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Volume 2, Issue 42:  Wednesday, April 12, 2000

  • "Bill Would Shelter Firms Sharing Hacking Info"
    Newsbytes (04/12/00); McGuire, David

    Reps. Tom Davis (R-Va.) and Jim Moran (D-Va.) today will introduce a bill that gives companies some immunity from the Freedom of Information Act in order to spur an exchange of information between companies and law enforcement agencies regarding cyberattacks on telecommunications and IT infrastructure. Companies are often skittish about sharing such information due to concern about liability or stock-price issues, says David Marin, a staffer for Davis. "We are creating an exemption for a potential threat that is going to become one of the national security issues of our time," Marin says. The bill will not permit companies to conceal information about their business practices, says Marin.

  • "Internet Tax Panel to Deliver Report"
    Washington Post (04/12/00) P. E3; Schwartz, John

    The Advisory Commission on Electronic Commerce will deliver its controversial report on e-commerce taxes to Speaker of the House J. Dennis Hastert (R-Ill.) and Senate Majority Leader Trent Lott (R-Miss.) this morning. The commission's chairman, Virginia Gov. James S. Gilmore, says the support of top lawmakers in Congress is a sign that the commission was a success, an assertion disputed by a minority group of commission members led by Utah Gov. Mike Leavitt. E-Fairness Coalition Executive Director Lisa Cowell dismisses the commission's report as irrelevant and "dead on arrival." The issue of Internet taxes is hot right now in Congress. A fast-track bill from Sen. John McCain (R-Ariz.) that would extend the Internet tax moratorium until 2006 hit a bump in the road yesterday, after McCain decided to withdraw the bill from Thursday's markup session. A spokesman for McCain said the senator decided to pull the bill due to pressure from e-commerce tax proponents, including businesses and state and local governments, who want more time to study the bill. McCain will get the bill rolling again soon, and "feels more strongly than ever that an extension of the moratorium is vital," said the spokesman. Meantime, Sen. Judd Gregg (R-N.H.) and Sen. Herb Kohl (D-Wis.) yesterday introduced an anti-tax bill of their own. Gregg criticized state and local governments' pro-tax stance as a "power grab" to collect more taxes. The pro-tax movement will soon be bolstered by legislation being prepared for introduction by Sen. Byron L. Dorgan (D-N.D.). Dorgan's bill largely subscribes to the views held by Leavitt and his group and calls for the simplification of states' tax systems.

  • "General Assembly Passes Bill on Software Regulation"
    Baltimore Sun (04/11/00) P. 10A; Wheeler, Timothy B.

    Maryland lawmakers' blueprint to boost the development of the state's technology industry by laying a favorable legal foundation is progressing as planned, as both the House of Delegates and Senate yesterday voted overwhelmingly to pass the Uniform Computer Information Transactions Act (UCITA). "It sends out a very aggressive message to the business community internationally that we really mean business in the e-commerce world," said House Speaker Casper R. Taylor Jr. Software companies and online firms such as AOL praised lawmakers for approving UCITA, which provides legal guidelines addressing the sales and licensing of computer software. Industry group the Internet Alliance also lauded the state's effort. "It's a step away from the Wild West, where you don't have recourse," said Internet Alliance State Policy Director Emily Hackett. "This is very good for consumers and for business." Maryland lawmakers added a handful of provisions to the bill providing consumers with added protections, such as refund guarantees for software purchases. The bill also ensures that consumer lawsuits will be covered by Maryland law, although the state's courts will have to decide whether the lawsuits will be heard in Maryland or another state. The bill is scheduled to go into effect on the first of October and a legislative oversight committee will be created to monitor its effectiveness.
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  • "New Browser From Microsoft Gets Criticism"
    Wall Street Journal (04/11/00) P. B7; Buckman, Rebecca

    The Web Standards Project, a group of grass-roots software developers, is criticizing Microsoft for using proprietary technology in the most recent version of its Internet Explorer rather than supporting World Wide Web Consortium (W3C) standards. The new version of Internet Explorer, scheduled for release later this year, includes features that are incompatible with standards the software giant had promised to support, the Web Standards Project says. Since Internet Explorer does not fully comply with the standards, a developer's programs might work only on Explorer and not on rival browsers, says Web Standards Project leader Jeffrey Zeldman. "They seem to be saying, 'We're the market leader, we can do whatever we want and we don't have to implement the standards,'" Zeldman says. In response, Microsoft argues that it never guaranteed 100 percent support for the W3C standards. Compared with other browsers, Microsoft's Shawn Sanford says Internet Explorer is the "most compliant" with the W3C standards.

  • "VW Sets Up Digital Market With IBM, i2, Ariba"
    CBS Marketwatch (04/12/00); Vaughan, Gareth

    IBM, i2 Technologies, and Ariba will collaborate with Europe's largest car maker, Volkswagen, to build an online business-to-business marketplace, which the car maker says will boost supplies and cut supply chain costs. "In some cases this could lead to savings of up to 50 percent," said Volkswagen board member Javier Garcia Sanz in a statement. Volkswagen will work with IBM, i2, Ariba, and other e-business leaders to build an online marketplace that will allow the company to increase efficiencies and cut costs from the process of procuring parts, tools, office equipment, and other supplies. Volkswagen said it will not participate in the online marketplace alliance launched by Ford Motor, General Motors, and DaimlerChrysler, although it has opened its own initiative to all market players, according to Volkswagen board member Jens Neumann.

  • "ACM Conference Focused on Internet Privacy"
    Associated Press (04/09/00); Jesdanun, Anick

    Attendees at last week's Computers, Freedom and Privacy conference, sponsored by the Association for Computing Machinery, called for greater privacy protections on the Internet, including rules that would give consumers control over their own information. Some Internet users criticized the effectiveness of the industry's self-regulation efforts and urged the introduction of privacy laws similar to the one Canada passed last week that requires companies to get permission from consumers before sharing their data. Microsoft used the conference to announce that it will develop Platform for Privacy Practices (P3P) tools for Web browsers this fall. FTC official Mozelle W. Thompson was also at the conference, and he said the agency would aggressively pursue Web sites that violate existing laws.

  • "Don't Get Tangled Up in Web Stock Scams"
    USA Today (04/10/00) P. 12B; Fairley, Juliette

    "Pump-and-dump" investment schemes are proliferating on the Web as the number of online investors continues to rise. By definition, pump-and-dump cases involve investors who purposely spread misleading information about stocks in order to produce a temporary rise in the stock's price, allowing investors to sell the stocks at profit. The number of people investing on the Internet is expected to rise from 900,000 in 1999 to 2.4 million by 2003, according to Forrester Research. John Stark, chief of the Securities and Exchange Commission's Internet enforcement program, said the commission has brought upwards of 115 cases since 1995. Online scam artists prey on investors' greed and inexperience, says James Walsh, author of "You Can't Cheat an Honest Man." Unscrupulous investors advertise their scams on the Web via bulletin boards, chat rooms, spam, and targeted advertising, says Bill McDonald, enforcement director of the California Department of Corporations.

  • "Judge In Case Can Browse Through Variety of Options"
    Baltimore Sun (04/09/00) P. 1D; Guidera, Mark

    U.S. District Judge Thomas Penfield Jackson, having ruled that Microsoft broke antitrust laws, now must decide on the most effective way of ending the software giant's monopoly. Some legal experts and consumer groups favor splitting the company, but a breakup poses many difficulties. If Microsoft is divided into three or more smaller companies, Jackson's court might spend years overseeing the actions of the new firms. Experts predict that a breakup would result in the creation of three spinoffs, which would each receive an equal number of Microsoft workers as well as the source code for both Windows and Internet Explorer. The new companies could merge with other software or Internet companies, and would be allowed to use Windows for any business initiatives. The parent company would receive Microsoft's other businesses, including its programming tools division, consumer software products, European cable ventures, and Internet initiatives. However, some legal experts believe that a breakup solution is highly unlikely, given Jackson's order that the two sides submit their proposed solutions within just 60 days. Other possible remedies include forcing Microsoft to open its Windows source code or auctioning licenses to use Windows code so rivals could create competing operating systems and software. With either of these solutions, experts worry that competition might not improve, since the code's usefulness would be limited without the Microsoft engineers who understand it. Another possibility is a conduct remedy, which would impose limits on Microsoft's behavior in areas such as contracts with PC makers. A conduct remedy, like a breakup solution, could force Jackson's court and the Justice Department to monitor Microsoft's behavior for years. Robert H. Lande, a professor at University of Baltimore Law School, says, "Innovation would really suffer if government lawyers are going to have their noses in everything Microsoft does."
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  • "Technology's Frontier: Reinvention of Politics"
    SiliconValley.com (04/09/00); Thomma, Steven

    The Internet is expected to revolutionize politics in the same manner in which the technology has changed the face of commerce. Candidates have already used the Internet to reach voters and raise money for their campaigns. The Internet is believed to have played a key role in the efforts of Sen. John McCain (R-Ariz.) and Minnesota Gov. Jesse Ventura. McCain actually received $3.7 million over the Internet from contributors, as his supporters made great use of the technology. In fact, Texas A&M political scientist George Edwards believes McCain's success online may have signaled the start of strategic use of the Internet for political campaigns. Moreover, McCain's state, Arizona, in March became the first state to accept Internet votes as binding in an election. The Internet is expected to improve upon the way in which voters communicate with their representatives because Americans will be more directly wired to candidates and the government. One such improvement is instant feedback to politicians in electronic town hall meetings or through email. Edwards says the technology could lead to more insurgency campaigns because of its potential to level the playing field. The communications capabilities of the Internet makes it the ultimate democratization tool, suggests Edwards. "This is as big as the printing press and the steam engine," says George Washington University professor of political management and staff director of the Online Democracy Project Michael Cornfield. "It is a new form of power."

  • "Net Tax Key to EU Directive"
    Wired News (04/10/00); Yackley, Ayla Jean

    An enormous e-commerce directive is being prepared by the European Union, which has as its objective the freer movement of goods and services across Europe, although some observers believe one of its provisions will in fact restrict growth by creating onerous online taxes. The Directive on Electronic Commerce, which is scheduled for a vote on April 11 and is expected to be ratified by this summer, would remove restrictions on digital signatures and online contracts. The directive would also ease the liability of service providers and other "passive" intermediaries of data when criminal activities occur in their domains, make companies provide basic information about their organizations, and prohibit member states from establishing their own bureaucracies to govern the online economy. However, under the directive, online stores would also have to collect value-added taxes, or VATs, from Europeans on all products sold in digital form--a proposal that critics claim would turn the owner of an e-commerce site into a de facto taxman.

  • "Ericsson and Delphi Set Up In-car Venture"
    Financial Times (04/11/00) P. 24; Tait, Nikki

    Delphi Automotive, the biggest auto parts provider in the world, announced a deal with Ericsson to develop products and common standards for in-vehicle "telematics." Telematics, considered one of the most rapidly growing sectors of automotive commerce, ranges from mobile phone connectivity to the downloading of email. As the Internet grows, consumers want telecommunications products they can safely use in their cars. Ericsson cited predictions of more than 1 billion mobile phone users by 2003. Part of the focus of the venture is to design common standards enabling telematics' capabilities to be adapted efficiently. Delphi said the deal is not exclusive, but that manufacturers would be concentrating on designing uniform interfaces.

  • "This Law Is User-Unfriendly"
    Business Week (04/17/00) No. 3677, P. 94; Gross, Neil

    The Uniform Computer Information Transactions Act (UCITA), a controversial bill that sets software apart from other goods and services, has already passed in Virginia and may soon be passed in other states. Consumer groups, technology trade associations, and many state attorneys general are objecting to the bill, which they say affords wide liberties to software vendors at the expense of consumers. Critics say UCITA diminishes consumers' warranty protection and makes it difficult for buyers to sue software vendors for shoddy products. Under UCITA, software licenses could prevent consumers from selling or even giving away used software. In addition, a software license could prohibit users from publishing complaints about software. UCITA would allow vendors to monitor the use of products and remotely shut off software if they believe a user has violated license terms. The bill's advocates say UCITA does not weaken consumer rights. Raymond T. Nimmer, a law professor at the University of Houston who helped write UCITA, says the bill preserves the warranty of merchantability that currently assures that products are appropriate for regular use and that statements on the package are accurate. "Under UCITA, there is an implied warranty of merchantability," Nimmer says. Meanwhile, a federal act called Magnuson-Moss prevents vendors that provide any written guarantees from disclaiming an implied warranty. However, by distinguishing software from other goods, UCITA would prevent laws like Magnuson-Moss from applying to software, says lawyer and consultant Cem Kaner. Critics also note that UCITA does not allow consumers to see warranties and licenses until after buying software and beginning installation. Finally, UCITA allows vendors to post changes in terms on their Web sites after software has been licensed, giving consumers the burden of checking vendor sites to see if terms have been altered, says Charles B. Shafer, professor of consumer law at the University of Baltimore Law School.

  • "Business Under Attack"
    Industry Standard (04/10/00) Vol. 3, No. 13, P. 108; Abreu, Elinor

    Activist groups protesting a wide range of issues are increasingly launching cyberattacks to highlight their causes. For example, a group called the Electrohippies Collective has announced an upcoming campaign of disrupting the Web sites of companies that specialize in the genetic modification of plants and animals. The Electrohippies, along with other protest groups, are using distributed denial of service (DDOS) programs that can be used from any computer; previous versions of the attack tool could only work on a server. "Hacktivists" are becoming more aggressive in their anti-corporate campaigns, hitting companies with mass emails, disrupting Web sites, and placing bogus messages on online corporate bulletin boards designed to negatively affect a company's stock price. Although many companies consider the attacks on their Web sites to be a form of censorship, hacktivists contend that they are simply moving civil disobedience into the electronic age, claiming that the high-tech DDOS tools they wield are legal and do not cause any permanent damage. The legality of denial of service protest actions is still unknown, and will not be established until a lawsuit or legislation provides a precedent. Legal analysts say a criminal or civil lawsuit against hacktivists would have a good chance of success if it could be shown that the hackers were intentionally trying to damage a company, and if actual damages or loss of profit resulting from the attack could be proved.

  • "Real-Time Enterprise"
    InfoWorld (04/10/00) Vol. 22, No. 15, P. 1; Schwartz, Ephraim; Scannell, Ed

    Top-tier IT players such as IBM, Compaq, and Oracle, as well as the top-five consultancies are developing solutions to integrate their customers' business-to-business operations and customer service systems in real time, or with zero latency. The solutions are intended to extract greater value from marketing initiatives by allowing businesses to make informed, fast decisions based on customer behavior and product availability data. "Zero latency allows a company to direct its [marketing] money more efficiently to get better results," says Bob Laughlin, president of marketing database company Consumer Direct. Zero latency systems are also beneficial because they align IT investments with general business strategies, increasing effectiveness and improving return-on-investment values.

  • "This File Will Self-Destruct-Now!"
    Interactive Week (04/03/00) Vol. 7, No. 13, P. 50; Spangler, Todd

    A new wave of products can now limit access to proprietary business-to-business information sent over the Internet. Several companies, such as Authentica, produce software that allows a sender to limit access to a file based on the recipient's identity, also converting the file so it cannot be copied, forwarded, or printed. The software enables the user to select a specific time that the document will self destruct. For example, Authentica's PageVault allows the sender to set the access level of a particular document, listing who can read it and what functions, such as forwarding, they are allowed to perform. The Authentica server software then digests this information, and sends the document to the recipient, who must log on to Authentica before viewing the document. Authentica's WebVault requires the same check-in process for HTML Pages, and its Mail-Vault product protects email messages. This new type of software has also created a new business niche for other companies. Authentica is currently working with 1ClickCharge to form an information-rental business. Authentica competitor Infraworks is currently testing its InTether software, which it says is the most comprehensive data-erasing program available.

  • "Sites That Never Sleep"
    Industry Standard (04/10/00) Vol. 3, No. 13, P. 306; Oh, Jenny

    Prompted by the enormous costs and staff involved in Web site maintenance, an increasing number of businesses are employing the services of Web hosting companies. Such hosts typically charge clients a negotiable, monthly fee to provide server hardware, network access, continuous server monitoring, traffic management, security, network support, and systems integration services. Hosting clientele include such well-known names as online recruiter KForce.com, which outsourced its Web hosting operations to GTE Internetworking, and clothing retailer Bluefly.com, which hired Digex to manage its Web operations. However, not all hosts provide the required hardware. Consequently, several telecom companies have begun offering colocation services, housing a company's servers and various other network equipment in exchange for a fee. Although children's content site Yourownworld.com claims colocation provided the perfect solution to the time-to-market problem, many believe the colocation option will diminish in popularity and eventually disappear altogether simply because it is not as profitable as full-fledged hosting and because companies that provide only colocation services will be unable to aid customers in times of crisis. Regardless, the Web hosting business will likely continue to thrive, which is why some analysts advocate reviewing hosting companies in terms of security, technical support, load balancing, mirroring, and caching services offered, before making a decision.

  • "Protect Yourself"
    Daily Record (04/08/00) Vol. 111, No. 156, P. 14; O'Hearn, Paul

    With the recent explosion in computer crime, medium and small businesses are finding it more cost-effective to outsource their computer security services. This has led to rapid growth in the IT security sector. One player in this field is Network Forensics, whose main products are Net4 Collector and Net4Analyzer. Net4 Collector reviews all data packets a network creates and records specific information on each one, ignoring huge amounts of unimportant data. The Analyzer simplifies data-mining and analysis functions. Both of Network Forensics' products can thwart cyberattacks and can serve as evidence in lawsuits once a denial-of-service hacker has been discovered. Companies looking for a simple yet effective firewall have many to choose from. Watchguard Technologies manufactures the Firebox, which can be tailored to perform networking, Internet sharing, and firewall services for both small and large businesses. Experts say software should be purchased for basic firewall protection for individual PCs or small businesses looking to save money. Symantec's Norton Internet Security 2000 is generally the most highly-regarded product in this field, as it can fend off hacker attempts to turn a computer into a "zombie" from which to launch denial-of-service attacks. Also recommended is the BlackICE application from NetworkICE, a firewall and network traffic monitoring system that can be customized to fit both small and large networks. The product can also track and detect hackers. Finally, those who are looking for free firewall software for single PCs can download Zonelab's software from Zonelabs.com.

  • "IT Shops Take Stock of Application Service Providers"
    IT Professional (04/00) Vol. 2, No. 2, P. 12; Shepard, Susan J.

    In just the past year the application service provider model has been transformed from a seemingly fleeting trend to a full-fledged market with strong long-term potential. ASPs rent applications to other companies, providing access to new, often-complex software and eliminating the need for significant staff effort or expense. Lured by the expectation that the ASP market will skyrocket from $150 million in 1999 to $16 billion by 2003, a variety of companies are launching application hosting services. Some are dedicated entirely to application hosting, while others offer application hosting as one of many services. Also entering the ASP arena are telecommunications firms, which often provide the hosting, networking, and delivery platforms to help companies launch ASP services. Some industries have adopted the ASP model more readily than others. A recent Evan Marketing Services survey of 400 IT managers reports that close to 60 percent of respondents in the insurance, legal, and real estate markets said they would consider using ASPs, while just one-third of respondents in banking and healthcare said the same. Yet when those respondents wary of ASPs were asked if they would consider using an ASP approved by an independent organization, their positive responses jumped to nearly 50 percent, indicating that reliability is a major consideration.

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