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Volume 2, Issue 140: Monday, December 11, 2000
- "Slowdown Forces Tech Firms to Tighten Belts"
USA Today (12/11/00) P. 1B; Iwata, Edward
High-tech heavyweights are reigning in their spending in response to the fall in the stock market, slow PC sales, and signs of an economic downturn. Companies are cutting back on travel and equipment, research and development, and bonuses for executives. In addition, many companies are slowing the rate at which they hire new workers. Intel on Thursday announced that its fourth-quarter sales in every product line around the globe would suffer as a result of sluggish spending worldwide. Instead of proceeding with a planned 8 percent increase in spending on administrative needs, marketing, and research and development, Intel said these expenses will remain flat from the third quarter to the fourth quarter. Intel is also scaling back its hiring, with top executives now required to approve each new employee. Meanwhile, NorthPoint Communications, Covad Communications, and Agilent Technologies each plan to lay off hundreds of workers. Microsoft says it will increase research and development by just 17 percent next year, down from a 27 percent increase in spending this year. Following an announcement that Hewlett-Packard would fall short of earnings goals for the fourth quarter, CEO Carly Fiorina and her management team said they would return more than $1.5 million in bonuses. Meanwhile, 3Com is shutting down sales offices and manufacturing plants, and cutting manufacturing costs by consolidating contracts.
- "'So, Fire Me!'"
Washington Post (12/11/00) P. E1; Joyce, Amy
The number of employees laid-off by struggling or failed dot-coms continues to rise, but industry observers say many of those laid-off employees, as well as those who survive the job cuts, remain positive about the outlook for future employment and do not lose confidence in their skills. Many tech workers see layoffs as an opportunity to find another, often higher-paying job. Workers usually store their resumes online, observers say, allowing them to catalog jobs that are available and move quickly once they lose their current position or the rumors of imminent firings or collapse begin. Observers say this situation also eases the guilt of those who keep their jobs because they see their former co-workers find new jobs without much hassle.
- "Privacy a Likely Loser in Treaty"
Wired News (12/07/00); McCullagh, Declan; Morehead, Nicholas
The Council of Europe is unlikely to add privacy provisions to its controversial international cybercrime treaty, according to Henrik Kaspersen, chairman of the council's cybercrime committee. Kaspersen said that the council would like to include privacy protections, but the number of existing privacy laws across the globe casts doubt on the likelihood of that scenario unfolding. "There are a number of existing case laws dealing with privacy throughout Europe, and we're also dealing with countries like the United States and Japan that have differing legal systems," Kaspersen said. The Council of Europe's cybercrime treaty has the support of the recently released McConnell International report--the same report that found a decided lack of global cybercrime laws. The council's cybercrime treaty is "realistic, practical, efficient, balanced, and respectful of due process that protects individual rights," the McConnell report states. The Global Internet Liberty Campaign, the Center for Democracy and Technology, and other civil liberties groups have been critical of the cybercrime treaty.
- "The Uniting Geeks of America"
Washington Post (12/09/00) P. E1; Johnson, Carrie
Industry observers say an increasing number of high-tech workers are dissatisfied with their jobs. Common complaints, especially among call center and distribution center employees, include low pay, stock options that have lost a large percentage of their value in the recent dot-com shakeout, and excessive mandatory overtime. Employees at a few companies have turned to unions to redress these complaints. At Etown, customer service representatives staged a sickout to protest low pay and other problems. The company fired many of the participants, although the company's CEO says the dismissals occurred because of a change in the company's overall business strategy. A few of the dismissed workers had already contacted officials from the National Labor Relations Board in an effort to facilitate the formation of a union. Established union groups are attempting to assist some of these efforts. At Amazon.com, workers at the company's Seattle call center have taken advice from the Communications Workers of America in their efforts to end what they characterize as low pay and brutal overtime schedules. Another pro-union group, the Prewitt Organizing Fund, has been trying to drum up union support at Amazon's distribution centers across the country. Observers say the unions are meeting with mixed success. Employees at Amazon have won some concessions but have yet to form a cohesive, unified labor front. As in many other industries, tech-industry management has been quick to respond to talk of unions and has been fairly effective in preventing them from gaining a foothold.
- "So Far, 'Tis Season for E-Tailers to Be Jolly"
Investor's Business Daily (12/11/00) P. A8; Prado, Antonio A.
E-tailers are enjoying a strong holiday season, according to several economic indicators that show large gains in the number of consumers buying online. The Economy.com/PC Data Index of Online Shopping, which measures how many consumers purchase items online each month, rose to a record high of 211 in November. During the week of Thanksgiving the index hit 242.67. By contrast, the index was at 150.2 in October. Online sales in the third quarter reached $6.37 billion, a 15.3 percent increase over the second quarter, according to the Commerce Department. In October, consumers purchased 4.53 percent more over the Internet than in September, according to the Online Retail Index from the National Retail Federation and Forrester Research. Since the index began in January, consumer buying over the Internet has risen 58.46 percent. Although the shakeout continues in the online retail sector, sales over the Internet are rising, says economist Celia Chen. E-tailers that perform well over the holiday season are most likely to withstand the turbulence in the dot-com arena. Still, brick-and-mortar retailers seem to be making the largest strides online this holiday season, analysts say. In addition to growing competition from traditional firms, e-tailers could be plagued by an economic downturn. Although consumer spending is still strong, economists are watching for a potential slowdown.
- "Ranks of Privacy 'Pragmatists' Are Growing"
TechWeb (12/07/00); Mosquera, Mary
Most Americans support the dissemination of data contained in public records, but they also say that there must be a legitimate legal or social reason for the extraction of this data, according to a recent survey conducted by Privacy and American Business and ORC International. As long as the information is not abused, most Americans support the use of personal data on the Internet for commercial purposes. This support includes the use of home or work addresses by law enforcement, potential employers, or consumer credit companies. Those surveyed believe it is less acceptable to allow private investigators or ordinary citizens to access the information. The 1,000 people surveyed in the report also say that they object to the government posting personally identifiable public information on the Internet unless there are safeguards. These safeguards include the government requiring the consent of the individual before personal information is displayed on public record, and requesting a specific purpose for such information to be displayed on the Internet. Privacy and American Business President Alan Westin says that more Americans now fall into the category of "privacy pragmatist" rather than "privacy fundamentalist." Ron Plesser of Piper Marbury Rudnick & Wolf says that the Internet industry must determine how to properly use Social Security numbers. "Regulating the purchase and sale of Social Security numbers over the Internet won't come overnight," Plesser says.
- "Forrester Exec Injects Security Summit With Harsh Truths"
eWeek Online (12/07/00); Berinato, Scott
Contradicting Bill Gates' optimistic tone at the recent Microsoft SafeNet 2000 security summit, Forrester Research director of politics and government John McCarthy cast a more negative pall, raising the specter of government regulations to deal with privacy and security issues. McCarthy said Internet privacy concerns, which caused online consumers to refrain from spending $4.2 billion last year, will not be solved for a long time. Furthermore, McCarthy said anyone who does not think the government will step in with regulations to address security and privacy issues is "naive." The largest consumer privacy concerns are the irritation of receiving spam, the feeling of violation as a result of the collection of personal data, fear of potential harm from others who have obtained personal data, and the Big Brother scenario of online surveillance by marketers and/or government, McCarthy says. McCarthy said he is not ready for government regulation of the Internet, but admits that it is already occurring and that consumers will probably demand more of it in the near future. "The reality is we've already got a growing labyrinth of privacy regulations, already on the books or out in the next six months," said McCarthy, pointing to bills such as the Health Insurance Portability and Accountability Act.
- "Pentagon Barraged With More Than 22,000 Electronic Attacks in 1999"
Miami Herald (12/10/00) P. 1A; Pincus, Walter
The Pentagon was hit by 22,000 electronic attacks on its computer network in 1999, and so far this year that number has increased by about 10 percent. Analysts contend that the huge majority of the attacks were harmless pranks, but a few cases are believed to be the work of other countries whose hackers have breached the Pentagon systems and downloaded large amounts of unclassified data. Pentagon officials say that they are unaware of any successful attempts to break into classified computer systems, although they also admit that all types of computer attacks will only increase in the future. Congress appropriated an extra $163 million for computer security in the 2001 defense budget in August.
For information regarding ACM's activities related to encryption, visit http://www.acm.org/usacm/crypto.
- "Federal Spending on E-Gov Efforts Expected to Grow"
GovExec.com (12/07/00); Dean, Joshua
E-government spending in the federal IT budget will increase from 24 percent next year to 28 percent in 2005, according to a new study by Input. Although Input forecasts federal IT spending will increase 5 percent, e-government spending will rise 10 percent. Input executive vice president Kevin Plexico says there is wide support for e-government initiatives, but there are also barriers such as tight budgetary controls and security and privacy issues. Federal e-government spending comes nowhere close to private-sector e-business spending, which, according to Input, is rising 20 percent to 25 percent per year. Plexico notes that federal e-government spending would increase if the funds from non-IT budget sources were counted.
- "Hong Kong Govt Proposes New Laws to Tackle Cyber Crime"
Newsbytes (12/04/00); Creed, Adam
The Hong Kong government's Working Group on Computer Related Crime has released a report calling for changes to the SAR's laws on cybercrime, noting that "certain legal concepts" have been unable to keep pace with the information age. The group called for greater consistency between crime laws in the offline and online worlds. Among other things, the report calls for increasing prison terms for those convicted of hacking offenses; protecting computer data at all levels of storage and transmission; outlawing the trade and sale of computer data that has been unlawfully obtained; placing certain offenses under the umbrella of extended jurisdictional rules; and pinpointing the definition of "computer." The report also calls for "an administrative guideline for Internet service providers."
- "German Officials Warn of Net 'Big Brother'"
TheStandard.com (12/06/00); Perera, Rick
German commissioners in charge of ensuring personal data freedom are warning of new legislation proposed by the German Conference of Interior Ministers that would require ISPs to track and store data on Net surfing. The Interior Ministers requested international authorities to develop "international minimum penal standards" for battling online crime and said it is "urgently necessary to require providers to register and store the 'digital footprints' that every Internet user leaves behind in principle." Werner Kessel, commissioner for data protection in the state of Mecklenburg-Lower Pomerania, joined in an organized statement with commissioners from all but one of Germany's 16 states to protest the new legislation. "The Federal Constitutional Court has repeatedly determined that the storage of personal data must not lead to an all-around surveillance of citizens," said Kessel. "That would, however, be the case in the area of Internet usage with the sought-after rule." The United Kingdom has already passed its Regulation of Investigatory Powers Act 2000, which allows authorities access to email and other encrypted Internet communications. The government of the Netherlands has also moved to expand its police snooping policies, in expectation of an international treaty on cybercrime.
- "Key Committee Faces Choices on Broadband, Privacy"
ComputerUser.com (12/08/00); McGuire, David
Outgoing House Commerce Committee Chairman Tom Bliley (R-Va.) says he has been lobbying the Chamber of Commerce to help develop a privacy mark for the Internet industry that would effectively eliminate the need for privacy legislation. However, if the industry fails to adhere to their own policies, Bliley predicts that the government will step in and introduce its own privacy rules. The Commerce Committee will play an important role in the debate on Internet privacy during the upcoming session, Bliley says. Bliley believes that any privacy law passed by Congress should take a light-touch approach. Despite what some privacy advocates believe, opt-in privacy rules will not work, Bliley says. Also, Congress will almost certainly consider broadband competition legislation during the upcoming session, according to Bliley. Bliley is less sure of the chances of such a measure being passed. Looking back, Bliley says his biggest disappointment was the Senate's failure to extend the e-commerce tax moratorium.
- "Putting Russia's Democracy to the Test"
TheStandard.com (12/04/00); McLaughlin, John
Russian Premier Vladimir Putin has launched an assault on the national media that is threatening the growth of the Internet economy. Only 3 million Russian citizens have Internet access; however, recent surveys show that 46 percent of the population is interested in getting access. Interest is so high that "residents of apartment blocks are pooling their resources to get dedicated lines or radio modems for their building," said Anton Nossik, editor-in-chief at Moscow-based online news service Lenta.Ru. Nossik also remarked that Putin can control the Internet simply by cutting the cables to other countries. In mid-September, the government issued an information security doctrine, saying it was building up state-controlled media to protect the national interest. ISPs in Russia have to fight the oppression of their government as well as the pricing of the monopoly telecoms. Many believe the mobile Internet will spark Russian economic growth because the cost of a computer is so high. Some experts predict that up to 6 million Russians could be online next year. Many analysts believe the Internet will eventually flourish in Russia because the government does have its pro-Internet members and the Putin administration has begun working with the Group of Eight's Dotforce taskforce.
- "Sleeping With the Enemy"
Intelligent Enterprise (12/05/00) Vol. 3, No. 18, P. 12; Nichols, Michelle
The old axiom of keeping one's friends and partners close but one's competition even closer appears to be the guiding force behind the New Economy, which sees companies partnering and collaborating on one deal and competing on another. The alliance between IBM, i2 Technologies, and Ariba is a case in point, in which IBM acts as the neutral glue between competitors i2 and Ariba. "We always knew [the i2/Ariba partnership] was going to be a problem," says IBM's David C. Rawlings. Although not yet a problem--in fact, i2 and Ariba recently extended their reseller agreements--it could easily become one, as the two companies have overlapping products. Companies are entering partnerships in order to squeeze as much efficiency as possible from their supply chain relationships, which are necessarily very transparent, causing companies to be wary of striking partnerships with competitors.
- "Beware Prying E-Mails"
InternetWeek (12/04/00) No. 840, P. 1; Kemp, Ted
New technology that places invisible HTML "bugs" in recipients' emails to track their usage is becoming increasingly common, allowing marketers more access to consumer and company information. The technology has code that tells how often and when recipients look at a particular email message, thereby alerting marketers to how effective sales pitches and similar marketing endeavors are. Problems arise when an email received by someone at work is then forwarded around the company. Vendor Internet Security Systems suggests that employees set their email programs to alert them before they send return receipts to senders, even though HTML tags buried in headers will probably hit the remote Web server named in the tag when emails are viewed in preview mode, thereby allowing email senders to collect data with cookies. Security experts say company IT staffs can change all browsers so cookies will be blocked. Although many marketers and email solicitors have regulations restricting the unauthorized use or sharing of data about individuals, many other vendors do not. For example, Korean firm Postel Services throws Web bugs into clients' emails before sending them to the recipient. Despite the controversy, the average company that uses HTML bugs has a response rate of 13.5 percent as compared to the average 5.4 percent that text-based non-spam emails generate, attributable to the increased information that companies can obtain about businesses and people by using tracking technology. Therefore, the practice is not likely to disappear anytime soon.
- "Training and Retraining Stop the IT Brain Drain"
Network Computing (12/04/00) Vol. 11, No. 24, P. 112; Schafer, Maria
Companies could improve their retention of IT workers by offering training and professional development opportunities, which many workers say is the most important factor influencing whether they stay at a job. Training is particularly attractive to networking technicians, especially call-center personnel, who have the highest turnover rates. Large companies with more than 1,000 workers are leading the way in training, having doubled the amount they spend on training per employee to $1,000 in the past year, according to Meta Group. Still, most companies are not doing enough to provide training for workers, even as the need to learn new skills grows. IT workers need to learn how to use new devices such as PDAs and how to upgrade the infrastructure to support Web applications. Security training is also important as the threat of cybercrime grows. The need for training is particularly urgent among call-center workers, who need to understand changes in technology such as the interactive Web and the integration of voice technologies with faxes sent over the LAN. In addition, one third of companies surveyed by Meta say the reason for high turnover at call centers is that employees do not have the training they need. Meanwhile, more than half of respondents attribute call center turnover to limited career opportunities. Companies are beginning to train workers with interactive, online tools. Some experts advise companies to focus on letting employees experiment with new technologies in a hands-on environment, or "sandbox." Many companies focus on certification, but certification providers vary widely in quality and the value of certification decreases as technology becomes outdated.
- "UCITA Questions Could Lead to Purposefully Poor Design of Ordinary Goods"
InfoWorld (12/04/00) Vol. 22, No. 49, P. 97; Foster, Ed
The National Conference of Commissioners on Uniform State Laws (NCCUSL) is pushing to exclude software from the law that governs the sale of goods in the United States. Instead of remaining under Article 2 of the Uniform Commercial Code, the NCCUSL wants software to be covered only by the Uniform Computer Information Transactions Act (UCITA). If the group succeeds in eliminating software from Article 2, manufacturers of many low-tech devices with embedded systems could intentionally design products to fall under UCITA, which weakens manufacturers' accountability for shoddy merchandise. Cell phones, cameras, cash registers, home medical devices, and sewing machines could all be designed to qualify as software rather than goods. "Every attempt I've seen in UCITA or Article 2 language to make a desktop/embedded distinction can be easily circumvented by an engineer who has been ordered to make sure a product falls under UCITA--in other words, gratuitously building an embedded system to be a UCITA 'computer' just to gain UCITA protection," says Philip Koopman, a professor of electrical and computer engineering at Carnegie Mellon. Companies seeking the protection of vendor-friendly UCITA could add unnecessary complexity to their products that could reduce reliability, Koopman says.
For information about ACM's UCITA activities, visit http://www.acm.org/usacm/IP.
- "Is Your PC Watching You?"
PC World (12/00) Vol. 18, No. 12, P. 59; Wallace, Bill; Fenton, Jamie
After worrying that large-scale companies would abuse spyware, privacy advocates are somewhat bewildered now that similar software products are being targeted to small business owners, spouses, and parents. Companies such as Dow Chemical and Xerox have fired employees over the manner in which they have used company computers, and privacy advocates fear that such monitoring practices are bound to have a negative impact on the home and small-business environment. The low-cost snoopware currently available includes SpectorSoft's Spector 2.1 and EBlaster, Trisys' Insight, and WinWhatWhere's Investigator. Spector 2.1 is designed to record VCR-like screen shots of computer use, log info, and keystroke data for suspicious wives and husbands, as well as parents who want to monitor the activities of their children. With Spector 2.1, users can only view the monitoring data on the same computer. However, EBlaster allows users to review the monitoring data from another computer remotely. Insight and Investigator are designed mostly for small business use. Investigator is the more detailed of the two products, recording the time and date when programs are run and when keystrokes are entered into computers. Presently, there are virtually no laws detailing how companies are to use snoopware, or how the technology should be used in the home. However, pending legislation would require employers to disclose their monitoring activities to employees.