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Volume 2, Issue 113: Monday, October 2, 2000
- "Software Fine Print Clicks In"
Baltimore Sun (10/01/00) P. C1; Stroh, Michael
Maryland's Uniform Computer Information Transactions Act (UCITA) went into effect this Sunday, making it the first state in the country to follow software companies' recommendations for strengthening "clickwrap" licensing agreements. Virginia also passed UCITA but will first conduct a study of its consequences. Maryland officials say the law could bring more high-tech business to the state and will ensure greater protection of intellectual property rights. However, critics argue that the law gives in to software companies' increasingly strict and consumer-unfriendly restrictions. For example, some software products require users to agree not to criticize the product in print or to settle any legal disputes over the software in a foreign courtroom. Other restrictions allowed by UCITA include a ban on reverse engineering, an essential practice of computer science students, and a ban on the donation of outdated software, which could impact schools attempting to equip their classrooms. Although UCITA proponents claim the law allows for refunds if consumers are not satisfied, consumer advocates say the current law already provides such refunds. Legislators in other states have not moved as quickly to pass UCITA bills, and Iowa recently passed a measure against UCITA.
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For information about ACM's UCITA activities, visit http://www.acm.org/usacm/copyright.
- "Linux Firms Still Searching for Success"
Los Angeles Times (10/02/00) P. C1; Menn, Joseph
Linux companies are not enjoying the level of success that analysts predicted last year when enthusiasm for Linux peaked. The four major Linux distributors that held IPOs before tech stocks fell this spring--VA Linux, Red Hat, Cobalt Networks, and Caldera Systems--have all seen a sharp decline in their stock values and none of these companies are profitable. VA Linux, which sells hardware bundled with Linux software and support, appears to have the most promising business model and is close to breaking even. Following a similar approach, Cobalt Networks also bundles Linux with hardware such as servers, and Sun Microsystems purchased Cobalt for $2 billion in stock in September. By comparison, analysts criticize Red Hat's business model, which amounts to selling Linux software with technical documentation and support. Because Linux can be downloaded for free, analysts question how Red Hat will make money in the long term. Still, corporate demand for Linux continues to grow rapidly, and paid Linux installations are expected to surpass 3 million by the end of this year, according to International Data. The success of the open source operating system is leading established tech firms such as Dell, Compaq, and IBM to enter the Linux market, experts say. As these tech heavyweights gain more experience with Linux, they will increasingly draw customers away from relatively new and untested Linux firms, analysts say.
- "E-Signatures Become Valid for Business"
New York Times (10/02/00) P. C1; Schwartz, John
Yesterday, the bill that gives e-signatures the same legal standing as an offline signature using pen and paper went into effect, and the expectation is that e-commerce will be faster, less expensive, and more secure. "I can do transactions at the speed of the Internet, cut costs 50 percent--and I'm more secure than I was before," says Communication Intelligence President and CEO Guido DiGregorio. Because the legislation does not specify particular technologies to be used, there will be a wide variety of technologies that offer secure e-signatures to take place, such as digital signature technologies from companies including VeriSign and Entrust Technologies. Other less-complicated systems include Charles Schwab's pad, which connects to a desktop PC and accepts e-signatures, and CyberSafe's smart card technology. At DLJdirect, customers will be able to provide information that is confirmed by an external credit-reporting agency, and the deal will be completed with a single click of the mouse. The legislation provides consumers with the choice of signing transactions online or signing offline with a pen. Within the next five years, 80 percent of all financial transactions will be entirely automated using e-signatures and digital signatures, says Prudential Securities analyst Bryan Keene. However, security and fraud liability questions remain, says Consumers Union legislative counsel Frank Torres.
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- "Microsoft, IBM Ask Congress for Permanent R&D Credit"
Newsbytes (09/28/00); MacMillan, Robert
Officials from several major high-tech firms testified this week that Congress should establish a permanent research and development tax credit. R. Randall Capps, general tax counsel for EDS, said before the House Ways and Means Oversight Subcommittee that Congress' practice of extending the research and development tax credit by small amounts each year is not beneficial to high-tech firms, which plan for research and development over five or 10 years. "The U.S. research community needs a stable, consistent R&D credit in order to maximize its incentive value and its contribution to the nation's economic growth," Capps testified. Also appearing before the House subcommittee were representatives from Microsoft, IBM, and the Technology Workforce Coalition. A member of the TWC said tax credits are essential for small businesses, which otherwise cannot afford the large outlays necessary for research and development in the high-tech industry. Although on several occasions Congress has almost passed legislation creating a permanent tax credit, those attempts have failed. House Ways and Means Committee Chairman Bill Archer (R-Texas) has said he opposes the measure.
- "Study Shows Growing Public Awareness of E-Govt."
Newsbytes (09/28/00); MacMillan, Robert
The Center for Excellence in Government issued a new study saying 50 percent of its respondents are familiar with e-government and that 56 percent foresee good things resulting from online government services over the next 10 years. Some 67 percent of respondents who currently surf the Internet have pointed their Web browsers to a government Web site. With e-government, the general public is looking forward to greater access to government information as well as higher standards of government accountability. Hart-Teeter conducted the study, which also showed that Americans were more concerned about their security and privacy online than the digital divide. Meanwhile, government agencies continue to move ahead with their e-government efforts. Of the government officials who participated in the study, 93 percent said their agency or department has a Web site, and 75 percent added that their agencies have invested more in IT since 1998.
- "Drug Tests Are Multiple Choice at Tech Firms"
Los Angeles Times (10/02/00) P. C1; Huffstutter, P.J.; Fields, Robin
High-tech firms are increasingly testing their blue-collar workers for drugs but forgoing the tests for programmers and executives on the white collar side. Amazon.com, Intuit, and other major players in the industry are pioneering the practice, which, while discriminatory, is not illegal, according to drug-testing experts. The companies defend the practice by saying that those who work in factories and do deliveries are operating vehicles and heavy machinery that represent a danger to themselves and others, while office workers pose no public safety threat. However, the policy's detractors contend that firms do not drug test their prized computer programmers and other white-collar employees because of the extremely tight labor market. Drug testing is declining across the board nationwide, due to questions about its effectiveness, its expense, the tight labor market, and its impact on employee morale. The American Management Association says 66 percent of companies required some type of pre-employment or random drug test of employees this year, compared to 81 percent in 1996.
- "Shortages May Affect Holiday Season"
Associated Press (10/01/00); Geller, Adam
Shortages of electronic components such as capacitors and flash-memory chips could make the holiday season difficult for device manufacturers as well as retailers, as consumers demand unavailable products. Sony, for example, recently announced that components shortages would force it to cut initial shipments of its PlayStation 2 video game consoles in half. Meanwhile, Palm shipped 1.5 million handhelds in the quarter ended Sept. 1, but the figure could have been as much as 40 percent higher without the shortages, analysts say. The problem stems partly from the strong economy, which has led consumers to spend freely on a range of high-tech products containing liquid-crystal displays, capacitors, and semiconductors, experts say. Although major retailers expect to be only slightly inconvenienced by the shortages, smaller retailers worry that they will not get the most popular products, which manufacturers often reserve for larger chains.
- "States Meet in Effort to Find Uniform E-Sales Tax"
Financial Times (09/29/00) P. 4; Leffall, Jabulani
Representatives from 27 states met in Chicago Friday to discuss a proposal to streamline their sales tax systems in preparation for the collection of e-commerce taxes. The "streamlined sales tax project" will be tested next year in Wisconsin, Kansas, North Carolina, and Michigan. The four-state pilot program is meant to provide lawmakers with an estimate of the effectiveness of tax software and how much a streamlined tax system will cost. The meeting in Chicago represents the first time in more than 40 years that states have gotten together to simplify their tax systems. Meanwhile, the Senate commerce committee on Thursday sat down with members of the public and private sectors to discuss the issue of Internet taxes.
- "Poll Gives Peek At IT Execs' Views"
Federal Computer Week Online (09/28/00); Kulisch, Eric
Attendees at the National Association of State Information Resource Executives (NASIRE) conference held this week in Baltimore, Md., offered their opinions on e-government in a poll conducted by Federal Computer Week. Results suggested that nearly all at the conference agreed that citizens expect the same level of service from e-government sites as from e-commerce sites. The poll found that 52 percent of attendees believe a state's governor is the key to state-wide e-government solutions, while only 18 percent said county or municipal governments were critical to providing e-government services. Collaboration between state and local officials through state-wide advisory panels was favored by 53 percent of those surveyed. Two-thirds of the attendees supported the idea of national e-government standards. Total attendance at the conference topped 400 IT officials representing 42 states, and the poll sampled 220 of them.
- "IT Companies Aim to Cash In on Genomics"
Financial Times (10/02/00) P. 21; Griffith, Victoria
IBM, Compaq, and other high-tech companies are targeting the IT needs of the biotechnology and pharmaceutical industries. Data storage, software, and supercomputers are some of high-tech wizardry needed for deciphering the human genome. IBM's Caroline Kovac says, "There's a real need for products that integrate all the data available, from 3D models to text documents and lots of different sources. We want to provide that." IBM has poured $100 million into developing the highest-caliber "Blue Gene" supercomputer for mimicking protein folding, and sealed a drug discovery alliance with genomics firm Incyte. The centerpiece of Compaq's approach is to strategically invest in biotechnology startups, which IBM has been doing as well for networking purposes.
- "Group Forms to Compete With Network Solutions"
Washington Techway (09/28/00); Daniels, Alex
A group of competing registrars upset at the hold Network Solutions has on the industry have come together to form the Registration Institute, or REGI, to act as a voice for the domain registration industry. The primary focus of the group is breaking Network Solutions' retention of "millions" of expired domain names. "They're keeping them all, and they didn't pay for them," says BuyDomains.com CEO Michael Mann. Upwards of 50 registrars have begun working in the industry since it opened up to competition. Register.com, GreatDomains.com, BulkRegister.com, AW Registry, and BuyDomains.com are the registrars currently in REGI. A group called Association Vision is being formed to manage the REGI. Michael J. Smith, former Capitol Hill lobbyist for the National Association of Manufacturers, is the head of Association Vision.
- "To Hack, or Not to Hack?"
Economist (09/23/00) Vol. 356, No. 8189, P. 96
The head of the Secure Digital Music Initiative (SDMI) recently offered $10,000 to any person who could crack several online music files protected by new security mechanisms. However, few hackers have responded to the challenge, for various reasons. Some hackers do not want to give what is effectively free consulting to the "enemy," while others believe that contestants may be placed on an "enemy's list." The person who cracks the files must sign over the rights to their hacking method, so that security protections can be adjusted accordingly, and some worry that the prize money, which is described as "up to $10,000," may be a lot less. Regardless, Bruce Schneier of Counterpane Security contends that the whole contest is simply a publicity stunt, because even if the SDMI mechanisms are not cracked during the time frame of the contest, there is no guarantee that they will not be breached at some later time. However, analysts say SDMI faces more danger from marketplace forces than from hackers, noting that the effort seems somewhat anachronistic in a post-Napster world. Sound engineers say some of the format's protection mechanisms are detrimental to sound quality, and experts warn that all software-based music-protection systems can be breached by studying the software in the player itself, similar to the recent circumvention of the DVD copyright protection mechanism. Security experts predict that the questionable SDMI standard will be cracked eventually.
- "Female Computer Experts Help Bridge Tech Gender Gap"
eSchool News (09/00) Vol. 3, No. 9, P. 50
After noticing a gender gap in technological competency and confidence between boys and girls in the classroom, Mahnaz Javid of Edmonds, Wash., developed a three-year study to try to find out what engages girls in computer technology. The result is TechnoSisters, an all-volunteer after-school mentorship program at Fairmount Elementary School in Everett, Wash. The adult leaders in the classroom are all women, and the 22 students are all girls. The program includes parent and teacher workshops and a software learning library for the students, and it lets girls learn technology from female role models who work in the computer industry--without boys around. Javid says this gives them the opportunity to be creative without competition for time and attention. The mentors in the program all think that the girls have the interest and capability to master technology. The students take apart working computers and then put them back together so they work. One student, McKenna Milici, says she enjoys the program's single gender because "the boys seem to be running everything." However, boys are allowed to sign up for the course after their parents are told that it is part of a research project on girls and technology.
To learn more about ACM's Committee on Women in Computing, visit http://www.acm.org/women.
- "Does the ADA Apply to the Web?"
Washington Technology (09/25/00) Vol. 15, No. 13, P. 28; Mason, Michael
The Justice Department recently filed an amicus curiae brief in a complaint against OKbridge, which operates Web-based bridge tournaments. The company had terminated the plaintiff's membership for what it referred to as cheating, and for posting vulgar messages in the discussion forum. The plaintiff claimed that OKbridge violated the Americans With Disabilities Act (ADA) by not accommodating the plaintiff's mental disabilities. A district court ruled in favor of OKbridge, concluding that OKbridge was not a "place of public accommodation." The Justice Department filed a brief on appeal supporting the plaintiff on the grounds that OKbridge does maintain a physical facility to house Web servers and personnel, and its tournaments are services of that place. Some courts have ruled that the act applies only to access to physical structures, while others say the ADA applies outside of physical structures and facilities. If Congress does not step in, the ADA's applicability to Web sites will remain unclear until several courts have analyzed the problem--which is complicated by the fact that no industry standard exists to govern interoperability among Web sites, assistive technologies for the disabled, and related software.
InformationWeek (09/25/00) No. 805, P. 50; McGee, Marianne Kolbasuk; Khirallah, Diane Rezendes; Lodge, Michelle
IT workers are feeling more job-related stress than ever before as the Internet increases the rate and volume of their work. The resulting backlash is taking a toll on companies as IT professionals switch careers, become less productive, and leave for other tech companies, often taking customers and co-workers along with them. IT workers constantly face tight deadlines and long hours, leaving little time for personal lives. Projects follow one on top of the other, giving workers no downtime in between, and sometimes these all-consuming projects are terminated without explanation. Tech workers must also refresh their skills frequently to keep pace with rapidly changing technology. As more IT employees grow dissatisfied and quit their jobs, the workload on remaining workers increases. Many American IT workers also feel pressured to compete with foreign workers who are increasingly coming to U.S. high-tech companies and are often accustomed to working over 60 hours a week. Tech companies, alarmed by the threat of losing their most talented workers, are beginning to address the issue of workplace stress by offering flexible schedules, telecommuting, and job sharing. Cisco plans to ease employees' family concerns by opening a child-care facility at its San Jose headquarters this month. Experts advise tech companies that want to keep their workers satisfied to focus on communication and effective leadership, to allow some creativity and fun in the workplace, and to respect the limits on the amount of work an employee can handle.
- "Don't Tax You, Don't Tax Me, Tax That Man Behind IP"
InternetWeek (09/25/00) No. 831, P. 56; Frezza, Bill
European tax authorities argue that U.S. companies that distribute downloaded digital products across international borders have an unfair advantage over domestic European producers, because the U.S. companies are not subject to the value added tax (VAT). Therefore European authorities want to convince U.S. legislators that U.S. companies should pay VAT as well, lest the European authorities block access to U.S. Web sites. Meanwhile, California is dealing with a proposal that would force all companies with in-state physical stores to collect sales tax on goods purchased over the Internet. The theory is that the in-state companies will then lobby to overturn the national moratorium on Internet sales taxes so as to even the playing field again. The eventual global outcome could be a unified global taxing authority, which would hamper international e-commerce, and a black market enabled by encryption technology. It could also be an erosion of the state's taxing powers, and a rise in economic activity.
- "A Crisis of Content"
Time (10/02/00) Vol. 156, No. 14, P. 68; Cohen, Adam
Napster and music companies will appear before a panel of appeals court judges next week and the case could finally come to a head. But even if Napster receives an unfavorable decision, peer-to-peer file-sharing technology appears as if it is here to stay, especially with the emergence of Gnutella and Freenet. Advanced file-sharing systems such as Gnutella and Freenet are more difficult to contain because they do not operate from a single Web site as does Napster. Such systems have no centralized location to shut down. Music companies view Napster as a serious threat because the technology enables computer users to download music for free. Indeed, the music industry stands to lose $3.1 billion to piracy over the next five years, according to a new study from Forrester Research. Furthermore, teenagers are not the only people getting music for free over the Internet. A Pew Internet & American Life Project study shows that more than half of those who download online music are older than 30. Although music companies hope to stop Napster in court, they are considering using technology such as encryption and watermarks to make it more difficult for pirates to copy their music. Some companies are conjuring up ways to use the Internet to make music a more rewarding experience for consumers, while others believe that charging people to pay to download for each track or on a subscription basis is the answer. Although music companies are on the front lines in the war over peer-to-peer file-sharing technology, every industry that deals in intellectual property should be concerned. Peer-to-peer services that allow people to get free videos and movies over the Internet are now available, and technology that will allow computer users to download books, blueprints, comics, stock photos, newspapers, and magazines could be next.
For information regarding ACM's work in the area of intellectual property, visit http://www.acm.org/usacm/copyright.