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Volume 3, Issue 153:  Wednesday, January 17, 2001

  • "Tech Alliance to Share Data About Hackers"
    Wall Street Journal (01/16/01) P. A3; Bridis, Ted

    A new alliance of 19 high-tech firms, including Microsoft, AT&T, IBM, and VeriSign, will work together to combat hackers and other threats to IT security. The Information Technology Information Sharing and Analysis Center, or IT-ISAC, will serve as a clearinghouse for information about new viruses or new methods of attack. Members, who pay $5,000 per year to be a part of IT-ISAC, will use email, fax, and telephone to warn other members. "We've known that each of us have a little of the picture," says Computer Sciences' Guy Copeland, a member of IT-ISAC's board of directors, who adds, "By sharing the information, we can be that much smarter." Although government officials are lauding the effort as a way to fight cyber-terrorism, IT-ISAC officials say they are undecided whether the alliance will share what it learns with the government. The potential for a conflict of interest between the tech firms and the government, as well as among the rival tech firms that make up the alliance, poses a significant challenge to IT-ISAC's goals, industry observers say.

  • "Some Bosses Help Staff Surf Web"
    Investor's Business Daily (01/17/01) P. A6; Howell, Donna

    Employees using the Internet for personal reasons cost U.S. firms $54 billion in lost productivity, according to software firm Websense. Personal Web use is widespread, Greenfield Online reports. Its recent survey found that some two-thirds of workers go online for personal business while at work. Although a firm concerned about its employee's use of the Internet can purchase software to monitor that use, some firms are promoting employees' Web use rather than trying to curtail it. Whirlpool and Eddie Bauer are among the firms that have set up Web portals designed to meet employees' needs. Through these portals, employees can access the sites necessary to conduct personal business such as planning a wedding or applying for a mortgage loan. Firms that have implemented portals for their employees say encouraging personal time on the Internet may actually help productivity. The firms argue that much of the personal business employees conduct can be taken care of only during normal business hours. If employees do not use the Internet to conduct that business, they will likely do so over the telephone, which can be an even more time-consuming process. The work portals also often feature information on company-specific information such as benefits and pension information.

  • "It's a Different Job Market Now, But Some Tech Sectors Are Still Hot"
    Washington Post (01/14/01) P. L1; Johnson, Carrie

    Although much media attention has focused on layoffs and closings in the dot-com sector, a recent survey of recruiters by the Washington Post reveals that job prospects in the high-tech industry are still quite good. According to the survey, demand is high for IT-security professionals, both among traditional businesses and government agencies that are attempting to improve their systems' security and among the companies that aim to provide these services. Candidates for these positions should be willing to enter a high-pressure, deadline-driven environment, recruiters say, and should also be prepared to endure an extensive background check. In the general tech field, recruiters have found a strong demand for computer programmers, especially those who know C++, Java, and Visual Basic. Recruiters report that tech jobs are available in areas such as optical-networking, biotech, and, among traditional industries, insurance and financial services. Insurance firms are moving toward paperless transactions and require not only general tech workers but also those with experience in e-commerce sales and marketing.

  • "Silicon Valley Job Growth Begins to Slow"
    New York Times (01/15/01) P. C1; Markoff, John

    Silicon Valley's job market has slowed somewhat, while housing shortages and wage disparities accentuate the region's success-related problems, according to a new report from nonprofit group Joint Venture: Silicon Valley Network. "The boom has brought an enormous challenge in terms of housing and congestion and the general quality of life. It threatens the quality of life here and, ultimately, the economy," says California economist Steven Levy. Last year saw the addition of 39,000 new jobs, a growth rate of 3 percent--down from 3.8 percent and 3.9 percent the preceding years. The region's $62,600 average income--73 percent above the national average--has lifted housing prices far out of the reach of medium-income families. Additionally, a shortage of approved housing units last year only worsened the problem. Surprisingly, Silicon Valley's economic model was not as hard-hit by last year's dot-com disaster as some might think. Job growth continued in the semiconductor and biotech industries, emphasizing the diversity of the technology-driven region.
    (Access to this site is free; however, first-time visitors will need to register.)

  • "France Plans Royalties Tax on Digital Devices"
    Reuters (01/15/01)

    France will impose a tax on devices that can record or copy audio and video material, the country's cultural minister announced on Monday. Fees from the tax will serve as royalty payments for the artists and producers who created the material. Devices such as CD burners, DVD players, third-generation mobile phones, and computers are among the technology targeted by the plan. Already, a coalition of manufacturers as well as opponents of the French government have denounced the plan, saying the tax is too high. The size of the tax will match the recording potential of each device--the tax on computer hard drives will be much higher than the tax on a recordable DVD disk. France joins Germany as the only European Union countries to impose royalty taxes on recordable technology.
    Click Here to View Full Article

  • "Labor Pains"
    CNet (01/16/01); Wolverton, Troy

    Several established unions have targeted workers in the dot-com sector as prime targets for a new labor movement. Industry observers say the dot-com sector may be ripe for such a movement now that the Internet-fueled boom has reached its end, leaving many workers who had been counting on stock options and other performance-based incentives frustrated and angry. Observers say dot-com workers may be unwilling to accept long hours, a mandatory-overtime policy, rapidly changing business strategies and other common features of the dot-com economy. Workers at the San Francisco-based retailer Etown.com had scheduled a unionization vote for this month until officials at the National Labor Relations Board postponed the vote to consider charges that Etown management had illegally interfered with the workers' efforts. Etown employees believe that a union will alter management's practices, which allegedly include an inconsistent scheduling policy and the failure to follow through on a promised raise. Organizers report less initial success at leading e-tailer Amazon.com. The Washington Alliance of Technology Workers, or WashTech, had already recruited a few Amazon employees to join two years ago. Now, WashTech is trying to organize approximately 400 call-center employees at Amazon's Seattle customer-service center. Also, organizers from the United Food and Commercial Workers Union are trying to bring the labor movement to eight Amazon distribution plants. Both efforts have been limited by a strong response from Amazon's management. Some observers argue that the labor movement, despite the recent troubles of the dot-com industry, will have a hard time gaining a foothold among workers. However, union advocates say high-tech workers will embrace unions because even well-paying jobs eventually encounter problems with management. They point to unions or union-like groups at tech firms such as Verizon, Lockheed Martin, and IBM as examples of how the labor movement can operate in the high-tech industry.

  • "Weathering the Tech Shakeout"
    Washington Post (01/16/01) P. E5; McCarthy, Ellen; Johnston, Nicholas

    Washington, D.C.-area tech companies are well poised for the New Economy downturn because they are not focused on consumer-oriented products or services, says a study by the Brookings Institution Center on Urban and Metropolitan Policy. Other tech regions around the country--for example, New York, Seattle, San Francisco, and Austin--are expected to grow at far slower rates than the Washington area's 4.3 percent, down from 5.7 percent last year. Instead of dot-com firms, the Washington area has attracted infrastructure- and systems-related companies such as Manugistics Group, WebMethods, and MicroStrategy. Joseph Cortright, a Portland State University professor who has studied new economy companies in the Washington area, notes that "the specialization of an area's new economy is an outgrowth of the industries that each city was doing well in years ago. In D.C., for example, the federal government attracted a large number of competent people to the labor market, which is evident in the concentration of computer systems design firms and related services."

  • "Does High-Tech Need a 'Czar'?"
    NewsFactor.com (01/16/01); Gebler, Dan

    The federal government so far has not shown cohesiveness in its approach to dealing with Internet policy, the IT workforce, and the role of the government in controlling the new economy, observers say. The Departments of Justice and Commerce, Congress, and agencies such as the FBI, FTC, and FCC have all played parts in regulating some aspect of the Internet--highlighted by Justice's Microsoft suit and the recent FCC rulings regarding the AOL-Time Warner merger. By creating an official Net czar post, many observers believe that President-elect Bush would provide coordination and leadership for these efforts. However, uncertainty about a formal high-tech czar position in the federal government has led to much analysis and speculation throughout the industry. According to a recent poll of corporate CIOs, 58 percent thought creating the post would prove beneficial, especially in regulating Internet security issues. As hackers and identity thieves run rampant on the Net, hopes are that a tech czar would coordinate and bring focus to a wide range of solutions offered by both the private and public sector, despite recent doubt cast on the government's role in monitoring the Internet by the FBI's exposed "Carnivore" email surveillance system, which was criticized by all high-tech sectors. Although observers say security issues would definitely benefit, ambivalence remains as to what the new czar's stance would be in regards to shaping the new Bush administration's policies on antitrust issues.
    For information about ACM's work in the area of public policy, visit http://www.acm.org/usacm.

  • "Let's Not Rush Into Electronic Voting"
    Mercury News Online (01/16/01); Gillmor, Dan

    Despite the outcry for new electronic voting systems, government officials should proceed with utmost caution in this area, argues columnist Dan Gillmor. The current energy crisis in California was a result of the impatience of that state's lawmakers in 1996. In the same way, the federal government's eagerness to mend a flawed election process could land us in a dangerous situation in another four years, Gillmor contends. Peter Newman, principal scientist at SRI International's Computer Science Lab, testified before a California election committee, urging them to take caution. "You can't trust the software platforms on which systems are running. You can't trust the servers. You can't even be assured you're getting software from the server you think you're getting it from," he said of the inherent risks to Internet voting. Rebecca Mercuri, computer science professor at Bryn Mawr College, says that, even with non-Internet electronic voting, a paper trail is absolutely necessary. The idea that a paper process is flawed ignores the potential problems connected with electronic voting. Additionally, many of the problems experienced in previous elections were due to the lack of personnel, as election officials do not have enough resources.
    Click Here to View Full Article

  • "Shortage of Compelling 'Content'"
    Financial Times (01/17/01) P. 15; Murphy, David

    Though broadband access in the U.S. has been available in homes for two years, content that takes advantage of broadband capabilities isn't drawing masses of users yet. Giga analyst Stan Schatt says, "You see a lot of deals with telcos partnering with the entertainment companies in the expectation that wonderful entertainment is coming, but it's still not here. Content is definitely a problem." Warren Kerrigan, CTO for Pres.co/Foresight in the U.K., says the always-on aspect that broadband brings will change the way people use the Internet. Inevitably, more people will use their computer in a casual manner when they don't have to take the time to boot up and dial in. Indeed, studies show that broadband users stay online longer and spend more than dial-up users. Always-on access and the yet-to-be-seen advent of the broadband "killer app" remain the greatest promise for high-speed Internet access. As for the speed of broadband itself, experts warn against expecting too much from a 512K connection, even though it seems much more revolutionary than previous 9.6K to 14.4K to 28.8K leaps. Richard Bowens, U.K. sales director for Level 3 Communications, says, "Putting broadband access into the home doesn't change anything except for moving the bottleneck of the Internet somewhere else." He says the server-side loads will hamper most networks from providing the speed necessary to fully utilize home users' broadband connections. Faster fiber-optic networks are a partial solution, but Peter Cowely, director of broadband and TV at U.K. ISP Freeserve, reminds people that there is no "free lunch." "The high cost of this new infrastructure can only take place if customers are prepared to pay for it via higher levels of advertising, more e-commerce, or new revenue models such as pay per view and pay per download," he says.

  • "ASSOCHAM Calls for IT Tax Exemptions"
    Internet.com (01/16/01); Pai, Uday Lal

    The Associated Chambers of Commerce and Industry of India (Assocham) and the National Association of Software Service Companies are calling for India's Finance Ministry to keep e-commerce, telecommunications infrastructure, and IT services tax-free. "Government intervention in e-commerce transactions should be minimal and parties should be able to enter into legitimate agreements to buy and sell products and services across the Internet," said Assocham President Shekhar Bajaj. Bajaj also called for the government to hold off on new Internet regulations and to provide more funding for e-commerce initiatives.

  • "Asia Pacific to Outpace US Online Population by 2005, But US Sites Turn Blind Eye Toward Globalization, Says Jupiter"
    Business Wire (01/11/01)

    Jupiter Research recommends that U.S. firms take domain names with registrars in foreign countries--for example, names under a specific top-level country-code domain--to prepare for the expected surge in Internet users who do not live in the United States. Jupiter says more than one-third of all Internet consumers will live in the Asia Pacific region by 2005, while the total number of Internet users in the United States will decline 12 percent within the next five years, from 36 percent to 24 percent. Overall, Jupiter forecasts that by 2005, three-quarters of Internet users will live outside the United States. However, few U.S. firms are prepared for this shift in the Internet population, Jupiter reports. Jupiter surveyed 20 popular Web sites for shopping, news, Web searching, corporate services, and travel and found that only one-third of those examined were prepared for a global marketplace. The analysts did discover that more U.S. firms are registering domain names in countries such as Italy, Brazil, Japan, and France. To U.S. firms entering the global Internet marketplace, the analysts at Jupiter also recommend partnerships with local companies to increase access to local capital and to better understanding of local market and also to use the services of translation firms, systems integrators, and other companies in preparing for globalization.
    Click Here to View Full Article

  • "Dot-Com Cybersurvivors Blend Management Rules With Web Vision"
    Dow Jones News (01/11/01) P. 5A; Richmond, Riva

    Survivors of the dot-com shakeout are employing cost management and selling customized products and services to sustain themselves, blending traditional business strategy with the rapid access of the Internet. A solid strategy has become necessary for dot-coms facing a brutal shakeout: Forrester Research expects 60 percent to 70 percent of independent dot-coms to either go bankrupt or be put up for sale. "In terms of the metrics of success, there is no Old Economy, New Economy," maintains Burly Bear Network investor Clifford Friedman. Burly Bear's core business is cable television, and CEO Howard Handler expects the company to turn a profit next year thanks to a growth in viewership and advertisers. Burly Bear owns a Web site packed with data, video clips, and chat to allow users to sample various types of media. Like Burly Bear, financial content provider Bulldogsearch.com is limited by the "freenick" mentality of online users, claims Bulldog co-founder Michael G. Thompson. Bulldog's free site offers brokers and investors hard data from top Wall Street stock analysts, but the company's main business is more traditional, supplying customized software to investment bankers and offering hedge funds with trading strategies related to analyst movements. As a result, Bulldog should break even by year's end, predicts Thompson. Ian & Ian's two-month-old e-commerce marketplace, iMar.com, connects buyers and sellers of New York City services and "experiences," and expects to turn a profit by April 2002. IMar makes money by charging a sellers' fee and gaining a cut from the buyer for handling transactions.
    Click Here to View Full Article

  • "Fighting the Dot-Com Org"
    International Herald Tribune (01/15/01) P. 12; Jesdanun, Anick

    Although individual computers must be re-configured in order to reach their Web sites, new cybercolonies that offer domain names ending in yet-to-be approved suffixes are currently available. The dispute over whether or not to introduce new top level domains is ongoing, with Internet users wanting the Web to remain informal and businesses seeking out stability through a central power. The new suffixes are available through alternative root servers that are not among the 13 controlled by ICANN. These other servers recognize ICANN's 252 TLDs and country code TLDs, but also permit the use of TLDs that ICANN has not yet approved. For example, Al Staley runs a computer business out of computers.biz. If ICANN approves the .biz TLD, then confusion could occur, as more than one computers.biz site would be available. ICANN's ability to approve new TLDs that will make currently used Web sites obsolete is unfair, according to Staley. More than 1,000 domain names using TLDs that ICANN has approved but not yet implemented currently exist. "Like it or not, you really do need a single root to make it all work," says ICANN Chairman Vinton Cerf. However, ICANN is not overly concerned with the issue, as less than 1 percent of all computers can be reached using the alternative TLDs, according to a 1999 prediction. The people running the alternative servers can continue to do so if they so desire, says ICANN CPO Andrew McLaughlin.
    For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html.

  • "Dot-PS: Domain Without a Country"
    Wired News (01/12/01); Cisneros, Oscar S.

    ICANN approved of .ps as the country code top level domain for the Occupied Palestinian Territories in March 2000, soon after the United Nations selected "PS" as the code to represent the Palestinian Territories on its list of recognized countries and territories. Since that time, only a single .ps domain name, gov.ps, has been implemented. The .ps domain has taken longer than expected to implement primarily because of the political turmoil in the area. However, this is about to change. "We expect the whole domain to be operational for commercial purposes by the end of (January)," says Ghassan Qadah, the .ps administrator and senior technology advisor to the Palestinian National Authority. For the first three to six months, only Palestinians or Palestinian entities will be permitted to register domain names ending in .ps, according to Qadah. Once that period is concluded, .ps domain names will be available to all, although international trademarks and geographic locations will be protected, says Qadah. For example, jerusalem.ps will be unavailable for registration, says Qadah. Qadah says .ps registration will be available through local ISPs, which are eager, like most Palestinians, to move to the .ps domain space. The country code system makes the Palestinian cause appear to be legitimate, and this will generate political issues, says Jeremy Kutner, a Harvard law student at the Berkman Center for Internet and Society. Palestinians should have their own domain name space just like other countries, says Palnet sales manager Ahmad Mousleh.

  • "Too Little Too Late?"
    tele.com (01/08/01) Vol. 6, No. 1, P. 74; Finnie, Graham

    Intergovernmental bodies such as the Organization for Economic Cooperation and Development (OECD) are ahead of the European Union when it comes to regulating the Internet, says tech industry observer Graham Finnie. Although the OECD is willing to work with business, nations, and global organizations on e-commerce, the EU continues to act alone in regulating the Internet, says Finnie. The EU has hammered out an e-commerce directive, adopted a controversial regulation that deals with "country of jurisdiction," and plans to move forward with a copyright directive and other new measures this year. However, the EU has churned out other rules, such as the new data protection directive, which will put its member states in conflict with the United States over the issue of spam. The EU needs to work with other governments and the industry rather than acting alone in regulating the Internet, says Finnie. "'Co-legislation' between government and businesses may be the only real hope for a set of rules that is sufficiently workable and globalized so as not to be worthless," says Finnie.

  • "Political Dividends for Bush Backers"
    Industry Standard (01/15/01) Vol. 4, No. 3, P. 63; Harris, Scott

    The presidential victory of George W. Bush has prompted former Netscape CEO Jim Barksdale to say he believes that the high-tech industry "will have more influence than it's ever had in the past." Among the industry leaders who are expected to benefit from the Bush presidency are Dell CEO Michael Dell, Cisco Systems CEO John Chambers, and venture capitalist Floyd Kvamme. George Slayton, CEO of marketing firm ClickAction, hopes to add the California Republican Party, the Promise Keepers, and President-elect Bush to his list of clients. Slayton co-chaired Bush's Silicon Valley campaign. Meanwhile, Sen. Spencer Abraham (D-Mich.), an ally of Barksdale, and former Democratic congressman from Silicon Valley Norman Mineta have been offered Cabinet positions, and Kvamme and interim TechNet co-CEO Lezlee Westine have been mentioned as possible candidates for posts in the Bush administration. Barksdale says Bush has even asked him to recommend candidates. Although the high-tech industry is likely to find itself in more influential roles in the years to come, not all observers see major changes ahead in U.S. policy on technology. Robert Atkinson of the Progressive Policy Institute says bipartisan support will be needed to advance tech-related issues, as was the case during the Clinton administration. The controversial election victory and the balance of power in Congress will make bipartisan support a must during the Bush presidency.

  • "Privacy, Net Tax High on Congress' Agenda"
    Computerworld (01/08/01) Vol. 35, No. 2, P. 6; Thibodeau, Patrick

    Congress is expected to address online privacy and taxation this session, with a number of bills relating to these issues already on the agenda. Meanwhile, the high-tech industry remains ambivalent on the potential impact of privacy laws on e-commerce. Some observers such as ExciteAtHome's Chris Kelly say privacy laws could boost e-commerce by easing consumer concerns about security and privacy, while others such as Information Technology Association of America President Harris Miller say self-regulation of the Internet makes privacy laws unnecessary. The House Commerce Committee expects to see many privacy bills early in the session, including a measure that would allow consumers to opt out of having cookies installed on their computers. Meanwhile, the Senate Commerce Committee expects to see Sen. John McCain's (R-Ariz.) privacy bill reappear. McCain's bill calls for Web sites to reveal how they use information and to let users restrict the use of their personal data. Privacy laws enjoy strong bipartisan support, making Congress likely to pass privacy legislation this session, says Steve Emmert of Reed Elsevier. In addition to privacy, online taxes will be a major issue this session with the current online tax moratorium scheduled to expire in October. Traditional retailers are increasingly protesting the moratorium, which they believe gives online retailers an unfair tax advantage. Wal-Mart, for example, is pushing states to simplify tax laws to make it easier for online retailers to collect taxes.
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