The optimism Silicon Valley business leaders had for a mid-2002 economic recovery is weakening as executives and analysts observe that the projected upturn in electronics sales is not yet happening. For example, Advanced Micro Devices has downgraded its revenue projections twice in two weeks, while Jonathan Joseph of Salomon Smith Barney gave a lower rating for National Semiconductor amidst concerns of a flattening cell-phone market. "We've been saying that it's really not until the fourth quarter of '03 that you return to earlier levels, and maybe even that's suspect," says David Readerman of Thomas Weisel Partners. He believes that real economic growth will probably stem from sectors that Silicon Valley has long dismissed as outmoded, such as domestic security and military contracting. For now, however, the PC market is not growing dramatically. Unemployment levels in Santa Clara County reportedly declined between April and May, but this news may have been dampened by the bleak national outlook for the telecom industry. Hopes of a rapid rollout of new wireless handhelds are dying amid the disorganized state of the telecom sector. Despite all this pessimism, many veteran Valley experts are predicting a recovery by the end of 2002, although they are taking a more cautious view.
http://www.nytimes.com/2002/07/12/technology/12VALL.html
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Legislation calling for increased computer network security research has encountered a roadblock in the Senate. Provisions calling for federal agencies to adopt computer-security standards developed by the National Institute of Standards and Technology (NIST) are being criticized by technology industry representatives, who claim such measures could limit government use of certain technologies, leading to a shriveling of business-government relationships. The provisions were introduced by Sen. John Edwards (D-N.C.), who insisted through deputy press secretary Carlos Monje that their purpose is to secure technology rather than restrict it. Under the bill, the National Science Foundation and NIST would apportion $978 million in grants over five years to research efforts concerned with securing networks from hackers and terrorists. Although Monje says the bill is "technology neutral," Association for Computing Machinery director of public policy Jeff Grove says the bill's language needs to be modified so that it does not restrict which technologies companies can use. University researchers are concerned that they will be required to comply with the standards if government agencies adopt them. The vote on the bill has been delayed while senators and tech industry lobbyists negotiate on refining the security standards' language to satisfy industry concerns.
http://chronicle.com/free/2002/07/2002071202t.htm
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European environmental laws will soon be enacted requiring PC manufacturers to recycle discarded computers, a move that could cause PC prices to rise, experts warn. The enforcement of the directives could cost British industry more than 3 billion pounds, according to the Department of Trade and Industry. Meanwhile, Computing magazine estimates that PC prices could climb as high as $50. Intellect director of consumer electronics Hugh Peltor says the costs could adversely affect companies fighting for life in the economic downturn, and believes that the only solution is to share the costs. Phil Reakes of Selway Moore thinks recycling deployment costs are workable, but acknowledges that manufacturers are not prepared to accommodate all the old computers they have sold to customers; corporate customers alone will be discarding old machines in the thousands, he notes. Reakes explains that further complications could ensue when a large firm selects a new supplier when upgrading to new PCs--for instance, the supplier may refuse to recycle computers from a competing supplier. The laws concerned are the Waste from Electrical and Electronic Equipment Directive, which encompasses recycling, and the Hazardous Substances in Electrical and Electronic Equipment Directive, under which certain materials incorporated into IT equipment would be prohibited.
http://news.bbc.co.uk/hi/english/sci/tech/newsid_2121000/2121954.stm

Hacktivismo, a political offshoot of the Cult of the Dead Cow hacker group, is planning the release of new peer-to-peer software protocol that will enable anonymous Internet use. Although current techniques for veiling one's identity online involve using a series of "proxy" servers, the Six/Four program being developed by Hacktivismo routes Internet data through a network of individual computers in a process similar to a virtual private network. The original end user's address is unknown to the computers carrying the data, which is then shuttled out through a trusted peer computer acting as a gateway. Six/Four is named after the June 4, 1989 date of the Tiananmen Square incident in Beijing. Hacktivismo founder Oxblood Ruffin says the program was created in order to maintain the individual rights of Internet users in countries such as the United States and oppressive regimes, such as in China and Iran. Six/Four was authored by "The Mixter," the 23-year-old German hacker who also created the Tribe FloodNet program popular among malicious hackers launching distributed denial-of-service attacks. Open Cola chief scientist John Henson says Six/Four is a "working model of the next phase of the Internet--secure communications by trusted peers over an untrusted network," while others say the protocol simply cobbles together existing technologies. A final version of the protocol is expected this fall.
http://www.wired.com/news/privacy/0,1848,53799,00.html

Internet piracy continues, despite major busts such as the raids conducted to flush out the members of the DrinkorDie ring, some of whom have earned jail terms for illegally copying and distributing software, games, and movies online. Pirates such as DrinkorDie leader John Sankus Jr., who pleaded guilty and received a 46-month prison sentence for his activities, admit that they form a community of sorts, one in which piracy is carried out mainly to raise one's social standing--"It's all about stature," notes fellow DrinkorDie member David Grimes, who is also doing time. There are two main categories of pirates: Release groups that make the actual copies, and courier groups that handle worldwide distribution. In release groups such as DrinkorDie, labor is divided up into suppliers, corporate insiders who get hold of software; crackers who bypass the software's security measures; testers who make sure that the protection-free version works; and packers who split the programs into smaller files for distribution. Once the stolen "warez" are released, the courier groups can copy the products to several dozen Web-based central distribution centers within 10 minutes. Secondary couriers can then disseminate the products to roughly 10,000 publicly available Web sites within six hours, according to government officials. Companies are losing tens of millions of dollars in revenues because pirates are copying and distributing products for free online; and although financial gain is not a high priority for the pirates, there are individuals taking these warez and selling them for profit.
http://www.nytimes.com/2002/07/11/technology/circuits/11WARE.html
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The H1-B visa program is being roundly criticized by opponents who want it scaled back or eliminated altogether. They argue that the annual cap of 195,000 new visas for foreign-born tech workers is excessive, adding that the economic slump has produced a large pool of laid-off American employees that can easily make up the shortfall. Given that the economic recession in the IT sector has gone on for two years, "To continue to say that they can't find qualified workers is absolutely ridiculous," asserts Marcus Courtney of The Washington Alliance of Technology Workers. Massachusetts could be significantly affected by the outcome of the debate, since Ibis Consulting Group consultant Shilpa Pherwani estimates that H1-B visa holders account for approximately 20 percent of the state's high-tech workforce. The slump does not guarantee security for visa holders, either: Thousands of foreign tech workers have been laid off themselves and been forced to return to their native countries. Barring further action, the visa cap will revert to the original limit of 65,000 H1-Bs, and Rep. Thomas G. Tancredo (R-Colo.) introduced the High-Tech Work Fairness and Economic Stimulus Act of 2001 to uphold those limits. However, certain labor economists believe such a move is premature, since they expect the burgeoning biotech sector to soon have a need for biologists and scientists that the U.S. workforce may lack.
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This month will likely see the introduction of a proposal from Reps. Howard Coble (R-N.C.) and Howard Berman (D-Calif.) that restricts Americans' copying of digital content and clarifies the legal rights of Webcasters. The bill, which the authors drafted in consultation with the Copyright Office of the Library of Congress, is divided into two parts: The first part would significantly limit consumers' "fair use" rights to copy TV and radio programs, a move that nonprofits and academics oppose; the second part would allow Webcasters to make temporary copies while streaming music to listeners, as long as they are licensed by the ASCAP or other agency and have signed an agreement with the record labels. Butera and Andrews lobbyist Philip Corwin stresses that "Exempting Webcasters' buffer copies from royalty obligations [is] the right thing to do--but almost meaningless given that, absent quick congressional action, the royalty scheme recently adopted by the Library of Congress will shut down most Webcasters the day it takes effect." Not even the authors necessarily endorse the bill, as indicated by a letter Coble and Berman sent to the subcommittee that oversees intellectual property; spokeswoman Gene Smith explains that Berman is against the buffer copy exemption, and his drafting of the proposal was done as a favor to House Judiciary Committee Chairman James Sensenbrenner (R-Wis.). Meanwhile, Berman plans to introduce a bill next week that gives copyright owners the right to strike back technologically at file-swapping networks that illegally trade pirated copies of their works. Coble and Berman's proposal stems from a Copyright Office report calling for amendments to the Digital Millennium Copyright Act.
http://news.com.com/2100-1023-943134.html

A programming flaw in the highly popular Pretty Good Privacy (PGP) email encryption standard could give hackers the ability to commandeer users' computers as well as decrypt sensitive emails. The flaw, which eEye Digital Security researchers uncovered weeks ago, exists in a companion plug-in that Microsoft Outlook users use to quickly encrypt messages; it enables hackers to take over victim computers by transmitting a specially coded email, after which they can deploy spyware to steal users' financial records, copy email decryption keys, or record keystrokes. The flaw's discoverer, eEye executive Marc Maiffret, says the security hole can elude even seasoned researchers combing through the software blueprints. Network Associates has made a free patch for the PGP flaw available for download on its Web site, and has repaired the hole in existing versions of the software. Experts say the threat is particularly insidious since encryption software is much easier to use with plug-ins, and PGP creator Philip Zimmermann notes that U.S. agencies such as the FBI use his software "quite extensively."
http://www.siliconvalley.com/mld/siliconvalley/news/editorial/3638319.htm

Bluetooth's future is being called into question by several new studies, while mixed signals filled the air at the recent Bluetooth Congress in Amsterdam. The technology's rapid, high-volume penetration into the mobile phone and automotive markets is critical, and congress attendees' hopes to make Bluetooth a pervasive wireless technology were dampened by Bluetooth SIG executive director Mike McCamon's assertion that "We are not even halfway there yet." However, he did have grounds for optimism, noting that the Bluetooth standard and software stack is stable, while the component business is comprehensible now. The next challenge lies in spreading consumer awareness and availability, establishing product interoperability, and placing the technology in a diversifying wireless market, according to McCamon. Also promising was the automotive industry's selection of Bluetooth for planned telematics applications; In-Stat/MDR predicts that the rollout of Bluetooth-enabled automotive products should begin next year, with 690 million chip sets shipped by 2006. Less encouraging was a Micrologic Research market survey that downgraded projected 2002 Bluetooth chipset shipments from 45.4 million units to 35.3 million units. Meanwhile, recent U.K.-based research found that RF signals emitted by Bluetooth antennas degrade when the antennas are in close proximity to plastic enclosures.
http://www.commsdesign.com/story/OEG20020710S0027

Companies across the nation are finding the University of Kentucky Center for Robotics and Manufacturing's rapid prototyping lab useful for product design, software installation, and boosting plant efficiency. The lab can translate simple drawings into sophisticated models that can be used to test and develop new products. Lab director R.J. Robinson praises the prototyping technology, which can reduce a process that once took weeks or months into a few hours. Drawings are emailed to the lab, where they are divided into thin cross sections by special software; the data is sent to a stereolithography machine, which assembles the model in layers. The lab has contributed to the development of commercial products such as engine parts, hip joints, and dishwasher blades, but it has also proven useful to academic work: For example, 3D Systems gave the lab an Award for Excellence for prototyping the model of a Native American skull for anthropological research at the University of Michigan. The center has also been recruited to make factories more efficient--in one case, Everburn Manufacturing was able to double the size of its plant free of shutdowns and delays thanks to lab consultation. The medical industry is one of the lab's biggest clients, and products it has helped develop include a device designed to keep nasal tubes in place. Customers have also gone to the lab to provide safe, ergonomic product designs.
http://www.kentucky.com/mld/kentucky/business/3603664.htm

China's future seems inexorably linked with technology. Foreign companies are increasing their investments there, spurred by China's recent entry into the World Trade Organization, the growing domestic demand for technology, the global IT slowdown, and the massive pool of cheap, talented labor. Microsoft China President Jun Tang says more research and development is coming out of China as well, such as contributions to the MPEG-4 standard out of Microsoft's Beijing Lab. And the country seems as though it has the capacity, both in terms of resources and demand, to produce an increasing amount of IT hardware, especially since PC penetration is less than 5 percent and 80 percent of the country's semiconductors are imported. Jian Daning, director of the Shanghai Waigaoqiao Free Trade Zone, says the younger generation of Chinese diplomats will act to enforce new laws that promote the IT industry in that country. Foreign firms such as Intel, Hewlett-Packard, Nortel, and IBM locating at special zones such as Waigaoqiao do not pay income taxes for the first two years, for example, and the Chinese recently set a goal to dramatically reduce the time it takes to clear IT products through customs. Meanwhile, the Chinese government has fostered IT growth by funding computer research through the Chinese Academy of Sciences, and hundreds of Chinese universities have established strong tech departments.
http://asia.cnet.com/newstech/sg/0,39001173,39063506,00.htm

Future battles could be waged by robot drones that communicate via a wireless network that mimics the human brain; determining the building requirements of such a network is the goal of a five-year, $11 million project from the Office of Naval Research. The Multimedia Intelligent Network of Unattended Mobile Agents (Minuteman) project coordinates the work of 45 teams comprised of almost 300 engineers and researchers. One researcher, Mario Gerla of UCLA, has already devised the basic hierarchy of the network: A Global Hawk autonomous vehicle (AV) will relay data and receive commands from headquarters while flying 50,000 feet above the battlefield, then transmit those commands to a second team of AVs flying at a lower altitude; this team will then route the data to single drones that act as liaisons to AV squadrons. Furthermore, any drone can serve as the main data router should the primary router get knocked out. The Minuteman network can maximize bandwidth because it can reconfigure itself, "in much the same way neurons reconfigure when doing goal-oriented tasks," notes National Space Biomedical Research Institute director Jeffrey P. Sutton. The AVs will have several modes of communication, including the ability to transmit color video or black-and-white photo images. Minuteman project director Allen Moshfegh says one of the challenges will be to upgrade the core routers' intelligence so that they can send data at the optimal path and speed. With enough funding, he predicts that such a goal could be reached within six to eight years.
http://www.nytimes.com/2002/07/11/technology/circuits/11NEXT.html
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Intel is working on technology that could be used to limit personal use of digital content. One example is the Trusted Computing Platform Alliance (TCPA), a technology designed to ensure secure e-commerce transactions that Intel is co-developing. Intel, along with Advanced Micro Devices and Microsoft, is working on Palladium, a system in which processor chips are enhanced with TCPA-like technology and combined with new security software. Palladium is envisioned as a form of virus protection and a spam blocker, among other things. But although Microsoft's Palladium manager Peter Biddle claims that preventing the copying of digital content is not the purpose of the product, he does acknowledge that digital files could be encoded so that they only play on the Palladium platform. Such an application would be true to the spirit of Sen. Ernest Hollings' (D-S.C.) proposed legislation to have anti-copying measures installed on all electronics so that the entertainment industry can assert more control over its copyrighted content--a proposal that Intel and others have robustly decried.
http://digitalmass.boston.com/news/globe_tech/upgrade/2002/0708.html

A researcher at the U.S. Department of Energy's Ames Laboratory has written a better message-passing program for supercomputers created from PC clusters. David Turner's MP_Lite program helps different nodes communicate more reliably and effectively, and gives users much easier to use management tools than are available currently. Clustered supercomputers calculate very complex problems that help determine, for instance, under what circumstances a manufacturing material will become brittle and crack. MP_Lite helps the clustered PCs work together more efficiently, makes the system transparent to the user, and consumes very little processing power, compared to other message-passing programs. Other laboratories using clustered PCs for supercomputing tasks, such as the Argonne National Laboratory, have developed their own specialized message-passing systems created from the standard message-passing interface, or MPI, in the public domain. Turner's new MP_Lite is available to anyone who wants to use it, and he hopes that programmers will incorporate its efficiencies into their own custom MPIs.
http://www.newsfactor.com/perl/story/18544.html

Christof Teuscher of the Swiss Federal Institute of Technology in Lausanne (EPFL) believes that biological systems can revolutionize computing. "Looking at computing from a biological point of view gives us an entirely new perspective and opens the door to systems that will be immune to breakdown and errors, can learn and evolve and ultimately replicate themselves," he says. The BioWall, created by Teuscher and EPFL colleagues, is testament to that vision: The 6-meter-wide mosaic is capable of repairing itself whenever its electronic tissue is disrupted by touch; the tissue is made up of chips bearing computer code that contains the data for self-replication, much like a cell nucleus is embedded with an organism's genetic blueprint. This also eliminates the need for a central "brain" mechanism to coordinate reconfiguration. Teuscher says the technology could be applied to automated machine network management, space exploration, and interactive apparel. Self-repairing and self-replicating integrated circuits could also prove useful in industries where safety is a major priority. Such fields are currently hampered by unrefined fault-tolerance techniques in which a system may need as many as three backup copies to take up the slack in the event of a crash. Although self-repairing circuits are not exactly new, Teuscher says BioWall tissue can reconfigure itself while it is still functioning, and features "a completely scalable architecture."
http://www.wired.com/news/technology/0,1282,53729,00.html

Alice, the brainchild of computer programmer Richard Wallace, is an artificial intelligence program so lifelike that some people who interact with it mistake it for a real person. It is based on the theory that human conversation is simpler than most people realize. Wallace speculated, based on the sort of questions people asked Alice, that most conversation is comprised of a few thousand statements, and he initially supplied Alice with approximately 40,000 preprogrammed responses to choose from, which gave it a 95 percent response rate. The wry dialogue that Alice makes during conversation with human participants is a testament to the inventiveness and dedication of its creator, and the number of exchanges that passed between program and users increased significantly as Alice's development progressed. Alice has won the annual Loebner Prize competition for being the most human robot in the world twice, but controversy has erupted over whether the program is actually intelligent. Alice fits the bill from the standpoint of the Turing Test, which characterizes a computer as intelligent if it can successfully mimic conversation to the point that it fools the interrogator into thinking that it is human. But some artificial intelligence advocates refute this position, arguing that a truly intelligent program must mirror the actual functions of the human brain, including neural pathways, learning ability, and creativity.
http://www.nytimes.com/2002/07/07/magazine/07WALLACE.html
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Former senior intelligence and security officials postulate that a terrorist-coordinated cyberattack against America's networks and businesses is inevitable. Experts are expecting terrorists to first launch a physical attack against a private U.S. firm, and then follow it up with a second assault--either physical or based in cyberspace--against regional telecommunications and power grids in an attempt to disrupt rescue and recovery efforts. Foundstone President Stuart McClure warns that hackers capable of causing such mayhem number in the thousands. An anonymous ex-intelligence official notes a combined physical/cyber attack has the potential to "shake the foundation of the country" and cause damages "in the trillions of dollars." This individual says plans for such a contingency should be in place, and urges that multinational CEOs set up secure communications links with government agencies. The official says that IBM, General Motors, General Electric, and other major companies could be potential targets. Former CIA profiler Eric Shaw adds that global corporations with Indian or Israeli ties are particularly attractive as targets.
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Some physicists indicate that quantum physics may have hidden depths, since theory alone is a matter of predicting probable measurements rather than certainties. People are attempting to find a "hidden variable theory" that most physicists dismiss as unnecessary because quantum mechanics accounts for all known experimental results. However, the property of non-locality, in which entangled particles influence each other at faster-than-light speeds, is hard to explain using this theory. Gerard't Hooft, winner of the Nobel Prize, believes that such unusual behaviors within the quantum world can be traced to simple cause-and-effect relationships--in essence, an underlying deterministic layer exists that applies to the smallest levels of space and time. Meanwhile, Imperial College's Anthony Valentini theorizes that in the early universe, matter may not necessarily have adhered to quantum mechanics. He even suggests that dark matter may be composed of non-quantum particles. Such particles could be harnessed to crack quantum encryption, build a computer that surpasses the performance of a quantum device, or facilitate faster-than-light communication. However, Lucien Hardy of the University of Oxford cautions that "These conclusions depend on a particular interpretation of pilot-wave theory, which whilst being perfectly respectable, has the support of only a small number of physicists."

In the late 1960s, social psychologist Stanley Milgram popularized his theory that there are an average of six intermediate people--"six degrees of separation"--connecting any two individuals chosen at random. Some mathematicians claim Milgram's small-world network theory can be applied to natural and technological systems. Cornell University's Steve Strogatz and graduate student Duncan Watts formulated theoretical models demonstrating that members of a large network can be linked by short paths, provided the networks consist of clumps of close associates and the occasional "random element." Watts set out to establish the existence of such social networks by studying the game Six Degrees of Kevin Bacon, and says that other systems--the electrical power grid of the western United States or the path of an epidemic, for example--follow the same connectivity principle. Researchers are now tackling how to map out the reasoning and pathways through such networks: Watts is replicating Milgram's experiment with email, and has recruited 50,000 participants so far. However, skeptics such as University of Alaska psychologist Judith Kleinfeld question the validity of Milgram's theory. Kleinfeld, for one, says the Milgram archive at Yale University has no records of Milgram's experiments ever being precisely replicated.
http://www.discover.com/june_02/featworks.html