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Volume 2, Issue 106:  Friday, September 15, 2000

  • "House Subcommittee Passes Electronic Privacy Law"
    Newsbytes (09/15/00); McGuire, David

    Rep. Charles Canaday's (R-Fla.) Electronic Communications Privacy Act of 2000, a bill that makes it harder for law enforcement agencies to monitor citizens' email and phone records, has received the full approval of the House Judiciary Committee's Constitution Subcommittee. The bill forces law enforcement to prove that "a crime has been, is being, or will be committed, and information likely to be obtained is relevant to the investigation of that crime," when attempting to access citizens' email or phone records. The bill now goes to the full Judiciary Committee.
    For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy

  • "Powers of New Economy Should Learn From Capitalism's Past"
    SiliconValley.com (09/14/00); Gillmor, Dan

    Although big business is fueling the current economic boom, many Americans feel uncomfortable with the power big business wields over their daily lives, not to mention its influence with politicians. The tech industry needs to take care that it does not alienate its customers with arrogant, often contradictory policies. For example, too many tech companies demand legislative favors from Congress but recoil at the thought of Congress imposing any kind of regulation on their activities. Also, tech companies make no attempt to hide their efforts to gather personal information about their customers yet claim they can police their own business practices. Tech companies--whether they sell hardware or software or Internet service--often promise performance and quality-of-service they know they cannot deliver. Tech companies, and big business as a whole, are risking their relationships with American consumers. While this might not seem like a serious problem with the economy still rolling, once the inevitable recession hits tech companies could find themselves at the center of a great deal of public anger.

  • "Privacy Watchdog Targets 'Web Bugs'"
    E-Commerce Times (09/14/00); Saliba, Clare

    A new set of regulatory guidelines from the Privacy Foundation demands that Internet advertising companies and Web sites notify users to the placement of Web bugs. Web bugs, or clear GIFs, are images embedded within HTML-enhanced commercial emails or Web page software code that help transmit data to a remote computer when the page is viewed. These stealth tools are used to build online profiles and can also count the number of times a specific page has been accessed. "They are designed to monitor who is reading, yet most people have no idea they exist," said Stephen Keating, executive director of the Privacy Foundation. The foundation sent its proposal to 40 corporate and federal agencies for review on Sept. 8, and later presented it at the Global Privacy Summit in Washington, D.C., on Sept. 13. Under the guidelines, sites using Web bugs would have to employ icons to indicate their presence, as well as icons that identify the company that is harvesting data. Each icon would have a clickable link to a page that explains what data is being collected, how the data is to be used, what parties are receiving the data, and any additional information to be combined with the data. Visitors must also be allowed to opt out of Web bug data collection, according to the guidelines. Furthermore, the guidelines prohibit the use of Web bugs to gather data related to children, sex, medical issues, and financial or employment matters. Incidents involving Web bugs have drawn controversy and criticism in recent months. For instance, Toyrus.com was accused of employing Web bugs to compile personal profiles of its online shoppers for an outside marketing agency.
    For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy

  • "China to Lead Asian Internet Growth"
    Newsbytes (09/13/00); Creed, Adam

    China will inevitably dominate the new Internet-based economy in Asia, and later the world Internet economy, according to a recent survey by consultants Deloitte Touche Tohmatsu. Asian e-commerce revenues ranged between $3.33 billion and $4.43 billion in 1999, figures that will likely grow to between $138.58 billion and $166.29 billion by 2003, the survey says. Japan currently leads the market with 27 million Internet users, while China is in second place with 16.9 million; South Korea and Australia trail China with 15.3 million users and 7.3 million users, respectively, says Deloitte. China is expected to double its number of Internet users every six months, making China the largest Internet market in the world in 10 years, by the survey's reckoning. One hundred Internet industry experts were interviewed for the survey.

  • "A Bug in the Legal Code?"
    Salon.com (09/13/00); Cave, Damien

    The decision by Judge Lewis Kaplan about a month ago to ban linking to the code that decrypts DVDs is representative of the battle for freedom on the Internet, says David Touretzky, a Carnegie Mellon computer science professor who oversees a number of versions of DeCSS. Touretzky believes the war for control of PCs is about to occur. The motion-picture and music industries want to encrypt everything from disk drives, monitors, and the wires that run between them, he says, and then they will try to determine what people watch and under what circumstances. Touretzky says in the years to come there will be a single device for making telephone calls, listening to the radio, and watching television, and that the government will try to control which machines can be hooked up to the Internet. He says the days of the old telephone system, when people rented instead of owned telephones, could return. "We've seen some clues about what's coming: processor chips with embedded serial numbers [Intel has already done this], word processors that secretly store their software license number in every document they touch [Microsoft Word did this until they got caught], attacks on anonymous re-mailers, the FBI reading your email [Carnivore], and so on," says Kaplan. And all of this is being done under the guise of protecting the consumer. Touretzky adds that Kaplan's ruling highlights the government's efforts to stop the dissemination of certain kinds of information. And legislation such as the Methamphetamine Anti-Proliferation Act, which bans linking to drug-making information, is a prime example. With such laws, he says, Congress does not have to worry about burning books again. By censoring the Web in such a manner, Kaplan's decision is the beginning of the end of the First Amendment.

  • "Giving Chips a Lesson in Power Management"
    New York Times (09/14/00) P. E14; Hercz, Robert

    Today's microprocessors are powerful, but much of that power is wasted on programs that only tap into a small portion of a CPU's capacity. The more transistors are added and clock speed is increased, the more power CPUs consume. Dr. David Albonesi of the University of Rochester is developing a microprocessor that can conserve power by slowing or shutting down unneeded applications. Albonesi's complexity-adaptive processing (CAP) continuously assesses the microprocessor's configuration so that power conservation is maintained through millions of adjustments per second. Increasing a standard CPU's circuitry by a small percentage will enable CAP to control the microprocessor using software. Using computer simulation, Albonesi's Rochester team has learned that CAP can double a microprocessor's efficiency. IBM is collaborating with the team in a three-year study aimed at developing a prototype CAP microprocessor. Meanwhile, Transmeta announced its own line of power-saving CPUs, the Crusoe chips, in January. Sony, Hitachi, and IBM are expected to roll out notebook computers with Crusoe chips in the fall.

  • "Study: PCs Will Rule European E-Tail"
    TechWeb (09/13/00); Page, Barnaby

    European consumers will still use PCs to complete the overwhelming majority of online retail sales in Europe by 2005, although new devices such as Internet-enabled mobile phones will help promote European e-tail sites, according to Forrester Research B.V. In 2005, PCs will account for over 80 percent of European online retail transactions, and more than 50 percent of European homes will have PCs, Forrester says. Meanwhile, improved definition television (iDTV) will represent 16 percent of Europe's estimated $147 billion e-tail market in 2005. Companies can use iDTV to present offerings in a high-quality audiovisual environment and to sell entertainment products. By comparison, WAP phones will represent about 3 percent of Europe's e-tail market in 2005, while wireless PDAs will account for less than 0.1 percent of sales. Mobile phones are best suited for simple, low-cost transactions such as flowers or movie tickets, says Forrester's Carsten Schmidt. Still, the importance of mobile phones in European e-tail should not be overlooked, Schmidt says, noting that mobile phones can deliver personalized alerts that build loyalty, location-based services that drive consumers to purchase items, and opt-in ads.

  • "As High-Tech Labor Shortage Looms, U.S. Firms Look Abroad for Workers"
    Investor's Business Daily (09/14/00) P. A10; Benesh, Peter

    The United States is in danger of losing skilled high-tech workers to other countries, a new study from the Cato Institute says. The study recommends Congress raise the number of H-1B visas issued each year to foreign high-tech workers. That number is 115,000 for this year, all of which have been given out, and will fall to only 65,000 in 2002. Legislation to change this has stalled in Congress, which means many of what the Information Technology Association of America estimates to be 840,000 job openings in the high-tech field will remain unfilled. Nations with economies dependent on the high-tech industry are resorting to emigration to fill similar labor shortages. Germany is planning to bring in 20,000 high-tech workers from India, while Ireland may allow 200,000 skilled workers to emigrate over the next seven years. The Cato Institute suggests that the U.S. alter the H-1B regulations to allow foreign workers to stay in the country after their visas expire and to bring their children with them, as studies have shown that the children of highly skilled workers often contribute to the economy in ways similar to their parents. However, some observers are critical of the H-1B system, saying it is a form of indentured servitude, in the words of University of California, Davis professor Norman Matloff. Matloff argues that because H-1B workers can work only for the company that brought them into the country, they are not able to benefit from the booming tech economy in the same way as U.S. workers who can bounce from job to job. He also contends that high-tech firms like H-1B workers because they are usually young and accept lower pay than their American counterparts.

  • "Middleware Market Is Primed for Growth, Study Says"
    InfoWorld.com (09/13/00); Campbell, Christine M.

    The worldwide middleware and business software revenues are expected to hit close to $9.7 billion in 2004, predicts International Data (IDC). U.S. middleware vendors claimed 75 percent of worldwide revenue in 1999, so major industry players such as IBM, BEA Systems, and Tibco Software are poised to benefit from the burgeoning market, says IDC's Sally Cusack. Cusack credits e-business for the middleware explosion, and names businessware management systems the market's most promising area due to its importance to e-business functionality. Cusack says that messaging, publishing, and subscribing capabilities are the basis of e-business middleware, with management services, security, and other functions added for a complete e-business package.

  • "Washington Debates Need for Technology Policy Chief"
    CNet (09/12/00); Luening, Erich

    Earlier this week both Rep. Jim Turner (D-Texas) and Rep. Tom Davis (R-Va.) introduced proposals that would create a chief information officer for the federal government. The federal CIO would be responsible for overseeing the government's IT policy and security plans, including the protection of citizens' personal data in government databases. Jim Flyzik, CEO at the Treasury Department, approves of a "stronger authority" who would oversee technology policies within the government. "The oversight could continue to be in the form of the Office of Management and Budget (OMB) deputy director for management, or could be in another option like a federal CIO," Flyzik said. Sally Katzen, deputy director for management at the OMB, is skeptical of both pieces of legislation because they would create federal CIO offices outside the bounds of the OMB. "We believe that separating oversight of IT management from OMB's management and budgeting authority will not achieve integrated and coordinated results, but rather will have negative effects," Katzen said.
    For information regarding ACM's work on matters of public policy, visit http://www.acm.org/usacm

  • "Lifestyle Drives Today's Workers"
    Christian Science Monitor (09/11/00) P. 1; Van Slambrouck, Paul

    Employees of the New Economy put a high priority on lifestyle, and a growing number of them are deciding where to live based on considerations such as nightlife, culture, and recreational facilities. This marks a shift in thinking from the days when Americans decided where they would live based upon where employers were located, and businesses are taking note. Now, companies are the ones scrambling to locate to ideal locations so that they might attract the best employees. Meanwhile, cities are no longer dangling carrots such as tax abatements and free sewer hookups. Instead, cities are striving to improve the quality of life to entice both businesses and employees. Houston, for example, is trying to keep competitive by improving its air quality, expanding green space, and creating more recreational areas. The country's unprecedented prosperity is one reason for employees' sense of empowerment, as is the changing nature of the New Economy. As far as work is concerned, loyalty and commitment are passe; today's workers value independence and the entrepreneurial spirit. A 1998 KPMG survey of high-tech workers showed that salary still plays a key role in luring employees, but quality of life surpasses other factors such as stock options and benefits. For these reasons, the hot markets for New Economy workers have been Seattle, Austin, San Francisco, Boston, and Washington. Silicon Valley--which once topped that list--is now out of favor because of outrageous home prices, long commutes, and sprawl. More recently, Austin is experiencing some of the same problems. As lifestyle continues to drive relocation factors for tech workers, some analysts are placing their bets on smaller, up-and-coming locations such as Burlington, Vt.; and Cedar City, Utah.

  • "Export Tax Breaks Passed by House"
    SiliconValley.com (09/13/00); Bjorhus, Jennifer

    The House of Representatives on Wednesday passed a bill that allows corporations such as Microsoft and Intel to keep $4 billion annually in export tax breaks, in a move that could lead the European Union to place sanctions on trade with the United States. The World Trade Organization ruled last October that the tax breaks are illegal export subsidies that provide the United States with unfair trade advantages, and gave U.S. legislators until this October to remedy the problem. The high-tech industry argues that the tax breaks allow them to compete more fairly with European companies, which receive their own export tax advantages. Without the new bill, U.S. high-tech companies would be "at a major competitive disadvantage relative to their European competitors," says the American Electronics Association. The bill establishes new corporate tax breaks but does not directly exempt exports from current tax rules, instead creating a category for foreign trade income to which U.S. taxes do not apply. Although the high-tech industry says the bill addresses the WTO's problems with the foreign sales corporation program, European trade officials are likely to be dissatisfied with the bill. The Senate Finance Committee will debate the bill next, and if lawmakers do not meet the Oct. 1 deadline, the EU could implement trade sanctions. Meanwhile, the European Commission has indicated that it will challenge the new bill if it does pass.

  • "Blair Package Backs Internet Businesses"
    Financial Times (09/12/00) P. 8; Grande, Carlos

    On September 11, British Prime Minister Tony Blair announced a package that will encourage the use of the Internet among consumers and businesses. Among the measures Blair supports is the opening of the first of 600 planned online centers that will extend Web access to Britain's socially disadvantaged. Another measure in the package is the launch of an online connection to a catchall site for the British government at www.ukonline.uk. This autumn will see the launching of the online training resource Learndirect, while 10 million pounds have been put aside for this year and 15 million pounds for next year in order to develop a business Web site. The package mandates that all government services be available online by 2005. One billion pounds have been earmarked out of the current spending review by Cabinet ministers for electronic delivery of public services. A report from the Performance and Innovation Unit (PIU) of the Cabinet Office recommends offering bonuses to permanent government officials and boosting spending on Internet initiatives. But the same report also warns that a shake-out will be necessary for the government to reach this goal. The government should implement dot-com ideas such as bonuses for people who meet their electronic delivery dates and a new incubator based in the Office of the e-Envoy, says the PIU report. The Office of the e-Envoy and the Treasury should jointly control the release of funds for e-government projects, the report suggests. The UK's high taxation of unapproved share option schemes discourages technology companies from UK investment, says the Computer Software and Services Association.

  • "Beyond Digital Signatures"
    Internet.com (09/12/00); Scasny, Randy

    Although the digital signature legislation in many states is up to date, the legislation pertaining to online transactions has fallen into a quagmire. For example, five digital signature bills have become law through the Illinois Legislature and six are in the works, yet only one bill deals with computer transactions, and that bill has been in committee since February. To remedy this situation, ProofSpace will make available a public keys cryptology-based product this fall called ProofMark that tracks the stages of Internet transactions. Aiming at financial services, health care, and online marketplaces, ProofSpace intends to obtain a distribution license for the software. ProofMark can be distinguished from other identity-based methods because as a product it can handle large quantities of transactions, according to ProofSpace CEO Paul Doyle. "Each ProofMark is independently verifiable so there is no need for organizations to rely on a centralized repository and trusted third party to witness, archive, and manage the transaction record," says Doyle.
    For information regarding ACM's work in the area of intellectual property visit http://www.acm.org/usacm/copyright

  • "Hyper Growing Pains"
    Computerworld (09/11/00) Vol. 34, No. 37, P. 52; Nash, Kim S.

    CIOs are changing their ways to adapt to an adrenaline-charged economy moving at Internet speed. Attention to detail is more important than ever, but CIOs must have immediate problem-solving skills and flexible, yet longer-term strategy and infrastructure building strengths to make their e-business ventures work. IT directors are banishing five-year plans, and some are even tinkering with budgets on a monthly basis to keep up with exploding sales figures. Some companies, such as pet product e-tailer Pets.com, are piggybacking onto larger, more established e-tailers such as Amazon.com to handle hypergrowth. Outsourcing is also emerging as a solution for Web firms hoping to get work done quickly without weighing down internal resources. Pets.com turned to outsourcing to weather the slings and arrows of outrageous fortune, as sales from the latest quarter reached $8.8 million, compared to $39,000 from the same quarter in 1999. Pets.com's strategy has been to outsource functions like payment processing until it becomes more cost-effective and otherwise prudent to handle in-house. The company's IT staff began monitoring site performance internally after other mission-critical projects were completed in order to gain the deeper analysis, reliability, and quality characteristic of in-house work.

  • "Privacy Spurs Innovation"
    InfoWorld (09/11/00) Vol. 22, No. 37, P. 1; Jones, Jennifer

    New companies and wireless vendors are taking advantage of controversial Internet security issues by offering users privacy-enhancement services. On September 11, New York-based iPrivacy will provide customers with a privacy shield for online transactions. IPrivacy provides credit card companies and third parties an infrastructure to protect users from disclosing personal data and clickstream information, which is often used to build consumer profiles. Customers would receive software from credit card companies that allows Web access on a site server without revealing personal data. By acting as a proxy through client-side software, the credit card company would fill out the necessary documents for ordering, buying, and delivering products. A company could also employ the iPrivacy service to identify sexual harassment and other ethics violations by using a third party such as a law firm to host the software. IPrivacy President Ruvan Cohen does not see the service as a solution to an online ethics problem, but rather as a big marketing opportunity. Tacit Information Systems is offering technology that can scan employees' outbound email to build individual personnel profiles, but the profiles remain encrypted until the employee approves their publication. Qode is offering users its own security measure for online shopping: a bar-code scanner plugged into a keyboard jack that allows customers to look for desired items on the Web. SkyGo, a wireless marketing company, will start testing a new mobile opt-in system in late September. The company will have strict policies regarding the use of a customer's data in target advertising, says SkyGo CEO Daren Tsui. Later this month Employment Law Learning Technologies will offer online tutorials that provide corporations with the basic principles of online privacy among other things.

  • "Surprise? The Internet Taxman Cometh"
    Multichannel News (09/11/00) Vol. 21, No. 37, P. 74; Arlen, Gary

    The tax-free Internet idea is losing ground. The United States Internet Council (USIC) has asked legislators to create standing committees to address Internet-related legislation, and the California Senate and Assembly have passed laws that will require retailers to charge sales taxes on online purchases made by California residents. Gov. Gray Davis has until Sept. 30 to sign or veto the bill. The current U.S. tax moratorium expires next October, and Sen. Ron Wyden (D-Ore.) and Rep. Chris Cox (R-Calif.), who created the original moratorium, are trying to make it permanent. Broadband providers would prefer to do without Internet taxes, but they may not get their wish. Various public-officials groups, including the National Governors' Association, see the Internet as a lucrative new source of tax revenue. The USIC argues that many legislators are not aware of the speed of technological innovation and its problems and solutions; it looks to wireless Internet distribution as the new state of the industry, and wants an end to the local-access and transport-area boundaries. Such alterations could affect broadband distribution and would allow tax reviews at all levels of the telecommunications process. Whatever Gov. Davis decides will probably set a precedent for other states. States are losing tax revenues to e-commerce, and those losses are likely to increase; economists note that the strong economy is holding back some of the losses as well. Most experts believe that the taxation idea will be settled in the courts. Other taxes besides sales tax can be levied as well, such as access taxes.

  • "IT Looks to Its Own Expertise"
    InformationWeek (09/11/00) No. 803, P. 277; McDougall, Paul

    Major IT vendors are using their own technology to upgrade their sales, marketing, and customer service processes as well as to showcase their technical expertise. IBM used its own offerings to design IBM.com's cutting edge e-commerce features. "We have to be able to prove our own capabilities through our own online presence," says IBM's Rick Thompson. IBM's efforts appear to be paying off: its direct sales revenues from this year's second quarter are double the figures from all of last year. The personal systems group is now setting up a Web site to allow customers to design their own solutions using IBM products, in an initiative to further boost online sales. Customers who need assistance before a sale can be closed can click on the Call Me Now button on IBM.com for almost instantaneous live telephone support. Customers can now purchase a product on IBM.com with as few as three mouse clicks. Sun is focusing on developing its own business-to-business e-commerce capacity, including supply chain streamlining. Cost-efficiency moves have also inspired IT industry consolidation, including Computer Associates' recent acquisition of Sterling Software. Thompson says that IBM is able to address technical issues with hardware and other systems internally, which is one advantage in the fiercely competitive IT space. "We're extremely aggressive...and we'll keep raising the bar," insists Thompson.

  • "The Last Computer"
    New Scientist (09/02/00) Vol. 167, No. 2254, P. 27; Chown, Marcus

    MIT physicist Seth Lloyd has envisioned the ultimate laptop as a 1-liter-sized ball of light with a temperature of around a billion degrees and no mass. The laptop would be a quantum computer that utilizes an unimaginable number of superimposed states to carry out problem-solving operations on a far faster scale than traditional computers. Data would be stored in the positions and trajectories of high-energy gamma-ray photons, with collisions between photons, electrons, and positrons processing the information. Opening a hole on the side of the laptop's container would release photons at the speed of light, and the user could record the sequence of clicks on a gamma ray detector to facilitate readout, Lloyd says. Reducing the laptop's size would increase its input-output rate, Lloyd says. This would cause the temperature to rise and other, more exotic particles to be created. Futuristic computers could also take the form of high-power relativistic devices similar to particle accelerators, according to the University of Hawaii's Walter Simmons. Going beyond his original ultimate computer concept, Lloyd thinks that string theory may make it possible to use black holes as computers.

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