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Volume 2, Issue 63:  Friday, June 2, 2000

  • "Judge Postpones Microsoft Ruling"
    Washington Post (06/02/00) P. E3; Grimaldi, James V.

    Following the government's request for the opportunity to respond to Microsoft's criticisms of the breakup remedy proposal, Judge Thomas Penfield Jackson postponed issuing a judgement in the trial, and gave the government until Monday to comment. "From a quick review, some number of those [Microsoft edits] seem to make some sense to us," said Justice Department attorney David Boies. Microsoft had filed a range of criticisms this past Wednesday, saying that putting together a breakup plan and completing reviews by both sides would take 17 months, while the government' remedy only permits seven months. Microsoft also said 10 years of enforced conduct restrictions is excessive, and asserted that four years would be more appropriate. Microsoft said the government's delay demonstrated its recognition that the breakup proposal is not well written and contains multiple faults. On the other hand, the Justice Department wants to comment because some of the company's changes might be acceptable and the government also wants to say why the court should reject some of the other changes, says Gina Talmona of the Justice Department. Two states, Ohio and Illinois, agree with the conduct restrictions but oppose a breakup of Microsoft. Microsoft can respond to the government's criticisms on Wednesday morning.

  • "EU Wants US Tax on Digital Exports"
    Reuters (06/02/00)

    European Union officials have announced that the European Commission intends to introduce proposals next week calling on the United States to impose value-added taxes on exports of online digital goods, including downloaded software and music. The proposals are intended to level the playing field between the EU and U.S. in the market for online goods, said David Byrne, European commissioner for health and consumer protection. EU firms who export their wares to the U.S. are at a significant disadvantage due to the existence of existing sales taxes in many EU member states, Byrne said. The EU will introduce the proposal Wednesday, an EU official said, adding that the EU has no intention of lifting value added taxes on online goods.

  • "Army of Programmers Helps Palm Keep Its Edge"
    Wall Street Journal (06/01/00) P. B1; Tam, Pui-Wing

    Palm currently leads the field of handheld computer devices over competitors such as Microsoft primarily because many software developers write programs specifically for Palm. Palm's strategy is similar to the tactics Microsoft used when establishing control of its operating system. Basically, Palm encourages the software developer community in the hope that its product will become the industry standard for all handheld devices. And indeed, customers who already know the Palm platform continue with the company over time. Often users purchase the device to get the software that is included. Many of the developers for Palm are small organizations that only sell products as downloads on the Internet. The large number of these small-time developers has a positive impact on the market for Palm. Other developers for Palm, such as HealtheTech, Vindigo, and Actioneer are Internet startups. Palm also has the advantage of starting in the industry long before its current competitors. Palm uses other methods to remain at the forefront of the industry, including recently purchasing AnyDay.com, which provides calendar solutions for the Web. The growing numbers of developers for Palm have brought about the obstacle of assisting a much larger group of individuals. Some developers have complained the company does not meet their needs. Palm is strengthening its infrastructure and hiring new employees to overcome this hurdle. Market competitors lag behind Palm. Microsoft just recently entered the handheld computer devices market with the Pocket PC. To attract developers, Microsoft has posted programming tools online. The Pocket PC also comes pre-programmed with many of the features that are add-ons for Palm. Other competitors include Handspring, Hewlett-Packard, and Compaq.

  • "ICANN Chief Disputes Article"
    InternetNews.com (06/01/00); King, Carol

    A report in the Wall Street Journal indicating that the Internet Corporation for Assigned Names and Numbers (ICANN) is experiencing potentially destabilizing financial difficulties is misleading, says ICANN CEO Mike Roberts. The report stated that ICANN is awaiting $1.5 million in overdue payments from several world governments and that the uncollected bills could threaten the group's budget--and ultimately its future. ICANN's fiscal year ends June 30. Roberts cautions that the billings were sent out to 250 countries only a few weeks ago and that the group is being patient about receiving the payments. France, Sweden, the Netherlands, Japan, Israel, and Taiwan are among the countries that have already paid their bills, Roberts says.

  • "Lament of the Pocket-Protector Set"
    Christian Science Monitor (06/01/00) P. 1; Chaddock, Gail Russell

    Although the battle is a quiet one, high-tech companies and workers disagree strongly over the H-1B visa bill currently being debated in Congress. The H-1B visa program was initiated to bring in foreign workers to alleviate high-tech labor shortages, and high-tech businesses have been putting pressure on the government to again increase the number of foreign workers allowed to enter the U.S. or remove the limits on foreigners completely. The businesses argue that Silicon Valley's growth will be curtailed without more skilled workers, and a positive vote from the government would prove that the U.S. is willing to globalize. Critics of H-1B disagree, saying the vote will demonstrate whether Congress is willing to protect the rights of American workers. Labor groups believe that businesses' true reason for utilizing foreign workers is to squeeze out older computer programmers and to acquire a cheaper workforce. The increase in the number of foreign workers allowed into the U.S. passed in 1998 included provisions calling for the Labor Department to avoid American workers losing their positions to foreign workers paid below-market wages and to require businesses to solicit American workers before hiring foreigners. The Labor Department has not been successful at this task and older computer programmers and minorities are the groups that will most likely be harmed because of this. Foreigners are upset that they can be deported immediately if they do not make their employers happy. Further, foreign workers must stay with a single employer for six years.

  • "Pennsylvania Makes Spreading Computer Viruses Criminal"
    Network World Fusion (05/31/00); Keegan, Daniel

    Pennsylvania Governor Tom Ridge on May 26 signed a bill that outlaws the intentional spread of computer viruses. Current law addresses the illegal effects of launching a virus, but does not make it a crime to introduce a virus. Under the new bill, which will go into effect in July, accessing and damaging a computer is a third-degree felony that carries a seven-year prison sentence and a $15,000 fine. Furthermore, hackers who reveal sensitive system information such as passwords or interfere with a computer, system, or network face a five-year prison sentence and a $10,000 fine. Convicted hackers will pay restitution to victims for damages to systems and data as well as lost profits.

  • "Who Should Fight Cybercrime?"
    Wired News (06/01/00); Dean, Katie

    Members of the Internet Engineering Task Force (IETF), engineers who basically designed the Internet and now manage its standards and protocols, are currently debating whether they should become involved in the fight against cybercrime. With incidents of hacking and viruses on the increase, members of the IETF wonder whether Internet protocols could be altered in order to make fighting various forms of cybercrime easier for law enforcement agencies. Although many governments are clamoring for international standards of "traceability," the IETF says that such standards would be impossible to develop. Wiretapping the Internet would also be much more complex than wiretapping a telephone, something that IETF members complain that most government officials do not understand. IETF member John Palme contends that the group should help out governments in their fight against online crime, stating that routers could be changed to figure out where every data packet is coming from and where its destination is, which would make tracking criminals much simpler. However, other IETF members say that law enforcement is not part of the group's responsibilities, and that installing ways around built-in Internet security systems that only police could use would eventually be detrimental to Internet security as a whole.

  • "Will B2G Become the 'Next Big Thing'?"
    CNet (06/01/00); Konrad, Rachel

    Although the government has lagged behind the private sector in the rush to get online, many analysts are now predicting that business-to-government e-commerce, known as B2G or G2B, is set to explode. Several private companies have recently begun hosting government Web sites and building government virtual marketplaces, including IBM, which yesterday announced an alliance with ezgov.com to provide online consulting for government agencies and create government Web sites to serve the needs of businesses and citizens. "In the last six to nine months, we've seen a dramatic increase ... in the government's recognition of the value of putting things on the Web and the value they can bring to citizens," says IBM's Todd Ramsey. Indeed, Gartner Group estimates spending on e-commerce by federal, state, and local governments will increase from $1.5 billion in 2000 to more than $6.2 billion in 2005. In fact, some analysts believe the B2G market may become the largest e-commerce market in the world and eventually expand beyond transactions with business to include transactions with consumers as well, possibly reducing the government's need for administrative staff and also generating revenue for companies that build and host government sites. Others, however, believe B2G may follow in the footsteps of its B2B and B2C counterparts, many of which have been forced to close their virtual doors or consolidate with others.

  • "Burglar Alarm Catches Hackers on the Net"
    ZDNet UK (05/31/00); Knight, Will

    Swedish security firm Defcom Security on Monday demonstrated a hacker burglar alarm that monitors network activity 24 hours a day for European companies. The alarm center in Stockholm remotely monitors networks, enabling companies to outsource intrusion detection rather than using their own security experts. Defcom is now testing similar centers in London and Berlin. In addition to protecting networks, Defcom announced that it can help track down hackers. The new centers will exchange information that could prevent distributed attacks on numerous clients. Defcom's service is the first remote network intrusion detection service in Europe.

  • "Americans In Paris? No, Paris, London, Frankfurt, Say Analysts"
    InternetNews.com (05/31/00); Lewell, John

    When it comes to e-business, strategies that are successful in the United States are not necessarily effective in Europe, according to a new report by the European management consultancy Roland Berger. Although certain elements, such as venture capital, IPOs, and risk taking have made the transition from Silicon Valley to Europe, Roland Berger's survey of 80 online companies based in the U.S. and 15 European nations reveals that local purchasing patterns, regulatory systems, and business styles vary from country to country. Consequently, U.S. companies find they need a different business model in order to break into the European market. In addition, Roland Berger warns against taking a country-by-country approach to expansion, calling it a "recipe for failure," and instead recommends venturing into several different countries simultaneously. Roland Berger's Eric Kintz notes that wireless technology and interactive digital TV technology are becoming the "primary access channels to the Internet" in Italy and France, respectively.

  • "Omens From the Microsoft Case"
    National Journal (05/27/00) Vol. 32, No. 22, P. 1692; Munro, Neil

    The Microsoft case is a prominent example of antitrust problems, but there are also many less vivid ways that the high-tech sector could run into antitrust issues. The Justice Department is looking into new Internet ventures by airlines and realtors, and is worrying about competition in handheld computers and Internet servers. The Sprint-WorldCom and Time Warner-AOL mergers are also under scrutiny. Joel Klein, the head of the department's antitrust division, says Justice wants to protect innovation and price competition, but focuses more on those who restrict innovation. Klein notes that antitrust laws forbid companies to preserve their dominance by forcing buyers to purchase connected products when they buy the main product; keep product data secret; sell products below cost to undercut others' revenue; collude with other companies to hurt new competitors; and pressure smaller companies to restrict the distribution of rival products. The department's chief economist, Timothy F. Bresnahan, sees the high-tech sector as a stack of technologies, each level building on the one before. Klein wants Microsoft split along such layers, with the Windows operating system going to one new company and all other products to the other--allowing software companies to ally with one or the other. The FTC will soon be looking into business-to-business exchanges. Instant-messaging technology is also under debate, as companies that make the software are accusing AOL of deliberately excluding their messages; AOL says it is protecting its subscribers' privacy and security. Meanwhile, Klein has not said whether he will approve the AOL-Time Warner merger, and he predicts that the issues of cable access will not fall under the aegis of antitrust regulators.

  • "A Welcome Intrusion"
    InternetWeek (05/29/00) No. 815, P. 39; Higgins, Kelly Jackson

    The majority of security providers have begun offering intrusion detection, a service in which companies pay a fee for the provider to manage security hardware and software tools and continuously monitor IT networks, in an initiative to capitalize on the increasing corporate desire for full-time software sentries able to automatically identify intruders and thwart attacks. Indeed, many companies find it easier to outsource intrusion detection to third-party providers due to the reduced costs involved, the tight job market for IT talent, and the constant need to upgrade detection tools. ASP startup Iapex, in fact, outsources all IT-related tasks, including the network, Web servers, and security. Other companies opt for a combination of outsourcing and in-house security management. For instance, under an agreement between IBM Global Services and The Depository Trust, IBM Global Services manages intrusion detection at the entry points of The Depository Trust's IT network while the client employs its own tools to monitor the interior portions of its network. Intrusion detection still has a long way to go to reach perfection, as the number of hackers and the severity and prominence of attacks grows. "Intrusion detection shouldn't provide a false sense of security," cautions Foundstone CEO George Kurtz. Despite the potential sophistication of intrusion detection tools, human interaction will always remain vital, providing the manpower and intellect required to wade through the barrage of information conveyed by security systems and separate the serious threats from the innocent mistakes.

  • "Thinning Down the Desktop"
    eWeek (05/29/00) Vol. 17, No. 22, P. 1; Popovich, Ken

    New legacy-free PCs could eventually replace many traditional desktop computers, but some IT managers are reluctant to adopt the scaled-down systems. PC makers are trying to provide cheaper, smaller PCs that offer improved manageability and security. Compaq became the first major PC maker to release a legacy-free system in January when it shipped its iPaq. A month later, Hewlett-Packard rolled out its e-Vectra, and IBM next month will release its NetVista. The new legacy-free PCs all run on Windows 2000, and include 500 MHz to 566 MHz Celeron processors, and 64 MB of synchronous dynamic RAM. The manufacturers are trying to replace PCI and ISA ports with USB ports. However, many large companies are not yet ready to give up traditional ports because they rely on a wide range of systems that use legacy technology. In addition, some companies are not prepared to migrate to Windows 2000 at this time. For these reasons, Compaq sells not only a legacy-free iPaq, but also a legacy-lite version that includes serial and parallel port connections. The iPaq is expected to offer easy installation and remote management. Meanwhile, HP's e-Vectra includes security features that help prevent workers from stealing computer equipment. The e-Vectra allows managers to determine which devices can be plugged in to the PC, and includes a keylock that prevents unauthorized access to the system. Although the legacy-free systems offer many advantages, some IT managers are concerned that the new PCs lack floppy drives and expansion slots. Still, International Data analyst Roger Kay predicts that more than half of all desktop sales will be legacy-free platforms in five years.

  • "Is Your Phone Infected?"
    New Scientist (05/20/00) Vol. 166, No. 2239, P. 11; Mullins, Justin

    Computer security experts warn that in the near future viruses may target intelligent mobile phones and personal digital assistants (PDAs). Such attacks would be more devastating than the current cyberattacks that travel via email because the new viruses could theoretically record conversations and forward them to other people, steal funds from "electronic wallets," or cause the phone's owner to face enormous phone bills. However, experts say the impact of viruses on mobile phones and PDAs can be minimized if the programmability of the products is limited, if important programs are saved in "read-only memory" so they cannot be overwritten by a virus, or if the phone's built-in programs are not linked, so one program cannot set off another. However, cell phone manufacturers contend that customers are constantly clamoring for more features and mechanisms on their devices, which greatly increases the chances for viral infections. Security professionals urge more research in this area before such cyberattacks become widespread.

  • "Design to Go"
    Industry Week (05/15/00) Vol. 249, No. 10, P. 89; Greengard, Samuel

    Personal computer companies are increasingly outsourcing their manufacturing so that by 2003 the market for electronic contract services will grow to $149.4 billion, up from $60 billion in 1998, according to Technology Forecasters, a company that monitors the contract manufacturing industry. However, PC makers are having contract manufacturers do more than just manufacture computer parts these days. PC companies now turn to contract manufacturers to design circuit boards, components, cases, and sometimes entire computer systems. In fact, most PC companies rely heavily on contract manufacturers to engineer and build systems in order to boost manufacturing speed up to 40 percent, and as a solution for managing costs and resources more effectively. For example, Celestica handles design and manufacturing for Dell Computer, Hewlett-Packard, IBM, and Sun Microsystems. In addition to Celestica, other contract manufacturers that have benefited from the outsourcing trend are Solectron, SCI Systems, Flextronics International, and Jabil Circuit. Technology Forecasters President Pamela Gordon says contract manufacturers are so involved in computer making that they now have intimate knowledge about improving the design of computers. Meanwhile, original design manufacturers in Taiwan such as Compal Electronics, Tatung, and Quanta Computer are starting to play a larger role in PC production. For their more sophisticated needs, OEMs are employing the services of original design manufacturers for jobs such as cases, personal digital assistants, notebooks, and even entire desktop PCs. PC makers are also using secure Web sites for project management and collaboration with contract manufacturers and designers. The Internet allows for changes and corrections to be made from anywhere in the world in real time.

  • "Vendors and Users Share Differing Views at Arizona Conference"
    ENR (05/29/00) Vol. 244, No. 21, P. 25; Lang, Laura

    The Future of Engineering Software conference last week in Scottsdale, Ariz., brought together construction industry firm executives, software vendors, and consultants to discuss ways to improve engineering software. The conference focused on naming problems with current software and suggesting ways to make the software meet the industry's needs. The 3D-building model, ASPs, and e-commerce were among the topics of panel discussions. Most attendees indicated that they believe the 3D model will become a key knowledge tool in the next five years. Software users noted that small companies are unable to find the type of sophisticated tools they need. Another issue mentioned at the conference is that contractors need appropriate tools for computer-integrated construction. CAD software vendors acknowledged that they have been inattentive to contractors' needs, and promised to create more integrated products.

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