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Volume 2, Issue 30: Wednesday, March 15, 2000
- "Virginia Is First With Controversial Software Law"
New York Times Online (03/14/00); Clausing, Jeri
Virginia Gov. James Gilmore today will sign into law the Uniform Computer Information Transaction Act, which will make Virginia the first state with a law addressing licenses for computer software use. Some critics worry that the law will allow software makers to shun consumer protections and fair-use laws as they pertain to copyrights. Opponents of the legislation include the American Library Association (ALA), the Federal Trade Commission, a handful of software developers, consumer groups, and two-dozen state attorneys general. The Business Software Alliance says the legislation will promote e-commerce, but Miriam Nisbet, legislative counsel for the ALA, argues the opposite, labeling the act a "Trojan horse." Gilmore will sign the act at the Global Internet Summit, being held Tuesday. In other news, the Senate Judiciary Committee last week gave the go-ahead to a bill that would allow more skilled foreign workers to enter the country and work in the high-tech industry. Also, the Information Technology Industry (ITI) Council recognized both Sen. Spencer Abraham (R-Mich.) and Sen. Christopher Dodd (D-Conn.) as a "High-Tech Legislator of the Year." ITI on Thursday will bestow similar recognitions on Reps. David Dreier (R-Calf.) and Jim Moran (R-Va.).
- "Cisco Aims to Speed Up Acquisition of Firms Within the Next Year"
Wall Street Journal (03/15/00) P. B11A
Cisco Systems will increase its number of purchases, acquiring as many as 25 more companies over the next year, according to Larry Carter, Cisco's chief financial officer. The company will continue its focus on the optical and wireless markets, both of which are growth areas, Carter said following his address at the Merrill Lynch Global Telecom Investor Conference. Cisco will serve a $148.3 billion market by 2003, with $62.5 billion generated by work on telecom networks, according to Carter.
- "Microsoft to Back a Browser Keyword System"
New York Times (03/14/00) P. C14; Harmon, Amy
Microsoft tomorrow is expected to announce during the PC Forum conference that it intends to support a keyword system developed by RealNames that enables Internet users to navigate the Web without using URLs. Surfers searching for the site of a particular company would simply type in a company or product name, minus the "www" and "dot-com," and the site of the company which owns the license to that keyword would automatically appear. The RealNames system would also bring users to sites most relevant to a keyword, regardless of whether a company has licensed the keyword, and even has a tracking capability that allows the system to assess the effectiveness of offline advertisements that mention keywords. RealNames charges large firms between $100,000 and $300,000 annually and a per-visit-generated fee to license a keyword. Smaller businesses can purchase a keyword for $100 annually. Microsoft says the deal will allow it to compete more successfully with AOL, which uses a similar keyword system. Microsoft already utilizes the RealNames system in its Internet Explorer browser, and plans to incorporate the technology into its MSN online service. RealNames says the deal will increase the use of keywords to such an extent that URLs and the "800" numbers used in traditional advertising methods become obsolete.
- "A Close Look at a New Medium"
Washington Post (03/14/00) P. E2; Bredemeier, Kenneth
Discussion at Monday's 2000 Global Internet Summit, hosted by George Mason University and attended by more than 500 industry executives and government officials, centered around the future of the Internet and the e-commerce economy. Dell Chairman Michael Dell estimated that by 2003 nearly 500 million Internet users will generate $4 trillion worth of annual Web-based transactions and claimed approximately $370 billion will need to be spent to prepare the Internet infrastructure to handle this massive volume. Microsoft's Richard Belluzzo said as more devices become connected to the Internet, the Web will become "an integral part" of the lives of most people, a statement "father of the Internet" Vinton Cerf supported with his claim that more than 900 million electronic devices will be linked to the Web by 2006. American Electronics Association President William T. Archey said a recent survey revealed the U.S., with 580 users per 1,000 residents, has the highest number of computer users in the world. Virginia Gov. James Gilmore gave a keynote speech in which he reiterated his opposition to the taxation of Internet transactions.
- "Chip Makers Not Stopping at 1GHz"
ZDNet (03/09/00); Spooner, John G.
Intel and Advanced Micro Devices each recently announced the development of a 1 GHz PC processor, but the two companies do not intend to stop there. Both are already engaged in efforts to develop even faster processors that will meet the steadily increasing consumer demand for more computer processing power and better performance. Intel is working to develop by mid year two 1 GHz-plus chips, Willamette and Timna, and also is attempting to increase the speed of its newly released 1 GHz Pentium III. AMD remains competitive with its efforts to create its own 1 GHz-plus processor, an Athlon chip that utilizes the Thunderbird processing core. AMD is opening a new manufacturing facility in Germany that will serve as the headquarters for development of the new Athlon Thunderbird-based chip. The company also seeks to release by the second half of 2000 two other processor cores, the Spitfire and the Mustang, and says the day when manufacturers will have the ability to combine multiple processors on a single chip is not far off. However, Mercury Research analyst Mike Feibus cautions that the rapid advances in processing power may foster a situation in which consumers will no longer accept small increases in processing power and will instead demand processor chips that are at least 1,000 MHz more powerful than earlier ones.
- "Antitrust Suit Against Intel Is Dismissed"
Wall Street Journal (03/14/00) P. B8; Hamilton, David P.
Intergraph's antitrust lawsuit against Intel was effectively dismissed on Friday when the U.S. District Court in Birmingham, Ala., found that the workstation manufacturer cannot pursue antitrust claims following an appellate court ruling in the case last November. The appellate court held that Intel did not abuse its stronghold in the PC chip market in a ruling that "effectively forecloses Intergraph's further pursuit of its monopoly claims," District Court Judge Edwin Nelson writes. The legal conflict began in 1997 when Intergraph claimed that Intel forced it to relinquish valuable patents and abused its market dominance by refusing to hand over chips and information that Intergraph needed to make its systems. Although Judge Nelson issued a preliminary injunction forcing Intel to give chips and related information to Intergraph, the appellate court overturned the injunction saying antitrust laws did not apply to the suit since the two companies were not rivals. Meanwhile, the FTC continues its own antitrust investigation of Intel, but insiders believe that probe will soon be dismissed as well. However, the litigation between Intergraph and Intel will continue, with Intergraph now seeking charges of patent infringement and other unfair business practices.
- "Commonwealth of e-Nations"
Financial Times (03/13/00) P. 10; Mulligan, Martin
ECommonwealth.net, an Internet portal for the 54 members of the Commonwealth, will go live next month. Members of the Commonwealth, formerly called the British Commonwealth, are sovereign states that used to be British colonies. The eCommonwealth portal is intended to lessen the digital divide between rich and poor nations and to encourage Internet-based economic improvement among all of the member nations. The Internet offers the greatest opportunity to the Commonwealth's many island member nations, Yeomans says, by helping negate their physical isolation, reduce migration, and improve education on the respective islands. ECommonwealth COO Paul Thompson knows that achieving the site's goal of inspiring Internet use among its member nations will not be an easy task. The small percentage of the 1.8 billion Commonwealth citizens that actually have access to the Internet struggle with slow processing and line speeds. One possible solution to inadequate land lines is wireless networking, which is already in use in Africa. The tiny island of Mauritius has also devised a solution, placing a technical break point for the fiber-optic cable running from Cape Town, South Africa, to Penang on its island. With that initiative, Mauritius has written "itself a place at the heart of the global e-commerce network," says Keith Yeomans, author of a report entitled "The Commonwealth in the Global Information Society."
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- "NSA Blackout Reveals Downside of Secrecy"
Los Angeles Times (03/13/00) P. A1; Drogin, Bob
A four-day blackout of the National Security Agency's (NSA) computer networks in late January exemplified what many in the know already knew: the agency is no longer a leader in the information and technological revolution that it began years ago. Equal blame has been placed on budget and staffing shortages, more evasive targets, and a slow-moving bureaucracy that relies too heavily on telex technology. The NSA no longer is a pioneer in cryptography, now that encryption software is readily available on the Internet and is used by terrorist groups such as Hezbollah and Hamas. The European Union also recently accused the agency of spying on private citizens and for using intelligence information to help American firms overseas win contracts. However, defenders of the agency contend that it does not spy on American citizens, and neither is it incompetent. The NSA has recently set new cryptologic goals, revamped some divisions, and streamlined the decision-making processes. The agency is also expected to get help from Congress with the funding of a low-altitude spy satellite project starting in 2002, and will obtain use of a navy super-spy submarine to be completed in 2004 called the Jimmy Carter, which will be able to tap undersea fiber-optic cables, a feat previously unheard of.
- "BT Ready for Global Web-Phone Network"
Associated Press (03/14/00)
British Telecommunications has partnered with Microsoft and other IT firms to create a worldwide network of Internet enabled wireless phones. BT intends to allow subscribers to access news, pay bills, trade stock, buy plane tickets, or listen to music via wireless handsets. BT says Microsoft will provide wireless Internet applications; Phone.com is to supply portal technology. Motorola, Siemens, Ericsson, and NEC are slated to supply wireless handsets. BT is expected to invest 160 million British pounds sterling in the ventures, which are to be launched by summer. Testing is slated for April.
- "Clinton CyberCrime Efforts Treading Familiar Path"
E-Commerce Times (03/13/00); Hillebrand, Mary
An interagency working group appointed by the White House recently released a report on cybercrime, concluding that online crime is a serious threat that the U.S. government is ill-equipped to handle at this time. The report, entitled "The Electronic Frontier: The Challenge of Unlawful Conduct Involving the Use of the Internet," says consumer privacy should be a major consideration in any government effort to fight cybercrime. Furthermore, the group says the federal government should acknowledge that Internet law enforcement is a significant challenge that requires appropriate resources, training, investigative tools, and cooperation among law enforcement agencies at all levels. Finally, the report says the federal government should continue to support the efforts of private industry to prevent cybercrime by educating Internet users. In addition to these three recommendations, the report finds that several current federal laws, such as those governing credit card fraud and identity theft, can apply to cybercrime. Since existing laws can be enforced in Internet crimes, the need to pass new laws to govern cybercrime is reduced. Still, some laws such as those involving investigation procedures and the collection of evidence might need to be updated to apply to Internet crime, according to the report.
- "Linux: The Future's Bright, but It's Still Black and White"
VNUNet (03/10/00); Compton, Jason
Linux was responsible for 25 percent of new server installs in 1999, but the fate of Linux is still uncertain as issues of installation, commands, and a lack of "killer apps" begin to emerge. Regardless, many visionary firms see the potential for the open source operating system, even competitor Unix companies, which were initially expected to attempt to crush the upstart rival, but have actually embraced it and are now scrambling to buy stakes in startup Linux companies. Unix rivals IBM, Hewlett-Packard, and SGI are all participating in the Trillian Linux Project, the first third-party operating system to run on Intel's upcoming Itanium 64bit CPU. In addition, Linux is now a top choice as a thin-client operating system. Linux companies themselves are working to strengthen their positions with strategic acquisitions and partnerships. Corel will acquire development tools firm Inprise/Borland and subsequently port an array of Borland tools to their Linux platform. VA Linux will buy Andover.net, a Web company that owns popular news and discussion sites for computer enthusiasts and developers.
- "Preparing for a New Cyberwar"
National Law Journal (03/13/00) Vol. 22, No. 30, P. 1; Rovella, David E.
The government is devoting more resources to the prevention of cybercrime in the wake of recent incidents such as the denial-of-service attacks on e-commerce sites such as Amazon.com and eBay. Attorney General Janet Reno and FBI Director Louis Freeh on Feb. 16 asked for $37 million to hire nine additional cybercrime prosecutors and to boost FBI resources. As part of the increased focus on cybercrime, Christoper Painter, a top cybercrime prosecutor for the Justice Department, is coming to Washington D.C. to head the Criminal Division's Computer Crimes and Intellectual Property Section. The section will support computer and telecommunications crime coordinators in the 93 U.S. attorney's offices. Painter says prosecution is an essential deterrent to cybercrime, noting that the Department of Justice section has brought few prosecutions at this point. The department has been working since 1996 to build its computer crime section into a network of experts to overcome the problem that many of these crimes extend over several jurisdictions, Painter says. Law enforcement officials have to act quickly in cybercrime cases, because evidence can disappear rapidly, Painter says. One major hurdle for law enforcement officials has been gaining the support of the private sector, since many companies are reluctant to provide access to their systems. Companies worry that the FBI will confiscate their systems, or that press reports of security problems will tarnish their reputations. Painter says the department's cybercrime efforts would benefit from changes in current laws and additional staffing.
- "A Recipe for E-Commerce"
InfoWorld (03/13/00) Vol. 22, No. 11, P. 12; Lattig, Michael
Online retailers are increasingly noticing the need to not only gather information about consumers, but to apply business intelligence tools to the data to better understand customers. WebTrends, a maker of software for gathering online consumer data, this week announced plans to enhance its products with the OLAP (online analytical processing) engine from business intelligence vendor Hyperion. New technologies that integrate Web-data collection with business intelligence will provide companies with a unified customer profile. Companies need to be aware of all the ways a customer is tied to their organization by consolidating information into a single view, and forwarding that information to the marketing department, says Meta Group's David Folger. WebTrends calls this process visitor relationship management (VRM). VRM systems are designed to enable online interaction with customers that matches the offline experience, says WebTrends' Bill Piwonka. "It's like when you go into the Gap and their salesperson is watching everything you do, and at some point they swoop in and say, 'Hey, try this belt,' or, 'That would look great with this sweater,'" Piwonka says. Both Folger and Piwonka agree that this new software might soon become a necessity for companies that want to stay competitive, as the Internet speeds up the pace of business and companies need to make decisions quickly based on customer profiles.
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- "IBM's Wireless Drive Leaves Microsoft in the Cold"
VNUNet (03/14/00); Kelly, Lisa
IBM has entered deals with Motorola, Nokia, Palm, Intel, and Cisco to develop an open, scalable platform based on the EPOC operating system for wireless data services. Notably absent from the consortium is Microsoft, although the company says it is merely studying its options, rather than working in opposition to open standards. The initiative is intended to spur the growth of mobile Internet use. In the next few years analysts predict that more people will use mobile devices than PCs to access the Internet, leading to $200 billion in mobile e-commerce spending by 2005, according to Ovum. However, for this to happen, "key players form the wireless, IT, and telecoms industries need to join forces and an open application development environment needs to be created," says IBM's Mike Lawrie.
- "Customizing for the Masses"
Business Week (03/20/00) No. 3673, P. 130B; Brady, Diane; Kerwin, Katie; Welch, David, et. al
Digital technology is allowing manufacturers to offer products tailored to a customer's specific requests, rather than a generic product aimed at a mass market. Using the Internet, consumers can send requests directly to manufacturers, which in turn send the instructions to the production line for a small extra fee. As mass customization takes hold, many manufacturers will modify production lines to leverage both automated assembly and customization technologies. Automotive-interiors supplier Lear this month announced its Common Architecture Strategy, designed to let customers ask auto makers for individualized interior features, such as a translucent orange dashboard. A car with customized features would cost about the same as an upgraded vehicle, and have roughly the same delivery time, Lear says. Lear's technology could be available by 2002 if auto makers support the concept. Meanwhile, Levi Strauss and Brooks Brothers offer customized clothing, using new assembly line technologies and a body-scanning booth that sends a customer's measurements to the manufacturing plant. Procter & Gamble is experimenting with individualized makeup and coffee, while Mattel allows customers to choose the clothing, skin color, hair style, and personality of its My Design dolls. Meanwhile, Gerber Scientific offers a system that helps clients customize clothing production lines, and the company expects mass customization to account for 70 percent of its business by 2003, says Chairman Michael J. Cheshire. Customization lowers inventory and adds value for the customer, Cheshire says. Despite the advantages of customization, the mass market is not likely to disappear. Although customization can ultimately make purchasing easier for the consumer, it initially forces buyers to go out of their way filling out preference forms or otherwise providing information to manufacturers.
- "Search of Gov. Employee's Net Use, Computer Not Unconstitutional"
E-Commerce Law Weekly Online (03/10/00)
The U.S. Court of Appeals for the Fourth Circuit handed down a ruling late last month that upheld the government's right to search and seize the workplace computer files of its employees. The ruling pertains to an investigation into the workplace conduct of Mark L. Simons, at the time an employee of the Foreign Bureau of Information Services (FBIS), a unit of the CIA. The Simons investigation was opened after it had been determined--through monitoring of computer resources--that Simons was violating the FBIS Internet usage policy by downloading pornographic material from Web sites, including pictures of minors. A warrant was issued and officers searched Simons' office while he was away, making copies of his computer, disks, zip drive files, and other documents. However, the executing officers failed to leave a copy of the warrant in Simons' office, as the warrant had specified. Simons was later charged with knowingly receiving and possessing child pornography that had been transported in interstate commerce. Simons made a legal attempt to keep the evidence out of court, claiming that his Fourth Amendment rights had been violated by the searches of his office and computer. However, Judge William W. Wilkins wrote in his ruling that "Simons did not have a legitimate expectation of privacy with regard to the record or fruits of his Internet use" because the FBIS Internet usage policy had been clearly spelled out. Thus, Wilkins concluded that "FBIS' actions in remotely searching and seizing the computer files Simons downloaded from the Internet did not violate the Fourth Amendment."
- "It's a Steal"
New Scientist (03/04/00) Vol. 165, No. 2228, P. 16; Graham-Rowe, Duncan
Computer security experts contend that as annoying as the recent denial-of-service attacks were, the development of crime on the Internet that mirrors real-life crime will be much more devastating. The Internet has already been host to blackmail, impersonation, fraud, drug dealing, information kidnapping, and general theft. Experts contend that the increasing availability of hacking programs that can be downloaded from the Internet will only bring more criminals into cyberspace. Although companies and individuals can use intrusion-detection software, these products rarely catch the person responsible for the intrusion, and penalties are not as severe as those for real-world crimes. Experts say the ease of committing cybercrimes and the strong possibility that criminals will not be caught is an incentive for them to go online. Security professionals also admit that a lack of standard procedures for law enforcement sometimes results in tainted computerized evidence during trial. Law enforcement officials also say they have no idea of the scope of cybercrime because e-businesses rarely report such crime for fear of bad publicity or of attracting other criminals. Experts say pure online companies are the easiest targets for criminals, because they have rushed online in an effort to be first in their field, relegating security concerns to the back burner. Although some security experts say public key infrastructure encryption devices may be the answer to rising cybercrime, privacy groups view it as a threat because it would give authorities access to personal information. Regardless, all experts agree that the Internet's popularity will only bring more "real" crimes online, and that currently there is very little protection against such action.
- "Businesses Seek to Cut Weak Links From Supply Chains"
InformationWeek (03/06/00) No. 776, P. 141; DeMocker, Judy
Many companies are supplementing their enterprise resource planning (ERP) systems with Internet-based applications to better manage their supply chains. Analysts say that the shift toward Internet-based supply chain systems is an outgrowth of the rise of business-to-consumer e-commerce, which has raised expectations on how business customers and consumers can access information about products, orders, and account histories. Companies, striving to meet these customer expectations, found that their ERP systems, which are commonly used to manage internal processes such as manufacturing, financing, and human resources, were not equipped to handle the entire supply-chain management process. Now, ERP systems continue to form the basis for many enterprisewide IT infrastructures, while service providers design add-on applications for companies that aim to share information within their supply chains using the Internet. IBM's microelectronics division began transitioning its supply chain management system to an Internet-based platform five years ago. Using software from SAP and Aspen Technology, the company uses the Internet to gather and store data, track orders, schedule product development, and send data such as ship dates and payment information to customers. "It's all being transitioned to make use of the Internet as a means of communicating requirements and sending status information out," says IBM's Ken Fordyce. "It creates some immediate benefits in reduced transaction processing, enhanced reliability, and improved customer responsiveness."
- "European Online Brokerages Still Need Improvement"
Tornado-Insider.com (03/07/00); Essick, Kristi
Europeaninvestor.com and market research firm BlueSky Research recently concluded a joint undertaking to rate the information content, educational aspects, and reliability of European and American online brokerage firms. The initiative, known as BlueSky Ratings, used a point system to assess 350 Web site characteristics and functions. Features such as accurate and comprehensive research and information, hands-on explanations, and access to mutual funds, equities, mortgages, IPOs, and foreign markets helped boost a site's point value. Consors Germany, with a score of 309 points, is the most highly rated European online broker, ranking a close second to American Web brokerage firm leader E-Trade, which received 315 points. In general, European sites offered greater access to multiple markets but were less educational and more difficult to use than the American ones. The research companies say BlueSky rankings are intended to provide potential first-time online investors with a tool to help make informed decisions.
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