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Volume 3, Issue 173:  Wednesday, March 7, 2001

  • "No Copying, No Trading?"
    USA Today (03/06/01) P. 1D; Snider, Mike

    While the Consumer Electronics Association (CEA) on Tuesday convenes a Digital Download Symposium on public access to digital content, the Recording Industry Association of America, the Motion Picture Association of America, and other content providers plan to spend the day enlightening the public about the rights of artists and creators. Both consumer advocates and the content industries are preparing for a huge battle over the century old principle of "fair use." Although "fair use" is designed to balance the rights of copyright holders and the public, some observers believe the scale already has been turned in favor of copyright holders because of the Digital Millennium Copyright Act of 1998, a major victory for the entertainment industry. This law makes it illegal for anyone to circumvent anti-copying technology. Moreover, Brad Templeton of the Electronic Frontier Foundation (EFF), an online free-speech organization, suggests that the content industries will try to use the law to prevent consumers from buying DVD players, music players, and TVs that are not licensed by them. The EFF has a history of fighting against anti-copying technology in PCs, high-definition TVs, and DVDs. Although millions of consumers have videotaped TV programs and have recorded music on tapes and CDs, these days the entertainment industry feels threatened by the power of the Internet. Consumers have indicated that they would accept on-demand services through which they would pick and choose music, TV, or movies, but not if the entertainment industry treats them like criminals by making use of anti-copying technology. "If the content industry has its way, the 'play' button will become the 'pay' button," says CEA President Gary Shapiro.

  • "Senate to Debate Killing Ergonomics Rules"
    Wall Street Journal (03/06/01) P. A2; Chen, Kathy

    Legislative action in the Senate may yet repeal workplace ergonomics standards approved in the last days of the Clinton administration as lawmakers prepare arguments for and against the 1,600 pages of regulation developed by the Department of Labor. Businesses, busy preparing for the October compliance deadline, say the standards will significantly raise costs, which most likely will end up affecting consumers and workers financially. Unless a majority in both sides of Congress and a presidential signature nullify the rules, companies across the country will have to evaluate their workstation design and production processes to be more ergonomically safe for employees. For Universal Dynamics, this means moving an entire machinery production plant. Although it only receives reports of one and a half work-related injuries per year, the manual heavy lifting of steel it now employs must be replaced by the use of cranes. However, because the ceiling of its current plant is too low, the company will have to move its production elsewhere, which eventually means, "We'd make less profit and pay people less," company President Donald Rainville says. Insurance companies also warn that the new rules will lead to an increased number of claims from its business customers. Bill Shackelford of GuideOne Insurance says this will likely lead to a 10 percent to 14 percent rise in annual premiums, costs that would again be passed on to workers and consumers. However, the Department of Labor maintains that the standardized workplace rules will save $9.1 billion nationwide in compensation and lost productivity on an annual basis, besides making the workplace safer.

  • "Businesses Count the Cost of Digital Pirate Raids"
    Financial Times--IT (03/07/01) P. 1; Fisher, Andrew

    Pirated software is costing businesses around the world more than $12 billion a year, according to the Business Software Alliance. The U.S. tops the list of losers, the biggest victims being companies such as Microsoft, Adobe, Autodesk, and Symantec, whose software packages, which can cost thousands of dollars, can be copied quickly and cheaply and sold to businesses and other users for a fraction of the real price. In 1999, American businesses lost $3.2 billion due to piracy, 25 percent of total revenue. In China, the loss rate is 90 percent, and in Russia it is 70 percent. The problem is less obvious than in other industries because theft of software is often difficult to identify, with more and more piracy taking place over the Internet. Simply by typing in the word "warez" on a search engine, hundreds of thousands of sites come up offering cheap software. Software companies have begun to be more aggressive in pursuing the criminals. Offenders who are prosecuted for either using or distributing pirated software in the U.S. face up to a $150,000 fine for each violation, and criminal penalties include up to a $250,000 fine and five years in prison. Some businesses protect themselves by building in security and locking devices to prevent the use of unregistered and unauthorized software.

  • "Bust? What Bust?"
    Washington Post (03/07/01) P. E1; Irwin, Neil; Noguchi, Yuki

    Speakers at the Global Internet Summit, which began yesterday in Fairfax, Va., are maintaining the optimism that characterized last year's inaugural meeting, despite the Internet economy's meltdown over the past 12 months. Cisco Systems CEO John Chambers said the Internet allows developing nations to cash in on what he called "the second industrial revolution." Chambers' company, which makes the equipment necessary for wiring the Internet, has lost 70 percent of its stock value in the past year. Other tech industry leaders spoke of the promise of the Internet, but George Grammas, a Washington, D.C., tech lawyer, said, "Last year was a very forward-looking 'What are the opportunities of the Internet?' This year it seems to be 'What are the big problems we're facing, and how are we going to solve them?'" Besides foreseeing a wealthy and prosperous future for the Web, the panelists also addressed specific Internet-related issues such as telecom infrastructure, online security, and increased technology in state and federal governments. The Global Internet Summit has VeriSign CEO Stratton Sclavos scheduled to speak in the next session on "building confidence and trust in a borderless world," as well as Compaq CEO Michael Capellas slotted for a discussion with Rand Blazer, CEO of KPMG Consulting, regarding leadership in the new economy.

  • "Study: Many Still Lax on Securing DNS"
    InfoWorld.com (03/02/01); Evers, Joris

    Since the media coverage of BIND vulnerabilities in DNS servers has quieted, so have Fortune 1000 firms' efforts to protect themselves, reports Iceland-based consultants Men & Mice. BIND, distributed free by the Internet Software Consortium (ISC), translates text-typed URL addresses into numeric IP addresses, which are then transmitted to connect a user to a Web address. It was discovered recently that BIND software prior to 4.9.8 and 8.2x possessed a number of holes that allow hackers to infiltrate DNS servers. Mice & Men reports that extensive media coverage helped spur Fortune 1000 companies to fix BIND holes; even so, 12.4 percent have not done so. Some 13.1 percent of online retailers' Web sites are still vulnerable. For England, Germany, and Switzerland, 9.9 percent, 15.3 percent, and 11.5 percent of all Web country code domains, respectively, are vulnerable.

  • "Building Communities on the Internet"
    Financial Times--IT (03/07/01) P. 13; Talacko, Paul

    Mandrakesoft, a relative newcomer to the Linux software front, has already established a solid hold in the market with its "distribution" emphasis, which provides a whole range of office-type software for the average consumer looking to leverage Linux. France's Mandrakesoft now has 31 percent of the U.S. market, according to a July 2000 survey by PC Data, putting it ahead of well known Linux developers such as Red Hat. Mandrakesoft released its first commercial product in early 1999, the result of a conscientious effort to make an easy-to-use Linux desktop framework comparable to Microsoft's Office. Since then, the company has encouraged the tradition of online, collaborative development for its software distribution. The Mandrakesoft Web site hosts a "cooker," or forum, where developers can share ideas and work together on creating an improved product, reflecting the way that the Linux kernel itself came about. CEO Henri Poole says Linux is ready for the consumer desktop, enabled by his company's StarOffice suite, which was recently acquired by Sun Microsystems. Sun has implemented an open source licensing scheme that will allow the software, renamed OpenOffice, to be improved upon and gather further popularity.

  • "Hollywood Putting the Squeeze on Consumers"
    SiliconValley.com (03/03/01); Gillmor, Dan

    Hollywood's media industry is scheming to take away customers' rights to use music, video, and other media content for legitimate purposes in the name of protecting copyrights, argues columnist Dan Gillmor. Not only are these industries dictating what rights consumers have, but they are also threatening to hamper the future markets of many of the tech companies that are currently supporting them. The recording industry is lobbying Congress incessantly for more restrictions on what customers can do with media and how they view or listen to it. For example, new digital TVs include technology that allows programmers to scramble signals up to the point of playback over the speakers and screen. This means that there is no digital copy that users can record if they wish to view the program at another time. Gillmor offers a way to subvert the system. He says that, no matter how well the industries control their content in digital form, sooner or later it has to be translated into analog form so that humans can understand it. He argues that people could use a video recorder or microphone to store video or audio content. From there, consumers can make a digital copy that may be one generation less in quality but will at least give some control back to the legal consumer. That is, he contends, until the media industries regulate the recording hardware, imposing technology such as digital watermarks and other copy-protection methods on manufacturers. Gillmor says tech companies should wake up to the threat this continuing infringement of fair use poses.
    For information regarding ACM's work in the area of intellectual property, visit http://www.acm.org/usacm.

  • "Thinking Outside the Beige PC Box"
    Investor's Business Daily (03/06/01) P. A1; Seitz, Patrick

    Desktop PC sales have stalled or are actually decreasing, the result of a stagnant, overcrowded market. Increasingly, other hardware devices such as Internet appliances, mobile devices, and handheld computers are infringing on the services that once made the PC essential. However, Michael Winkler, executive vice president for Compaq's global business unit, argues that new technology and innovations are making the PC competitive again. He notes his company's iPaq computer line, the result of a united executive vision for the company's efforts, resulted in a $1 billion business nine months after its development. Winkler also argues that expanding fringe markets pose an opportunity for PC makers as well, as Compaq demonstrates with its slew of new mobile products and related services. Sony is responding to the synergy between new gadgets and the PC as well. It launched its Vaio PC line three years ago in order to defend its consumer electronics products, since those devices, such as MP3 players and digital cameras, are increasingly converging with personal computing. Sony has been a strong contender in the handheld and laptop markets, which have been seen as competing directly with the traditional PC.

  • "Chip Makers Warn of Disappointing Sales, Profits"
    Wall Street Journal (03/06/01) P. B6; Thurm, Scott

    The Semiconductor Industry Association revealed yesterday that sales of chips fell 6 percent from December to January. Worldwide chip revenue last month totaled $16.9 billion, down from $17.9 billion the month before. Revenue declined in each of the four areas the association follows: the Americas, Asia-Pacific, Japan, and Europe. However, last month's revenue marked a 14 percent increase over January 2000's revenue of $13.8 billion. A spokesperson for the association said sales would likely remain stagnant until the fourth quarter. Separately, four leading chipmakers yesterday warned investors that revenue and profits would be less than expected. Xilinx said revenue for its fourth quarter would be $383 million, far less than the $481 million investors had anticipated and a 15 percent drop from its third-quarter revenue. Cypress said revenue for its first quarter would be as much as 21 percent lower than previously expected, while Vitesse said its second-quarter revenue would fall about 16 percent short of expectations. LSI said its first-quarter revenue would be 20 percent off predicted totals.

  • "Internet Savvy Job Hunters Flock to Online Sites"
    Financial Times--IT (03/07/01) P. 6; Moran, Nuala

    Online job sites are focusing on recruiting graduate students, as many recruiters believe that this job pool is the most Internet savvy, rivaling even the IT sector. The Association of Graduate Recruiters says nearly two-thirds of U.K. employers hired graduates using online resources and also found that 88 percent of last year's grad students researched job opportunities online. Although IT companies have long been at the forefront of online recruitment because of the nature of the applicant base on the Web, mainline companies are also taking Internet recruitment seriously. L'Oreal, the global cosmetics firm, plans to find 25 percent of its graduate hires online this year. L'Oreal director of international recruitment, Phillippe Louvet, says the Web is an ideal tool for putting together the multinational teams that L'Oreal desires for its global operations. He notes the extent to which the company has made efforts to shape the online process to take full advantage of the capabilities of the Internet. For example, graduate students wishing to apply to the finance department in L'Oreal's London office will have their documents forwarded to the appropriate section of the 42,000-employee company. Louvet boasts about the company's continuing innovation in Web recruitment, citing the use of Webcam technology to conduct preliminary interviews. Deloitte Consulting is also pushing its online recruitment efforts to reach the 50 highly qualified MBA candidates for whom it competes with other consultancies, such as McKinsey and Cap Gemini, says the company's European recruitment manager, Job Voorhoeve. The company uses an exclusive Web site that caters only to MBAs from prestigious universities such as Harvard, Kellogg, Wharton, and the London Business School. Voorhoeve says using the online tools saves time and money spent on traditional campus job fairs.
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  • "'Web Bugs' Make Cookies Look Good Enough to Eat"
    Newsbytes (03/01/01); Krebs, Brian

    Privacy advocates and security experts have pinpointed a major security threat on the horizon called "Web bugs," a technology basically similar to the "Melissa" and "I Love You" viruses that terrorized computers approximately a year ago. Web bugs are very small scripts that Web sites can deploy to copy files from hard drives and ship them to third-party sites while evading nearly all firewalls and leaving without footprints. In addition, these bugs can surreptitiously install programs. Recently, Privacy Council CEO Gary Clayton displayed Web bug technology before Congressional lawmakers, who watched as Clayton stole over 1,000 names and addresses from a hard drive's address book. Spectators such as Sen. Richard Shelby (R-Ala.) were stunned. "This is somewhat like commercial espionage," Shelby said. Online Privacy Alliance counsel Christine Varney had stronger words. "There's nothing that will deter this behavior faster than putting some of the CEOs doing this in jail," Varney said. Clayton also has found that some Web sites currently use a milder version of Web bug technology, using Web bugs to backpack transaction data to third-party marketers. These marketers then gather information into profiles for banner ad targeting. Clayton wonders whether this is a loophole whereby Web sites with privacy policies are shipping information to marketers not bound by such policies. Clayton urged Congress to consider legislation that would outlaw the use of Web bugs unless consent had been granted by those whose information is being lifted.

  • "CIOs Take Knives to Their Budgets"
    TechWeb (03/05/01); Schachter, Ken

    Corporate IT spending may grow by no more than 6 percent this year, a new survey from Merrill Lynch analyst Steven Milunovich reveals. The survey of 50 U.S. and 20 European CIOs found that 48 percent of respondents were likely to spend less on IT than they did last year, while 34 percent said they would raise IT spending, and 18 percent said they would remain on budget. The survey hints that CIOs may have tightened their belts since last month, when a similar survey forecast 9 percent growth in IT spending this year. The survey found that CIOs are willing to spend this year on Windows 2000, wireless devices, storage, and NT servers. Also among CIOs' possible purchases this year are Unix servers, communications equipment, and customer relationship management software. The survey found that areas likely to see reduced spending this year are outsourcing and consulting, printers, and mainframes.

  • "AOL to Open Netscape Office in India's Tech Center"
    Washington Post (03/06/01) P. E5; Klein, Alec

    AOL Time Warner has confirmed plans to invest as much as $100 million in Bangalore, India's high-tech hub. The plans, which have gained approval from India's Ministry of Commerce and Industry, center on AOL's Netscape division and Netscape's joint venture with Sun Microsystems, iPlanet E-Commerce Solutions. A Netscape office will open in Bangalore where engineers will develop corporate e-commerce software and services. AOL made inroads into India last year when it began offering a version of its industry-leading AOL Instant Messenger under a co-branding agreement with Indian ISP Satyam Infoway. However, AOL itself does not yet offer Internet access services in the country. Although India has the world's second largest population, many observers do not view it as an ideal market for Internet-related services because it lacks infrastructure. Only two out of every 1,000 people have a telephone, for example. However, a growing number of corporations are outsourcing computer-related work to India's strong IT sector, the Indian Embassy in Washington claims. AOL itself is continuing its expansion around the world. Already the industry leader in the U.S., it is growing its presence in markets in Europe, South America, and now Asia.

  • "Japan Hopping on E-Bandwagon"
    Associated Press (03/05/01)

    Japanese government officials are finally poised to move Japan alongside other countries advanced in Internet infrastructure. A wide-ranging "e-Japan" program will include $16.7 billion in the next fiscal budget for training school teachers about the Internet, bringing 30,000 foreign tech workers into the country, and letting Japanese citizens pay taxes online by 2003. Most of the changes will come as the government facilitates growth in the private sector regarding the Internet, according to Kenji Kondo, a Cabinet official working on the program. Many experts see the monopoly that Nippon Telegraph and Telephone has over the country's telecommunications infrastructure as a major barrier to the Japanese Internet presence. The monopoly controls over 99 percent of Japan's phone lines and has been accused of charging a prohibitive 7 cents per minute for standard phone connections, making Internet use an expensive hobby. Japanese government officials have threatened to take legal action against the company in order to establish competition and foster the building of a high-speed optical network in the country.

  • "Tech Priorities Shifting"
    InternetWeek (03/05/01) No. 851, P. 1; Kemp, Ted; Koller, Mike

    The recent slowdown in the U.S. economy is prompting many corporations to focus their e-business spending on cost-cutting rather than revenue-boosting, a recent survey by AMR Research concludes. AMR surveyed CIOs and IT executives at 100 firms that have revenues of at least $500 million. The survey found that the top e-business priority this year of 38 percent of respondents is reducing costs. Among other top priorities, 25 percent of respondents named improving customer relationships, while 20 percent said growing market share and revenue. IT spending at Alaska Airlines will grow only 5 percent this year, CIO Robert Reeder says, as compared to 20 percent in previous years. He says the company will provide such cost-saving measures as an improved luggage-handling system, which alone should reduce costs by $4 million. IBM has already begun using the Internet to save money. Last year, it reduced its call-center budget by $1.5 billion by moving customer-assistance services to the Web, a decision it views as a key factor in its strong fiscal performance last year. US Bancorp Piper Jaffray analyst Mike Marzolf says IT capital spending this year will be "more thoughtful and less reactive."

  • "Machine Head"
    New Scientist (02/24/01) Vol. 169, No. 2279, P. 26; Cohen, David

    Scientists at several laboratories around the world are working with computer programs that can analyze a problem and propose solutions that perhaps no human being has ever considered. At Oxford University, Ashwin Srinivasan is working with a program called Inductive Logic Programming, or ILP. ILP can turn information inputted into it by Srinivasan and his colleagues into a theory and then use this theory as the basis for developing further ideas. As an example, Srinivasan and his colleagues had ILP analyze ACE, an enzyme involved with high blood pressure, and try to develop a way to inhibit ACE molecules. ILP found two solutions--one that had already been discovered by a human scientist and one that no scientist, it seems, had ever considered. Srinivasan says ILP has also provided new insights into numerous situations, including treating Alzheimer's and selecting embryos for in vitro fertilization. Carnegie-Mellon University professor Raul Valdes-Perez has created a similar program, MECHEM, which has provided new ideas in fields ranging from particle physics to linguistics. Moscow-based chemist Andrew Zeigarnik notes, "I would say that MECHEM should have been the first author on all of the papers it contributed to." However, many within the scientific community would dispute the notion of giving a computer program credit for its discoveries. Simon Colton, a mathematician who has developed several computer programs to analyze numbers and provide new ideas, disagrees. He also contends that the vast amount of information with which scientists and mathematicians must grapple justifies the use of programs such as his.

  • "Tech Industry to Influence New Export Control Bill"
    Washington Technology (03/05/01) Vol. 15, No. 23, P. 18; Gildea, Kerry

    U.S. Sen. Michael Enzi (R.-Wyo.) in January introduced legislation, the Export Administration Act of 2001, crafted to ease export controls on new technology. The Senate Banking, Housing and Urban Affairs Committee has so far held two hearings on the legislation, and committee chair Sen. Phil Gramm (R.-Texas) says the committee members are open to further debate. Gramm says the committee is trying to balance two equally important considerations as it works to shape legislation. "We want to dominate the world in high technology...At the same time, we are the principal guard at the gate in terms of security in the world," he said last month. The proposed legislation would both ease the controls on general high-tech exports while giving increased authority to those who reviewed such technology for possible risks to national security. Also, the legislation would accord the president the authority to restrict any high-tech export to protect national security. Those who violated the proposed law would be subject to a penalty. The high-tech trade association AeA supports the legislation on general principle but is working to make some changes to its specifics. AeA wants the language of the legislation to allow exports of data between divisions of the same company--for example, transmitting source code from a U.S. firm to its overseas subsidiary. The AeA also advocates a tiered system of penalties for breaking the law, noting that, as the legislation now stands, breaking the law because of an administrative error carries the same penalty as breaking it willfully. Observers say Gramm and others on the committee seem willing to work with the high-tech industry. However, observers note that the military and national-security sectors are likely to argue for keeping export controls in place.

  • "Criminal Neglect"
    Internet World (03/01/01) Vol. 7, No. 5, P. 27; Isenberg, Doug

    Doug Isenberg contends that despite the government's declaration of a war on cybercrime following last year's "I Love You" virus and the denial-of-service attacks made against major e-commerce merchants, very few laws have actually gone on the books to fight such crime. Although the U.S. Congress has a wide array of Internet-related legislation on its plate this session, most of it relates to privacy, anti-spam statutes, intellectual property, and domain names; Internet crime is near the bottom of the list. Isenberg argues that while some existing laws, such as the U.S. Copyright Act, can be applied to today's technology, hacking and virus-spreading may need their own special legislation. He further contends that Congress will find its most difficult task in attempting to determine what should be considered a criminal offense. For example, he asks, at what point does hacking change from "mischievous prank" to a criminal act. Isenberg points out that although the answers to that and various other questions will not come quickly or easily, they must be discussed if the growing problem of cybercrime is to be combated.

  • "Breaking the Access Barrier"
    Government Technology (02/01) Vol. 14, No. 2, P. 18; Towns, Steve

    A lack of awareness is the reason why state governments have been slow to adopt IT accessibility policies, says Bob Ruppenthal, program analyst of Pennsylvania's Office of Vocational Rehabilitation. In fact, one of the issues that continues to confound states is Section 508 of the Rehabilitation Act, which requires agencies of the federal government to make their computer equipment accessible to people with disabilities. However, the U.S. Department of Education maintains that states have to adhere to the Rehabilitation Act as well because they receive Assistive Technology Act funds. In order to receive these funds, which help states provide assistive technology devices and implement policies, states have to write some form of Section 508 into their grant applications. All 50 states currently receive such funds. So far, Maine, Minnesota, Missouri, Maryland, New York, Texas, Kentucky, Arkansas, Pennsylvania, and Nebraska are the states that have taken the lead in implementing significant laws, regulations, or policies on making computer technology accessible to those with disabilities. Once the U.S. Access Board publishes final standards for accessibility at federally funded facilities as part of Section 508, federal agencies will have six months to comply.
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