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Volume 2, Issue 55:  Friday, May 12, 2000

  • "Microsoft, Slashdot Exchange Volleys"
    Washington Post (05/12/00) P. 1E; Schwartz, John

    Microsoft's lawyers sent an email to Slashdot.org ordering the news site to remove information about the Kerberos software security system mixed with information taken from Microsoft's site. Microsoft cited the Digital Millennium Copyright Act, a document that lends weight to the copyright holder's argument in disputes when material is reprinted. Microsoft wants individuals to take the information from its own Web site so anyone trying to obtain the information would have to sign an online form agreeing to handle the files as intellectual property. Slashdot, a company that promotes the use of open source software such as Linux and is known to dislike Microsoft, responded with an email suggesting Microsoft was trying to censor the news site, and then posted the letter online. The software in dispute, Kerberos, has been free for everyone and was created by engineers worldwide. Microsoft made a version of the security system program for its Windows 2000 operating system. This dispute coincides with Microsoft's antitrust case, in which the Justice Department cited the Kerberos controversy as part of the proposal to break up Microsoft, suggesting that the company was attempting to gain an unfair advantage in the market using its monopoly.

  • "Clinton Asks Congress to Raise the Limit on Visas for Skilled Workers"
    New York Times (05/12/00) P. A14; Pear, Robert

    President Clinton proposed an increase in the number of high-tech workers permitted to enter the U.S. to help fill the void of computer programmers, engineers, and other skilled workers in the market. Congress will probably approve a substantial increase as many members recognize that the demand for these skilled workers is much greater than the government originally predicted. "The administration understands better now than in 1998 that information technology gives an incredible push to the overall economy," says Robert Cohen of the Information Technology Association of America, although he believes even the proposed increases are not enough. There are concerns that American workers should be trained instead of bringing in foreign workers. "There is still no objective, credible study that documents a shortage of American high-tech workers," adds Rep. Lamar Smith (R-Texas). In response to these concerns, President Clinton also proposed significantly higher fees for those employers that utilize the foreign worker program and then suggested using that money to train American workers. Europe and Asia are also competing for the same groups of foreign high-tech workers, primarily from India, to boost their economies.

  • "Next Viruses Will Be Silent Killers"
    MSNBC.com (05/11/00); Sullivan, Eamonn

    Computer security experts warn companies that the "I love you" virus was mere "child's play" compared to the viruses that will be unleashed in the near future. Experts say hackers will soon use stealth emails to infiltrate company databases and steal data undetected. A group of European computer security professionals recently attempted to build a much more dangerous virus than the "I love you" worm, and were successful, according to one of the group's members, Michael Zalewski, a Polish security specialist who works for Telekomunikacja Polska SA. Zalewski says the new virus is especially devastating because it can work across platforms without being noticed, and can replicate itself without requiring the recipient to help it along by opening an email attachment or performing some other action.

  • "Intel Finds Flaw in Up to 1 Million PCs"
    Washington Post (05/11/00) P. E5; Garretson, Rob

    Intel yesterday announced that almost 1 million motherboards it has shipped to PC makers since November are potentially defective and could ruin computer files. The flaw is in the motherboard's memory translator hub, causing problems in transmitting signals between the SDRAM and the 820 Intel processor, says Intel's Michael Sullivan. Affected systems could intermittently reset, reboot, or hang because of electrical problems, Intel says. Under severe conditions, the flaw can corrupt data. The faulty motherboards were shipped to many computer manufacturers, including Hewlett-Packard. However, IBM, Dell, and Gateway say the defect does not affect their systems. Consumers who have bought computers since November are advised to visit Intel's Web site to see if their systems include the flawed motherboard, and to contact their manufacturers if they have had problems. Intel says it will replace the defective components, which could cost the company several hundred million dollars.

  • "Microsoft Offers Alternative Plan in Antitrust Case"
    New York Times (05/11/00) P. 1A; Brinkley, Joel

    Microsoft today submitted a remedy proposal in the antitrust suit focusing on governing company relations with other computer makers and software developers instead of a breakup. Microsoft also requested that the government's breakup proposal be dropped right away. A breakup of this nature would be unprecedented, as the first governmental split of an organization based on a court order and not a consent decree. Microsoft stressed a breakup of the company could harm the economy, cause many Microsoft employees to leave the company, and ultimately destroy the company's business. The argument behind the surprise motion for a prompt rejection of the government's proposal was that the company achieved a monopoly legally, and therefore the government had no business splitting the company. The self-imposed restrictions include Microsoft's agreement to release technical Windows information to other vendors without discrimination and to allow other manufacturers to set non-Microsoft Web browsers as the default on new PCs. Microsoft also suggests compliance in providing a license for Windows to computer makers that sell products by a competitor of Microsoft. Furthermore, the company proposes to avoid making deals giving companies special benefits if they feature only Microsoft products. A final major self-imposed restriction is that Microsoft would not place conditions on the release of its software for non-Microsoft operating systems based on whether the other company distributes or promotes competitor's software. The government released a statement in response to Microsoft's remedies, saying the company's restrictions would not "prevent the company from using its monopoly power in the future to engage in the same kind of illegal behavior to crush new innovations." The federal and state governments will reply to Microsoft's remedies officially next Wednesday, and a remedy hearing where the two sides argue their proposals will be held on May 24. Microsoft asked for more time to prepare for a remedy trial, especially if Jackson decides to break up the company, but Jackson wants the remedy phase finished by the end of this month.

  • "Internet Not as Connected as Thought"
    Bloomberg (05/12/00)

    IBM, Compaq, and AltaVista will release next week the initial findings of their ongoing project to study the state of the Internet, part of which finds that fully 22 percent of all Web sites are not accessible from other, central Web sites. After studying 600 million Internet pages the companies have developed their "Bow Tie Theory," which asserts that the Internet is not fully integrated and, in fact, actually consists of four major portions. The researchers claim that only a third of all Web sites are connected and easily accessible to one another, forming the bow tie "knot," or core of the Internet.

  • "What Judge Jackson Might Be Thinking"
    SiliconValley.com (05/10/00); Gillmor, Dan

    U.S. District Judge Thomas Penfield Jackson must have some rather strong personal opinions on the Microsoft court hearing he currently resides over, according to Dan Gillmor. Jackson is probably relieved that the remedies of both the government and Microsoft have now been submitted and there is some basis to move on with the proceedings, says Gillmor. The judge would presumably feel that with all the evidence, a breakup is necessary. Jackson might be surprised he ever thought Microsoft would back down on their case even a little, since the company has shown no respect for the law and does not act as if it has been reprimanded in any way, notes Gillmor. Although the government's recommendations probably troubled Jackson somewhat and he may be unsure that a breakup is the appropriate method to end Microsoft's monopoly, he does not trust the company, Gillmor speculates. The judge must think that Microsoft's lawyers have done poorly in the trial, but also be aware that the same lawyers are known to be excellent in the appellate courts as long as a client's actions have not poisoned its own case of appeal. Microsoft has been trying to brush the court case to the wayside via Congress and has been arguing its case publicly, says Gillmor. Jackson must want to point out to Microsoft that federal judges are appointed for life and the court system is an entirely separate branch of government, according to Gillmor.

  • "Study Finds Internet of Social Benefit to Users"
    New York Times (05/11/00) P. E7; Raney, Rebecca Fairley

    The use of email is improving family bonds, say more than half of Internet users surveyed in a new report from the Pew Internet and American Life Project. The study also found that roughly half of Internet users have a social network of friends and relatives, while only 38 percent of people who do not use the Internet said the same. "It's clear that Internet users have a more robust social network than non-Internet users," said the director of the project, Lee Rainie. Approximately 9 million women have used the Internet for the first time over the past six months, according to the study. Half of all Internet users are now women, the study said. Furthermore, about 60 percent of women, but only 44 percent of men, said they believe email is a very useful tool for staying in touch with family members.

  • "Tech Issues Top Both Parties' Agendas"
    USA Today (05/11/00) P. 6A; Squitieri, Tom

    Capitol Hill's latest fashion this year is Internet legislation, with both parties lauding the contributions that technology has made to economic growth. And the politicians are looking to the industry's wealth for political contributions. A Center for Responsive Politics analysis shows that the top 10 computer industry donors gave Democratic candidates $2.15 million last year and gave Republican candidates $1.33 million. A group of Republicans have signed the "E-Contract 2000," hoping to represent their party as the party of Internet growth and prosperity. House Speaker Dennis Hastert (R-Ill.) says the Republicans' high-tech agenda includes ensuring the availability of well-trained and skilled workers, increasing security, providing telecommuters with work benefits, and protecting intellectual property rights. Meanwhile, Minority Leader Dick Gephardt (D-Mo.) says it is silly to claim that any one party is the "technology party." Some Republicans are not pleased with the slow pace of Rep. Tom Bliley (R-Va.), chairman of the House Commerce Committee, and they have gone to the Judiciary Committee for faster movement on some Internet bills. However, Bliley has a close bond with the Senate Commerce Committee, which strongly controls Senate Internet legislation, and he says he wants to protect the Internet. His priorities for the year are an electronic signature bill, protecting intellectual property, repealing the phone service excise tax, and passing an anti-spam bill.

  • "Trying to Gauge, and Bridge, Europe's Gap In Net Access"
    New York Times Online (05/09/00); Giussani, Bruno

    Despite efforts in Europe to catch up with the U.S. in Internet use and e-commerce, the gap is actually growing, says Sam Paltridge, a communication analyst at the Organization for Economic Cooperation and Development (OECD). High access charges are widely viewed as an inhibitor to Internet use, but Paltridge suggests that pricing structures influence use more than cost level. Total access charges for 20 to 40 hours a month of Internet use, mostly at off-peak times, are actually less in some countries like Britain and Italy than in the U.S., according to Paltridge's research. However, U.S. consumers pay flat rates while their European counterparts have metered access. European consumers are unlikely to leisurely browse the Web while the meter is running, unlike American users who spend long periods of time familiarizing themselves with e-commerce. In general, countries that offer unmetered access are ahead of metered nations in terms of usage rates, Internet hosts, and e-business development, Paltridge says. In addition to usage, the number of secure servers a country has is a good indicator of e-commerce potential. At the end of April, the U.S. had 194 secure servers for every million inhabitants, followed by Australia with 131, Britain with 59, Germany with 37, France with 19, Japan with 17, and Italy with 12. Secure servers offer a better view of true e-commerce potential than frequently cited Internet penetration and usage figures, Paltridge says. Another deterrent to Internet use in Europe is consumption taxes on phone charges, which increase the longer users stay online. To nurture e-commerce, European countries should develop favorable pricing structures, Paltridge says.

  • "Monitoring Poses Threat to Cyber-Anonymity"
    Financial Times (05/11/00) P. 4; Waldmeir, Patti

    Cybercrime, like street crime, has the effect of spurring public desire for law and law enforcement, which means more government monitoring of the Internet and less privacy, writes Patti Waldmeir. Waldmeir says an upcoming case in a federal appeals court in Washington, D.C., brought about by privacy activists, will challenge the FCC's new regulations for digital wiretapping. The FCC's regulations are based on the Communications Assistance for Law Enforcement Act, a 1994 law that forces telecommunications firms to build wiretapping capabilities into their networks. Although the FCC regulations are meant to apply only to telephone calls that are routed through the Internet, civil liberties groups contend that they will result in the law enforcement monitoring of email and other Internet activity without a court's permission. Waldmeir says this case brings the age-old debate of personal privacy versus social order into the high-tech era. "This is a case about preserving the old constitutional balance between liberty and law enforcement. Technology changes the calculation; it should not be allowed to change the result," says Waldmeir.

  • "PC Makers' New Markets"
    InformationWeek (05/08/00) No. 785, P. 22; McDougall, Paul; Bacheldor, Beth; Garvey, Martin J.

    IBM and Hewlett-Packard each recently unveiled plans to lead efforts to develop separate online exchanges for computer and component companies, sparking debate among analysts over the future of the computing industry. On the one hand, observers claim that despite the potential friction that may arise between suppliers and buyers, the two exchanges could very well benefit both businesses and consumers by lowering the price for PCs, servers, and network systems. "Ultimately, you'd expect lower prices because they're driving costs out of their supply chain," claims Jupiter Communications analyst Tim Clark. American Airlines senior systems analyst Philip Holden adds, "if they eliminate the shortage of components and ship to users with more reliability, that's great." However, the FTC is examining the planned exchanges to ensure they comply with antitrust laws, and some analysts predict IBM and HP will be unable to maintain competitive exchange environments that provide equal access for all suppliers. There is also a compatibility issue, as various marketplaces typically operate using different computer languages and therefore cannot "speak" with one another. Nonetheless, IBM says nine vendors are interested in becoming partners for its exchange, including Dell Computer, while HP has secured the support of such vendors as AMD, Compaq, and Gateway. Intel, however, has so far remained neutral. Both IBM and HP already participate in electronic auctions with certain suppliers, and claim the formation of the proprietary exchanges is a logical expansion of their limited e-marketplace systems to include a variety of other companies. Additionally, IBM in March formed agreements with Ariba and i2 Technologies to integrate IBM's e-business infrastructure products with Ariba's network-services and procurement applications and i2's e-business planning and collaboration applications.

  • "Are CIOs Ready for the Net's Next Phase?"
    Interactive Week (05/08/00) Vol. 7, No. 18, P. 38; Duvall, Mel

    Companies are now entering a phase of e-commerce that centers on building a virtual supply chain, and the resulting changes in business operations will require CIOs to reposition themselves to succeed. By linking the internal systems of suppliers and buyers over the Internet, companies expect to develop a supply chain that offers just-in-time delivery, cutting costs while increasing efficiency. The demand for online supply chains is fueled by the success that companies have had with moving their operations to the Web. A recent survey of IS managers conducted by Interactive Week and Advantage Business Research shows that the average amount of money being spent on Internet and Web technologies jumped to $4.3 million this year, up from $619,000 in 1999. As a result, online sales rose to $51.2 million this year, compared with $2.5 million last year. The growth of online marketplaces has increased the importance of CIOs, expanding their traditional role in technology to include business responsibilities as well. In addition, CIOs need to manage not only internal IT systems, but also contend with the IT resources of application service providers (ASPs), suppliers, partners, and rivals. The top management activity for CIOs this year is expanding and improving e-commerce operations, followed by improving site security, improving infrastructure, making corporate data more accessible, and improving access to back-end systems. Many companies are looking to ASPs to help CIOs meet these challenges, especially since speed to market is so important to online efforts. The most commonly outsourced service is Internet access at 29.9 percent, followed by Web hosting, consulting, and software systems integration. ASPs can even help companies without a CIO at a critical stage of an online project to find a skilled CIO with new CIO-outsourcing programs. Despite the increasing use of ASPs, ASPs did not rate well in terms of customer service, although the situation might improve over the next year with more mainstream firms using ASPs.

  • "E-Vikings Blaze the Online Trail"
    Financial Times--Nordic IT (05/11/00) P. 10; Brown-Humes, Christopher

    Information technology experts are now calling Nordic entrepreneurs "e-vikings" for the way in which their companies are starting to enter other European markets, including the United Kingdom, Germany, and France. The region has become so powerful in the information society that IDC now rates Sweden, and not the U.S., as the world's leader. Nordic countries not only have the highest penetration of mobile phones in the world, but the highest penetration of Internet use. In Iceland, for example, the penetration rate is now as high as 82 percent. The Scandinavian countries have the largest maker of mobile phones in the world in Nokia, the largest supplier of mobile infrastructure in Ericsson, and the largest Internet bank in Europe in MeritaNordbanken. The region also has some of the leading telecom companies in the world, including the state-owned giants of Sweden, Norway, and Finland in Telia, Telenor, and Sonera, respectively. The IT revolution that has taken place in the remote fringes of Europe has U.S. companies moving their operations to the region, buying up firms from a myriad of smaller IT players in the area, or forming joint ventures. Microsoft, Intel, and Oracle now have a presence in Kista, the giant technology park north of Stockholm that is often called Wireless or Mobile Valley. Microsoft inked a joint venture with Ericsson last December, while Intel acquired a Danish company for $1.25 billion. One of the reasons so many people in Sweden are online is that the country does not view computers as a tool just for the elite, says Swedish Trade Minister Leif Pagrotsky. The country offers tax incentives that encourage Swedes to purchase computers through their employers. However, with Nordic companies now spreading to other parts of Europe, some market observers question whether the region will maintain its edge as Europe's IT leader.

  • "War of the Words?"
    National Law Journal (05/01/00) Vol. 22, No. 36, P. C1; Gundersen, Glenn

    The basic rules of trademarks are being disrupted as multitudes of companies rush to patent ".com", "e-", and "i-" names. The Patent and Trademark Office (PTO) is being inundated with filings for new Web-related marks. Suddenly, words that were previously deemed as public domain are under consideration for protection with an added letter or dot-com attached, leaving trademark lawyers wondering how they are supposed to handle the disarray that new Internet names are causing. Companies are struggling to obtain secure dot-com names that have not already been snatched up in the trademark frenzy. The PTO faces a major challenge, and so far, it has taken the position that the Web's branding strategies do not necessarily create protectable trademarks. Furthermore, the PTO has been taking the stand that the prefix "E-" combined with a word does not create a brand name, but a generic or descriptive phrase, such as "e-mail" or "e-commerce". How the PTO and the public handle this issue will be determined in the months to come.

  • "What Is an E-Strategy?"
    Business Communications Review (04/00) Vol. 30, No. 4, P. 24; Herman, James

    Although no set path exists for companies to follow in creating strategies for e-business, e-strategies often emerge in three stages--awareness, alignment, and strategic change. The awareness phase begins when management becomes involved in e-business and an effort is made to educate the entire organization about the effects of e-business on all areas of the company. As awareness grows, business leaders will notice decisions that must be made about issues such as brand management and distribution. Companies must determine, for example, whether to conduct business online directly with consumers, and if so, how existing channels will react. To make these crucial decisions, companies need to outline organizational alignment that clarifies who makes certain decisions and who manages e-business ventures. Initially, e-business projects might center on Web-enabling front-end systems, while back-end systems remain the same. However, as efforts progress, strategic issues such as how to use resources become important. During the strategic thinking phase, companies should assess their situation in relation to their industry, taking note of how the Internet is changing the industry and what their company has already done in e-business. Companies should also consider issues such as scope and scale of operations, customer-facing initiatives, and supply network initiatives. After answering strategic questions, companies should form a business architecture that lays out all the activities necessary to reach and maintain strategic positioning, including timeline and cost estimates.

  • "Brand-Building in the New Economy"
    Revolution E-Brands Report (04/00) Vol. 1, No. 2, P. 4; Murphy, Claire

    Although creating a prominent, trusted brand name is an ongoing task integral to the survival of any business regardless of whether it is online or not, the general guidelines for successful brand-building need to modified to fit the Internet realm. The following is a list of 10 "golden rules" to follow when developing an Internet brand name. Number one: Be first. However, once a company has arrived, so to speak, it cannot simply stand still. It should continue to grow and enhance its presence by constantly improving its offerings and maintaining a positive public profile. Number two: Be unique. Rather than simply naming a company after the category of products it specializes in, pick a distinct, memorable name that, due to its uniqueness, consumers are likely to remember and competitors will be unable to imitate. Number three: Be consistent. A company must maintain a consistent, high level of customer service regardless of the circumstances that might arise. Number four: Be focused. Brands must link themselves to one or two key concepts or words that sum up what it is the company is all about. Number five: Have a personality: Brands should have a distinctive character. Number six: Be true to yourself. A brand must be credible, and to be credible a company must stick to what it is consumers believe it does best. Number seven: Set the agenda. A company should position itself as the expert in its category. Number eight: Beware of stretch. A brand will only carry a company so far. Number nine: Word of mouth is as powerful as advertising. Good publicity often is more valuable than paid-for advertising. Number 10: Be in it for the long haul. Once consumers recognize a brand, the company must build upon that recognition by strengthening it and encouraging consumer loyalty.

  • "PKI at a Crossroads"
    Network Computing (05/01/00) Vol. 11, No. 8, P. 45; Moskowitz, Robert

    Despite the fact that public key infrastructures (PKIs) have been around for years, experts say finding interoperable technology for the system is proving more difficult than previously believed. Certificate authorities (CAs) are believed to be the best "building blocks" for PKIs, and two ways to join CAs have been identified: hierarchical signing and cross-certification. Hierarchical PKIs have rarely been attempted, and the PKI community has clearly demonstrated a preference for cross-certification. However, the liability issues associated with cross-certification have scared off a lot of CA vendors. Still, some vendors such as Entrust and Baltimore Technologies have developed CA cross-certification for their enterprise products, but many vendors complain that there has not yet been any model of interoperability of cross-certificate request and cross-certificate response from the Certificate Management Protocol. Regardless, most analysts say CA cross-certification will become commonplace in the near future once the problems have been ironed out.

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