Court sides with ex-Intel worker

Plus: Nextel buys MCI’s wireless assets; WLAN hotspots to double by 2005; MCI fraud victims could get more compensation; and more

California’s highest court last week decided that a former Intel employee did not trespass on Intel’s IT systems by sending mass e-mail messages critical of the company to its employees. After leaving Intel, Kourosh Kenneth Hamidi helped form FACE (Former and Current Employees) Intel, a group that bitterly objects to and hopes to reform Intel’s personnel practices. On behalf of FACE Intel, Hamidi sent to Intel employees six mass e-mail messages containing negative claims about the company, reaching as many as 35,000 people. Intel sued to prevent Hamidi from continuing his e-mail campaign and in November 1998 won an injunction against him. The case eventually reached the California Supreme Court, which overturned a lower court’s ruling. Because Hamidi did not hack into Intel’s systems to send his messages, and because he removed any recipients who asked not to be contacted again, the court decided that he “did nothing but use the e-mail system for its intended purpose – to communicate with employees.” Intel is considering an appeal.

Nextel is buying MCI’s fixed wireless service assets for $144 million. MCI, formerly WorldCom, filed a motion with the U.S. Bankruptcy court in the Southern District of New York last week that states wireless service provider Nextel was the top bidder in an auction to sell off MCI’s wireless assets. Industry watchers weren’t surprised that the carrier was selling its fixed wireless network and spectrum. MCI, which has been in bankruptcy proceedings for nearly a year, previously stated its plans to ditch some of its wireless assets before emerging from bankruptcy sometime in September. The carrier did not come close to the $400 million it spent on picking up wireless Multichannel Multipoint Distribution Service carrier CAI Wireless in 1999. Yet MCI was able to more than double the best offer from BellSouth.

The number of wireless LAN hot spots worldwide will more than double by 2005, but the services are unlikely to reach “critical mass” until three to five years from now, according to Ken Dulaney, an analyst at Gartner. Potential fans of hot spots, where Internet access is available to users of notebook PCs and other devices equipped with IEEE 802.11 technology, are frustrated by the limited number of hot spots available and the lack of consistency among billing systems, Dulaney says. The report forecasts there will be about 71,000 hot spots worldwide this year, up from about 14,800 in 2002 and 1,200 in 2001. The number of hot spots will grow to about 152,000 in 2005, according to Gartner. There will be 9.3 million visitors to hot spots in 2003, up from 2.5 million in 2002, Gartner says.

Victims of MCI’s fraud could receive 50% more compensation if the courts approve a modification of settlement terms that the Securities and Exchange Commission proposed last week. The SEC modified its proposal for a settlement of its claim for a civil penalty against the company, still legally known as WorldCom, asking that the company contribute stock worth $250 million, in addition to the $500 million in cash already required, to compensate victims of its fraud. MCI was guardedly positive about the modified proposal. “We appreciate the efforts of everyone involved in reaching this decision, which remains subject to court approval,” CFO Bob Blakely said in a statement. “We believe that it is another significant step toward MCI’s emergence from Chapter 11.”

The court overseeing the reorganization of bankrupt telecom carrier Global Crossing Holdings has approved the takeover of the company by Singapore Technologies Telemedia. The U.S. Bankruptcy Court for the Southern District of New York approved a change in the deal whereby ST Telemedia will pay $250 million for a 61.5% stake in Global Crossing, rather than sharing the acquisition with Hong Kong’s Hutchison Telecommunications. The court has made the reorganization agreement exclusive until Oct. 28; no other potential investor can enter into negotiations to buy a stake in Global Crossing until that date unless ST Telemedia backs out of the deal. Global Crossing operates a fiber-optic network that connects 27 countries and about 200 cities, but collapsed under the weight of its debt and filed for Chapter 11 bankruptcy protection in the U.S. in January 2002. The deal still has to pass U.S. regulatory hurdles.

The U.S. Department of Health and Human Services last week upped the ante on a nationalized electronic medical-record system for healthcare providers. HHS announced that it will seek a medical vocabulary system that standardizes the terms used in medical records information and that it will provide a standardized medical record that physicians and IT administrators can use to build electronic medical record services. HHS will work with the College of American Pathologists to codify more than 340,000 medical concepts. They have commissioned the Institute of Medicine, a nonprofit arm of the National Academy of Sciences, to build the standard medical record.