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Volume 2, Issue 89:  Friday, August 4, 2000

  • "Microsoft Faces Antitrust Proceeding in Europe"
    Los Angeles Times (08/04/00) P. C3

    The European Union yesterday launched a formal antitrust case against Microsoft, accusing the company of abusing its dominance in the operating system market to gain control over the server software market. The proceedings began after Sun Microsystems complained that Microsoft used unfair licensing practices and withheld critical information about Windows. Since Microsoft holds about 95 percent of the PC operating systems market, Sun says the company is obligated to share information about its software to allow interoperability with non-Microsoft server software. In response, Microsoft legal director for Europe John Frank contends that Sun is trying to learn Microsoft's trade secrets, and that no company is required to share such information. The EU has sent a statement of objections to Microsoft, giving the software giant two months to respond. If Microsoft is found to have violated antitrust law, the EU could fine Microsoft as much as 10 percent of its yearly global sales. Meanwhile, the EU continues to investigate antitrust complaints about Microsoft's Windows 2000 software, and the EU might combine the two cases if the issues overlap, says an EU spokeswoman.

  • "U.S. Eases Export Restrictions on Computer Sales"
    Wall Street Journal (08/04/00) P. A2; Bridis, Ted

    The White House announced yesterday it will ease export restrictions and allow computer manufacturers to offer more powerful business computers to customers in Tier Two and Tier Three countries. Tier Two countries, which include South Korea and countries in Africa and South and Central America, will be able to purchase computers with as many as 45,000 mtops. Tier Three countries, including India, China, and Russia, will be able to purchase computers with up to 28,000 mtops. Although by no means supercomputers, computers this powerful can run a small- to medium-sized business server. The White House also announced it will not prevent the sale of computers to military customers, saying advanced technology now has an unavoidable "ubiquity." Restrictions on sales to countries such as Iraq, Cuba, and Sudan remain in place. The changes come after intense lobbying from the computer industry, which was concerned that export laws would cause companies to fall behind in the international market.

  • "On the Web, Security Is a Moving Target"
    Washington Post (08/04/00) P. E11; Musgrove, Mike

    The arrival of account aggregation Web sites, which store a great deal of a user's personal and financial information, including credit card numbers, has raised new security concerns among consumers and merchants. Bill Hancock, the chief security officer for Exodus Communications, which hosts the Yodlee aggregation Web site, offers several recommendations for choosing a safe aggregation site. The site should provide a clear privacy policy and should use an encrypted connection whenever users transmit sensitive information. Hancock also suggests browser certification software that can monitor whether users have accessed the site from their own computers. Other aggregation sites attempt to establish trust with their users through partnerships with respected companies such as Goldman Sachs or American Express. Although most aggregation sites do have some kind of insurance policy to protect users against credit card fraud, security experts agree that site developers can never be too paranoid about safety. As one expert points out, "If experience teaches us anything, it's that a lot of Web sites get broken into, multiple times."
    For information regarding ACM's activities related to security, visit http://www.acm.org/usacm/crypto.

  • "Report: New Day Dawning for Dot-Com Workers"
    E-Commerce Times (08/02/00); Enos, Lori

    The high-tech labor shortage is forcing Internet startups to provide workers with high starting salaries as well as non-monetary benefits such as flex time, according to a recent report from Hewitt Associates and WetFeet.com. Dot-coms can no longer tempt workers to accept low base salaries in exchange for stock options, and most lead programmers surveyed earn close to $100,000 a year. Cash bonuses are not widely offered by dot-coms, with only 17 percent of the surveyed workers outside of the sales division receiving bonuses. Meanwhile, stock options or grants are given to 94 percent of dot-com workers, the survey shows. In terms of non-monetary benefits, 86 percent of dot-coms offer flexible work schedules, 57 percent allow telecommuting, and 85 percent provide training benefits and personal services such as fitness programs. Dot-coms are finding it necessary to offer these benefits as high turnover rates and rapid growth continue. The yearly turnover rate for the past 12 months was 14.6 percent, while the Bureau of Labor had expected only 13.2 percent turnover. In addition, the one-year employee growth rate over the past year averaged 85 percent, the survey says.

  • "A Long Love Affair With the PC Might Be Holding Back the U.S."
    Wall Street Journal (08/03/00) P. B1; Mossberg, Walter S.

    Companies in Europe and Japan have gained a significant edge on U.S. companies in the development of new digital technologies. The most advanced wireless phones and non-PC-based Internet devices that are not yet available to U.S. consumers are commonplace elsewhere. This is a dramatic reversal from the history of technological change, in which U.S. companies dominated their foreign rivals. However, that dominance led to overconfidence in the superiority of the PC. Foreign companies realized that consumers wanted devices that are faster, more reliable, and less bulky than the traditional PC. Although U.S. firms have become aware of this, they are still handcuffed by the slow-moving bureaucracy of the wireless industry. For example, unlike the rest of the world, the U.S. does not have one standard for wireless phones. However, several U.S. firms have begun to move into the new wireless Web, and industry observers believe they may soon match, if not supersede, the gains of companies abroad.

  • "Justice Told to Expedite Reply on Net Wiretap"
    Washington Post (08/03/00) P. E1; Miller, Bill

    The Electronic Privacy Information Center (EPIC) has succeeded in getting the Justice Department to act faster on releasing information about the FBI's Carnivore surveillance system. U.S. District Judge James Robertson yesterday responded to EPIC's request for swift action by mandating that the Justice Department expedite a review of the Carnivore system and provide a formal response by Aug. 16. EPIC attorney David L. Sobel said the judge's decision was good news and would make it less likely that the FBI will "drag its feet" on releasing information about Carnivore. However, EPIC still may not receive the information it wants in a timely manner, as the judge's decision permits the FBI to stagger the release of information, and the Justice Department could force further delays by arguing that the information is classified material.
    For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy.

  • "The Spy Who Employed Me"
    Register Online (08/01/00); Cullen, Drew

    British data protection commissioner Elizabeth France has developed guidelines to be released next month that call for British companies to let workers know when and where they are being monitored. Although many companies already have monitoring policies in place, the new guidelines address issues that might be unclear, such as whether employers can track employees who are using company cell phones outside of work. Under the new guidelines, workers can expect not to be monitored outside of work on company mobile phones, says France, who aims to protect employee privacy rights. Since the guidelines are not actually law, companies will not be required to follow the code.

  • "Debate Erupts Over Disclosure of Software Security Holes"
    Computerworld Online (07/27/00); Harrison, Ann

    Debate raged at the recent Black Hat Briefings security conference in Las Vegas about the pros and cons of full disclosure of software vulnerabilities. Network Flight Recorder CEO Marcus Ranum charged that disclosure does nothing to improve security, but rather gives valuable information to hackers and makes cyberattacks easier. Ranum said despite the release of data relating to vulnerabilities, there has been no "appreciable impact" on the speed at which bugs are fixed after they have been identified and publicized. In addition, security disclosures are often used by firms to publicly embarrass vendors such as Microsoft, or as vehicles to gain publicity or money, Ranum said. Instead of disclosing security flaws, companies should focus on creating better software, using as an example the increasing amount of software equipped with auto-update capabilities that enable bug fixes and patches to be streamed directly to computer users, Ranum suggested. However, other security experts at the conference maintained that disclosure of security flaws is still the best way to force software vendors to upgrade their products and to quickly remedy potentially devastating bugs.

  • "Web Surfing, at the Sound of Your Own Voice"
    New York Times (08/03/00) P. E1; Greenman, Catherine

    Several companies are now marketing telephone-based voice portals as an alternative way to access the Internet. With voice portals, users can call from any kind of telephone to request information from the Internet. Voice-recognition software allows the services to understand and retrieve the desired information. Currently, these services are somewhat limited, providing only basic information such as weather, sports, and stock information as well as movie and restaurant listings. However, many services will soon offer email and e-commerce options. Analysts have mixed feelings about the potential of this new technology. By 2005, voice-portal services could generate as much as $12 billion in revenue each year, according to the Kelsey Group. Right now, most voice-portal revenue comes from advertising. Most of the services play brief ad messages while their computers are processing customers' requests. Other analysts doubt whether users will want such a limited service. An analyst at Forrester Research notes, "People have a lot more choices, and they can retain a lot more when they're looking at information on a PC."

  • "In Search of an E-Commerce Candidate"
    E-Commerce Times (08/02/00); Weisman, Jon

    Frontrunner presidential candidates Al Gore and George W. Bush hold similarly moderate views on Internet policy issues, but dark horse candidate Ralph Nader of the Green Party is taking the boldest stance on e-commerce. Given the chance, Nader usually sides with individuals rather than corporate Goliaths, and his approach to the Internet is no different. Nader refers to the "zero-sum situation between real stores and Internet stores" when noting that newspapers and magazines are placing their news, help-wanted ads, and real-estate ads on the Web. Nader believes it unfair to give online companies government protections while brick-and-mortar companies lack the same support. Nader's Consumer Project on Technology has also taken issue with Network Solutions over its monopoly of the domain name market. "At no time did the government seek any competitive bids to determine the prices that consumers and businesses should pay for domain name registrations," said the group. Meanwhile, Gore and Bush have placed e-commerce growth at the center of their tech agendas. To that end, Bush places a premium on slashing taxes, investing in research and development, cracking down on "frivolous" lawsuits, and pushing for free trade and "sensible" export controls. The digital divide is also important to Bush and Gore, as is increasing Internet users' privacy. Bush is a proponent of industry self-regulation of online privacy, while Gore would like the government to play a limited role. Gore believes that the creation of "red light districts regarding sites that are inappropriate for children...is an area that requires some government intervention," says Gore campaign spokesperson Dagoberto Vega.

  • "ICANN Taps Nominees"
    InternetNews.com (08/02/00); Olavsrud, Thor

    ICANN revealed a list of 18 candidates for the five at-large director positions on the organization's board of directors. The African candidates are Alan Levin and Nii Quaynor, and the Asian/Pacific candidates are Johannes Chiang, Lulin Gao, Masanobu Katoh, and Sureswaran Ramadass. The European candidates are Maria Livanos Cattaui, Alf Hansen, Olivier Muron, Oliver Popov, and Winfried Schuller, while the Latin America candidates are Raul Echeberria, Ivan Moura Campos, and Patricio Poblete. The North American candidates are Lyman Chapin, Donald Langenberg, Lawrence Lessig, and Harris Miller. ICANN says 211 individuals were recommended or were interested in becoming a candidate. Factors that assisted the committee in determining the list of candidates included a reputation for hard work and integrity, complemented with an ability to provide independent judgements, and a comprehension of Internet history and architecture. There is some concern that the new list is not representative of the entire spectrum of the At Large Membership's views. A voter education phase will come after the Sept. 1 announcement of the complete ballot, and the elections will be held from Oct. 1 through Oct. 10.
    For information regarding ACM's Internet governance work, visit http://www.acm.org/serving/IG.html.

  • "Dutch E-Mail Snooping?"
    InfoWorld.com (08/01/00); Perera, Rick

    The U.K.'s Regulation of Investigatory Powers bill is not the only piece of legislation worrying civil liberties advocates in Europe. The Dutch Parliament is examining a bill that would allow the Internal Security Service of the Netherlands, the Binnenlandse Veiligheidsdienst (BVD), to monitor electronic communications on wireless devices. "The signature of only one minister would be required to tap a particular person's phone calls or email," says BVD's Vincent van Steen. Civil liberties advocates are not happy with the proposed law. Heightening their concerns is a report from the newspaper De Volkskrant that the Netherlands government has been monitoring email communications between a Dutch software company and an Iranian customer. Van Steen says the BVD does not normally monitor email, and when it does it must get permission from four government ministers. A law is already on the books in the Netherlands that forces ISPs to enable law enforcement agents to tap their networks. The new bill would also force ISPs to help security agents decrypt data on their networks.

  • "ICANN's Pace Slows Progress on the Internet"
    Computerworld (07/31/00) Vol. 34, No. 31, P. 24; Gillmor, Dan

    Although ICANN is not actually a government entity, sometimes it appears to utilize government-like powers, and currently the organization is making some significant decisions regarding the Internet's future, according to columnist Dan Gillmor. The changes that ICANN has made recently, such as heading toward an expansion in the number of top level domain names, are improvements. However, these changes are not really solving the real problems that should concern us all. ICANN is moving slowly toward domain name expansion, which allows the larger companies that already possess most of the power online a necessary relief period to come up with new tactics to ensure continued dominance. For example, Network Solutions is working to maintain its control, including a plan to auction unpaid domain names instead of returning them to the general domain name pool where the names could be re-registered. Microsoft's monopolistic bent pales in comparison to Network Solutions' tactics; quick reform is needed to rein in Network Solutions' machinations. Expect Network Solutions to look for ways to retain its monopoly of the domain system. Other owners of corporate trademarks will no doubt also retain control of trademark names. ICANN's lethargy is giving the corporations the time they need, and because of this, any changes that are made will end up making the registrars richer. If the new top level domain names work smoothly, then ICANN would have no reason to impede the use of even more domain names, which potentially could move the Internet toward working properly, concludes Gillmor.
    For information regarding ACM's Internet governance work, visit http://www.acm.org/serving/IG.html.

  • "Brain Gain"
    Industry Standard (08/07/00) Vol. 3, No. 29, P. 116; Pappas, Leslie; Halan, Monika; Helft, Daniel

    The Internet is at the forefront of a wave of expatriates leaving the West and returning to their developing countries for greater opportunities. As markets such as China, India, and Latin America forge ahead with their own Internet revolutions, the top foreign talent in the West is starting to look abroad. For example, James Liang, who won China's first national computer programming contest at the age of 13, returned home after stints at Georgia Tech and Oracle to run Ctrip.com, an online-travel agency, with three classmates. Luo Hui, deputy director of China's Ministry of Science and Technology, says students returning from overseas have started most of the nation's dot-coms. The emerging markets are doing their part by encouraging development in technology sectors, slashing taxes, and loosening immigration laws. Although technology professionals who have struck gold in America realize their money goes farther in their homelands, returning expatriates are often driven by concerns other than economics, such as feeling it is their duty to help build the Internet for their country. Other expatriates feel they will thrive in an environment in which they are the big fish in a small pond. With their return, younger graduates are starting to stay home. Although emerging countries are benefiting from the "brain gain," many foreign tech workers still choose to head for and remain in the West. In India, for example, while 1,500 Indians returned last year to assume senior-level positions, more than 30 times that number left the country for the U.S. There is still a great demand for skilled tech workers in the West with the U.S. needing 1.6 million tech workers in 2001, and Europe needing 1.7 million tech workers in two years.

  • "Reports of the PC's Death..."
    Business Week (08/07/00) Vol. 3693, P. 38; Burrows, Peter

    Investors overreacted to the International Data report last week that revealed PC unit sales grew just 14.5 percent in the second quarter, about half the growth of a year ago. Their reaction sent Dell Computer and Hewlett-Packard shares reeling by 10 percent each to $46 and $110 respectively, and knocked down Apple Computer 6.5 percent to $50. However, many analysts still forecast a 19 percent growth for the second half and an 18 percent growth for the year. Many observers believe a lack of inventory rather than a scarcity of buyers had much to do with the weak sales. Matt Massengill, CEO of Western Digital, a maker of hard disk drives, says PC makers could have sold more units in March and April if they had obtained all the necessary supplies, adding that demand remains healthy. In fact, prices have not only stabilized, but have moved upward, which would explain Apple's 43 percent increase in net income, Compaq's $387 million in earnings, and IBM's narrowed losses in its PC division to $69 million. Although market experts are confident about the short-term outlook of the PC industry, the same cannot be said about the long haul with fewer customers to sell PCs to down the road. PC makers already are fast at work figuring out ways to broaden their products and services.

  • "Mixing B-to-B Dot-Coms With UCITA Will Make for a Volatile Combination"
    InfoWorld (07/31/00) Vol. 22, No. 31, P. 89; Foster, Ed

    The Uniform Computer Information Transactions Act (UCITA) will make licensing even more complicated for business-to-business (B2B) dot-coms such as ASPs and digital exchanges. Even without UCITA, B2B dot-coms have difficulty convincing customers to relinquish business data, since even small technical errors can lead to major financial losses. If skittish customers refuse to accept shrink-wrap/ click-wrap agreements, dot-coms could be held liable for damages that result from glitches. Dot-coms can protect themselves to some extent with a contract services, work-for-hire model, but even a services contract will not work the way dot-coms expect under UCITA. Although implied warranties traditionally do not apply to services contracts, under UCITA, such warranties apply to any services contract involving "computer information." Customers could then hold dot-coms responsible for implied warranties of merchantability that programs will be suitable for ordinary purposes. A B2B dot-com that chooses off-the-shelf products as part of an overall system for customers could be considered an integrator, and held responsible for an implied warranty that all parts of the system will work together. Furthermore, a B2B dot-com that is found to have violated a contract is responsible for unlimited consequential damages under UCITA's default rules.
    For information about ACM's UCITA activities, visit http://www.acm.org/usacm/copyright.

  • "Wholesalers Make Hay in Domain Name Deregulation"
    Interactive Week (07/31/00) Vol. 7, No. 30, P. 10; Smetannikov, Max

    Following ICANN's deregulation of the domain name registration business that was once monopolized by Network Solutions through an exclusive government contract, domain name prices have fallen from $70 for a two-year contract and $35 annually to as low as $8. These prices often include registration packages as an extra incentive for customers. These incentives can include Web site and email hosting, advertising partnerships, trademark protection services, or distinctive directory listings, among other things. NSI now has more than 130 ICANN-accredited companies to compete with, and the competition is on a global scale. "Network Solutions was getting so much money at one point, it was characteristic of a monopoly, and we believe we have been an instrument of bringing reasonableness into pricing," says BulkRegister.com CEO Tony Keyes. Due to NSI's control of the master registry, wholesalers continue to buy from the original registrar. However, wholesalers pay a mere $6 per name annually. This enables the wholesalers to make a profit by turning around and selling the domain names in bulk for $8 to $12. The registration business is dividing into corporate, retail, wholesale, and bulk sectors, says NSI spokeswoman Cheryl Regan. NSI partnered with Thomson & Thomson to help the company compete in the corporate sector, and made partnerships with America Online, Dell Computer, Microsoft, and Yahoo! to compete in the retail sector. However, in the wholesale market BulkRegister is the current leader with 9,000 resellers, followed by NSI with 5,000 resellers, and Tucows with 4,000 resellers. NSI remains the undisputed champion of domain name sales, with 12 million domain names sold up to this point.

  • "Copyright Ownership Often a Murky Affair"
    Washington Technology (08/01/00) Vol. 15, No. 9, P. 23; Hewitt, Devon

    According to federal copyright law, an author owns all intellectual property rights, including copyright, to a work, unless those rights are expressly assigned by contract to a third party. Copyright ownership includes the exclusive rights to reproduce a work, prepare derivative works, perform and/or display it, and distribute it. However, when it comes to software, ownership might not be clear-cut. Federal copyright law considers a work created by an employee within the scope of employment to be authored by the employer, in the absence of an agreement otherwise. But this does not automatically include independent contractors, subcontractors, or consultants who participated in the work. If one of these develops a work in whole or in part, the contractor is considered the author only if the work is considered to be "work for hire"--something that is a contribution to a collective work; an atlas; part of a motion picture or audiovisual work; a test or answer material for a test; a translation; an instructional text; a supplementary work; or a compilation. The words "work for hire" must be included in the subcontract, which should be executed by both parties before work is begun. And the document should include language assigning all intellectual property rights to the contractor, should the work not be considered work for hire. The contract should be exclusive and irrevocable. Federal law still assigns the right to claim authorship to the actual author, along with the right to prevent the copyright owner from distorting or mutilating the work; these rights, however, can be waived by contract. Copyright does not apply to skills, ideas, or knowledge, so contractors should think about including nondisclosure or noncompete provisions.
    For information regarding ACM's work in the area of intellectual property, visit http://www.acm.org/usacm/copyright.

  • "Catch-Up Across the Pond"
    Telephony (07/31/00) Vol. 239, No. 5, P. 42; LaBarba, Liane H.

    Europe is attempting to catch up with the United States in providing Internet service by creating more capacity to support voice and data. "There is a subtle shift moving through Europe with real, tangible commitments being made to facilitate the bandwidth demands," says Ciena COO Gary Smith. As Europe's capacity increases, dependence on U.S. networks decreases. "About 30 percent of the Internet traffic on our network starts and ends in Europe, compared to far, far less only two years ago," says GTS CEO H. Brian Thompson. GTS is working to increase capacity on E-bone, its European network, to keep up with rising demand. Building scalable, more intelligent networks will help Europe meet bandwidth demands without going broke, but capacity is not enough to maintain a solid infrastructure. Connectivity and content are equally important, says Thompson. The provider WorldCom plans to expand its international data services to multinational businesses. While Europe has a while to go before its traffic is on a par with the United States, it has started to become an Internet superpower in the last 18 months, says TeleGeography analyst Graham Finnie.

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