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Volume 2, Issue 128: Wednesday, November 8, 2000
- "Election Holds High Stakes for Some Tech Companies"
Investor's Business Daily (11/07/00) P. A6; Krause, Reinhardt
High-tech firms have made a major investment in this year's election, donating money to both political parties and their presidential candidates. A shift in which party controls the White House or Congress could decide several pieces of legislation and policy initiatives that directly affect software firms and hardware makers. Those two groups spent a combined $24 million on federal candidates from Jan. 1, 1999 to Jun. 30, 2000--more than traditional corporate donors such as pharmaceutical, commercial banking, and oil and gas firms. The Internet will likely be a top issue in the next Congress, observers say, with lawmakers dealing with topics such as consumer privacy, e-commerce sales tax, and whether Internet service providers should be open to regulation. Although tech firms spent equally between the two main parties, observers say tech companies likely have more sympathy for Republican candidates, who would be less inclined to regulate markets or to block proposed mergers. Republicans also played a key role in the recent passage of legislation increasing the number of H-1B visas granted each year to foreign high-tech workers, giving them a boost in the esteem of many tech firms. However, few observers expect a major Republican victory on Tuesday would mean the end of all government intervention in the tech industry, saying the Justice Department's case against Microsoft will likely continue. According to the Center for Responsive Politics, AT&T has spent the most of any tech company this election cycle, having donated $4.3 million from Jan. 1, 1999, to Jun. 30, 2000. The company is worried that regulators may force it to sell some of its cable-TV interests. Other big spenders include Microsoft, Verizon, and Global Crossing.
- "Trade Group Challenges Rules on Data Sales"
Washington Post (11/07/00) P. E1; O'Harrow, Robert Jr.
The Individual Reference Services Group (IRSG) has requested that a federal judge overturn privacy regulations approved by the FTC, claiming that the regulations threaten to disrupt the lucrative market for personal information. The FTC has instituted regulations requiring financial businesses to offer users the opportunity to "opt out" of data profiling that could be sold to others. The regulations will go into effect on July 1, but the IRSG argues that the FTC went beyond its authority by issuing these rules. The IRSG fears that financial institutions will refuse to reveal their data-sharing practices with clients as a result, says IRSG's Ronald Plesser. The FTC has ignored the practice of selling credit header reports in accordance with the Fair Credit Reporting Act, Plesser contends. Credit headers are used to prevent fraud, for marketing purposes, and to locate individuals such as debtors and subjects of news investigations. By limiting the companies' dissemination of information, the FTC is also bringing up First Amendment issues, adds Plesser. Journalists and private investigators worry that valuable sources will be lost if the ruling stands. Meanwhile, legislators and privacy advocates are lauding the FTC's efforts. "[The FTC is] following the will of Congress...regarding the desire to protect consumer privacy," insists agency spokesman Eric London.
- "Experts Says France Could Block Most Nazi Web Sales"
A French court in May ordered U.S. Internet giant Yahoo! to block French Internet surfers from outlawed Web sites that sell items like Nazi uniforms and SS badges. On Monday, three specialists called on by the judge to give expert testimony stated that although Yahoo! is unable to screen out all pages it hosts, a filter system could be created to block out access to 90 percent of Nazi sales to French Internet users. One of the experts, Winton Cerf from the United States, said the auction sites would come up with different keywords in order to bypass the filters. "From the very beginning, we knew that people would try to control information on the Internet," Cerf said. "Happily the Net is not very cooperative and we don't have many [censorship] tools." Under French law, it is illegal to sell objects with racist overtones.
- "Report: U.S. Net Use Slips"
NewsFactor Network (11/06/00); McDonald, Tim
Japanese at-home Internet users used the Internet an average of 13.9 different days during August, compared with 12.7 days for U.S. users, according to a Media Metrix study that sampled more than 100,000 people in seven different countries. However, U.S. users logged on for an average of 15 hours in August, with Canada averaging 10 hours and 48 minutes, and Japan averaging 10 hours and 22 minutes. Together with the other four countries--Germany, France, Australia, and the United Kingdom--Internet users averaged 12.1 usage days and 12 hours, 10 minutes for August. Although Microsoft, Yahoo!, and America Online still dominated the top Web properties for August, Japanese ISPs have made great strides, with Nifty Sites coming in 22nd overall, and DTI, So-net, Hi-Ho, and MBN all making the top 50. Japan claimed 12 percent of the total online community. Microsoft's Web sites claimed 82.9 million visitors averaging 76 minutes of usage time, while AOL dropped to No. 2 with 81.3 million users averaging 357 minutes of time. Yahoo!, Lycos, and Excite rounded out the top five. Meantime, a PricewaterhouseCoopers Internet survey, which surveyed 2,500 consumers in the United States, the United Kingdom, France, Germany, and Australia, found that U.S. users spend more time online (4.2 hours per week) than other countries. This is in part because the U.S. still leads in terms of household Internet access at 44 percent. Germany has shown the biggest increase in household Internet penetration--72 percent. The study also found that broadband is not being used to a great degree in most countries except Germany, which leads with 48 percent of Internet users accessing the Internet with a high speed connection. In the U.S., 85 percent of Internet use depends upon analog phone lines, compared to 97 percent in Australia, 87 percent in the United Kingdom, and 84 percent in France.
- "PSINet Assailed as Spam Contract Surfaces"
CNet (11/06/00); Festa, Paul
PSINet has admitted to providing access to Cajunnet, a marketing firm known for sending spam, which would seem to violate the ISP's antispamming policy. CNet acquired an unsigned electronic copy of an addendum to a contract, or "pink contract," between the two companies that would allow an ISP to permit its client to send spam. Cajunnet reviewed the copy of the addendum acquired by CNet and authenticated it; however, John LoGalbo, PSINet's vice president of public policy, said the copy was a draft and some of the provisions differed from the one signed by the two companies. CNet's copy of the agreement says that Cajunnet would pay $27,000 for the right to send unsolicited email through PSINet's lines. Steve Linford of the Spamhaus Project said, "We have known of this PSINet contract for a number of days...we know there are more of these contracts in existence between spam gangs and large U.S. backbones." PSINet has a spam policy that threatens to cut service to any client found sending unsolicited email; this policy would have been clearly violated if there was any relationship between Cajunnet and PSINet. Eugene Wanless, Cajunnet general manager, is very honest about his company's practice of sending out between 5 million and 20 million emails at a time. He also said that AT&T, Sprint, and UUNet had all discontinued service with the company recently.
- "Prolific 20-Year-Old Computer Hacker Pleads Guilty"
Los Angeles Times (11/07/00) P. A11; Rosenzweig, David
Jason Allen Diekman, a 20-year-old hacker who admitted to investigators that he had broken into thousands of computers over the last two years, pleaded guilty to federal charges on Monday. Diekman was arrested in September for illegal computer hacking--mostly due to his break-ins to NASA's Jet Propulsion Laboratory and at Stanford University--and for purchasing $6,000 in high-tech equipment using stolen credit-card numbers. Diekman will be sentenced on Feb. 5.
- "Intercepting E-mail Illegal, French Court Rules"
Agence France-Presse (11/03/00)
On Nov. 2, a French judge declared that email is covered by France's telecommunications code, ruling in favor of a Kuwaiti student whose email was intercepted by authorities at the School of Industrial Physics and Chemistry in Paris. Emails cease to be confidential once placed on the Internet and therefore are not like other correspondence, the school officials' lawyer argued. Suspicions that student Tareq Al Baho was using the school's messaging service for his own ends were grounds for the tap, the officials claimed. The judge ordered the university to pay 10,000 francs in damages to Baho and also fined three staff members for privacy violations.
- "Net Calls May Can the ICANN"
Observer (11/05/00); Doward, Jamie
With increasing numbers of commercial Internet sites crowding the Domain Name System, many people are dissatisfied with ICANN's handling of the problem. Despite promises to create a new batch of top-level domain names to accommodate the predicted surge of registrants, ICANN has consistently delayed the launch. Experts now predict progress will not be made until early next year, prompting some companies to take matters into their own hands and offer as-yet unlaunched domain names to registrants on a speculative basis. Critics have also decried ICANN as unaccountable as well as possessing an enormous amount of regulatory power that goes unchecked. "There is a real fear that ICANN places American law over other countries' laws--even for many operations entirely within these countries," claims Simon Moores of the Research Group. Infighting among ICANN's council is only exacerbating the situation. Recently elected appointee Karl Auerbach is calling for the dismissal of ICANN President Mike Roberts and chairwoman Esther Dyson is expected to quit in November. ICANN delayed the launch of the new domain names out of fears of too many names swamping the system, claim ICANN supporters. Currently under discussion is a "sunrise policy" in which the largest companies will be able to purchase associated domain names ahead of all others--a preferential policy that critics feel will only worsen the situation.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/usacm/privacy.
- "Pop! Tech Conference Puts Touch of Humanity in the Age of Technology"
SiliconValley.com (11/04/00); Gillmor, Dan
Advances in technology may overlook the impact that computers and the Internet are having on the lives of human beings, writes Dan Gillmor. Although it is easy to measure the economic impact of e-commerce, how e-commerce and issues of Internet privacy and the threat of cyberattacks or crippling computer crashes affect the way human beings go about their daily lives is harder to measure. If we cannot find a way to measure these less tangible things, Gillmor believes, we must alter our way perception that numerical measurement is the absolutely most important value. Gillmor points to the opinions expressed at the annual PopTech conference, which this year had the theme, "Being Human in the Digital Age," as an example of how to bring a little soul into the hard numbers of the digital age. He says new technology does not excuse human beings from acting ethical, especially as technology permits one person sitting at a computer to wreak so much havoc across the world.
- "A Wealth of Consensus, But Maybe a New Chairman"
Washington Post (11/05/00) P. H7; Mayer, Caroline E.
The FTC will continue on the same moderate path in its enforcement role regardless of who wins the presidency. Still, the FTC has become increasingly concerned with consumer privacy on the Internet. If Al Gore is elected, Robert Pitofsky, a Democrat, would likely be reappointed in 2001. If George W. Bush is elected, the new chairman would likely be chosen between two commissioners already in the agency, Thomas B. Leary or Orson Swindle. If Bush wants to keep the commission on its moderate course, Leary would be the choice. However, industry officials say that Swindle has a good chance of becoming chairman if Sen. John McCain (R-Ariz), who is a longtime friend of Swindle's, remains chair of the Commerce Committee. Swindle, often in the minority of commission decisions, says he "doesn't believe government is competent to play referee in the free market." He was against the FTC urging Congress to create legislation to force companies to tell consumers how they collect and use personal information gathered on the Web. He also dissented when the FTC called for consumer opt-out legislation for programs that give companies the ability to track Internet users' Web-surfing habits. The new chairman would have to appoint staff members to determine the agency's agenda; however, he will still have to convince two of the four other commissioners to go along with his decisions.
- "Fired: Laid-Off Workers in Revolving Door"
CNet (11/02/00); Junnarkar, Sandeep
Layoffs in the dot-com sector this year left little impact on the employment rate in the high-tech industry, as workers who lost their positions found themselves quickly inundated with job offers. Over 22,000 high-tech workers, mostly in the content and retail sectors, have lost their jobs since December, according to Challenger, Gray & Christmas. Nonetheless, some high-tech areas still have an unemployment rate of less than 1 percent, compared with the national average of 4.1 percent as of May, according to the Bureau of Labor Statistics. Furthermore, technology-related jobs will account for the five fastest-growing occupations between 1998 and 2008, government studies reveal. The high-tech industry will create 1.5 million new jobs next year, about half of which will go vacant because of the shortage of skilled workers, says consulting company Management Decisions. With tech companies unable to fill positions, laid-off dot-com workers should have no trouble landing new jobs and generous salaries. However, the dot-com shakeout has made workers more wary of stock options that can become worthless, as many learned the hard way. Meanwhile, as the dot-com sector continues to plummet on Wall Street, other areas such as wireless, optical networking, business-to-business, and Internet infrastructure are gaining favor. Experts predict that as these areas increasingly intersect with online content and retail, the fallen sectors might rise again.
- "Business Method Patent Claim Revived by Federal Circuit"
American Lawyer Media Online (11/07/00); Ringel, Jonathan
The U.S. Court of Appeals for the Federal Circuit last week upheld E-Data's claim that 10 companies violated its 1985 patent on a method of selling content over the Internet. The appeals court decision forces a district court to review its 1998 decision not to broaden the patent to Internet-based technologies. E-Data, formerly Interactive Gift Express, holds a patent on technology that allows companies to sell directly to remote consumers without storing inventory at multiple locations. Instead, companies copy data onto a "material object" such as a book for each individual sale. E-Data accuses the defendants, most of which are software companies, of violating its patent by selling software and documents over the Internet. However, the online services the defendants provide were not commonplace when E-Data received its patent in 1985, and the district court ruled that the patent does not apply to the Internet. However, the appeals judges found that the earlier interpretation of the patent is too limited, and ordered the district court to reinstate the case with a wider interpretation. Still, the appeals court disagreed with E-Data's argument that information is a material object--a decision likely to benefit the defendants that sell only information over the Internet. Defendants in the case include CompuServe, Broderbund Software, Ziff-Davis Publishing, Waldenbooks, and several others.
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- "Information Exploding by the Petabyte"
Investor's Business Daily (11/06/00) P. A8; Deagon, Brian
The Internet has created so much new data and has simplified the means to create even more data that users do not know how to process or present all of the data available to them, industry observers say. According to a recent study from the University of California at Berkeley, data production worldwide in 1999 equaled 1.5 billion gigabytes. That total will only continue to advance and has created what Nobel Prize-winning economist Herbert Simon calls a poverty of attention. Users do not want to wait longer than eight seconds to receive data, argues Paul Borrill, CTO of Veritas Software. He believes that handling all of the new data being produced will not be a problem but that only those who learn how best to present that data to consumers will succeed in the information age. Storage-system maker EMC has turned its attention to the information-management market, noting that each household will soon require 1,000 GB of data just to store its own records. "With this huge deluge of data, a lot comes down to availability," says EMC CTO Jim Rothnie. "Data that's scattered everywhere is often wasted and never exploited." The market for data-storage systems will be worth $100 billion annually in five years, Rothnie predicts. Observers say this explosion of information reveals the extent to which use of the Internet has changed everyday life. The Berkeley study found Internet use has grown by 2,000 percent, and another report found the Web contains more than 1 billion Web pages.
- "Korea Readies to Fight Cyber-Terrorism"
Internet.com (11/02/00); Kim, Michael
To combat cyber-terrorism and improve the national security of corporate information, Korea's Ministry of Information and Communication (MIC) has announced plans to establish private organizations similar to the Information Sharing and Analyzing Center (ISAC) of the United States. The plan will begin with the formation of two ISACs in the telecommunications and financial sectors, according to government officials. The Korean ISACs are expected to help protect their member companies from hacking, computer viruses, and other forms of online terrorism. The Financial Supervisory Service will set up the financial ISAC by year's end, while the telecommunications ISAC will be established early next year with participation from the Korea Telecommunications Operators Association. The other industrial sectors will be covered by ISAC services later on. Companies will receive technical support through the Korea Information Security Agency. Five divisions, including planning, information exchange, and training, will comprise the ISACs, says a MIC spokesman. "A team of experts will determine and control the size of each division and workforce after a thorough evaluation of submitted proposals," the spokesman adds.
- "Gartner ITxpo Europe: E-Government 'Not for Governments'"
InfoWorld.com (11/06/00); Sayer, Peter
Speakers at Gartner's European IT conference told attendees that the rise of e-government could result in governments handing over many of their functions to the private sector, whereas Gartner senior analyst Andrea di Maio suggested governments consider whether private enterprise was better suited to handle online services. "E-government might not be for governments," she said. Di Maio says the management of IT services and infrastructure in particular is probably better off in the hands of private enterprises, because government services are even shorter of skilled IT personnel than are private companies. Di Maio also says governments should keep only the services that they perform best and pointed out that another part of e-government is constituency participation--something that governments are not dealing with. She introduced a new term--"e-governance"--to define the process by which society creates rules and regulations to facilitate the new information age. Di Maio also warned that those who cannot or will not use technology to access government must not be treated as second-class citizens. Other barriers to e-government include political constraints and trying to measure its success.
- "Next President's Agenda Is High Tech's Question"
Washington Technology (11/06/00) Vol. 15, No. 16, P. 16; Gildea, Kerry
The high-tech industry believes the next president will play a crucial role in shaping export policies for powerful technology. The government has been easing export controls, for example, by passing the Fiscal Year 2001 Defense Authorization Act, which abbreviates the congressional review period for export controls from 180 days to 60 days. Although the relaxed policies will help the industry compete in global markets, high-tech firms are still pushing for more change. For example, the industry wants an even shorter review period and new criteria for reviews. Presidential candidates Al Gore and George W. Bush both seem likely to support favorable export policies for the high-tech industry. Bush says the government's export limits are random and ineffective at keeping pace with rapid advances in computing power. If elected, Bush says he will reduce limitations on commercial technology and permit companies to export products that are widely available in foreign markets. By contrast, today's export policies are based on computing power measured in MTOPs (million theoretical operations per second)--a method Bush says prevents export controls from keeping pace with technology. Gore does not offer as many details on export controls, but also seems likely to support tech-friendly policies. Gore says technology is important to both the nation's economy and defense, saying he would work to balance the interests of the two areas.
- "High Tech's Honeymoon on the Hill May Be About to End"
Business Week (11/13/00) No. 3707, P. 69; Borrus, Amy; Gleckman, Howard; Yang, Catherine
Although the high-tech industry appears to have gotten everything it wanted from the 106th Congress, next year is expected to be a much different story. Stock prices are already falling now that the dot-com hype is over. Tech leaders may no longer be able to command the ear of politicians if the economy sours, as economists predict. Moreover, the IT industry is not on the same page when it comes to the issues it will have to face next year. For example, Hewlett-Packard, Intel, and America Online have broken ranks on the issue of online privacy and more companies are expected to follow their lead. Online privacy is much more divisive than getting the go-ahead for digital signatures or more visas for foreign high-tech workers. In addition to online privacy, the issues ahead involve open access to the broadband pipes of cable companies, file-sharing technology, and online taxes. The IT industry is now making political contributions that rival the entertainment and gas industries, but this still may not make a difference. "Next year is going to be very tricky," says Edward Black of the Computer & Communications Industry Association.
- "Beating IT Age Bias"
Computerworld (10/30/00) Vol. 34, No. 44, P. 106; Hayes, Frank
- "Of Catenanes and Porphyrins"
Business 2.0 (11/14/00) Vol. 5, No. 21, P. 238; Overton, Rick
Engineers and investors are investigating the field of molecular electronics as a source of new technologies. Computers with individual molecules acting as switches could consume far less power. Recent accomplishments by Hewlett-Packard, IBM, ZettaCore, and Molecular Electronics could guide future applications of molecular electronics. Ari Aviram and Mark Ratner of IBM began the field of molecular electronics by manipulating individual atoms into structures, and then Jim Tour and Mark Reed proved that individual molecules can display simple electronic properties. Tour and Reed have since established the startup Molecular Electronics, where Tour is striving to create nanocells, or self-assembled molecules that can be programmed for specific functions. Scientists from UC-Riverside and North Carolina State University are jointly working with porphyrin molecules at their startup, ZettaCore. Porphyrins can store more than 2 bits of data in each molecule and pave the way for faster, more powerful computer devices, claims UC chemist David Bocian. Meanwhile, researchers at Hewlett-Packard Labs have teamed up with UCLA chemists Fraser Stoddart and Jim Heath, who are exploring the possibilities of logic gate-like mechanisms assembled from catenane molecules.