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Volume 2, Issue 137:  Monday, December 4, 2000

  • "Tech Groups Still Wary of International Cyber-Crime Treaty"
    Newsbytes (12/01/00); Krebs, Brian

    A group of high-tech leaders will meet with Justice Department officials today to discuss their concerns about the latest version of the Council of Europe's international cybercrime treaty. The tech community is worried that even with recent changes, the treaty could limit legal activities on the Internet and place an unreasonable burden on Internet service providers by requiring them to keep subscriber data for a certain length of time. The World Information Technology and Services Alliance today released a statement to Council of Europe General Secretary Walter Schwimmer saying that the treaty's recent revisions are "largely cosmetic" and fail to address the tech industry's concerns. The treaty, designed to improve international law enforcement cooperation for cybercrime, calls for harsher cybercrime penalties and standardized laws. However, privacy advocates are worried that the treaty will promote unreasonable monitoring of private communications. Also controversial is the treaty's provision on "illegal devices," which restricts the distribution of software and hardware created to enable cybercrime. This provision could restrict the creation of security tools, which are often based on the same technology as the tools employed by hackers, critics say. The most recent version of the treaty is likely to be the last draft, as the council must approve a final version sometime in the first half of next year.

  • "Holiday Traffic at Online-Only Stores Lags Chains' Sites"
    New York Times (12/04/00) P. C8; Hansell, Saul

    Sales returns from the early stages of the holiday shopping season indicate that pure-play online retailers are not doing as well as traditional retailers' online channels. Although Amazon.com remains the No. 1 destination for online shopping, according to Nielsen//NetRatings, it has not seen the same explosive growth as Wal-Mart.com, Target.com, or Kmart's Bluelight.com. Other pure-play retailers, including eToys and Buy.com, have seen their traffic drop. EToys, for example, is already facing a decline of 15 percent. Although Amazon traffic has increased 41 percent, analysts say this may be because shoppers are drawn to its new joint venture with traditional toy retailer Toys "R" Us. Overall, sites belonging to traditional retailers have seen traffic increase by 28 percent, the online shopping service BizRate reports. Pure-play retailers have been hurt by the public's perception of the dot-com industry as turbulent and unreliable, BizRate CEO Chuck Davis, says. "When people read these horror stories in the press, they feel they are better served by brands they know," he states. However, the increase in traffic to traditional retailers' sites does not necessarily mean greater sales, argue officials at eToys, who point out that last year Toys "R" Us had more visitors to its site, but eToys sold more merchandise. Analysts say overall online sales this holiday season may not meet their expectations. Sales are up 40 percent so far, Jupiter Research reports, but many analysts last year said growth could near 70 percent. However, analysts have detected an expansion of the market for online sales. According to brokerage firm Robertson Stevens, more women and more middle-income individuals are buying online. At Wal-mart.com, for example, 38 percent of shoppers had household incomes of less than $40,000 and 61 percent were women, Media Metrix found. Those groups account for 28 percent and 50 percent of Internet users respectively.
    (Access to this site is free; however, first-time visitors must register.)

  • "Industry Heavyweights Join to Address Key E-Biz Problems"
    Network World Fusion (12/04/00); Jacobs, April

    A group of major IT vendors formed the Business Internet Consortium last week in order to address issues confusing businesses seeking to adopt e-commerce solutions. The members plan to form workgroups to explore a number of issues, such as how XML can be fully utilized to help change traditional business into e-business, and how e-business infrastructure and be implemented in existing business systems. The consortium will be looking to its customer base for input into the process on addressing real issues, inviting them to join the consortium.

  • "Legislating Cookies"
    TheStandard.com (11/30/00); Roemer, John

    The Internet privacy debate will play out in the courts now that plaintiffs in Denver and Redmond, Wash., filed federal class action lawsuits last week against ExciteAtHome subsidiary MatchLogic and online advertiser Avenue A, respectively. The two suits essentially charge that the companies violated the Electronic Communications Privacy Act (ECPA) and the Computer Fraud and Abuse Act by placing cookies on the hard drives of consumers' computers. Attorneys for class-action law firm Milberg Weiss Bershad Hynes & Lerach, who are involved in both suits, say the plaintiffs' cases will argue that existing wiretap laws under the ECPA apply to the Web and that the companies are using a method that is similar to what wiretappers would do to intercept a telephone conversation. However, wiretap law expert and Denver attorney Philip Gordon says the ECPA is designed to protect phone conversations, not necessarily transactional data, which would be the equivalent of the number dialed and the length of the call. Gordon is unsure if the suits would be granted class action status, and he adds that the outcome of the cases could hinge on whether plaintiffs read the companies' privacy policies. The ultimate ruling could force Web sites to give up cookies altogether or give them free reign to track consumers online and sell their information to third parties--until Congress addresses the issue, Gordon says.

    For information regarding ACM's activities on behalf of privacy matters, visit http://www.acm.org/usacm/privacy.

  • "What's a Penny Worth on the Web?"
    Boston Sunday Globe (12/03/00) P. F1; Denison, D.C.

    Although previous attempts at charging micropayments--payments of less than $5, and often only a few cents--for access to Internet content have had little success, some e-businesses are again considering them as a way to create revenue without alienating consumers. Early micropayment systems failed because no one standard system existed, the software itself was clumsy, and consumers thick in the early Internet rush of free goods and services had no interest in paying for anything. But today few dot-coms believe they can generate revenue from advertising alone. Meanwhile, few consumers are willing to go through the trouble of purchasing small items--for example, a single song or news article--with their credit cards, while many dot-coms do not allow such small credit-card payments because of the high transaction costs. Micropayment systems avoid this problem by aggregating these payments into one lump sum that consumers pay on a regular basis. Micropayment advocates point to the practices of long-distance companies as an example of how the system can work. One firm already practicing the system is QPass, which consumers can use to pay for archived articles on the New York Times site, access to the Wall Street Journal's site, and other premium content. IBM and MIT's World Wide Web Consortium are also developing new micropayment technology. Although some analysts believe micropayment may be the only way for e-commerce to succeed in the mainstream market, dot-coms that have attracted an audience with free content say they would lose customers if they charged for access, even if the fee were merely pennies.
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  • "Microsoft, VeriSign Lead Net Security Push"
    E-Commerce Times (11/30/00); Lyman, Jay

    Microsoft, VeriSign, and WebMethods have joined forces to develop a new technology to enhance online security called XKMS, and submitted this new technology as a potential new standard. "Our new XML offerings, coupled with the XKMS specification released today with our partners Microsoft and WebMethods, further arm developers across a broad range of industries with the tools they need to quickly and easily develop and deploy trusted e-commerce applications," says Anil Pereira, senior vice president and group general manager of the Enterprise Division at VeriSign. RSA Security, a leading online security company, supports the proposed new standard made available through the work of VeriSign, Microsoft, and WebMethods, says Scott Schnell, RSA Security's senior vice president of marketing and corporate development.

  • "Americans Cautiously Willing to Share Info Online--Study"
    Newsbytes (11/30/00); McGuire, David

    Out of more than 1,000 polled Americans, the majority stated a willingness to share personal information over the Internet as long as adequate safety measures were in place, according to a study by Columbia University law Professor Alan Westin. Eighty-eight percent of the surveyed Americans expressed concern over online safety, while 84 percent thought that federal agencies should be prohibited from posting even public records of personal information over the Internet. However, roughly 70 percent of the respondents had no problem with the public posting of personal data provided that agencies asked the individuals' permission beforehand, and over 60 percent would accept public postings if the agencies required that users show a "legitimate purpose" in accessing the information. More than 90 percent of those polled agreed that companies could disseminate personal data related to fraud, criminal convictions, and other dishonest behavior with law enforcement officials. Over 80 percent would accept employers sharing such information as well. The results of the study indicate that Congress must create and enforce a national baseline standard for the management of personal data online, Westin concluded. Congress could try to pass such a bill next year, according to congressional observers.

  • "Govt Drafts Plan to Combat Cyber-Terrorism"
    Daily Yomiuri On-Line (11/30/00)

    The Japanese government is taking steps to keep government administrative offices, banks, and other key institutions safe from cyber-terrorists. The plan calls for cooperation with other countries and, if necessary, the enactment of laws to combat cyber-terrorism. Terms of the plan also call for the private sector to work with the government to help protect seven key service areas: telecommunications; government and administrative services; financial services; air transportation; railway transportation; electricity supply; and gas supply. A government panel is expected to give its stamp of approval to the plan sometime this month.

  • "Enterprise; Outsourcing Spending Set to Soar"
    VNUNet (11/30/00); Ranger, Steve

    Giga Information predicts 18 percent growth in outsourcing spending next year, with the biggest gains to be had from traditional players such as IBM and EDS. Currently worth $85 billion worldwide, the outsourcing market is moving away from smaller boutique outsourcers weakened by the failure of many of their dot-com clients. Traditional suppliers are expected to double their eservices revenue next year, which will comprise up to 30 percent of their total earnings. But Giga still believes in a selection of specialized companies rather than one big contract when choosing to outsource.

  • "E-Gov Revolution Transforms Federal Operations"
    GovExec.com (11/29/00); Trattner, John

    E-government has been front and center in the minds of federal workers since the Clinton administration ushered the Paperwork Reduction Act of 1998 and corresponding executive orders into law. In broadest terms, these measures will bring government forms, services, and purchasing online as soon as possible. In doing so, the government will make itself more accessible to citizens and reduce the taxpayer burden of operating the government. Among the mandates set down by these orders, agencies must provide electronic communication between themselves and citizens. They must also provide a clear privacy policy and must make the forms most commonly used by the public available online by the end of this year. Many agencies have already responded to these mandates, and the results show how the Internet is transforming government. The Web site of the National Oceanic and Atmospheric Administration features thousands of pages of content on a vast array of topics. The Department of Agriculture garnered an audience of 400,000 to its Web site when it invited public comment on new standards for organic foods. Many agencies have begun making purchases and requesting bids over the Internet as well. However, many agencies admit they are only now beginning the laborious process of placing all of their functions online, a process made even more complicated because of the obsolete nature of much of the government's IT architecture. Indeed, the Council for Excellence in Government and the National Partnership for Reinventing Government realized last year that to bring federal agencies into the twenty-first century would require the help of the business and scientific communities. The councils, along with the National Science Foundation, formed several panels to research ways in which the government can co-ordinate with these groups to maximize the effectiveness of the electronic-government age. Government officials believe that the Internet will, in the end, not only make government more efficient and more responsive, but also make citizens more aware of the government's activities, revitalizing their notion of what democracy is.

  • "Businesses, Individuals Push EU Web Use Higher"
    Wall Street Journal (11/29/00) P. B9; Mitchener, Brandon

    A report prepared by the European Commission for the eEurope Action Plan, which aims to encourage Internet use in the European Union, states that Internet use by small and midsize businesses has risen to 70 percent, with 40 percent having their own Web sites. Residential Internet use rose to 28.4 percent in October, from 18 percent in March and 12 percent a year earlier; however, those figures still lag behind the United States, where more than 40 percent of homes are online. Europe's ascending Internet use rate can be attributed to falling prices for dialup connection charges. European businesses are also much more willing--indeed, eager--to accept governmental regulation of the Internet than their American counterparts, according to a study by Andersen Consulting.

  • "Email Snooping Row Kicks Off Again"
    Register Online (11/28/00); McCarthy, Kieren

    U.K. Data Protection Commissioner Elizabeth France has proposed a code of practice for monitoring employee email and phone conversations that is at odds with the government's Regulation of Investigatory Powers (RIP) Act. Under the RIP Act, staff email and phone conversations are routinely available to employers. The RIP Act violates the recently introduced Human Rights Act and infringes upon the individual's freedom, according to civil rights groups and trade unions that support France. France's code considers personal and private emails to be out-of-bounds and stipulates that employees be notified when monitoring activities are taking place. These restrictions can only be bypassed if the messages being monitored are connected to a crime. The Department of Trade and Industry has not yet produced a code of practice for RIP, although one is expected in the middle of 2001. Meanwhile, a lack of communication between government departments is only serving to complicate the situation, as are several versions of the RIP Act that are floating around.
    For information regarding ACM's activities related to privacy and email monitoring, visit http://www.acm.org/usacm/privacy.

  • "The Great Foreign IT Worker Debate"
    InformationWeek (11/27/00) No. 814, P. 153; Ruber, Peter

    The H-1B visa program is generating controversy as advocates maintain that the U.S. tech industry needs foreign workers to ease the existing labor shortage, while opponents argue that companies abuse the program to obtain cheap labor. President Clinton on Oct. 17 approved a law that lifted the H-1B visa cap to 200,000 a year for the next three years, but at the same time asked U.S. firms to "redouble their efforts to find long-term solutions to the rapidly growing demand for workers with technical skills." Tech companies should especially focus on hiring groups that are underrepresented in the industry such as women, minorities, people with disabilities, and older workers, Clinton said. Many critics of the H-1B program agree that the U.S. should provide technical training for its own citizens rather than take skilled workers from other countries that also need IT talent. In addition, some observers say H-1B visa holders are essentially indentured servants because employers control the visas, making it nearly impossible for the visa holder to switch jobs. The program's rules also stifle the entrepreneurial capabilities of foreign workers who want to start their own companies, critics say. Although companies are required to pay visa holders the going salary for their jobs, some firms, especially IT employment contractors, find ways around this requirement. The H-1B visa program can also create friction in the workplace, as American workers sometimes resent visa holders, who tend to work hard and put in long hours, some observers say. Even as debate continues over the H-1B program, companies are looking for other solutions to the labor shortage such as offshore programming or overseas subsidiaries in places such as India where labor is inexpensive.

  • "Agent of E-Change"
    InfoWorld (11/27/00) Vol. 22, No. 48, P. 47; Raths, David

    The Internet and e-commerce are forcing information technology professionals to shift their priorities, learn new skills, and think on a broader scale. "It's a foundational shift," says Getty Images CTO Bud Albers. "My people want to know the endgame. In the old days, it was just sit down, shut up, and build this. Now we're working more closely with the business side, and the employees are more concerned about the bottom line." While IT professionals were once concerned with supporting operations, they are now often building systems that generate revenue. This new role is not only forcing IT staffs to work much faster, but also to become involved in business planning from the start, advising business managers on what is technically possible. "I now spend a third of my time with the head of strategy and business development and the head of sales and marketing, because now all roads go through IT," Albers explains. Getty Images is in the process of moving its catalog operations online. This new emphasis on blending IT and business have made project management skills much more important to IT. Accelerated development cycles, legacy and Web-based IT staff integration issues, and the need to coordinate everything with senior business managers mean that IT managers must develop significant project management skills in order to survive in today's environment.

  • "Firms Work to Keep Women"
    InternetWeek (11/27/00) No. 839, P. 90; Boyd, Jade

    Companies are trying to retain female IT workers by changing their work culture and offering benefits such as flex time and mentoring programs. IT careers tend to highlight the differences between men and women, because technology emphasizes quantitative and linear thinking, which is often considered a male strength, says Judy Rosener, professor in the graduate school of management at the University of California, Irvine. Meanwhile, IT jobs usually undervalue traits that are usually considered female strengths, such as interpersonal skills and intuition, says Rosener. However, solving IT problems requires both quantitative thinking skills and interpersonal skills, Rosener says, noting that companies should change their work culture to reflect this if they want to retain female employees. After noticing that women were leaving the company at a much higher rate than men, Arthur Andersen two years ago started a program designed to keep female workers. Arthur Andersen found that female workers wanted flexible work schedules, mentoring programs, and evidence of women reaching executive level positions. The company implemented these changes and is now having more success hiring and retaining women. Meanwhile, a similar program at IBM helped the company increase its number of women executives to 508 in 1999, a 27 percent rise from 1998. A growing number of Fortune 500 firms are trying to retain women by offering mentoring programs, flex time, on-site day care and elder care, and telecommuting, says Cathy DeMartino of executive search firm Lucas Group.
    To learn more about ACM's Committee on Women in Computing, visit http://www.acm.org/women.

  • "Bucking Privacy"
    Interactive Week (11/27/00) Vol. 7, No. 48, P. 32; Rodger, Will

    The so-called "safe harbor" rules that U.S. officials hammered out with European Union regulators have not caught on among U.S. businesses. Through mid-November only one company has joined the program. Although it appears U.S. companies are holding out on the Commerce Department's Safe Harbor list, the situation is not likely to get any better for the industry as far as the privacy issue is concerned. European countries are no longer the only nations that want strict rules in place for protecting the personal information of private citizens. Argentina, Chile, and South Africa have all passed laws that provide greater protections for consumers, and Brazil could be next to bring its regulations in line with the European Commission. Meanwhile, Congress is expected to introduce a number of bills during the next session, even though several have already been filed. Furthermore, several large high-tech companies now say self-regulation may not be best for companies that use the personal information of consumers. America Online's Steve Case, Intel's Andy Grove, and Hewlett-Packard's Carly Fiorina have questioned the general position of U.S. businesses. Fordham University law professor Joel Reidenberg says stricter rules on consumer information would "level the playing field" worldwide.

  • "Whatcha Gonna Do...When the Bad Boy Is You?"
    Information Security (11/00) Vol. 3, No. 11, P. 16; Blank, Dennis

    The Business Software Alliance (BSA) warns that global software piracy is a $12 billion a year business, and that one third of the counterfeiting takes place in the United States. The BSA contends that 109,000 jobs were lost because of piracy in the last five years, and $991 million in tax revenues never made it into state and federal government coffers during the same period. Piracy experts say counterfeiters are increasingly operating out of Malaysia, Indonesia, Thailand, Cambodia, and Mexico, and that the perpetrators include everyone from members of organized crime groups to people philosophically opposed to the sale of software for profit. Experts warn that companies of all sizes can be held legally liable if it is discovered that they are using counterfeit software, regardless of whether they were cognizant of the fact. Employees are advised to sign a corporate policy statement that spells out appropriate use of software, particularly those that use it at home. Quarterly audits as well as routine hardware and software inventories should also be conducted, including random audits.

  • "Making It Personal"
    eWeek (11/27/00) Vol. 17, No. 48, P. 1; Callaghan, Dennis

    Personalization software has become a popular addition to retail Web sites, with vendors vying to sell collaborative filtering and artificial intelligence applications. Lands' End, a catalog apparel retailer, launched a relatively simple personalization application on its Web site last month, called My Personal Shopper. The program guides customers to an outfit they might like by comparing two styles side-by-side, or by asking their preference in fabric or colors. Meanwhile, SmarterKids.com is using an interactive forms system to help parents shop for their children. Parents of the 170,000 children profiled at the site have spent 60 percent more than parents who do not use the guide. Many companies are also using customer dialogue to guide their recommendations; a common approach is to ask customers to fill out questionnaires on their interests. Letting the customer control their experience at the site is a more effective use of personalization, says Laurie Windham, CEO of e-business consultancy Cognitiative. "Effective use of personalization is about building a better relationship with the customer, not trying to fool the customer into doing something they don't want to do." Online superstore Buy.com has seen a large conversion rate increase since implementing collaborative filtering personalization software from E.piphany. Vice president of customer support Travis Fagan says that customer dialogue is important to the company as well, depending on the product sold. For items like notebooks and PCs, a questionnaire is better to personalize an offering, but for entertainment categories, suggestive selling applications and engines prove more useful.

  • "Digital Divide So Close and Yet So Far"
    Time (12/04/00) Vol. 156, No. 23, P. 118; Taylor, Chris

    "Philanthropic entrepreneurialism" is starting to replace feel-good rhetoric about closing the digital divide. Robert Knowling, who was one of the few African-American CEOs in Silicon Valley before his resignation from broadband Internet provider Covad last month, was known for injecting a dose of painful honesty during digital-divide conferences. He says people in the industry appear to be looking at the issue more realistically these days, compared to five years ago. While lawmakers churn out abstract bills that involve FCC regulation and tax breaks for telcos, some high-tech companies are moving forward by offering dirt-cheap computers and peripherals to employees and by training low-income earners to install and maintain their products, which will enable them to become skilled workers in the new economy. Although programs created out of the idea of philanthropic entrepreneurialism allow the high-tech industry to create a skilled workforce, those who participate in such programs also benefit from the opportunity to make money. Researchers have discovered that a large number of people without Internet access are simply not interested in the technology. UCLA researcher Jeffrey Cole believes such attitudes will change in a generation or two.

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