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Volume 3, Issue 152: Friday, January 12, 2001
- "The Dog Day in June the Lights Went Out"
New York Times (01/12/01) P. C1; Gaither, Chris
The energy crisis in California, where utility officials continue to threaten rolling blackouts, may wreak havoc in Silicon Valley. High-tech firms fear a repeat of Jun. 14 of last year, when energy shortages forced many utilities to blackout customers. Silicon Valley manufacturer SDL estimates that it lost over $3 million because of that day's power problems, and some analysts say the cost of blackouts to some tech firms could be over $1 million per hour. The current energy crisis, which stems from a failed effort at state-wide power deregulation, has pushed many utilities to the edge of bankruptcy and may soon result in dramatically higher energy bills for consumers, both individual and corporate. Silicon Valley, which consumes 2,900 MW of energy on its busiest days, would be devastated by a long-term energy crisis. Manufacturing plants can take days to recover from a shutdown, and e-commerce firms based in Silicon Valley could be crippled if a blackout shut down their sites for an extended period of time. Several companies are investing in diesel generators and small substations to provide enough electricity to function, and firms have struck deals with utilities to reduce secondary consumption--for example, their air conditioning and heating systems--so that the utilities will spare them from rolling blackouts. However, analysts say the real problem is that the area lacks the necessary power infrastructure. Power plants in the region produce only 200 MW a day. Recent efforts to build new plants in San Jose's Coyote Valley have met with community and even some corporate opposition, and even if approved the new plants would not be ready until 2003.
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- "Clinton Advisers Trace Productivity Gains to Technology"
Washington Post (01/12/01) P. E3; Berry, John M.
President Clinton's Council of Economic Advisers (CEA) yesterday issued its final report in which it said technology was the driving force behind recent economic gains in productivity and efficiency. The report found that technology applied throughout the many sectors of the U.S. economy, from retail to finance, was largely responsible for a 1.6 percent rise in labor productivity since 1995. Labor productivity is a measure of the goods and services derived from each hour worked. Although some critics of the CEA's report say the productivity increase is the major cause of the recent economic growth, the CEA contended that if the economy slows down, productivity may continue to increase. The CEA did back off a November prediction that 2001 would see economic growth of 3.2 percent. A CEA official agreed that a recent estimate by 50 leading economists of 2.2 percent growth this year is a reasonable guess.
- "Clinton Reduces Export Curbs on Computers"
Financial Times (01/11/01) P. 5; Alden, Edward
The White House yesterday announced it would allow computer makers to export more powerful machines to several countries, including Russia, China, and Vietnam. The decision to reduce export controls follows an internal review that concluded that preventing the export of sophisticated computer systems does not significantly improve national security. During the Cold War, officials feared that computer technology from the United States could let foreign powers develop advanced weapons. Officials now believe this threat exists in the export of software and individual knowledge, not hardware. U.S. hardware makers will be able to export computers three times as powerful as they were previously allowed to the aforementioned countries. No export restrictions will be imposed on computers shipped to Asia, Latin America, and most of Africa. Manufacturers will still not be able to ship hardware to those countries considered "states of concern"--Iraq, Iran, and North Korea, among others.
- "President May Need a Tech Czar"
Investor's Business Daily (01/11/01) P. A6; Tsuruoka, Doug
Tech-industry analysts say President-elect George W. Bush should name a "tech czar" to play the role of White House CIO. The tech czar would oversee tech issues for the federal government, including Internet privacy and sales tax on e-commerce purchases. That latter issue could dominate discussions of tech policy in the coming year, as the moratorium on Internet sales tax ends. Bush favors a continuance of the moratorium, but many states oppose it. Analysts say Bush may even create a second tech position in his administration to advise him on tech policy. Although Bush has yet to say whether he will actually create either of these two positions, analysts are already discussing likely candidates for the jobs. Among those discussed for the position of tech czar are Virginia CIO Donald Upson, a Bush backer, and venture capitalist Floyd Kvamme. IBM CEO Lou Gerstner is also reportedly interested in a position in the Bush White House and could be a candidate for the tech-policy adviser role, analysts speculate.
- "Dutch Employers Can Monitor Employees' Online Activities"
Newsbytes (01/10/01); Gold, Steve
A new data protection ordinance grants employers in the Netherlands the right to monitor the email and Web activities of their employees, according to the Dutch Data Protection Registrar, or Registratiekamer. "The prohibition on processing personal data concerning a person's health, as referred to in article 16, does not apply where the processing is carried out by...employers," states article 21 of the Personal Data Protection Act. The new law was signed by Queen Beatrice last summer and has been in effect since the beginning of January. Employers who intend to monitor their staff's online activity will have to consult a list of guidelines published by the Registratiekamer. The Registratiekamer also states that personal email and work-related email should be kept separate, and that employers should try to avoid reading personal messages if there is no other alternative. European Internet penetration ranks high among Dutch citizens when at work, recent estimates indicate.
- "Israel High Tech Braces for Drop in Investment"
Wall Street Journal (01/12/01) P. B5; Teibel, Amy
Sources from the venture-capital industry predict that investment in Israeli high-tech firms will decline this year by as much as 50 percent. The decline follows a record-setting year for high-tech investment in Israel, with a total of $3.1 billion invested. However, investment dropped off in the recently ended fourth quarter, falling to $850 million--the first such downturn in eight months, according to PricewaterhouseCoopers. Although analysts say the downturn in investment does not pose a major crisis for the Israeli high-tech sector, it does reflect the growing unease with high-tech firms in world financial markets as well as businesses' reluctance to enter the Israeli market during the current strife between the government and the Palestinians. However, some officials in the Israeli high-tech sector say the decline in investment could be good in the long-run for Israeli business because it will force firms to develop realistic strategies.
- "Consumers Holding Off on Buying Computers"
New York Times (01/11/01) P. E8; Greenman, Catherine
Revenue from the sale of PCs in December 2000 fell 30 percent from the same period in 1999, according to a recent report from PC Data. Analysts say the slow sales will likely continue into the new year. Many analysts think that the decline in PC purchases can be attributed to two factors: consumers are not as willing to spend money as they were in previous years, and those who have bought a PC in recent years have little reason to upgrade now. The slow sales have also led to a rise in PC makers' inventory levels, which some analysts speculate may cause them to reduce prices in the near future to clear floor space for the new 2001 models. However, with the exception of struggling Apple, which has already announced price cuts for several of its high-end models, few PC makers have yet announced reductions. Analysts say the companies are afraid of starting a price war. Some PC vendors hope that a rise in the availability of high-speed Internet access will draw consumers back into the stores, and some analysts note that those who purchase PCs now will find that they are receiving more features at the same price they would have paid last year for a less powerful computer.
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- "Microsoft Competitors Hire Starr to Back Breakup"
Washington Post (01/12/01) P. E1; Grimaldi, James V.
A trade group of Microsoft rivals, including Oracle, America Online, and Sun Microsystems, has hired Kenneth Starr to bolster the government's case against the software giant. Although Starr gained public notice as he pursued the Whitewater case and later the Monica Lewinsky affair against President Clinton, he claims to agree with the administration's antitrust case against the software firm. "This is, as I see the case, an application of traditional and well-established antitrust principles to a setting of new technology," he said yesterday. Legal observers say Starr could greatly boost the government's prospects, as he is familiar with the circuit court that will hear Microsoft's appeal. Starr, a Republican, may also calm concern that the incoming Bush administration will seek to end the government's antitrust case, legal observers speculate. The trade group of Microsoft rivals yesterday also retained Walter Dellinger, President Clinton's former solicitor general, for the Microsoft case. Dellinger recently assisted Vice President Al Gore's court case to force a manual recount of votes in Florida.
- "Privacy Policies Could Hang Dying Dot-Coms"
InformationWeek Online (01/11/01); George, Tischelle
The privacy firestorm surrounding Toysmart.com's attempted sale of its customer database may have ended with parent company Walt Disney's purchase of the data, but analysts say other online retailers may be tempted to commit similar privacy violations in the future. "Data is like gold," says Forrester Research public policy analyst Jay Stanley. "There will be 1,001 temptations for e-commerce companies to cash in on this," says Stanley. E-commerce attorney Jason Epstein of Baker, Donelson, Bearman & Caldwell predicts that online retailers may very well "hang themselves" with their own privacy policies because they are not required by law to have privacy policies. Thus, customer data can be one of online retailers' most valuable commodities, Epstein says. Some say that Toysmart's recent privacy misadventures may spur other online retailers to tweak their privacy policies to allow the sale of customer information in certain instances. Disney, an advocate of online consumer data privacy laws, showed its "respect of privacy laws and the Internet" by coming forward to purchase and destroy the Toysmart data, says Epstein.
- "Europe Tries to Take On Spammers"
Associated Press (01/10/01)
European legislators have set their sights on the prohibition of spam and other unsolicited electronic messages, but European Union Commissioner Erkki Liikanen acknowledged at a public hearing that enforcement would be a difficult proposition. Under the European proposal, privacy measures leveraged against unsolicited phone calls would expand to include electronic communications such as emails and mobile phone advertisements, while mass mailings to email accounts would be unlawful unless the consumer agrees in advance to receive such messages via an "opt-in" system. In comparison, the United States restricts federal regulation of data protection to medical and financial services, allowing industries to self-regulate in other sectors. A "Safe Harbor" project to ensure that U.S. companies satisfy EU data protection guidelines when doing business with the continent is off to a rocky start: only a dozen U.S. companies have signed up since the program went into effect on Nov. 1.
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- "Are All Dot-Com Layoffs Created Equal?"
E-Commerce Times (01/10/01); Mahoney, Michael
Dot-com layoffs have been the target of much recent media attention, but few reports have focused on the different reasons for the job cuts. More than 40,000 dot-com jobs were cut in 2000, but the causes of the layoffs changed over time, according to Challenger, Gray and Christmas. Initially companies laid off workers because the firm was failing, says Challenger, Gray and Christmas CEO John Challenger. However, layoffs were not so much a sign of impending doom by the end of May, when a growing number of dot-coms began to cut workers as a way to stretch their cash through the end of the year, says Challenger. Toward the end of the year, many companies evaluated their market position and laid off workers in an attempt to start out stronger in the new year. Meanwhile, Challenger says the business-to-business sector is now experiencing the problems that the online retail sector saw at the end of last year with cash flow and obtaining financing. Looking ahead, Challenger predicts that dot-coms will continue to fold in the next few months, although layoffs will not necessarily continue. Online content providers in particular seem to be having trouble bringing in revenue, says Challenger, noting that the online units of the New York Times, News Corp., and Knight Ridder all recently announced dot-com job cuts. Dot-com workers are likely to increase pressure on their employers this year as they see their stock options lose value, and some dot-coms are likely to collapse if dot-coms workers are successful in unionizing, Challenger says.
- "Do You Even Know Who's Watching?"
Wired News (01/11/01); Kettmann, Steve
Germany's Virtual Privacy Center educates citizens on their right to control their personal information online, and Independent Center for Privacy Protection head Marit Koehntopp hopes its cause will encourage worldwide participation. "The user has to be aware...how to control everything about his or her identity that he gives other people," Koehntopp argues. Data protection commissioners affiliated with the Virtual Privacy Center monitor government and company activities in every German state. Privacy commissioners in the Netherlands, Switzerland, and Ontario, Canada, are also associated with the agency. "This is trying to build a system and a place where people can go and discuss issues and maybe even solve some real problems," notes Ari Schwartz of the Center for Democracy and Technology in Washington. A law that restricts companies from monitoring employee email may be passed in a few months by Social Democrat Chancellor Gerhard Schroeder's center-left government. The Virtual Privacy Center offers educational programs on biometrics, anonymity, and identity management, Koehntopp points out. The center also appears to be more effective at enforcing the European Union's Data Protection Directive than other EU countries, argues Schwartz. "It's been very impressive that they have (s their work not only on the local level, but on the national and international level, too," he boasts. U.S. efforts to protect online privacy pale in comparison: chief counselor for privacy Peter Swire has only three people under his command and is restricted to an advisory role, and may be out of a job when President-elect Bush moves into the White House. Furthermore, the Privacy Commission Act received a 250-146 congressional majority but still failed to capture a two-thirds vote this past October.
- "Yahoo! Will Allow Nazi Stamps, Coins"
Associated Press (01/11/01)
Yahoo!'s recently imposed ban on the sale of Nazi memorabilia on its Web sites will not include copies of Adolf Hitler's "Mein Kampf" or Nazi coins and stamps, the company has announced. The company says it views Mein Kampf as an educational resource. The ban has not stopped hate-related material from appearing on Yahoo!'s Web sites. Indeed, there were still 15 KKK items for sale as of Jan. 11. And the Union of Jewish Students of France says there were still 400 Nazi items for sale when the ban went into effect. "We always knew it's not going to be 100 percent foolproof," says Brian Fitzgerald, senior auction producer at Yahoo!.
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- "Global Consortium to Market IPv6 Tech in India"
Asia ISP News (01/09/01); Pai, Uday Lal
The Internet Protocol Version 6 (IPv6) forum, held in India, is considering marketing next generation IPv6 technologies in Asia with a focus on India. India could then leverage these technologies to enter global markets. "Now we have a chance to lead the next generation Internet; and show that we are world class when it comes to development and deployment of the applications of the new Internet based on IPv6," says IPv6 founder and director Hemanth T. Dattatreya. The network will be linked to Europe and Japan after the backbone is set, thereby creating an IPv6 backbone that is transcontinental, says Dattatreya.
- "Quantum Computers: Using Light Instead of Moving Atoms"
New York Times (01/11/01) P. E8; Austen, Ian
Although quantum computers require only the spins of atoms to operate, the devices can take up an entire room, according to Pierre M. Petroff of the University of California, Santa Barbara. A research team led by Petroff has created a device that may enable quantum computers to run on light rather than atomic particles, allowing for more compact models. The machine is called a quantum dot single-photon turnstile device, a mushroom-shaped semiconductor Petroff originally conceived of seven years ago. Researchers think that such a device could lead to quantum computers that communicate with each other. Channeling single photons through polarizing filters could produce qubits--quantum memory units that represent several states simultaneously. Instead of employing atomic spins, photon-based quantum computers would exchange data using fiber optics systems similar to those that power the Internet. The current version of the photon turnstile produces quantum dots from indium arsenide within a gallium arsenide microdisk 200 nanometers thick. Single photons are spit out when a laser beam strikes the edge of the microdisk, but detecting the photons is difficult because the disk's circular shape scatters the particles in any direction. The device is also the size of a tabletop because the semiconductor can only operate at extremely cool temperatures. Petroff believes a smaller version that runs at room temperature will eventually be developed, and researchers are pinning their hopes on an elliptical microdisk to refine photon output.
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- "Outlook for 2001"
InformationWeek (01/08/01) No. 819, P. 43; McGee, Marianne Kolbasuk
IT executives appear confident that their budgets will rise this year, despite recent concerns about the economy, according to InformationWeek Research's Outlook For 2001 Study. Although many large tech companies have taken a beating on Wall Street recently, executives remain optimistic that the Federal Reserve's cut in interest rates and other factors will ward off a serious recession. Roughly 7 out of 10 companies say IT spending will grow to an average of 8 percent of their total revenue in 2001, up from 7.8 percent in 2000. Among the technologies executives rank as most important are network security, PCs, Web development tools, Web server software, and Windows 2000 desktops and servers. In addition, experts predict that mobile devices will flourish this year. E-business spending is also expected to remain strong because companies believe e-business will bring new revenue streams and opportunities. Three out of four respondents said their companies will begin using online exchanges in 2001. Increases in IT budgets in 2001 are aimed at critical business goals such as improving customer service, creating marketing advantages, and organizing and using customer data. Although consumers and small companies are slowing their IT spending, this slowdown is balanced to some extent by larger companies that are less vulnerable to economic fluctuations. Still, IT executives say they might revise their IT spending plans depending on factors such as a slowing U.S. economy, inflation, and restricted credit.
- "Change Agents: The Leading Trends for 2001's Digital Citizen"
Interactive Week (01/08/01) Vol. 8, No. 1, P. 66; Robinson, Sara;Charski, Mindy; Spangler, Todd; et al.
The year 2001 will be a year of major developments key to the growth of the Internet. In the digital entertainment industry, the controversy over copyrighted material online is expected to continue. Early in the year, the courts will decide on the file-sharing dispute involving Napster and the recording industry, and later in the year the courts will take up a DeCSS case in which the movie industry has sued a Web publisher for making technology available that allows Web surfers to get movies online for free. AOL and other big companies should start to offer music and other entertainment online this year. Content sites and marketers will rely more on broadband offerings in 2001 as the number of broadband users swells. There will be 15.2 million broadband users in the United States this year, up from 9.4 million presently. While content sites explore streaming audio and video, marketers will invest in rich-media ads. Also, the electronic book industry could agree on standards, and search engines will seek to charge Web sites to be listed in their indexes. In the personal technology industry, makers of Internet appliances will try to convince consumers that their digital gadgets are worthwhile for connecting to the Internet, and the market will see more signs of home networking. The major issues that lawmakers will address this year are privacy and Internet taxation. However, Congress also is expected to take up the issues of spam, intellectual property, and the government's telecommunications policy. On the international scene, Internet taxation and privacy will be addressed. However, the most controversial issues that high-tech leaders around the world will address are curbing cybercrime and recognizing foreign jurisdictions over e-commerce.
- "If Girls Don't Get IT, IT Won't Get Girls"
Computerworld (01/08/01) Vol. 35, No. 2, P. 44; Melymuka, Kathleen
High school girls show the same level of competence in technology as boys, but are five times less likely to consider IT careers, according to a recent study from Arthur Andersen's GROW (Growth and Retention of Women) Project. About 500 girls and 150 boys between the ages of 15 and 18 responded to the survey, revealing that 85 percent of girls and 87 percent of boys are enrolled in computer courses this year. Girls said they recognized the importance of technology, but planned to pursue careers in health services, teaching, art, and music. When asked how they define career success, 28 percent of girls said success means feeling personally fulfilled, while only 5 percent cited money. Girls seem to associate small business and public service with happiness, while they view corporate America as revolving around money. "IT and corporate America need to let [girls] know they can be happy and rewarded and be doing something socially significant in IT," says Andersen's Karen Kurek. Drawing girls' interest to the industry should be a major concern for tech companies as they face an ongoing labor shortage. Girls represent not only a large and untapped IT labor resource, but a pool of new ideas and values for the tech community. Girls said good leaders are people with strong morals who understand what others need and help co-workers reach their full potential. By contrast, boys tend to think a good leader should be competitive and aggressive.
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To learn more about ACM's Committee on Women in Computing, visit http://www.acm.org/women.
- "Protecting Digital Content"
Broadcasting & Cable (01/08/01) Vol. 131, No. 2, P. 44; Albiniak, Paige
Congress will most likely have to deal with the copyright protection of digital content during its next session. Although the copyright industries, which include movie studios and record companies, allege that they want to wait and see how well the Digital Millennium Copyright Act works, they are also very worried that consumer advocates will push Congress to liberalize the law in the meantime. Regardless, most analysts predict that Congress will not do anything drastic until streaming media becomes big enough to pose a threat to traditional business, although broadband networks, when they become popular, will add more confusion to the debate because they would be able to easily store and transmit large files such as movies.
For information regarding ACM's work in the area of intellectual property, visit http://www.acm.org/usacm/IP.
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