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Volume 2, Issue 74:  Wednesday, June 28, 2000

  • "Oracle Hired Firm to Probe Microsoft Allies"
    Wall Street Journal (06/28/00) P. A3; Simpson, Glenn R.; Bridis, Ted

    Oracle yesterday publicly admitted that it employed detective agency Investigative Group International (IGI) to investigate trade associations it claims were used by Microsoft as "front groups" to sway public opinion about the company during its anti-trust case against the U.S. government. IGI waged a year-long clandestine campaign against the Independent Institute, the National Taxpayers Union, and the Association for Competitive Technology, whose trash IGI attempted to purchase for $1,200. Oracle said in its public statement that IGI discovered that these groups were "misrepresenting themselves as independent advocacy groups, when in fact their work was funded by Microsoft for the express purpose of influencing public opinion in favor of Microsoft during its antitrust trial." Oracle claims that IGI committed no illegal activities during its investigation and that the detective agency operates within the law. However, Oracle has also admitted to enlisting the aid of Washington, D.C., public-relations firm Chlopak, Leonard, Schechter & Associates to spread negative information about Microsoft's allies to various media organizations, according to those familiar with Chlopak's business operations.

  • "Protection From Cyber-Attack Sought"
    Financial Times (06/27/00) P. 4; Adiga, Aravind

    The United States is seeking ways to defend itself from cyber-attacks that could wreak havoc on the nation's technological infrastructure. The problem is particularly daunting because these attacks could come from any number of sources: a hostile country, a terrorist organization, or even a solitary, clever hacker. Security experts from the military and the private sector are discussing the issue this week at a National Defense Industrial Association symposium. Some friction has arisen, however, because private security firms do not want to reveal sensitive information to the government or the public. Meanwhile, talk at the symposium hints that the United States may be planning to launch its own cyber-attacks in time of war.
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  • "Hand-Held Devices Steal Spotlight at PC Expo"
    Los Angeles Times (06/28/00) P. C3; Menn, Joseph

    The PC Expo kicked off yesterday in New York, focusing more on the growing handheld market than on PCs. Jeff Hawkins, who helped develop the original Palm Pilot and went on to found Handspring, delivered the keynote address. Rather than discussing PCs, attendees debated whether the handheld market will eventually eclipse the cell phone market. Although Dell Computer CEO Michael Dell noted that the 7 million handhelds that market leader Palm has shipped are dwarfed by the 400 million PCs in the world, experts predicted that the handheld market will explode in coming years. By 2005 the number of people using portable Internet devices will rise to 1.5 billion, up from 20 million today, predicts Merrill Lynch analyst Henry Blodget. Compaq showed off its Pocket PC device, which is based on Windows CE and can surf the Web with a wireless modem attachment. Meanwhile, Handspring displayed its Visor, which is based on the Palm operating system and can be upgraded with wireless connections.

  • "House Approves Budget Bill That Curbs Clinton's Spending on Technology, U.N."
    Wall Street Journal (06/27/00) P. A32; Rogers, David

    President Clinton's technology budget would be significantly slashed by the $37.4 billion budget bill that the House passed yesterday, which will now be sent to the Senate. The measure would cut heavily into the Commerce Department budget, reducing NIST funding to $423 million, $291 million short of the requested funds and one-third less than this year's NIST budget. In addition, the National Telecommunications and Information Administration would receive $57.5 million, $168 million less than requested; this budget would not provide any of the $50 million Clinton proposed to give low-income families greater access to the Internet. Meanwhile, the Patent and Trademark Office would receive $134 million less than Clinton requested.

  • "Firms Crack Down on E-Mail"
    USA Today (06/28/00) P. 2B; Yaukey, John

    Employers are increasingly monitoring workers' email and Internet use due to concerns about liability and lost productivity. Roughly 45 percent of U.S. companies monitor employees' electronic activities such as email, Internet use, and voice mail, and that figure is expected to rise in the future, according to the American Management Association. Blocking software is in place at about 55 percent of companies to prevent employees from using technology in an unsanctioned manner. Meanwhile, 29 percent of firms block access to inappropriate Web sites. In a recent survey, 60 percent of respondents said they received inappropriate email at work, while 14 percent of respondents admitted to distributing such messages. Email is a far riskier way of sharing inappropriate material than phone calls or in-person conversations, because email leaves a digital record that can turn up as evidence in a lawsuit, experts say. Beyond liability concerns, companies are worried about employees wasting work hours with technology--90 percent of respondents in a recent Vault.com survey said they had visited non-work-related Web sites on the job. Some employees who view monitoring as an invasion of their privacy have taken the issue to court, but judges tend to uphold a company's right to monitor equipment that belongs to the firm.
    For information on ACM's work with privacy issues, visit http://www.acm.org/usacm/privacy.

  • "Study Predicts Huge Growth in Business-to-Business Web Sector"
    New York Times (06/27/00) P. C6

    Business-to-business e-commerce will grow from $336 million today to $6 trillion by 2005, Jupiter Communications predicts. By 2005, 42 percent of all product transactions among businesses will occur online, up from 3 percent currently, says Jupiter. Companies that sell directly to buyers now represent 92 percent of B2B e-commerce. However, B2B e-commerce is seeing a rise in coalitions such as the auto-parts exchange formed last month by major auto companies, and independent companies that link buyers with sellers, says Jupiter analyst Melissa Shore.

  • "Americans Rule the Web--for Now"
    Associated Press (06/24/00); Jesdanun, Anick

    The U.S. military and academic establishments built the Internet, and American technology and investment capital caused it to flourish, but now the rest of the world is catching up. More than half of the people now online live outside of the United States, claims a study by the Angus Reid group in Vancouver, British Columbia. Foreign businesses are also beginning to establish a presence online, although many of them must overcome the English-language bias of both the Internet and computer hardware. Europeans have truly taken to the Internet only in the last year or so and have been somewhat put off by U.S. online retailers' insistence on the use of credit cards for payment, according to Liesbeth Hop, president of Amsterdam-based Internet-research group Pro Active International.

  • "Amazon's Hottest Product: Skepticism"
    Washington Post (06/28/00) P. E1; Streitfeld, David

    Amazon's meteoric rise is being followed by an equally dramatic fall, investors believe. Six months after Time magazine dubbed Amazon chief Jeff Bezos "Person of the Year," stock in the online company has fallen more than 66 percent. Although Amazon.com remains the definitive Internet company, claiming 17 million customers in 160 nations, naysayers contend that even with financing help, Amazon may be forced to file for bankruptcy. Although North American e-commerce may be worth more than $29.3 billion in 2000, many other e-tailers are also experiencing financial difficulty. Critics say extravagant promotions and advertising campaigns, junk bond sales, and massive debt coupled with deeply flawed capital management has set the stage for Amazon's demise. Even Bezos concedes that his vision for a "small, profitable company" has spiraled into a "large, unprofitable company." Yet some Wall Street analysts maintain their faith in Amazon and say that competing e-tailers' disasters may give the company much needed leverage.

  • "Germany Wants Hate Crackdown"
    Reuters (06/27/00)

    Germany, which has seen its extreme right-wing political faction increase its online presence tenfold since 1996, recently hosted an international conference on Internet extremism. Germany's justice minister, Herta Daubler-Gmelin, said Tuesday that both the international legal community and online companies should develop standards to prevent or filter extremist Web sites and child pornography on the Internet. She targeted America, which sent no representatives to the conference, as the prime source of Internet extremism. She wants online retailers to stop selling books and music that might inspire hate, and commended Amazon.com's decision to stop selling Adolf Hitler's Mein Kampf in Germany.

  • "Who Wins in the New Economy?"
    Wall Street Journal (06/27/00) P. B1; Murray, Alan

    The computer age has been called both a centralizing and democratizing agent, according to Alan Murray's The Wealth of Choices. Murray writes that opinion appears to be split among two camps: one ascribing to the Monopolist myth, and the other to the Populist myth. Believers in the Monopolist myth, some social critics among them, say that despite "cyberbole," modern communications technology has not revolutionized existing social structures; they cite widening income gaps, Microsoft-scale fortunes, and monopolizing mergers. Populists contend that the Internet has created a global marketplace that favors the democracy of ideas and commerce; they cite videoconferencing to villages and online entrepreneurship in Kenya. University of South Carolina communications professor William Dutton concludes that both myths are "overly deterministic." Although the Internet may not ultimately banish social divisions, Murray says, technology will continue better the lives of more people, empowered by their access to information and greater opportunity.

  • "Industry Group Opposes New Internet Tax Legislation"
    Computer Reseller News Online (06/27/00); Taft, Darryl K.

    The Internet Tax Fairness Coalition (ITFC) is criticizing a bill introduced last week by Sen. Byron Dorgan (D-N.D.) that would restrict federal lawmakers' voice in the Internet tax debate. Dorgan's bill gives states the power to determine what parties are involved in the simplification of the U.S. sales and use taxation system. "This legislation would create a 'Trojan Horse' for state and local tax collectors," says ITFC's Mark Nebergall. Dorgan's bill would allow state and local governments "to impose costly interstate tax collection burdens on remote sellers at will within four years," Nebergall adds.

  • "Embassies to Test Worldwide Net"
    Federal Computer Week Online (06/26/00); Jordan, Bryant

    Following a recommendation from the Overseas Presence Advisory Panel, the State Department intends to test a program that would connect via the Internet U.S. diplomatic missions around the world and all federal agencies with an international presence. An inter-agency, interoperable infrastructure would allow agencies to exchange email and other information. The U.S.'s role in international affairs "demands that we develop an integrated, responsive and secure IT capability, including systems and tools that enable us to access, manipulate and share up-to-date information and to collaborate with others in addressing foreign policy issues," said State Department CIO Fernando Burbano to the House International Relations Committee when explaining the plan last week. Many of the panel recommendations were already addressed in a 1998 State Department report, "Diplomacy for the 21st Century," according to Burbano. The report outlines a plan to build by 2005 a secure global network and infrastructure, access to internal affairs information and applications, and integrated messaging, and ultimately create more efficient operations via information technology. The State Department has scheduled the pilot programs, which will be tested at the Mexico City and New Delhi, India embassies, to be functioning by the end of the year.

  • "Bermuda Changes Taxes, Laws to Promote E-Commerce"
    E-Commerce Times (06/23/00); Trimingham, Robin W.

    The Organization for Economic Cooperation and Development has concluded its investigation into the tax practices of most of the world's offshore jurisdictions, and has decided that Bermuda, San Marino, the Cayman Islands, Mauritius, Cyprus, and Malta are not "harmful tax jurisdictions." All six countries have promised to ensure that any remaining harmful tax practices will cease by 2005, and that no new ones will be imposed. U.S. taxing authorities are happy with the move. Bermuda does not generate government revenue through income tax, basing its taxes instead on consumption, and during the past few years the nation has demonstrated interest in developing itself as a global center for e-commerce. Last summer the Bermuda government passed one of the first pieces of e-commerce legislation, the Electronic Transactions Act, designed to ease the use of electronic transactions. The bill also aims to remove uncertainties about electronic documents and signatures, promote public confidence in the validity of e-transactions, and encourage the development of the infrastructure necessary for secure e-transactions. In addition, the bill offers the "Standard for Electronic Transactions," a standard designed to ensure that those doing e-business connected with Bermuda will conduct themselves so as to preserve Bermuda's good name. The standard also makes e-commerce service providers and intermediaries responsible for knowing their customers and establishing transparent business practices.

  • "Six Political Issues That IT Professionals Need to Help Politicians Understand"
    InfoWorld (06/19/00) Vol. 22, No. 25, P. 77; Vizard, Michael

    Politicians with a limited understanding of technology will be legislating on six major IT-related issues over the next two years, and IT workers need to provide some input on these issues, writes Michael Vizard. In terms of privacy, IT workers need to ensure that laws are carefully worded to protect consumers, while not creating burdensome restrictions that would slow online business. Meanwhile, laws regarding encryption need to allow encryption to be strong enough to let the U.S. take part in overseas business transactions, while not permitting encryption so strong that tracking cybercriminals becomes impossible. Exchanges are another major issue, as the government has already begun investigating whether a new airline exchange is an effort to fix prices. Vizard says the government should allow exchanges some time to get off the ground before starting investigations. Meanwhile, discussions of whether to amend the Sherman Antitrust Act seem inevitable in light of the government's lawsuit against Microsoft, and Vizard says the act needs to be significantly updated to be relevant in the Internet era. The fifth issue centers on how to modify visa laws to eliminate the abuses that can occur under the current laws, which allow U.S. workers to be replaced with lower-paid foreign workers, who are then bound to their employers. Lastly, the Uniform Computer Information Transaction Act (UCITA) should be modified to limit the power it gives to software vendors in contract disputes, Vizard says.
    For information on ACM's UCITA-related activities, visit http://www.acm.org/usacm/copyright; for ACM's activities in the area of encryption, visit http://www.acm.org/usacm/crypto; for information on the association's work related to privacy issues, visit http://www.acm.org/usacm/privacy.

  • "Basically Uncrackable"
    Computerworld (06/19/00) Vol. 34, No. 25, P. 82; Harrison, Ann

    Several research organizations around the globe, including a team of scientists at Los Alamos National Laboratory, are using the laws of quantum physics to create what could be unbreakable data encryption systems. Called quantum cryptography, the new systems would have a much higher level of security than the public-key cryptosystems that are currently employed by many business and government organizations to keep proprietary information private. The codes that provide security on the public-key cryptosystems could theoretically be breached by new algorithms or other powerful computational devices. However, quantum cryptography employs codes comprised of a series of individual photons with various polarizations or other properties. The direction that a photon's electric field vibrates makes up the zeros and ones of computer language. Scientists say potential problems of the new technology include the fact that the weak pulses used to move the light particles might not have any photons. Another possibility is that the pulses may have several photons that could enable someone to steal the photons from the signal and covertly collect data about the encryption key. Regardless, most scientists say these problems can be fixed with a version of quantum cryptography called quantum entanglement, which can transmit data at higher rates and provide better security over greater distances. Quantum entanglement would probably first be used by the military or banks, which could use it to encrypt data sent to various branches. American Express has shown an interest in the technology, implying that it may eventually become widely used in the financial services industry.
    For information on ACM's activities in the area of encryption, visit http://www.acm.org/usacm/crypto.

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