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Volume 2, Issue 84: Monday, July 24, 2000
- "U.S. PC Sales Slowed During the Second Quarter"
Wall Street Journal (07/24/00) P. A4; Hamilton, David P.
PC sales growth in the U.S. slowed considerably in the second quarter, although worldwide sales boosted some PC vendors, according to two reports that will be released today. Dataquest will report that U.S. sales grew 12 percent, while worldwide sales rose 18 percent. Meanwhile, International Data will announce that U.S. unit shipments increased only 7 percent, while global shipments jumped 15 percent. These figures compare to 29 percent growth in U.S. PC sales in the second quarter of last year, according to Dataquest. Last year's strong PC sales, driven by inexpensive and free PC deals, are now giving way to a long-term slump in sales, some analysts say. However, IDC analyst Anne Bui says the U.S. consumer PC market still has room for growth, with just 52 percent of U.S. households owning at least one PC. The corporate PC market has also slowed, although experts believe this trend will reverse later in the year as companies invest in Microsoft's Windows 2000. In the meantime, Hewlett-Packard, Dell, and Gateway are benefiting from strong sales in the worldwide PC market.
- "A Suspicious Eye on U.S. 'Big Ears'"
Washington Post (07/24/00) P. A1; Drozdiak, William
Several European nations, particularly Germany, are concerned that the U.S. National Security Agency may be using its gigantic intelligence presence in Europe--originally established to combat Russia during the Cold War--to conduct economic espionage for the benefit of U.S. companies. Germany has questioned why the U.S. needs to maintain its giant monitoring center in Bad Aibling 10 years after the demise of the Soviet Union. The U.S. government adamantly denies that it is spying on European companies, and says that its intelligence gathering is aimed at terrorism, weapons of mass destruction, money laundering, and corporate corruption. The European Parliament last month voted to open an inquiry into the "Echelon" system, a spying device rumored to be operated by the U.S. in conjunction with Britain, Canada, Australia, and New Zealand. The system can supposedly intercept and monitor billions of emails, faxes, and telephone calls every hour, although the U.S. has never officially acknowledged its existence. However, European critics point to a 1994 incident where the U.S. persuaded Saudi Arabia to renege on a $6 billion contract with Airbus, showing the Saudi government intelligence information that confirmed that Airbus officials had engaged in bribery. The contract eventually went to Airbus rival Boeing, an American firm. The U.S. also similarly persuaded Brazil to award a large weapons contract to the American firm Raytheon after showing government officials intelligence information detailing corruption among executives at the French company Thomson-CSF, originally slated to win the Brazilian contract.
For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy.
- "Bringing Democracy to Net Naming"
digitalMASS (07/19/00); Lipman, Julia
There has been very little public debate over ICANN and its power over the Internet's future, but public policy groups are trying to change that trend. The Internet Democracy Project, with Hans Klein, consists of several organizations including the American Civil Liberties Union and Electronic Privacy Information Center and was created two weeks ago to assist in improving the standing of civil society online. The group and its publication, an online newsletter called The Cyber-Federalist that works to keep subscribers updated on ICANN's election processes, is one of a front of groups, including ICANNWatch and the Association for Computing Machinery's Internet Governance Project, that monitor ICANN and try to ensure the rights of non-commercial domains. These non-commercial interest groups are hampered from joining in on the process of creating new top level domain names and registries for those names because ICANN requires a non-refundable $50,000 application fee, a high enough figure to eliminate most applicants outside of the corporate environment. The non-commercial interest groups are also concerned that ICANN favors corporations in trademark disputes. Hans Klein, with individuals from Korea, Australia, Germany, Ecuador, and Burkina Faso formed the Civil Society Internet Forum last week that petitioned ICANN chair Esther Dyson to permit the new organization to be involved in ICANN actions.
For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.
- "The Real Foundation of the Software World"
New York Times (07/24/00) P. C1; Lohr, Steve
The software industry is desperately seeking the programmers who will drive the next wave of software development. Microsoft, IBM, and other major software companies need programmers to design and build the systems that will power e-commerce platforms, a market that could be worth $100 billion within the next 10 years. Observers believe that e-commerce is only in its early stages, and that the companies that will succeed in this new software market are the companies that position themselves to deliver the operating platforms and technology to push e-commerce into the everyday dealings of both consumers and businesses. Both Microsoft and IBM, for example, estimate that they will each spend $2 billion to train programmers in the computer codes, such as extensible markup language (XML), necessary for e-commerce to reach its full potential.
- "Lycos CEO Proposes FCC Web Oversight"
Newsbytes (07/19/00); MacMillan, Robert
Speaking at the National Press Club, Lycos CEO Bob Davis said the FCC needs to create an oversight program to curtail activities on the Web such as the posting of violence, obscenity, and illegal pornography. Davis said he does not believe that online privacy has enough government oversight, and he urged resistance to the idea of Internet-only, discriminatory taxes. The accessibility of illegal music as provided by Napster was another issue he raised, claiming such abuses are inevitable. However, Davis did not slam the Internet itself for the crimes he wants the FCC to control. "You can't blame the Internet for what is malignant in our society," he said. Davis is also of the opinion that the Internet industry must come together to be a strong lobbying force, and to build "confidence in the Web through market-driven policies."
- "NSI Accused by Rivals of Hoarding Domain Names"
CNet (07/21/00); Livingston, Brian
Network Solutions' competitors claim that NSI is retaining one million or more expired domain names that should be made available for others to register. NSI's actions are illegal and are an extension of the monopoly previously held by the company, according to Sasha Mornell, Register.com's senior vice president. After searching public databases to determine how many domain names should now be available for registration, BuyDomains.com found that 207,448 .com domain names expired in May but NSI kept those names off the market, which could mean that NSI is retaining about 300,000 names each month. NSI, which through May had deleted names from the central registry maintained by the company and made those names publicly available, now intends to auction domain names. At a 2 percent to 5 percent charge-back rate, NSI would have about 200,000 to 500,000 unpaid registrations annually, according to NSI senior vice president Roger Cochetti. However, NSI's competitors disagree strongly with this figure, quoting NSI's own annual report that states that "from September 1995 through December 1999, approximately 36.5 percent of registrations have ultimately been deactivated for nonpayment," which would result in at least 3.6 million unpaid domain names annually. NSI will only provide the number of paid registrations in the company's quarterly results, according to NSI spokeswoman Cheryl Regan. Although ICANN does say that NSI's intended domain name auctions might breach some agreements, ICANN has not concluded what action it will take. NSI did postpone the intended auction by 40 days due to ICANN's concerns, says Cochetti.
- "Newsprint Without the Print"
Upside Online (07/20/00)
Newspapers are poised to take advantage of the fact that by 2003, the handheald market will have made inroads into 36 percent of U.S. households. A content-hungry consumer base continues to grow, as a recent Forrester Research report reveals that wireless consumers will grow from 2 million in 2001 to 23 million by 2003. Initially anxious about declining circulation and the migration of classified ads online, newspapers are now more secure about their future in the high-tech marketplace due to partnerships with high-tech firms. Analysts say that newspapers continue to be the largest, most in-depth and trusted providers of local content, which is has been found to be the most valuable form of content. Palm already features content from USAToday.com and the Wall Street Journal. Armed with Palms, Visors, cell phones, and other handhelds, consumers will be increasingly checking store hours, sports scores, and restaurant locations. In October, the New York Times, Reuters, and other members of the Geneva-based International Press and Telecommunications Council will approve NewsML, an XML-based formatting protocol that allows multimedia news to be conveyed via various fixed or wireless platforms. CIBC World Markets executive director of equity research Rudolph Hokanson says that to accommodate communication with non-news content providers, newspapers must be "content-centric, platform agnostic."
- "13 Airlines Form Aviation E-Commerce Exchange"
Agence France-Presse (07/24/00)
The largest business-to-business online marketplace in the airline industry, Aeroexchange, will be announced today by 13 airlines. Oracle has been chosen to supply the technology for the venture. Aeroexchange will launch in a few months, with transactions expected to reach $45 billion a year. The exchange will be open to all airlines, industry-related companies, and suppliers, allowing participants to reduce costs by using joint buying power and by streamlining the supply chain, according to the founding members. Aeroexchange will offer a range of aircraft components, maintenance services, and general goods and services. Founding airlines include America West, FedEx Express, Lufthansa German Airlines, Northwest Airlines, Singapore Airlines, and several others.
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- "New World Economic Order"
InfoWorld (07/17/00) Vol. 22, No. 29, P. 1; Schwartz, Ephraim; Neel, Dan; Grygo, Eugene
Online auctions and digital exchanges are transforming the business world by allowing small companies to compete more effectively with large corporations. Small companies looking to establish an online presence are often limited by their inability to make huge investments in Web infrastructure--an obstacle that is eliminated by online auctions and exchanges. Large companies are participating in auctions and exchanges as well. Sun Microsystems this week plans to announce that it will allow its resellers to obtain Sun hardware from auction sites like eBay, TecSell, and Mercata. In addition, Sun plans to offer its own auction business, which will be maintained by auction management firm Andale. Even as large companies move into the auction and exchange businesses, they are welcoming small competitors to take part in the trend. Large companies say they are helping smaller firms because auctions and exchanges benefit from having as many suppliers as possible. However, this open attitude might be motivated in part by the Federal Trade Commission's worry that exchanges will exclude smaller participants, thereby posing an antitrust concern.
- "CIOs Vexed by New Licensing Deals"
Computerworld (07/17/00) Vol. 34, No. 29, P. 1; Deckmyn, Dominique
Vendors are beginning to sell software based on subscription and limited term licenses, and experts predict that these new models will gradually replace perpetual licenses. The trend is disturbing to some CIOs, who believe the new models could be more expensive in the long run. Validating the CIOs' concerns, Gartner Group estimates that corporations will spend more on subscription-based software over time. Oracle's new limited term licenses, for example, cost users more than the traditional licenses after roughly five years, says Gartner's Marie Reeve. Meanwhile, users are complaining that Microsoft's new per-seat licensing is pricier than the old concurrent licensing. Another new pricing model is per-processor licensing, which makes software more expensive as it is moved to a more powerful system. Although some users are dissatisfied with the new licensing models, experts say the new terms can make administration easier and sometimes save money for users.
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- "Study: Manufacturers Slow to Embrace Internet"
Washington Business Journal (07/20/00) Vol. 19, No. 10, P. 22; Hughlett, Roger
Small manufacturing companies are not moving quickly to the Internet, according to a recent survey from the National Association of Manufacturers. E-commerce is not a high priority for small companies that do most of their business locally and have limited resources. Of those surveyed, 9 percent of companies carried out 10 percent of their total transactions online. Only 1.4 percent of respondents conducted more than 10 percent of sales transactions over the Internet. The sluggishness of small manufacturers with regards to the Internet concerns experts, who warn that a failure to embrace the technology now could leave small companies at a disadvantage in the future.
- "Feds Build ID Model for E-Biz"
InternetWeek (07/17/00) No. 821, P. 1; Tillett, L. Scott; Yasin, Rutrell
Federal authorities will soon establish a central agency to create standards for authenticating millions of digital certificates that have been issued to government workers and the public. These standards, which will support endeavors ranging from online patent applications to student aid applications, could eventually be adopted by the private sector. The impetus behind the standards creation was President Clinton's recent signing of the E-Sign Act, which is the private sector's version of the Government Paperwork Elimination Act of 1998, which gave electronic signatures the same legal validity as ink ones at federal offices. The E-Sign Act gives online contracts in the corporate world equal ranking with pen-and-paper contracts, requiring digital certificates to verify these e-signatures. Computer experts contend that the most difficult problem will be constructing a public key infrastructure (PKI) to manage the digital certificates used to sign and encrypt online data, because federal agency systems will have to be upgraded to accept digital certificates in lieu of personal identification numbers. Two firms, Digital Signature Trust and Operational Research Consultants, have been enlisted by the federal government to aid in deploying the PKI technology among the different agencies, and AT&T may sign on to the project next month.
- "Secure Document Delivery Gains Favor"
InformationWeek (07/17/00) No. 795, P. 89; Hulme, George V.
Analysts believe that secure document delivery services may be set to take off as companies become more comfortable with outsourcing various security functions. The recent passage of federal e-signature legislation that makes online documents legally valid as well as the technology's user-friendliness has contributed to the widespread use of secure document delivery. Companies such as CertifiedMail.com, PostX, Tumbleweed Communications, and Zipmail have all sprung up in recent months to provide services that protect the privacy and integrity of electronic documents. Most of the services also have tracking mechanisms that alert a sender when a document has been received. CertifiedMail's Bob Janacek contends that secure document delivery will be widely embraced by business because corporations find S/MIME and digital certificates too complicated and arduous, and would rather outsource encryption. Analysts also say outsourcing secure email is cheaper than using overnight delivery services, and businesses may be forced to outsource due to the widespread use of the Internet to conduct commerce, as well as the increased speed at which such commerce is conducted. The Aberdeen Group estimates that only 10 percent of U.S. firms currently outsource any of their security functions, but that the number will jump to 45 percent by 2002.
For information regarding ACM's activities related to encryption, visit http://www.acm.org/usacm/crypto.
- "Antitrust Gauntlet Thrown, Exchanges Examine Options"
Industry Standard (07/24/00) Vol. 3, No. 27, P. 110; Pressman, Aaron
Judging by the number of people in the business sector who attended the antitrust portion of the recent FTC workshop on business-to-business exchanges in Washington, the B2B industry is taking the issue seriously. Industries that are familiar with government antitrust scrutiny are moving cautiously into B2B exchanges. For example, MetalSite.com brought large metal makers together with thousands of customers in 1998, but not before the site had some strong safeguards in place. The site addressed antitrust issues by relying on specific antitrust policies and rules for information exchange, briefing every employee on antitrust issues, and signing up Arthur Andersen to audit antitrust compliance two times a year. Federal regulators hope the B2B industry will follow such a lead because exchanges can very easily turn into a forum for collusion. For example, in a B2B exchange it would not be difficult for a major block of an industry to jointly sell their goods at fixed prices. Meanwhile, regulators are just as concerned about joint buying. So far there has been little antitrust inquiry. The FTC is reviewing the exchange of the Big Three automakers, Covisint; the exchange set up in April by Cargill, Tyson Food and four other meat and poultry processors; and the major airlines' online ticket-selling venture Orbitz. Deputy assistant attorney general John Nannes urges companies at the outset to make sure that B2B exchanges are designed without anticompetitive effects and to establish rules or limits so that regulators will not have to get involved.
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