop a vaccine to


prevent the West Nile virus disease.On 22 August, 2000, Peptide bought
Oravax. The combined new Peptide-Oravax company was soon renamed
Acambis with Dr Monath as its head.

After 11 September, 2001, the Acambis vaccine became hot property. The
US government bought 182 million doses in case of a terrorist attack.
It was noted that "Approval in the US will help Acambis persuade other
governments to buy stockpiles of


the drug."On 28 August 2002, Acambis acquired Berna Products
Corporation, a North American sales, promotion and distribution

In the course of 2000, Baxter acquired Althin Medical A.B. and North
American Vaccine, Inc. "Within weeks of completion of its acquisition
of North American Vaccine, the company received market authorization
from the United Kingdom Medicines Control


Agency (MCA) for NeisVac-C, a group C meningococcal vaccine."Randall
Chase, who was the President and CEO of North American Vaccine, Inc.
and oversaw the sale of that company to Baxter International, Inc.
went on to become a director of Acambis. Meanwhile, Nicholas Higgins
who was at Porton International also became a director at


Acambis.Hence, scientists who had been linked with public, national,
research centres were now part of a private company.


On 20 September, 2000, Baxter International bought a 20% stake in
Peptide.In December 2000, Acambis signed an agreement "to manufacture
components of bacterial vaccines for Baxter at its Canton
manufacturing facility. In 2003, Baxter halted certain bacterial
vaccine projects and informed Acambis that it was no longer required
to manufacture these components."555 On 19 May, 2004 Baxter terminated
Acambis agreement. Meanwhile, Acambis was conducting a clinical trial
of a vaccine targeting the


West Nile virus.On 9 July, 2004, David Lawrence, who had been Vice
President of Chiron became Vice President Finance, of Acambis.557

If we stand back an interesting pattern appears. A man from the US
military starts a small firm (Oravax), which almost goes bankrupt. It
is acquired by a British firm (Peptide), is renamed (Acambis); gets
investment from a large British firm (Baxter). It then breaks these
connections, acquires the VP of another European firm (Chiron), which
soon after has problems. The American firm has plugged into European
investments and know how and then become all-American anew.

Dyncorp Vaccine Corporation In 1997, Computer Sciences Corporation
(CSC), and Porton International (a US company to distribute the
products of UK based Porton Down government laboratories), co-
founded the Dynport Vaccine Company (DVC). DynCorp and Hadron (see
below), were both linked with the CIA, were both defense contractors
connected to classified research programs on communicable diseases,
and both linked to a controversial software program known as PROMIS.

On 7 May, 2001, DynCorp, which was strongly connected with ENRON and
the government, received a new contract for $51 million to upgrade the
FBI's information technology network, as well as an $8.2 million
contract to manage SEC information


technology.On 12 November, 2001, DynCorp, was awarded a $322 million
contract to develop, produce and store vaccines for the Department of
Defense. Dyncorp had contracts for $537.45 million in 1998 and
$1,359.41 million in 2002.560

On 4 September 2003, Dynport was awarded an $11 million grant from the
National Institute of Allergy and Infectious Diseases (NIAID), one of
the National Institutes of


Health, for fast-track development of a heptavalent botulinum
vaccine.On 7 March, 2003 Computer Systems Corporation acquired control
of Dyncorp Vaccine Company (DVC). On 17 August, 2004 Computer Sciences
Corp. acquired Porton International Inc.'s interest in
biopharmaceutical company DynPort Vaccine Company LLC.562 Standing
back the same pattern emerges. A US company linked with the military,
develops links with a British company, acquires know how and then
takes over entirely.

Private Anthrax Companies

The study of anthrax as a possible bio-warfare weapon and vaccines to
prevent it has a considerable history. During the 1950s both the US
national laboratory at Fort Detrick and the British national
laboratory at Porton Down studied anthrax and the related bacillus
globigii in detail (cf. Appendix 3). With the treaty in 1972, it was
assumed that this work had stopped. In 1989, when the top scientist of
the Soviet Union's Biopreparat laboratories defected to the United
Kingdom a different picture began to emerge. It was clear that this
work had continued. In the decade after the end of the cold war,
during the 1990s, four private companies (Regma, Hadron, Porton
International, Bioport) and one semi-secret company (Battelle) became
involved with anthrax.

1. Regma Technologies In 1989, Dr. David Kelly played a key role in
debriefing Dr Vladimir Pasechnik, when he arrived in Britain from the
Soviet Union. For the next decade (1989-1999), Pasechnik worked at the
UK Department of Health's Centre for Applied Microbiology Research.
"He then formed his own company, Regma Biotechnics, to develop
therapies for cancer, neurological diseases, tuberculosis and other
infectious diseases. Dr. David Kelly helped


Vladimir Pasechnik found Regma Biotechnologies," and "arranged for
Regma to have


a laboratory at Porton Down."Regma soon had a contract with the US
Navy for 'the diagnostic and therapeutic treatment of anthrax.' 2.
Hadron Advanced Biosystems Dr Vladimir Pasechnik's number two
scientist at Biopreparat was Dr. Kanatjan Alibekov who defected to the
United States in 1992. Dr Ken Alibek, as he came to be called, became
very close friends with William C. Patrick III, who has five
classified patents on the process of developing weaponized anthrax and
is a biowarfare consultant to both the


Pentagon and the CIA.Both Alibek and Patrick were leading anthrax
experts, with classified consulting contracts with the CIA. Alibek,
besides using CIA provided Visa


cards, also worked at the Battelle Memorial Institute (BMI, see below).
Advanced Biosystems became involved in basic research in May 2000
"when it received its first contract award from the Defense Advanced
Research Projects Agency (DARPA). To date, Hadron Advanced Biosystems
has received $12 million in funding for medical biodefense research
from DARPA, the United States Army Medical Research and Materiel
Command and the National Institute of Health."567 Alibek became the
President of Hadron Advanced Biosystems, which describes itself as "a
company specializing in


the development of technical solutions for the U.S. intelligence
community," and which has close ties to the Pentagon and the CIA.569
Or thus the official story. Advanced Biosystems was actually a
division of Hadron Inc,570 which in turn was a subsidiary of Sycom
Services Inc.,571 which in turn was a division of Analex Corporation
(see below), closely linked with NASA, until 17 November 2004 when
Analex, announced that it was


divesting Hadron Advanced Biosystems.The CEO of Hadron, was John M.
Stout, a former executive of Harris Corporation, who is also on the
board of Analex.

On 20 December, 2001, Hadron Advanced Biosystems announced new
research efforts: "in the field of methods for boosting non-specific
immunity. The objective of these investigative efforts is to identify
mechanisms by which the immune system may be temporarily boosted so as
to provide short-term, enhanced immune responses to exposure


to infectious agents, especially those that might be used as
bioterrorist weapons."On 21 May, 2002 Hadron Advanced Biosystems
announced that it had made nine provisional patent applications that:
"cover novel treatments of Anthrax and Filovirus infections, a new
approach for the identification of Smallpox drug candidates, a medical
device design with many potential uses including for cancer treatment
and biodefense, and a new use of biodefense research for possible
cancer treatment. The United States Army Research Command supported
three of the nine patent applications."574

3. Battelle Memorial Institute (BMI) The Battelle Memorial Institute
(BMI) is a favourite Pentagon and CIA manager. Ken Alibek served as
their biological warfare program manager in 1998. Ken Alibek was also
the head of Hadron and Bioport. There were reports that the CIA had
contracted with Battelle Memorial Institute, under project "Clear
Vision," to illegally produce the


particular strain of anthrax that was mailed.
4. Porton International
The Porton Down Chemical and Biological Warfare (CBW) laboratory in
Wiltshire had always been owned by the British Government. In 1993,
part of the laboratory was privatized. Possibly as a result of having
provided a form of powdered anthrax that the US did not have, Porton
[International] was given the exclusive right to market commercially
the bio-warfare vaccines and other products produced by the British
government, at its Porton Downs labs.576 In the years that followed,
Porton International became "a leading vaccine development company
focused on biodefense vaccines and


one of the largest private biotechnology firms in the world."

In 1997, the U.S. Department of Defense awarded a defense-biologics
contract in excess of $300 million to Dynport Vaccines LLC which, as
noted earlier was a joint venture


with Porton International and U.S. defense contractor Dyncorp.By April
2003, Porton International, in a joint venture with the DynPort
Vaccine Company (DVC), now owned by Computer Science Corporation
(CSC), had completed "Phase 1 testing of an improved


cell-cultured smallpox vaccine."
5. Bioport and Michigan Biology Products Institute (MBPI) and Bioport
The State of Michigan owned the Michigan Biology Products Institute
(MBPI),580 "which held the exclusive contract for providing the US
government with Anthrax vaccine."581 In September, 1998, MBPI was
acquired by Intervac and was renamed Bioport. Soon,


Bioport, became the "FDA approved monopoly holder of an anthrax
vaccine."Bioport received contracts and continued to grow. On 31 May,
2003, Bioport acquired Antix Biologics Inc. On 9 July, 2004, Antex
Biologics, a wholly-owned subsidiary of Emergent BioSolutions and
sister-company to BioPort Corporation, "received a $2 million grant
from the National Institute of Allergy and Infectious Disease (a
division of the National Institutes of Health) in connection with its
Helicobacter pylori (H. pylori) vaccine candidate."583

In the course of 2003, Emergent BioSolutions became the parent of
BioPort. Its revenues grew from $60 million in 2003 to $100 million in
2004. On 30 November, 2004, Emergent Biosolutions also became the
parent of newly opened Emergent Biologics Inc., as a potential $100
million facility in Frederick, Maryland:

The nation's only maker of a licensed anthrax vaccine cut the ribbon
Tuesday for a new plant capable of producing 100 million doses
annually for sale to federal, state, local and foreign governments.
Emergent BioSolutions Inc., the newly formed parent of anthrax vaccine
maker BioPort Corp., is buying a building for the $95 million plant in
an industrial park south of Frederick. The federal government has
agreed to include a minimum of 5 million doses of Emergent's vaccine
in a developing national stockpile of antidotes to biological and



A report the following day added that the plant "will employ 100
workers in its first phase and eventually as many as 300 to produce
BioThrax, the only anthrax vaccine 82 approved for use in the United
States. Maryland is providing as much as $10 million in
incentives."585 There were also further plans: Emergent may eventually
open a pilot plant in Frederick to test and develop new products,
El-Hibri said. The company is working on two new botulinum vaccines,
and vaccines to prevent the sexually transmitted disease chlamydia;
the intestinal disease shigellosis; and pylori bacteria, which can
cause stomach cancer.586 Bioport "suffered a setback…when the
Department of Health and Human Services announced plans to order 75
million doses of anthrax vaccine from California-based VaxGen Inc.,"
and only 5 million doses from BioPort.587 As we indicated earlier, by
a surprising stroke of good fortune, the Carlyle Group had also
invested heavily in Vaxgen. Such orders were first steps towards the
government's "Project BioShield - a $5.6 billion bill allocating funds
over ten years for stockpiling new vaccines and developing
countermeasures."588 Not far from Frederick is the Bethesda-based
National Institutes of Health (NIH), which drives billions of dollars
in research spending. In Frederick, the NIH's National Cancer
Institute operates a research center that has lured bioscience firms
to the county, including California-based Scientific Applications
International Corp., which operates the cancer institute….in the same
industrial park as BioPort's plant.589 The presence of the U.S. Army
biodefense research center at Fort Detrick, and the concentration of
other vaccine companies -- including a MedImmune Inc. vaccine facility
inspired a local official with a goal "to make Maryland the vaccine
capital of the world." 590 This was a much bigger picture than an
isolated company, which hit pay dirt by having the right vaccine at
the right time and place. To understand that bigger picture we need to
look to the companies controlling Bioport. Analex Not everyone is
familiar with the Analex Corporation. If we trace it back to its Greek
(ded or ana) and Latin (lex) roots it literally means "not law",
illegal or beyond the law. Officially the Analex Corporation has three
business areas: Aerospace Services; Medical Services and Commercial
Engineering Services.591 In addition, it has two wholly owned
subsidiaries: Beta Analytics Inc (BAI), which deals with all aspects
of security and SyCom, which has three areas of focus: software
engineering; engineering support and information systems management.
But there is also an Analex Advanced Biosystems Inc. which was until
17 November, 2004, which was also known as Hadron Advanced Biosystems.
In one version of the story, Hadron acquired Analex and then changed
the name of Hadron to Analex.592 Sterling E. Philipps is the President
of Analex and was the Chairman and CEO of Hadron, which owns Hadron
Advanced Biosystems, which is connected with Emergent Biosolutions.
Emergent Biologics, and Antex Biologics (figure 16). Although this may
sound unassuming and not very visible, Analex has very impressive
connections, as becomes clear if we explore its supporters and the
members of its
management and board. Officially, the senior lender of Analex is the
Bank of America with support from Pequot Capital; General Electric
Pension Trust and New York Life Capital Partners LLC.

Analex Management

The Chairman and CEO of Analex, Sterling E. Philipps, was President
and CEO of Hadron Inc., (the parent company of Bioport,) and was
previously President of Business Development for Computer Sciences
Corporation (CSC). The President and Chief Operating Officer of
Analex, Michael Stolarik, spent 20 years with BDM International where
he became Corporate Vice President. In the background, there are also
connections with the Carlyle Group. The Chairman emeritus of Carlyle
is Frank C. Carlucci, who was also the Chairman of BDM International:

a multinational information technology company that operates in three
interrelated markets: systems and software integration, computer and
technical services and enterprise management and operations. The
company serves the department of defense, international defense
agencies, civil government agencies and commercial clients. During the
year 1996, the company acquired CW Systems Inc, IG Systems Inc, Melco
Systems Inc, Advanced Systems Design Inc (ASD), RGTI Systems Inc and
Software Engineering Inc.593

BDM International had close links with the Department of Defense
(DoD), Vinnell and


the Royal Saudi Air Force.BDM also had other links with Iraq (1986) and Saudi


Arabia (1992-1997).By 1997, TRW acquired BDI and in 2004,
Northrop-Grumman acquired TRW. The Chief Financial Officer and
Treasurer of BDM International was C.


Thomas Faulders, III, who played an integral part in the company's
sale to TRWin 1997 and is also on the board of Analex.

Michael Stolarik, President of Analex, was previously also President
and CEO of the


AT&T subsidiary, GRC International.The Vice-President of the same AT&T
subsidiary GRC International Inc., Mr Kent Werner,598 who went on to
be the Business Development Vice-President for AT&T Government
Solutions, is also on the board of Analex. Ronald B. Alexander, who
was also with GRC International, is also on the Baord of Analex as
well as Vice President and Chief Financial Officer of Hadron Inc.

Michael Stolarik, is also a member of the AT&T Government Markets
Senior Leadership Team; President and CEO of Space Applications
Corporation and a Vice President of Titan Corporation which has as its
business focus "Homeland Security and War on Terrorism" and
specifically "C4ISR -Command, Control, Communications, Computer,


Intelligence, Surveillance, and Reconnaissance" which, as we noted
earlier is one of the central themes leading to convergence in the
military. (The Chairman President and CEO of Titan, Gene W. Ray, was
also a General Manager and Director of SAIC. The Executive Vice
President, Lawrence J, Delaney, was also a senior Vice President of
SAIC, also linked with BDM, and was Chief Information Officer of the
Air Force. Titan's board has links with General Electric, AT&T's GRC,
Panamsat and Litton 84 Systems). In the past years, Titan Inc. has
been on an acquisition spree: National Security Solutions;600 Horizons
Inc. (1998); Delfin Systems (1999); Systems Resources Corporation,
(2000), BTG Inc (2001), Semcor+ ACS (2000)), retaining the key
personell from these companies in their own management. In 2004,
Lockheed was trying to buy Titan. Thus, Michael Skolarik as President
of Analex has a complex series of links that connect him directly with
two of three military contractors, with various departments of the Air
Force and Navy, with AT&T, SAIC and via BDM directly back to Carlyle.
Analex Board We have already mentioned that C. Thomas Faulders III was
on the board of both BDM International and Analex. Mr. Faulders
previously held senior positions in MCI Communications Corporation
(1985-1992) and Comsat (1992-1995). 601 He is the CEO of LCC
International and on the boards of Unitech, Sentori, e-Plus and United
Defense Industries. Frank Carlucci, of Carlyle and BDM fame is also on
the board of United Defense Industries. (William E. Conway Jr. another
of the founders of Carlyle is also on the Chairman of United Defense
Industries, was aso a Vice president of MCI and is one the board of
Nextel). Peter C Belford Sr. is a member of the board of Analex, is
also President of their Aerospace Services division, was a Vice
president at Computer Sciences Corporation, then CEO at NYMA, which he
arranged to sell to Federal Data, then a Senior Vice President at
Federal Data Corporation, which he helped to sell to Northrup Grumman.
He is also on the board of Unitech.602 One of the most senior figures
of the board is Lt. General Lincoln D Faurer (1928-) who was Deputy
Chairman of the NATO military committee, then Director of the NSA
(1981- 1985) and chief of the Central security service.603 He is a
director of Alphatech Inc. (since acquired by BAE) and TSI TelSys
Corp.604 He is on the board of Mantech International Corporation,605
and of Saflink, a leading provider of biometric and smart card
security solutions.606 (Saflink's board also includes a former Special
Assistant to the US President on Homeland Security; and executives
from Blair Equity, General Dynamics, Hughes, TRW, Honeywell and PacTel
Meridian Systems.) In addition, General Faurer, is President of LDF
Inc., a consultancy specializing in matters concerning Command,
Control, Communications, Computing and Intelligence (C4I). By
co-incidence, General Joseph K Kellogg is also on the board of Analex.
Since 2000, he has also been the Director of C4 Systems Directorate
J6, discussed earlier.607 He was previously Commanding General,
Special Operations Command Europe; United States European Command,
Germany (August 1992-August 1994). Officially, he is now head of
Homeland Security at Oracle.608 In December 2003, he took a leave of
absence to become the Chief Operating Officer (COO) of the Coalition
Provisional Authority in Iraq.609 While in Iraq, General Kellogg's
deputy was Joseph Draham from the GTSI Corporation. Daniel R. Young, a
Managing Partner, Turnberry Group and a Director of GTSI Corporation,
is also on the board of the Analex Corporation.610 The 2002 annual
report of Analex describes the company as being "At the Heart of
Homeland Security.611
85 Bank of America: senior lender612 Pequot Capital General Electric
Pension Trust New York Life Capital Partners LLC Carlyle Group SAIC
Computer Systems Corp. Lockheed Northrop-Grumman (Titan) (TRW 2000
(1997: BDM International, Inc.613 (CW Systems, Inc., IG Systems, Inc.,
Melco Systems) DOD Vinnell Saudi Air Force);614 Federal Data) Links:
Amgen (Dyncorp Vaccine LLC) - Avant Immunotherapeutics Healthcare
Ventures Associates, Inc615 Human Genome Sciences MedImmune (U. S.
Bioscience, Inc (1998); Aviron (2002); FluMist (2003)) Advancis
(Diversa Corporation, GenVec, Inc., InterMune Pharmaceuticals, Idenix
Pharmaceuticals, Inc., Tercica, Inc. and TolerRx Inc) Analex Inc.616
Advanced Biosystems617 Porton Down Fort Ketrick Regma Technologies
Beta Analytics Hadron Inc Sycom Hadron Advanced Biosystems I and F
Holdings N.V SAFLINK Intervac Intervac Management LL Emergent
BioSolutions (Michigan Biology Products Institute) Bioport Battelle
Porton International Acambis (Peptide(Oravax)) 618 (North American
Vaccine,Inc(2000)) Baxter International619 Emergent Biologics Vaxgen
Antex Biologics620 Figure 16. The larger context of Analex and
Bioport. Once again, standing back there are clearly a number of ways
of interpreting these connections. In general terms, they simply show
that executives are very mobile, that they tend to make their careers
in a number of companies and are not infrequently members of a number
of different boards. These connections also confirm that distinctions
between persons working in different sectors such as the military,
86 government, or industry are dissolving. So too are distinctions
between those in disciplines such as telecommunications, computer
science, and biotechnology. These connections show that the rise of
many new biotech firms may seem like a flourishing of private
enterprise, but it is also a particular brand of private enterprise,
with strong investments from the large pharmaceutical companies, from
the military, from equity firms and from persons connected with
government yet pursuing private gain over public good. On the surface,
this entails a chaotic whirl of deals. On closer inspection at least
two patterns emerge: 1) individuals typically invest in or develop a
company, sell it off, then start a new company on a larger scale to
compete with the earlier company/companies;621 2) key players
establish special licensing arrangements with the winners to become
dominant players. More significantly for our purposes these
connections confirm that the anthrax scare which was depicted by the
news media as an almost isolated affair involving some small companies
such as Bioport with links to Battelle, is linked very closely with
Analex which has among its directors former heads of the NSA and the
present head of the government's C4I directorate. This nexus has close
links to the highest levels of the military, to two of three chief
military contractors (Lockheed Martin and Northrup- Grumman) AT&T,
SAIC and the omnipresent Carlyle. The convergence of the biotech
sector, which some have characterized by terms such as NBIC
(Nanoscience, Biotechnology, Information technology and Cognitive
Science) is something much larger, which intersects with the
convergence trends in the telecoms, media and financial sectors.
V. Implications 13. 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. The Bust was vividly described by Plunkett Research:

In mid-2000 the Internet industry entered a bleak and dreary phase
after the NASDAQ collapsed in March, bringing the entire sector to its
knees. Hundreds of thousands of people lost their jobs. Stock
portfolio values plummeted. Thousands of firms closed their doors,
filed bankruptcy, downsized or were scooped up at bargain prices by
competitors. Sellers of hardware, software, consulting and
telecommunications services suffered mightily. Entrepreneurs found it
nearly impossible to raise funds to launch or sustain their
businesses. The dream of a "new economy" became a nightmare for
some-profits still matter; business cycles


still happen.
There was 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."623 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."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."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.

Everything went very quickly. To take a concrete example: The EBone
began in September 1991 "when members of several European academic and
research networks


met to resolve long-standing European connectivity problems."In March
2002, KPNQwest finished its acquisition of EBone for 645 million
euros. At the beginning of July 2002, KPNQwest NV was shut down. On 15
July 2002, Interoute acquired the EBone for 15 million euros. 627 In
November 2002, Alcatel forced Interoute into liquidation. Two weeks
later it emerged from liquidation following an agreement with
Alcatel.628 There were many such examples. In the process, 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. A number of
reasons have been given for the bubble burst. These include: glut in
the market; irregularities in accounting and fraud; a supposed lack of
investment money; problems of competence and viability; effects of
convergence and simple over-ambition. We shall outline briefly why
these reasons did not explain the problem; examine in more detail the
fate of one key player, Level 3 Communications, before standing back
to look again at the world scene where a very different picture
emerges of a healthy growth in telecoms worldwide. Were the US players
ignorant of this big picture? Or was the whole telecom bubble burst
ultimately a diversionary tactic? We shall suggest that the source of
the crisis began long before 2000; that the real struggle involves
control of key infrastructures and that that struggle did not end in
2001. In 2004, it continued full pace although it now entailed a new
dimension: control of satellite networks (§ 11). An analysis of this
problem will lead us to suggest that a deeper source of these crises
lay elsewhere, in a struggle between a peaceful model of a society
bound by law versus a military model bound by command, which saw
itself above, or more accurately, outside the law. This appears to
have been America's real crisis. Perhaps they were striving to impose
their crisis on the world, so that they could refashion global
politics and create a new world order.

Glut in the Market

One of the most common explanations for the telecom troubles of
2000-2001 was that there was a glut in infrastructure: too many cables
and networks and not enough content. If this were the cause, then all
the telecoms should have been affected equally, which was by no means
the case. In addition, one would expect that the building of
infrastructure should have come to an abrupt halt after 2001. This was
also not the case. Clearly the story was more complex and explanations
need to be sought elsewhere.

Irregularities and Fraud

Another popular explanation was that the telecom meltdown arose from
irregularities in accounting --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.629 In May 2003, the Securities and Exchange Commission issued
a Civil penalty of $1,510,000,000.630 As noted earlier the actual
amount of debt was $1 trillion with over $350 billion of unaccounted
inter-company debt. By 8 August 2001, it was reported that, the
European arm of Worldcom, Worldcom International, and Global


Crossing UK were facing problems.Such irregularities also occurred in
a number of other companies that went bankrupt including Enron, and
Adelphia. In some cases, simple fraud undoubtedly played a role in the
bankruptcies. But a few rotten apples could not explain a large tremor
in a major industry. Nor could they explain how some of the firms that
went bankrupt, e.g. BBN and Williams, almost immediately went on to be
very successful.

Lack of Investment Money

It was also often claimed that success or failure was simply a
question of having or not having money from investors. A number of
examples show the contrary. One of KKR's competitor's in New York,
Forstmann Little, was led by Ted Forstmann. Since 1978,


Forstmann Little bought eighteen companies, including General
Instrumentsand computer-magazine empire Ziff-Davis (1994), for $1.4
billion.633 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. He also invested in McLeod.
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. XO, originally supported by
Craig McCaw and subsequently under the aegis of Carl Icahn, also had
plans in Europe, which it "voluntarily" abandoned. Hence, although XO
had been dubbed one of the telecom trinity (along with 360
communications and Level 3), it clearly was not part of the vision
that supported Level 3. Viatel had real networks in Europe, but after
its initial financial troubles had difficulties raising $60 million at
a time when its competitor had raised over $14 billion. Hence, money
alone could not explain success or failure.

Competence and Viability

Another of the myths connected with the bust and telecom
bubble burst was that there were a great number of naïve and
overenthusiastic individuals, who lacked the competence to succeed and
the discipline needed to create a viable company, which became clear
when the realities of the market brought them back to earth. No doubt
there were such cases. But one could hardly say that companies such as
BBN (Bolt, Baranek and Newman) belonged to that category. After all
they belonged to that very small group that founded the American
Internet. They were absolutely solid and had the best possible
credentials. They were taken over by GTE, which was taken over by
Verizon and renamed Genuity. As we have noted, Verizon showed no signs
of bankruptcy and yet they discarded Genuity (formerly BBN), which
soon went bankrupt.

Traditionally bankruptcy marked the end of a firm after all its hopes
for survival had gone. The ingenuity of the new kinds of bankruptcy
typified by Williams or BBN (in its guise as Genuity) was that firms
with proven competence and ability saw their assets diminished, died
and then, phoenix like, arose anew as if nothing had happened. Within
a year of being integrated within Level 3, Genuity was thriving as
never before. Far from being a case of incompetence, it almost looked
as if the deeper reason for its bankruptcy was in order that someone
else could profit from their competence. In the short term, this was
Level 3. Perhaps there was a much larger picture: perhaps even Level 3
was merely a pawn in a vastly larger game.

Over Ambition

Others have claimed that the failures were caused by the excessive
greed and over ambition of a few. Again this could not be the whole
story. On 11 October, 2003, spoke 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.All three seemed
realistically ambitious and extremely successful. In 2004, XO and 360
Networks were bankrupt and only Level 3 remained.

In this context, the bust and the telecoms meltdown emerged in
a more complex light. It was not simply a result of a glut in the
market; a lack of competence and ability or even a lack of funding.
The companies that failed often had all the right ingredients and the
companies that were ultimately successful often had all the
appearances of being unsuccessful, going bankrupt at the same time as
key investors were reshaping their future. Curiously, the epicentres
of the crises were three American cities: New York, Washington and San
Francisco (along with the adjacent Silicon Valley). There were of
course rumblings other centres of world finance such as London, Paris,
Frankfurt and Amsterdam, and Tokyo. To understand the bigger picture
we need a) to zoom in on one of the key players and then b) to stand
back in order to understand the world scene.

Level 3 Communications

We mentioned Level 3 in passing earlier (§5). As with Williams
Communications it will be useful to examine Level 3 as a case study in
order to throw light on other dimensions of the so-called telecom
bubble burst. Level 3 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.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.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.638

An announcement on 26 April 2001 by XO made it clear that it was
working with Level

3. XO stated 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 639

Level 3 for XO's North American networks."On 22 July 2001, Warren
Buffet invested


$100 million personally and his partners invested $400 million in level 3
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 1 March 2000, Viatel acquired AT&T's
UK subsidiary and thus expanded its pan-european 641

routes by 1700 kilometers.On 12 April 2000, Level 3 Communications and Viatel


made an agreement to collaborate on the trans-atlantic system.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.643
On 10 September 2001 "Level 3 Communications Inc. bought back the
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."On 14 September 2001, Level 3 received another $750 million
underwriiten 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).
Good connections with the financial world continued. On 17 December
2001, Level 3 announced that it had "signed a 15-year lease agreement
to provide data center space to Lehman Brothers, the global investment
banking firm."646 On 25 February 2002, Level 3 acquired Corporate
Software.647 Meanwhile, 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 million to keep the firm
afloat.Three weeks later, on 2 March 2002, Viatel was bankrupt. Level
3 acquired the whole Viatel network (figure 10).

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.


Figure 10. Level 3 networks in 2004.
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.By 2004, Genuity had expanded and owned Software Spectrum,
"one of the world's largest resellers of business software" and
Structure LLC, "a leading IT infrastructure outsourcing company." On 9
August 2003, Level 3 acquired Telverse, a Voice over IP


startup. On 6 October, 2004, Level 3 announced "new agreements to
supply network services in the UK and Ireland to ntl, one of the UK's
largest broadband services


providers."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."
Meanwhile, in April 2004, Level 3 announced the purchase of ICG
Communications' dial unit for $35 million. 29 September 2004, L-3
Communications Corp.'s government services division won a three-year
task order to provide mission support and information technology for
the Homeland Security Department's multibillion-dollar U.S. Visit
program. "The contract is worth a maximum $107.9 million if all
options are exercised. It ranks No. 14 on Washington Technology's 2004
Top 100 list of federal prime contractors. The company employs 38,000
workers and had 2003 revenue of $5.1 billion."655 On 1 October, 2004,
L3 announced that it would pay $34 million cash for Sprint's wholesale
dial-up Internet access business.656 On 24 November 2004, Level 3
announced that it was launching a channel partner programme in Europe:
"Commencing early 2005, Level 3 will initially focus its
partner-recruitment and sales efforts around


(3)Tone Business, its hosted VoIP offering for small and medium-sized
Level 3 was not the only company to expand into Europe. We noted the
activities of the Carlyle Group; Blackstone; Platinum; Cinven, Apax
and other equity groups. Meanwhile, Cogent Communications (Washington)
began in August 1999. In April 2000, it made a $310 million Cisco
partnership agreement. In September 2001, it acquired NetRail and
became a Tier One Service Provider. In April 2002, it acquired the
major US operations and assets of PSINet. In January 2004 it acquired
LambdaNet France, Spain, including operations in the United Kingdom,
Belgium and the Netherlands. In March 2004, it acquired the German
network assets of Carrier1.658 By 2004, Edward J. Lu, the co-
founder and Vice-President of Corporate Development of Cogent, was
with the Carlyle Group.

The number of these takeovers was considerable. In April 1999, Global
Telesystems (GTS) took "a 52% stake in Omnicom, a new entrant in the
telephone market in France, for nearly $210 million, with a view to
raising its holding to 67%. This access gave GTS/Hermès, which also
controlled "French licence holder Esprit, a national presence


plus numerous agreements with distributors."On 9 September 1999,
Concentric Network Corp (San Jose) acquired Internet Technology Group
plc, one of the UK's


largest ISPs.On 7 April 2000, Aether Systems, Inc. acquired IFX Group, PLC


"Europe's largest provider of mobile financial data."On 6 October
2000, Via Net.Works, Inc. (Reston, VA), announced that it was
acquiring Highspeed-Server-

Internet Verwaltungs GmbH.On 6 February, 2004, AG Interactive, the new
media subsidiary of American Greetings Corporation, "acquired K-Mobile
and key brand Kiwee, an established major European player in the
mobile content provider arena."663 On 16 March 2004, Air2Web, an
American "top wireless solutions provider," announced its acquisition
of "Wokup SA, the European leader in providing mobile
applications."664 On 1 June 2004, Premier Devices, Inc. (San Jose),
claimed that it had acquired all of the


shares of Motorola Broadband Nurnberg GmbH.
To return to Level 3: The story of its success raised more questions
than it answered. 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 have been entirely independent of John
Malone, Gene Schneider (père) and Mark Schneider (fils), who saw
Europe as another version of the Wild West, and were acquiring
infrastructures by buying Noos and Canal+ France. It could also have
been independent of Platinum Equity's acquisition of Alcatel's
network. There was reason to believe, however, that they might all
have been connected, for at least three reasons. First, Warren
Buffett, who supported Level 3, also recommended United GlobalCom as a
worthwhile stock.666 So he must have been aware of their basic plans.
Significantly he did not invest in them directly. Second, Warren
Buffett, in addition to leading a team to invest $500 million in Level
3, "now owns 879,000 shares of Level 3 (LVLT), as well as

1.6 million shares of fellow broadband network WilTel (WTEL).667
Without inside knowledge, Warren Buffett would have been very ill
advised to buy more than 1.6 million shares in the new version of
Williams Communications which had just gone bankrupt. 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."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 Platinum's website explained: "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."

Thus, Warren Buffett would have had a 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, while investing for oneself in both Level 3 and in Wiltel
at a time that they seemed to be only a bankrupt telco and a
struggling start-up and long before the outside world realized that in
their new form these companies would be competing with France Telecom.

To make this a reality would have required undermining the French
giant's infrastructure. Here, Level's 3's acquisition of the Viatel
(WorldCom) legacy could be seen as a first ingredient; Platinum's
acquisition of Alcatel's French network could be seen as a second
ingredient; and UnitedGlobalCom's acquisition of Noos and Canal+ as a
third and fourth ingredient. A possible scenario was, of course, not
necessarily a description of what actually happened. Nor could we
expect investors such as Warren Buffet to share their trade secrets
and reveal all the reasons for their successful investments.
Nevertheless, it remains remarkable that prescient individuals were
able to invest in bankrupt ugly ducklings just months before they
emerged as beautiful swans. Were they working alone? Were there more
powerful interests in the background than the short term ambitions of
ambitious investors and equally ambitious start-up companies? Or were
they effectively just carrying out assignments? To even consider such
questions, we need to make a small detour: to look at the same events
from the world scene.
Figure 11a. Growth of the telecom industry from 1991-2003 and b)
related statistics


according to the ITU (International Telecommunications Union).
World Scene

When we stand back to look at the global picture we are confronted
with what appears as a blatant paradox. As a result of the bust and
meltdown, there should have been a world wide slump in both the
Internet and the telecommunications industries. According to the
statistics of the International Telecommunications Union (ITU),
however, 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 in September 2004. It
was due to grow to 940 million by the end of 2004 and surpass 1
billion users in 2005. Between 1991 and 2003 the telecommunications
industry grew from $523 billion annually to $1.37 trillion annually.
The mobile market grew from a mere 16 million in 1991 to 1.329 billion
in 2003. There was no slump. There was only growth (figure 11).

Meanwhile, the world changed. 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. By 2003, six of the
original members held their place. In terms of GDP, China was number
7; Spain was 8, Canada was 9 and Russia was 16. Since August 2001,
China had the largest telephone company in the world. It was now also
the largest mobile phone producer in the world.

September 11 may indeed have slowed down developments in telephony and
the Internet in the United States, but the world did not bother to
wait. While Mr Kissinger urged Mr. Bush to work on a new world order
that still reflected the world view when he was in power, a new world
order of a more tangible kind was emerging. It was not concerned with
either rhetoric or double-speak. It looked at real numbers. A decade
ago a great majority of Internet users were in the United States and
an overwhelming majority used English. In 2004, English represented
35% of the Internet, Chinese was 16% and in simple quantitative terms
was predicted to surpass English within 3 to 5 years. In 2004, the
United States entailed less than a third of Internet users and that
percentage was dwindling daily. Nor should this really be a surprise.
If the Internet was truly for

95 everyone then a country that represented 4% of the world population
needed to recognize others, even if continued to lay claim to 40% of
the world's energy.

When we look more closely at the momentous telecom battles between the
RBOCs (Regional Bell Operating Companies) and their competitors;
between the Turners and the Malones, between the KKR's and their
competitors; even between Tine-Warner and Disney the sums were
typically in the $1-10 billion range and at most in the $10-100
billion range. This was small potatoes in a world where the big time
military contracts were in the $100 billion to 1 trillion range; or
for that matter in a world where the annual telecom earnings were $1.3
trillion. From this point of view the bust was a storm in a
teacup and the telecom bubble burst was probably literally a bubble
amidst the great telecom oceans.

Ignorance or Distraction

Why then were we confronted so inexorably with all the gory details of
local events when the global picture looked so much better; is so much
better? Why make such a fuss when looking further would have allayed
fears, calmed markets and helped the global economy? Here again a
number of interpretations and answers offer themselves. A benevolent
view would note that the Americans were so caught up with their self
importance that they were simply unaware of the existence of Internet
life beyond the galaxy of their fifty states. No doubt it would be
quite easy to find such persons on the street. Their equivalents exist
in every country of the world.

A crucial point is that such "persons on the street" were hardly those
who were making decisions about the future of Telecommunications and
the Internet. One would expect that the heads of the Internet and the
heads of ICANN, who held meetings all over the world, must have
realized that the Internet was spreading. Some cynics would answer: of
course they did and that was precisely why they have downplayed
international aspects of the Internet while all the time paying
lip-service to the importance of national representatives. Focussing
attention to the crises in America made it easy to overlook that
events elsewhere were rendering these crises ever less significant.

Others would point out that even this was too generous a view of the
situation. Ambitious American companies such as Liberty Media,
GlobalUnitedCom, Level 3, Platinum Equity; including failed ones such
as Worldcom, Global Crossing, Unisource and Viatel were fully aware
that Europe, Japan China, India and the rest of the world had telecoms
and Internet markets which could not simply be brushed aside.
Moreover, they worked with the great banks (Citicorp, Credit Suisse)
and major equity firms such as Carlyle, and Blackstone, which had
offices or at least officers around the world and had full access to
the both the global picture and its national variants.

Conspiracy theorists would point out that companies such as Unisource
and Viatel were closely linked with AT&T; that AT&T could have
deliberately sold its treasured holdings to these companies;
encouraged conditions which led bankruptcy; then recovered their
possessions as if nothing had happened. This might well be
exaggerated. Company 1997 1998 1999 2000 2001 2002 2003 NTT 9 9 11 8 9
8 28 Deutsche Telekom 31 35 35 48 52 41 363 British Telecom 78 73 66
64 72 84 76 Bell Canada Ent. 95 81 110 264 214 178 162 France Telecom
---64 69 70 69 51 376

Company 2002 2002 2002 2002 2002 Operating EBITDA EBITDA Net Debt
Revenue (US $m) Margin % profit to (US $m) (US $m) market cap

BT Group 33,098 11,160 34% 1,639 1.11 Deutsche Telekom 56,338 17,721
31% (25,502) 1.11 Ericsson 16,730 (996) (6%) (2,143) 0.29
FranceTelecom 48,930 8,525 17% (21,937) 1.41 Nokia 31,497 6,600 21%
3,602 0.01 Swisscom 10,506 3,255 31% 817 0.13 Telecom Italia 31,900
8,683 27% 311 0.45 Telefonica 29,813 (1,126) (4%) (11,933) 1.52
Teliasonera 6,827 1,192 17% (918) 0.22 Vodafone 36,778 2,106 6%
(25,242) 0.16

Figure 12a. Statistics from Forbes ranking the world's largest
telecoms; b) statistics from Deloitte concerning the top European
telecoms for 2002.671

In any case American firms wishing to make inroads in these other
Internet and Telecom markets had very good reasons to sell their
version of the story about a bust and a telecom bubble burst
even though they knew it was only local news, and were almost
certainly conscious that these troubles were being self-induced.

If everyone could be made to believe that this was really a global
problem, prices, especially infrastructure prices, would plummet;
companies could be acquired for a song. Before anyone realized what
was happening, Europe would unwittingly have fallen to the wiles of
the fibre barons, even more so than their ancestors had been taken in
by the robber barons a century earlier. If this sounds like an overly
paranoid assessment, in 2004 American telecom firms were still taking
over infrastructure in Europe (cf. figure 10) and some groups
continued their efforts to persuade us that the US remains the
epicenter of all these activities.

Traditionally the statistics produced by Forbes have been accepted
internationally as synonymous with the most accurate facts available
at a given time. Their lists covered top companies, richest persons
and so on. Of interest to us are their statistics concerning the
world's leading international telecoms for the years 1997 through
2004. For the moment we shall focus on five companies which are
universally recognized as significant players


(figure 12a).
Yearly fluctuations in sales and operations inevitably led to some
minor shifts as seen in NTT's position from 1997-2002. Bell Canada
Enterprises (BCE) were more quixotic than would be expected. But our
chief concern lies with the statistics for 2004. In the case of
British Telecom (BT) which had agreements with AT&T, there was no
significant change. But within the period 2002-2004 NTT moved down
from position 8 to 28; Deutsche Telekom from 41 to 363; and France
Telecom from 51 to 376. Meanwhile, in the full list, the top telecoms
of the world were Verizon (11) and SBC Communications (26).

A comparison with the statistics of Deloitte concerning the top
European Telecoms revealed that operating revenues and the profits of
Deutsche Telecom and France Telecom were very much higher than those
of British Telecom. Moreover, the web pages of Deutsche Telekom and
France Telecom had firm statistics to show that the income of these
two companies continued to increase during the period 2001-2003. It
would look as if the US firms were trying to reposition themselves as
the only serious players on the block. Perhaps, if their figures
resembled even remotely the charts of the International
Telecommunications Union (ITU) for the same period, their hubris would
be less evident, and their claims more convincing. The implication,
unfortunately, was that even the Forbes lists had become tainted by a
focus that made them useless for impartial observers of events on the
world stage. Such a loss of face and reputation could ultimately cost
their native country much more than many a bust.

The obvious question was: Why would Forbes do this? It could be that
the real causes of the telecom debacle lay elsewhere and that a much
bigger game is involved. First, although the media focused our
attention on the timeframe 2000-2001, it was striking that these
problems in the telecom world began in 1996 and continued in 2004.
Second, these problems affected specific domains of
telecommunications, namely infrastructure and networks. Third, we
shall find that these problems extended to other dimensions of
infrastructure, namely satellite communications. Once we have examined
these connections we shall be in a position to suggest a very
different explanation of recent events.

Networks in North America, Europe and Globally

In some ways, telephone companies were not unlike railways. Without
railway tracks there could be no railway system. Without telephone
lines and cables there could be no telephone system. Both required
enormous investments in infrastructure in order to function. The
enormous costs and the need for long term investments over a 30-50
year time frame were beyond the reach of any individual company. That
is why both railways and telephones were initially state owned
monopolies. Only the state had the necessary long-term vision and the
monies to make it happen. To ensure that such monopolies did not get
out of hand the Federal Communications Commission was founded in 1934.
During the 1960s and 1970s, there was a new wave of anti-monopoly
feeling that led a) to the "breakup" of AT&T in 1984 and b) to the
Telecommunications Act of 1996. This was the first overhaul in almost
62 years and had as its goal "to let anyone enter any communications
business --to let any communications business compete in any market
against any other."673 In theory, therefore, 1996 was the crucial year
for leaving the monopolistic model behind and entering into an open,
competitive telecommunications era. Deregulation and liberalization
became the new buzzwords of the day. We shall review key developments
at the US, continental and global levels separately and then bring to
light unexpected connections between these three arenas. Of course,
one of the first paradoxical things that happened was that the new
telephone companies made deals with the railway companies using their
tacks to create an alternative that might have been termed an
"information railway." Alas, this again was a track that went beyond
our current study.

United States

In the United States, everything seemed to get off to a good start,
almost. The basic Telecommunications Act was ready by 8 February
although there were revisions that took until 13 January, 1997. On 8
March, 1996, Chairman Hundt of the FCC, named Solomon J. Trujillo to
head the new Telecommunications Development Fund. Conveniently,
Trujillo was also President and CEO of US West Communications

674 675

Group."Trujillo became President and CEO of US West as a whole in June 1998."
He went on to become the CEO of Orange and was a member of the Bretton
Woods Committee, a "group organized to increase public understanding
of international financial and development issues and the role of the
Bretton Woods institutions --the International Monetary Fund, the
World Bank and the regional development banks --in the global


economy."(Frank Carlucci, Chairman Emeritus of the Carlyle Group was
also a member).

Soon there two attempts to create a new US network. It would have been
a bit too obvious if the head of the new Telecommunications fund, who
was also a head of a Baby Bell would immediately have engaged his
company to build a network to further the liberalization process. So
two relatively unknown firms did the building, went bankrupt and then
were taken over by the Baby Bell whose head was leading the
telecommunications fund. To make sure this worked the Baby Bell
acquired executive help from AT&T. To divert attention from these
activities there were soon new mergers and name changes. Or at least
that was one very plausible way of reading what happened.


We noted earlier (§ 7) that the Denver based Anschutz (holding)
Company was the owner of a regional telecom called Qwest
Communications, which "began in 1995 when SP Telecom, a subsidiary of
Southern Pacific Railroad, combined with Qwest Corporation, a small
Dallas-based digital microwave firm. "Realizing early on that the
Internet would create unseen demands that existing networks couldn't
possibly meet, Qwest set out to build a whole new kind of network –
faster, more flexible and more robust than any network on earth.
Today, the Qwest Macro Capacity ® Fiber Network contains the world's
most advanced optical networking equipment and reaches 104,000 miles
around the world."677

On 21 October, 1996, Qwest and Frontier678, "announced they were going
to jointly build a new nationwide fiber network. This announcement
sparked a huge cross-country construction boom in
telecommunications."679 Frontier was linked with Alltell.

Since AT&T basically had its own infrastructure, one might have
expected that one of the Baby Bells would be the initiators of a new
national network. Instead it was two relatively unknown companies:
Qwest and Frontier. However, two months and one day later, on 22
December 1996, Joseph P Nacchio, former Chief Engineer of AT&T was


named CEO of Qwest.He began in early 1997.

In June 1998, the US West Communications Group, the telecommunications
and data networking unit, and MediaOne, the cable and international
business unit, were separated into two free-standing companies."681 By
March 1999, AT&T was attempting to buy MediaOne, (which happened
within a year), and on 30 June, 2000, there was a merger of US West
and Qwest.682 This created:

a $19 billion global giant with leadership in network technology, as
well as applications and services. Its advanced fiber optic networks
link directly to nearly 30 million customers through more than 2.6
million miles of fiber in the U.S. The company also has a rapidly
growing presence in Europe through an alliance with the Dutch telecom
company, KPN, and a foothold in Asia through a new Asia-

Pacific office and interests in the US-Japan Cable project.

On 31 October 2000, Qwest Communications International Inc. "the
broadband Internet communications company, today announced an
agreement with McLeodUSA for voice and data communications services
worth approximately $600 million in revenue to Qwest over three
years."684 By 11 February 2002, Mcleod had $3.3 billion in debt and
had filed for bankruptcy after having sold "350 POPs and its ISP
client base to high-speed network Level 3."685

Hence the Qwest company, which was theoretically creating a network to
compete with AT&T, was almost immediately run by AT&T's chief
engineer; soon merged with one of the Baby Bells, which spun off its
Media One. Comcast was going to merge with Media One and compete with
AT&T. Instead, AT&T acquired both Media One and Comcast. We shall see
presently that there were also European dimensions to the Qwest story.
But the pattern was clear: As new competitors to AT&T came on the
horizon they met with one of two fates: bankruptcy and/or takeover and
usually in that order.

Vyxx (Williams Communications)-IXC

Two and a half months after the initial Qwest-Frontier announcement,
on 8 January, 1997, Vyvx, Inc., a division of the Williams Companies,
and IXC Communications also teamed up to build a new nationwide
network. Vyxx was soon renamed Williams Communications Systems (WCS),
whose adventures we outlined earlier (§ 7). WCS went bankrupt, was
renamed Wiltel; merged with Milgro and the combined company became
Nextira, which posed as a competitor for Equant. And as we have shown
Williams Communications effectively became an instrument of SBC and
Verizon, i.e. the Baby Bells.

Meanwhile, IXC Communications operated a digital communications
network comprising of 9,300 fiber route miles of fiber optic
transmission facilities. In 1998, the company acquired Network
Evolutions, Inc., Eclipse Telecommunications, Inc., The


Data Place, Inc., NTR.Net Corporation and Smartnap.In March 1999, there was


speculation that IXC might be sold.On 21 July 1999, Cincinnati Bell
announced it would acquire IXC in a stock swap for $3.2 billion and
acquire the 20,000-km network it


was building to link over 150 American cities.
According to another account, Broadwing, the parent of local telephone
firm Cincinnati Bell, entered the broadband business in 1999 by
purchasing IXC Communications for $2.2 billion. On 26 Febraury 2003
Broadwing sold IXC to a joint venture of Corvis and Charter
Communications (a Paul Allen of Microsoft investment) for $130
million.689 In February, 2004, Corvis agreed "to acquire Focal
Communications Corporation ("Focal"), a Chicago-based competitive
local exchange carrier that provides voice and data


solutions to enterprises, carriers and resellers for total
consideration of $210.0 million."
In January 2002, Lynn Anderson, formerly CFO at GE Capital, became the
Chief Financial Officer (CFO) of Corvis. By co-incidence, the majority
owner of Corvis was the Carlyle Group. Perhaps not by co-incidence the
company flourished.

In 2004 one of its websites boasted that it: "leads the industry as
the world's first intelligent, all-optical, switched network provider,
and offers businesses nationwide a competitive advantage by providing
data, voice, and Internet solutions that are flexible, reliable and
innovative on its 18,500-mile fibre optic network and its
award-winning IP backbone."691 Some would have said that it was a
happy co-incidence that this second American network to provide
liberalization had the luck to be guided by a former GE executive and
owned by the efficient Carlyle Group. Others might have marveled that
the two new networks, intended to compete with former monopolists such
as AT&T and General Electric, had very close connections with AT&T and
General Electric respectively.


At first sight the European turf battles for infrastructure were
completely unconnected. In terms of pan-European networks there were
essentially three ingredients: 1) e-Bone; 2) Unisource and 3) AT&T's
UK Holdings. Closer inspection suggests that they might have may have
been more closely linked than suggested by the wide ocean separating

By way of context, it is useful to make a small detour on George
Soros, whose investments have bridged both oceans and continents. He
too was interested in networks. In 1997, the Telecom Venture Group
(TVG), backed by George Soros, became a foundation shareholder in
Powertel with a $17 million investment. TVG sold its stake in 1999 at
more than $2 a share, representing close to a 500% return. Wiltel
became the chief shareholder of Powertel. Almost predictably Powertel
went bankrupt. The TVG syndicate subsequently offered $14 million for
the debt and equity interests of PowerTel's largest shareholder
-struggling US telecom WilTel -in a deal that would have given it a


controlling interest in PowerTel.The ploy did not work and instead BT
acquired Powertel.

One interpretation was that TVG, Wiltel and Powertel were merely three
of the hundreds of cases of small time "wannabes" that became
overextended, went bankrupt and were gobbled up. This would not
explain why the likes of George Soros and Warren Buffett were
interested. Another interpretation was possible: As our case study of
Williams Communications Systems (WCS) revealed, Wiltel was part of a
much bigger picture. Two new American networks were being built: 1)
Qwest+Frontier, soon to be owned by Baby Bell, US West; 2) Williams
Communications Systems (renamed Wiltel)+ IXC with strong links to
another Baby Bell SBC, as well as GE Capital and Carlyle. Both of
these networks had their eyes on links with their European
equivalents. George Soros also had his eyes on these European networks
and had already made significant inroads there. This context would
provide a motive for Soros' interest in three seemingly marginal,
American players: his hope being to link the established European and
the emerging networks. But he was up against other players. At an
individual level, it was George Soros versus Warren Buffett. But at an
organizational level this meant that Soros was up against the Baby
Bells, with support from GE and Carlyle, with AT&T in the background.
He was not part of the inner club. What seemed to have been a
brilliant plan for an integrated Euro-American network was eclipsed by
more powerful interests. Soon after this, Soros receded from public

As we shall see, by 1999, Qwest-Frontier merged with Global Crossing
and Global Crossing acquired the first of the new American Networks.
Global Crossing had quietly been commissioned into being by AT&T.
Global Crossing then merged with US West. This gave them further
access to the assets of a Baby Bell. Global Crossing soon went
bankrupt and seemed to go to an unexpected buyer: Singapore
Technologies. Fortunately they were a bona fide member of the
WorldPartners scheme of which, by coincidence, AT&T was a founding
member. The game was not over yet: liberalization was proving to be
liberating even for former monopolists. We must now return to Europe
to pick up the thread, or was it fibre, of our story.


The European Ebone was founded in Copenhagen in 1991 and established
the first pan-
European tier I, "IP backbone, providing service to Internet Service
Providers and telecommunications carriers." 1993 saw the advent of a
second company, Hermes Europe Railtel, partly sponsored by Soros. This
"created the first independent pan-European fibre optic network and
led the industry in the adoption of advanced optical technology to


serve the telecommunications market."The company had a 20,000 km fiber
network as well as carrier and ISP services. By 2000, it was "the
largest pan-European internet backbone, carrying approximately 50% of
European traffic, impacting 100,000 European businesses.694

E-Bone GTS (Global TeleSystems)

Michael J. Kleeman was one of the founders of Wiltel (formerly
Williams Communications Systems). He was also one of the founders of
Global Telesystem Group


(GTS), "a company conducting telecommunications activities financed by George


Soros."So Kleeman, also a Director at Arthur D. Little and the Boston
Consulting Group, was a direct bridge between George Soros' plans in
both America (Wiltel) and in Europe (GTS). In 1998, Global Telesystem
Group (GTS) acquired 89% of the Hermes Railtel Europe joint venture
which had joined as a co-founder of the E-Bone as a company in 1993.
Global Telesystem thus acquired the E-Bone and renamed its main


business E-Bone "reflecting the existing name of its pan-European IP
backbone."On 8 December 1998, Global TeleSystems (GTS) announced a
$4.1 billion merger with Esprit


Telecom.For a short time George Soros seemed to be winning in the
background. By 2002, however, GTS was bankrupt. By 2004, it had
re-emerged as an Indian company, GTL. 699

E-Bone KPN/Qwest

Meanwhile, in 2000, Qwest, had made an alliance with the Dutch
National Telecom, KPN. From Qwest's point of view, there were very
good reasons for this alliance, because KPN, as we shall see below,
had also been one of the co-founders of another network called
Unisource. When GTS announced its bankruptcy, KPN/Qwest agreed to buy
their holdings:

At the time the pre-negotiated bankruptcy deal was announced, Ebone
claimed 250 ISP and telecom customers, 4,000 enterprise customers,
14,000 dial-up users and a total debt of EUR 2,345 million."700 On 18
March 2002, KPNQwest completed its previously announced acquisition of
the Ebone and Central Europe businesses of Global TeleSystems (GTS) in
a bankruptcy deal valued at EUR 210 million plus the assumption of EUR
435 million debt. The new combined company will operate a
25,000-kilometer network with connections to 60 major European cities.
In addition, 14 Metropolitan Area Networks (MANs) will be in

Alas, by 31 2002, May KPN/Qwest was also bankrupt.


Computer Sciences Corporation (CSC) was founded in 1959. In 1969, CSC
formed Infonet to deal with its timesharing business. In the next
decades CSC, expanded considerably in scope, gaining a 51% hold of the
French office of KPMG and developing military contracts. On 12 June
2002, less than two weeks after KPN/Qwest went bankrupt, Infonet "won
bankrupt KPNQwest's position as the supplier of IP virtual private
network services to customers of the troubled data carrier's parent
company KPN."702 In March 2003, Computer Sciences Corp (CSC) acquired
Dyncorp whose clients include: DEA, DOE, DOD, DOJ, DOS, IRS, FBI, CIA,
HUD, SEC, BAE Systems, DuPont, General Dynamics, and Raytheon. DynCorp
manages email and information systems for federal investigation
agencies. Whenever criminal behavior is detected, they have the power
to subvert the process of law and cover-up corporate-
government criminal activities.703


KPN, along with Telia and Swisscom, had also developed a second
European network, Unisource. In 1994, AT&T and Unisource established
an "alliance," Uniworld. On 14 May 1996, they built on this alliance:
AT&T and Unisource announced the formation of


two companies, AT&T-Unisource Services and AT&T-Unisource
Investment.Given AT&T's subsequent links with BT in 1999, the European
Commission required AT&T to sell its stake. It was assumed that AT&T
would sell it back to Unisource.705 Unfortunately, both Unisource and
its founders such as KPN were also in difficulty so, instead, on 19
April 1999, AT&T sold AT&T-Unisource [Communications Services (AUCS)]
to American based Infonet "for a European Reach."706 Europe's two main
networks were now in American hands. By 2002, Infonet and Genuity
(under Level 3)


were being cited in tandem.On 16 November 2004, BT took over Infonet for $520


million.This theoretically brought them back into the European sphere,
but given the close ties that had evolved between AT&T and BT in the
meantime, the connection with the European continent was still not
clear. In any case, the pioneering and central role of the Netherlands
in both the E-Bone and Unisource had been eliminated.

AT&T UK Viatel Level 3

In 1994, AT&T had also established AT&T UK Communications. On 30 March
1999, after AT&T set out on Concert, its joint venture with BT, the
European Commission noted:

AT&T is currently the second biggest telecommunications operator
world-wide by turnover, and first US long distance telecommunications
operator. AT&T is also active internationally, notably in the UK where
it operates a group of wholly-
owned subsidiary companies including AT&T Comms UK, and ACC Long
Distance UK, a subsidiary of ACC Corp.. AT&T has also recently
completed its merger with Tele-Communications, Inc. (TCI), a US
corporation that owns approximately 22% in Telewest Communications, a
UK cable company offering television channels, telephony services,
data communications services, and Internet access. AT&T currently has
a share in AUCS (AT&T-Unisource Communications Services). It is also a
member of the WorldPartners alliance which is made up of AT&T, KDD,
Singapore Telecom, Unisource and Telstra. Both AUCS and WorldPartners
provide global telecommunications services to multinational
corporations that AT&T distributes in the US, as well as in the UK for
AUCS services.709

Of course, AT&T had foreseen this. On 29 February 1999, it had sold
AT&T UK communications to Viatel. As noted earlier Viatel, then went
bankrupt and Level 3 got their networks. Thus another European network
entered into American hands. In our discussions of giants such as
General Electric we noted a pattern whereby they sold off a serious
asset and then acquired them anew. Something similar seemed to be
happening here: AT& T sold off its two main holdings in Europe,
Unisource and its UK branch and then regained access to them.
Meanwhile, it did not have to worry about the seeming, competing
efforts of Pan European Communications or their owner, United
Pan-Global, because these were in turn owned by Liberty Media in which
AT&T had gained a significant stake by buying TCI/Liberty. Meanwhile,
the heads of the company possibly had their eyes on a much bigger


The year 1996 was significant not only because of the
Telecommunications Act but also because it saw a radical breakthrough
in technology:

In February 1996 Fujitsu Ltd., Nippon Telephone and Telegraph
Corporation, and a team of researchers from AT&T succeeded in
transmitting information through an optical fibre at a rate of 1
trillion bits per second—the equivalent of transmitting 300 years of
newspapers in a single second. This was accomplished by simultaneously
sending different wavelengths of light, each carrying separate


information, through the optical fibre.
Fibre optics were no secret. In addition to classic players in the
cable industry, such as Cable and Wireless, there were companies such
as Reach, which now have connections


with more than 40 submarine cables.Even so, the 1996 breakthrough
changed the rules of the game. It meant that the rhetoric of
multimedia could become a reality. The report was conscious of this:
"If it can be integrated into a network, this new technology will make
it easy, inexpensive, and incredibly fast to send information, such as
video and memory-sensitive three-dimensional images."712 The good news
was that this technological advance set the stage for the broadband
revolution, which would become a hot news item in the coming years.
But while the news media spoke of broadband as if these were ADSL
connections of 1-2 Megabits, the Fujitsu, NTT and AT&T pioneers fully
realized that this heralded a future terabit era.

The bad news was that AT&T's (and indeed everyone's) existing cable
infrastructure was


obsolete.A new network had to be built. It would not have been very
practical for AT&T to announce that it was building a new monopolistic
network, the very month that the anti-monopolistic Telecommunications
Act was coming into effect. As noted above, there were also revisions
to the Act which took until 13 January, 1997. That same month the
newspapers said nothing of the fibre optic breakthrough and simply
reported: "AT&T needed to raise $750 million in a hurry to lay an
underwater fiber-optic cable across the Atlantic. Risking $15 million
of his own money, Gary Winnick formed a new company,


Global Crossing, and raised the total in record time."
On March 20, 1997 Global Crossing715 announced "their first fiber
build – Atlantic Crossing 1 – connecting the U.S. with the U.K. and
Germany. By the end of 1997, Global Crossing had also announced
projects connecting the U.S. to Bermuda and the Caribbean, the U.S. to
Central American countries, and the U.S. to Japan – all undersea fiber


builds.In August 1998, Global Crossing became a publicly traded
company on Nasdaq: "Although the company had quarterly revenues of
only $117.7 million in their first public report, the stock market
valued the company at over $5 billion….. By March 1999, when they
first agreed to purchase Frontier, the stock market value of Global


Crossing had increased to $30 billion."On 30 April 1999, the FCC approved the


proposed merger of Global Crossing and Frontier.As a result Global
Crossing, now owned "the nationwide U.S. fiber network that Frontier
had built with Qwest, along with


a bunch of top-notch web hosting centers and a local telephone company."
On 17 May 1999, Global Crossing announced that it would merge with US
West to create a first global and local service provider called Global
Crossing Corporation a "$75 billion company with 115,000 route miles"
that would "connect 185 cities worldwide."720 On 19 June, 1999, Qwest
offered "$41.3 billion for U S West, as well as $10 billion in assumed
debt" and "$13.6 billion for Frontier and assume $1.4 billion in
Frontier net debt.721 On 28 September, 1999, Global Crossing completed
the acquisition of Frontier Corporation for approximately $11 billion.
By 2000, the scene looked even rosier: "Global Crossing Ltd. is
building and offering services over the world's most extensive global
IP-based fiber optic network, which will have more than 101,000 route
miles, serving five


continents, 27 countries and more than 200 major cities."
By all appearances, this was proof that the liberalization of the
telecoms markets was working magnificently. Very conveniently, on 11
October 2000, Global Crossing had a new CEO, Thomas J Casey, who had
been at the Antitrust Division of the U.S. Department of Justice
(1975-1978) "responsible for the development of evidence concerning
common carrier issues in US v. AT&T, the government's antitrust suit
that led to the breakup of AT&T."723 Three years later (6 May 2003)
the technology reporter, Russ McGuire, believed that Global Crossing
"merely focused on managing these construction projects and selling
the capacity – not operating the networks in competition


with AT&T, Worldcom, Sprint or others."Like so many others, the
reporter appeared to have forgotten, or perhaps never knew, that the
original incentive for Global Crossing came from AT&T.

On 28 January, 2002, Global Crossing announced bankruptcy "in
combination with the announced takeover of the company by Hutchison
Whampoa and Singapore


Technologies for $750 million (later reduced to $250
million)."Platinum Technologies, Gores Equity and even AT&T had
expressed an interest in buying the bankrupt firm but did not.
Fortunately, there was already a World Partners alliance which linked:
AT&T (40%), KDD in Japan (24%), Singapore Telecom (16%) and Unisource

(20%).On 9 December, 2003, Global Crossing emerged from bankruptcy. In
retrospect, perhaps it was more than co-incidence that:

a) John M. Scanlon, who had 24 years of experience with AT& and Bell
Labs, became the first CEO of Global Crossing when it went public in 1
April 1998.727 b) Robert Annunciata, who had been the CEO of Teleport,
which he sold to AT&T for $12 billion in 1998, before heading AT&T's
$22 billion worldwide business


services group, was named CEO of Global Crossing on 24 February 1999;
c) Leo Hindery, who was President and CEO of TCI, and CEO of Liberty, before

they were acquired by AT&T; who was then President and CEO of AT&T

Broadband & Internet Services, the business unit responsible for all of AT&T's

domestic local telephony, video and Internet operations, was named CEO of


Global Crossing on 2 March, 2000 and that:

d) John J. Legere J. Legere, who was president and CEO of AT&T Asia-Pacific

from 1994-1997 and from 1997-1998 was president of worldwide outsourcing at

AT&T Solutions was named CEO of Global Crossing on 4 October 2001 and

remained so in 2004.730

Again multiple interpretations are possible. The media focused on
these rapid turnovers of CEOs as proof of the terrible state of the
telecom meltdown; how even the most clever persons from AT&T were
"powerless" in light of these tumultuous events. A cynic might have
suggested that the invention of a company that attracted enormous
amounts of capital to build a new fibre optic network and then
conveniently went bankrupt so that it could be taken over by an
invisible parent, was certainly a lot more economical than trying to
build the whole network using one's own money. In any event, it was
more than striking how a small number of executives moved incredibly
smoothly among these giants. The news media painted the departure of
Annunciata and others from AT&T as a rejection of the old regime. Some
might suspect that they were actually covert emissaries from a new
regime in the same company.

A paranoid mind would begin reflecting about the World Partners
alliance. The European Unisource thought it was a serious partner only
to find its networks shifted to American hands. KDD thought it was a
serious partner. Was Carlyle's acquisition of their DDI packet a first
step in the direction of what happened to Unisource? Was this a
competing bid for the same resources If so who was the eminence grise?
Such questions pointed far beyond the scope of this modest essay.

Global -Local

We noted earlier that Global Crossing claimed in May 1999 that they
were creating the world's first global and local service provider.
This was not quite true. As we shall see presently (§ 11), the same
arguments were used in 1990 at the founding of the Teledesic satellite
system. They were also used by Harold Furchgott Roth, who was
responsible for examining the proposed AT&T –BT alliance. Some aspects
of the five companies involved in the alliance were mentioned in our
discussion of BT (§ 4). The report, written in February 1999, showed a
full awareness of international competitors such as Cable and
Wireless, GlobalOne and Equant.

This led to a very telling conclusion: "we conclude that a carrier may
be a provider of global seamless services even if it does not own a
facilities-based global network or offer "one stop shopping" on a
global scale." 731 A cynic might paraphrase this: if one cannot own
everything in telecommunications one can at least try to control
everything. Perhaps a more realistic reading would be that this
conclusion meant precisely what it said: that one did not need to
build and own one's own networks to be a leading player. If so, this
one sentence of 1997 was a blueprint for a new AT&T. The old AT&T had
been a bulwark of physical phones and phone lines. The new AT&T was
about software and services. Parallels with IBM would be possible. The
implication was to sell one's physical possessions. 1997 was also the
year that AT&T sold its entire satellite infrastructure to Loral.

It was undoubtedly a great stroke of fortune, at least from AT&T's
viewpoint, that the author of the document in February 1997 went on to
become a Commissioner at the Federal Communications Commission (FCC)
on 3 November, 1997. Commissioner Harold Furchtgott-Roth, was "the
only Commissioner who is not a lawyer, and the one most supportive of
deregulation, and limiting the regulatory authority of the FCC. He
opposes the FCC's use of its authority to approve license transfers to
conduct competitive analysis of mergers which duplicates the antitrust
merger review process of the


Department of Justice."Commissioner Furchtgott-Roth was one of the
early champions of the new liberalization of telecoms and
deregulation. As noted earlier (§ 9), he was also very adamant that
questions about subliminal adds in election campaigns were beyond the
purview of the FCC.

The 1997 report linked with his name went on to identify potential
emerging providers:

We also find that several new carriers and alliances emerging as
potentially significant providers of global seamless services. Many of
these carriers are fast-growing due to their ability to provide global
services over "state-of-
the-art" IP-based global networks. For instance, Teleglobe, the
largest Canadian international services carrier, announced plans to
build an IP-
protocol network that will reach 400,000 route miles on several
continents…Qwest and KPN, a Dutch carrier, recently completed the
first of six fiber optic rings across Europe that will provide
IP-based services to large corporate customers…Global Crossing, which
recently acquired Frontier, is building a global IP network that may
be the first to be completed…GTS, which merged with Esprit to provide
service over its pan-European network in 12 countries and 20 cities,
also is building a global IP-based network to carry traffic at speeds
up to 1.28 terabits per second…Level 3, which is building a global IP
network with transatlantic and transpacific undersea cables joining
the continental networks, plans to offer an innovative bandwidth
package to corporate customers that includes free voice
services…Viatel is a facilities-based international services


provider building the Circe network.
The list thus identified six supposed competitors: 1) Teleglobe; 2)
Qwest/KPN; 3) Global Crossing/Frontier; 4) GTS/Esprit; 5) Level 3 and
6) Viatel. In retrospect, we know that within the next three years
five of these would be bankrupt and only Level 3 remained.

United States Europe Global 1991-E-Bone Cable and Wireless

Teleglobe 1997 Qwest-Frontier Global Crossing-Frontier 1998 Vnyx
(WCS)-IXC E-Bone-GTS (Global TeleSystems) GTS-Esprit

E-Bone KPN/Qwest-Qwest 1998 AT&T UK-Viatel-Level 3 Level 3 1999
AT&T-Unisource –Infonet-BT

Liberty-United Pan-Global

Figure 13. Some of the competing networks in the United States, Europe
and Globally.

This could, of course, have been merely the luck of the draw, as could
the fact that, by 2004, the Yankee Group named AT&T as number 1 and
Level 3 (partly owned by AT&T


through the TCI/Liberty acquisition) as number 2 in overall reputation
for excellence.
More suspicious minds would be tempted to think that in 1996 or at
least by 1999, a small group could see what was coming. Cynics might
even claim that the entire telecom burst was effectively a convenient
way to eliminate the competition and assure that the traditional
monopolistic approach continued under a cloak of liberalisation and
deregulation. This could lead to speculation far beyond the scope of
this essay.

In any case, if we stand back to take a bird's eye view (figure 13),
it is noteworthy that: a) that there was effectively a small number of
players in the infrastructure wars; b) that these were also the
central players in telecom bubble burst and c) that AT&T was the only
company that ultimately had some control in all these companies. While
some persons were fretting about bubble bursts in telecommunications,
some companies were bursting forth into new global markets under new
and often unknown guises. If this were simply luck or fate, then these
were extremely lucky companies.

There is always the danger of reading into past events intentions
which may never have been there. The complex steps AT&T took in
preparing for the Concert venture, discussed earlier (§4) reduced this
likelihood as did AT&T's further joint ventures in 20 other countries.
Once again, discussion of these would be beyond the scope of this


essay. For the purposes of our story, it is necessary to lift our eyes
upwards to developments in the skies. These will reveal uncanny
parallels with the telecom problems on earth and could throw further
light on the dimensions of a new great game or perhaps only a great
new game.

109 15. Satellites The news media gave enormous coverage to some
aspects of the telecoms problems of the past decade, especially the
bankruptcies and mergers. 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."736 More than a
year earlier some were predicting a similar trend in the satellite
market. On 16 April 2001, Stephanie Chénard predicted: "Clearly what
has happened to the Internet is not going to be without


consequences in the satellite sector."On 24 September 2001, Teresa
Foley predicted: "A year from now, the satellite landscape will be
transformed. With an unprecedented number of companies being broken
up, bought sold and being privatized, there are sure to


be some notable winners but also some mighty losers."These were
prophetic words.

As a first step to understand why satellites have become so important
it is useful to recall that in 1990 when Teledesic developed its
vision of Low Earth Orbiting (LEO) satellites there was talk of
creating an "Internet in the sky." The vision was rhetorically
attractive: "Teledesic will support more than 1 million simultaneous
connections at 2M bit/sec each -the equivalent of 128 million
simultaneous voice conversations at 16K bit/sec each." Indeed, at a
time when the World Wide Web itself had less than a million users,
this sounded spectacular. In retrospect, it was hardly a solution for
everyone in a world with a population of 6 billion.

Another part of the Teledesic vision was to become "the first local
phone company with


global presence."That was in 1991 more than five years before Concert,
Worldcom, Global Crossing and other players began to speak of
local-global as a key strategy. Teledesic was the brainchild of Craig
McCaw (who sold McCaw Wireless to AT&T in


1994) and Bill Gates. AT&T had a 12% stake in Teledesic.
Like railroads and telephones, satellites were traditionally a domain
requiring such large


investments that they were typically funded by governments.The past
five years have


seen major changes. If we accept KKR'sremarks 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. This seems to have happened with too
much consistency to be co-incidental. More disturbing was how some of
the same companies and the same equity firms, which were active in the
telecoms debacle, reappeared in the satellite saga. In light of the
elaborate context that was emerging, the question needs to be asked if
what seemed as two events (telecom problems and satellite crisis) were
in fact part of a unified strategy.

A simple and perhaps simplistic analysis would suggest that the new
deregulation and liberalization rules unleashed extraordinary winds of
change which caused many ripples in all areas of telecommunications
both on earth and in the heavens. Another hypothesis might have been
that AT&T, which had focused on building and owning its
infrastructure; effectively outsourced the hardware so that they could
focus on software and services. But the battle of the skies was so big
that it made even AT&T and Microsoft look like relatively small
players. So another hypothesis would be that a few very big players
saw this as their chance to control the communications chain. James
Bond films with megalomaniac media moguls in Tomorrow Never Dies
(1997) and killer satellite schemes in Die Another Day (2002) explored
such scenarios. Did the latest wave of convergence integrate reality
and fiction? Or had James Bond become a whistleblower?

A more refined version of this same hypothesis would have suggested
that this new quest led to two camps of contenders: one peaceful and
civilian, led by firms such as General Electric and General Motors
(Hughes); the other with a military dimension led by Lockheed, Boeing
and Grumman. If so, the great game now entailed the age old struggles
of War and Peace. As usual, before reaching conclusions, it is best to
review the evidence although, once again, study of all the details
would be far beyond our scope. We shall limit ourselves to a dozen or
so major players in the field, provide a few key facts and focus on
developments of the past four years. Here our diary approach using
specific dates becomes particularly useful in order to see how major
decisions followed each other in the course of a few weeks or months
at a time.


Teledesic was founded in 1990 by Bill Gates and Craig McCaw with a $9
billion vision:

Teledesic would upgrade the world's telecom infrastructure in one fell
swoop. ... In the old paradigm, telecom satellites were like mainframe
computers. Perched in geosynchronous orbits 22,000 miles above the
ground, they required expensive user terminals with large dish
antennas…. In the new paradigm, satellites are more like PCs. They are
smaller, less expensive and may one day be mass-produced. Because they
always are moving in relation to the ground, a fleet is required to
ensure continuous service. But it's worth it: LEO satellites are
accessible to small businesses and even individuals….The original
design called for a whopping 840 satellites. In conjunction with prime
contractor Boeing, Teledesic has reduced its satellite


configuration to 288 satellites.
On 9 July 1999, Teledesic LLC, the broadband satellite venture backed
by Craig McCaw (30%), Bill Gates (20%), Alwaleed (16%), AT&T (12%),
Boeing and others, completed a major launch contract with Lockheed
Martin and signed a system agreement with Motorola to build its
satellite communications network.744


The only operating satellite phone company at the time was Motorola's
Iridium satellite constellation: "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 112 Earth coverage
at all times."745 Within a month of Gates' Teledesic-Boeing agreement,
in the first week of August 1999, Iridium filed for and in 2000 it
went bankrupt.746 On 1 October 2001, Iridium was bought by General
Dynamics. ICO Global Communications ICO-Teledesic ICO was a UK based
company with Hughes as its prime contractor: "ICO will consist of 10
operational spacecraft with 2 in-orbit spares in a 45 degree
inclination orbit. Hughes Space and Communications will design,
manufacture, and launch the ICO satellites."747 CIO had raised over $3
billion in financing. Two weeks after the Iridium bankruptcy filing,
on 27 August 1999, ICO Global Communications went bankrupt.748
Teledesic then merged with ICO: i.e. on 24 July, 2000, Craig McCaw
invested $1.2 billion in ICO; called the new firm ICO-Teledesic; named
former Cable and Wireless Executive, Greg Clarke, the new CEO,749 and
announced an IPO within six months, which was subsequently withdrawn
on 19 March 2001.750 Five days earlier, on 14 March, 2001
ICO-Teledesic and Ellipso Inc had agreed to collaborate and help
stabilize the mobile satellite industry. The Ellipso project included
the "The Boeing Company, the Harris Corporation and L-3
Communications."751 This was the same Harris Corporation encountered
earlier (§ 5), (that had direct links to Jeb Bush, implicated in
helping a more powerful brother), that helped the Defence Research and
Engineering Network (DREN) go to the Baby Bells rather than Worldcom,
(one of the last straws that triggered Worldcom's bankruptcy). As part
of this agreement, ICO-Teledesic Global "proposed mergers of New ICO
and Teledesic with ICO-Teledesic Global: "Building on its core
capabilities of high-quality, mobile voice services, New ICO will also
offer wireless Internet and other packet-data services. Boeing
Satellite Systems, the world's leading satellite systems provider, is
building New ICO's satellites." 752 This was separate from Teledesic's
global broadband satellite communications network. By 2002, Teledesic
was scheduled to start launching. A new CEO and Chairman appeared, the
by now almost familiar, Admiral Bill Owen, an advisor of Secretary of
State Donald Rumsfeld; a CEO of the Vote Here Company; who had also
been CEO of SAIC. In April, 2004 Owen went on to become the President
and CEO of Nortel Networks. Lack of connections was clearly not a
problem. With the support of individuals such as Craig McCaw, and Bill
Gates and the presence of companies such as such AT&T money or power
should not have been obstacles. Even so, by November 2004, Teledesic
had collapsed. Pessimists would insist that the plan never even got
off the ground. Globalstar In 1991, a division of Ford Aerospace
founded Globalstar. "The mobile system for Globalstar satellite phones
is a Low Earth Orbiting (LEO) constellation consisting of 48 orbiting
satellites which are 700 miles above the earth. Globalstar's
satellites relay the
calls to ground bases gateways which connect the call to the public
phone network. This provides customers with voice and data service
from virtually anywhere to everywhere."

At the time Iridium went bankrupt in 1999, it seemed that Globalstar,
a Loral-backed company, was in better shape.754 In 2000, Globalstar
entered an alliance with Globalcom, which was also linked with Iridium
and Inmarsat. On 18 November 2001, Globalstar was


preparing for bankruptcyBy 18 February 2002, Globalstar had announced it was


bankrupt.On 21 November 2003, the court approved the acquisition of
Globalstar by


Thermo.By April 2004, Thermo Capital bought the bankrupt Globalstar
satellite phone service.


The advent of the Russian Sputnik in 1957 prompted the US to found
Comsat in 1962 "as the US representative and shareholder in
international satellite operators Intelsat and


Inmarsat."By 1965, Comsat "developed and managed Early Bird, the first
commercial telecommunications satellite in western history, sent into
orbit in 1965 in collaboration with NASA….in 1969, when Apollo 11
carried the first men towards the Moon, the entire world was able to
see the enterprise live on television -through Early Bird


transmissions -called into service for the occasion."When the Kennedy
administration conceived the Communications Satellite Act in July
1961, that led to the Comsat satellites, they wanted someone else than
AT&T to take the lead. Hughes stepped in, took the company public.
AT&T soon had a 29% stake in Comsat.

Lockheed Martin

Lockheed Martin Corporation was an important player in the satellite
field from the outset especially through its Lockheed
Telecommunications Systems. In 2000, Lockheed Martin Intersputnik, a
joint venture with Intersputnik and the operator of the LMI-1
satellite, closed its London office.760 On 7 August 2000, Lockheed
bought Comsat Corporation. This entailed: 1) Comsat Global
Communications; 2) World Systems 3) Comsat Digital Teleport, Inc.
(CDTI). Five months later, in February 2002, "Citing overcapacity in
the telecom industry and deteriorating economic conditions in Latin
America, Lockheed Martin said it will exit the telecom business." 761

On 21 March 2001, it announced that it would sell Comsat Mobile
Communications to


Telenor, whereby it became Telenor Satellite Services.On 30 May 2002,
Lockheed Martin "announced that Intelsat, Ltd. will acquire Lockheed
Martin's World Systems and


Comsat Digital Teleport, Inc. (CDTI), businesses."This had occurred by
26 November 2002.764

Comsat International

Comsat International, founded in 1990, provided data and voice
services to corporations and telecommunications carriers in major
Latin American markets, including Argentina, Brazil, Colombia, Mexico,
Peru and Venezuela. It employed some 470 personnel in the


U.S. and in six Latin American countries.It was acquired by Lockheed
and then shed. In our discussion of the telecoms problems we noted the
efforts to create new networks by Esprit Telecom Group, which merged
with Global Telesystems Group in 1998 shortly before both went
bankrupt. It is interesting to note that Walter Anderson, the founder
and Chairman of Esprit, went on to become 1) Chairman of Teleport UK
Ltd. (Satellite Communications); 2) Chairman of U.S. WATS; 3) Chairman
of WorldxChange (Telecom


Services and then became 4) Senior Advisor of Comsat International.
Meanwhile, H. Brian Thompson, who began was an executive vice
president of MCI (1981-1990); chairman and chief executive officer of
LCI International (1991-1998); vice chairman of Qwest (from June
–December 1998), became the new chairman of the board of Comsat
International. On 1 September, 2004, Comsat International, Inc.
("Comsat"), a full-service provider of voice and data communications
throughout Latin America, announced it had acquired Vicom Ltd.:

a provider of satellite services and metropolitan fiber circuits in
Brazil, from Net Servicos de Comunicacao S/A. ("NET"). Under the
agreement…Comsat has acquired 100% of the outstanding shares of Vicom,
as well as use of certain fiber


optic infrastructure owned by NET….Via multi-year IRUs on the Global
Crossing regional fiber ring, high-speed international connectivity
was launched in Brazil, Argentina, Peru and Venezuela. At the same
time, domestic fiber connectivity was laid in Brazil and Argentina
including metropolitan fiber


networks deployed in Buenos Aires and Sao Paolo.
Hence in the past four years, Comsat Corporation, which had been a US
government satellite system linked with the intergovernmental Intelsat
and Inmarsat systems, was bought by Lockheed and then split up into a
number of private companies, at least one of which is run by
individuals linked with the telecom bubble burst through companies
such as GTS and Esprit. GTS, it will be recalled was one of the pieces
of Soros' puzzle, in the quest to control European networks. The quest
for superstructure or heavenly infrastructure was clearly becoming
connected with the quest for earthly infrastructure both underwater
and underground.


Viasat began in 1986 with three people. It grew mainly through
government systems and military contacts. "In April, 2000 the company
acquired the satellite networking business of Scientific-Atlanta,
adding the SkyRelay VSAT and Skylinx DAMA satellite networking product
lines, the Satellite Ground Systems gateways and satellite antenna
systems business, and a worldwide sales and service organization. Then
in mid-2001, ViaSat acquired the VSAT products group of
Lockheed-Martin Global Telecommunications, now known as our Comsat
Laboratories division."769

Loral and Lockheed The Loral name had also been linked with satellites
for over 40 years. Between 1972 and


1996, Loral grew from a $7.5 million to a $15 billion company.In 1996,
Loral merged with Lockheed.771 "Loral Space & Communications was
created in 1996 when Loral Corporation sold its defense and systems
integration businesses and formed one of the world's largest satellite
manufacturing and satellite services companies." The company had three

1) satellite services business formed "by acquiring assets from AT&T
in March 1997 and Orion Network Services in 1998, and rapidly
established Loral Skynet, which manages and operates our Satellite
Services business, as one of the world's leading satellite


2) Space Systems/Loral (SS/L) "designs, manufactures and integrates
satellites and space systems. SS/ L-built satellites have achieved
over 1000 years of cumulative on-orbit experience over its 40-year

3) 56% ownership of XTAR, a joint venture between Loral and Hisdesat
Servicios Estrategicos.773

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 was


preparing to sell its commercial satellites to Intelsat as part if its
Chapter 11 filing."

That same day Loral agreed to sell its six North American Satellites
to Intelsat.On 1 November, 2004 the same Bernard l. Schwartz who had
been head of Loral was involved


in another billion dollar bankruptcy.

In February 2002, when Lockheed announced that it was leaving the
telecom business, Lockheed stated that it would "retain parts of its
Global Telecom subsidiary, but sell its large stakes in Intelsat,
Inmarsat and New Skies NV."777 Within two years Inmarsat, Intelsat and
New Skies were bankrupt.

Inmarsat claimed that it "was the world's first global mobile
satellite communications operator….Formed as a maritime-focused
intergovernmental organization….Starting with a user base of 900 ships
in the early 1980s, it now supports links for phone, fax and data
communications at up to 64kbit/s to more than 210,000 ship, vehicle,
aircraft and portable terminals. That number is growing at several
thousands a month." In 1999,


Inmarsat became a limited company.In 2002, Inmarsat faced bankruptcy.
In December


2003, Apax Partners and Permira Advisers acquired Inmarsat.This was
the same Apax Equity that partnered in acquiring Intelsat, was
involved in the Vivendi breakup and made bids for Springer Verlag and
Hollinger. It seemed as if a small group had their eyes on something
much, much bigger than the acquisition of bits of dysfunctional media
empires. As a recent book title put it: there were "Global dreams of a
new world order." Intelsat

Intelsat began as an intergovernmental organization in 1964. In 1966,
"Cable & Wireless' first satellite earth station was built on
Ascension Island as part of the Apollo space project…. By 1995 Cable &
Wireless operated 66 main earth stations in the Intelsat Global
Network -more than any other company."780 In February, 2002, Intelsat


with Loral.Also in 2002, it postponed its Initial Public Offering
(IPO). When Loral went bankrupt in July, 2003, it sold its satellites
to Intelsat. In February 2004, Intelsat


announced that it would make its IPO by 30 June, 2004.On 11 May 2004, Intelsat


applied to acquire licences of Comsat.In May 2004, Intelsat also asked "Morgan


Stanley and Merrill Lynch & Co. to explore possible acquisition
offers.In August 2004, Zeus Holdings advised by Apax Partners and
Permira Advisers with Apollo


Management and Madison Dearborn Partners acquired Intelsat.

New Skies

New Skies Satellites based in the Netherlands was one of the four
fixed satellite companies with a truly global reach. On 26 February
2002, New Skies and Intelsat announced an agreement to expand their
service in the Atlantic Ocean region.786 By 2003 they too were
bankrupt. On 18 July 2004, they were acquired by the Blackstone


In 1990, TMI Communications (Ottawa), and American Mobile Satellite
Corporation (Reston, Va.), signed contracts with Hughes and Spar
Aerospace Ltd. of Canada in 1990 to build satellites. In 1995, this
became the North American mobile satellite system (MSAT). By 1999,
MSAT, Inmarsat, and Iridium had become linked through


International Satellite Services.Possibly because of its strong
Canadian base this was one of the only satellite networks that did not
go bankrupt.


Teleglobe, initially a subsidiary of Bell Canada Enterprises (BCE) was
a major Canadian player on the world scene both in terms of undersea
cables and satellites. In 3 May 2001, Williams Communications revised
its broadband agreements with Teleglobe.789 On 15 May 2002, Teleglobe
went bankrupt. By February 2003, there was a new private company run
by Mr. Liam Strong. From 1997 through mid-2001, he had served as the
President and Chief Executive Officer of MCI Worldcom International
(global voice


communications carrier).Cynics would be prone to suggest that those
with experience in telecom bankruptcies were particularly useful in
cases with satellite bankruptcies.


In 1989, Panamsat began as a small startup satellite company in
Homestead, Florida. "Panamsat was the first private international
satellite company connecting Europe and Latin America to the United
States. Panamsat grew by expanding their fleet of satellites. 791

In 1995, Panamsat became a part of Hughes Electronics."As indicated in
our discussion of the equity firms (§ 9), by 2001 Panamsat was in
trouble. By June 2004, Carlyle worked directly with KKR to buy
Panamsat and "split" the results 27% and 44% respectively.


Eutelsat was founded in the 1970s and grew into an international
satellite operator that "broadcasts more than 1,300 TV channels and
700 radio channels to nearly 110 million homes in Europe, the
Americas, Africa, and Asia. With 22 satellites, it provides Internet,


multimedia, and corporate services and mobile voice, data, and
tracking services."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

793 794

10.8%.In December 2003,both Intelsat and Panamsat were offering to buy


Eutelsat.In 2004, one of the largest investors in Eutelsat was Telecom
Italia with a 20% stake. Eutelsat did not gone bankrupt as such but
did become a private firm. In 2004, its nine member board included two
senior partners from the American Equity firm, Lehman Brothers.


At first sight, AT&T played only a marginal role in these momentous
changes. We noted earlier how AT&T was active in satellites through
Telstar in 1962. The act establishing Comsat required that they leave
the field. A decade later they were back in the satellite business.
When the Teledesic venture appeared on the horizon, AT&T immediately
took a 12% stake.

In March 1996, AT&T invested $137.5 million for 2.5% of DirecTV. The
two companies announced plans for joint marketing efforts. In March of
1997, AT&T sold its satellite interests to Loral. In June 1997, C
Michael Armstrong, made waves at Hughes for his introduction of
DirecTV. By 20 October 1997, Armstrong was Chairman and CEO of
AT&T.796 On 9 December, 1997, less than six weeks after the hero of
DirecTV had become CEO of AT&T came a surprise announcement:

The telecommunications giant did a 180-degree turn on its move toward
direct television yesterday when it withdrew its equity stake in
DirecTV, a unit of Hughes Electronics. The two companies ended a
marketing agreement in which AT&T would distribute the DirecTV
direct-broadcast television service and


digital satellite system (DSS) equipment through AT&T.
By all appearances, AT&T, which had introduced one the fist satellites
in 1962, had sold off its satellites in 1997 and exited from the one
partnership that gave it a foothold in the emerging Direct Broadcast
world. Or so it seemed. In fact, the situation was more complex. To
understand the bigger picture we need first to outline the history of
Primestar and Echostar. This will take us back to three familiar
players: General Motors, Boeing and General Electric. Underlying the
great upheavals in the industry there may well have been a more
fundamental struggle of military versus civilian interests. In 1995,
it looked as if the civilian interests might win. These were
championed by Democrat Al Gore and senior democrats such as
Congressman Barney Frank. Indeed the bust, the telco bubble
burst, and the satellite crisis could be seen as three manifestations
of a deeper crisis, whereby the military seems to have been seeking to
replace constitutional and legal foundations of government and
everyday life. If so, the defeat of Gore in 2000 and the defeat of
Kerry in 2004 could be seen as marking the defeat of civilian
interests and an ascendancy of military priorities.


Primestar was founded by the five big cable companies Comcast,
Continental Cablevision, Cox, TCI and Time Warner. In 1991, Primestar
launched its first medium powered Kuband service. In 1994, it
introduced a nationwide digital TV service via a medium power KuBand
satellite. It also unveiled plans for transition to high power Direct
Broadcasting Satellite (DBS) operations in 1996. By the end of 1994,
Primestar had shipped 350,000 units and had approximately 250,000
subscribers. In 1997, Primestar moved its service to a new
medium-power satellite. This increased its capacity to a total of 160
channels. The rise of cable companies and the rise of satellite
communications emerged in tandem.

TCI Satellite Entertainment 37% Time Warner 30% AT&T 10% Comcast 10%
Cox Communications 9% General Electric 4%

Figure 3. The main owners of Primestar and the percentage of their holdings.

In 1999, Hughes Electronics and DirecTV announced their "agreement
with Primestar Inc., to acquire the 2.3 million-subscriber Primestar
direct broadcast satellite medium-
power business and Tempo high-power satellite assets in two
transactions valued at


approximately $1.82 billion."On the surface, General Motors, through
its subsdiary, Hughes, had now acquired one of the key players in the
American Direct Broadcast scene.

Meanwhile there was a Primestar Partners L.P. which had a number of
members, including TSAT, Time Warner Satellite Services, Newhouse,
Cox, Comcast, MediaOne (formerly Continental) and GE Americom. On 11
June 1997, this group entered into an agreement to combine the assets
of Primestar Inc. with American Sky Broadcasting


(ASkyB)owned by Rupert Murdoch. The ASkyB Project also entailed MCI,
which joined with Newscorp (for $682.5 million) in plans to "broadcast
over 200 channels


across the nation." In 1998, Primestar ended its plans to work with ASkyB.

There were six main owners of Primestar Partners (figure 3).
Initially, AT&T had only a 10% stake. But as we have noted, within
three years AT&T had acquired TCI and Comcast. This gave it at least a
57% stake. In addition, AT&T controlled a section of


Time Warner so its stake was well over 60%.In simple terms, AT&T's
seemingly unusual, sudden entry into the cable field was also an
invisible re-entry into centre field of the civilian, satellite
communications, in which it had been a great pioneer. Some would
intuit that by selling off its official satellite interests, AT&T
provided an excellent distraction as to its real plans. Of course, it
could simply have been due to a change of management. If so it would
have been strange that the same C. Michael Armstrong would destroy
AT&T's bonds which he himself had laid while he was CEO of Hughes only
a year earlier.


Hughes had founded DirecTV and now owned Primestar. In the US, there
was one other serious player in the Direct Broadcast Satellite (DBS)
game. In 2002, General Motors Corporation, Hughes Electronic
Corporation, EchoStar Communications Corporation attempted a $25.8
billion merger which was blocked for regulatory reasons.802

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.As a result, DirecTV, previously known as Hughes


Electronics, became a division of Fox Entertainment Group in 2003.On
the surface it looked as if the three major systems in the US,
Primestar, DirecTV and Echostar had all been sold to foreign interests
and that General Motors and its subsidiary had left the satellite
business entirely.

Hughes under its new name of DirecTV now had an 11 member board which
had "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."805 What was noteworthy
was how the "independent" directors also reflected the interests of
direct competitors: e.g. CBS, the new name for Westinghouse Electric,
now officially part of Viacom. Verizon, as a Baby Bell, was linked
with AT&T. James Cornelius was also a director of Hughes Electronics.

General Motors-Hughes

The story of Direct Broadcast Satellites is more complex. So too is
the story of General Motors' connections with Hughes and we need to
examine both in a little more detail. The years between 1976 and 1980
saw the beginnings of satellite television through the advent of a)
Home Box Office (HBO); b) Turner Broadcasting System (TBS); c)
Christian Broadcasting Network (CBN, later the Family Channel) and d)
the request by Comsat/Satellite Television Corporation "to construct a
Direct Broadcast Satellite (DBS) system." It also saw the rise of two
organizations. One was the Society of Private and Commercial Earth
Stations (SPACE). A second was the Direct Broadcast Satellite
Association (DBSA). SPACE had represented primarily the manufacturers,
distributors, and retailers of DTH systems. DBSA was comprised of
companies such as RCA Americom, AT&T, Hughes, Comsat, and USSB --all
of which were interested in high power DBS. On 2 December 1986, these
two organizations merged to found the Satellite


Broadcasting and Communications Association (SBCA).
One of champions of DBS in the years to come was Senator Al Gore. In
1991, Senator Gore introduced cable legislation. In 1992, President
Bush, Sr. vetoed the Cable Act. Congress overturned the president's
veto. The new legislation guaranteed "access to satellite delivered
cable programming services by alternative multi-channel video
providers such as DBS operators." In the next years Senator Gore
worked for the Satellite Home Viewer Improvement Act (SHIVA), which
President Clinton signed in November 1999. By 2001 that legislation
was attacked by the new administration.

In I983, Hughes Communications launched Galaxy I, the first satellite
dedicated to cable TV distribution. In 1985, General Motors acquired
Hughes Electronics. In 1992, Hughes announced its own DirecTV DBS
project.807 In December, 1993, Hughes launched the first of three
satellites designed to broadcast 150 channels of TV across the United


to homes equipped with small satellite dishes.
Meanwhile, there were many changes in the military. Between 1979 and
1986, military spending had doubled. The fall of the Berlin Wall and
the end of the Cold War in the period 1989-1991 had changed attitudes
towards military spending. In 1993, the then Secretary of Defense, Les
Aspin, urged top industry officials "to consolidate or go out of
business." Observers noted that these trends explained "many of the
mergers and buyouts


that have occurred in the last decade." In 1995, a group of
expertsissued a warning about what they called the Military-Industrial

Despite the talk of surpluses, there is simply not enough money
available to the federal government to fund all the programs on its
wish lists. Budget gimmickry is a sophisticated art on Capitol Hill
these days, but hiding every excess as an "emergency measure" won't
work forever. In the years to follow Americans will have to make hard
decisions about acceptable levels of military spending versus
investments and spending in non-military areas like social security,
education, housing and healthcare.

By 1995, Hughes had come to a crossroads. An article of 10 December
1995, raised the challenge as a question: "Can defense firms go
commercial?" There were two accounts of


what happened next. One was that Hughes merged with Raytheon
(1997).The other was that it led to a "single blockbuster
restructuring…built around the sale of defense operations to Raytheon
Co. That left El Segundo, California-based Hughes a 'pure play' in
satellite communications." Hughes executives maintained "that the
transformation required four years of extremely complex finance work
to target manufacturing assets for sale, and to apply some of the $17
billion in proceeds toward expanding Hughes's much smaller,
high-growth satellite communications ventures."811

For the next five years this image of Hughes as a now civilian company
remained. By 1998, slightly more than four years after launch, DirecTV
announced that it had reached 4 million subscribers. Hughes also began
consolidating as if it were still a military company. In 1998, Hughes
Electronics a) made a $1.5 billion alliance with America Online Inc.;
b) it bought U.S. Satellite Broadcasting (USSB) for $1.3 billion in
cash and stocks. This allowed Hughes to combine its DirecTV
programming with USSB's premium movie broadcasts, and increased
DirecTV's total channels from 185 to 210. In 1999, Hughes and DirecTV
also acquired "the 2.3 million-subscriber Primestar direct broadcast
satellite medium-power business and Tempo high-power satellite assets
in two


transactions valued at approximately $1.82 billion."

We noted that in the late 1970s the Direct Broadcast Satellite
Association (DBSA), had five major players: 1) RCA Americom; 2) AT&T;
3) Hughes; 4) Comsat and 5) USSB. By the late 1990s Lockheed Martin
had acquired the AT&T holdings via Loral and in 2000, Lockheed also
bought Comsat. Meanwhile, as we have seen, General Motors/Hughes had
taken over USSB as well as DirecTV and Primestar. Instead of
capitalizing on this wonderful collection, General Motors sold all its
assets in Hughes to Boeing.

On January 13 2000 Boeing and Hughes Electronics Corporation announced
that Boeing would acquire Hughes' space and communications business
and related operations for a value of $3.75 billion in cash. As a
result, Hughes Space and Communications Company, Hughes Electron
Dynamics, and Spectrolab, Inc., in addition to Hughes Electronics'
interest in HRL, the company's primary research laboratory became part
of Boeing's


newest subsidiary, Boeing Satellite Systems, Inc.This meant that all
these civilian efforts were again in the hands of two of the main
military contractors: Boeing and Lockheed.

For almost a year it seemed as if the Hughes momentum would simply go
on. In April 2001, Hughes acquired DirecTV Broadband Inc. Then on 13
December 2002, Hughes announced it would close its high speed Internet
service.814 In 2004, Hughes Electronics renamed itself DirectTV Group,
which owned the largest direct broadcast satellite serving 12 million
television viewers in the U.S. and 1.5 million in Latin America. By
this time DirecTV Group Inc. owned Panamsat. Soon after Panamsat went
bankrupt. As we have seen, 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.A short time
before both Intelsat and Panamsat were sold, there was a mysterious
mechanical failure which led to a considerably lower bid. The Lord's
Prayer had spoken of things "on earth as it is in heaven." The pattern
of important assets suddenly going bankrupt only then to re-emerge
seemed to prove that the reverse could also be true.

Boeing 122 When the so called merger with Hughes first took place in
2000, Boeing executives were very enthusiastic about synergies: This
transaction will boost Boeing's space and communications revenues and
earnings by more than a third and will provide for significant future
growth. It will be accretive to earnings per share in its first full
year of operations, 2001. The Hughes businesses, which anticipate 1999
revenues of $2.3 billion, when added to Boeing's space and
communications operations, will initially create an entity with annual
revenues approaching $10 billion. 'Boeing intends to be number one in
space.' This acquisition is a significant step forward in executing
our goal of becoming the industry leader in integrated, space-based
information and communications,"816 As we have seen, the next two
years brought an enormous amount of bankruptcies. There were various
others such as GE Logistcomm's GlobalWave and Orbcomm Vantage. These
should have cleared the way for Lockheed and Boeing to triumph. In
November 2001, the US Air Force awarded Lockheed and Northrup Grumman
a contract for up to $2.698 billion to begin the System Development
and Demonstration phase of the Advanced Extremely High Frequency
(Advanced EHF) program. Within three months, in February 2002,
Lockheed stated that it was leaving the telecom business.817 By 15
July 2003, Boeing announced that it would leave the commercial space
business.818 As usual this was not quite the whole story. GE (General
Electric) Americom Of the original founders of the Direct Broadcast
Satellite Association (DBSA) founded in the 1970s there was only one
that was not taken over by Lockheed or Boeing, namely, the Radio
Company of America's American Communications Inc. better known as RCA
Americom which, it will be recalled was a subsidiary of General
Electric (GE), which also owned NBC, Vivendi etc. Americom. claimed
that it was they that partnered with Primestar to create the first
U.S. direct to home (DTH) home satellite service. "Our equity interest
in this service underscores our commitment to exploring new
applications for DTH satellite technology."819 One of their websites
claimed much more: With Home Box Office we developed the first
satellite-delivered channel to cable systems. Prior to our
innovations, home cable TV subscribers were receiving their signals
from ground-based antennas that HBO had mounted. Our work helped
create the distribution superhighway that now also carries
entertainment and sports services such as The Discovery Channel,
Nickelodeon, MTV and the Madison Square Garden network; and news and
information services, including the ABC, CBS, CNN, PBS, PaxNet and NBC
networks. In 1997 we launched AMC-2 and AMC-3 to add more capacity to
this highly successful satellite distribution service.
In December 2004, a search for GE Americom on Google took us to the
website of Lockheed Martin Space Systems. "About the company" took us
Lockheed Martin Space Systems which, we learned was an enterprise
built by "heritage aerospace companies including Lockheed, Martin
Marietta, RCA, GE and Loral. These space age pioneers have joined
forces to blaze a new trail in serving and protecting our world at the
dawn of the new millennium."

A click on commercial systems revealed that GE Americom was but one of
a long list that includes Asiasat, Chinasat, Echostar, Inmarat,
Intelsat, Iridium, Korea Sat, LMI-
Lockheed Martin Intersputnik, New Skies, and at least ten others. It
was wondrous to see how a company, which announced it was leaving the
telecom field had, within less than two years, conveniently managed to
acquire a majority of the satellite systems from the commercial field
just after they all went bankrupt. One could of course attribute all
this to fruits of liberalization: proof that the competitive spirit
was now sky high. Meanwhile, in the midst of the telecom bubble burst
and satellite bankruptcies a merger took place.

SES Global

On 16 April 2001, GE American Communications Inc joined forces with
the Société Européenne des Satellites SA (SES Astra), of Luxembourg.
The union resulted in SES Global. As one reporter noted: This shifted
"the power structure of the industry


overnight."SES Global claimed to be:


"the world's leader in global satellite communications.""Located in
prime orbital slots and covering the earth's landmasses, the
spacecraft fleet which are fully owned by SES Global include the ASTRA
satellites in Europe and the Americom satellites in the Americas. SES
Global also has interests in and partly owns Sirius, AsiaSat,
Nahuelsat, Star One and Worldsat."822

SES Global acquired the Americom satellites from General Electric in
2001. General Electric Capital remained one of the major shareholders
of SES Global. On 20 December, 2002, an Ariane 5 successfully launched
Astra-2D, GE-8 and LDREX from CSG, Kourou, pad ELA 3. The satellite
was jointly owned and operated by GE Americom and AT&T Alascom.823
Miraculously, AT&T, which had sold off: a) its cable interests; b) its
wireless interests and c) all its satellite interests was now back in
the business it had helped start almost four decades earlier. And
miraculously, Lockheed, which had announced its departure form the
business that same year, was involved once more in building civilian
satellites. So too was Boeing. In April 2004, SES Americom announced


that it would acquire the bankrupt Verestar satellites.On 1 December, 2004, SES


Americom formally acquired Verestar.
In 1986, at the height of the Cold War US military spending was $365.3
billion. By 1994 that had diminished by 21% to $288.1 billion. In
2001, the Pentagon requested a budget of $293.3 billion, which was
scheduled to increase slowly to $331.7 billion in the next five years.
Then came September 11, 2001. By 2002, the official military budget
was $396.1 billion. The War Resisters League argued that the real
figures were much higher: that for 2005, current military spending
would be at $536 billion; that the wars in Iraq and Afghanistan would
cost an extra $50 billion and that past military costs in terms of
Veterans' benefits and national debt amounted to another $349 billion.
Their claim was that of the $1,926 billion of federal funds available
for 2005, 49% was going to military activities; 33% to human
resources; 13% for general government and only 6% for physical
resources. Our concern is not with the details, but with the big
picture. These estimates suggest that military expenditures are now
double what they were at the height of the cold war in 1986.

In our analysis of developments in telecommunications and especially
multimedia (including telephony and Internet) we noted how a very
small number of companies dominated the scene, especially AT&T (and
its Baby Bells), General Electric, General Motors and IBM. We noted
that the three major military contractors: Lockheed/Martin, Boeing and
Grumman/Northrop were encroaching on these developments. We noted also
the recurrence of a small number of equity firms, especially Carlyle,
Parsons, Cinven and a handful of others. Our study of the satellite
crisis has brought us back to the same players. We saw how some
individuals moved elegantly from the military to telecommunications to
satellites. These parallels were so striking that worries about the
two crises being connected and even possibly staged, were too
persistent simply to go away.

Our study of the historical context of these developments made it
clear that the so called crises of 2000-2001 had their origins in the
early 1990s and that their roots went back to the 1950s and sometimes
earlier. In some senses, the hype surrounding overambitious new
companies, which then went bankrupt, brought a sense of the déja vu.
As we repeatedly noted, however, the companies that went bankrupt were
not the ones with little to offer. They had the most valuable assets,
which were forced into an undervalued state such that others could
acquire them.

We mentioned that many of the mergers and buyouts occurring in the
military between 1985-1995 were due to the gradual retreat of the Cold
War. Since then the same trend shifted to the civilian world. On the
surface, this meant that General Motors/Hughes, Lockheed and Boeing
retreated from the civilian/commercial world. In practice, however,
something more sinister happened. Under the guise of liberalization
and deregulation, hundreds of billions of taxpayers' monies, which
were invested in both terrestrial communications (telephones) and
satellite communications were privatized; reduced to a fraction of
their true value and fell into the hands first of a small number of
equity firms and then often ended in the hands of a few military
contractors. Conspiracy theorists saw this as one big plot. More sober
minds assured us that it was really only a number of plots. Some
consultants re-assured us that this was evidence of a fickle market
climate which arises in truly free countries.

The pioneers of the Internet painted a magnificent vision, partly
rhetorical, about a new era of communications via the Internet, which
would improve our health, further business, and transform our
education. This was the e-version of healthy, wealthy and wise. The
mergers and bankruptcies described above revealed a second vision that
focused only on money "at all costs." In the movie Jerry McGuire
(1996) this spirit took the form of: "Show me the money." The rhetoric
of the fast track business became nothing counts, but the bottom line.
But those who focus only on this financial bottom line forget the
fallout, in a literal sense, of their actions. If persons lose
confidence in their employers; if they no longer believe in their
companies, then one day companies no longer work as they should, it is
not business as usual and there could well be more serious

In this second vision, there might be nothing to die for in the
happier sense, but everything to fight for, to struggle for. One could
be tempted to call it an e-Scrooge vision, but that would not catch
another dimension of the trend whereby military terms are marching
into our everyday conversations: where persons "shoot aggressive
glances," "fire volleys of invective" and instead of engaging others
simply "fire" them. In a world where executives are armed to become
corporate warriors in hostile takeovers, there is a danger that this
second vision, which claims to be based in sober realism and cold
facts (warm facts are very hard to find these days), is gaining the
upper hand, is threatening the promises of the original visionaries;
is being reflected in the political turmoils of the day. What had
begun as an American dream is threatening to become a global

16. Trust 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 pointed out:

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.
While the media continued discussions about the symbolic event on 11
September, 2001,827 a war on terrorists was launched (Appendix 3).
Critics observed that the quest to emancipate countries from veils,
was itself a thinly veiled attempt to control markets as a means of
controlling their oil. For some this seemed a win-win situation. A
quick attack helped the military industry; quick control of oil fueled
the economy. The aftermath of the attack was a boon to the building
industry and a haven for contractors and consultants to help with new
infrastructure and new ways of doing things. As long as one took full
control, and could determine directly who the consultants and
contractors would be there seemed to be no problem. From the calm of
far away places such as Casablanca, such a vision for virtual
government seemed like an ideal blueprint. It intertwined the
military, business and investment. It seemed an ideal combination of
money and power.

At the same time, such reasoning pointed to something more disturbing
than what General Eisenhower once called the military industrial
complex. The makers of the blueprint may have thought that by
supplementing warfare with distance-government, they could decide on
the destinies of cities and even whole countries from the comfort of
their offices without the bother of hot sands and heated debates.
Alas, missing from the blueprint were some other details. In November
2004, the Lancet, one of Britain's leading medical journals, provided
serious evidence that over 100,000 civilian lives were lost in Iraq
during 2003-2004. Pointing fingers at others for being terrorists in
the absence of real evidence was unconvincing. Doing so, while
committing what amounted to acts of torture and genocide invited
outrage not only from the survivors but the entire world community.

The outrage was not really against Americans as such, but rather
against a small group with disproportionate power, who were giving
America a bad name. The concept of puppet-dictators, where small
groups, often generals, ruled from behind the scenes, was
well-established. Was there a danger that there could also be
puppet-democracies, where small groups followed a private agenda even
if the figurehead was man of the year? There was concern about the
numbers of innocent victims who were being killed. But the outrage of
the international community was also about something else; something
that went much deeper than headcounts of numbers killed or injured, or
statistics about how many dangerous weapons were destroyed. The real
outrage was about a distortion of reality: particularly with respect
to religion.

In its long history Europe had, of course, often experienced religious
strife, religious persecution and even religious wars. But these were
counted as dark moments and were the exceptions to a brighter vision.
The European tradition had confirmed that tolerance was a wiser path.
In its great moments, as at the court of Roger II in Palermo, Muslims,
and Jews, worked harmoniously and creatively with Roman and Orthodox
Greek Christians. There were other such moments in Toledo, Granada,
and Segovia. Cities such as Amsterdam became famous for maintaining
such a spirit of tolerance in the midst of a French revolution and
even in the thick of the World Wars. The deeper lesson was that
different religions, different beliefs, different views could exist in
parallel as long as one agreed on basic rules of acceptance of one
another. In a sense, these were the positive results of over three
millennia of learning to live together.

Now a small group, acting in the name of America, proposed a radically
different approach. Their model assumed that differences needed to be
eliminated; that differences of religion were sources of conflict, not
only between individuals, but in the clash of civilizations. Their
model proposed naïve oppositions of peace-loving Christians "pitted"
against war-loving Arabs. Their militant stance posing as a Christian
model seemed to have forgotten Paul's letter to the Corinthians (1:13)
that "love endures all things, love forgives all things." It revealed
complete ignorance of the Koran that asked Muslims to treat Jews and
Christians alike as equals. Going uninvited to other countries to kill
innocent women, children and many other civilians did not strengthen
their case. The outrage of the international community hinged
ultimately not just on the large numbers of innocent victims, but also
on the enormous consequences this militant model pretending to be
Christian could have on both Christians and Muslims. Insidiously, what
posed as a war on Islam was equally a war on Christianity. If this was
a modern version of the crusades it was being led by infidels. The
world knew that this had little to do with everyday Americans and yet
somehow everyday Americans had voted this group into power.

According to the rhetoric, the enemy entailed terrorists, who were
assumed to be foreign rather than American citizens. The so-called
Arabic terrorist from Afghanistan who warned of terrorist attacks
shortly before election time turned out to be a young man with an
American passport and the rather un-Arabic name of Perlman. Like the
American cartoon figure, Pogo, there was a growing realization that:
"We have come upon the enemy and we are they." The enemy was not
outside but within. And like the war on drugs, flag waving and
fighting with weapons were of little use in battling the fears within.
A growing minority felt that instead of fighting those outside one's
country, it might have been helpful to "fight" for peace within one's
own country and especially within one's own troubled spirit and the

In the past, the world looked to the US and Europe as champions of
democracy and of


universal rights of the majority.There was always an unwritten law
that those who laid claim to having the answers for others, led by
example. The bankruptcies and financial irregularities suggest that it
is not business as usual, that there were problems of infrastructure
at multiple levels. Interventions and wars abroad undermined
credibility and threatened others' faith in those who claimed to come
from the land of the free. In the past, any intimation that a
politician had lied typically forced them to resign. In the past years
presidents and prime ministers were accused of lying on multiple
fronts and yet they did not consider resignation. It would seem that a
small group believing itself to be beyond the law has a plan.

16. Law Writing in 1927, the American, Valentia Straiton, drew
attention to the way in which different cultures brought into focus
different dimensions: "The Egyptians were worshippers of Nature; the
Greeks reveled in beauty; the Romans demanded law; and the


Northern races reverenced courage."While acknowledging the thrust of
this approach, Europeans would have insisted that law played a deeper
and more universal role in their tradition. Yes, Rome's empire evolved
with an assumption that no individual was above the law. But at least
since the time of Moses, there was a close link in Western culture
between civilization and law. Plato's Laws was one of his most
important books. In the course of the centuries, Europe saw 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 remained paramount.

Although it entered nationhood in a spirit of revolution, the United
States traditionally saw itself as sharing and building on the same
Greco-Roman and Judaeo-Christian heritages as Europe. Anglo Saxon and
Napoleonic law both had a deep influence. Before the days of law and
order, there was an assumption, as in Europe, that law was the
foundation of society. Although Bostoners sometimes threw out English
tea, America embraced the great traditions of Anglo-Saxon law,
complete with the models of lower and high courts. Or at least this
was the prevailing view on the East coast.

Beside the Law

The all too often Wild West developed another approach (see Appendix
2), which led to the notion of good guys versus bad guys, where the
good guys were given special licence to set things straight. In the
old days, it was entertaining to watch the adventures of the Lone
Ranger and his loyal Indian assistant, Tonto (often without stopping
to think that this was a Spanish word for "blockhead," "daft," "fool"
or "simpleton." It was all very harmless. The maverick, good guy
always caught the bad guy with the predictability that a Mountie
always "got their man."

The new media have changed such times forever into nostalgic memories.
In the new world, the overt actions under the cover of emergency
measures undermined much more than the habits of a single country. To
return to our story about the US approach to being outside the law:
The US put pressure on Belgium to abandon its internationally-binding
laws for those who committed acts against humanity. It refused to be
subject to the world court in The Hague. It went further by blocking
aid to the 35 countries, which refused to guarantee US citizens abroad
immunity from the international laws of the world court.830
Implicitly, the US claimed to be above the law, which was also the
title of a Hollywood

831 832

film (1988), a book by David Burnham (1996),a television series
(2000)and more recently a music CD. Explicit allegations of acting
above the law have been leveled at the

833 834 835 836

President,the Vice-President,the US Treasury,bounty huntersand


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; and was
implicated in the Carlyle Group and Halliburton's activities. The same
man was said to have advised the President on means of circumventing
the Geneva


Convention.The strategy for so doing was to paint an elected President
with the title of Commander in Chief as if he were a Churchill. A
significant difference was that Churchill consistently urged for a
humane end to the conflicts in those darkest hours of a real war and
never suggested breaching basic rules of the Geneva Convention. Such
attempts to circumvent the law by someone nominated to a central
position in the legal system proved a grave cause for concern.

There were some reasons for optimism. The law, which stands for
eternity, had a reputation for being slow and for frequently being
behind the moment. Dickens reminded us that such moments in the eyes
of the law could sometimes take many years in the lives of mortals.
And yet, although justice is symbolized as a blind woman, she saw what
happened. In 2004, the Supreme Court ruled that the treatment of
prisoners in Guantanamo Bay, contravened the Geneva Convention and was
therefore unacceptable. Partly out of solidarity because of its
special status with the US, the United Kingdom also imprisoned foreign
"suspects" without clear evidence recognized in courts of law. On 15
December 2004, the Law Lords from the highest judiciary level voted
that such imprisonment was illegal and that holding individuals as
prisoners for three years without due process was also unacceptable.

Law and Order

Given the above, the economic crises of the past few years emerged as
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 were linked with a crisis in trust, honesty and
integrity, whereby the primary institutions of capitalism were called
into question: banks, insurance companies, consultancy firms. This was
compounded by a more subtle trend whereby America invaded some
countries physically with their troops and others metaphysically by
imposing their values, their ways of life, everywhere. When this high
road was accompanied by evidence of irregularities, even in the legal
system, it opened very great dangers. Europeans, who have literally
seen barbarians banging at the gates, would say that calling in
question the basis of law and trust, potentially called into


doubt the future of civilization.While America passed radical bills to
maintain law and order, there were more than a few in Europe and
around the world who felt a need to assert more enduring values where
rhetoric of law and order gave way to a state where law was once more
above order.

Europe and America have always been different. Europe was the old
father who had made many mistakes. America was the young rebellious
son. Europe often looked tired and pessimistic. America had the verve
and optimism of youth. Europe moved more slowly but was steady.
America moved more quickly but was often a little too fast. Our story
of telecoms, satellites and the Internet offered a case in point.
Europe was multilingual. America claimed to be mono-lingual, even
though there were many who spoke Spanish, Italian, Chinese, Korean and
other languages, even native ones. Europe insisted on cultural
diversity: America strived for a melting pot which pretended that
everyone in the US was American and still gave free range to many
expressions of traditions. No one doubted the common roots of Europe
and America or their mutual respect as when France gave a statue of
liberty as a symbol of esteem; or when America helped out in Europe's
infelicitous wars. For all their differences both Europe and America
shared a common Christian heritage. One would have expected Europe to
represent the Old Law and America to represent the New Law almost as
two testaments to a common heritage.

Instead, as we have seen, recent events pointed to a different turn.
Since the days of Rome, Europe for all its mistakes, had one
unshakeable assumption: that law is at the basis of everything and
that no person, no matter how important or mighty, is above the law.
This assumption lay at the basis of national law, transnational law,
international law and of the World Court in The Hague. This principle
was shared by each of the individual countries in Europe and is
emerging as a cornerstone of the new European Union, even though
forming of a new European constitution has brought to light how
difficult are serious attempts to amend such laws as jurisdictions
change. Now a personal tradition, claiming that some individuals are
above and/or beyond the law, has tried to impose itself as national
policy and dictate the rights of others elsewhere around the world.
The Lone Ranger had artistic licence that was different from heads of
state. It would be prudent if this remained so, else there would be a
great danger that the ideals of law in Europe and the East found
themselves opposed to those who would have us believe that they are
more important than kings, emperors and the cumulative wisdom of three
millennia of civilized life. If the contrasts between Europe and
America were couched in these terms, the distance between the two
sides could increase such that even Moses could not part the waters,
or heal the rifts. We can only hope that America's own strong
traditions in law will recognize that this is one drift which could
complicate unnecessarily our views of the Atlantic and the great
nation that bridges its shores with those of the Pacific.

Meanwhile, there are also other voices. The Project for a New American
Century (PNAC) is now being opposed by a Project for the Old American
Century (POAC):

The vetoing of the Fairness Doctrine by President Ronald Reagan and
the Telecom Act of 1996 have all but eliminated any rational discourse
of opposing ideas on the airwaves. While claiming victimization at the
hands of a non-existent liberal media, a few powerful men with an
agenda to utilize this nation's decreasingly free press as a
propaganda tool, have cornered the market on talk radio and
simultaneously created their own propagandist cable "news" channel.
The voices exposing the lies and hypocrisy of the far right as they
legislate in favor of their campaign donors to the detriment of
citizen health and the environment will be heard. Those who would lie
us into believing that a defenseless third world nation posed an
immediate threat, kill hundreds of thousands, spread deadly depleted
uranium across a country, and make billions in profit for the
companies of which they are former CEOs will have their daily


actions documented here. We will be the free press.

17. Conclusions We showed that the large telephone companies played a
key role in the rise of the Internet and continue to do so. We found
that the so-called bust and the telecom bubble burst of
2000-2001 were part of something that began much earlier and is still
continuing. We noted that the evolution of the original ARPAnet to an
Internet was seen by some as leading to an Interspace, whereas others
foresee a Total Information Awareness system or even a Global
Interplanetary Internet. We saw how the rise of the Internet in the
past half century was about a shift from analogue to digital
communication, which implied, ultimately, that all our categories of
telephone companies, television companies, cable companies, satellite
companies, Internet companies are outmoded. This enormous shift is one
underlying reason for the endless mergers and bankruptcies of the past
decades, which came in the wake of a shift from Information and
Communication Technologies (ICT) towards Universal Convergence
Technologies (UCT). In the United States, this convergence may have
another name, namely, Nanoscience, Biotechnology, Information
technology and Cognitive science (NBIC), but the effects are the same.
This helps to explain why visions of the Internet spread from
e-military and e-science to e-business, e-learning and ultimately, to
everyday life.

Our story was about understanding who the main players are in this
enormous shift. We discovered that in the United States the usual
suspects were five civilian firms (AT&T, General Electric, General
Motors, IBM and Microsoft) and three military contractors (Lockheed,
Boeing and Grumman). We showed that they dominated developments in a)
telecommunications, 2) Internet and new media and c) satellite
systems. We discovered that a handful of equity firms –often working
in tandem--and banks are also active in these fields and recur with
surprising regularity in the bankruptcies and mergers.

We examined more closely the usual explanations for the bankruptcies:
glut in the market; irregularities in accounting and fraud; a supposed
lack of investment money; problems of competence and viability;
effects of convergence and simple over-ambition. We established that
these could not explain the phenomenon. Even less could they explain
two paradoxes. First, the companies that went bankrupt were not those
with nothing to offer. Often, as in the case of BBN, they had the best
possible credentials. Second, almost immediately after these companies
went bankrupt they re-emerged, phoenix-like, and carried on as
successful enterprises. This led us to seek deeper reasons.

We learned that the rhetoric of a smooth shift from monopolies to
deregulation and liberalization was somewhat more complicated than was
often suggested. A few of the very big players seemed to keep growing.
Visions for global domination had not disappeared. We saw also that
the great losses of the past years affected very specific bits of the
market and that from a global viewpoint a very different picture
emerged. At the world level there was no downturn in growth of the
Internet or telephony. The news media had focused on details involving
a few billions at a time. They forgot to tell us that the telephony
market brought in $1.37 trillion in 2004 alone (figure 8); that in
2002 the number of mobile phones exceeded the number of fixed line
phones: that there were more than 1.3 billion of each in 2004, and
that, in the four years since the bust, the Internet grew by
more than 600 million users. In a world of over 6 billion persons,
where global markets entailed well more than one trillion dollars in
transactions daily, it was vital that we looked to a much bigger

We discovered that energy companies and the military play a more
central role in these developments than is usually acknowledged.
Indeed, we perceived competing civilian and military visions and also
a trend in recent years for the military version to gain the upper
hand. We suggested that these contests between military and civilian
visions offer deeper insights into the real causes of the so-called bust and telecom bubble burst which dominated headlines in

In addition to the perennial quest of companies to earn money, we saw
a trend to use funds and resources from the public sphere for the
private sphere; that equity firms, consulting firms and banks play a
role in this process; that this trend is intertwined with military
interests and is linked with the executive branch of a public
government administration, which in turn has their own private stakes
in these developments. The examples of satellite systems and two
start-up firms served as cases in point. We saw also that these
concerns are intertwined with a quest for energy. Indeed, whereas the
newspapers typically spoke of convergence only in terms of new media,
we suggested that the new media are now interlinked with finance and
energy; that there is convergence in all three areas and also
convergence between these areas.

We found that such convergence brought many problems in their train.
Some of these were obvious: e.g. problems of restructuring. But when
we delved to search for deeper reasons for recent conflicts we
discovered that the cause might lay in a misunderstanding between a
quest for sameness which saw difference as negative, and a quest for
diversity which saw difference as positive (Appendix 2).

In conspiracy theories, everything could be blamed on an evil fiend or
secret societies working behind the scenes. Hollywood had shown how
this can be caricatured for a spectrum of entertainment ranging from
James Bond and Lara Croft to Austin Powers. Our story is not nearly so
simple. In our story, there is no single villain. On the surface, it
has all the appearances of being anything but a conspiracy. Indeed,
some believed that it has all the semblances of democracy and economic
freedom in action. Not all were convinced.

If this were a murder mystery, we would only have reached the point in
our story where Poirot observed that no dead bodies had been found,
only dead companies and numerous jobs that were killed. He would have
made a list of the usual suspects, but would not even have decided yet
if this were a civil inquiry or a criminal investigation. There would
be many exciting chapters left before he reached his predictably
brilliant conclusions. When the appropriate bodies such as the FCC,
IRS, FBI, CIA, NSF, NSA and the ever-growing Homeland Security have
done their jobs, no doubt many exciting chapters could follow, perhaps
many exciting books.

Our book, however, is neither a next installment of Bond, nor a murder
mystery in the traditions of Poirot or Holmes. Our real concern lies
elsewhere: with fundamental problems, basic trends and underlying
principles. The changes that are happening are long-term. Yet we live
in a world where the major means for understanding such changes and
indeed our main means of affecting these changes focus only on the
bottom line for this fiscal quarter, on the sound bite, the so-called
events of the moment. Our media, our politics and our industry are
focused on short-sighted moments in a world where long term visions
are our only hope for sustainable survival. Our regulatory bodies are
designed to address individual media in a world where these individual
media have become part of a much more complex whole. Whether we call
this by old terms such as Information and Communication Technologies
(ICT) or new terms such as Universal Convergence Technologies (UCT) or
NBIC is insignificant. The buzzwords are ultimately uninteresting: the
process is occurring whether we have names for it or not.

The basic infrastructure for the railroads, telegraph, radio and
television took decades to establish. The telephone was invented in
1860 by Antonio Meucci, Alexander Graham Bell took the credit, and yet
it still directly affects only about 20% of the world's population. By
1897, Karl Ferdinand Braun had invented the Cathode Ray Tube (CRT)
oscilloscope, the forerunner of television and yet it was well past
1950 before this became an everyday medium, even in the United States.
By 1934, there were ideas for what we today call the Internet, but it
was not until the 1990s that this began to affect millions of persons.

Today we need a new infrastructure that will integrate radio,
television, Internet in a single framework. The rhetoric of the moment
has translated the old slogan of liberté, égalité, fraternité into the
new mantra of liberalization, deregulation, and privatization. Our
study suggests that this may be too simplistic.

Traditionally, governments focused on the public good (not for profit,
enduring concerns) and industry focused on individual gain (for
profit, ephemeral concerns). Is it not perilous when those voted
democratically to defend the public good, are engaged by, and in,
agendas which further private profits and personal gain? At what point
does privatization of public goods become a contradiction in terms; a
conflict of interest and interests? What happens when military
contracts play an ever more central role in civilian infrastructure?
What institutions or at least measures are in place to ensure that the
resulting products will serve citizens and not simply be self-serving
for a military, which inevitably has other agendas? Is this why
conflicts of interest become replaced by interest in conflicts?

In the past, governments focussed on peace and the military focused on
exceptional times when there was war. Today some heads of state think
of themselves as commanders in chief of governments, which are
formally not at war. Government, which should be concerned with
enduring stability, and the military, which is concerned with
temporary instability, have become intertwined. Is it wise that those
concerned with pressing dangers of the moment define our
infrastructure for the next century? Is it prudent that those
concerned with emergency training become actively involved in our
everyday education? Are we only training our youth to be soldiers to
fight for the moment or are we instilling in them the enduring values
that will lead to future generations?

Governments focussed on the activities and legislation needed for
everyday life, while a legal system attends to a framework that
ensures proper limits to all action, civilian and military. If law
were no longer the basis for action, then actions would become simply
a matter of power. This might sound attractive, but if it were true it
would mean ultimately that there is no legal difference between a
dictator and a president. Without law there is no legitimacy that goes
beyond the brute force of might is right.

The news media have warned us of the material consequences of the
stock market slumps. Our book has drawn attention to a non-material
level, where this has led 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 sense of honesty and integrity, in both


secular and the sacred spheres,which are a basis of law and ordered
society. 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.
This is a challenge on which America's bold claims and actions will be
judged. Perhaps, this is also a challenge where older civilizations
such as Europe and Asia could point a way towards a more balanced

This book has no quick answers and certainly no magic solutions. Its
purpose is simply to show that the bust and the telecom bubble
were about something much more profound than a couple of events, which
have been linked with some serious traffic accidents one fine day in
September of 2001.

Maastricht 21 12 2004 VI. Appendices Appendix 1. Competitors

The breakup of AT&T in 1984 opened the doors for hundreds of
competitors. Most of these were small and short lived. On the US
scene, there were three more serious competitors: MCI, Worldcom and
Sprint. On the world scene, there were a half dozen serious players:
NTT, British Telecom, Deutsche Telecom, France Telecom and
Cable&Wireless. In the past decade, most of these have been outplayed
or played out, some would claim very deliberately, and have diminished
in power with respect to AT&T.


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 that led to its divestiture in 1984.

In 1975, MCI activated its first computer switch which became the
cornerstone of their network. In 1983, MCI made the largest order of
fiber optic cable ever placed thus far of more than 150,000 miles. By
1987, their new coast-to-coast fiber optic network began operations.
On 3 November 1996, British Telecom agreed to a merger whereby it
would acquire MCI for $20 billion.842 This would have created a major
competition for AT&T. The combined BT-MCI would have been "one of the
largest companies in the world, with annual revenues of $40.6 billion,
181,000 employees, and 43 million customers in


72 countries."Some spoke of a new world order.

In May 1997, the EU gave its consent. In July 1997, the US Justice
Department agreed to

the mergerand in July the FCC also agreed to the merger. Then, on 10
July, 1997 MCI warned "shareholders that it was running up
unexpectedly large losses as it tried to break into the local phone
business. The company said those losses could reach $800 million in
1997 alone." On 21 August 1997, the deal was in disarray; there was
discussion that if British Telecom bought MCI, it would pay "from 10
percent to 25 percent less for the company than the original terms of
the deal. That consensus knocked "$3.4 billion off the


company's market value in one frantic trading session."The next day BT
renegotiated saying it would "pay about $17 billion [rather than $20
billion] to buy MCI and create a joint entity, to be known as Concert
Plc." BT already owned about 20 percent of MCI.
In October 1997, presumably of their own accord, Worldcom announced
plans for a hostile takeover of MCI for $40 billion that threw into
question the planned BT-MCI merger. By July 1998 the MCI-Worldcom deal
was done; Cable and Wireless had bought MCI's Internet assets and BT
was looking for a new partner. On 10 November, 1998, AT&T and BT
applied to the FCC for a joint venture, called Concert which lasted
until 847

16 October 2001.Two years and one week after MCI planned serious
competition to AT&T through a merger with BT, AT&T had created its own
joint venture with BT against MCI.


Although founded in 1983 by Bernie Ebbers, Worldcom's website used to
claim that 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. The company went
public in August 1989.

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).

UUNet, founded in 1987, became the first business Internet Service
Provider (ISP) with a


backbone network.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.

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).In the next 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, they
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."850 In 1998 also, in order to
help the MCI/Wordcom merger MCI sold its backbone to Cable and
Wireless for $625 million.851 By 22 July 2002, MCI/Worldcom was
bankrupt:852 Some spoke of an $11 billion accounting fraud.853 Others
noted that it had over $1 trillion dollars of intercompany debts, of
which $380


billion involved unidentified entities within the company. To be
"worldconned" became a new expression for persons who were conned "big

It is noteworthy that two weeks after Worldcom's bankruptcy in 2002,
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 techno-

logically advanced statewide networks in the country."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."856 On 8 December 2003, MCI, Sprint and
Time Warner Cable entered a Voice over IP deal.857

Bell South had hoped to acquire Worldcom's fixed wireless assets. So
did Nextel, which had as its President and Executive Vice President,
two executives from AT&T


Wireless.On 25 July 2003, Nextel Communications Inc. was awarded the fixed-
wireless assets of bankrupt WorldCom Inc. by Bankruptcy Judge Arthur
Gonzalez. Nextel agreed to pay $144 million for the licenses. By
co-incidence, the Chairman of Nextel, William E. Conway, Jr., a former
executive at MCI, was also a founding partner


of the Carlyle Group.The same Judge Gonzalez, was also involved in the
Enron case,


and had also helped settle a Worldcom-Verizon dispute.
In November 2004, MCI boasted the "industry's farthest-reaching global Internet


backbone,spanning six continents, over 140 countries, over 2,800
cities and over


4,500 Points of Presence (PoPs)."Hence, like AT&T, MCI/Worldcom was
extremely active in the development of the Internet as we know it
today. Unlike AT&T, however, the eight years since its planned merger
with BT eliminated MCI and Worldcom as central players. They were no
longer real competitors in the global game.


In 2004 Sprint claimed to be the number three carrier in the US
although in terms of customers it was number five (cf. figure 1). It
began as the Brown Telephone Company in 1899. In the 1930s, it was
reorganized as United Utilities. In 1976, it became United
Telecommunications. By 1980, it had installed its first fiber-optic
cable and first digital switch, established "UNINET as the world's
third largest commercial packet data


network."In 1986, under the new name of Sprint, it launched its domestic long


distance service "with the nation's first 100% digital, fiber-optic
network."On 28 April, 2000, Sprint agreed to a merger with Worldcom
for $115 billion; a proposal that 865

the EU officially vetoed on 28 June, 2000and a plan they terminated on
13 July 2000 due to regulatory conditions. This effectively eliminated
Sprint from the league of AT&T's serious competitors.

In 2001, Sprint and America OnLine (AOL) announced a strategic
alliance. As noted earlier AT&T had more than an alliance. It owned a
substantial chunk of the Time-
Warner-AOL trio. Sprint also developed links with SAIC (§ 6). In 2004,
Sprint had more than 75,000 employees and served 26 million customers
in more than 70 countries. Officially it was doing well but there were
rumors about it going bankrupt. On 19 May 2004, AT&T signed a deal
"with Sprint, which runs its own CDMA-based wireless network in the US
and competes with AT&T for long distance. AT&T will lease the


ability to offer its own service using Sprint's existing wireless
infrastructure."Sprint was now effectively a useful tool for AT&T's
larger plans. On 9 December, 2004 Sprint and Nextel, whose chief
executives were former AT&T executives announced plans for a $36
billion merger. On 14 December, 2004, Verizon announced that it had
the backing of its wireless partner, Vodaphone, to acquire Sprint.
Such a move could bring Sprint back into the limelight. On the other
hand, if the so-called competition between AT&T and Verizon was merely
a façade, then this could be the final step in the integration of
Sprint into to the Ma Bell bosom.

World Scene: NTT

On the world scene, Nippon Telephone and Telegraph (NT&T) is the only
company operating at the scale and size of AT&T. As one might expect
these giants have been co-
operating happily. In 1996, they worked together in creating a new
kind of fibre optic wire (cf. below § 10). On 28 April 1999, the two
companies announced that they would "develop agreements and business
ventures that provide value-added networking solutions for large and
mid-sized multinational businesses and industries in the Asia
Pacific….The first priority of the two companies will be to
collaborate on the operation and development of the IBM Global Network
(IGN) in Japan which AT&T is in the


process of acquiring."On 30 November, 2000 NTT DoCOMO and AT&T announced:

a long-term partnership to develop wireless multimedia applications.
The alliance will enable users to access HTML applications and content
on mobile wireless terminals and allow the two companies to promote
common global standards. As part of the deal, NTT DoCoMo will invest
nearly $10 billion for AT&T referred


stock, equivalent to 406 million shares of AT&T Wireless tracking stock.
As a result NTT's DoCoMo had a 16% stake in AT&T Wireless.869 On 26
December 2002 AT&T Wireless and NTT DoCoMo outlined "plans for
targeted rollout of W-

CDMA services in four US cities by 2004.
British Telecom

A number of private telegraph companies emerged from 1846 onwards. The
Telegraph Act of 1865 passed control of these to the General Post
Office (GPO). This was renamed the Post Office in 1969 with a separate
division called Post Office Telecommunications (PTO). This division
was renamed British Telecom in 1980-1981. It was privatized in 1984
and renamed BT in 1991.871

Although much smaller than AT&T, BT operates around the world. In
2004, its global services department had 20,000 employees on four of
the five continents (not in


Africa).On 29 March 1996, British Telecom and Cable & Wireless
"restarted discussions about a merger which would see C&W acquire BT
in a reverse takeover."
In 1993, BT announced an alliance with MCI. In 5 November 1996, they
announced a definitive merger:

They announced Concert, a new high-growth global communications
powerhouse borne from the union of British Telecom and MCI. This is
different from the "Concert" they created three years ago. That
organization will now be called Concert Communications Services. This
new global company will provide local, long distance, and
international services including voice, data, wireless, Internet,


information technologies, and outsourcing.
This merger would have posed serious competition for AT&T. Indeed, BT
planned to become "the leading global telecommunications operator"
with "network related products and services."875 By 1998, this plan
was definitively derailed by the Worldcom/MCI merger. In July 1998, BT
announced a joint venture with AT&T. In September 1998, BT bought the
Concert Business Services back from MCI. On 16 November, AT&T
announced that it would: "beef up its international business services
by integrating the


Concert global telecom products of its joint venture partner, BT."
But there was much more to this alliance than a simple joint venture
by two companies. Three other companies were involved: 1) VLT Co. L.
L. C., (a Delaware limited liability corporation, which was a
subsidiary of a holding company based in the Netherlands) 2) Violet
License Co. LLC, (a wholly owned subsidiary of VLT) and 3) TLTD, (a
Bahamas-based corporation, was also a subsidiary of a holding company
based in the Netherlands). In February 1999, the five companies made
an application "to assign to VLT ownership interests of AT&T:

a) of authorization in international cable facilities within United
States territorial limits":

AT&T Corporation (multiple authorizations) AT&T Alascom (multiple
authorizations) AT&T Puerto Rico, Inc. (multiple authorizations) AT&T
of the Virgin Islands, Inc. (multiple authorizations)

b) of licence applications of cable landing licences:

AT&T Corporation (multiple licenses) Transoceanic Communications, Inc.
(multiple licenses) AT&T Puerto Rico, Inc. (multiple licenses) and in
addition c) to License Co. earth station radio licenses held by AT&T
or its subsidiaries:

AT&T Corporation (multiple licenses) AT&T Alascom, Inc. (multiple licenses)877

In short VLT, was assigned AT&T's licences within US territorial
waters. In a separate document, those licences outside US territorial
waters were assigned to TLTD:

TLTD, a Bahamas-based corporation, is also a subsidiary of a holding
company based in the Netherlands that will be equally owned by AT&T
and BT. AT&T proposes to assign to TLTD its ownership interests in
international submarine cable facilities outside the U.S. territorial
limits. TLTD's assets will also include BT's ownership interests in
international submarine cable facilities outside the

U.K. territorial limits and AT&T's and BT's operating agreements to
provide international telecommunications services to various
countries. TLTD seeks new Section 214 authorization to provide
facilities-based and resold international basic 878

switched, private line, data, television, and business services.
By 2000, TLTD, Telespace Limited, (not to be confused with the
Canadian company of the same name) had moved to Redmond (of Microsoft
fame). It had also merged with and changed its name to
which became: "the parent corporation of Beijing based QinNet
Electronic Technologies Co. Ltd., which provides complete Internet
services, including Internet service providers, Internet content
providers, E-business, and E-
commerce solutions, to government entities, private enterprises, and
individuals in China."879

At the start of 2000, when Concert finally "began", nothing was said
of these other companies. On 11 May, 2000, BT, AT&T and Concert
announced that they were investing $2 billion over three years: "to
deliver global e-commerce services via a network of 44 Internet data
centres in 16 countries. The centres will be directly connected to an
Internet protocol (IP) backbone and will provide the wide range of
co-location, web


hosting, application and networking professional services."By 16
October 2001, BT and AT&T had ended Concert with $7 billion in

Some would point to this failure as vivid proof of how profoundly the
telecommunications bubble burst brought suffering even to the
mightiest telecoms. Other interpretations are possible. In the course
of five years, AT&T had removed BT as a potential competitor on the
global scene. Its pseudo-pact with BT allowed it to shift a great
number of its licenses to unknown companies, whereby it could work
more effectively and invisibly on the global scene.

Cable and Wireless

The company had its beginnings in the 1860s with the laying of the
1866 Atlantic cable. Founded in 1872, the Eastern Telegraph Company
was an amalgamation of a number of important smaller telegraph
companies. "In the early years of the 20th century, the Eastern became
part of the Eastern and Associated Telegraph Companies which


incorporated many other telegraph companies from all around the
world."In 1929, it became Imperial and International Communications
(IIC) and in 1934 it was renamed Cable & Wireless.883

By 1887, the company owned 22,000 miles of submarine cable. By 1929,
this had increased to 164,400 nautical miles of submarine cable. By
1992, "C&W owned 25% of the world's digital and analogue submarine
cable systems including 28,000 km of digital


cable -due to increase to 42,000 km by the end of the decade."By 1990
it had 37,681 staff worldwide.885

In 1998, MCI acquired the ailing Cable and Wireless company "for $1.8 billion


dollars."In July 1998 also, in order to help the MCI/Wordcom merger
MCI sold its


backbone to Cable and Wireless for $625 million.By 2003, Cable and
Wireless were also bankrupt and sold "their USA based operations to
private investment firm, Gores

888 889

Technology Group,for $125 million dollars."This deal was due to be
concluded in March 2004.890 Gores Technology was owned by Alec Gores.
As we shall see presently, Alec Gores' brother, Tom Gores owned
Platinum Technology, which was also making aggressive acquisitions of
infrastructure in Europe. The Gores Group, like the Carlyle Group, had
profited from the Iraq war (cf. § 9 below).

More interesting for our purposes, by November 2004, Cable and
Wireless claimed to


have developed a new webMethods software with Deloitteand Touche and
described itself as having:

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.
It was amazing to trace how an ailing, near bankrupt company could 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 a few
years.Even so what was once the largest cable company in the world no
longer posed serious competition to the international vision of AT&T.

Deutsche Telekom Deutsche Telekom is "Europe´s largest
telecommunications company" and also a "global


player with a presence in about 65 countries on six
continents."Deutsche Telekom was privatized in 1996.

In 1988, Deutsche Telekom and France Telecom worked together to create
a value added network, Eucoom. This led to other joint ventures:
Eurnetcom (outsourcing services) in 1992; and Atlas (virtual private
networks). On 15 December 1995, the FCC cleared the way for a joint
venture that began in 1996, whereby Deutsche Telekom and France
Télécom each acquired a 10% stake in Sprint and the three partners
together created


"Global One, to provide multinationals with global services."By 1999,
Global One had "1,400 points of presence in over 65 countries" and
claimed to have: "one of the world's largest and most advanced
ATM-based networks, which delivers a high speed service --1.5 Mbps to
155 Mbps --that simultaneously supports


voice, data, Internet, and multimedia in a self-healing network."
In 1999, Deutsche Telekom focused its core activities in four
strategic divisions: mobile communications, Internet services, data
communication/IP/system solutions and fixed-
line network access. In 1999, Deutsche Telekom bought Britain's
One2One. There were rumours it might buy Sprint, Cable and Wireless or
other major players. In 2001, Deutsche Telekom quietly bought Voice
Stream Communications and Powertel.897 In 2004 it remained one of the
significant players on the world scene. Not surprisingly,


AT&T and TMobile signed an alliance on 2 February 2004.As a result
AT&T gained access to the latest third generation mobile phones.

France Telecom

France Telecom was formally launched in 1991. It too is a major
European telecom with a global reach. In 2003, it divested a number of
subsidiaries, namely, Telecom Argentina, Wind, Casema, CTE Salvador
and Eutelsat. Even so it has been developing a world wide strategy in
conjunction with Deutsche Telekom.

In 1949, the Société Internationale de Télécommunications
Aéronautiques (SITA) was founded. This became the global data network
for major airlines, and companies such as Boeing. SITA became Equant,
operating "an advanced IP-based network that offers global wide area
network (WAN)-to-local area network (LAN)-to-Desktop connectivity over
the world's largest commercial data network."899 On 20 November, 2000,
Equant and France Telecom announced that they would merge Equant and
Global One. On 2 July, 2001, Equant began full operations "as a
combined company, providing advanced global IP and data services for
multinational businesses over the world's largest


commercial data network, spanning 220 countries and territories."
France Telecom was one of the only global players which remained on a
course independent of AT&T. As we shall see later, however, by 2004,
companies such as Level 3 Communications and Equity companies such as
Platinum were posing a threat to the French company's infrastructure
(§10). Telefonica

With 115 million customers, Telefonica is the leading Telecom for
Spanish and Portuguese peoples, active in 13 countries. On 14 April
1997, AT&T "signed a memorandum of understanding with Telecom Italia,
Telefonica de Espana, S.A. and Companhia Portuguesa Radio Marconi,
S.A. to plan to build Columbus III, an undersea fiber optic cable
network that will link the United States with southern Europe by July


1999."In 2002, there were threats by AT&T Peru to sue Telefonica for
being "anti-

competitive."Nonetheless, Telefonica continued to grow as a serious
player. On 8 March 2004, Telefonica acquired Bell South's South
American cellular markets and


became the world's fourth largest cellular company with 62.5 million customers.

Appendix 2: Forbes Statistics about the top telecommunications companies of the

World 1997-2004. 1997 rank company country industry revenues ($mil) 9
Nippon Telegraph & Telephone Japan telecommunications 78,321 31
Deutsche Telekom AG Germany telecommunications 41,916 70 STET-Soc
Finanziaria Telefonica Italy telecommunications 26,263 78 British
Telecommunications UK telecommunications 23,695 95 BCE Canada
telecommunications 20,658 138 Telefonica Spain telecommunications
15,838 192 TELEBRAS-Brazil telecommunications 12,426 198 KPN-Royal PTT
Nederlands NV Netherlands telecommunications 12,163 254 Cable &
Wireless UK telecommunications 9,599 278 DDI Japan telecommunications
9,024 348 Telefonos de Mexico --telecommunications 6,935 1998 rank
company country industry revenues ($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 1999

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 United
Kingdom 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
Telecommunications 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 Appendix 2. Diversity or Sameness? Reflections
on Differences between Europe and the United States.

To understand why America, like Goethe, has two guiding spirits (zwei
Seele in einer Brust) and to understand why Europe and America have
very distinct approaches to the world, requires a detour into history
and psychology. We shall begin with notions of law to explore how a
psychology of the "good guy, initially associated with the American
West, shaped American definitions of difference, values and law into
something very different than European world-views. Understanding
these differences and their consequences will help us to understand
the deeper roots of what US citizens sometimes perceived as simple
anti-American sentiments. They will also cast light on the immensity
of the problems that have been set in motion by a small group of
individuals acting in the name of a great nation.

Psychology of the Good Guy

The East Coast of the United States saw itself as building on the
great traditions of Greco-Roman and Judaeo-Christian law, with a
strong influence from the Anglo-Saxon tradion. It was not always so in
the all too often Wild West. This inspired a whole genre of cowboy
movies. It also focused attention on a particular kind of hero,
epitomized in figures such as the Lone Ranger or Zorro: where
individuals, claiming to work for the right, took the law into their
own hands, and sometimes killed and destroyed, without regard for
local authorities and jurisdictions. If one was the good guy, the end
justified the means. In the often chaotic climate of those times,
order was above the law. In time, such cowboys moved to the cities
where a new kind of urban cowboy emerged with names such as Superman,
Batman, Spiderman, Spiderwoman and Catwoman. They began as comic strip
figures and then moved to television programmes and later the film
screens. In recent years, such television heroes have more modern
equipment and trendier names such as Knight Rider and Airwolf.
Although the names changed, the basic attitude of the semi-lawless
days of the Wild West prevailed. There was a notion that might is


right.Gradually this attitude spread throughout the country. Even at
Harvard, a recent study suggested that countries with the most money
made the most progress and hence implied that might is right.905

Parallel with this attitude of the good outside the law emerged
another notion. To agree with someone was much more than to share the
same view on a given topic. To agree with someone was paramount to
being a friend. Those who agreed with one were friends and allies.
Those who disagreed with one were enemies. Foreigners who disagreed
with one became "enemy aliens."

In this context, one's beliefs were not merely a series of views one
held now and might well change tomorrow. Beliefs became central to who
one was perceived to be and thus became a key to acceptance in a
community. This applied especially to religious beliefs. In certain
fundamentalist groups this led to extremes, which others sometimes
mocked and caricaturized. More insidious were milder versions, which
somehow conflated themselves with the attitude of the good outside the
law. On the surface, this meant that the Lone Ranger became an
everyday citizen just as Zorro, Superman and Batman did in the movies.
In everyday life, it meant that Maverick could become a name for the
good guys. As long as these were private fantasies or personal styles
there were no serious problems.

Indeed, for those who never left their little village this was an
entirely understandable point of view. Unfortunately, it had an
unexpected corollary: As a result of this attitude, we are all
foreigners everywhere on earth except for our home, our ranch, or the
very tiny space of the village where we began. Those who liked to
travel soon found that mutual respect was an efficient way to escape
being dinner of the cannibals and related less threatening scenarios.
Unless we learn to accept others as equals, why should we expect them
to do the same for us, especially when they often come from
civilizations that are far older than our own? Cowboys did not need
such niceties, cowboys that travel do. All persons that travel do.
Even persons who don't travel should.

The rise of Ronald Reagan issued in a new era. Reagan confirmed that a
hero in the movies could become a hero in real life. He also learned
that gentle cajoling with words could be more effective in removing a
Berlin Wall than bringing in the heavy artillery and mortar. At the
same time, when the fantasies of a rancher from the West to become
president became reality, there were more subtle problems. The
traditions of personal values sometimes posed as those of a nation. As
a result, those who agreed with America were friends: those who
disagreed were enemies. Those of one's own particular brand of
Christianity were friends: those of other beliefs and creeds were
enemies and members of evil empires. No wonder Americans were confused
in Beirut, which once had well over a hundred sects of Christians
living amicably with Arabs and Jews.

In the Western vision that went to Washington, it was assumed that
because "God is on our side", one was clearly doing the right thing,
even if those things did not quite fit in with age-old laws. After
all, it was a problem of living according to one's own law. The laws
of foreigners, those who were different, and were the enemy did not
apply anyway.


So a clear challenge emerged: assert American law for
Americanseverywhere and deny the right of others to apply their laws
under Americans at any time. Superman would have understood clearly:
the International Court of Law in the Hague would have had, and
continues to have, problems.

The present administration continued the western influence on the
White House. The so-
called wars in Afghanistan and Iraq were therefore much more than
attempts to fight terrorism and spread the influence of democracy.
They were attempts, perhaps ingenuous, perhaps insidious, for some of
the soldiers, undoubtedly all-too-sincere attempts, to raise
well-intentioned personal traditions of maverick actions of saving the
day to the level of national policies, that were supposed to save the
world. In the small towns of the West, this could be forgiven. In
Dallas, it could be overlooked. But Bagdad was not a shanty town. It
was a cradle of world culture, millennia before America was discovered
by Columbus. What posed as a war on terror thus constituted actions
that terrorized the rule of law. There was an implicit assumption that
certain key individuals and ultimately the nations on behalf of whom
they claimed to speak, were, or at least could pretend to be, above
the law or, more precisely, outside the law, because these were times
when emergency was a way of life. The congressional experts cited
earlier had warned that "hiding every excess as an 'emergency measure'
won't work forever." The present administration seemed to have proved
them wrong.

Herein lay one of the reasons why the world was uncomfortable with
America. It was one thing, at the level of individuals, to perceive a
polarity, whereby persons who agreed with one were friends, while
those who disagreed were enemies. Translated into government policy
this meant that those who disagreed with the government were
unexpectedly seen as enemies of the state. In practical terms, this
meant that any visitor to the United States, or the United Kingdom,
could be held and imprisoned indefinitely without any


documented evidence of wrongdoing.This does not appear to be the best
incentive for world peace. Nor do accompanying measures particularly
encourage tourism.

Closer examination of this psychological notion of the good guy
reveals that it had deep-
seated links with American definitions of difference and approach to
the law. Each of these deserve a brief explanation.

Difference and Diversity

Marshall McLuhan spoke of a global village. Part of this message was
that we were now all connected as if the whole world were a single
village. The new media, especially mobile telecommunications media,
were connecting persons everywhere. But the individual villages did
not go away. This left open the question in respect of what one would
wish or be able to communicate.

In the section above, we outlined a psychology typical of the American
West, whereby agreement on views determined friendship and community.
In simple terms, this meant that sameness was a point of departure.
Same became something almost sacred. In England, agreement is about an
unstated consensus. In America, agreement became a key to being part
of the same group, which had vestiges of a clan. Hence the simple
question "Do you agree?" came to mean something profoundly different
than "Etes vous d'accord?" or "Sind Sie einverstanden?" These related
French and German questions were about decisions to do things
together, without any assumptions about having the same views. At a
political level Europeans had ententes, concordats, and concords,
which were very far removed from agreements in the American sense.
American agreements meant that the person was a "good guy," "on our
side" because they were ultimately "the same as us." Ententes assumed
and promised much less: they were decisions by two parties to work
together, even if they probably had very different ideas and sometimes
even if they despised each other. More friendly ententes were heartier
and therefore called ententes cordiales. In Europe, understanding
another viewpoint and sharing it were two actions. In America, they
were typically assumed to be a single action. An American who asked:
"Do you see my point?" assumed that if the other person could see,
they would not only understand, but also have the same position about
that point. Indeed, if there were a discrepancy between what one said
(externally) and the viewpoint one had (internally), then one was
being "insincere," which was "a bad thing." So Americans diligently
ended all their letters with "Yours sincerely," with only a few, such
as Lionel Trilling, who were aware of the ironies of this allusion to
the thinkers of Saint Cyr.

In Europe, any incident which could have disrupted a situation was
invariably followed by assurances that things remained the same
(German: Es ist mir egal); that it did not matter (French: Il n'y a
pas de quoi) or that it was really nothing at all (French: De rien or
Spanish: De nada which were closely related to the Italian: Non c'è
niente). None of these even alluded to having or sharing the same
ideas. They were solely assurances that the situation, the
relationship, or the matter at hand could continue in the same way.
Americans, who assumed an equation between thought, word and deed,
needed no distinctions between the three. Hence, Americans faced with
potentially disruptive situations simply said: "No difference."

Americans typically saw differences as potentially negative.
Accordingly, in human relations this implied that friends must "settle
their differences" or else they would "need to go their different
ways." By contrast, when Europeans asked a colleague or friend: "Do
you see the difference?" this was not to complain about an obstacle in
a relationship, but rather to signal a deeper level of insight, which
arose from seeing more differences, having a more differentiated view
(positive), which arose from making careful distinctions. This had a
long tradition. "Distinguendum est" was one of the key activities of
scholasticism in the scholar's quest towards a more transcendent
understanding of the outer and inner worlds.

In the European tradition, the essence of friendship thus entailed
that one saw and perceived positive differences, understood them and
accepted the other person "warts and all" without any assumptions that
one needed to "share the same ideas" in the sense of their being the
same as the friend. This seemed to promise less than the American
notion of friendship, but it meant that persons could have very
different habits, could still be accepted and even be friends. It
meant that one traveled searching for variations and differences
rather than "more of the same." Having something that was different
became a virtue rather than a failing: one had a little je ne sais

The American quest for something the same led to a melting pot
mentality, which was far from a European viewpoint, where difference,
rather than sameness, was the essence of one's identity. In Europe,
Vive la difference! had a deeper meaning. Hence, being Bohemian was
one of many ways of being quintessentially European. In England, being
an eccentric was a sign that one had arrived in society. In America,
by contrast, being called an eccentric meant that one was on the edge
of society and in danger of being an outsider. Hence, in America,
those who were different were non-conformist, which was something on
the borderline of being an American, and in times of McCarthyism was
"proof" of being un-American.

Europeans assumed the existence of public and private dimensions in
everything they did. In America, there was a greater tendency to
relegate the public side to work and private side to the home.
Americans turned their public side off: Europeans didn't or did so
much less. Meanwhile, Americans extended their notions about being the
same to both the private and the public sphere. As a result they
expected not only their friends to be "of the same mind" as they were,
they expected them to speak the same language as they did. Hence
Americans often dismissed as too different (negative) and ignorant
Europeans and others who could not speak American English as well as
they did. By contrast, Europeans often dismissed as too ignorant and
too undifferent Americans, who could only speak English.

This extension of sameness applied to many dimensions. Americans who
travelled expected their food to be the same. Hence, Americans
defended McDonaldization in terms of efficiency, often meaning that
they welcomed how it was never different. A hamburger is a hamburger,
is a hamburger. Meanwhile, Europeans condemned McDonaldization for its
homogeneity. On the surface, the French phrase: Une rose est une rose,
est une rose" had a repetition that seemed to praise its sameness, but
was actually a paean to its difference and uniqueness.

These seemingly superficial "differences" had profound consequences.
Linguistically they meant that Americans chose uni-ore more precisely
mono-lingualism, whereas Europeans chose multi-lingualism. Americans
sometimes assumed that persons who had not mastered American were too
different to be worth trusting. Europeans sometimes assumed that
persons who had not mastered a few languages were too unaware to
different world views opened by other languages to be worth knowing.
Alas, some naïve American tourists sometimes mistook this for
anti-Americanism, because for them, persons who did not seek their
friendship were assumed to be "enemies."

Architecturally, these seemingly superficial differences meant that
American villages and towns generally looked the same. A corollary or
implication of this approach was that one was less American to the
extent that one was different and one was more "all American" to the
extent that one was the same, and of the same view. This applied
equally to food and architecture. All-American towns really looked the
same. Towns that looked different bordered on being "un-American." An
unexpected consequence of a fear of difference was an equally great
fear of diversity.

In Europe, with its different assumptions, almost the reverse was
true. A very European town prided itself on the extent to which it was
different from neighbouring towns even if the next town was only five
miles away. In Europe, because difference was a virtue, diversity
became a central element of cultural expression. In Europe one went to
McDonald's in those rare times when lack of time made fast food a
necessity; or as an experience every once in awhile just to be
different, but for the most part McDonald's was uninteresting. Why
limit oneself to a burger with a single kind of cheese on a continent
with thousands of cheeses? Why limit oneself to a "choice" between a
Pepsi and Coke when one had a choice of thousands of wines? In Europe,
one ate and drank very diverse foods and drinks in extremely diverse
architecture. One found very positive differences and much diversity.
For this reason, while one could speak of un-American towns, there was
no such thing as un-French towns; un-Italian towns, un-English towns.
There were simply very French, very Italian and very English towns.

Since difference was not a virtue in America, everything tended to
sound, look and even taste the same. And when Americans went abroad
they tended to stay in hotels where as much as possible was the same
as back home. For this reason, Americans liked Hiltons and Sheratons
and Marriotts. By contrast, since difference was a virtue for
Europeans they sought out everything that tended to sound, look, and
taste different. When Europeans went abroad they typically stayed in
hotels that were as different as possible as their usual homes:
finding a hotel with a difference was something positive; something
that made all the difference was very positive. Admittedly there were
also German tourists who took their sausages on vacation in Italy; or
the British who brought their bangers and mash wherever they went. But
"real" Europeans chuckled about these in the same way that they
chuckled at Americans with shirts in clashing colours. Just as
Americans prided themselves on the extent that they were basically the
same, Europeans prided themselves on their lack of sameness, on their

It would be naïve of course to pretend that Americans, the country
famous for its extreme individualism, was incapable of differences.
The subtle distinction is that in America, difference and, to the
extent that it can exist in such a climate, diversity is a personal
thing. One began at a public and social level with a commitment to
sameness (and to a certain extent to conformity). Once one fitted into
this norm one was accepted. That was why everyone, who was a US
citizen, was first, and foremost an American. As an extra, an aside,
almost as a luxury, one "did one's thing:" wore bright shirts, long
hair, or other costumes for which America became famous all over the
world. Significantly, the norm was that one still tended to wear the
same things. So America became the land of blue jeans and Levis. This
led some Englishmen to quip that it was "the land of unlimited
impossibilities where nothing was so old as the new." Underneath the
diversity of personal expression, were many basics that were assumed
to be shared with everyone. One spoke the same language, one basically
did the same things. One wore the same costumes. That was how one knew
that they were "one of us." In England, and in Europe, a person's
apparel was never such a giveaway. Friends might appear in the
strangest costumes, enemies in the most familiar ones.

Of course, all over the world friendship is about sharing things. But
there are subtle distinctions. In America, as we have seen, friends
are those who are the same as us. In England, friendship is intimately
connected with experiencing things together. This means that one does
the same things together, but leaves open that there could be vast
areas in which the two friends are not the same. European friendship
sets out from another premise. Doing things together is fine but
essentially friendship is about a complete trust in another person,
which has nothing to do with their being the same as the friend. On
the contrary, it assumes that one's fellow human is different, and
friendship is ultimately a pact that one will explore differences
together which are of course not the kind of differences that
Americans feet need to be resolved.

Canadians, who are somewhere between the European and American models,
accordingly developed their own versions of friendship. As in the
United States, Canadians, especially in the White Anglo-Saxon
Protestant (WASP) traditions tend towards an assumption that
conformity is a reflection of virtue. However, unlike their neighbours
to the South, Canadians have too many examples of other cultures in
close proximity to accept this tendency uncritically. So they create a
deeper tolerance for different ways. As in the English tradition,
Canadians emphasize the importance of shared experiences. Like the
English there is great sensitivity to not hurting the other person. So
many topics are typically avoided unless they are brought up
deliberately. At the same time, thanks to the Scottish tradtion there
is an unerring sense of directness and honesty which leads to an
openness that is often missing in the English tradition.

As a result, Americans typically see deeper friendship as a
confirmation of being the same; Europeans see deeper friendship as a
process of seeing more differences, more diversity and possibly even
becoming more different as one grows. Of course, Americans who set out
with a commitment to sameness still have a personal freedom which
allows them to do "their own thing", sometimes with such reckless
abandon, that they have no problem with the "differences" of
Europeans. But given their radically different points of departure it
means that it is ultimately easier for Americans to be friends with
Europeans, than for Europeans to be friends with Americans. Americans
are only looking for persons who could be trusted because they are the
same enough or at least appear to be. Europeans are looking for
persons who are deep and strong enough to explore and develop
differences and who can be trusted when the two individuals drop their
superficial similarities and explore what lies beneath.

In the American case, the commitment to make difference a personal
thing, and specifically linked to personal appearance, means that
there can be diversity of dress, including wild plaid shirts or hair
styles, but it also means that it goes no further. In "all-
American" towns, the architecture is basically the same; the built
environment remains without diversity. That is a psychological root
for what the world later called McDonaldization.

This psychology of sameness helped to define the nature of tourism in
America. Since towns followed the principle "if you've seen one,
you've seen them all," there was little incentive to create a tourist
industry traveling from one picturesque town to another as one did in
Europe. So tourism became defined largely by climate. Florida was a
place one went for the winter to get away from the cold up North, not
because the buildings were so fascinating. For Europeans in search of
the different it meant that apart from some art collections in the
cities, the real attractions were not in towns and villages but in the
enormous landscapes of nature especially the parks of Utah, Nevada,
California and Colorado where uniqueness reigned untamed by dreams of
sameness. Significantly, this did not mean that these towns and other
expressions of sameness were static. On the contrary, since they were
on the frontier, which was always expanding and growing, they were
free to grow and change as long as they all changed together. This
unleashed a great sense of freedom and dynamism into the built
environment which led ultimately to important contributions in
American architecture, especially in large cities, and especially in
terms of individual buildings. The large cities, tried to remain true
to the commitment of sameness of the earlier towns. This was one of
the reasons why American cities revived the idea of grids from the
Greeks so that all their cities had the same straight streets and the
same concepts of square or rectangular blocks. Not by co-
incidence, European architects such as Mies van der Rohe, who had the
brilliant idea of extending the two dimensional grids of squares and
rectangles into the three-dimensional environment, were very
successful in this climate. As a result, although the great cities
such as New York or Chicago had different landmarks such as a Chrysler
building or even wild buildings by Canadians such as Gehry, their
general feel was of a sameness that was fundamentally distinct from
the differences in Rome, Paris, London, Berlin and other great
European cities.

There was also another fundamental difference between European cities
such as Rome and American cities such as New York, which went far
deeper than the obvious fact that Rome was older than New York,
although it was related to this detail. Rome gained its name as
eternal city partly because its citizens decided that there were large
bits of their city which were not open for change; even if those bits
were sometimes literally in ruins. As a result, Rome could acquire
buses, subways, modern buildings, but this was built around, above and
sometimes even under an historical core, which one continued to study
with all the tools of modern archaeology to keep alive the differences
of earlier times.

This was in marked contrast to a New York, where history, which
reflected difference, was necessarily relegated to buildings that
reflected the personal expression of individuals. So the building that
housed the Frick Collection became an historical monument, but there
was no historical feel as in Rome or even an historical section
(historische Viertel was a technical term in German not in American).

As their East and West Coast settlements and their shanty towns of the
Wild West transformed themselves into the face of today's skyscraper
cities, Americans were obviously not blind to the great changes that
were occurring. Often, with no little nostalgia, they looked back on
the greater sameness that they had once enjoyed. The European response
to this universal dilemma would have been to create historical areas,
where one had buildings with dates. By contrast, America saw these as
dated buildings, which meant they had to go. In Europe, history meant
something stayed. In America, "It's history" meant that something did
not stay. It was replaced. Often this was the next modern building.

Walt Disney recognized that the nostalgia for the sameness that since
had been eclipsed, reflected a deeper need, which could also lead to
new business. Where a European would have tried to conserve or
reconstruct an historical town of the past, Disney applied the ideal
of sameness retrospectively. He constructed buildings that gave the
impression of being the same as those in earlier towns of the West.
Instead of trying to reproduce accurately town A to the exclusion of
town B, he sought to reconstruct the sense and atmosphere of an old
town. To choose any town would have led him back to the diversity of
the European tradition. Choosing to build something that reflected
any-town, he upheld the deep American commitment to sameness.

Walt Disney's genius was that he extended this approach to all three
phases of time: Fantasyland (the past); Frontierland and Adventureland
(present) and Tomorrowland (future). The four together became
Disneyland. Subsequently the Epcot Center was devoted specifically to
the future. On the surface, these Disney worlds catered to
individuals. At an another level they controlled experiences,
depersonalized them and threatened the very idea of truly "personal"
experiences in the European sense. Ultimately, they were a vehicle for
recreating the community sense of sameness that Americans vaguely
remembered. For this reason it could appropriately be called
Fantasyland rather than Historyland. Fantasyland took visitors back to
a time when sameness was still intact. A Historyland would have taken
them back to a time when differences with the present were painfully

On the surface, Disney had created a brilliant new form of
entertainment that evolved into the notion of theme parks, which
spread throughout the world. At a deeper level, they externalized the
essence of the American commitment to sameness, which was a central
starting point for their approach to values and culture. Sociologists
have rightly noted that McDonaldization and Disneyfication are
related: they are two methods to capture and express the essence of
the American psychology. Both address the quest for sameness.
McDonaldization does so for the present and especially with respect to
food. Disneyfication extends this to past, present and future.

As long as countries had clear borders all this made "little
difference." Europeans saw that in America they did things differently
and that was fine. Europeans could see this as just another example of
diversity. But once the advent of new media led the values of one
country to go beyond their home borders it was another story. Or to
combine the American commitment to sameness with a Spanish flavour: it
changed the whole enchilada.

A deep seated American psychology of sameness, which inspired
McDonalds and Disney, was creative in an American landscape, where it
inspired great examples of personal expression. But once this
psychology moved from a personal level to the level of national policy
an imperialism of values began to loom. Canadians responded by
contrasting an American "melting pot" culture with their own
commitment to multiculturalism. Hence Toronto became a city where
persons from at least 72 countries maintained their own cultures in
terms of language, food and religions. Parts of the city have
bilingual signs in Canadian and Chinese; other parts have bilingual
signs in Canadian and Greek. This solution introduces diversity mainly
into the level of experience and less into the level of architecture.
When this personal American psychology of sameness became part of an
American policy that was consciously exported to Europe and around the
world, the first response was a gut reaction that one did not want to
have other countries dictating their values and culture interfering
with the home front. This led to the well-publicized protests that
became associated with meetings of the G8, the World Bank, the World
Trade Organization and indeed all organizations associated with
globalization. These protests were described as anti-Americanism, but
were really a more general protest against other countries who tried
to extend their values and their rules beyond their own borders.
Within Europe, sensitivity to this general problem had led the
European Union to keep culture out of the forefront of its activities.
(Admittedly, there was a small directorate on


Culture but it ranked number 22 out of 24).
Only when the American quest for sameness, which allowed personal
expressions of individuality, crossed the Atlantic, could Europeans
begin to understand that this was something profoundly different than
the diversity that lay at the core of their values. Cultural diversity
became a topic. America produced individuals but it did not foster
diversity. Formalizations of the psychology of sameness as
McDonaldization/ Disneyfication or M/D principle went further. They
undermined and threatened the central principles of what it meant to
be European.

The M/D principle ultimately did away with history: a trend reflected
in the Harvard Professor, Fukuyama's End of History. This was
incompatible with a European tradition of a cumulative building on the
past. The M/D principle seemed to foster individualism. But at a more
subtle level, because its quest was sameness it treated the whole
world, individual persons and objects alike, in terms of the things
they had in common, rather than bringing to light their uniqueness. In
this sense, the M/D principle favoured universals over particulars
(i.e. it was more Platonic than Aristotelian). Europe, assumed both
universal and particulars. The M/D principle was a method for persons
to become individuals, while learning to become the same, to fit the
norm, to become normal. Those who were not normal enough were crazy.
That was why psychiatry and mental hospitals were much more popular in
America than in Europe.

By contrast, the European programme was to begin with a framework to
assure that persons had a modicum of things in common and then help
them learn to become different. That was why Europeans began with
classes to familiarize them with basics of citizenship. Therafter,
they were encouraged to become as different as they dared – assuming
of course that remained within the bounds of the law. This produced a
lot of individuals, who might sometimes seem happily crazy at
carnivals, but far less mental patients. The American system boasted
more freedom for individuals, but it was an individualism that too
readily threatened to be become a-social or even anti-social.
Ultimately, Europe's approach to differences and diversity offered
much more generous borders to the human psyche, whereby a social sense
combined with individualism could grow in tandem.

These fundamental differences between the American M/D principle and
the European quest for diversity affected all areas of activity, even
foreign affairs. Americans typically assumed that only those who spoke
English were worth speaking to: Europeans typically assumed that until
they had learned the foreign language in question it was they who were
not worth talking to. When Americans looked beyond their borders, they
immediately measured them by indicators which were the same as their
own. As a result, the CIA World Factbook is an excellent source of
information and statistics concerning factors shared with America:
e.g. the countries' population; their physical, especially their
energy resources. But it tells almost nothing about things these other
countries had which made them unique: e.g. about their libraries,
their art collections etc. By contrast, Europeans' studies of other
countries distinguished themselves by revealing unique things about
other cultures, often things the persons in that country had forgotten
about themselves. Hence, it took a Frenchman, Champollion, to decipher
hieroglyphs and re-
open the world of Egyptian culture. Other Frenchmen, such as Pelliot
and his colleagues at the Ecole de l'Extrème Orient (Hanoi), had
re-opened to the world the wonders of Khmer architecture that had
reached their pinnacle in Anghor Wat.

Armchair internationalists at Harvard, such as Huntingdon, a protégé
of Zbigniew


Brzezinski,writing of The Clash of Civilizations and the Remaking of
the World Order, argued in a new way that religion was the root of all
evil; that different religions were at the root of inevitable new
clashes. Earlier we noted how this assumption completely overlooked
fundamental Christian and Muslim tenets towards humility, love and
respect that were far removed from the militant Americans'
misinterpretation. By now, we are in a position to ask Socratically,
whether, in terms of ideas, the real source of conflict might
ultimately have nothing to do with the Middle East. The Middle East
just happens to be where the oil is. In terms of beliefs and ideas,
the debate is not about religion. At the deepest level, it is
ultimately a secular misunderstanding arising from two very distinct
approaches to difference: 1) a notion of difference as something
negative whereby differences needed to be resolved; 2) a principle of
difference as something positive that inspires variety and diversity.

In the simplest terms this opposition between sameness and diversity
threatens to become a conflict between American sameness versus
diversity in Europe and the rest of the world. If so, the so-called
potential clash of civilizations has nothing to do with unseen
terrorists. Ironically, it stems from America's assumptions and ideals
of sameness becoming translated from the sphere of personal
expression, where they are liberating, to the realm of national
policy, where they pose a threat to the sovereignty of all other
nations; where they challenge the cultural traditions of persons
everywhere; where they pose a spectre of a uni-lingual, mono-cultural
narrowness that threatens cultural diversity.

If the Remaking of the World Order were truly a remaking of the world
in the image of American sameness in accordance with their M/D
principle, it would lead to a world disorder and threaten the future
of civilization. These concerns are "nothing personal" against
Americans. They are not anti-American as such. They simply resist the
hubris of any country that assumes its rules should apply to everyone
else: and that everyone else should have nothing to say, especially
when everyone else happens to be 96% of the world's population. This
basic problem of sameness/diversity which is the source of
misunderstanding became clouded because the champions of the American
side are a small group who present a very one-sided view of the story.
A small group, preaching in the name of Christianity, has taken a
militant stance that contradicts the peaceful ideals of both
Christians and Muslims. This small group, speaking in the name of
democracy, acts in the manner of an oligarchy. This small group,
claiming that they are defending freedom, are systematically eroding
the freedom of both individuals and nations, in striving themselves
for an ultimate privileged freedom which would even be free from
constraints of law. Under the pretext of a lofty ideal of free trade,
this small group urges others to remove all walls and barriers to
trade, while themselves living in gated communities and condoning the
building of walls between Palestinians and Jews.

Old America once shocked and inspired the world with their idea that
persons should honestly say what they thought and live accordingly.
The so-called representatives of a new America are giving America a
bad name because they are not "as good as their word" and their
actions are for personal gain rather than for the greater glory. This
face of a new America has made its personal idiosyncracies into
national policy and is making the public good of their nation into a
source for personal idiosyncracies of a less noble kind. This was why
the world is increasingly puzzled, and sometimes angry: not with all
Americans but with this mis-representation of almost half --some said
more--of the population that has democratically voted for a different

To return to McLuhan's image of a global village: it means that
Americans seek to communicate what they think is the same; whereas
Europeans tend to share the different things they have discovered.
This is not to say that an American with a developed sense of personal
expression cannot communicate with Europeans. But it does mean that
often, even when speaking about simple things such as agreement, they
often talk past each other.


We just saw how seemingly simple decisions about sameness and
difference have profound implications for the way one sees, hears,
tastes, even touches and feels the world. These distinctions are
essential ingredients of a country's culture. One could try to define
these characteristics nationally, as America does. Or one could define
these characteristics at a variety of levels, nationally, regionally
and locally. Some countries such as Germany emphasize the role of
regional identities (Länder). Then there are countries such as Italy
where, notwithstanding rumours that Jerusalem lays claim to being the
navel of the world, every village thinks of itself as the centre of
the world, and some places such as Foligno even call themselves such
(The town sign states: Foligno. Centro del mondo). The decisions a
country makes in this respect, is one dimension of its values.

Related to this is the extent to which one believes the state should
have a say or any say in such matters. Hence, traditionally each
country made its own decisions about the extent to which they wished
to have a welfare state; to what extent they wished to have social
security and a social safety net. Ultimately these were the choices
that molded society, affected their culture and influenced the extent
to which countries were or were not different. Europe was
traditionally more concerned with society as a whole: America was
always famously individualistic: magnificent if the individual
achieved their dreams, a life of bag people if things "didn't work
out." At the level of everyday work, there was a further dimension.
Traditionally one's employer lived in one's own town. If there were
problems on the side of employer or employee, one met for a chat and
discussed how things could be resolved. How one did this varied from
country to country.

Altogether the combination of these different attitudes and different
ways of doing things, the extent to which one assumed honesty in doing
things, constituted a country's values and contributed to its culture,
which also varied in terms of the different kinds of expressions to
which one gave special attention (e.g. fine arts such as painting,
sculpture or performing arts such as music, theatre, dance). Countries
existed, their boundaries existed, partly to ensure that the values of
a country could be fostered within the borders of that country. When
one crossed boundaries one knew the rules changed. If one did not like
the rules and expressions of that country one simply did not go there.
One went back to that beach in Italy or that hut in the Austrian alps
instead. Vive la différence !

Unintended Exports of Values

One of the most complex and unstudied dimensions of new media entails
the ways that they are transforming what was, until recently, a stable
landscape of clearly defined borders. Admittedly wars sometimes
changed the borders of some countries, but for the most part such
irregularities had usually been sorted out by the time of the next

New media and the global market transformed these relations. Many
contemporary employees never see their real bosses. The employees
might well be in Europe while the boss at the head office might be in
America. As a result, the decisions of the head office in America have
many repercussions. From the viewpoint of the head office, in a world
where the next billion dollar merger counts, it takes the effects of
thousands of jobs, to achieve significant savings for the decision
makers. In this context the piddling amounts of a worker's salary
become insignificant to the decision makers. And yet, for the
individual, the absence of each of those insignificant, piddling
amounts of salary makes all the difference to the life of that person
and their families. When these cuts happen with reckless abandon there
are more losses than the obvious material ones. More subtly they also
cut away at persons' sense of self-esteem; at their/our sense of
humanity, at our confidence in government and law; in our trust of
governmental and social systems.

As we have noted, decisions about when one fired someone were
intertwined with assumptions about one's values. As long as this
happened within the borders of one's own country, this produced no
unexpected results. The new global context of business means, however,
that decisions America makes about its economy immediately has
repercussions around the world: loss of jobs and earnings are the
obvious consequences. More insidious and more dangerous is how these
economic decisions made in America are closely bundled with a whole
series of assumptions about the social system as a whole: for
instance, to what extent workers should have compensation, insurance,
health benefits, pensions, rights; to what extent the employer is
committed to looking after employees' lives as opposed to simply
reimbursing them for x hours of work per week. In other words, every
so-called economic decision of an American executive concerning
offices beyond the borders of America, is much more than a simple
extraterritorial application of economic principles. Insidiously, it
is also an intervention, albeit often unintended, in the value systems
of the other country.

When the decisions of an executive in America can wipe thousands of
jobs in countries outside America, these decisions tacitly threaten to
impose America's social values on those countries. As a concrete
example, in December 2004, when General Motors, headquartered in
Detroit, Michigan, felt a slump in the economy, 10,000 workers in
Germany working for Opel (also owned by General Motors) woke up one
day to find that they had lost their jobs. Similar patterns are seen
around the world.

Such examples suggest that the physical entry of armed forces into
Afghanistan and Iraq is but one example of a more disturbing invasion:
a metaphysical imperialism, not simply of businesses that want to make
new money in old markets, but also, almost invisibly, assume that they
can determine others' ways of doing business, of values and their
lack. Tragically, Americans who have been trained in a culture of
sameness, who begin with assumptions that agreements are with friends
who "are the same," seldom even suspect that there could be such
problems. Ironically, those who are astute enough to sense the
tensions, given their values and their training, would immediately be
inclined to fear they had encountered unexpected anti-Americanism in
persons, whom they now thought they had mistakenly thought were

Aside from mutual incomprehension, these actions threaten much more
than the jobs of the next few thousand who "need" to be fired to make
the next merger "worthwhile." They are undermining centuries of ways
of doing things; of traditions, of culture, and could threaten the
very fabric of civilized life. In this scenario, there is something
much more frightening and dangerous than unpredictable terrorists who
might in extreme cases hijack a bus, train or plane or blow up an
occasional building. The real fear lies in overenthusiastic mavericks
who think that they are saving the world and in the process wreak much
more havoc than the trails of their so-called smart bombs and heavy
artillery suggest.

Civil or Military

We have already cited the warnings of experts in 1995 that funds were
limited. The escalation of military budgets and focus on short-term
gains has made that situation worse. As long as such decisions
affected only those within the borders of their country, there was
little reason for re-action or action, even if one felt personally and
saw to it that things were done differently in one's own country.

But with the new media and unintended exports of values, the world is
suddenly a different place. In the past, foreign secretaries and
ambassadors kept their eyes on exports and imports, on the balance of
physical trade. Now imbalances of invisible values loom as dangers
potentially greater than imbalances of physical goods. If a country
suddenly becomes extremely militaristic, this could have severe
consequences for education, health and indeed the entire social
infrastructure of a country. Contemporary Zimbabwe is sometimes cited
as an example. But given invisible exports of values, unintended or
not, what had traditionally been politely referred to as the domestic
affairs of a country, suddenly become the often unwanted affairs of
its neighbours. And if the country happens to be America, then the
repercussions of decisions on the home front suddenly have
consequences for the whole world. Decisions in Washington about a
industrial complex, or about a military-industrial squeeze, are
decisions that not only affect the way Americans dealt with their
taxes, government, value and culture. It affects the whole world.

In the past years, even the richest countries of the world suddenly
find themselves talking about eroding pensions; about less secure
positions; about abandoning traditional notions of a welfare state
where everyone was assured a decent life. As national security became
a daily mantra, personal security is being eroded on a daily basis in
terms of human rights; in terms of jobs, benefits and pensions. There
are cuts everywhere and especially in health, social services and
care. In most cases, these decisions are not because countries have
decided consciously that they wanted to change their values or their
culture. The invisible invasion of values from beyond their borders is
forcing them into corners that go against the grain.

Also in December 2004, on the BBC, there were glimpses how even the
pensions of senior civil servants, the bowler-hatted mandarins of
Britain, were finding their futures compromised by models and schemes
from across the pond. This is not just because a Labour government has
suddenly turned on the Mandarins who run their country behind the
scenes as civil servants had always done. It is, some would argue,
because, at some point, America's choices and decisions in terms of
civil society or militarism are having consequences around the world.
In the old days, presidents were famous for phrases such as "The buck
stops here." In a global village, an electronic world which, in some
senses, has no borders, the buck no longer stops here/there with the
president. If he picks up the tab he also passes it on. If he spends
too much on military parties, we all find ourselves "footing the

Daily Life or Emergency as Daily Life

Related with this also are more subtle problems: that the quest to
declare a state of emergency as a part of everyday life implies that
everyday life in the old sense is no longer possible. If it existed
there would be no emergency. Unwittingly, sometimes unwillingly, and
yet inevitably, persons find, often post facto, that their civil
rights are being eroded and taken away. In the Hollywood movie, Enemy
of the State (1998), a prominent politician found himself murdered
because he refused to endorse a new Telecommunications and Privacy
Bill. In real life, "enemy of the state" is a term the US


military are said to have adopted from the Nazis.In real life, in
2004, a new Telecommunications Act was passed, which said nothing
about privacy in the title but 911

had many implications for privacy between its covers. In December,
2004, a new Intelligence Bill was signed. These documents are signs of
a trend whereby what were effectively decrees for emergencies are
silently becoming part of what we thought were our normal lives.
Traditionally the world would have rightly dismissed such developments
in America as their problem. But in an interconnected, electronic
world where their assumptions and decisions about privacy affects
persons in other countries, and indeed sometimes affects them more
than American citizens, there are very serious reasons for
international concern.

Europeans, who were perfectly willing to be tolerant about Americans
deciding what they did when they were home alone, are increasingly
concerned that such ongoing cries of Clear and Present Danger are more
than vaguely reminiscent of the dangers faced by the boy who cried
wolf once too often. They also marvel as a disturbing paradox
unravelled. On the one hand, it is technically illegal openly to
criticize the government or discuss overtly anything relating to
terrorism. At the same time, Hollywood produces film after film about
one horror scenario after another. Freud would probably have noted
that the suppression of conscious fears in everyday life, inevitably
recurs in subconscious and unconscious ways. If Hollywood represents
America's unconscious, then Freud would be one person who did not have
to worry about losing his job for lack of work. Appendix 3. Project
for the Old/New American Century: POAC or PNAC

In the 19th century, there was a civil war that deeply divided
America.On the surface, it was a geographical division between North
and South. Rhetorically, it was a struggle between freedom in the
North and slavery in the South. Ironically, at another level it was a
struggle between commercial goals run wild (North) and more humane
values (South). At the outset of the 21st century America is again
very deeply divided. Geographically and demographically the divide has
shifted to one between a conservative Middle America and a more
progressive Coastal America. On the surface, this translates into
right-wing in the middle and left wing on the coasts.

Alas, those from Middle America who thought they voted for a
conservative solution have discovered that although the top two
executive positions are being run by persons from the Mid-West, many
real decisions are being made by a very small group who have nothing
to do with Middle America. This small group is more closely associated
with some values traditionally associated with New York and the East
Coast. Accordingly, those from Middle America have formed a Project
for the Old American Century (POAC), which calls for a return to
traditional, bucolic values that are familiar at least since the time
that Virgil wrote the Georgics. In theory, these are intended as a
balance to the other group represented by a Project for the New
American Century (PNAC). The problem is that this group does not
represent the interests of America as a whole. It represents primarily
their own interests. The danger is that these own interests are being
swayed by other concerns that pose a threat not only to America but to
the world as a whole. We shall suggest that these dangers centre on
two major areas: oil and "health."


Rather than accepting that the US depends on other countries for oil,
some have believed that the US could simply "go in" and arrange the
destiny of other nations. Some have linked such plans with the
Bilderberg Conference, which had an American group "heavily influenced
by the Rockefeller family, the owners of Standard Oil" and a European
group, led by Prince Bernhard active in Royal Dutch Petroleum (Shell),
whence "the Bilderberg business reflected the concerns of the oil
industry in its meetings."912 Others have linked such plans with
Israeli efforts to re-open an oil pipeline between Mosul and Haifa,
and to make Haifa into the Rotterdam of the Mediterranean.913 One more
detailed plan was Project Independence by a so-called Unknown Soldier
(Miles Ignotus):

The goal is not just to seize some oil (say, in accessible Nigeria or
Venezuela) but to break OPEC. Thus force must be used selectively to
occupy large and concentrated oil reserves, which can be produced
rapidly in order to end the artificial scarcity of oil and thus cut
the price… This being the ultimate goal, there is only one feasible
target: Saudi Arabia. With some 40,000 men by now mobile on the ground
and in the air, the physical occupation of all the major oil fields on
and off-shore would be complete…. But if the risk seems high,
something can be done to reduce it: in Kuwait, Abu Dhabi, Dubai, and
Qatar there is a production capacity of 6.6 million barrels a day, a
good deal of it now shut in for "conservation" (read
price-rigging).…One way to cope with the Iranian problem is to combine
it with the planning dilemma of Kuwait....In a sober assessment,
mindful of all political costs and all the strategic risks, it can be
done. It must be done.914

This sounds very modern but Project Independence first appeared in
Harpers Magazine in March, 1975. Observers have claimed that the
author, Unknown Soldier, was none


other than Henry Kissinger himself.James Akins, who served as U.S.
ambassador to Saudi Arabia under Kissinger, claimed that: "The plan to
take over Iraq is a revival of an


old plan that first appeared in 1975. It was the Kissinger plan."When
Akins became


critical of the plan he lost his job.
These ideas were taken up by "a small group of right-wing Republicans
who, in 1997, formed the Project for the New American Century (PNAC),"
and specifically claimed that Saddam Hussain's power over a
significant proportion of the world's oil was a "hazard." This group
sent a letter to President Clinton on 26 January, 1998 urging him to
"enunciate a new strategy that would secure the interests of the U.S.
and our friends and allies around the world." 918 The co-founders of
the PNAC were William Kristol and Robert Kagan, who worked with former
Secretary of State, George P. Schultz, who was also a head of Bechtel,
which has strong involvement in the "rebuilding"of Iraq. Members of
the PNAC include Dick Cheney, Donald Rumsfeld, Paul Wolfowitz and Jeb

Observers have noted that the PNAC members have become key members of
the Defense Policy of the US government. Some have noted that members
of both groups tend to have links back to the Iran Contra scandal. If
former Ambassador Akins is right then this is no co-incidence. The
same key persons planned Iran's war on Iraq, staged the first Gulf War
and organized the Iraq war that toppled Saddam Hussein. The democratic
process brought interruptions in the form of Presidents such as
Clinton but these "obstacles" were overcome.

In September 2000, one year before the fateful September 11, 2001 a
PNAC report claimed that "...the process of transformation is likely
to be a long one, absent some catastrophic and catalyzing event-like a
new Pearl Harbor."919 Some say that September 11 was the catalyzing
event. A number of observers have linked the attack on the Twin Towers
with the Mossad.920 "It is a fact that that day, the Jews didn't come
to work."921 By co-incidence, John O'Neill, an FBI agent who was a
leading expert investigating


terrorism, died at the Twin Towers, on his first day of work there.An
Israeli reporter was very explicit about the next step: "The war in
Iraq was conceived by 25 neo-
conservative intellectuals, most of them Jewish, who are pushing
President Bush to


change the course of history."
To return to the PNAC: William Kristol's family owns the publishing
company National Affairs, Inc., which has Henry Kissinger on its
board. Kristol is a member of the Council on Foreign Relations (CFR),
an attendee of the Bilderberg meetings and "publisher of the 'Weekly
Standard' which is owned by Rupert Murdoch. To place this publication
in context, Rupert Murdoch is controlled by the Rothschild, Bronfman,
and Oppenheimer families, who along with Murdoch, are known as the
'Billionaire Gang of Four.' "924

In August 2002, these ideas of taking over Arab oil were explicitly
repeated by James Woolsey,925 a former head of the CIA who claimed in
April 2003 that the US was fighting World War IV (in his view the Cold
War was World War III) "and that it could


continue for years."At the time, some assumed that this was merely a
vision linked with small circles within the CIA, traditionally
infamous for their almost covert operations, which had the attractive
feature that official members of the government could plead ignorance
or at least plausible denial of the Company's (i.e. CIA's) actions.
Observers have rightly been worried by recent evidence that the inner
circles of visible government were taking a more hands-on approach to
these invisible areas of the special agencies. The CIA itself has
claimed that the extreme interrogation methods at Abu Ghraib, code
named Copper Green, "stemmed from Rumsfeld's long-standing desire to


wrest control of America's clandestine and paramilitary operations
from the C.I.A."
Some would suggest that the removal of six senior figures in the
second half of 2004 was part of that exercise.928

In the James Bond film, the World is Not Enough, the plot involved
competing Russian and American oil pipelines. In the film, the US
pipeline won the day. In real life, the Russian pipeline existed and
the American one was unfinished. Meanwhile, a gas pipeline from
Turkmenistan through Afghanistan was planned by Bridas (now BP


Amoco) and then found competition by Unocal from Texas.In this context, SAIC's


increasing interest in BP was possibly more than a
co-incidence.Pessimists noted that while one of the overt reasons for
the war on terrorism was to permit oil and gas pipelines to work, a
more covert reason may well have been to gain control of the world's
energy sources.

These American ambitions to control oil are not directed only to the
Arab world. In 2003, the Yukos Oil Company was valued by U.S.
investors at $40 billion. On 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 had already been outsourced to
companies such as Schlumberger and Carlyle. In light of the
bankruptcies in the media field, it is easy to see a pattern: Insist
publicly that a valuable asset was really worthless and then buy up
that asset to make priceless profits. By coincidence, Yukos was also
due to be privatized. One could almost have predicted that there would
be buyers from abroad in the audience. On 19 December, CNN announced
that the sale had gone to a little known company Baikalinvezt for
$9.3. billion. They did not mention that there were two other
partners, an equity company, First Venture and Infocom, with less
Russian names. The lucky buyers had acquired the assets for $30.7
billion less than the value CNN had listed 12 months previously.
Fortunately, President Putin made arrangements to keep the assets in
Russian hands such that even attempts by courts in Houston to
interfere were in vain. Those who tended towards conspiracy theories
painted much more disturbing scenarios. The website of noted that the law firm involved with the pipeline
in Afghanistan was Baker and Botts. The firm's senior partner, James
A. Baker, was in the thick of these oil deals also entailing Texas oil
companies, linked with the present administration, which worked with
the Taliban.931 We encountered James Baker earlier (§ 12) as a member
of the Carlyle Group trying to persuade Kuwait to cancel Iraq's debt
as the personal envoy of the president. He had extensive ties to
Enron, Global Crossing and Arthur Andersen. He also led the campaigns
of the last four Republican presidents. On September 11, 2001 he was
reported to have watched the attacks from the Ritz Carlton Hotel with
the Bin Laden family.

Also on September 11, 2001, Gerald Paul Hillman, the Managing Director
of Hillman

932 933

Capital,wrote about President Musharraf.Hillman was also a member of
the Defense Policy Board, which advised the secretary of defense of
the United States. As an


analyst Paul Hillman had discovered that France had oil deals with
Saddam Hussein.If so, one of the deeper incentives for attacking Iraq
was not so much to depose Saddam but to cancel Saddam's treaties,
which were not advantageous for the American group. This would also
explain why Hillman raised unexpected questions before the war about
the legality of Saddam's contracts.

The same Gerald Paul Hillman is connected with Richard Perle935 in
Trireme Partners, on whose board sits Henry Kissinger. Trireme has
been implicated in much more than just


profitable contracts resulting from the Iraq war.Hilman, Perle, and
Kissinger are also


connected through Hollinger.Some have linked these names with the Wolfowitz

938 939

cabalOthers have suggested that the real eminence grise is George P. Schultz.
On 24 October 2004, Walter Cronkite, the former CBS anchorman, who was
once called


the "most trusted figure" in American public life,"when asked about
the latest bin Laden tapes stated: "I'm a little inclined to think
that Karl Rove, the political manager at the White House, who is a
very clever man, he probably set up bin Laden to this


thing."In December 2004, two days after bin Laden warned of possible
bombings in the Saudi oilfields, a CIA expert appeared on CNN to
assess how realistic these dangers were. If bin Laden's comment was
out of the blue how could the CIA have flown to Saudia Arabia and made
a detailed study of the dangers within two days?

With such reality as a storyboard, Ian Fleming's successor could have
had a field day writing the plot of a future James Bond adventure: The
director of Specter conceives of a villainous plot to take control of
the world's oil supplies. To do so directly would hardly be in keeping
with the Specter approach. So the new head of the US intelligence
agencies is contacted on the pretext that America has an opportunity
to acquire the vast oil supplies they have long been trying to obtain.
The plan seems simple. The US indirectly pays an Arab (Bin Laden) to
give them instructions how to deal with the Middle East. Posing as a
terrorist Bin Laden gives regular tirades, which are coded
instructions for the next stage in the game. The world then thinks the
US is chasing the terrorist but in fact the accomplice posing as a
terrorist is a paid accomplice who is also pulling the strings. At a
critical moment the plan starts to go awry. The initial plan to gain
control of all the world's oil is transformed into a horror scenario
where the US would need indirectly to destroy Arab resources to
maintain the upper hand. Enter James Bond…. One could easily see that
the film would need several sequels.

Lest we be lulled into thinking that this is merely a storyboard for
the next Hollywood series, it is sobering to remember that in 1962
there was a:

plan called Operation Northwoods, which was approved by the Joint
Chiefs but never implemented. The Chiefs wanted to launch a terrorism
war against Americans themselves, so that it could be blamed on Cuba,
thereby justifying retaliation. The phrase "conspiracy to commit
treason against the American


people" comes to mind, but for the Pentagon this was just business as usual.
In addition, two important connections require brief consideration: 1)
with special interrogation techniques and 2) with developments in
biowarfare. These profoundly change the scale of the problems at hand
while confirming that truth is indeed stranger than fiction and much
more disturbing.

Terminal Interrogations

As the Iraq war dragged on, some attention turned to the treatment of
prisoners. The US tried captured soldiers from various countries 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 had if they were tried on US soil.
In December 2004, we learned that the CIA had special variants for
special treatment in Guantanamo Bay. The press mentioned this and
focused on the irregularities of one Baghdad prison. But the media, on
the whole, were very quiet about the existence of at least ten more
such detention places, two of them on board large US ships, where the
Geneva Convention played little or no role at all. This received
passing coverage on the German television station, RTL.

Looming in the background are much more frightening stories, which go
back to 1945 when the US learned of Nazi drug experiments during the
liberation of the Dachau concentration camp. Dr. Kurt Blome had led
Nazi efforts in biological warfare. He escaped the war trials.
Instead, US officers and the CIA began to work with Dr. Blome in
Operation Dustbin at Kransberg Castle near Frankfurt. By 1951, there
was also a Project Artichoke concerning brainwashing. This was a "top
secret project to use chemicals, drugs and torture on human beings in
order to break their will and make them submissive." These experiments
took place in Haus Waldorf (formerly Villa Schuster) an


isolated CIA safe house near Camp King, at the edge of a town called Kronberg.

Project Artichoke was visited by two CIA agents, John McNultyand Dr.
Frank Olson, the leading US expert on biological warfare, who worked
at Fort Detrick, where they experimented with anthrax and used
bacillus globigii. This seems to have been linked


with Project Whitecoat.The anthrax and bacillus globigii were was also
exported to Porton Down in the UK and "sprayed over populated
areas."946 Fort Detrick had departments on "biological warfare
experiments in populated areas", "assassinations materials research,"
and "terminal interrogations." Olson is reported to have been
disturbed by the extreme interrogation methods. "Some of the people
they interrogated died."947 It appears that both these methods of
biological warfare and brainwashing were used in the Korean war and
inspired the original story of the Manchurian Candidate (1962). Dr
Frank Olson seems to have been so disturbed by what he knew and had
seen that he wanted to leave the CIA. Later in 1953, he is said to
have committed suicide although there is serious evidence that he was
murdered. (That same year, 1953 an army service man, James Kelly, died
in experiments with biowarfare in Porton Down.) Parallels with Dr.
David Kelly, the UK's chief expert on the same topics, have been


made.We shall see presently that these connections go much deeper.

By 1975, there were reports "that the CIA allegedly drugged its
employee Frank Olson


with LSD before his supposed suicide."The "heads of the White House
Chiefs of Staff, at the time recommended to President Gerald Ford that
he apologize to the family in the name of the government, and to
support retribution in order to prevent worse things


from happening."This was done. The heads of the chiefs of staff in
1975 were Donald Rumsfeld and Dick Cheney951 respectively. In 2003,
the same Donald Rumsfeld "encouraged physical coercion and sexual
humiliation of Iraqi prisoners in an effort to generate more
intelligence about the growing insurgency in Iraq,"952 in an operation
code-named "Copper Green." As one observer has noted, in light of the
above history: "You won't view the torture at Abu Ghraib, or Donald
Rumsfeld's reported role in approving unorthodox interrogation methods
in quite the same way."953 One fears that the interrogation and
torture used by the Americans in Iraq, could have applied methods that
were supposed to have ended with World War II and were "developed" in
the course of the past half century. If so, reporters have been right
in suggesting that the events of Abu Ghraib and Guantanamo were much
more than the infractions of a few subordinates who got carried away.
If so, the conviction of Charles Graner on 15 January, 2005 as "the
ringleader of a group of rogue guards" was more a diversionary tactic
than a fulfillment of justice.

This background also throws an entirely new and chilling light on the
decision to make a new version of the Manchurian Candidate (2004) set
in the Gulf War rather than the Korean war, involving a "programmed"
Vice-President. For it suggests that the same methods which had
originally been designed to "break" the resistance of enemy prisoners
and were then refined to produce programmed assassins in war
situations could also be adapted to create programmed politicians in
so-called peacetime situations. The film also begged scary questions:
Was Meryl Streep playing the part of Lynn? Indeed, the new version of
the Manchurian Candidate leads us to look at a number of recent films
in a very different light.

Programmed Assassins

The Bourne Identity (2002) was theoretically just another Hollywood
thriller, but as some have observed, it reported the surface of a
deeper story. The CIA's Project Artichoke in the 1950's led to
subsequent programs to develop human mind control techniques, known
under code-names such as MK-ULTRA, "designed to exert such
control….that an individual would do another's bidding, 'against his
will and even against such fundamental laws of nature such as
self-preservation.'" and lead to "programmed assassins." It has been
pointed out that in "real life", Dr. Peter Bourne, was formerly
President Carter's special assistant on drug abuse and that the
MK-Ultra project was directly linked with the spread of LSD and drug
culture in the late 1960s.954

Even this is probably but a small part of a much larger picture which
some have linked to deals made between the Rockefellers and IG Farben
at the end of World War II. This view implicates most of the great
pharmaceutical companies such as Hoechst, Bayer, and BASF. All this
may possibly also be connected with some frightening developments in


Biowarfare is, of course, nothing new. Chemical warfare is said to
have been reponsble for 80,000 lives in World War I. In the 1930s, the
Japanese began research into warfare applied to a specific race:

Already from 1937 the Japanese had built a laboratory in camp 731
installed in Manchuria. Its director was Ishii Shiro, a military
surgeon by profession. The tests were carried out on animals but also
on thousands of Chinese, Russian prisoners and even Americans. They
inoculated viruses, bacteria of infectious diseases, even by means of
insects, in order to check the diversity of the specific answers to
each race. This camp and all the installations were destroyed by the
Japanese in August 1945, when the Russians entered Manchuria. A party
of the Japanese scientists of this camp and the results of their work,
were recovered by the Americans after the war. The latter were shown
by the Chinese to have released on North Korea insects, such as fleas,
mosquitos, flies, carrying disease, able to cause epidemics. However,
secret documents published since guaranteed


immunity to Japanese researchers for rendered service.
In 1980, Dan Goosen, the director of a laboratory for bacteriological
and chemical warfare in South Africa, and head of Project Coast,956
was given orders to develop a pigment-based weapon capable of killing
only persons with a black skin. The CIA became interested in this work
and approached Dr. Wouter Basson to come to the US. When he declined
he found himself facing death threats.957 Others in the US were
thinking along similar lines. In 2001, the Project for a New American
Century (PNAC), produced a white paper, 'Rebuilding America's
Defenses', in which they explicitly stated:

the art of warfare ... will be vastly different than it is today ...
"combat" likely will take place in new dimensions ... advanced forms
of biological warfare that can "target" specific genotypes may
transform biological warfare from the realm of


terror to a politically useful tool." Meanwhile, this research from
South Africa was taken up by Israeli researchers who visited the South
African Lab and developed these methods at the top-secret laboratory
of Nes Tziyona near tel Aviv.959 There was also related work in
Novosibirsk. A team of scientists came to Israel to compare notes. On
their way back on 4 October, 2001, their plane was hit by an
"errant"missile, crashed and at least 5 micro-biologists were killed.
On 24 November, 2001, a Swissair flight from Berlin to Zurich crashed
killing 24 persons including the only Isarelis on board: "the head of
the haematology department at Israel's Ichilov Hospital, and the
directors of the Tel Aviv Public Health Department and


the Hebrew University School of Medicine."They were Avishai Berkman,
Amiramp Eldor and Yaacov Matzner respectively.

One of the only non-Israeli persons who had access to this lab was Dr.
David Kelly. He was also one of the only persons who had a full
picture of developments at Porton Down, Fort Ketrick and private
companies such as Regma and Bioport involved in anthrax. More
significantly he was a key figure in DNA sequencing. On 17 July, 2003,
Dr. Kelly died under mysterious circumstances. Were some individuals
afraid that he would blow the whistle on efforts in Russia, Israel and
the US to develop earlier efforts of the Japanese and South Africans
to create ethnic-specific weapons? Three weeks after Dr. Kelly's
death, on 10 August, 2003, Dedi Zucker, a former member of the Israeli
Parliament (Knesset) caused a storm when he claimed that: "the
institute (the Institute for Biological Research, one of the most
secret places in Israel), was 'trying to create an


ethnic-specific weapon' in which Arabs could be targeted by Israeli weapons".
This called for designer drugs in a new sense. It also meant that
experts in DNA sequencing were suddenly a key to the puzzle. Since
September 11, 2001, more than 40 such experts around the world have
died mysterious deaths. Could it be that Dr. David Kelly's so-called
suicide was a part of something much bigger?

Porton Down and Fort Detrick

As a next step we need to make a detour to study recent anthrax
problems. Anthrax, again, was nothing new. As noted earlier, anthrax
was studied and bacillus globigii was used by Dr. Frank Olson's team
at Fort Detrick in the 1950s and experiments which sprayed these
substances were conducted at the Porton Down Chemical and Biological
Warfare (CBW) facility in Wiltshire owned by the British Government.
In theory, the biological weapons treaty of 1972 stopped all such
work. In practice, it seems this was not the case. In 1989, when the
top scientist of the Soviet Union's Biopreparat laboratories defected
to the United Kingdom a different picture began to emerge. According
to David R. Franz, who headed the defense-related biological research
program for the Army at Fort Detrick, Maryland (1987-1998), the US
military obtained


"its Ames anthrax in the powdered form for testing" from Porton
Down.This anthrax was developed at the Ames military lab and was
stored in two places: Fort Detrick (Maryland) and Dugway (Utah).
According to the FBI, only 10 persons in the US could have access to
these stocks.963 One individual who continued to have unauthorized
access was a fervent Zionist, Philip Zack, who was dismissed from Fort
Detrick in 1992 for anti-

Arab behaviour.As discussed earlier (§ 15) in the decade following the
Soviet defection, four private companies (Regma, Hadron, Porton
International, Bioport) and one semi-secret company (Battelle) became
involved with anthrax. Two of these were founded by Russians, two were
controlled by Arabs.


During the anthrax panic during the autumn of 2001, Pasechnik the
founder of Regma


Inc. put his research on anthrax at the disposal of the British
Government.In November 2001, two weeks after meeting with Dr. Ken
Wiley, another world expert in


DNA sequencing, he died under mysterious circumstances.

As suggested earlier it is remarkable that a company, which many
identified as one of the chief suspects in the anthrax case, received
a large contract from the government regarding anthrax two days before
the before the anthrax troubles began and went on to develop three
patents with direct support from the US Army Research Command plus six
other patents within nine months of the original problems concerning

In the months before he died in 2003, Dr. David Kelly was discretly
approached by headhunters to work for either a) Regma Biotechnologies
or b) Hadron Advanced Biosystems. Kelly was considering resigning from
his senior post at the Ministry of Defense to work in America, partly
so that "he could obtain the specialized treatment his wife, Janice,

On 2 October, 2001, "just two days before the first anthrax case was
reported in Boca Raton, Florida, and a week and a half before the
first anthrax was sent through the mail to NBC News in New York,
Advanced Biosystems received an $800,000 grant from NIH to


focus on very specific defences against anthrax."

We noted earlier Battelle's involvement in Project Clear Vision. The
BBC noted that in early September 2001, just before the terrorist
attacks, Battelle "conducted a secret biological warfare test in the
Nevada desert using genetically-modified anthrax" and that Dr.
Patrick's "paper on sending anthrax through the mail was also part of
the classified


contractor work on the deadly bacterial agent."The BBC also suggested
that the Institute for Genomic Research, allegedly helping the FBI
solve the anthrax mailing


mystery through genetic analyses was in fact implicated.(Perhaps the
BBC reporters were getting closer to the heart of the matter than was
comfortable. If so, the controversy about Dr. David Kelly, which
seemed at the time to turn on what he had leaked to the BBC, was not
just about silencing Dr. Kelly, but served as a pretext to undermine
the BBC as an independent voice). Meanwhile, another observer noted

there are several serious indicators that the source of the anthrax
weapon used in the mailings was the Ames, Iowa strain of
silica-impregnated and electro-

statically charged anthrax produced by the Battelle Memorial Institute
under their classified CIA and Defense Department "Project Jefferson."
This hyper-
weaponized germ was likely produced with the help (or under the
direction) of Dr. Alibekov and/or Dr. Patrick.971

By 26 February, 2002, an American investigative reporter, Dr. Patricia
Doyle "alleged that Rumsfeld and Ken Alibek with cooperation of
certain highly placed CIA agents were, indeed, behind the anthrax
letter attacks."972

Porton International

In Britain, Porton Down had always been a government lab. As noted earlier:

In 1993, part of the anthrax defense program was "privatized" through
a complex LBO of the anthrax vaccine unit, Porton Products, by a
company called Speywood Holdings Ltd. Speywood, in turn was controlled
by another corporate front, I&F Holdings NV, which was incorporated in
the Netherlands Antilles. The I&F shell was owned by Fuad
El-Hibri…Prior to his creation of Porton International, Fuad El-Hibri
had worked in the mergers and acquisitions department of Citibank in
Saudi Arabia. Citibank and Fuad El-Hibri were bankers for the
financial holdings of the Bin Laden Group and the Carlyle Group.973

At the time, Saudia Arabia wanted anthrax vaccine to counter Saddam
Hussein's capabilities in Chemical and Biological Warfare. The US was
unwilling to help. So, ironically, Fuad El-Hibri, a Lebanese with
German citizenship took over the know how of the UK's privatized
national lab, and created a company in the United States. El-Hibri
became biotech director of Porton, re-organized its bio-terrorism
defense business, and helped supervise deliveries of bio-tech defence
products to Saudi Arabia.


In September, 1998, the same Fuad El-Hibri, who owned Porton
International, via I&F and Intervac,974 worked with Admiral William J.
Crowe, Jr., head of the Joint Chiefs of Staff during the Clinton
administration, and created Bioport, which took over the activities of
MBPI.975 This is the same Admiral Crowe who originally sold anthrax to
Saddam Hussein. That was when the United States wanted the "Butcher of
Baghdad" to use anthrax on Iran. 976

Faud's father, Ibrahim El-Habri, became the CEO of Bioport. Ibrahim
and Faud El-Habri now had a controlling interest in the two private
labs that had the only vaccine for the


anthrax virus.Two weeks later, in October, 1998, Bioport signed an
exclusive contract


with the Defense Department to furnish several million doses of
vaccine.They received a $45 million contract for developing AVA
(Anthrax Vaccine Absorbed) for 2.5 million US Soldiers. They had three
years to finish production: i.e. October 2001 which, by coincidence,
was when the anthrax letters began arriving." On 12 March, 1999, the
CIA's military analyst, Patrick Eddington, revealed that the $60
million Bioport contract might just be the beginning: "The Pentagon
has a $322 million, 10-year program to develop at least three, and
perhaps as many as a dozen additional biological warfare
vaccines....These have never really been tested, and most importantly,
no one has provided data to validate the threat."979 By August 2001,
the Pentagon had given Bioport $120 million. By 25 October, 2001, the
Secretary of the Department of Health and Human Services (HHS), Tommy
Thompson asked Congress for another $500 million to produce enough of
Acambis's smallpox vaccine "so every American will be assured there is
a dose with his or her name on it if it is needed" Many argued, that
the vaccines were reported with various side effects, including sudden
death.980 Meanwhile, in early October 2001 Bioport had problems
distributing Cipro vaccines. To save the day


Bayer promised to send their vaccines and increased their stocks.
The Carlyle Group apparently had stocks in Intervac, the parent
company of Bioport. The chief stock holder of this parent company of
Bioport was Admiral William Crowe, Jr., who was Chairman of the Joint
Chiefs of Staff; (worked closely with the then Secretary


of Defense, Frank Carlucci, Chairman Emeritus of the Carlyle
Group),and incidentally was also the Chair of the Advisory board of
the Center for Middle East Public Policy (CMEPP).983 On all sides,
there was evidence of using public monies to subsidize private firms,
in which the politicians had considerable investments of their own.

After the attacks of September 11, 2001, the FBI placed El Hibri's
company at the top of their list of suspects for sending anthrax
spores through the mail system. On 12 November, 2001, Bioport
announced that their plant:

was partly dismantled for cleaning just as the anthrax attacks began
in early October. Company officials say they finished cleaning
Thursday and will need several more weeks to work up to production.
The delay is the latest in a series of problems that have prevented
the military from using the anthrax vaccine


produced here since December 1997.
At about the same time, George W. Bush "placed BioPort's North Lansing
laboratory under protection, invoking the national interest."985 On 31
January, 2002, 986 the Federal Drug Administration (FDA) approved
BioPort's anthrax vaccine license supplements. By the summer of 2002,
George W. Bush also "renounced long-standing calls by the


Russians for mutual inspections of biochemical weapons sites like Battelle."
From all this a rather curious picture begins to emerge. Leaving aside
Battelle, which was effectively a secret services lab, two companies
were founded by former leading Russian experts (Regma, Hadron) and two
were owned by personal friends of Ibn Bin Laden and family (Porton
International and Bioport). In this context, the fact that former
Secretary of State Baker watched the unfolding of the September 11
with the Bin Laden family at the Ritz becomes curiouser and curiouser.
At the same time, two of these companies (Porton International,
Regma), had direct links with the English national Chemicals and
Biological Warfare (CBW) Lab at Porton Down. In an area, which is
theoretically of the 175 greatest significance to Homeland Security
this degree of foreign ownership is striking to say the least. One
scenario would be that the present administration was totally unaware
and some would say totally irresponsible to allow the chief companies
for anthrax vaccines to fall into the hands of Russians and Arabs.
Given the connections between Bioport and Analex with connections to
the NSA and the Army's C41 this can hardly be the case. There is
another more frightening scenario. In 2000, PNAC had explicitly
acknowledged the need for a catastrophic and cataclysmic event like a
new Pearl Harbor."988 By co-incidence, the summer season of 2001 (May
21) began with a new version of the film Pearl Harbour. September 11
served as the new cataclysmic event. Some have speculated that 9/11
could even have been a special contract on behalf of the PNAC, which
had in the meantime become an important faction in the government. If
no-one in the government had prior knowledge,989 why did Condoleez
Rice urge her colleague Willie Brown not to fly that week? Why did it
take 75 minutes for military planes to try intercepting the so-called
hijacked planes?990 Is it merely co-incidence or merely ironic that
one of the persons to write on the implications of 9/11991 was Gary
Illingworth from the 152nd Aircraft Control and Warning Group?992 If
the Bioport company run by a former Russian (Abikev) was suspected of
being involved would not the natural response have been to check out
this allegation rather than declare this out of bounds for reasons of
national security? Or was the administration's definition of national
security one that was averse to having their own complicity made
clear? At the time Cipro was not an everyday pill. Why did George W.
Bush order White House staff to begin taking Cipro pills against
anthrax on 11 September, 2001?993 Two weeks later, on 26 September,
2001 broadcasters994: featured the Bayer pharmaceutical company's
anthrax antibiotic Cipro, without mention of far less costly and risky
alternatives to mass population prophylaxis. The Food and Drug
Administration (FDA) and Centers for Disease Control and Prevention
(CDC) advanced Cipro for anthrax along with a "Model State Emergency
Health Powers Act" for generic bioterrorism response including forced
drugging and certain vaccinations for anthrax and smallpox. Due to the
panic and official endorsements, Cipro sales skyrocketed more than
1000%. At a single consumer prescription cost of $700 for a mere
sixty-day supply, the resulting revenue helped rescue Bayer from the
brink of bankruptcy. Then, Department of Health and Human Services
(HHS) Secretary Tommy Thompson rushed to spend millions more on a
"special" Cipro contract in further defense of the nation's health. By
November, in the wake of the anthrax mailings, more than 30,000
panicked people in the United States were taking Cipro. 995 This was
six days before the finding of a case of anthrax in Boca Raton,
Florida and two weeks before the first official report on 12 October
In the short term, there was forced "emergency" legislation effecting
stringent population controls. Vaccine companies profited, such as
OraVax, now known as Acambis, which received government contracts for
Smallpox vaccine as well as other bioterrorism vaccines.997 At the
time this looked like a new development. In fact, the scene had been
set in 1998 at the time when the PNAC was writing their manifesto and
when Carlyle group was acquiring Bioport:

In April, 1998, OraVax/Acambis' Vice President, Dr. Thomas Monath met
with President Clinton, New York's Emergency Management Director,
Jerry Hauer, Rockefeller University president emeritus and American
Type Culture Collection (ATCC) curator, Dr. Joshua Lederberg, CIA
Director John Deutsch, and government biological weapons [and chief
anthrax] expert William C. Patrick, III, to discuss/negotiate the
first of several multimillion dollar anthrax, smallpox, and West Nile
virus vaccine contracts.998

Also present at that meeting was Dr. J. Craig Venter, head of Celera,
the private company


concerned with commercializing the results of the human genome
project.Elsewhere, Venter had drawn attention to the pitfalls of
believing that one could readily pinpoint or target a specific race:
"Using self-identified race as a surrogate for testing a person
directly for a relevant trait is akin to recording the average weight
of a group rather than weighing each individual."1000 Conveniently his
human genome project promised a solution: if one used his technology
one could do better than targeting vague groups. One could target
specific individuals. Alternatively one could force large groups to
undergo detailed examination so that individuals or groups could be
targeted at will. Is this the deeper reason for the forced
examinations and vaccinations?

In any case, the business deals, which began on a small scale during
the Clinton administration, proceeded on a much larger scale under the
new administration. After the anthrax letter attacks in October 2001,
major pharmaceutical firms such as Bayer, institutes such as Battelle
and companies such as Analex, Hadron and Bioport benefited
financially. The success of Bioport also meant of course that El-Habri
profited as did Admiral Crowe and the Carlyle Group.

In short, on the surface, it seemed as if one tragic event, carefully
planned by someone, and a series of minor scares with letters had
proved a) an excellent incentive to both the pharmaceutical industry
and b) very useful for all those concerned with security problems at
all levels. At another level, these events raised more questions than
they had answered. Real terrorists would have been concerned with
killing as many persons as possible. They would have attacked the Twin
Towers in the middle of the working day rather than in the early
morning when many persons had not yet arrived for work. Real Arabic
terrorists would presumably have been at pains to ensure that Jewish
employees would also be at work. They would not have chosen a day when
Jewish workers were absent. Similarly, Arabic terrorists seriously
concerned with wreaking havoc using anthrax would not have bothered
with a few symbolic envelopes. They could just as easily have poisoned
the water supply or produced a spray that covered a major city. The
targets were not Americans in general and the targets were definitely
not Jewish Americans in particular. Somehow the event was symbolic:
9/11 was also 911, the new emergency number which, as some observers
have noted, introduced serious intrusions on notions of privacy, by
allowing law enforcement authorities to trace the position of cell
phones of perfectly law-
abiding citiziens.

The news media asked us to believe that the tragic events were
achieved by a highly organized group of Al Qaeda terrorists. 19 were
identified almost immediately and arrested. Several hundred, some say
several thousand, further suspects were arrested. Theoretically the
situation was under control. Very soon there was evidence that things
were not under control. To appreciate these events we need to take
another brief detour back to the 1980s.

Deaths in Space Industry

At the beginning of the 1980s, Ronald Reagan started the Star Wars
Program. One of the key contractors was SAIC. Another was General
Electric Company (GEC). These developments seemed to offer new
possibilities for Britain:

In return for the Thatcher government's early support of the Star Wars
program, the Reagan Administration promised a number of extremely
lucrative SDI contracts to the British defense industry--hundreds of
millions of U.S. dollars the struggling British economy can little
afford to lose. Britain traditionally has one of the finest defense
industries in the world. Their annual overseas weapons sales amount to
almost $250 billion.1001

In the following years there were three striking developments. First,
Marconi, which was leading the world in this domain, was:

declared virtually bankrupt after it's shares fell below "junk" status
on the UK stock exchange. Both the chairman and C.E.O. resigned and a
great many employees have lost their jobs and pensions as the share
price fell from a twelve month high of £4:45 to only 5 pence. Marconi,
once a major player in the defence industry had, over the last few
years, moved into the Telecoms sector and suffered when the downturn
in technology and telecom stocks came along last year.1002

Second, in the period 1992-1998 there were a mysterious number of
deaths. Some reports


spoke of 10 victims.In fact, the demise of at least 25 U.K. scientists was


documented.Third, firms working with Marconi such as MicroScope were
taken over by General Electric (GE) within weeks of the mishaps.
Ultimately, GE effectively acquired this branch of Marconi and ended
up with a contract that involved some £3 billion. In light of our
study of the technology and telecom "downturn," this sounds all too
familiar. This discussion would be out of place here were it not for
the fact that reporters have rightly pointed to parallels between
these deaths in the space industry and more recent deaths in
microbiology. If a long-term plan exists then the plans that led to
the Star Wars initiatives of the 1980s and more recent efforts to
revive the plans would be connected. If there were plans in the 1980s
by a small group in the US to acquire the know how of the United
Kingdom in these domains, one could expect that they would continue in
other forms a generation later.

Deaths in Microbiology

In the months after 11 September, 2001 a chain of events began
unfolding which seemed at first to be entirely unrelated. We have
already noted that on 4 October, 2001, a plane from Tel Aviv to
Novosibirsk was hit by an errant missile. Five Russian scientists are
reported to have died. This does not explain why the Mossad sent a
search party to find the scientists who were said to have died; nor
why their names were not revealed, nor why even the report on their
findings has remained top secret.

We noted that Dr. Vladimir Pasechnik founded Regma Technologies. He
"was a leading specialist in the field of DNA sequencing –
sophisticated research which is a vital element in developing
biological weapons –and defences against them."1005 On 2 November,
2001 he was found dead in his village home in Salisbury,1006 although
the official announcement did not come until 23 November from a former
MI6 member in the United States.1007

On 12 November, 2001, Dr Alibek's Hadron and Dyncorp were granted a
"$322 million


contract to develop, produce and store vaccines for the Department of
Defense."That same day the series of curious deaths continued: Dr
Benito Que, a cell biologist working on infectious diseases such as
HIV "was found comatose outside of his lab at the Miami


Medical School."On 16 November, Dr. Don Wiley, of the Howard Hughes
Medical Institute at Harvard University, an expert on how the immune
system responds to viral attacks such as the classic doomsday plagues
of HIV, ebola and influenza, disappeared and was found dead. Don Wiley
had just met with Dr. Kelly, himself an expert on DNA sequencing, when
he was head of microbiology at Porton Down. Kelly had been following
the work of both Que and Wiley.

On 10 December, 2001, Robert Schwartz, "an expert in DNA sequencing
and pathogenic micro-organisms, who worked at the Center for
Innovative Technology in Herndon, Va.,"1010 was stabbed and slashed to
death. On 11 December, Nguyen Van Set, 44, died at work at the
Commonwealth Scientific and Industrial Research Organization (CSIRO)
in Geelong, Australia, in a laboratory accident. This was the lab
where colleagues at the animal diseases facility of the same institute
"had just come to fame for discovering a

virulent strain of mousepox, which could be modified to affect
smallpox."By the spring of 2002, the number of deaths of world level
microbiologists had increased to 11. A French commentator noted that:

All were working in DNA sequences. Their research aimed at developing
pharmaceutical products capable of combatting pathogenic agents and
basing itself on the genetic profile of the latter. Their work also
aspired to develop products that would work in co-operation with the
genetic code of a given



The French observers also had a suggestion why Pasechnik and a series
of colleagues had been eliminated. These researchers posed a threat to
the business of vaccines which were


all the rage with the Bush clan via the Carlyle Group.Meanwhile, Dr.
Patricia Doyle, an investigative reporter in the domain of biowarfare
offered a preliminary guess as to what was happening:

There appears to be a clandestine plan to develop a virulent
infectious disease and quite possibly a 21st century version of the
1918 Spainish flu or other virus. This pathogen is going to be
genetically-altered to only infect a certain group of people. I
believe that Dr. Wiley's research of immunity factors of viruses,
bacterias and mycoplasmas will be used to create a pathogen that will
NOT infect (will leave untouched) a designated genetic type….In
essence, a doomsday bioweapon can be released with a guarantee that
the genetic code of certain


individuals, and the virus itself, will protect these individuals from

The deaths continued. There was the high profile case of Dr. David
Kelly. There was Dr. Mike Patrick Kiley, a world expert on Ebola, and
mad cow disease, who died of a heart attack. There was Dr. Robert
Shope, a virus expert who warned of epidemics and who died the same
week. Between September 11, 2001 and January 2004 at least 44 leading
scientists all around the world had died. By 29 January, 2004, Dr.
Doyle identified another common feature of the victims: "all were
expert in emerging infectious diseases


especially Ebola, Mad Cow, HIV."
In retrospect, many of the microbiologists had been engaged in DNA
sequencing that could provide "a genetic marker based on genetic
profiling…The research could play an important role in developing
weaponized pathogens to hit selected groups of humans by


identifying them by race."

Science fiction films such as Mission Impossible II (2000) have
explored such frightening


scenarios. In the film, the story was about a corporation called
Biocyte.In real life, the site is almost empty, but its home page is
Informagen Inc. with a link to Biotechnology/Pharmaceutical Companies.
In the film, Tom Cruise, as Ethan Hunt saved the day and the world by
stopping a new vaccine called Chimera. In real life,1018 the
pharmaceutical firm Acambis actually has a proprietary ChimeriVax™
technology,1019 as part of programmes to develop vaccines against
infectious diseases such as smallpox, Japanese encephalitis, dengue
fever and West Nile. In the film, the villain was John C. McCloy.
Critics admitted that they were puzzled by a name with such close
parallels to


John J. McCloy of Marshall Plan fame.John J. McCloy was also once the secretary


for war involved in the Manhatten Project to create the atomic bomb.If
the stories are true that link the Nazi human experiments with the CIA
activities via Projects Artichoke and MK-Ultra, then the real worries
outlined by leading scientists such as Bill Joy and the seemingly
fictional dangers outlined in Mission Impossible may be much more


connected than most of us suspect.

180 Mission Impossible reminded us that to be successful one needed
not only a deadly disease but also an effective cure. Played on a
global scale one would need to assure that there were no brave experts
who might suddenly save the day with unexpected cures. One also needed
to eliminate whistleblowers. Eliminating over 44 of the top world
experts of very diverse nationalities, working in highly specialized
domains and living as far afield as Australia and Siberia confirmed
that those behind the plan could not be a small cell of Al Qaeda
terrorists. This pointed to a group with global ambitions and global
reach. Planned Diseases The past decades have brought increasing
evidence of diseases being spread intentionally: Collusion between
Government and vaccine producers may have occurred in the development
and testing of agents of biological warfare. Intentional feeding of
mentally retarded children with hepatitis B virus contaminated feces
was justified as being necessary to protect other children. Possible
responsibility for diseases such as AIDS, autism, sudden infant death
syndrome, chronic fatigue syndrome and mental illnesses is vehemently
denied and those making such suggestions attacked. To a large measure,
vaccine and vaccine-related research have become money-driven
endeavors with emphasis on perception rather than reality.1023 On 7
April, 1992, Robert Steinbrook, an LA Times medical writer reported
serious evidence that the spread of the AIDS virus was linked with
experimental polio vaccine and hinted that it could have been
intentional.1024 Meanwhile, another investigative reporter in the
realm of biowarfare, Leonard G. Horowitz, went much further. First he
reported on an: apparently intentional spread of an infectious
agent-the AIDS virus (HIV)-by a Florida dentist in his effort to bring
national media attention to his conclusion that the AIDS-virus, from
which he was dying, was a government biological weapons laboratory
creation. He believed that the genocidal weapon was subsequently
distributed through contaminated vaccines.1025 In a subsequent study
Horowitz documented a series of cases involving companies linked with
Rockefeller (Exxon, Chase Manhatten bank, Sloan Kettering Memorial
Cancer Center) and the Merck, Sharp & Dohme pharmaceutical company—"A
major biological weapons contractor for the DOD [Department of
Defence] whose contaminated vaccines were most plausibly the vehicle
which transmitted AIDS viruses simultaneously to U.S. and Africa
specific populations; Litton Industries and Dow Chemical."1026 Another
source reported that "a new investigation shows conclusively that HIV
infection among San Francisco gay men was a result of contaminated
vaccines."1027 Nor is this limited to HIV. As one observer has noted
this is a general problem with respect to medicine in the United
Despite a wealth of scientific evidence that pesticides, polluted
water and air, contaminated food, prescription drugs and other
correctable sources of human illness are causing Americans to become
the least healthy people on earth at the same time we are the
wealthiest-the government does almost nothing to address these
problems. We have higher rates of infant mortality, infertility,
cancer, contaminated food, diabetes, drug addiction, crime, learning
disabilities and chronic illnesses than any developed nation. Many of
these problems are actually far less prevalent in undeveloped Third
World countries.

The same corporate interests that are knowingly causing these problems
doubly profit by creating technologies, therapies, charities, social
programs and drugs to treat them. They then reap a public relations
bonanza by claiming to be heroically solving mankind's problems [Watch
the commercials of companies like Exxon, GE, Archer Daniels Midland,
Philip Morris and Chase Bank for some prime


examples of this].
There is a growing literature on the intentional infection in
laboratory animals;1029 on vaccine contamination1030 and, of course,
on bioterrorism where in "addition to anthrax, other potential agents
of bioterrorism include smallpox virus, the bacteria that cause plague
and tularemia, botulinum toxin, filoviruses (e.g. Ebola virus) and


(e.g. Lassa virus), and other selected pathogens."Dr. Horowitz has
gone much further to suggest that the idea of using medicine to target
specific individuals was nothing new and that it was: "intimately
linked to the earliest efforts of the British oligarchy, the
Rockefeller and Bush families, to depopulate targeted races and people
through the practice of eugenics (i.e. racial hygiene). In fact, this
group, and other allied political 1032

notables, pioneered and funded Hitler's efforts in this regard."The
implications of such claims are so vast that one can only raise the
series of questions below.


In light of the above evidence and especially the statements by
Horowitz, questions arise how far would a group that was completely
without scruples go? Would they sacrifice a few thousand innocent
lives through a disaster at the World Trade Centre in order to create
a political climate conducive to their plans? Some members of the
press have told us that from the outset those plans included an
invasion of Iraq and a removal of Saddam Hussein. Both members of the
military and of the press have also criticized the American government
for not sending in a sufficient number of troops to win a "clean"
victory. We were assured by the Secretary of State that everything was
under control, that thanks to the use of intelligent bombs the whole
process was nearly surgical. But what if the purpose was not a
surgical operation? What if the goal was to cripple Iraq permanently?
Would a group with its eyes on world domination sacrifice the lives of
over 100,000 innocent civilians to achieve their goal? Were they
trying to rid the world of a dictator's scourge, or were they there to
learn new methods that could be added to their own arsenal? Would they
be prepared to use the worst methods of torture the world had seen to
achieve such goals? Would they have been willing to flaunt openly the
Geneva Convention and all the attempts of the last century to limit
the horrors of armed conflict? Would they be prepared to try to
re-write the legal system to achieve their ends?

If the key to this new attempt at world domination involved new types
of biowarfare that targeted specific genotypes, how much testing would
the group be prepared to do? What scale of testing would they be
prepared to do? Is it possible that the mysterious outbreaks of
contagious diseases in animals such as Mad Cow Disease, of new types
of bird flu, even in countries such as the Netherlands and Germany
which have the highest standards of hygeine were not just natural
tragedies? Could they have been planned experiments to ensure that the
specificity of targeted genotypes was working? Would a group with
their eyes on world domination limit their experiments to animals?

Would such a group go the next step and experiment on humans? We know
that the Vaxgen company, now owned by the Carlyle group, tried its
AIDS vaccines on very large groups in Asia and elsewhere. Is not the
forced use of untested anthrax vaccine by 2.4


million soldiers in the US army a dangerous experiment of sorts?Is it
possible that the mysterious outbreaks of West Nile Fever, of SARS, of
smallpox, of new types of cancers, and even the enormous spread of
AIDS were not just natural tragedies?

For nearly three millennia the Hippocratic Oath has been a model to
the domain of medicine: the quest to save lives and reduce suffering.
What happens when such goals are challenged by the temptations of
almost unlimited power? Did not the tobacco industry reveal the
extents to which it was prepared to go in encouraging persons to smoke
when there was overwhelming evidence that smoking was not just harmful
but deadly? Did not


the Opium Wars in the 19century reveal how far some would go ito
support even the most dangerous kinds of smoking in the interests of
politics? Was not the Iran-Contra scandal linked with large drug deals
in the interests of politics? Did not the ousting of the


Taliban, who were supported by the CIA,re-instate Afghanistan as the
producer of 70% of the world's heroine production and as such increase
the sources for the funding of


terrorism?If one were truly leading a war on drugs and a war on
terrorism these would be tragic developments. But for a group
concerned with world domination would not drugs be a welcome
distraction and a possible new source of revenue even if it came at
the expense of others' health and other lives?

Does not the trend towards convergence of Nanoscience, Biotechnology,
Information technology and Cognitive science (NBIC) extend the
possibility of control of the entire life-cycle from mere objects to
the life-cycle of humans themselves? If one could control this and
remove all those who disagreed would this not be an irresistible
temptation to those without scruples? Would they stop at removing
serious scientists who objected to this? Were these the deeper reasons
for the demise of Dr. David Kelly and dozens of the leading experts in
micriobiology in the world?

How far would the pharmaceutical companies go if there were not very
clear controls to limit their powers? Would they be prepared to
produce drugs that, instead of curing patients, made them more
dependent on what was supposed to be curing them? This would of course
not be thinkable in a democracy with a whole series of checks and
balances in place to ensure against such possibilities. But what if a
small group were able to subvert that process? What if a small group
conscripted the highest levels of the military by giving them the
illusion that they would be in power or at least have a significant
piece of the pie? What if a small group conscripted some of the key
figures of the pharmaceutical profession including one of the heads of
the human genome project with the same kinds of promises? What if the
same group were able to conscript some of the leading banks and
corporations with the same kinds of promises? What if the same group
could conscript leading political figures including a former president
and a former prime minister with such such promises? What if the same
group were able to control the news media as some have suggested
happened in a deal between Karl Rove and Jack Welch of General
Electric(§ 9 above)? Is this why the regular media have not discussed
the possibility that the tsunami on 26 December 2004 might have been
caused by


experiments with eco-weapons by the US, Israel and possibly India?
Were such events the deeper goal of the Carlyle Group and the Project
for the New American Century? If so are they succeeding? Is this a
clear and present danger closer to home than usual? Should all this be
dismissed as yet another of the ever growing number of conspiracy
theories? Could the tragic events of the past years be the direct
results of a small group whose stated aim in 2000 predicted "advanced
forms of biological warfare that can "target" specific genotypes may
transform biological warfare from the realm of terror to a politically
useful tool"?1037 If so should not these developments be a matter of
concern to all human beings? 184 Appendix 4. Vaccine, Biotechnology
and Genetic Engineering Firms.1038 Abbott Laboratories Abgenix Acambis
Acambis (Peptide Therapeutics)Oravax),Berna Products)1039 ActivBiotics
Advancis1040 Affymetrix Amgen (Applied Molecular Genetics)1041 Amgen
(Kinetix, Immunex) Amylin Pharmaceuticals Advanced Biosystems Analex
Advanced Biosystems Antigenics Antigenics (Mojave Therapeutics)
AutoImmune AVAX Technologies, Inc Aventis Pasteur1042 Aventis Pasteur
(Connaught Labs) Bavarian Nordic Baxter International (North American
Vaccine) Bayer Corporation Berna Products Corporation (>Acambis)
Bioreliance Cepheid1043 Bioport Corporation Bristol Bristol-Myers
Squibb California Biotechnology Celera Genomics Group Celltech
Celltech (Medeva) Chiron Chiron (PowderJect) Ciba-Geigy Novartis (Ciba
Geigy, Sandoz) CombiMatrix1044 Connaught Laboratories Corixa
Corporation1045 Corixa (Coulter Pharmaceuticals)1046 Coulter
Pharmaceutical Crucell NV1047 Cura Gen Curis Inc. Cytogen
Cytotherapeutics Decode Deerfield Partners, LP Diacrin (>Genvec)
Diversa Double Twist Eli Lilly Encysive Pharmaceuticals Inc.1048
Endogen Engeneos Evans Vaccine Exelcis Gemini Genelabs Technologies
Gene Logic Genentech Genvec Genvec (Diacrin) Genzyme


Genzyme Transgenics Corp. (GTC)

Gilead Sciences, Inc Gilead (NeXstar)
Glaxo Wellcome Healthcare Ventures Hoffmann Hoffmann-LaRoche


Human Genome Sciences (HGS)
ICI Pharmaceuticals (>Zeneca) Ipsen Limited IDEC Immunex (>Amgen)
Incyte Genomics Integrated DNA Technologies (linked with Nanogen)


Isis Pharmaceuticals (Ibis Therapeutics)
Johnson & Johnson Kinetix (>Amgen) KuDOS Pharmaceuticals LaRoche
(>Hoffmann-LaRoche) Lederle Lab Div-American Cyanamid Co McKesson HBOC
Massachusetts Public Health Biologic Lab


MaxygenMedeva MediGene Medimmune Medimmune (U. S. Bioscience, Aviron,
FluMist) Merck1054 Millennium Pharmaceuticals Mojave Therapeutics
Molecular Biosystems Myers (>Bristol Myers Squibb) Nabi


NanogenNanotronics Nascent Bioscience Neurogen (link Avant via Penner)
NeXstar North American Vaccines Novavax1057 Oncologix Organon Teknika
Corp Oravax (>Acambis) Ortho Pharmaceutical Corporation OSI
Pharmaceuticals Peptide Therapeutics

1058 1059
Pfizer, Inc Pfizer(Pharmacia Corporation) Pharmacia Corporation


Powderject Pharmaceuticals

Protein Sciences CorporationRepligen Reprogenesis Roche Ross Products
Division-Abbott Laboratories, Inc Sandoz (> Novartis) Sanofi
aventis1062 Squibb (>Bristol Myers Squibb) Tenet Healthcare
Corporation Titan Pharmaceutical Triangle Pharmaceuticals Transgene
Translational Genomics United Health Group VaxGen Vical1063 Xenova1064


Wyeth Zeneca Zeneca (ICI Pharmaceuticals)


The champions of these developments insist that we are on the
threshold of a new era in human development. In the past, there were
bureaucratic structures in government to address our needs as citizens
and equally bureaucratic structures in the field of health care to
meet our needs for health and well being. In future, all these needs
will be individualized and personalized. Generic drugs will be
replaced by individual drugs that will meet our personal needs. It
will be a better world we are told. 2

Lawrence Lessig, "Innovation, Regulation, and the Internet," The
American Prospect, Issue Date: 0.0.00. 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).

5 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.


In a sense one could go back much further. Scholarship requires access
to sources and equipment. These were traditionally in memory
institutions (libraries, museums and

archives) and laboratories. The invention of microfilm (1900), which
led to the founding of University Microfilms (1938, now Proquest),
marked a first step away from direct dependence on physical presence
at fixed repositories of memory institutions and labs. Sarah Allen's
Weblog, "Historical perspective on links and trails," December 28,
Frederick Seitz, "The Cosmic Inventor, Reginald Aubrey Fessenden (1866

Transactions of the American Philosophical Society Held at
Philadelphia For Promoting Useful Knowledge, Volume 89, Pt. 6, 1999. Cf. Welcome to the Reginald A.
Fessenden ARS 'W1FRV' (first radio voice) Marshfield, Massachusetts
Where the world's first radio voice broadcast took place... On


Paul Otlet. Ron
Day, "Paul Otlet's Book and The Writing of Social Space," Journal of
the American Society for Information Science, 48(4) (1997),
pp.310-317. It was reprinted in: Historical Studies in Information
Science, edited by Trudi Bellardo Hahn and Michael Buckland.
(Information Today), New York: Wiley, 1998, pp. 42-50. Cf:




Translated by the author from the original French cited on the
Mundaneum website at Bientôt la
télévision sera un problème essentiellement résolu, comme il l'est
déjà scientifiquement, l'image se reproduit à distance, sans fil. On
peut imaginer le télescope électrique, permettant de lire de chez soi
des livres exposés dans la salle "teleg" des grandes bibliothèques,
aux pages demandées d'avance. Ce sera le livre

téléphoné". 12 The sketch dated 1948.06.15 from the Otlet Archive at
the Mundaneum in Mons is being published by Charles van den Heuvel,
"Visualising Organisations and Organising Visualisations. Otlet's
Sketches for a Synthesis of the Sciences in a European Context and the
WWW," Science in Europe – Europe in Science: 1500-2000-Maastricht,
Nov. 2004.


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].
. 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

14 The Internet:
Jesper Vissing Laursen, Past, Present and Future -Internet & WWW

16 Peter T. Kirstein, "Early Experiences with the ARPANET and INTERNET
in the UK." Cf.


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." For
another useful timeline 19

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



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



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,




30 In the 1990s he worked on a large
chemical information system, the CORE project, with Cornell, OCLC, ACS
and CAS.



33 34

35 36


38 The site is no longer


In 1993, AT&T also acquired McCaw Cellular for $11.5 billion, to place
it "squarely in the fast-growing cellular services market." .

40 Cf.

41 Cf.

42 Cf.


44 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) 46

Clay Shirky's Writings About the Internet, Economics and Culture,
Media and Community, Open Source: ATT and Cable Internet Access,









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

66 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.



70 Some say $54

billion, while others claim the deal was worth $68 billion. 71


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.



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.





79 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.





Colin C. Haley, "AT&T Expands News Corp. Deal,", July
14, 2003.




"C. Michael Armstrong," Business Week, 14 June 1997.



89 90;dsessionid=20H0IZUQ3IMYZB




LCC was founded in 1983 as a small telecommunications company. In
October 1996 the company sold its shares to the public "The offering
raised nearly $50 million for LCC and provided more than $40 million
for its founding shareholders, chairman Rajendra Singh and his wife,
Neera Singh."
On 18 February 1999,
LCC "announced a new business strategy that will allow the Company to
focus entirely on its towers and core telecom services businesses. LCC
also announced that Steven J. Gilbert, Chairman of Gilbert Global
Equity Partners, L.P., joined its Board of Directors."


Shelley Solheim , "Cingular's Acquisition of AT&T Wireless OK'd,"
-eWEEK, 1 November 2004.
The AT&T Wireless website states:

AT&T Wireless Services (AWS) has merged with Cingular. Cingular is a separate

company from AT&T but has a temporary license to use the AT&T brand while it

transitions AWS off of the AT&T name and logo.





Media One.


Mike Ricciuti, "AT&T, MediaOne merger a done deal," CNET,
Published: June 15, 2000, 7:55 AM PDT. Others claimed that "AT&T
acquired the Media-One Group for $62.5 billion." Media One.


Media One.


Comcast officially acquired AT&T Broadband (i.e. its cable assets) for
$70 billion in November 200. John Borland, "Comcast, AT&T cable deal
to create Net giant,", December 20, 2001:,+AT&T+cable+deal+to+create+Net+giant/2100-1033_3-
. 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. "AT&T,
Comcast to pay $100M to settle suit," Big News, 28
October, 2004:



Jennifer Jones and Martyn Williams, "Proposed Comcast-AT&T Broadband
deal may herald trend." Info World, July 9, 2001 8:30 am PT

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.

104 105



Comcast Dream of Merging Media Comes into Focus, Red Nova, 21 November


Michael Learmonth, "Infoimaging. Comcast, Disney pact for kids net,"
Forbes, 10.19.04, 11:22 AM ET,


"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)."



Andrew Ross Sorkin, "Firms Said to Explore a Giant Offer for
Adelphia," New York Times, November 12, 2004.


Ina Fried,"Microsoft braces for crucial TV test," CNET,
Monday, November 8 2004 12:02 PM.,39037051,39200338,00.htm

114 Forbes.


Bob McIntyre, "Firms Double-Dipping with State and Federal Tax
Breaks," New Jersey Policy Perspective, 22 September 2004.


Associated Press, "Lucent to Receive $816 Million Tax Refund,"
Wednesday November 10, 6:39 pm ET.


"Ma Cable?," Online Newshour, May 6 1999.


ID__10197--/free-co-factsheet.xhtml SBC.

Bell South. Sprint. Century


"Top cable companies mull joint Adelphia bid," Buffalo Business First,
September 28, 2004,
Cox. Charter.


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% 121

ID__10197--/free-co-factsheet.xhtml SBC.

Bell South. Sprint. Century
Tel. Cf .a website that
specifically urges Alltell customers to go to Verizon Services.



124 Cf.

125 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. ?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. ?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.

128 In May 1999,
Vodaphone shareholders agreed to acquire Air Touch for $74.7 billion.
The new company claimed to have 29 million subscribers spread
throughout 23 countries



The former is no longer extant and
is now under



The former is now under

133 formerly


Ibid. (+Ameritech+ Pacific Telesis).


This merger also included Continental Television. Cf.

136 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.






Barr has been active in Verizon's actions against Worldcom. He "sent a
letter late Monday to the head of the U.S. General Services
Administration urging the government to suspend federal contracts with


Justin Hyde, "Verizon ventures into cable's turf with plans to sell
video services," USA Today, 21 May 2004, p. 8A. 142 "SBC Offers
IP-Based Advanced TV," Teelcom Web, 13 November 2004.

143 144 145

Jeff Clabaugh, "Qwest's accounting qualms trigger stock shock,"
Washington Business Journal, June 26, 2002.
Cf. For the
connections with Andersen's accounting 146


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, 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 was again trying to buy

148 There are also
links between Enron and Jeb Bush There are links between
the Bush Family and Iran Contras Cf. There are also
links between the Bush administration and Enron:





152 This
proves a very complex adventure. A group of shareholders represented
by Coburn Meredith submitted their own claims.


"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.
Mr Perle was also found to have made deals for post war Iraq via a
British intelligence contracting company. 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. 156


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. 160

161 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 Group."




167 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.

168,5932,31,00.html?query=20134. Cf.
Press Release 8 October 2003. Is it just
coincidence to note that Arun Sarin remained on the board of Vodafone


went on to replace Sir Christopher Gent as the head of Vodafone in
July 2003?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)? 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



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. ?news=901144

173 174 At the same time Qwest
was conveniently looked after by Verizon (= 3 former Baby Bells in
one: Bell Atlantic + Nynex +Qwest).



Pulver Com's Telecom Antitrust Intelligence Report. Broken Trust 1:


"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].


"Verizon Wants to Compete for TV Subscribers," Red Nova, 23 November 2004.





183 which now contains only the
second part of this quote which was previously available at






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

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.












"Warburg, Providence may buy Telcordia for $1.3 bln," Reuters, Thu Nov 11, 2004

01:18 PM ET.


200 Concerning the

privacy issues raised by ENUM re: submission to the ACA expressing concerns that the ENUM protocol
-703.0KB 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 in response to the ACA discussion
paper, 7th October 2002 Alert report.


The site is no longer extant.

202 203

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:


205 Cf.




"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.
Elizabeth Wasserman,"The Internet After Ira Magaziner", The Industry
Standard, Nov

16 1998,,1151,2494,00.html.


"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." Cook Report on the Internet, "EMPHASIS ON
GRIDLOCK," April 1998 (7.01), pp. 1 – 8.



213 214 From:
International DOI Foundation

Sent: Monday, July 29, 2002 16:12 PM To: Subject: Corbis
and Content Directions partner to implement DOIs for images



David Sidman, "Digital Object Identifiers: Not Just for Publishers,"
CMS Watch, 2002-03-31.


218 219 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


This was available at but is now
in the archives of 226 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.







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.






http://www.i-c0sx (Homepage). Cf.; Cf.;

B-WiN; G-WiN, Abilene, vBNS



By Tim McDonald, "EU To Block WorldCom/Sprint Merger," E-Commerce
Times, June 21, 2000. 238





Ian Foster, Carl Kesselman, eds., The Grid: Blueprint for a New
Computing Infrastructure, San Francisco: Morgan Kaufmann Publishers,


244 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.




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; Spanish in third place, Japanese in fourth, German in fifth,
French in sixth and Korean in seventh


place.The Internet as envisaged by the United States remains
effectively a uni-lingual, uni-cultural phenomenon.

To be sure there were multilingual projects in the United States. But
their purpose was very different. In the military, there was a quest
to develop new tools, which allowed communication with knowledge only
of English. A "Translingual Information Detection, Extraction and
Summarization (TIDES) program was developing advanced language
processing technology to enable English speakers to find and interpret


information in multiple languages without requiring knowledge of those
languages." In the American vision, the
worlds of e-business and e-science required global, standardized
solutions in which variations of culture and language at the national,
regional and local level played no significant role. In their high
industry, there was a quest for tools, 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


presence. 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.

: 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 was that this US
vision foresaw controlling not only their own education but the edu.
domain for the entire world, assumed that the future of education and
e-learning would 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 was at odds with the US's own quest for democracy. Much more
than money and profits are at stake. Here 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 include well over 70 of the world's
6,500 languages. 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:

When the Internet Society told us that the Internet was for everyone,
did it perhaps


believe that a U.S. version of the Internet should serve as a model
for everyone?
If so there is a question which of the 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 Societyand
some even spoke of a Knowledge Society. While the United States
continues to assume that the Internet was 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 and now
25 languages. Faced with this new vision it again has a choice. Europe
can follow blindly the American solution, or insist on a
multi-lingual, multi-cultural, open source model for the future of the
Internet and the future of knowledge and culture. 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. I am grateful to
Suzanne Keene for this reference.



Dr. David K. Kahaner, US Office of Naval Research Asia, reported on
the development in 1994.
. It used to be available also at: Cf.

250 under scenarios for 2025.


According to Bruce Schatz we are moving from Arpanet and Internet
towards Interspace.


IBM also has a software called Interspace.


254 There is also a WorldNet Daily a WorldNet Television.


256[ ]


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.

Cf.: There is alos a Syntek Capital
which deals with Media, Telecoms and IT Software.


263 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.

264 Meanwhile Oliver North
is writing columns to support the idea of war in Iraq.

265 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 "aid".

266 For criticism cf: "Military
intelligence system draws controversy",, Thursday, November
21, 2002 Posted: 8:26 AM HKT (0026 GMT). This has since
been complemented by a new plan for a LifeLog system.,1294,58909,00.html. For recent
criticism Declan McCullagh, "Senator presses Pentagon on spy plan,"
CNET, June 24, 2003, 5:07 PM PT.
. 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 "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 .

Cf. One of the reactions to TIA
has been the Government Information Awareness Project. which also draws attention

to related work such as: Open Secrets

Project Vote Smart

The Center for Public Integrity

Columbia Journalism Review NameBase



Eliot Borin, "Feds Open 'Total' Tech Spy System," Wired News, 7 August 2002.,2100,54342,00.html


This logo has since been abandoned.

270 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.,2100,54342,00.html



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.


(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. 277



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


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).


287 288


Washington Technology.



292 293


Companies 1-10. 2. Northrop Grumman Corp.. Washington Technology,
05/07/01; Vol. 16 No. 3.


John Moore "Northrop makes deal with TRW,"'July 8, 2002.



298 The
Lockheed Martin Team has won the contract so there are bright
prospects ahead for both Lockheed and Northrop.







Cf. Joint Tactical Communications Newsletter No. 92-1. This CALL
newsletter provides military units that participate in joint tactical
operations with interoperability lessons collected from Operations
DESERT SHIELD and DESERT STORM. Joint command, control and
communications (C3) systems are set apart from service-unique systems
in various ways. Chapter 1. Command and Control (C2)



307 308


310 The same 1995
report mentioned that: "The Chairman of the Joint Chiefs of Staff is
sponsoring a series of wargames, referred to as Nimble Dancer, to
assess the capability of the 1997 force and the future BUR force with
enhancements to win two nearly simultaneous major regional conflicts.
Participants include representatives from the Joint Staff, Office of
the Secretary of Defense, the Services, and all of the combatant
commands." It is
striking that the subsequent wars in Afhanistan and Iraq were planned
as two nealy simultaneous major regional conflicts.




This idea was repeated in the defense report of 1996.






319 2002/7th_ICCRTS/Tracks/pdf/125.pdf

320 2002/7th_ICCRTS/Tracks/pdf/125.pdf




324 MITRE is the Assistant
Secretary of Defense for Command, Control, Communications, and
Intelligence (ASD/C3I) C3I FFRDC. The C3I FFRDC Mission and Scope is
to provide systems engineering and integration support to the C3I
community, applying engineering discipline and principles to DoD's
command, control, communications, computers, intelligence,
surveillance, and reconnaissance (C4ISR) mission area.

325 326

Dan Ackman, "Based In Mississippi; Bankrupt In New York," Forbes,
07.22.02, 8:36 AM ET


"Bankrupt MCI gets wireless deal in Iraq, Deal troubles rival telecom
companies," Thursday, May 22, 2003 Posted: 9:59 AM EDT (1359 GMT).


For a History of Universal Music



331 media profiles. American broadcasting company.



Who Owns What. Time Warner Corporate Timeline.


Who Owns What. General Electric Corporate Timeline. 335 David Podvin
and Carolyn Kay, The Media Cover-Up of the Gore Victory. Aprt Four:
General Electric Style.






















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

360 As another
example of the complexities: In 1997, the Telecom Venture Group (TVG),
backed by George Soros, became a foundation shareholder in Powertel
with a $17 million investment. TVG sold its stake in 1999 at more than
$2 a share, representing close to a 500 per cent return. Wiltel became
the chief shareholder of Powertel. The TVG syndicate then offered $14
million for the debt and equity interests of PowerTel's largest
shareholder -struggling US telecom WilTel -in a deal that would give
it a controlling interest in PowerTel.








368 369



The Well Oiled Media., September 16, 2001


For past examples
Sheila McNutty, "Chevron reports 80% fall in earnings," Financial
Times, 31 July 2002, p. 18.

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.


Quoted from formerly:
. Cf. The History of EMSL. .

374 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.,12239,919897,00.html.
. 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 | 12h32.,5987,3234--300807-,00.html




Estelle Dumout, "Certification électronique: un acteur franco-français
vient de naître , " ZDNet France, Vendredi 16 juillet 2004.,39020715,39161573,00.htm 378
Price Waterhouse Coopers Global.

(cf. formerly:</HLIN
K>). KPMG. . Deloitte. Global. . CapGemini. . Ernst and Young.
. Andersen Consulting now Accenture.\history\hi
(cf. formerly: ).

Booz Allen and Hamilton. . On 29
January 2004 Schlumberger Sema was acquired by Atos Origin. S.A. (formerly: ). Logica. (cf. formerly: ). CMG, now
part of Logica as in previous note (cf. formerly: ). Computer
Sciences Corporation (CSC). (formerly: ). CGI Group. (formerly: ).

Cf. Roland Berger. .

Another example, Diamond Technology Partners is now Diamond Cluster
International. (cf.

formerly: asp ).


For instance, Andersen, in its new guise as Accenture, has just
produced a comprehensive report on e-government.\epresskit\egov\epres_rea
. 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?

381 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. 382

As an example of the complexities a former lawyer from Vinson and
Elkins, who worked on the Enron case, was subsequently nominated for
one of the highest legal posts in the national administration.



Stephen Rosenbush and Heather Timmons, "Inside the Telecom Game,"
Business Week, August 5-12 2002, pp. 64-70.





389 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.
In 2003, these became the big 4, (with consulting branches, cf.
Accenture, Bearing Point, Deloitte Consulting and CapGeminiErnst and
Young), with earnings of some $62 billion.390

391 For a discussion that these
are not a co-incidence
?story=20020712 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.


August Cole, "Northrop in $111 million settlement," Last Update: 4:49 PM ET Jun 9, 2003 .


The top 100 false claim act settlements.


Kelly Patricia O Meara, "What Does It Take To Lose a Contract?"The
Liberty Committee, Posted Feb. 25, 2001.

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,

214 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."



Marco Travaglio e Peter Gomez, Berlusconi, Turin: Stampato in proprio
ufficio parlemantare dell On. Gianni Vattimo, 2003.



403 See


Bill Mundy, "Trophy Property evaluation: A Ranch Case Study."


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,


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
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.



John Cassy "UPC bankrupt," The Guardian, Tuesday October 1, 2002.,3604,802216,00.html (The
mention of £63bn is clearly a typo for £6.3bn, but at the same time
betrays a disturbing lack of intimacy with other major currencies).




John Cassy "UPC bankrupt," The Guardian, Tuesday October 1, 2002.


"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 419










Sold to a new company formed by private equity firms The Carlyle Group
and Welsh, Carson, Anderson & Stowe. 7 billion.,%20








Relizon parent buys satellite operator, June 30, 2004.
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 Canada.

436 Carlyle and
Bain bought this from Onex and Oaktree who acquired it after a
financial crisis in 2001.


Carlyle Group.






443 444

445 446

Lynn Landes, "E-Voting. Voting machine fiasco: SAIC, VoteHere and
Diebold Scam to vet software?," Online Journal, 20 August 2003.


Lynn Landes, "E-Voting. Voting machine fiasco: SAIC, VoteHere and
Diebold Scam to vet software?," Online Journal, 20 August 2003.








454 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






459 460 World Bank. GDP 2003.


Blackstone. 462 This was
at a time when the euro was worth less than the dollar. 463




Almeida Capital. Alt Assets. 466



469 470





Leigh Phillips, "Canal Plus, France Telecom cable divisions to merge,"
DMEurope, 19/03/2004. Why a very
successful company with sales of 400 million a year should be worth
only 500 million euros as not explained. 475





"Sale of Kirch's Springer stake near," Europe, May 10, 2002
Posted: 6:27 AM EDT (1027 GMT).


„Deutsche Bank Reduces Stake in Axel Springer Verlag Frankfurt am
Main", 09.10.2002. 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.


Richard Poynder, "BertelsmannSpringer Is Sold to Private Equity
Firms," 27 May 2003.


Jack Grone and Marietta Cauchi, "UK Buyers Submit Bids For Hollinger
Intl's Telegraph Grp, DOW JONES NEWSWIRES.


Shaykh Dr. Abdalqadir as-Sufi, "Now it is Clear! A Ramadan Review." Cf. The
Kuffar move to the Endgame, and the
Battle of the Oil Barons.


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 the millions (Enron, Qwest) or
bankruptcies of a billion here and there. They say very little of ever
expanding military budgets, whereby over 40 billion dollars of
taxpayers money are planned to redesign the Internet to meet the needs
of the secret services rather than everyday citizens. They are almost
silent about annual military budgets in the hundreds of billions and
big time projects such as the Joint Strike Fighter of over $1


The NSF plays a complex role. We were constantly told about the need
for free discourse and it is entirely laudable that 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." Ironically,
the same NSF was also involved in the kinds of technologies that
pointed to a future sketched in films such as Minority Report.



New York: Crown Business.




495 Nor is this
something new. Evelyn L. Hu, Co-Director, of the California
NanoSystems Institute, prior to joining the University of California,
Santa Barbara (UCSB) in 1984 "worked at AT&T Bell Laboratories,
developing microfabrication and nanofabrication techniques." Susan Hackwood was a
Department head at AT&T and went on in 1984 to become founder and
Director of the National Science Foundation Engineering Research
Center for Robotic Systems in Microelectronics. AT&T's Albert
Plassner is on the board of Nanoscience Technologies Inc.
The Israel Institute of Technology (Technion) which has 52 staff
members working on nanotechnology has direct links with AT&T.
SAIC is working with companies such as Nanosys Inc.

Meanwhile, AT&T also has close links with the Institute for Research
in Cognitive Science (University of Pennsylvania).


499 500

















Donald Rumsfeld has investments in a number of pharmaceutical/biotech
firms: Amylin Pharmaceuticals; Baxter International; Biotechnology
Venture Partners, LP; Coulter Pharmaceutical; Deerfield Partners, LP;
Johnson & Johnson; Medimmune; Pharmacia; United Health Group; Vitria
Technologys and some telecom companies: Comcast; Qwest Communications
International; SBC Communications and Tellabs:
For an
example of inside trading by Doanld Rumsfeld:


519 520














The article admitted that: Smallpox can be prevented with decades-old
vaccines like those donated by Aventis (nyse: AVE -news -people ), but
many patients are likely to experience dangerous side effects. There
is no currently no treatment once someone has the virus, which causes
death more than 30% of the time.


The article admitted that: Smallpox can be prevented with decades-old
vaccines like those donated by Aventis (nyse: AVE -news -people ), but
many patients are likely to experience dangerous side effects. There
is no currently no treatment once someone has the virus, which causes
death more than 30% of the time.







Another company involved in creating a West Nile vaccine for horses is Wyeth:


from Federal Register: March 22, 1996 (Volume 61, Number 57, Page
11812] Summary: In accordance with
37 CFR 404.7 (a)(I)(i), announcement is made of the intent to grant an
exclusive, royalty-bearing, revocable license of U.S. Patent
Application Serial Number 08/348,882, filed November 28, 1994 and
entitled ``Infectious cDNA Clones of Japanese Encephalitis Virus and
Attenuated Strains Japanese Encephalitis Virus Made from the Clones'',
to OraVax, Inc., 230 Albany Street, Cambridge, Massachusetts 02139.
Rights to this invention are owned by the United States Government as
represented by the Secretary of the Army.


Federal Register: June 21, 1995 (Volume 60, Number 119)]


from Federal Register: May 3, 1996 (Volume 61, Number 87, Page
19910] ]Availability for
Non-Exclusive, Exclusive, or Partially Exclusive Licensing of U.S.
Patent Application Concerning A Vaccine Against Gram-
Negative Bacterial Infections






549 The Phase 1 award, covering the
first 8 months of work is for $263K. Following successful completion
of Phase 1, Phase 2 of the grant will be funded at a level of $2.7M
for up to two years. The Fast-Track grant is expected to cover the
costs of research and development, including initial human clinical






554 Meanwhile Peptide made a
deal with Medeva on 23 January 1997, a firm thatw as subsequently
acquired by Celltech in 1999.






The contract has a value of more than $51 million in the first year,
FBI officials

said. About $100 million has been collected for the program from previous

funding approvals, and the Bush administration has requested a $75 million

increase for the program — to $95 million — for fiscal 2002.












Hadron has long been linked with the CIA. The links include charges
by many former government officials, including the late former
Attorney General Elliot Richardson, that the company's former
President, Earl Brian, illegally procured a database system called
PROMIS (Prosecutors' Management Information System) from Inslaw, Inc.
and used his connections to the CIA and Israeli intelligence to
illegally distribute the software to various foreign governments.


On 16 January 200,1 Sterling Philipps was named the CEO and Jon Stout
became the Chairman of Hadron Inc. Mr. Phillips held
senior management positions with Federal Data Corporation, in both the
Science and Engineering, and Corporate Marketing Groups. Previously,
he was the Chief Operating Officer of TRI-COR Industries, Inc. and
served as President of Business Development for Computer Sciences
Corporation. He has led management teams responsible for acquisitions
in several of his former positions. Mr. Phillips also held senior
national and international marketing positions with IBM for nearly
twenty years.


Founded in 1964, Hadron offers systems integration, software
development and engineering services. Its customers include the
Federal Aviation Administration and intelligence agencies as well as
Northrop Grumman Corp., Los Angeles, and Johns Hopkins University of
Baltimore. Northrop Grumman and Johns Hopkins University's Applied
Physics Laboratory are Hadron's largest customers, accounting for more
than 50 percent of the company's 1998 revenue of $21 million.

Hadron started its buying spree Dec. 21, 1998, with the $1.6 million
purchase of Vail Research and Technology Corp. of Annandale, Va.
Hadron also acquired Avenue Technologies, Inc.

Hadron is a leading information, management and technical services
corporation, providing a broad range of technical services to
businesses and federal government agencies through its subsidiaries
Avenue Technologies, Inc., Engineering & Information Services, Inc.,
SyCom Services, Inc. and Vail Research and Technology Corporation.
Hadron specializes in the areas of trusted/secure computer systems,
weapons systems analysis and support (including intelligent weapons
systems and biowarfare defense), and computer systems support. Hadron
can be found on the Internet at



Upon the successful completion of these investigative efforts, Hadron
Advanced Biosystems intends either to license its technology to, or
seek a joint venture with, a partner to complete the necessary
clinical trials, regulatory approvals, and the development,
manufacturing, and marketing of any future products which might arise
from these efforts





The fact that these Battelle agents and affiliated agencies gained
financially as a result of the anthrax mailings and public fright fits
the parameters of a conspiracy to commit military-industrial sabotage,
terrorism, and serial homicide approaching economic genocide.



The fact that these Battelle agents and affiliated agencies gained
financially as a result of the anthrax mailings and public fright fits
the parameters of a conspiracy to commit military-industrial sabotage,
terrorism, and serial homicide approaching economic genocide.


In the mid 1980s, it was found that its Anthrax vaccine was less
effective against the Ames strain than against the Vullom strain used
by the USSR. So further testing was necessary with the virulent
version of the Ames strain on guinea pigs, mice and monkeys. Like
Porton, MBPI got specimens of the virulent strain. (In November 2001,
an environmental assessment report of its planned laboratory
renovations was found in the Kabul house of a Pakistani scientist by
US intelligence, suggesting its facility was of interest to foreign


In the mid 1980s, it was found that its Anthrax vaccine was less
effective against the Ames strain than against the Vullom strain used
by the USSR. So further testing was necessary with the virulent
version of the Ames strain on guinea pigs, mice and monkeys. Like
Porton, MBPI got specimens of the virulent strain. (In November 2001,
an environmental assessment report of its planned laboratory
renovations was found in the Kabul house of a Pakistani scientist by
US intelligence, suggesting its facility was of interest to foreign







588 Other
biodefense stocks riding the wave of Homeland Defense funding include
Eden, a company working on a drug targeting the acute effects of
radiation injury, and Aethlon Medical (OTCBB: AEMD) with its
Hemopurifier™ treatment for drug and vaccine resistant bioweapons









RE General Dynamics and TRW scandals.












"He understands the needs of the [military] services and has a feel
for technology issues in a practical sense," said Jack Pellicci, a
retired Army brigadier general who serves as Oracle's group vice
president for business development in its Government, Education,
Health and Aerospace/Defense division.









617 Biosystems (ABS)
conducts research and development of medical defenses against, and
treatment of, biological weapons as well as new products with the
potential to prevent or treat infectious disease.

ABS also provides consulting services to defense, intelligence and
anti-terrorist agencies in the analysis of biological threats on the
battlefield or from terrorists. ABS scientists 227 have extensive
experience and broadly recognized scientific leadership in biological
agent research, immunology, molecular biology and genetic engineering.
In addition to its initial contracts with the Defense Advanced
Projects Agency (DARPA), the United States Army Medical Research
Institute for Infectious Diseases (USAMRIID) and the National
Institute of Health (NIH), ABS is exploring new business opportunities
with other agencies and corporations. In support of these efforts,
alliances have been formed with research institutions such as George
Mason University, the University of Alabama (Birmingham) and Southern
Research Institute. 618 619 620
621 For example, Daniel R Omstead began in the pharmaceutical industry
at Ortho Pharmaceutical Corporation and at the R.W. Johnson
Pharmaceutical Research Institute, both divisions of Johnson and
Johnson and at Merck Sharpe and Dohme Research Laboratories, a
division Merck and Company, Inc. He then went on to become President
and CEO of Reprogenesis, Inc. a private development stage biotech
company developing therapies in the field of regenerative medicine. In
2000, Reprogenesis was merged with two other biotech companies to form
Curis, Inc. Then he became CEO of HQCM a pharmaceuticals investment
capital fir which also employs former Secretary of Defence, Perry. 622 623
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. 624 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. 625
Dennis K. Berman, "Before Telecom Bubble Burst, Some Insiders Sold Out
Stakes", Wall Street Journal, 11 August 2002.
626 HEAnet timeline.












637 638



643 644


647 Staff, "Level 3 Acquires Corporate Software," xSP,
February 25, 2002.



650 651

Stephen Lawson, "Level 3 to buy bankrupt Genuity's assets," IDG News
Service, 11/27/02.


Carolyn Duffy Marsan, "Level 3 acquires VoIP start-up," Network World
ISP News Report Newsletter, 09/08/03.


"Level 3 Signs New Network Services Agreements with ntl," UK Trade and
Investment News.

"In brief: Level 3 inks $337 IP VPN deal,"Network World, 10/18/04



Colin C. Haley, "Level 3 Dialing Up for Dollars," xSP, October 1,
2004. 657


Cogent Communications.







665 666

667 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.



670 671,1014,sid%253D2834%2526cid%253D27303


Our subset is actually based on two lists. From 1997-2002. Forbes had
a list of top 500 international firms so AT&T which was in the US list
was not included in the international list. In 2004 Forbes expanded
their list to include the top 2000 firms in both the US and
internationally. When the list was consulted no figures were available
for 2003 hence its absence in figure 8.

673 674





Frontier was formerly known as Rochester Telephone, with a long
history as the "Bell" company for part of upstate New York.

679 680,1281,1004_archive,00.html



684 685












697 698

699 700

702,39024661,11033890,00.htm 703

704 705





710 For a handy
history of cables,


712 713 For an idea
of AT&T's cables and their costs



It was co-founded by Dr. David Lee who remained as president and CEO
until early 2000 when he founded Clarity Partners LP.











726 727



From 11 October 2000 to 3 October 2001 Thomas Casey was briefly CEO.


Boeing purchases some global network services from AT& T, but uses
SITA (now Equant) and Sprint as its primary international services
providers; (2) Compaq buys some global network services from AT& T and
C& W, but uses MCI as its major supplier; and (3) Exxon purchases
global network services from AT& T, but uses Global One as its primary
international carrier. Thus, we clarify that global seamless services
can be offered by a single source or multiple sources. Second, we
clarify that an "integrated international network," as that phrase is
used in the definition of global seamless services, includes a network
with either global or regional coverage. We make this modification
because global MNCs are increasingly using multiple vendors, with each
providing service in a particular geographic region, when purchasing
telecommunications services. We reject C& W's argument that we should
define global seamless services more narrowly. C&W argues that global
MNCs have no financial incentive to purchase global seamless services
from any carrier that does not have a global facilities-based network
or offer "one stop shopping." We find there is no evidence in the
record to support this view. In fact, the record shows that, contrary
to C&W's claim, several large global MNCs are purchasing global
seamless services from carriers that do not own facilities-based
global networks or offer "one stop shopping." Thus, we conclude that a
carrier may be a provider of global seamless services even if it does
not own a facilities-based global network or offer "one stop shopping"
on a global scale.



AT& T Corp., Transferee, CS Docket No. 98-178 (Feb. 18, 1999). One
date given is

19 February 1999 although the top of the document bears the date 29
October 1999.

FurchtGott Koch's deregulation views are clearly evident in the
document: Dangerous too is the Commission's intrusion into other
nation's regulatory bailiwicks. The decision notes that "it is not
clear that Oftel's non-
discrimination policy is sufficient to prevent BT from manipulating
the deployment of particular technologies. . . ." The Commission
should reject the temptation to evaluate the efficacy of others'
regulatory regimes and instead focus on the impact of those policies
on the legitimate considerations of this agency in evaluating




For another discussion of the telecoms



Theresa Foley, "Satellite companies: gasping for oxygen?,"
Communications International, 16 April 2001.


Theresa Foley, "Satellite Surge," Communications International, 24
September 2001.




For a brief history


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.



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).





752 The Ellipso team is
also involved in the development of the Virtual Geo broadband
satellite system that will replicate the characteristics of satellites
in geostationary orbit, efficiently reusing valuable spectrum without



"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 service."






760 761



765 766






Two of the key employees from Loral went off to found L3
Communications: As a result, Lanza and LaPenta, in conjunction with
Lehman Brothers and Lockheed Martin decided to form a mezzanine
company -L-3 Communications -
that would be the supplier of choice for prime contractors. In
establishing the company, several advanced electronics businesses were
purchased that were part of the Lockheed Martin, Loral Corporation
merger that occurred in 1996. Also purchased from Lockheed Martin was
a division located in Camden, NJ that had been part of GE.




Loring Wirbel, "Loral bankrupt, Boeing exits commercial satellites,"
EE Times, July

16, 2003 (8:20 a.m. EST)



Cf. note above and
"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."

On 1 November 2004 the same Bernard l. Schwartz of Loral was involved
in another

billion dollar bankruptcy.


Aurora Capital Group has agreed to acquire K&F Industries Inc. for
$1.06 billion in cash (approx. $350 million in equity and $750 million
in debt) from Bernard L. Schwartz and Lehman Brothers Merchant
Banking. The deal is expected to close next month. K&F is a New
York-based manufacturer of aircraft wheels, brakes, fuel tanks and
anti-skid systems for commercial, general aviation and military



778 779



Anna Sulisz, Intelsat-Loral merge approved by FCC, Intelsat, 2004-02-12

20:10:49 Source: Intelsat. 782

783 784

Among the rumored suitors for Intelsat, which is based in Bermuda but has

offices in Washington, are private equity firms Apollo Management LP, Thomas

H. Lee Partners, Carlyle Group, Bain Capital LLC and Madison Dearborn
Partners LLC. 785

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.




789 790






797 AT&T had invested $137.5
million for a 2.5 percent equity stake in DirecTV and had options to
purchase up to 27.5 percent more. With the termination of the
agreement, which began in March 1996, AT&T is selling back its 2.5
percent stake for $161.8 million, and the remaining equity options
have been canceled.


DIRECTV gains 11 transponders at the 119 degrees West longitude slot,
and two satellites (one to be launched as a back up for DIRECTV or
other Hughes-related businesses) from Tempo Satellite Inc. This gives
DIRECTV high-power DBS frequencies at each of the three orbital slots
that provide full coverage of the continental United States: 101, 110,
and now the 119 degrees West longitude slot. 799


PRIMESTAR announced that it had ended plans to create a joint
high-power DBS operation at 110 degrees West with the Rupert
Murdoch-owned ASkyB Corporation. The company said that it will
concentrate on expansion of its existing medium-power DBS business
while also moving forward to launch a differentiated service using the
11 high-
power DBS channels at 119 degrees West which are owned by TEMPO.

801 Under the agreement:
American Sky Broadcasting (ASkyB) owns 1 billion dollars of non-voting
shares and will provide some satellites. ASkyB is owned at 80% by News
Corp. -Ruppert Murdoch's company-and at 20% by WorldCom.


For more details on this complex proposed merger, Cf. also the connections with HEC

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.




The main directors were: 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.





These included Rep.Barney Frank (House of Representatives); Ralph
Degennaro (Taxpayers for Common Sense); John Fairbanks (Business
Leaders for Sensible Priorities); Dr. Lawrence Kolb (Council on
Foreign Relations) and Greg Speeter (Natonal Priorities Project) .


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.



DIRECTV gains 11 transponders at the 119 degrees West longitude slot,
and two satellites (one to be launched as a back up for DIRECTV or
other Hughes-related businesses) from Tempo Satellite Inc. This gives
DIRECTV high-power DBS frequencies at each of the three orbital slots
that provide full coverage of the continental United States: 101, 110,
and now the 119 degrees West longitude slot.


815 Relizon
parent buys satellite operator, June 30, 2004.

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 Canada.

816 817


Loring Wirbel, "Loral bankrupt, Boeing exits commercial satellites,"
EE Times, July 16, 2003 (8:20 a.m. EST) URL:

819 820






826 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) 2) ?msg_id=007uDJ


For an insightful view of how others are looking differently Kishore
Mahburani, Can Asians Think ? Understanding the Divide between East
and West, Southrovalton, Vermont: Steerforth Press, 2002.


E.Valentia Straiton, The Celestial Ship of the North (1927). Reprint:
Kessinger Publishing. p. 51 (ISBN I-56459-265-0)


Elisabeth Becker, "U.S. suspends some military aid over international
court," The New York Times, 2 July 2003.

831 Above the Law: Secret Deals, Political Fixes and Other
Misadventures of the U.S. Department of Justice. New York: Scribner,

Cf.; 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.






837 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

The Gonzalez choice. The Barre Montpellier Times Argus, November 13, 2004
cf. 839
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 Empire:

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. [].

Cf. 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
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, which will have branches for art and
aesthetics (Berlin); humanities (Bologna); languages and literature
(Madrid) as well as internet and Philosophy (Paris) and go far beyond
the scope of this modest paper. For a study of some of the larger
consequences of the Internet see the author's Understanding New Media
I: Augmented Knowledge and Culture, Calgary: Univeristy of Calgary
Press, 2005 (in press). See also the website at



Traditionally this was linked with faith in the religious sense along
with the other two cardinal virtues of love and hope.







848 849


IT Vibes.


Denise Pappalardo and David Rohde, "Cable & Wireless nabs MCI's 'Net
backbone for $625 million," Network World Fusion, 6/1/98.



854 855 MCI Wins $250 Million
COVANET Contract, 26 November 2003.


Ciaran Buckley, "MCI upbeat despite $3.4bn loss," Electric News,
Published Friday 5th November 2004 12:37 GMT.


Grant Gross, "Time Warner partners with MCI, Sprint on IP telephony,"
IDG News Service. 08 December 2003.

Interestingly enough Alltel, also has acquired its lines from AT&T.

859 860


Based on number of company-owned global PoPs.








868 869






876 877 FCC
Pubic Notice DA 98-2412, November 27, 1998.

881 dailyarchives.asp?ArticleID=30627


883 It became
nationalized in 1950 and privatized in 1981, which cleared the way for
a licence for an alternative telecommunications network (Mercury
Communications Ltd).


1 nautical mile = 1,852 metres (1.85 km) 1 mile = 1,609.344 metres (1.61 km)



IT Vibes.


Denise Pappalardo and David Rohde, "Cable & Wireless nabs MCI's 'Net
backbone for $625 million," Network World Fusion, 6/1/98. 888



IT Vibes.


IT Vibes. 891 For a
further link with Deloitte
892 Cable &Wireless.


For an overview of some of the complex buyouts, cf. Telecom Chronicle
Mergers and acquisitions:1995 – 2001. See also:
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.














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.


Michael Geist," US extends its hegemony over the Net," Toronto Star, 3
June 2003.



With Prodi's reforms the number of directorates was halved. Education
(number 10) and Culture (22) were subsequently merged.

909 The "Clash of
Civilizations" theory, developed by Harvard professor-turned President
Jimmy Carter's National Security Adviser Zbigniew Brzezinski and his
protégés, including Harvard Prof. Samuel Huntington, defined the Arab
and Islamic world as an "arc of crisis" from the Middle East to the
Islamic countries of Central Asia in the then-Soviet Union. Brzezinski
wanted to use the "Islamic card" against the Soviet Union, and in so
doing, began the policy of promoting Islamic fundamentalists against
moderate and pro-Western Arab and Islamic governments. After the end
of the Cold War, the Brzezinski/Huntington crowd updated their "arc of
crisis," declaring that the Islamic religion is the enemy, in a new
war in which religions, rather than political systems, inevitably
battle each other. However, trained by British and U.S. special
intelligence services and the CIA, and armed by Israeli military
networks, the very terrorist drug-runners in the Islamic world who
were launched by Brzezinski and "adopted" by the Iran-Contra networks
run by Lt. Col. Oliver North, under the elder George Bush's Executive
Order 12333, have become the main suspects in terrorist attacks
against the United States.





Some go further to link these efforts specifically with a Project
Shekinah. Others point to a striking number of links between the US
administration, especially in the defence area, and the Jewish
Institute for National Security Affairs (JINSA) and the Mossud.;

914 915
. On 12 June 2002, Paul Bremer
left his position with Kissinger Associates to become Chairman and
Chief Executive Officer of the Crisis Consulting Practice, a branch of
Marsh Inc. He was subsequently appointed as


the US "governor" of Iraq.Some claimed that these appointments were
mainly to assure the interests of companies such as Halliburton and
private equity groups such as Carlyle:


Ibid. This was in 2003 in an interview with a reporter from the Toronto Star.




-Rebuilding America's Defenses, p. 51, PNAC Report, September 2000.



S 922

Ibid. Cf. Jean-Charles Brisard and Guillaume Dasquie, Bin Laden, la
Verite Interdite. Translated into English as: Forbidden Truth : U.S.
-Taliban Secret Oil Diplomacy and the Failed Hunt for Bin Laden, New
York: Avalon Books, 2002. 923 Israeli Journalist Ari Shavit. Cited by
Ian Gurney, The Prince Of Darkness, 2-7-4.



James Woolsey, Tenemos que desmantelar 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? (8/3/02)




William Kristol, the head of PNAC writes enthusiastically on these themes.


Timeline of Competition between Unocal and Bridas for the Afghanistan Pipeline.



"Former federal war crimes prosecutor John Loftus already claims
knowledge of paperwork confirming secret dealings between Enron and
the Taliban" and "also claims that Cheney instructed the FBI in
January 2001 to back-off investigations of al-Qaeda in order to
protect Enron's interest in the development of a gas pipeline through
Afghanistan. That pipeline was originally due to be built by Unocal,
with no less than Henry Kissinger himself hired by them to advise on
the project."


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, is also
closely linked with the wars in Afghanistan and Iraq.


This was at site Interestingly enough it
is now to be found under October 11:


935; Ken Silverstein and Chuck
Neubauer, "The World; Consulting and Policy Overlap; Advisor Perle has
given seminars on ways to profit from possible conflicts discussed by
defense board he sits on," Los Angeles Times, 7 May, 2003. pg. A.1



938 939



942 James Bamford, Body of
Secrets: Anatomy of the Ultra-Secret National Security Agency from the
Cold War through the Dawn of a New Century, New York: Doubleday, 2001.
721 pages.



A generation later there is a Paul McNulty who is US Attorney and a
John McNulty who the CEO of Secure Computing:;




948 For other
motives concerning David Kelly's demise such as his plan to write a
book"which would cover themes such as the ethics of biowarfare and the
role of corporations. It is striking that an
army serviceman, James Kelly died of experiments with biological
warfare at Porton Down in 1953. This is also the year that Dr. Frank
Olson died of his "suicide. On the
dangers of new biological warfare methods: Michael Crowley, "Disease
by Design: De-mystifying the Biological Weapons Debate," Basic
Research Report, Number 2001.2, November 2001

950 Ibid. 951

For a brief biography of the Vice President see the carefully
documented report by the Canadian Broadcasting Company:



954 955
Déjà à partir de 1937 les Japonais avaient construit un
laboratoire dans le camp 731 installé en Mandchourie. Son directeur
était Ishii Shiro, chirurgien militaire de profession. Les tests ont
été réalisés sur des animaux mais aussi sur des milliers de
prisonniers chinois, russes et même américains. Ils ont inoculé des
virus, des bactéries de maladies infectieuses, même par le biais
d'insectes, afin de vérifier la diversité des réponses propres à
chaque race. Ce camp et toutes les installations ont été détruits par
les Japonais en août 1945, lorsque les Russes sont entrés en
Mandchourie. Une partie des savants japonais de ce camp et les
résultats de leurs travaux ont été récupérés par les Américains après
la guerre. Ces derniers ont été accusés par les Chinois d'avoirs
largué sur la Corée du Nord des insectes , comme des puces, des
moustiques, des mouches, porteurs de maladie, capables de provoquer
des épidémies. Or des documents secrets-
publiés depuis-garantissent l'impunité à des chercheurs japonais pour
service rendu.


Burgess and Purkitt state that genetic engineering research was also a
component of Project Coast and led to the research of lethal bacterial
agents which would affect only non-white people. Cf.

957 Des
révélations récentes nous apprennent que l'état d'Israël s'est livré à
des recherches génétiques permettant le ciblage ethnique. Les
chercheurs israéliens ont participé et se sont basés sur les études
génétiques réalisées en Afrique du Sud. Daan Goosen, directeur d'un
laboratoire de guerre bactériologique et chimique, avait reçu l'ordre
à partir de 1980 de mettre au point une arme pigmentaire, capable de
tuer uniquement les individus ayant une peau noire. Il révèle aussi
qu'ils avaient reçu la visite de chercheurs israéliens. Ces derniers
font leurs recherches dans le laboratoire ultra-secret de Nes Tziyona
situé à proximité de Tel Aviv. " (" Les armes de l'ombre " -Marc
Filterman ; édition Carnot) L'affirmation selon laquelle l'Afrique du
Sud se livrait, sous le régime de l'Apartheid, à des recherches
génocidaires est correcte. Elle a été confirmée par le premier
intéressé, le Docteur Wouter Basson, lors de son procès ayant débuté
au Tribunal de Prétoria en octobre 1999 (suite à des révélations
faites pendant les auditions de la Commission " Vérité et
Réconciliation ", qui avait pour mission politique de faire la lumière
sur l'activité du régime de l'Apartheid). Outre que de meurtre, il a
été inculpé aussi d'escroquerie et de trafic de drogue. For links with
Larry Ford (a founder of Biofem and friend of Larry Myers of Bioport)
who committed suicide.


959 Des
révélations récentes nous apprennent que l'état d'Israël s'est livré à
des recherches génétiques permettant le ciblage ethnique. Les
chercheurs israéliens ont participé et se sont basés sur les études
génétiques réalisées en Afrique du Sud. Daan Goosen, directeur d'un
laboratoire de guerre bactériologique et chimique, avait reçu l'ordre
à partir de 1980 de mettre au point une arme pigmentaire, capable de
tuer uniquement les individus ayant une peau noire. Il révèle aussi
qu'ils avaient reçu la visite de chercheurs israéliens. Ces derniers
font leurs recherches dans le laboratoire ultra-secret de Nes Tziyona
situé à proximité de Tel Aviv. " (" Les armes de l'ombre " -Marc
Filterman ; édition Carnot) L'affirmation selon laquelle l'Afrique du
Sud se livrait, sous le régime de l'Apartheid, à des recherches
génocidaires est correcte. Elle a été confirmée par le premier
intéressé, le Docteur Wouter Basson, lors de son procès ayant débuté
au Tribunal de Prétoria en octobre 1999 (suite à des révélations
faites pendant les auditions de la Commission " Vérité et
Réconciliation ", qui avait pour mission politique de faire la lumière
sur l'activité du régime de l'Apartheid). Outre que de meurtre, il a
été inculpé aussi d'escroquerie et de trafic de drogue.







966 Pasechnik's death is
announced in the US by Dr. Christopher Davis, who states that the
cause of death was a stroke. Davis is the former member of British
intelligence MI6 who had initially de-briefed Dr. Pasechnik, with the
help of Dr. David Kelly, at the time of his defection. Davis says he
left the intelligence service in 1996

967 8 10 03






972 She
returned to this on 9 May 2002, by which time she reported that she
was under surveillance


The fact that these Battelle agents and affiliated agencies gained
financially as a result of the anthrax mailings and public fright fits
the parameters of a conspiracy to commit military-industrial sabotage,
terrorism, and serial homicide approaching economic genocide.
Bioport's principal investor was Saudi business man Fuad El-Hibri-a
close friend of the bin Laden family, and a previous merger and
acquisitions manager for the Rockefellerlinked Citigroup in New York.

974 For
more details with respect to the Michigan Biologic dimension


The take-over of MBPI had been organized by the same Fuad El-Hibri who
took over Porton in the UK, . He used a labyrinth of corporations,
including an entity called Intervac, whose controlling shareholder was
his I and F Holdings N.V in the Netherlands-
Antilles. To facilitate the deal, El-Hibri applied for (and received)
US citizenship and gave a valuable stake in Intervac to Admiral
William J. Crowe Jr, who had headed the Joint Chief of staff during
the Clinton Administration. As a result of these maneuvers, I&F NV—
Ibraham and Fuad and their Antillian associates— had a controlling
stake in two private labs that had the only vaccine for Anthrax. Their
facilities also may have had the only specimens of the virulent
version of the Ames strain outside of government repositories. At
least one of these facilities, Porton, moreover, had it in the dry
powder form used in the attack on the US Senate Office Building.

976 977 Ibid.:

Their facilities also may have had the only specimens of the virulent
version of the Ames strain outside of government repositories. At
least one of these facilities, Porton, moreover, had it in the dry
powder form used in the attack on the US Senate Office Building.

This is also the same Admiral Crowe who was involved in less than
accurate accounts of

Civilian Iran Air Flight 655 which was shot down by the USS Vincnnes
killing 290 civilians. docs/ir655-nightline-19920701.html













-Rebuilding America's Defenses, p. 51, PNAC Report, September 2000.

989 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.

990 "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."

991 2002/7th_ICCRTS/Tracks/pdf/125.pdf

992 993


Such as Peter Jennings on the ABC Nightly News (September 26, 2001)


Unreported by the media was the grave likelihood that
given Cipro's myriad side effects, and largely untested status, more
people had died from taking the drug than the handful who had
succumbed from the anthrax mailings.

996 Cf. Two of
the letters were postmarked September 18, 2001 in Trenton, one of
which was sent to the New York Post …where it was handled by several
staff members, and the other to Tom Brokaw of NBC, opened September
19-25 but not found until October 12, 2001996 The first envelopes in
the anthrax mailings were postmarked 18 September and 9 October
2001.996 There were attempts to
link this event with a number of anthrax incidents (attacks) until it
became clear that the source was a military lab (almost certainly in
the US) and that recipients such as Senator Tom Daschle were at odds
with the government in power.

http://www.hopkins- It is noteworthy
that Alibek, President and CEO of Advanced Biosystems Inc. (ABS), who
used to work in Russia insisted that the anthrax was produced by a
lone individual whereas the UN experts insisted that it was of a high
quality that could only have been produced in a government lab. Chris Mooney, The
Secret War on Tom Daschle," The American Prospect, Web Exclusive:




According to New York Times reporters William Broad and Judith
Miller,(37) "seven scientists endorsed the stockpile…." These included
"two men who stood to gain financially from the decision. . . ." These
men included Dr. Monath and Dr. J. Craig Venter, president of The
Institute for Genomic Research near Washington working on anthrax
genetics. "The apparent consensus on acquiring vaccines masked deep
divisions among scientists and military officials,"


According to New York Times reporters William Broad and Judith
Miller,(37) "seven scientists endorsed the stockpile…." These included
"two men who stood to gain financially from the decision. . . ." These
men included Dr. Monath and Dr. J. Craig Venter, president of The
Institute for Genomic Research near Washington working on anthrax
genetics. "The apparent consensus on acquiring vaccines masked deep
divisions among scientists and military officials,"





1004 appear to
have been induced to commit suicide, by remote mind-control.
Scientists and their expertise are expendable to prevent the real
purpose of HAARP and ELF's being revealed or the capabilities of
nano-technology and computer-controlled aircraft, (and cars) but
micro-biologists are the most recent target of 'commercial espionage'
which implies bio-terror is high on the agenda of the NWO. That is why
vaccines and chemtrails, dispersing biological agents, are a deadly
combination and a threat to the human race, a potential 'doomsday
weapon.' A Global psycho-electronic mind control system is possible by
injecting micro-
electronic robots, the size of bacteria, inserted through vaccines,
into the blood-
stream, which can perform tasks within the human body, (like Fantastic
Voyage.) These nano-robots can travel through capilliaries without
rejection by the immune system, being made from biological material,
to carry out internal life-saving repairs or act as body-wreckers and
no-one would know how or why you died. Travelling into your brain by
remote control, they could interfere with the cerebral cortex and
instill feelings of 'love for Big Brother,' or any other impulses the
'operator' desires. Superdomes for sport with huge antenna, (like the
British Dome) presently being built in Germany, Japan, Korea and all
over Africa, near military installations, will act as computer
correlation centres with metal discs and power lines for ELF
transmitter systems, to link up (through chemtrails) with HAARP and
satellites for mass population control and 'mood' enhancement, but
athletic stadiums can also be requisitioned as arenas for detention
and quarantine or even public executions, like the football pitch in


1006 Other sources insist
that he died on 23 November Pasechnik's death is
announced in the US by Dr. Christopher Davis, who states that the
cause of death was a stroke. Davis is the former member of British
intelligence MI6 who had initially de-briefed Dr. Pasechnik, with the
help of Dr. David Kelly, at the time of his


defection. Davis says he left the intelligence service in 1996.


Yet another report says that on Nov. 16, 2001, Pasechnik was found
dead in bed -10 days after he and Wiley had met in Boston to discuss
the latest developments in DNA sequencing.

1008 DynCorp and Hadron, both defense
contractors connected to classified research programs on communicable
diseases, have also been linked to a software program known as PROMIS,
which may have helped identify and target the victims.




1012 Tous travaillaient
sur les séquences de l'ADN. Leur recherches visaient à développer des
produits pharmaceutiques capables de combattre les agents pathogènes
en se basant sur le profil génétique de ces derniers. Leur travail
aspirait également à développer des produits pharmaceutiques qui
ouvrent en coopération avec le code génétique d'une personne donnée.

1013 En faisant cela, il
risquaient de mettre à mal tout le business des vaccins, tant à cour
au clan Bush, au travers du Carlyle Group.


If an unaltered pathogen were released, such as a virulent strain of
Ebola or other level 4 bioweapon, those who release it would also fall
victim to it. A type of MAD, mutually assured destruction, has thus
far prevented the release of Level 4 pathogens. However, if there was
a bioweapon that would NOT kill those who release it, then we would
see a worldwide pandemic with a protected group left unaffected by the
pandemic or "plague." 1015




In real life, there also was a company called Biocyte, which worked on
stem cells and has since changed its name


Dr. Thomas Monath, Chief Scientific Officer of Acambis, was Colonel
and Chief of the

Virology Division of the US Army Medical Research Institute of
Infectious Disease.

During almost 20 years as Director of the Centers for Disease Control
and Prevention's

Division of Vector-Borne Infectious Diseases, he was instrumental in
building the

division into a key centre for research into arthropod-borne viruses
such as yellow fever.


The ChimeriVax(TM) technology platform is a method for development of
new vaccines against viruses in the family Flaviviridae. The
technology utilizes a molecular clone of yellow fever 17D, one of the
safest and most effective vaccines ever developed, as the foundation
for construction of new live, attenuated vaccines against related
Flaviviruses. To generate a new vaccine, the genes for the viral
envelope of yellow fever 17D virus are replaced with the corresponding
genes of the target virus, for example West Nile, creating a yellow
fever-West Nile hybrid or 'chimera'. The new virus contains West Nile
envelope proteins required for stimulating immunity but retains the
replicative machinery of yellow fever 17D vaccine virus.

The ChimeriVax(TM) technology is being developed in several product
programmes including vaccines against dengue fever, Japanese
encephalitis, tick-borne encephalitis and hepatitis C. Peptide's most
advanced programme using this technology is to develop a vaccine
against Japanese encephalitis, the leading cause of viral infection of
the central nervous system in Asia. Phase I trials are scheduled to
commence shortly. 1021 http://www.doug-


Bill Joy, "Why the Future Doesn't Need Us," Wired magazine, April
2000. Joy's article was a reply to Freeman Dyson's article: The Future
Needs Us.



Not only does its financial strength curry support from Government,
but it is likely to be heavily relied upon in the case of biological
warfare. Unfortunately, the primary motivation of this industry
appears to have shifted from global Public Health concerns to simple
profit motivation. An enormous price differential exists between
charges for pediatric vaccines in Westernized countries compared to
the developing world. Part of this differential is attributed to
refinements in vaccine production, for example use of more purified
bacteria products, or the use of inactivated versus live but weakened
polio virus. Still the differences are staggering, for example US$0.07
versus US$10.65 for diphtheria-tetanus-
pertussis (DTP) vaccine and US$0.10 versus US$8.25 for polio vaccine.
Far more money is to be made vaccinating children from affluent
countries, as well as international travelers from these countries,
than addressing the world's health needs. The multi-national
Pharmaceutical Industry has essentially withdrawn from servicing the
developing world leaving this responsibility and low profit margin to
a Developing Country Vaccine Manufacturers Network with facilities in
countries such as India , Iran and Thailand .

Compulsory polio vaccination was legislated in the late 1950's to help
reduce stockpiles of relatively ineffective lots of inactivated polio

The public is justifiably skeptical of the willingness of Government
officials to request a full accounting of past and present vaccine
manufacturing practices.


See A free-lance
journalist, writing in Rolling Stone magazine, advanced the theory
that AIDS was transmitted to humans in the late 1950s through a batch
of experimental polio vaccine prepared in monkey kidneys and sprayed
into the mouths of hundreds of thousands of people in what was then
the Belgian Congo. And a New Hampshire attorney, writing in The
Lancet, a British medical journal, suggested that contaminated polio
vaccine may have transmitted HIV to some gay men in the United States
in the early 1970s. The attorney said that some gay men were
prescribed multiple doses of the oral vaccine every month for the
treatment of recurrent herpes infections. 1025




It demonstrates proof of a strong link between the U.S. outbreak of
AIDS, and hepatitis studies that were performed on gay males, starting
in the late 1970s. The analysis refutes explanations that attribute
the connection simply to sexual risk behavior on the part of the study

The analysis also presents evidence suggesting that HIV infections
occurring in the studies were more likely to have been intentional
rather than accidental. This raises the question of whether the men in
these studies might have been used as guinea pigs for covert
experimentation, or whether a sexually-transmitted epidemic might have
been deliberately induced, as a means to rid society of
"undesirables". Regardless of whether the virus itself came into
existence naturally, its initial spread was clearly unnatural.



Infectious agents and cancer.

Scientists have since found that intentional infection of some
laboratory animals, such as hamsters, with SV40 causes mesotheliomas
to develop. 1030

1031 -


1033 docs/ir655-nightline-19920701.html
1034 "CIA worked in tandem with Pak to create Taliban" Times of India,
7 March 2001. 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. ?article_id=824.


1038 For a related list:

Edward Rudnic, CEO of Advancis. "Our question was 'If you change the
way you dose antibiotics, will the bacteria behave differently?' "







Michael Bigham a co-founder of Gilead was the founder of these.


Crucell, which has links with Chiron, claims "Our current vaccine
candidates against West Nile virus, Influenza, Malaria and Ebola,
which are in various stages of pre-clinical development, all have
considerable potential to improve human health."


(formerly Texas Biotechnology Corporation)






Maxygen . Our partners include world-leading pharmaceutical and
biotechnology companies such as Roche, Aventis Pasteur, Intermune and
ALK-Abelló, among others.







1060 Originally spun
out in 1993, PowderJect Pharmaceuticals is a development-stage drug,
vaccine and diagnostics delivery company specialising in the
needle-free, pain-free infection of drugs, biopharmaceuticals,
conventional and DNA vaccines and diagnostics in dry powder form. In
2003, PowderJect was acquired by Chiron Corporation. 1061



We research and develop biopharmaceutical products based on our
patented DNA delivery technologies for the prevention and treatment of
serious or life-threatening diseases

• Vaccines for use in high-risk populations for infectious disease
targets for which there are significant U.S. needs, • Vaccines for
general pediatric or adult populations for infectious disease
applications for which a challenge model or accepted surrogate marker
are available, and • Cancer vaccines or immunotherapies that
complement our existing programs and core expertise. 1064


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