BUSINESS NOTES.

MOTOROLA EXPECTED TO WIN BIG CONTRACT: Motorola Inc. is expected to announce today that it has won a lucrative contract to set up a digital cellular telephone network for several Japanese companies.

The multiyear contract potentially is worth billions of dollars, The Wall Street Journal reported Tuesday, citing people familiar with the deal.

Laura Cain, a spokeswoman at Motorola's headquarters in Schaumburg, Ill., would not deny the report. ``I can't tell you you're wrong,'' she said Tuesday. ``We can't release details until the official announcement (this) morning.''

Motorola stock rose nearly 2 percent Tuesday on reports of the deal, up $1 to close at $58.37-1/2 on the New York Stock Exchange.

NET TRAFFIC COULD COST PAC BELL $500 MILLION: With Internet traffic in California ballooning to 30 percent of all residential phone calls, Pacific Bell says it will lose half a billion dollars over the next 10 years under current federal rate formulas.

To persuade the Federal Communications Commission to scrap what it calls artificially low rates for data calls, PacTel presented the agency with one of the most extensive studies of dial-up Internet usage. The report, made public Tuesday, contends the results portray a likely image of what the rest of the country will face in years to come.

Thus far, the FCC hasn't bought the phone company's argument. Internet access providers are lining up to speak out against it, saying federal decisions have always found that they are not carriers and shouldn't pay the same rates.

To the Internet companies, the call for raised rates is an ill-disguised attempt to make them pay in advance for something the telephone companies need to do anyway - upgrade their networks.

`BOWIE BOND' CREATOR EYES SILICON VALLEY: The Wall Street firm that created ``Bowie Bonds'' - the concept that helped rocker David Bowie raise $55 million by using his music as backing - has its sights on Silicon Valley.

``What was groundbreaking for us was using intellectual property as opposed to hard financial assets to back the deal, like mortgages,'' said Riaz Valani, a fast-talking senior associate with New York's Fahnestock & Co., formerly from Fremont.

``Any software component that generates a licensing revenue or royalties would be an easy candidate,'' Valani said.

By selling bonds, he said, the company gets a bundle of money up front to spend on research and development or other avenues of corporate development and investors get an attractive return on their investment.