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ACM TechNews is published every week on Monday, Wednesday, and Friday.
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Volume 2, Issue 121: Monday, October 23, 2000
- "Web-Firm Layoffs Increase Steadily and May Accelerate"
Wall Street Journal (10/23/00) P. B8; Tran, Khanh T.L.
Internet companies are laying off workers at an increasing rate, according to a new study to be released today from outplacement firm Challenger, Gray & Christmas. The firm says the number of layoffs increased 18 percent from September to October, from 4,805 in September to 5,677 by Oct. 20. Challenger Gray CEO John A. Challenger says he expects that the number of dot-com layoffs will peak in the November, December, January period, when many Web firms will have run out of cash. Challenger Gray derives its findings from corporate filings such as 10-Q documents and layoff notices, and the company says it calls companies to confirm its data. Challenger says dot-com layoffs began as a trickle last December, but began accelerating in May. He says that 44 of the 274 firms that announced layoffs since last December have already gone out of business.
- "BSA to Press Need for Single Net Contract Law"
Newsbytes (10/19/00); MacMillan, Robert
The Business Software Alliance (BSA) and the Digital Commerce Coalition (DCC) will discuss the need for states to adopt the Uniform Computer Information Transactions Act (UCITA) at an FTC forum next week. No states except for Maryland have a policy on digital transactions of software and other information, and UCITA would provide uniform state laws for online contracts, the two groups say. UCITA would protect consumers by requiring IT companies to pay for returns and defective software, and to pay for any damage caused by faulty software, BSA and DCC officials say. This type of law will become increasingly important as e-commerce increases the number of transactions that occur between states with varying contract laws, says BSA President Robert Holleyman. Meanwhile, David Crane, manager of government affairs and corporate counsel at Autodesk, notes that UCITA is only a default rule that states can amend, and that individual contracts will override UCITA. Holleyman says it is unnecessary to implement a federal version of UCITA until all states adopt the law.
For information about ACM's UCITA activities, visit http://www.acm.org/usacm/copyright.
- "PC Shipments in 3rd Period Were Strong"
Wall Street Journal (10/23/00) P. A4; Williams, Molly
International Data (IDC) and Dataquest both say PC shipments were healthy in the third quarter, but the two firms diverge on their outlooks for the fourth quarter. IDC says global PC shipments in the third quarter increased 18.3 percent, while Dataquest says shipments grew 15.2 percent. However, IDC predicts a standard fourth quarter with shipments rising 20 percent, while Dataquest offers a bleaker forecast. Dataquest had predicted 18.6 percent growth, but it now plans to lower its estimate to 16 percent. Inventories appear to be too large, and PC makers might be forced to reduce prices as a result, Dataquest says. The corporate market is not adopting Windows 2000 as quickly as anticipated, and the consumer market is saturated, Dataquest says. Nonetheless, both firms predict strong PC sales next year, as corporate users embrace Windows 2000 and consumers purchase new PCs with faster processors.
- "Britain Braces for Battle on Workplace Surveillance"
Reuters (10/23/00); Meares, Richard
A law scheduled to go into effect on October 24 has set off a fierce battle in Britain between businesses and privacy activists. The new law, which privacy activists and most others contend is tilted heavily in favor of employers, affords businesses the right to monitor employee emails and other communication on the job. However, there is still much confusion surrounding the new law, as it does not clearly specify who is allowed to monitor employee communications, stating only that the "system controller" has such powers, but can also transfer that power to someone else. Other provisions in the bill are also confusing to both sides, although it is clear that a private email will remain so under the new guidelines, although employers will be granted the power to read the text of employee emails until it becomes obvious as to whether it is private or business-related. However, privacy advocates argue that even if a boss is required to stop reading an email once it is clear that it is private, the damage to the employee has already been done.
For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy.
- "Internet Registry Firms Await Decision on Broad Expansion of Domain Names"
Wall Street Journal (10/23/00) P. B15A; Loftus, Peter
ICANN will vote this November on which new top level domains to introduce to the Internet, and analysts say the decision will affect the domain name registration market. New TLDs should open the market to registrars other than industry-leader VeriSign, analysts say. VeriSign has registered more than 19 million names in the .com, .org, and .net domains, and its Network Solutions unit has resold 11.8 million of these names. Although ICANN is introducing the new TLDs in part to end VeriSign's monopoly of the domain name registration market, company officials say NSI will still benefit from existing customers wanting to register their established addresses under the new TLDs. VeriSign's main rival, Register.com, has much more at stake with the new TLDs, analysts say. The firm has yet to show a profit, even though its sales of domain names has reached 2 million. Register.com's stock is only 1.3 times greater than its revenue, while VeriSign's stock is 33 times greater. Register.com also may have lowered its revenues because of a recent sales promotion that featured lowered prices for registration. Register.com has submitted .pro as a possible new TLD. Other registrars hoping to benefit by becoming registrars for new TLDs include Lycos, Nokia, and BulkRegister.com.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html
- "Grading UDRP's First Year"
Recorder Online (10/16/00); Sandburg, Brenda
Observers say the Uniform Dispute Resolution Policy (UDRP) enacted by ICANN last year to mediate disputes over domain names has generally succeeded but could use some fine-tuning. Under the system, trademark owners who believe others have unfairly incorporated their trademarks into domain names may have a panel of one or three arbitrators settle the dispute. That panel then considers how close to the trademark the disputed domain name is or whether the trademark owner has a legitimate claim to that name. Perhaps most importantly, the panel must decide if the disputed name was registered in good or bad faith. For example, a UDRP panel gave the rights to crew.com to J.Crew because the original registrant was attempting to sell it. For the same reason, a panel awarded wal-martsucks.com to Wal-Mart. However, a panel found Penguin Books had no right to penguin.org, and that bridgestone-firestone.net, a site critical of the tire manufacturer, was a fair use of the trademark. Critics of UDRP say the system overextends the extent of trademark law, giving owners "broader rights in cyberspace than they have in the real world," according to Jamie Love of the Consumer Project on Technology. Love argues for more top level domains that define categories of services. Other critics suggest an appellate system to review UDRP decisions. However, ICANN officials do not believe an appellate system is practical, arguing that it would clog the system. Disputes that extend beyond the arbitration process should go to court, ICANN says. ICANN believes it can improve UDRP by creating stricter standards for what is and what is not fair trademark use.
- "High-Speed on Slow"
Wall Street Journal (10/23/00) P. R56; Burns, Johnathan
Many customers purchasing broadband Internet access are disappointed by the lack of customer support from Baby Bells, unreliable access, and speeds that are slower than expected. Companies such as Verizon Communications, BellSouth, and Qwest Communications International are pushing broadband services in an effort to retain customers. Losing a customer to another DSL provider could mean that the competitor will also take over the customer's basic voice service within two years. In addition, DSL providers face competition from cable providers such as AT&T, which plans to offer voice and broadband over its cable network. The U.S. will have 1.5 million DSL subscribers and 2.4 million cable-modem subscribers by the end of this year, says Yankee Research. However, as companies race to provide DSL, they lack the experience and technical staff to support the service. In many cases, customers are waiting months to receive DSL service. Meanwhile, the speed of DSL depends on how far a user is from the phone company's central office, and some users are finding that the service's speed does not match their expectations. In addition, the modems for DSL service are harder to get back online once they are knocked off. Always-on broadband connections also leave users more vulnerable to hackers. However, the Bells' widespread network reach is expected to help them win the majority of broadband subscribers, and customer satisfaction is likely to improve as technology advances and technical staffs grow, experts say.
- "Airlines Must Disclose Lower Internet Fares"
Washington Post (10/21/00) P. A2; Mayer, Caroline E.
U.S. airlines' reservation agents must inform travelers that cheaper airfares can be found on the Internet or airlines will face the consequence of legal action, the Department of Transportation announced Friday. "It is deceptive and hence illegal for an airline's reservation agent to quote or sell a fare to a consumer who requests the lowest fare" if the fare quoted is not lower than those found on the Internet, the department said. The department said that it would not require airlines to offer online fares over the phone. Airline tickets purchased over the Web now comprise 6 percent of all airline ticket purchases, compared with 0.5 percent in 1996.
- "High-Tech Groups Oppose Fake-ID Bill"
Newsbytes (10/18/00); McGuire, David
Several high-tech businesses and trade groups have sent a letter to leaders in the Senate, expressing their displeasure with a bill sponsored by Sen. Susan Collins (R-Maine) that cracks down on the sale of fake IDs on the Internet. The group, which includes Yahoo!, Lycos, and the Information Technology Association of America, says that language in the bill leaves ISPs vulnerable to liability. "The language of the bill creates criminal exposure for routine communications functions that Internet companies perform automatically at the initiation of third-party users," the letter says. The group is asking the Senate to compromise on the issue by adding "liability limitation" protections to the bill.
- "Lieberman Says IT Should Police Itself"
InfoWorld.com (10/17/00); Weil, Nancy
Democratic vice presidential candidate Joe Lieberman, speaking at Gartner Group's ITxpo this week, said the government should take a hands-off approach to online privacy, allowing the industry to craft its own policies. However, Lieberman says "a much more aggressive attempt to legislate" will result if the industry fails in this regard. Lieberman suggested that Web sites privacy policies be reviewed annually by the inspector general or an outside agency. Lieberman also said the government should keep a moratorium on Internet taxes in place for another two to five years. Nonetheless, Lieberman said that it is only a matter of time before e-commerce taxes will be put in place. Thus, the creation of a fair tax system for all jurisdictions is essential, Lieberman said. Lieberman also said that he is "personally committed" to the creation of a chief information officer to coordinate IT policy at the federal level. In addition, Lieberman favors one federal Web site that would link to all other federal Web sites so that citizens would have an easier time finding information.
For information about ACM's efforts on matters of public policy, visit http://www.acm.org/usacm.
- "Europe on the Brink"
Industry Standard (10/23/00) Vol. 3, No. 43, P. 226; Barack, Lauren
The tumbling of London's fashion site Boo.com and natural health products site Clickmango, as well as Sweden's business clothing site Dressmart, has left a chill down the spine of Europe's would-be Internet entrepreneurs. Unlike their counterparts in America, European Web entrepreneurs are not operating in a culture that is relatively accepting of business failure. In America, the experience obtained through a failed business venture is often viewed as something that will enhance the reputation of a young entrepreneur. Not so in Europe, where employees of a bombed-out outfit might have difficulty finding another job. Such a risk-averse attitude toward life could prevent many European workers from casting their lot with an e-commerce firm. So far, few have been rewarded as handsomely as some American workers who have enjoyed success with a dot-com. However, the prospects remain with International Data predicting e-commerce sales in Europe will grow from 13 percent of the value of e-commerce in the United States in 1998 to 89 percent by 2004. Entrepreneurs who have decided to brave the new economy have come to the conclusion that there must be more effort on their part to convince workers to accept the risk of a dot-com. Offering private health care appears to be working. Furthermore, as it continues to observe American flops from afar, Europe could be the place where successful dot-coms are created in years to come.
- "IT Plan Ready for New Administration, Congress"
Federal Times (10/23/00) Vol. 36, No. 38, P. 18; Flyzik, Jim
The Chief Information Officers Council is creating an e-government transition plan for the next administration, using input from various sources to provide a blueprint for an e-government infrastructure that provides customer-friendly, functional government services online. Among the issues in the CIO Council's transition plan are how best to coordinate government, intergovernmental, and private-sector electronic initiatives; how to give citizens, including those who are disabled, the most efficient access to electronic government; and how to establish security and privacy standards that will make citizens feel at ease doing business with the government over the Internet. The council will publish a draft of its transition plan at www.cio.gov by the end of October.
- "Chipmakers Under Pressure to Keep Up"
InformationWeek (10/16/00) No. 808, P. 30; McDougall, Paul
Manufacturers such as IBM and Intel must face overwhelming demand, product failures, delayed product launchings, and competitive innovation in order to survive in the chip market. Demand for microprocessors is stretching out capacity. For example, reports that IBM was having difficulty supplying chips to Cisco Systems caused the company's shares to drop 6 percent in trading on Oct. 12. Companies are also under pressure to keep up with the mobile market while competitors such as Transmeta are taking the lead with innovative products. IBM has announced plans to build a $2.5 billion plant that will fabricate pervasive computing chips, while Intel has unveiled a pair of energy-efficient mobile chips. Intel is spending $6 billion this year to expand capacity, but other problems have beset the company in recent months. Repairing a memory defect in motherboards sent to PC makers cost Intel $200 million, while problems in testing forced the company to recall its Pentium III chip. Most of Intel's troubles revolve around its decision to design products based on Rambus memory, observes J.P. Morgan analyst Terry Ragsdale. Intel's rivalry with Advanced Micro Devices has also contributed to its woes, resulting in Intel pushing its technology beyond its limits. A shortage of Intel's Pentium IV chips and the delayed launch of its 64-bit Itanium chip could also spell trouble. Shortages of faster and better chips could hamper software developers working on new business applications, while PC makers would suffer from reduced demand for upgraded systems.
- "Federal Web Sites Need Some Work"
Roll Call (10/16/00) Vol. 46, No. 26, P. A30; West, Darrell
- "Is Security in the Cards?"
InternetWeek (10/16/00) No. 833, P. 1; Yasin, Rutrell
With Internet fraud and theft increasing, Visa and American Express have teamed up with online retailers to beef up security measures. "Visa is providing certain tools to assess risk level, and American Express is providing a peer network to confront merchant fraud," says Expedia's Suzi Levine. Visa International has launched a Global Data Security Web site to help merchants fulfill tougher Internet security standards. Merchants can determine how well their data is protected by comparing their security measures to the site's standards. American Express and online retailers have formed the Worldwide E-Commerce Fraud Prevention Network as a clearinghouse for information and techniques to strengthen online security and lower fraud-related costs. The Network may host a prevention summit as well as workshops next year. American Express is also implementing private payments that provide users with random, unique numbers for each Internet purchase.
- "After the Election, Tech Issues Move to Front"
Washington Techway (10/09/00) P. 64; Crabtree, Susan
If the Democrats win the House in next month's elections, the New Democrats--business-friendly moderates--will claim much of the credit, which will increase their influence. New Democrats have a list of digital economy legislative priorities, and they are the Democratic Party's main link to the tech sector. They approve of Vice President Gore's selection of Sen. Joe Lieberman (D-Conn.) as his running mate, and those New Democrats who do not have to worry about reelection are putting together "third way" initiatives and tech sector policy goals. Broadband legislation, database protection, privacy concerns, and intellectual property will all remain to be dealt with, but the digital divide will probably be the New Democrats' top priority. They will have to reach out to their more liberal colleagues, many of whom will be heading key House committees. They support the Digital Divide Elimination Act, and legislators will support workforce training initiatives and research and development tax credits.
- "Five Factors Impede E-Gov's Progress"
Government Computer News (10/16/00) Vol. 19, No. 30, P. 13; Daukantas, Patricia
Government agencies face five barriers to implementing electronic solutions, warns Kathleen Adams, formerly of the Social Security Administration and currently at SRA International, where she specializes in health systems and e-government. First, to succeed in the Internet age, government agencies must become more centered around customers. Second, agencies must coordinate their different service channels: Web pages, 1-800 numbers, and office locations. Third, agencies must provide customers with forms they can easily use over the Internet, or customers will refuse to complete their transactions. Fourth, agencies must account for security and privacy. Adams notes that government efforts to provide electronic authentication are developing more slowly than many had expected, but she says many agencies are not rushing PKIs because the newest authentication technology is outpacing legal precedent. She believes that, in the end, some combination of PKIs, biometrics, and smart cards will be the basis for electronic authentication. Finally, Adams says government agencies must ensure their sites have the bandwidth and infrastructure to handle heavy traffic. Overall, Adams estimates only half of government agencies have a strategic plan in place for electronic solutions, but she believes initiatives such as FirstGov, the federal government's new Web portal, will draw attention to the possibilities of e-government and increase the pressure on all agencies to integrate their services online. She says the government should approach the Internet age with the same inter-agency cooperation that helped it solve the Y2K computer crisis.
For information regarding ACM's activities related to encryption, visit http://www.acm.org/usacm/crypto.
Washington Monthly (10/00) Vol. 32, No. 10, P. 25; Thompson, Nicholas
The government should become heavily involved in the research, development, and application of nanotechnology, writes Nicholas Thompson. The government initially funded nanotech research, and private companies seem unlikely to make significant strides in this field or to share information, Thompson contends. The government must also organize a regulation initiative, since along with nanotech's benefits come many sinister implications, Thompson warns. Weapons of mass destruction can become so numerous through self-replication that perhaps abandoning nanotechnological research is the only alternative, Sun Microsystems cofounder Bill Joy has written. But Thompson argues that abandonment is impossible, and thus government control of development is warranted. The research should be based either in the U.S. or with allied nations, and the U.S. government must lay out the guidelines for international cooperation, Thompson writes. The government will also have to institute oversights and constraints, both nationally and internationally, to prevent private industry from cutting corners in nanotech, Thompson suggests. President Clinton's National Nanotech Initiative is expected to pass in Congress this fall, but Thompson claims that more must be done.
- "Ready, Fire, Aim"
CIO (10/01/00) Vol. 14, No. 1, P. 66; Dobrin, David
Rather than strive to make headlines, Benchmarking Partners partner David Dobrin says that business leaders should take practical steps toward business-to-business (B2B) e-commerce. All too often, companies rush into e-business without first determining what it takes to be successful online. Dobrin says companies entering the B2B e-commerce world would be best served to think about two relatively unglamorous issues: catalog content and reverse auctions. Reverse auctions are a useful tool for businesses, but they can be dangerous, Dobrin says. Too often, companies are overcome with "auction fever" and take on contracts impossible to fulfill. Before going online, companies must develop a process to help decide which contracts to seek aggressively, using real-time data to monitor available resources. Catalog content creation is a simpler issue to tackle. Products listed for sale on an e-marketplace will sell better if product information such as descriptions, prices, specifications, and availability is clearly provided, says Dobrin. Companies should work to develop an e-marketplace-friendly catalog before going online, recommends Dobrin. The Internet is a wonderful new business tool, Dobrin says, but engaging in e-commerce does not mean that a company can then overlook the practicalities of business.