Salt Lake Tribune | 1999-05-13 | Page 29

C7 The Salt Lake Tribune BUSINESS Thursday, May7, 1999 UTAH BRIEFS CENTERPIECE Low Crop Prices Won’t Trickle to Consumers WASHINGTON — Growers trying to eke outa living amid lag- ging farm economy can expect low prices again this yearfor rice, soy- beans andother crops. But consumers might not find lowerprices for food products and other goods, industry analysts say. “Will the consumerseethe benefit of it?” asked Joe Miller of the American Farm Bureau Federation. “The answer is probably no. The[retail] industry, because of packaging and handling costs they don't tend to lower their prices when the raw commodity prices fall apart.” “It showsthere is a real disconnect in what the actual price of wheator corn is and whatthe consumerpaysforit,” Millersaid. Major cereal makers, for instance, recently announced breakfast cereal price increases of 2.5 percent to 3 percent, even while wheatpricesare at their lowest in years. Congress passed a $6 billion bailout package for farmers last year and lawmakers aretalking about a similar deal in 1999. WASHINGTON — Prices of existing homes rose in most metropolitan areas during the first three monthsof this year. Nationally, the median resale price — meaning half of homes sold for more and half for less — was $131,600 during the JanuaryMarch quarter, up 4.6 percent from the same quartera year earli- er, the National Association of Realtors said Wednesday. By comparison, inflation rose at a 1.7 percent annual rate during 1998 andhaskeptto an even lower 1.5 percent rateso far this year. “The rise in homepricesin all regions has been fueled by a combination of buyers ready to move up to more expensive homes and a growing numberof first-time buy- ers in this favorable economicenvironment,” said James Smith, chief economist for the eS Regulators betting new combinationswill bring lowerprices andbetter service pleted and launched a new Web $$$ “It’s no longer local, long-distance andwireless or even cable; the BY BRYAN GRULEY THE WALLSTREET JOURNAL WASHINGTON — AT&TCorp. buys the nation’s biggest cable-television company and then hurries to buy another huge cable operator. The seven Baby Bells acquire each other real estate group. Summers Seen As Competent Successor to Rubin Former between companiesthat have never competed trol of a fewlarge and powerful companies. But so far, the same government that has tak en Microsoft Corp. to court for alleged anticompetitive behavior has done almost nothing to ane mergermania in telecommunications. offer local phone service, or that the phone companies might delivertelevision Policy-makers are betting that all these combinations will, in time, bring the lower prices and better service expected from the 1996 law that deregulated telecommunications. It’s a gamble that looksriskier all the time, as cable and phone bills keep growing. would jumpintoeach others’ businesses. That hasn't happened, largely becauseit turns out that government-sanctioned monopolies — the Bells and the cable companies — aren’t easily weaned from their ways. Regulatorsalsothink that these deals, despite Bells using the cable networksthat it acquired y? der AT&T's proposed $58 billion acquisition of MediaOne Group Inc. With that plan, coming on the heels of its purchase of cable giant Tele-Communications Inc., AT&T could deliv- telecommunicationspolicy. Washington wouldn't stand for two companies dominating most industries. But in telecommunications, a duopolypitting Bell wires er bundles of phone, video and high-speed Internet service to more than half the country’s than the current monopolies. Meantime,poli- a Montana Republican and a key player in against souped-up cable lines looks better tion roseto vast proportionsafter economic gyrations. Rubin was is estimated at $80 million and Sachs and Co. ‘Thesecretary, whose net worth who made $26 million his last year on Wall Street, championed policies that opened upforeign markets and cut thefederal defi cit, leading to a blissful state of empowermentzones to help revi talize cities and made sure law makers included day care and child care when considering we! fare reform low unemployment, higher wages leaves behind hand-picked suc cessors Lawrence Summers and economic growth and a booming heleaves off by helping staunchpanic that was building when the Mexican peso In some ways, paradoxically Rubin's decision to cut and run ‘The issue for the marketis Are we changing a person or tailspin and Russia’s economy nearly collapsed. Republicans as fell, could be a bullish sign for the markets, After all, if Rubin antici the Clinton stock market Rubin furtheredhis reputation Asian markets went into a well as Democrats praised his % @ Foemer owner of Wi service soxkbrokerage firm pow storey. (an pushy Petp you recover wenenent ome Comutagon No Loa Too Seat Randall K u Aorney at Law 373-8726 992-1072 oO Salt LakeCitylawfirm Kirton & aren't likely to stop theoverall deal The Salt Lake Tribune is a wholly owned subsidiary of AT&T but is operated by an independent management company com- posed primarily offormer owners andofficers of the Kearns-Tribune Corp. Qo Camco Construction has gone 365 days without an accident serious enough for an employee to lose one or more days of work. Camcobuilds and renovates com- mer andindustrial space along the Wi atch Front. Oo Duro-Last Roofing Inc. of Grants Pass, Ore., has recognized Broken ArrowInc. of Lake Point, Utah, as a master contractor. Duro- Last periodically recognizes cor- tractors that consistently do a high- quality job installing their roofing systems. son to the U.S. Olympic Committee gree from the State University of be in charge of developing a @ Continued from C-6 Games-time merchandise “super: New York at Plattsburgh and earnedgraduatecredits in graphic design from the School of Visual products bearing SLOC insignia andwill be the organizations liai- on licensing matters. She also will store” and arranging other retail sales. has been an adjunct professor of sports licensing at New York University “Her experience at the Atlanta Gameswill be ofgreat assistance as SLOC continuesto build solidrela: tionships with licensees,” said her immediate boss, Mark Lewis, SLOC vice president of marketing andlicensing. Lamando has a bachelor’s de- Arts in New York City. SLOCwill unveil its mascots for the 2002 Olympics on Saturday, which marks 1,000 days until the Gamesbegin. AreYou a Homebuilding Superintendent? 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He earned $26million in 1992 beforeresigning to advise Clinton and widely given credit for pushing and agradually expandingrolein insurance productcalled Variable cameco-senior partner at Gold- great cooperation between the Fed and Treasury, and the inter- Summers, a former Harvard economics professor, has had a strong background in academia diaOne. The Justice Department could force behavioral restraints designedto keepit from using its reach to bully rival cable operators or programmers. But those kinds of conditions University and the London School ertheless sent tremors through changeinpolicy quired from TCI and would acquire from Me- the Federal Communications Commission) Klein did stop Primestar Inc.’s bid to buy a budgethas beenbalanced, there's Applegate, chief investment strat egis LehmanBrothers in New York. “At theendof theday, this movedoes not seemto indicate a various programming interests AT&T ac- less properties (both remain under review by After graduating from Harvard Intermountain Financial Group ofSalt Lake City, which represents MassMutual Life Insurance Co., has introduceda newlife mit Groupof Salt LakeCity to handleits public-relations efforts. Still, enforcers maywell extract a price for approval, andit would likelybe paidout of the the companiessell certain overlapping wire- ministration. care competition comingonlyfromthesatellite-TV eager to bring. Bell Atlantic’s purchase of GTECorp. Heallowedthelast two on the condition that Florida chairman of the Joint Economic Committee, whois normallycritical of the Clinton ad- munications; and 23rd in health competition case that he probably won't be 1997 and, recently, SBC Communications Corp.'s acquisition of Ameritech Corp. and Republican§ based on annual revenue. Publicis anked 12th in food & beverage; 13th in entertainment; 16th in con: sumer products; 20th in telecom- McConkiehasselected The Sum carriers, Klein is left with another potential- steady, moderate policies. “Robert Rubin has been one of the more effective Treasury s retaries in recent histor than 180 public-relations firms — onits face, a potential monopoly. But be- cause cable is a monopoly in mostplaces, with Atlantic Corp.’s purchase of Nynex Corp. in When the government sliced Ma Bell in 1982 into AT&T and seven regional phone companies dubbed the Baby Bells, the goal was to foster competition in the long-distance 1998 ording to figures from the Council of Public Relations Firms The council's ranking listed more 688 E. VineSt. in Murray. “It’s no longer local, long-distance and wire- Joel Klein, the Justice Department's chief telecommunications agenciesfor keyindustrysectors in Combining TCI's old cable-TV network with MediaOne’s would appear to give AT&Tac- eroding, Steve Sunshine, a former Justice Department antitrust enforcer who is now an attorneyin Washington. “The government isn’t going to worry about a reassemblyof Ma Bell until there are only a handful of players” that spansthe spectrum, he says. antitrust enforcer, dared to take on Microsoft in court, But Klein has allowed a bunchofbig telecommunications mergers, including Bell largely hands-off approach to deal-makingin Publicis Dialogueof Salt Lake City was ranked among top U.S. vider of homeloans, has openedat cess to roughly60 percent of U.S. households less or even cable; the market boundaries are wereatthe turn of the 20th. Here are four reasons the government has so far taken a Creative of Salt LakeCity. SBC-Ameritech deal, and faces it yet again with AT&T's plan to purchase MediaOne packagesofvoice, video and data tions, an industry vital to the U.S. economy at the outset of the 21st century as railroads in the midstofglobal crises Klein confronted a similar problem in the ellite rivals eventually will offer their own on the Internet? The answeris crucial in telecommunica- site was created by Smith Lyons havebeen effective. cy-makers hope that nascent wireless andsat- behemoth with significant control of the conduits that bring voice, video and data into homes; the stuff that runs through those pipes; and the equipment that translates the stuff into pictures, text and sound. AT&Tsaysit is confident the MediaOne acquisition will pass regulatory muster. Still, for regulators and lawmakers, it raises this question: Intheir hopeof cracking the monopolyin local phoneservice, might theygive birth to a new monopolythat could create a bottleneck ness leaders. tential competition” cases rarely prevail in court. Enforcers can’t rely on the formulas that apply in most other merger cases and instead haveto provethat the partners intended to compete and that the competition would sionedin the ‘96 act,” says Sen. Conrad Burns, households. The combination would create a views they've arrived at together through shared experience.” Most market watchers expect the new team of Summers and Ei- service outside their homeregions). But ““po- resist. “It has the potential to provide consum- ers with the kinds of choices that were envi- worked as partners for years, both in managing Treasury and and the merger wouldn't changethat. Klein considered trying to block the deal by arguingthat Bell Atlantic and Nynex werepotential competitors that would have invaded each other’s markets had they not agreed to combine (the 1996 law allowed theBells to sell diaOne. For policy-makers,the offeris hard to the rise of superfast computers, digital pipelines and the Internet. Each of the companies claimed virtually 100 percent ofits market, from TCI and hopes to acquire from Me- between these businesses have blurred with developing policy. Many oftheir wouldn't let them. But now AT&Tvows to compete with the man, changing a policy?” said Jeffrey were huge companies dominating lucrative markets from Boston to Washington. But they hadn't competed head-to-head because the federal rules governing the old Bell network long-distance companies and cable operators their size, make for tough challenges under federal antitrust laws, partly because the lines merger against each other. Klein first faced this di lemmain the Bell Atlantic-Nynex deal. Here theyhad been promised — that the Baby Bells, Capitol Hill and the markets. which had become accustomed to his soothing, reassuring presence Stuart Eizenstat to pick up where suffer where noneexists, as with When lawmakers passed the 1996 telecommunications law, they expected — because his rise as an investment executive in New York, where he be- of his plans to depart from the that predict howa merger could affect prices monopoly in the local phone business. Few pected to leave his government ost. His impending departure nev- Clinton administration. And he prices. Enforcers apply court-tested formulas imagined that cable operators might one day of Economics, Rubin's compensa- Rubinhad given ample warning enable the combined companies to raise But it is tough to showthat rivalry could world as economic woes roiled guished.” thatit would reduce competition and, in turn accepting what reguiators felt was a natural Rubin's resignation was not a surprise. Rubin long had been ex- national crises have been extin block a merger, antitrust enforcers must show antitrust enforcer made Rubin a hero among busi- hotspots. He's almostlike a superhero,” said Richard Yamarone, a senior economist at Argus Research Corp. in New York. Now, “The most viablerival, satellite TV Primestar aside, the telecomdeals cut to the heartof antitrust law. To persuadeacourt to phoneand phone-equipmentbusinesses, while that consolidation could bring all telephone. television and Internetservices underthe con- Salt Lake Mortgage has com- site at www.slmortgage.com, The that controlled Primestar to erush cable's aca WorldComInc. swallows MCI. Time Warner Ine. buys Turner Broadcasting. As the deals pile up, U.S. regulators and lawmakers keep saying they are concerned @ Continued from C-6 Russia and other financial would have empowered the cable operators Steve Sunshine until five remain, and soon that could be four. zenstatto extendthepolicies that Asia, valuable satellite-TV license, which he felt market boundaries are eroding. Those lines would becomeeven fuzzier un- Existing-Home Pric Rise in Most of U 4 Could Tele-Mergers Resurrect Ma Bell? 108 ager ieee tenn z to have both http://www. sltrib.com Fux 801-281-2224, or e-mail john@lewcom. 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