In a two-column lead, the New York Times announces the Sprint-MCI Worldcom merger, which was hinted at in the papers yesterday. All the papers say the $115 billion deal (the NYT says $108 billion) will be announced today--barring an unlikely last-minute offer from Bell South--and will likely be approved by the FCC. The Washington Post and Los Angeles Times front this story but lead with the largest-ever successful claim against an insurance company--$456 million, which the State Farm Mutual Automobile Insurance Company must pay to millions of clients whose cars lost value when State Farm ordered their mechanics to make repairs with low-cost, generic parts. (It works out to about $100 for each of the policyholders in the "class" of plaintiffs taking action against State Farm.) The plaintiffs argued that the parts were sub-standard, while the insurance industry and some consumer groups argued that using generic parts keeps down premiums. State Farm insures one out of five cars in the U.S., notes the LAT, and the verdict will almost certainly lead to higher industrywide premiums within a few years. If the Illinois county court awards fraud damages, the bill for the company could reach $4 billion.
The new company formed by MCI-Worldcom and Sprint will control about 30 percent of the U.S. long-distance market--second to AT&T's 45 percent--and at $200 billion will be the biggest telecom in the world, says the Wall Street Journal. The merger marks the increasing importance of wireless networks and data-voice integration. (MCI has a large data network, Sprint a large wireless one.) As usual, the papers spice the abstract financial story with corporate intrigue: The code names for Sprint and MCI were "Snow" and "White," the Journal explains--thus the deal became known as "Snow White." (Oooh.) When the "upstart Mississippi" telecom Bell-South made an offer, the company was called "Project Blue." All the stories are sourced to anonymous persons "close to the deal."
The WSJ investigates the ban on cell-phone use during commercial flights and finds that it is not supported by any empirical evidence. The ban, the Journal notes, is actually an FCC rule, not an FAA rule, designed to limit interference with ground-to-ground cell communication. (Air-to-ground signals sometimes override those on the ground.) A 1996 study commissioned by the FAA analyzed a decade's worth of inflight instrument-malfunction reports and could not trace a single incident to a cell phone. Both Airbus and Boeing have bombarded their planes with cell waves and failed to record any interference; Boeing still recommends that phones not be used in the air--but to prevent electronic interference similar to (though slightly stronger than) that of a laptop or CD player. Meanwhile, passengers and pilots on corporate jets use cell phones thousands of times a day without incident, while commercial air passengers must use airline-installed "Airfones" at rates 20 times that of individual cell-phones. The airlines are reported to get 15 percent of this take.
The NYT reports that Microsoft and MIT have announced a joint venture to develop technology for online teaching. Microsoft will initially invest $25 million over five years. What is unusual about this venture in corporate-sponsored R&D, explains the Times, is that this partnership serves the core interests of the university more than those of the corporation. Dismissive scientists are already referring to the new company--called I-Campus--as "MSMIT."
On the Post editorial page, historian Philip Zelikow defends George W. Bush's refusal to denounce Pat Buchanan, as other GOP candidates have done. Zelikow compares Bush's stance to that of Dwight Eisenhower, who in 1952 let his work in NATO speak for itself rather than attack isolationist Robert Taft. "The shouting about Patrick Buchanan's defense of American isolationism in World War II," Zelikow writes, "has deflected attention from the real task: Defeat the ideas, not the man." (Click here to read Slate's "Ballot Box" on Buchanan and the GOP.)
In the Journal, mathematician John Allen Paulos notes that no amount of technological advance will repeal Murphy's Law--hence last week's loss of the Mars Climate Orbiter, which crashed after being fed data in pounds rather than newtons. Increasingly complex human systems, Paulos writes, will never escape the clutches of foolish humans. "To the contrary, it may be that the more complex a gadget is, the more links with quite fallible people are necessary." (To read Paulos' June dispatches in Slate's "Breakfast Table," click here.)
How strong is the nation's economy? So strong, reports the LAT, that many corporate recruiters are doing something unprecedented: hiring liberal-arts graduates. "I don't want to say [graduating liberal-arts students] are wined and dined," says an Ursinus guidance counselor, "but they are taken care of. They come with presents! Day planners and stress balls and fun things that keep the student with that employer's name in mind." Today's Papers still has his Slate baseball cap around here somewhere ...