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Volume 2, Issue 71: Wednesday, June 21, 2000
- "Arrival of New Economy Is Often Slow"
Wall Street Journal (06/21/00) P. A2; Wessel, David
The Organization for Economic Cooperation and Development (OECD) has promised a thorough report on New Economy growth issues next spring, but will present a preliminary study this month. OECD experts offer advice for governments seeking to reap the fruits of the technological age: nurture competition, networking, innovation, globalization, deregulation, and inter-corporate cooperation. The OECD also advises governments to support partnerships between science and business, and to promote efficient innovation and dissemination of knowledge. Australia, Ireland, and various Scandinavian countries have been experiencing technology-associated boosts in productivity. But the U.S. leads the world in Internet access, with 25.1 Internet hosts per 1,000 inhabitants, compared to the next highest, 5.5 in
the United Kingdom. Since the late 1990s, patents granted by the
U.S. have grown by 12 percent, compared with the previous 15 years' 3.3 percent.
- "Upside Counsel: Anti-Spam Laws Go National"
Upside.com (06/20/00); Sinrod, Eric J.
State and local laws pertaining to the Internet are eventually likely to be replaced by national and international laws. Indeed, the U.S. federal government is already taking action against states' efforts to regulate spam. Upward of 18 states either have spam laws on the books or are debating putting them in place. These laws differ in their wording, but most force spam to be identified as such in the subject line; prohibit the violation of ISP spam policies; outlaw the falsification of email routing information; require an opt-out system; and bar the use of others' domains unless consent has been granted. Despite these general similarities, the differences in the laws pose a logistical challenge for email advertisers, and the courts are beginning to realize this. Thus far, a Washington state spam law and a California spam law have been struck down by the courts. Congress is looking to pick up where the states leave off. Many observers expect the Unsolicited Electronic Email Act, recently approved by the House Commerce Committee, to receive Congress' full approval. The bill is similar to many state anti-spam laws, but would provide uniformity and negate the need for a patchwork of state laws. Eventually, even national laws will lose significance as the Internet becomes a more global medium.
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- "Official Says US Faces Potential Electronic Pearl Harbor"
Newsbytes (06/19/00); McGuire, David
Richard Clarke, National Coordinator for Security, Infrastructure Protection and Counter-Terrorism, says the United States could be victimized by "a major information warfare attack" unless government and industry collaborate on strengthening the security of the nation's computer infrastructure. Clarke's comments came during a panel sponsored by the American Enterprise Institute for Public Policy Research. Clarke also lambasted GOP lawmakers in Congress for failing to fund a number of Clinton administration proposals that would have strengthened cybersecurity. Other panelists agreed that the nation's privately owned "critical infrastructure" is vulnerable to attack. The panelists challenged Congress to come up with a legal framework that would permit the owners of the critical infrastructure to share information about computer attacks.
- "Shoppers Find Blowout Sale on Net Is Over"
Wall Street Journal (06/21/00) P. B1; Quick, Rebecca
As investors lose patience with unprofitable dot-coms, online shoppers are likely to notice that generous offers such as free shipping, giveaways, and below-cost products are disappearing. The availability of venture capital began to decline earlier this year, and online firms can no longer afford to lose money in their efforts to draw customers. Free shipping might be among the first consumer perks to vanish. Cookware site Tavolo.com and cosmetics retailer Beauty.com both recently put an end to free shipping offers, noting that freebies tend to attract bargain shoppers who never become profitable customers. Another online cosmetics retailer, Ingredients.com, has stopped sending free make-up samples to visitors who register at its site. Ingredients.com now waits until a customer buys something before sending a free gift. Online companies are approaching business in a more cautious manner to avoid becoming casualties of the shakeout among consumer e-commerce firms.
- "Emachines Warning May Herald Another PC Price War"
CNet (06/20/00); Fried, Ian
Emachines, the No. 3 seller of PCs at U.S. retailers, yesterday reported that its PC sales have been dropping since April, in a warning that could portend another bout of PC price wars among manufacturers. From April to May, Emachines' sales fell 18 percent, compared with the average 9 percent decline in that time period, leading to an inventory surplus. Emachines plans to eliminate the excess by cutting prices, which in turn would force PC makers such as Hewlett-Packard and Compaq to also reduce prices to stay competitive. Although consumers would benefit if PC prices fall as low as $399, manufacturers would take a financial hit. Meanwhile, some analysts say the excess inventory might not be an industry-wide problem. Experts note that PC sales are usually slow in the first two quarters, and that no special deals have emerged to counteract the seasonal slowdown. In addition, Emachines might be suffering more than other PC makers because it focuses on the U.S. retail market, and sales have been strong recently in the corporate and Asian markets.
- "Bush Offers Internet Teaching Proposal"
Boston Globe (06/20/00) P. A8
Texas Governor George W. Bush raised the stakes in the upcoming presidential election by introducing the details of a $400 million, five-year education initiative that would shun the use of the Internet as a substitute for education and instead make use of the medium's potential as a learning tool. Vice President Al Gore has been focusing on efforts to provide schools in poorer areas of the country with greater access to computers and the Internet, but Bush indicated that the approach is flawed because teachers can become dependent on the Internet as a replacement for real educational activities. The funding called for in Bush's plan would be tied to student performance and would give schools some leeway on how the money would be used. A total of $80 million a year would be allocated to research and information on education technology programs.
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- "Cast a Vote for a Democratic Net"
USA Today (06/20/00) P. 3D; Weise, Elizabeth
Internet users across the globe have the chance this fall to participate in what will likely be the world's largest open democratic election. The Internet Corporation for Assigned Names and Numbers, the nonprofit organization charged with overseeing the Internet, is holding an online election to fill five seats on its board. North America, Europe, Latin America, Africa, and the Asia-Pacific Region will each be represented by one of the elected members. The election begins Sept. 20 and closes Oct. 1; registration is open until the end of July and is available to anyone older than 16 who has postal and email addresses. Andrew McLaughlin, ICANN's chief policy officer, says that if the election is successful, the next four board seats also will likely be determined via the same election process next year. Currently, only 20,000 people--8,000 from North America--have registered to vote in the election. Roughly 70 countries have been represented in the registration process to this point. Germany is preparing to launch a campaign to highlight awareness of the vote. Each of the five elected board members will hold their post for two years.
For information on ACM's Internet governance work relating to ICANN, visit http://www.acm.org/serving/IG.html.
- "Nevada Judge Throws Out Microsoft Consumer Suit"
A class action lawsuit accusing Microsoft of overcharging for Windows was dismissed on Monday by a Nevada judge, in a decision that might give the company an edge in similar suits that have been filed in dozens of states. The Nevada ruling echoed the decision last week by a judge in Oregon, who found that consumers cannot sue Microsoft unless they purchased the software directly from the company. Microsoft, which has no direct sales operations and is facing over 130 class action suits, says the recent rulings will boost its legal footing in the remaining suits.
- "E-Commerce to Erupt"
A study released Monday by Microsoft and research agency Datamonitor predicts a boom in e-commerce among small to mid-sized firms between now and 2003. Online sales for small and medium-sized enterprises (SMEs) are expected to grow 800 percent to 3.2 billion euros over that time span. In Germany alone, 600 new SMEs go online each day. Despite the rush to get online, companies have been slower to set up their Web sites for online transactions, with only 5,000 of the 2 million SMEs online in the U.K., Germany, France, Italy, Sweden, and the Netherlands capable of processing online payments. The study also found that the packaged software industry made an enormous contribution to the economies of the six countries surveyed, accounting for 37.8 billion euros of the gross domestic product, 13.2 billion euros in tax revenue, and roughly 750,000 jobs.
- "Missing Link Slows Russian E-Commerce"
Wall Street Journal (06/21/00) P. B11C; Borzo, Jeanette
Although Internet ventures and dot-com incubators are emerging in Russia, some experts doubt the potential of Russian business-to-consumer e-commerce at this time because of the low Internet penetration among consumers. Fewer than 3 million of Russia's 146 million inhabitants use the Internet, and the average monthly income in Russia is $60. Russia's 11 time zones are another inhibiting factor, making delivery impractical. Russian software and service company Information Business Systems (IBS) studied successful e-commerce markets worldwide, and found that Internet sales jump significantly once 10 percent of a nation's population is wired. Since IBS found that as little as 1 percent of Russians are online, the company says business-to-consumer e-commerce does not seem profitable. Nonetheless, some observers are optimistic about the Russian e-commerce market, noting a rise in Internet use in Russia. By the end of this year 6.6 million Russians will be online, estimates the U.S. firm eTForecasts.
- "Stop Thief!"
Baltimore Sun (06/19/00) P. 1C; James, Michael
The high-tech age has brought with it a new battle over intellectual property rights that is being fought across the globe. Although intellectual property rights have always been a contentious point, the Internet has exacerbated the problem because of its ability to move content around the world instantaneously. Various companies such as such as Napster and iMesh allow users to swap songs and full-length movies online without paying for them. Proponents of such practices contend that consumers have paid way too much for these products for too long. Others say sites such as Napster should be viewed as a marketing tool, citing a recent study by CyberDialogue that finds that most of those surveyed would purchase a CD once they had downloaded it for free and discovered that they liked it. However, many artists and the recording industry--those who own copyrighted works--strongly disagree and point to new technology that can be used against pirates to protect copyrighted materials, much of which is the same technology that the pirates use themselves. Music and movies are not the only items being pirated. The World Intellectual Property Association says software manufacturers lost $11 billion in sales in 1999 due to piracy.
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Information regarding ACM's work in the area of intellectual property can be found at http://www.acm.org/usacm/copyright.
- "Campaign 2000 and E-Commerce"
Network World Fusion (06/15/00); Gittlen, Sandra
Both Vice President Al Gore and Texas Gov. George W. Bush have incorporated e-commerce, and technology in general, as key components of their platforms in the race to become president. Gore's chief goal is protecting U.S. businesses from the potential threat posed by global e-commerce while ensuring that e-commerce continues to create "countless jobs" for U.S. workers. To that end, Gore says he would lobby other countries to keep the Internet free of legislation that would stifle the development of e-commerce, especially those that place taxes on the medium. Gore would like to see the government get more involved in developing the Internet's potential. Gore intends to foster this relationship by providing more funding for IT research and awarding tax breaks to companies that fund research and development efforts, a plans also favored by Bush. Closing the digital divide is one of Gore's primary Internet objectives. Bush believes education is paramount to ensuring that the new economy continues to flourish and grow. Bush strongly opposes Internet taxes and tariffs, and would like to see legal reforms that would allow online companies to operate without being hampered by "frivolous lawsuits." Bush is a staunch supporter of states' ability to control sales taxes on purchases made within their borders, online or not.
- "New Industry Alliance Addresses Online Privacy"
Computer Reseller News (06/19/00); Savage, Marcia
The Privacy Leadership Initiative, created by a group of industry executives with members such as IBM, Procter & Gamble, Ford, Compaq, and AT&T, is being launched this week and advertised in national publications to promote industry self-regulation of online consumer privacy. The initiative follows a recent Federal Trade Commission recommendation that Congress establish legislation to protect online consumer privacy. The Privacy Leadership Initiative intends to speed adoption of Internet privacy technologies, develop privacy practices and make them available to companies, enhance accountability efforts, and promote privacy on the Web via educational campaigns for both consumers and businesses. The site will provide individual privacy protection solutions as well as react to the needs of the country's digital economy. "There is simply no doubt that industry must project leadership on the issue of privacy, prove to consumers that the private sector is a responsible steward of their personal information," said IBM Chairman Lou Gerstner, in a prepared statement.
For information on ACM's activities in the area of privacy, visit http://www.acm.org/usacm/privacy.
- "Are Online Elections Too Important to Be Left to the Government?"
Windows Magazine Online (06/16/00) No. 89,; Rosenbaum, Dan
Columnist Dan Rosenbaum ridicules the government's Luddite attitude toward online voting--Bill Kimberling, deputy director of the Office of Elections at the Federal Elections Commission, in particular. Speaking at the Maryland Association of Elected Officials, Kimberling recently said, "I don't want to vote over the Internet, and I don't want anyone else to either." Kimberling's opinion smacks of ignorance, and that is a problem coming from someone of his stature, writes Rosenbaum. Rosenbaum agrees that there is a long way to go before Internet voting can be used in a binding election, but he wonders if Kimberling is aware of the problems facing the current election system. He points out that there is little difference, once at a polling place, between casting a ballot in person and voting via computer. To make true Internet voting a reality, methods need to be developed for ensuring that people cast only one vote, that their identity can be confirmed, and that the votes remain anonymous. Rosenbaum is confident that these problems are solvable.
- "This Tax Could Tangle the Global Net"
Business Week (06/26/00) No. 3687, P. 194; Echikson, William
The European Commission (EC) wants to place a value-added tax (VAT) on non-European companies that sell and deliver products online. Such a tax is already imposed on European companies. Commenting on the draft law recently made public, the EC's Per Haugaard says the commission does not think e-companies should have an advantage over regular retailers. But taxing or regulating e-commerce could undermine the ongoing global e-commerce negotiations in Paris, and could hinder Europe's effort to construct its New Economy. The U.S. and Europe have spent over two years negotiating Internet taxation at the Organization for Economic Cooperation & Development. The new proposal would not raise much revenue, since over 80 percent of such downloads are non-taxed business-to-business transactions, and it would be difficult to enforce. And the measure would allow non-EU digital suppliers to pay the VAT in the union nation they choose--which means they will probably all go to Luxembourg, which has the lowest VAT. Other nations are likely to protest the measure for that reason.
- "Allaying the Fear of Big Brother Inc."
National Journal (06/17/00) Vol. 32, No. 25, P. 1924; Stone, Peter H.
In an effort to ward off federal privacy legislation, high-tech industry leaders are unveiling a massive, multimillion dollar public relations campaign to persuade the public that industry self-regulation is in the best interest of all concerned. A consortium of high-tech companies and advocacy groups called the Privacy Leadership Initiative recently hired the public affairs firm Weber McGinn to help roll out its marketing campaign touting industry self-policing, as well as the promotion of software and other new technologies that will help consumers protect Internet privacy themselves. However, fearing that some type of federal privacy legislation is inevitable, some industry leaders say it might be better for Silicon Valley to support a bill by Sen. John F. Kerry (D-Mass.) that would require that Web sites post their privacy policies clearly. The bill would also establish a commission to determine whether more federal legislation would be needed in the future. Supporting the Kerry bill could stave off more severe regulation by the FTC that could give the agency the power to regulate how companies obtain and disseminate consumer data. Ironically, some companies say they would even embrace the FTC regulations if it allowed them to avoid more draconian state and local regulations.
For information on ACM's activities in the area of privacy, visit http://www.acm.org/usacm/privacy.
- "Should You Care What Keeps the CEO Up at Night?"
Business Communications Review (06/00) Vol. 30, No. 6, P. 70; Meyer, Peter
Since top executives worry more about moving into new markets and retaining skilled workers than about technology, IT departments should learn to present their work in a way that highlights the issues that concern CEOs. The main concern for CEOs surveyed by Business Communications Review is creating and controlling new markets. IT departments can leverage the fact that CEOs are not likely to focus on cost-cutting when trying to enter a new market, and are therefore prone to look at IT investments as opportunity costs rather than cash outlays. Second on the CEOs' priority list is obtaining and keeping talented employees by making the work more appealing. IT departments can use this knowledge to their advantage as well, by remembering that a CEO might support a project that involves implementing software that employees favor, for example. To write project proposals that will gain support from upper management, IT departments should focus on the initiative's potential to affect the issues that CEOs care about most.
- "Microsoft Wins Year's Reprieve From Penalties"
New York Times (06/21/00) P. C1; Brinkley, Joel
Judge Thomas Penfield Jackson made an unexpected move Tuesday when he delayed his remedy order pending Supreme Court review. Now his remedies, which included splitting Microsoft's Windows and Internet operations, will not be effective for a year or more considering a potentially lengthy appeals process. Microsoft can continue its expansion unrestricted by the remedies, which the company claimed would prove detrimental to the U.S. economy. The Justice Department wanted the case ceded to the Supreme Court on the basis of an antitrust provision that recommends a direct appeal to the Supreme Court if the case is of national import. Now the higher court must decide if the district court can hear the appeal before the Supreme Court takes over the case. Judge Jackson referred the case to the Supreme Court, citing a need for input and guidance with this ground-breaking case. No Supreme Court decisions are expected before October.