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Volume 2, Issue 68:  Wednesday, June 14, 2000

  • "Microsoft Claims Antitrust Judge Made Many Errors"
    New York Times (06/14/00) P. A1; Brinkley, Joel

    The U.S. Court of Appeals yesterday agreed to hear Microsoft's request for a stay of U.S. District Court Judge Thomas Penfield Jackson's remedy order, while the Justice Department filed a motion to Jackson asking that the appeal be sent directly to the Supreme Court. In an unusual move, the appeals court said that Microsoft's appeal would be heard by the entire court, with the exception of three recused judges, possibly as a signal to the Supreme Court that it intends to move quickly on the case. In its appeal, Microsoft argued that Jackson had "committed an array of serious substantive and procedural errors," and cited "far-reaching and irreversible consequences" for reasons to stay Jackson's order. Jackson is likely to certify Justice's request today and send it to the Supreme Court. The Supreme Court then has the authority to hear the appeal, and if it does, one of the justices is expected to likely quickly rule on Microsoft's request to stay Jackson's remedy order.

  • "Gates Sees Future Computing Still PC-Centered"
    Reuters (06/13/00); Reuters

    The future of computing and the Internet will be based on an ever-evolving PC platform, declared Microsoft CEO Bill Gates at a Taiwan technology conference on Tuesday. Although some industry insiders have already declared the end of the PC, Gates sees the PC experience as the foundation of the future of computing, with information devices such as set-top boxes, mobile phones equipped with screens, electronic books, and speech and handwriting recognition technology leading the way. Gates plans to make the general-purpose PC, new and improved with a microphone, camera, and smaller size, the gateway to more specialized appliances. He also the future computing environment will use wireless technology, broadband, and the Internet for more than just surfing. He says, "The PC has become not only a creativity tool but a communications tool. All of the advanced equipment that connects us to the Internet will follow the rules of the PC." Gates made no mention of the antitrust proceedings.

  • "Software Licensing Rules Revised; Do You Accept?"
    Philadelphia Inquirer (06/11/00) P. E1; Gelles, Jeff

    The Uniform Computer Information Transactions Act (UCITA) is bringing up controversy as states begin to enact it. The computer-driven economy has created new questions about how people use software and the rights of the user versus the rights of the software maker. UCITA has brought about a face-off between some of the computer industry's biggest names and a range of consumer advocates, state and federal officials, and software users. The act is favored by software companies, and its supporters say that it applies basic contract-law principles to 21st-century problems, allowing a manufacturer and a user to agree on the terms for using any given software. Critics of UCITA say that any negotiation is fiction and that the act gives the companies too much leeway. Federal Trade Commission (FTC) lawyer Michael S. Wroblewski says that UCITA allows parties to use state contract law to override federal and state consumer protections. The Consumer Federation of America, the American Library Association, and 24 state attorneys general, among others, have joined the FTC in protesting the act. Legal expert Craig Thor Kimmel says that the act could make software expenses more like utility bills--recurring fees that would allow the software companies to cut off software if they go unpaid. University of Houston law professor Raymond T. Nimmer counters that such concerns are exaggerated.
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  • "Maryland Gains New Tech Czar"
    Washington Techway Online (06/12/00); Terry, Rob

    Maryland has announced that a former Baltimore Gas and Electric senior engineer will become the state's new technology coordinator. Cherise Y. Seals will begin fulfilling her duties as the state's "tech czar" on June 26; the position has been vacant since November. The Maryland General Assembly created the position in 1997 with the aim of boosting the state's profile as a technology leader. Richard C. Mike Lewin, secretary of Maryland's Department of Business and Economic Development, says Seals "has the experience, energy, and depth of knowledge to stimulate our growth and keep Maryland in the forefront of technology." As tech czar, Seals will influence the growth of the state's tech sector, as well as tech policy issues.
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  • "Study: E-Commerce Flourishing in Northern Europe"
    E-Commerce Times (06/13/00); McDonald, Tim

    The United States excluded, Sweden and other Scandinavian countries are leading the world when it comes to e-commerce, according to two recent surveys. The Economist Intelligence Unit (EIU) recently judged the top 60 countries in the world on their readiness to carry out electronic business, finding that the top five are the United States, Sweden, Finland, Norway, and the Netherlands. The U.K. was listed at the sixth spot and Switzerland came in tenth, while Germany, France, and Italy placed 13th, 14th, and 19th, respectively. For the purposes of the survey, the EIU looked at a number of economic factors--including political stability, strength of the economy, and tax, trade, and regulatory policies--in combination with the so-called connectivity factor, which is based on an examination of a nation's communications infrastructure in terms of quality and quantity. Meantime, the July issue of Wired magazine lists 46 areas that are of the most importance to the new digital economy; the top three are California's Silicon Valley, Boston, and Stockholm, Sweden. London and Helsinki, Finland take the sixth and seventh spots, respectively. The magazine bases its results on a number of different criteria, including access to venture capital, citizens' desire to set up new ventures, the presence of established firms to provide economic stability and knowledge, and the ability of nearby research centers and universities to create new technology and train workers.

  • "Cos. Eye Profits From Web Domains"
    Associated Press (06/11/00); Beck, Rachel

    Licensing affords companies with a great opportunity to market their brands to the general public, and online companies are just now realizing this. Pets.com, for instance, is attempting to exploit the licensing potential of its popular sock puppet mascot by selling puppets to the public. Hamsterdance.com is pursuing a similar strategy with its dancing animal cartoons, while Autobytel.com envisions its brand name on jumper-cable sets, floor mats, and other auto products. The licensing prospects for domain names appear so bright that a new company, NetNameLicensing, is launching on June 13 to help online companies market their brands.

  • "New Economy, Old-School Rigor"
    New York Times (06/12/00) P. C1; Deutsch, Claudia H.

    General Electric has received kudos from business analysts, who say that the firm, once the epitome of an "old economy" company, has smoothly transitioned to the Web using an old-economy quality-control model called Six Sigma. Six Sigma is basically a mathematical way of breaking down customer desires into steps, and approaching every problem with the knowledge that there is a data-oriented, tangible solution to it. Six Sigma says that intuition is not something on which any business decision should be based; rather, detailed market research should inform all decisions. GE CEO John F. Welch early last year ordered all GE business departments to establish and implement an e-commerce strategy by the spring of 1999. Six Sigma was used as the guide to lead the company onto the Internet, as the model tells employees to view a Web page as a product and e-business as a process. All of the GE departments successfully met the deadline. For example, when deciding how to get customers to view new products for sale on its Web page, GE Appliances did a Six Sigma analysis to gauge exactly what kind of information customers wanted, how long they would be willing to wait online to obtain such information (i.e., how many mouse clicks they would put up with), and whether it was necessary to show time-consuming, full-color digital photos of the new products, or simply show schematics that could be loaded quickly. Contrary to many managers' gut instincts, Six Sigma analysis showed that when first viewing new products, customers were more concerned with speed than detail. Detail became important only when the customers were approaching a purchase decision.

  • "For a Dead Idea, the 'Network Computer' Is Downright Sprightly"
    Washington Post (06/11/00) P. H1; Streitfeld, David

    New Internet Computer (NIC), a new 12-employee company, is taking on a proverbial Goliath in its ambitious drive to introduce network computers to a PC-saturated, Microsoft-dominated market. Oracle CEO Larry Ellison, primary owner of NIC and innovator of the network computer, plans to sell 5 million Internet devices by next year. Ellison began the company five years ago only to see his brainchild fail, then experience wide popularity, including with rival Microsoft. Ellison even claims Microsoft persuaded other computer manufacturers to not make network computers. But that was in 1995: now Microsoft is working to extend Windows into the Internet device market. The company's MSN Companion device was previewed at Comdex last fall and is expected to go on sale in September. Meanwhile, Gateway has joined forces with America Online to develop an Internet device based on Linux. The NIC also will be powered by Linux, a free alternative to Windows, and its supposed advantages over Windows will be affordability, user-friendliness, and no risk of hard-disk failure, as NIC runs off a CD. Meanwhile, Netpliance is already selling the I-Opener, an Internet device running QNX. The I-Opener sells for $99 plus shipping, while Microsoft's MSN Companion will cost less or even be free, but users will have to sign for monthly access to MSN. NIC will sell its machine for $199, plus an additional $129 for the monitor. The company already has 20,000 ready to go, earmarked for use in schools, which are expected to be a big market for the devices. NIC's machines will also be available on its public Web site later this month. Although analysts generally agree a market exists for low-cost, easy-to-use machines for surfing the Web and doing email, they don't see them replacing PCs.

  • "UK to Topple E-Mail Snooping Bill"
    E-Commerce Times (06/12/00); Gold, Steve

    The House of Lords will kill the British government's much-maligned Regulation of Investigative Powers bill later this month, according to media reports. The bill, which gives police and other government agencies significant monitoring powers over the Internet, is reported to be undergoing committee review in the House of Lords and will be turned over to the upper chamber in one or two weeks' time. The bill has been fiercely opposed by U.K. businesses, which say the legislation is too burdensome and would force some high-tech companies to relocate to countries with a less oppressive online business environment. Communications and network security company Biodata Information Technology urged the government to allow a public debate on certain aspects of the bill.

  • "Tech Boom Fuels Rising Home Costs"
    Washington Post (06/12/00) P. A6; Lardner Jr., George

    Home prices and rental rates are significantly higher in the nation's leading high-tech markets than in areas bypassed by high-tech booms, according to a new study from the Department of Housing and Urban Development (HUD). HUD reports that home prices in these markets have grown at twice the speed of inflation over the last three years and that the cost of purchasing a house in the top 10 high-tech markets since 1995 has risen more than 18 percent. "Economic good times are paradoxically creating a housing crisis for many Americans," concludes the report, which will be presented at today's meeting of the U.S. Conference of Mayors in Seattle. Chicago led all metro areas with 339,318 high-tech workers in 1997, with the Los Angeles-Long Beach area of California coming in second with 336,406 tech employees. The largest percentage of high-tech workers, though, was found in San Jose, Calif.--where 14 percent work in the technology field--followed by Austin-San Marcos, Texas, where 11.9 percent of people are employed in the tech industry. The report also notes that the New Economy is contributing to sprawl because businesses and residential developments are spreading farther out from city cores. In recent years, HUD says that land use has grown at 2 percent compared to a population growth of just 1 percent. Said growth is putting undue stress on infrastructure and creating more pollution. The continued growth of suburban high-tech corridors such as Silicon Valley, Route 128 in Boston, and the Dulles corridor outside of D.C. could lead to greater disparities between the wealth of city fringes and the decay of urban centers, HUD warns. Seniors and immigrants, it adds, will make up a larger portion of residents in this country over the next three decades. Seniors will require assistance with housing remodeling and rehabilitation, and a large portion of the immigrants will seek housing in the suburbs rather than in ethnic enclaves in cities. Despite the bad news for cities, the report was optimistic in divulging that many cities are making a comeback with increased housing, higher wages, and lower crime levels. Meanwhile, HUD has already launched a campaign to develop 100,000 more homes in central cities each year for the next decade.

  • "Study: U.S. Distributors Not Ready for the Net"
    E-Commerce Times (06/08/00); Enos, Lori

    Although a majority of U.S. distributors acknowledge the Internet will have an impact on business, many firms are not prepared for the coming change, reports a recent study by Cap Gemini Ernst & Young looking at suppliers, distributors, and customers in a variety of vertical industries. The report shows that 77 percent of distributors expect the Internet to affect their business in some way; yet despite this, only a small percentage of distributors currently conduct more than 50 percent of business online. The report also concludes that the Web will cause reductions in distribution chain prices, although distributors, who see the primary impact of the Internet as being a venue for new competitors, do not expect this to be the case. When online ventures begin to lower prices, there will probably be "a 60-80 percent reduction of transaction costs for customers in the most e-mature industries--and most of that comes from the intermediaries' part of the value chain," says David Ridemar, who heads Cap Gemini Ernst & Young U.S.'s strategic research group. However, distributors are acknowledging positive effects of the Web as a venue from which to sell more services, to widen product ranges, and enable improved delivery services, flexibility, and speed. Through traditional qualitative assets, primarily the individual company's relationships with suppliers and customers, distributors, suppliers, and customers all think that distributors will be able to control price levels and compete with new e-businesses. Yet the report warns of another possibility: "Those who under-invest in Internet technology and strategy now will probably be locked out of major part of the business," says Ridemar.

  • "CIO Council: Lack of Funding Hinders Security"
    Government Computer News (06/05/00) Vol. 19, No. 14, P. 8; Dorobek, Christopher J.

    The Chief Information Officers (CIO) Council recently unveiled several new projects to help federal agencies increase their computer security awareness, including a database of security best-practices at bsp.cio.gov. Although there has been some criticism of the site by those who claim that it will make those organizations that contribute to it vulnerable to attack, the CIO Council contends that it is simply doing what hackers do, and sharing ideas and information about various weaknesses in software and hardware used throughout the government. National Security Agency (NSA) analyst Mary Schanken says the site will not reveal any specific technical vulnerabilities of the various agencies, and that best-practices information that is submitted will be reviewed by the NSA and the National Institute for Standards and Technology to ensure that it is legitimate and that it meets certain basic criteria. The CIO Council also plans to publish this month a set of IT security standards that can be used throughout the federal government so agencies can see the benchmark by which they will be judged by oversight bodies. However, the CIO Council has complained that gaining Congressional funding for IT security is extremely difficult because there is no one agency within the government that has complete authority over the matter.

  • "European Net Access Industry Reinventing Itself"
    Newsbytes (06/09/00); Dennis, Sylvia

    The Internet access market is thriving in Western Europe, according to a new report, European Internet Access Market 1999-2004, published by Internet Data Corp. (IDC). With new users in all markets, the industry has grown rapidly, and the proliferation of subscription-free and unmetered Internet access services has contributed to the growth. IDC predicts that although prices will continue to fall, total Europe-wide spending on Internet access services will grow at a rate of 28 percent a year between 1999 and 2004. Leased line and dial-up services are being surpassed by DSL, cable modem, and fixed wireless access connections, which could result in a new round of sharp price cutting in leased line service. Freeserve has taken the lead in the free Internet access marketplace, and has been widely imitated by ISPs across Europe.

  • "Regulating the Internet: the Consensus Machine"
    Economist (06/10/00) Vol. 355, No. 8174, P. 73

    The original decision-making process of Internet advocates has been able to survive the wholesale commercialization of the technology, but expansion and globalization of the Internet are likely to pose new challenges to the way in which policies are formed pertaining to the technology. Although there is a perception that the Internet is ungoverned, the Internet has been regulated and is highly organized. However, Internet enthusiasts have chosen to approach the technology from the bottom up rather than the top down. The general public may not be familiar with the World Wide Web Consortium (W3C), an international standards body, the Internet Engineering Task Force (ITEF), which develops technical standards such as communications protocols, the Internet Engineering Steering Group, which is affiliated with the ITEF, and the Internet Corporation for Assigned Names and Numbers (ICANN), which governs domain names such as dot-com and dot-org. The culture of these Internet organizations is open in membership and arguments, allowing everyone to have a voice. The groups are cautious in their deliberations. Still, cracks in regulating the Internet are starting to show. Just last year the issue of helping law enforcers conduct wiretaps caused some rumblings among ITEF members. Similarly, the W3C is becoming controversial because its decisions are starting to have more than a technical impact. Policy issues are becoming more important than technical concerns, Internet experts say. In fact, ICANN is facing issues that are more political and economic. ICANN, which represents all users, has come under fire for its secrecy and for appearing to be a group beholden to corporate interests. The big issue for ICANN is to create a consensus on top-level domain names. Even if ICANN is unsuccessful, the original decision-making process of Internet bodies may not necessarily be overhauled. If anything, Internet groups are likely to become more formalized.

  • "Surprise! Europe Has Web Fever"
    Fortune (06/12/00) Vol. 141, No. 12, P. 222; Fox, Justin

    Although Europe has made great gains in the Internet and infotech sector, it is still chasing the United States. For example, the number of Europeans using the Internet will outstrip the number of connected Americans as soon as next year, but the U.S. will remain well ahead of Europe in terms of the percentage of the population that is online. The percentage of the European population that has made an online purchase is also expected to increase significantly by 2003. One reason Europe finds itself behind is that it has done little to help foster an environment conducive to the growth of upstart companies. Stats suggesting that Europe dominates the U.S. in mobile phone usage can be misleading--the U.S. lags Finland, Sweden, and Italy, but is ahead of France and Germany. Moreover, Silicon Valley has yet to truly turn its focus on the wireless sector; when it does, Europe will find more upstarts to contend with. Most embarrassingly, Europe has been completely shut out in the race to develop the hardware that the Internet revolution is so dependent upon. Still, one theory of thought holds that the U.S. is good at innovating, while Europe's forte is perfecting innovations, and that Europe could wrest the technology lead from the U.S. in this manner.

  • "The Country Boys of High Tech"
    National Journal (06/10/00) Vol. 32, No. 24, P. 1827; Peterson, Molly M.

    Virginia representatives Rick Boucher (D) and Bob Goodlatte (R) usually vote on opposite sides, but in one area they are in agreement. They both want the "Information Revolution" to reach the rural areas of their districts, and they have co-authored a bill to further their goal. Their bipartisanship has garnered wide congressional support for their efforts. Boucher notes that the Internet eliminates distance in communication, and Goodlatte points out that it brings economic opportunities to rural Americans. Boucher has worked on telecommunications issues for some time, beginning back in the 1980s when he worked on legislation to bring network TV to his district by satellite. Boucher serves on the Commerce Committee and Goodlatte on the Agricultural Committee, and both are assigned to the Judiciary Committee, giving them an advantage for their initiatives. They are co-chairmen of the Congressional Internet Caucus, which Boucher co-founded, and they have both spoken overseas on global electronic commerce. They say that an essential part of a seamless Internet is the deployment of high-speed data pipelines, and their bill would lift certain federal requirements on regional Bell telephone carriers so it would be easier for them to offer long-distance data services. They also support a broadband bill that would also change the 1996 Telecommunications Act, and they say that high-speed Internet access is crucial for the economic survival of their districts. However, their broadband bill is opposed by Clinton administration officials, interest groups, and Rep. Tom Bliley (R-Va.), who says that the 1996 law is working. Interest groups say that the proposed bill would limit consumer choice and competition.

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