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Volume 2, Issue 49:  Friday, April 28, 2000

  • "Microsoft Denial as EU Looks Into Claims Over Windows 2000"
    Financial Times (04/28/00) P. 3; Buckley, Neil

    Microsoft yesterday began a campaign in Brussels to show that its Windows 2000 server software is fully compatible with rival operating systems, as the European Commission investigates complaints that Windows 2000 only functions properly with Microsoft software. Following complaints from Microsoft rivals, the commission is looking to ensure that Microsoft does not expand its PC OS dominance into the server OS market. Control of the server market would also give Microsoft control of e-commerce, says EU competition commissioner Mario Monti. To dispel these concerns, Microsoft yesterday held a demonstration of Windows 2000 showing that the software works well with products from rivals such as Novell. Microsoft says it worked closely with Novell to make the two companies' products compatible. In addition, Microsoft says Windows 2000 is compatible with Unix. The commission is now evaluating information sent in by Microsoft, and authorities must decide whether to bring a case against the software giant for abuse of a dominant market position.

  • "States Said to Back Proposal From U.S. to Divide Microsoft"
    New York Times (04/27/00) P. A1; Brinkley, Joel

    The federal and state governments in the antitrust suit against Microsoft agreed to file a joint proposal that would include breaking the company into two separate entities. Remarks from the leaders of Microsoft, especially those of Chairman Bill Gates and CEO Steve Ballmer, strengthened the states' support of a federal breakup plan. The proposal's primary aim is to break Microsoft in half, with the operating systems under one company and the rest of operations including applications software and Internet capabilities under the other. Interim restrictions on Microsoft's conduct will be included due to the likelihood of an appeal if the breakup plan is approved. The conduct remedies would be the only restraints on Microsoft if the division of the company is overturned. These interim restrictions would include a plan to publish a uniform price list for Windows and allow competitors to view Windows' interface codes. These remedies would remain in place three years if the breakup occurs and 10 years if it does not, and a method of enforcement must be developed. Some state officials, such as Ohio Attorney General Betty Montgomery, have still not joined the majority in support of the breakup and remedies. A few states may file minority opinions despite Judge Thomas Penfield Jackson saying he does not want them to do so.

  • "EU Move on Phone Monopolies Would Cut Cost of Internet Use"
    International Herald Tribune (04/27/00) P. 1; James, Barry

    The European Commission (EC) yesterday called upon telecom companies to open their networks to competitors, a calculated move that would break domestic companies' monopolistic hold over phone lines and spark the widespread introduction of flat-rate Internet access services. The commission said it is willing to take antitrust action against those phone companies that refuse to comply with the move. Giving competitors access to the networks would "facilitate a rapid take-up of e-business and e-commerce," said Mario Monti, EC commissioner of the single market. Erkki Liikanen, the EC commissioner of technology, said he expects the policy to increase competition in the Internet industry over the next six months and that service prices would fall as a result. Liikanen also anticipates the move to spur a roll out of high-speed Internet access services to businesses and consumers.

  • "AboveNet Attack Could Be a Test"
    Interactive Week Online (04/27/00); Smetannikov, Max

    AboveNet Communications is working with the FBI to find the source of an attack that disrupted its network for almost six hours on April 25. The attack, classified as a denial-of-service, was probably done by an individual who had taken the time to understand how AboveNet networks were put together. Security experts say the company may have been singled out as a test for NetKill, a new type of software that automates the preparation and implementation of various denial-of-service attacks. The type of denial-of-service attack that works particularly well on NetKill is "SYN Wait," which is possible to trace. The attack was not as distributed as others against high-profile Web sites in February and was not a "smurf" attack, in which the server is overloaded with pings.

  • "Retailers to Ramp Up IT Spending"
    IDG News Service (04/26/00); Gruske, Carolyn

    IT spending is expected to be a top priority for online and traditional retailers alike this year, according to two separate studies. The first study, published by Computer Sciences and Retail Info Systems News, predicts that overall IT operating budgets will rise by 8.4 percent this year, while technology capital budgets may increase an average 16.8 percent. Meanwhile, the second study, conducted by RetailTech Magazine and PriceWaterhouseCoopers (PWC), reports that retail IT spending will grow from 1 percent of sales to 1.7 percent of revenue. The PWC study finds that IT spending will be directed toward such items as systems to lower store labor expenses, techniques to improve the reliability and speed of data communications, customer service initiatives, and tools to speed the customer checkout process. The study also reported that in-store kiosks continue to generate interest among retailers, although the CSC/RIS study found that kiosks will not be a priority. While there was some disagreement between the two studies, both concluded that integration of networks and business processes offers a variety of useful benefits to retailers, including supply chain efficiencies, reduced costs, and a unified customer experience offered both online and in the store. Both studies recommended streamlining online and traditional business models, and advocated implementing cutting-edge business-to-business and business-to-consumer initiatives.

  • "Europe Expected to Make Big Contributions to Internet Economy"
    CyberAtlas (04/27/00)

    The global Internet economy will reach $6.9 trillion by 2004 and Europe will account for $1.5 trillion in online sales, according to Forrester Research. Europe appears to be on pace to become a leader in the new economy if the continent is able to sustain its e-commerce growth through 2003, says Forrester. Projections over the next five years put the growth in online sales for retail goods and services at 140 percent annually. As online retailers improve their Web sites, as many as 100 million Europeans could be shopping online by 2004. However, business-to-business e-commerce is expected to drive Europe's new economy. In fact, Forrester projects that business-to-business e-commerce will account for $1.4 trillion of the continent's total business online. For that to happen, entire sectors will have to make their way online and emerging online marketplaces will have to facilitate online business trade in the region. Germany, the United Kingdom, and other parts of Northern Europe will be largely responsible for the continent's initial success, although France is expected to be Europe's third largest Internet market. WAP phones, interactive TV, and other Internet-enabled devices may be able to bring more Southern Europeans online. Asia's Internet economy is expected to reach $1.6 trillion, but Europe's is seen as being more balanced, with a faster adoption rate and stronger business-to-consumer growth. North America will account for $3.5 trillion of the new economy, Latin America $82 billion, while Eastern Europe, Africa, and the Middle East are expected to trail with a combined $68.6 billion e-commerce market.

  • "Syria Advances Cautiously Into the Online Age"
    Washington Post (04/27/00) P. A1; Schneider, Howard

    In a surprising development, the Syrian government is throwing its traditional caution to the wind and embracing the Internet as an economic spark plug, a modernization move that is largely being pushed by President Hafez Assad's eldest son, Bashar Assad. Bashar Assad, potential successor to his father and a proponent of technology, predicted that "the Internet is going to enter every house." Syrian culture may dictate some regulation of the Internet, Assad said, but he would like "everybody to be able to see everything" because exposure to knowledge will allow people to improve themselves. Assad indicated that he favors "self-discipline" and "self-regulation" of Internet content. At present, the Syrian government controls the Internet and only a few thousand government officials and commercial users are permitted to use the medium. Efforts are underway to bring Internet access to a broader section of the population.

  • "G-8 Cybercrime Conference in Paris Next Month"
    Reuters (04/26/00)

    Paris will host a meeting of the Group of Eight (G-8) industrialized countries May 15-17. Representatives of Germany, Great Britain, France, Italy, the United States, Russia, Japan, and Canada will meet with members of 150 top corporations to discuss joint measures to combat crime on the Internet. The privacy of Internet users is important to the G-8, and the talks between the public and private sectors will reflect that, said French Foreign Ministry spokeswoman Anne Gazeau-Secret.

  • "GAO Report Criticizes Federal Technology Research Program"
    Computerworld Online (04/26/00); Thibodeau, Patrick

    The General Accounting Office (GAO) on Tuesday issued a report criticizing a government program aimed at advancing high-risk technologies for replicating privately-funded research. The Advanced Technology Program (ATP), run by the National Institute of Standards and Technology, works to speed the development of risky technologies that private companies are unlikely to finance. The three ATP projects examined in the GAO report, including creating handwriting recognition systems and boosting fiber-optic line capacity, were all being duplicated by the private sector. "The federal government should not use its R&D budget to compete with or replicate the private sector," says House Science Committee Chairman F. James Sensenbrenner (R-Wis.), who released the GAO report. In response, ATP officials say government investigators specifically chose three finished projects that support their argument and formed excessively broad conclusions. The GAO report notes that the government has difficulty knowing what the private sector is working on because private firms are often reluctant to reveal proprietary information.

  • "EU to Relax Rules on Data-Encryption Exports"
    Wall Street Journal (04/28/00) P. A17; Winestock, Geoff

    The European Union recently voted to liberalize its rules on exporting data-encryption products, allowing for the free trade of such products within the 15 EU countries as well as 10 other countries, including the United States. Analysts say that the loosening of the rules now gives EU companies a competitive advantage over U.S. high-tech firms, which, despite the relaxing of encryption-export laws by the Clinton administration in January, still must deal with licensing regulations and checks by security agencies. Analysts contend that the EU's recent move will spur American tech firms to lobby the U.S. government for more liberal encryption export laws to level the playing field. The new EU regulations do not apply to trade with countries outside of the EU and the other 10 nations specified.

  • "Study: Net Intellectual Property Suits on the Rise"
    E-Commerce Times (04/26/00); Conlin, Robert

    Intellectual property lawsuits involving the Internet will rise over the next several years, according to attorneys recently polled by PricewaterhouseCoopers. Eighty percent of respondents say lawsuits that involve intellectual property violations are on the rise. The main intellectual property issues are business method patents and Internet issues, according to more than half of the respondents. Over half of the respondents say the Internet will make it more difficult to enforce patent rights, and about 90 percent criticize the U.S. Patent and Trademark Office's handling of patent regulation in the Internet age. One patent that critics say is too broad is Amazon's patent on its 1-Click express ordering process. Amazon has sued rival Barnesandnoble.com for using the 1-Click method. In a recent reversal of opinion, Amazon CEO Jeff Bezos said the length of business model patents should be shortened from the current 17 years to three to five years. However, Bezos still argues that legal protection is necessary for firms that spend large amounts of money to create features such as 1-Click.

  • "Online Sales Could Grow 500 Percent This Year in China"
    Associated Press (04/27/00)

    China's online sales could rise 500 percent this year to $42 million, up from $6.6 million last year, according to a survey released Thursday by the Center for Computer Industry Development and CCIDNet Consulting. Although China's potential $42 million in e-commerce sales hardly compares with the U.S. total of $31 billion last year, the Chinese e-commerce market is promising because of the nation's huge population and growing Internet use. The Chinese Internet population, 8.9 million users according to the latest count, is doubling every six months. However, e-commerce is China is hindered by a lack of credit cards, a poor delivery network, and consumers' concerns about purchasing items they have not seen.

  • "Korean Firms Hit by Chernobyl Computer Virus"
    Reuters (04/26/00)

    South Korean officials say that the "Chernobyl Virus" recently hit the country, erasing data on hard disks at hundreds of companies. The virus got its name because it was released last year on the 14th anniversary of the nuclear accident. Officials say that the damage caused by the virus last year was much greater than damage incurred this year, although no monetary figures were revealed.

  • "Tech Lobbyists Eye China's Potential"
    Interactive Week (04/24/00) Vol. 7, No. 16, P. 91; Brown, Doug

    High-tech lobbyists are pushing Congress to grant Permanent Normal Trade Relations (PNTR) status to China so the U.S. will be able to capitalize on the nation's huge market, but labor unions and human-right activists oppose the move. Over the next several weeks the tech industry will continue to argue that the U.S. will not be able to take advantage of the concessions China made to become a member of the World Trade Organization if Congress does not provide PNTR status. Meanwhile, companies in other nations would be able to leverage these concessions, which include lowering tariffs, opening the telecom and Internet markets for investment, and strengthening protection of intellectual property of foreign products. High-tech lobbyists contend that granting PNTR status to China would lead to more U.S. jobs and better human rights conditions in China. However, unions argue that PNTR status would result in more American jobs moving to China, while other activists say China should be required to improve its human-rights record before receiving PNTR status.

  • "Web Infrastructure is Key Asset of Vulnerable Dotcoms"
    InternetWeek (04/24/00) No. 810, P. 9; Preston, Robert

    As old-economy giants increase the pace of their e-business transformations, many are discovering that one way to build a strong e-business architecture quickly and relatively cheaply is to simply buy a struggling new-economy dot-com that has already invested heavily in servers, switches, bandwidth, applications, and back-end systems. Companies such as grocer Safeway and financial services firm Merrill Lynch have been actively acquiring dot-com companies to speed up their e-business transformations. But old-line firms need to be careful not to treat a newly acquired Internet architecture as a commodity, because it will need constant upgrading and improvements--a lesson companies such as Victoria's Secret and Toys "R" Us learned the hard way. As industry giants such as Ford, GM, General Electric, Citigroup, and Wal-Mart pursue their ongoing and increasingly important e-business transformations, IBM CEO Louis Gerstner's prediction that e-business cannot really take off until the old-line giants accept the trend is being proven correct.

  • "Employee Study Cites Rampant Internet Abuse"
    Network World (04/24/00) Vol. 17, No. 17, P. 38; Marsan, Carolyn Duffy

    Employee Internet and email use is rising on the job, despite a large increase in formal email and Internet policies prohibiting such usage, according to a recent survey commissioned by Elron Software, a purveyor of Internet and email filtering software. The study shows that 68 percent of companies now have formal policies regarding employee Internet use and 60 percent have policies pertaining to email usage, as compared to 49 percent and 47 percent, respectively, last year. Furthermore, the study says 24 percent of employees admit to receiving confidential email from employees at other companies containing proprietary information, compared to 9 percent last year. Roughly 20 percent of workers polled say they have received "at least one potentially offensive email" every month from a fellow employee. About 33 percent of workers say they go online for at least 25 minutes per day for personal reasons, usually for shopping purposes.

  • "EPIC Survey Finds Encryption Regulations Are Ending"
    InfoWorld (04/24/00) Vol. 22, No. 17, P. 62H; McCarthy, Jack

    The Electronic Privacy Information Center (EPIC) recently released a report called Cryptography and Liberty 2000: An International Survey of Encryption Policy. The report says most governments are liberalizing rules regarding strong encryption policies because of the explosion of e-commerce and the need for encryption to protect privacy and Internet security. One of the most significant recent developments in the encryption debate was the Clinton administration's decision to allow the export of mass-market encryption software last January, EPIC says. However, the report warns that several countries, such as the United Kingdom, India, and Belgium are currently proposing regulations that would allow those governments the right to obtain encrypted keys or plain text. The report says several other countries, including Burma, China, and Pakistan continue to place restrictions on both encryption technologies and Internet usage. However, EPIC says these policies will only serve to further isolate those nations from the rest of the world, and the availability of encryption devices on the Internet will render their encryption regulations virtually meaningless.

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