1. Ma Bell Knows Best

AT&T ( T) just wants to share.

The San Antonio, Texas, telco blundered into controversy again this week when it mailed out a new privacy policy.

AT&T says the new statement continues its practice of not sharing customer data with third parties for marketing purposes. But the San Francisco Chronicle notes that AT&T grants itself greater latitude to share with the government.

If that rings a bell, it's because just last month AT&T and other big phone companies came under attack for reportedly handing information over to the feds. A lawsuit by a privacy rights group contends that AT&T has given the National Security Agency real-time access to Internet communications.

Now, the Chronicle reports, AT&T is going a step further. The new policy advises Internet and video subscribers that AT&T plans to track their viewing habits. AT&T also lays claim to the use of customer data "to protect its legitimate business interests, safeguard others or respond to legal process."

Safeguarding others is no doubt AT&T's top priority, just as Verizon's ( VZ) mission is to thwart fiendish terrorists . AT&T tells the The New York Times the policy changes aim to purge the privacy statement of legalese.

But what AT&T's new privacy statement really cuts down on is privacy.

Dumb-o-Meter score: 93. Maybe AT&T just wants independent confirmation that there's 57 channels and nothin' on .

To view Colin Barr's video take on AT&T's entry in Five Dumbest this week, click here .

2. You're Finnished

Nokia ( NOK) and Siemens ( SI) are getting all fired up.

The European tech giants agreed Monday to combine their telecom-equipment units in a cashless merger valued north of $30 billion.

The new company, to be called Nokia Siemens Networks, is poised to confront expanding rivals like Ericsson ( ERICY) and Alcatel ( ALA). Helsinki-based Nokia Siemens Networks says it expects to enjoy "market strength and a leading position in fixed-mobile convergence."

Nokia Siemens Networks has also promised 1.5 billion euros' worth of annual cost synergies by 2010, including 6,000 to 9,000 job cuts. But who's counting? CEO Simon Beresford-Wylie, after all, is a people person.

"Nokia Siemens Networks brings the two finest teams in the communications industry together at an unprecedented time of industry change," Beresford-Wylie says in Monday's joint press release. "I know the power of the Nokia team and have a deep appreciation for the quality and spirit of the people of Siemens."

Yes, thousands of layoffs should lead to some spirited discussions.

Dumb-o-Meter score: 90. Nokia Siemens also boasts a "leading 'quadruple play' product portfolio" -- presumably referring to television, Internet and telephone service, along with pink slip printing.

3. AMR's Loss Leader

The airlines just can't avoid turbulence.

American Airlines owner AMR ( AMR) and United Airlines parent UAL ( UAUA) scored upgrades this week from analysts who see a revenue lift ahead. The news comes as the industry struggles to return to sustained profitability . A trade group recently tabbed U.S. carriers' first-quarter loss at around $2 billion.

Thursday's note from UBS analyst Kevin Crissey, which also named other airlines, including Southwest ( LUV) and Airtran ( AAI), was the latest ray of sunshine for the industry. But timing still isn't on the airlines' side.

Crissey's note came just as news broke of a transatlantic probe of alleged price-fixing at airlines, including British Airways ( BAB).

British Air acknowledged Thursday it is assisting the U.S. and U.K. officials in a probe of passenger fares and fuel surcharges. British Air says it placed two execs on leave during the investigation.

Possible witnesses apparently include American Airlines, which obviously knows a thing or two about raking in huge windfalls through price-gouging. Just look at the numbers: AMR lost $861 million last year.

American "has received a United States federal grand jury subpoena in connection with a government investigation into alleged price fixing in the air passenger industry," the company said Thursday, according to the AP. "The airline has been informed that the company is not a target of the investigation."

No, you'd actually have to make money once in a while to draw that kind of scrutiny.

Dumb-o-Meter score: 85. You know the old saying: If you're on the verge of going broke, don't price-fix it.

4. The Vonage Spin Machine

Vonage ( VG) knows just the balm for burned investors.

The Holmdel, N.J., Internet phone company has been slammed since last month's initial public offering (IPO). Shares have lost almost half their value as customers flee and competitors swoop in. Verizon is the latest to pile on , claiming Vonage infringed seven Internet voice patents.

Vonage's $531 million IPO windfall didn't come cheap. Some users were infuriated when Vonage botched the customer stock allocation. Others sued after an investor Web site apparently fell short of regulatory standards.

Now, the papers themselves are giving Vonage a headache. Verizon's suit, filed June 12, came after the company reviewed Vonage IPO documents, The Wall Street Journal reports. Some wags suggest a Verizon courthouse victory could finish Vonage competitively .

Vonage responds that it "respects the valid intellectual property rights of others" and intends to defend itself vigorously. And how best to do that? Why, the serial press release issuer has hired Craig Streem of Aon ( AON) as investor relations chief. Aon, of course, is no stranger to old Wall Street favorites such as blaming market conditions for its own shortcomings.

"We are very excited that Craig has decided to join Vonage," CEO Mike Snyder said in a statement Tuesday. "His vast experience in spearheading investor relations and communications efforts for several organizations will make Craig an invaluable member of our team."

One thing bodes well for Streem: Vonage's relations with investors can't get much worse.

Dumb-o-Meter score: 82. Selling the Vonage story will require a whole lot of spearheading, that's for sure.

5. Taking the 'Art' Out of Kmart

Blue lights are flashing in the art world.

Kmart, the discount retailer snatched out of bankruptcy last year by hedge fund manager Ed Lampert, is parting with its corporate art collection.

The Troy, Mich., unit of Sears Holdings ( SHLD) "is opening the vault containing over 1,000 works of fine art to the public for the first time ever," National Retail Equipment Liquidators explains in a Tuesday afternoon press release. Pieces for sale include a "15th century Chinese Ming Dynasty watercolor on silk," along with a "rare Picasso tapestry."

It seems safe to assume Kmart showed better taste in collecting than it did in furnishing its notoriously shoddy stores. Still, the sale recalls a gallery manager's 1999 comment on the big Kmart in Manhattan's East Village.

"If you see a pile of bricks in the middle of the street, it's a pile of bricks, but if you see a pile of bricks in the Whitney, it's art," James Pernatto told The New York Times. "I wonder if it works in the reverse also: If you saw a Picasso in Kmart, would it be a parody of itself?"

Guess we'll find out.

Dumb-o-Meter score: 80. The Picasso is worth an estimated $25,000, CNN reports.

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