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Volume 3, Issue 174:  Friday, March 9, 2001

  • "Intel, in Sales Slump, Will Cut 5,000 Jobs"
    Washington Post (03/09/01) P. E1; Musgrove, Mike

    Chip manufacturing giant Intel announced on Thursday that its sales estimates for this quarter should be lowered another 10 percent and that 5,000 workers would be lost through attrition over the next nine months to make up for the loss. Intel had said in January that its sales would be down 15 percent, but the revised expectation is that sales for the 86,000-employee company will drop 25 percent. Although predictions for a slowdown in the PC sector were correctly addressed earlier by investors, a drop-off in flash memory chips and processors for servers has further cut into Intel's business. Intel CEO Craig Barrett has defended his company's continued investment expenditures in the midst of a slowing tech economy. In February, he told a gathering at the Intel Developer Forum that the way out of a recession was not through saving. Instead, he said his company's buyouts of several smaller tech firms and sustained research costs were wise, given that "the build-out of this digital world is still in its infancy."

  • "Even Among Big Names, Linux OS Has a Future"
    CyberAtlas (03/08/01); Pastore, Michael

    A new survey of corporate users by Internet.com found that 39 percent of respondents use the Linux operating system. Running Web servers was the most popular use of Linux, at 67 percent, with running Internet access servers second and running network/file servers a close third. The survey found that nearly 80 percent of Linux users prefer it because its performance is better and it is a more stable system. However, only 33 percent of respondents use Linux to run their general desktop. The survey found that many potential Linux users prefer established systems such as Microsoft Windows because they want a system that is easy to use, easy to upgrade, and has vendor support. Many potential users also choose not to run Linux because it lacks e-commerce and enterprise applications, backup support, and a robust file system, the survey said. The survey also revealed that many Linux users employ the operating system in KDE or GNOME environments, which makes it easier to use and mimics many features of Windows. Among Linux vendors, Red Hat has the best name recognition among respondents at 79 percent. However, 35 percent of respondents said they could not name the most important companies in the Linux market.

  • "Tech Spending Has Slowed, but It Remains Healthy"
    Investor's Business Daily (03/09/01) P. A4; Prado, Antonio A.

    CIO magazine and Deutsche Bank recently released a joint survey of 250 CIOs to gauge the outlook of IT spending in the new economy. The numbers indicate that although spending is slowing--down by 42 percent since early last summer--the tech sector is still expected to grow at double-digit rates, says Ed Yardeni, a top economist at Deutsche Bank Securities. Of those polled, nearly half remained optimistic about their companies' IT prognosis and said a slower economy would not affect their tech spending. Other figures released in the report showed that the IT labor market had improved over last summer, as only 55 percent of CIOs described the market as tight. IT workers' pay increases are also slowing, the survey found, although their 9 percent growth rate is still nearly double the average for other sectors.

  • "FBI Warns European Hackers Targeting E-Commerce"
    Reuters (03/09/01)

    Organized hacker groups from Russia and the Ukraine have been exploiting a vulnerability in Microsoft's Windows NT operating systems to access more than a million credit card numbers from at least 40 e-commerce sites in 20 U.S. states, according to the FBI. Although Web companies were warned when Microsoft first discovered the problem in 1998 and developed and publicized ways to fix the weak spots, they have not utilized the software. The hackers try to extort money from their targets or attempt to convince them to hire the group to provide Internet security.

  • "New Decryption Code Underscores DVD Security Weakness"
    CNet (03/07/01); Lemos, Robert

    Massachusetts Institute of Technology undergraduate Keith Weinstein and MIT alumnus Marc Horowitz last week published a code that unscrambles the encryption on DVDs. The code, designed for an MIT seminar on the controversial Digital Millennium Copyright Act (DMCA) of 1998, is only seven lines long, which Weinstein argues proves that circumventing copyright protection on DVDs is an easy matter deserving of free-speech protection. "You can write these seven lines of code on a piece of paper and give it to someone," he says. "It's ridiculous to say that that's not protected speech." The code unscrambles the encryption on a DVD so quickly that the movie can play at the same time. However, Robin Gross, a staff attorney for the Electronic Frontier Foundation, notes that the code needs so much processing power to run that the movie appears choppy. This, Gross argues, shows that the code does not actually pose a threat to copyright protection. A spokesperson for the Motion Picture Association of America (MPAA) says the organization is investigating the code. The MPAA has already won one major victory against those who want to publish codes that unscramble DVD encryption programs. Last year, U.S. District Court Judge Lewis Kaplan ruled against 2600, a Web magazine that had posted a link to DeCSS, a program that hackers created to crack the DVD encryption code so that DVDs could be played on PCs that run the Linux operating system. Kaplan found DeCSS in violation of the DMCA and ordered all links to the code dropped from the 2600 site. Gross contends that the same legal reasoning will not apply to the MIT code because it does not violate any copyrights.

  • "Users, Vendors Face Off Over UCITA Law in Texas"
    InfoWorld.com (03/09/01); Thibodeau, Patrick

    Opponents of the Uniform Computer Information Transactions Act (UCITA) are attempting to block its passage by the state legislature. The bill, drafted by the National Conference of Commissioners on Uniform State Laws, has been made law in only two states, Virginia and Maryland, but is currently pending in Texas and a few other states. Opponents say its passage is unacceptable in any state. UCITA opponents, which include major corporations such as Phillips Petroleum and Boeing, argue that the law gives too much power to software vendors. If passed, for example, UCITA would let vendors remotely disable software programs if there were a contract dispute. Nationwide Insurance predicts that UCITA could lead to a $20 million increase in internal costs. Proponents of UCITA, which include a wide range of tech firms, including Microsoft and Compaq, say UCITA will give them increased protection under existing laws. However, many proponents admit that a compromise will likely be necessary to pass UCITA in most states. Observers in Texas say passage is very unlikely "because of the amount of opposition out there," says Celeste May, general counsel to state Sen. John Corona (R), who is sponsoring the Texas version of the bill. The Texas legislature adjourns for two years after its session concludes in May, adding to the pressure that UCITA proponents face.
    For information about ACM's UCITA activities, visit http://www.acm.org/usacm/IP

  • "Tech Organizations Will Stump for Fast-Track Authority"
    Newsbytes (03/07/01); McGuire, David

    The High-Tech Industry Coalition on China, which last year brought together several tech trade associations to lobby for awarding China permanent normal trade relations (PTNR) status, has remained together after Congress and former President Clinton approved that status. Now, the coalition is lobbying Congress to give President Bush fast-track authority on all trade negotiations. With fast-track authority, the president could negotiate trade agreements with foreign nations without having the agreements subject to amendment by Congress. The coalition argues that such authority would speed the tech industry's entry into growing markets such as China.

  • "Energy Savings Being Built Into Computing Devices"
    SiliconValley.com (03/06/01); Lii, Jane

    The energy crisis in California has highlighted the need for computer devices that are more efficient in their consumption of power, and several major hardware firms are introducing products to meet that need. IBM has unveiled its eServer Z900, which it says uses 13 KW, only 5 percent of the 260 KW an array of servers would need to meet its computing power. Sun Microsystems' Sun Ray will reduce power consumption by 95 percent, the company claims. It hosts operating systems and software on a central server, which users then access with a "smart card." Energy-reduction efforts are also occurring in the semiconductor sector, with upstart Transmeta having already released Crusoe, a chip that reduces the number of transistors it needs to run, thereby generating less heat and using less energy. Several companies are releasing servers based on the Crusoe chip, including FiberCycle, which claims its Crusoe-based server will use 25 percent of the power of comparable servers. Server manufacturers are also redesigning their machines to reduce energy consumption, simplifying the wiring to cut back on heat generation and eliminating unnecessary features. IT experts say another way to reduce energy consumption is to switch from cathode-ray monitors to LCD monitors. In general, LCD monitors consume only 30 percent as much energy as a cathode-ray monitor. However, the cost of LCD monitors has discouraged their use--currently, they have only a 5 percent market share. Research firm Stanford Resources predicts that its market share could increase to 8 percent this year if prices continue to fall.

  • "Tiny Company Wields Patents Against Giants"
    Wall Street Journal (03/09/01) P. B1; Regalado, Antonio

    A small patent firm named TechSearch holds the keys to a broad range of commonly used technologies and is pursuing an aggressive scheme to collect licensing and settlement fees from large corporations. TechSearch President Anthony O. Brown says his company is simply making a way for inventors to collect on their intellectual property. His company focuses on buying obscure but far-reaching patents on common technologies from individual inventors who may not have the resources to pursue their claims by themselves. However, the companies being asked to pay up for these licenses--including Nike, Sony, Walgreen, and Gap, according to TechSearch--decry the tactics as "extortionate" because they cover widely used practices such as file-sharing between computers and computer-based educational techniques. Often, large corporations will simply pay the requested licensing fee rather than enter into costly legal proceedings. Raymond Niro of Niro Scavone Haller & Niro, the law firm employed by TechSearch, uses a contingent-fee arrangement usually reserved for personal injury suits, adding to the ire aroused by the businesses being sued. The U.S. Patent Office is currently re-examining patents held by TechSearch due to a lawsuit the company brought against the Green Bay Packers over alleged infringement on the team's Web site. Despite the bulldog tactics used by TechSearch, inventor Bruce Warren offers a different perspective on the pursuance of the patent licensing. He sold his patent for educational software to TechSearch in return for a percentage of fees collected but says his previous attempts to contact companies regarding his patent were met with fierce legal responses. Without TechSearch and their lawsuits, he "would be shut out of the system," Niro says.

  • "ICANN Meetings Open in Mass."
    Associated Press (03/08/01); Jesdanun, Anick

    There are several key issues on the agenda for the upcoming ICANN quarterly board meetings, which begin on March 9 in Australia. One of the issues is ICANN's decision to only elect five at-large board members to represent the Internet community. A study that will determine the future of these at-large board members is in the works. ICANN rushes decisions and fails to obtain sufficient input from Internet users, according to lawyer Eric Grimm. The crux of the situation is that Internet users demand that things be done at the speed of the Internet, but the same group complains if ICANN acts quickly. The Internet is changing, and there is demand for an administrative organization that responds, says ICANN CPO Andrew McLaughlin. There is nothing to do but continue making significant decisions "as best we can," says McLaughlin. Two other items on the agenda are to convince countries to acknowledge ICANN's authority and pay their fees and to look again at how new top level domain names were chosen. ICANN Chairman Vinton Cerf says that he wants to look into procedural problems in the selection process. There are problems to be fixed, but that is no reason to act like this is an experiment without consequences, says Group One Registry attorney Peter Schalestock. If the elected board members participated in the decisions, the TLD selections might have been "vastly different," says ICANN board member Karl Auerbach. Some companies, particularly those that bid successfully for control of a new TLD, support ICANN. ICANN will never attain a final form, notes VeriSign's Brian O'Shaughnessy. Technological, societal, and institutional change is inevitable, says O'Shaughnessy. Potential restructuring of ICANN's Domain Name Supporting Organization will also be discussed at the meeting. The committee desperately requires reform, says Wayne State University Professor Jonathan Weinberg. ICANN says it is "a work in progress," but this is simply a method of avoiding negative criticism, says Weinberg.
    For information regarding ACM's Internet governance work related to ICANN, visit http://www.acm.org/serving/IG.html

  • "FBI Battles Computer Crime 'Epidemic'"
    Medill News Service (03/07/01); O'Neill, Jennifer

    FBI Director Louis Freeh says cybercrimes such as hacking, viruses, and cyberterrorism are currently a priority for the agency, adding that the bureau now has greater resources, including 200 agents across the nation dealing solely with the issue, to combat it. However, Freeh stresses the need for private-sector help because that is where alerts to computer crime often arise. The FBI needs the computer logs, codes, and access to companies' systems in order to help out with a criminal investigation. Freeh admits that many companies are uncomfortable with giving the FBI such open access to their systems, as many companies use encryption, along with several other security mechanisms, to protect their information from criminals, competitors, and the government. Freeh maintains that the widespread encryption of information in the private sector is the biggest challenge the bureau currently faces in cybercrime investigations. In order to assuage the fears of the private sector and to reconcile privacy issues and property protection, Freeh says, "The balance we're looking for in 2001 is to make sure that Fourth Amendment rights are secure while also making sure constables have the ability to function."

  • "Greener Digital Futures"
    eMarketer (03/07/01); Cohen, Nevin

    A recently released report by the Forum for the Future shows disturbing inaction on the part of European Internet company CEOs and senior managers to address the social and environmental impacts of their companies. Although the responses to the survey marked 65 percent of those questioned considered the issues "very important," only 34 percent and 21 percent have programs in place that deal with social and environmental issues, respectively. Responses indicated that European Internet executives were too busy with other pressing business concerns or were blatantly ignorant that the IT sector had an impact on the environment. In contrast to old economy companies that have dealt with stringent environment regulations for decades, Internet companies have yet to develop defined mechanisms within their corporate structure to deal with these issues. The Forum for the Future study is part of a broader e-business ethics research effort instigated by a consortium of British agencies, think-tanks, and private firms.

  • "A Little E-Mail (or a Lot of It) Eases the Workday"
    New York Times (03/08/01) P. E8; McGrane, Sally

    Personal email at work is apparently a prevalent phenomenon, as the employees at Internet-age companies replace traditional "water-cooler" socializing with instant messaging and quick email exchanges. An International Data study in September found that 3.4 billion work-related emails and 2.7 billion personal emails are sent every day in North America. Kim Green, a freelance Web producer, says she uses email nearly two hours every day in order to stay happy, and as a full-time employee she found email necessary to make it through the workday. Green says email does not negatively affect her productivity, reflecting the sentiment of Franklin Becker, who operates the International Workplace Studies Program at Cornell University. He notes that it is nearly impossible for workers to concentrate solidly for 10 hours a day and that online communications "keeps people engaged" and also enlivens the workplace. He is currently studying the workplace habits at a small Internet company in upstate New York, saying, "People at this dot-com company are sending instant messages back and forth all day, even though they're all within 20 feet of each other. It's silent all day, then someone will send a joke out, and a bunch of people will chuckle at once." Intel director of corporate affairs Tracy Koon says her company's email policy reflects the fact that technology workers naturally will use electronic mediums for their communications, but she notes that it should not interfere with people's work.
    Access to this site is free; however, first-time visitors must register.

  • "Firms Slow to Embrace Online Purchasing"
    Washington Post (03/08/01) P. E5; Irwin, Neil

    Executives at the Global Internet Summit in Fairfax, Va., expressed concern yesterday about two new studies that show that businesses are not moving their purchasing processes online as quickly as many had expected. A survey by Jupiter Research found that corporate purchasing agents expect only 20 percent of transactions to occur online by 2002. A separate survey by Ernst & Young and the National Association of Manufacturers revealed that no more than 24 percent of manufacturers say e-commerce ranks among their three most important business priorities this year, while only 1 percent consider themselves "deeply involved" in e-commerce. According to the Jupiter survey, 58 percent of businesses are not online because their suppliers are not yet online. Other reasons cited in the Jupiter survey include a lack of knowledge about the Internet, a lack of trust, and too few products being offered. According to the Ernst & Young- National Association of Manufacturers survey, while 35 percent of those surveyed sell online and 50 percent expect to sell online, only 5 percent share inventory data online. Executives attending the summit said the surveys could spell trouble for companies in the business-to-business (B2B) exchange sector. Although those companies were considered some of the hottest Internet properties when they emerged last year, the sector has not caught fire yet, as the two surveys confirm. VerticalNet chair Mark Walsh says part of the problem is that companies tout their exchanges as being seamless when the reality of B2B e-commerce is much more problematic. "There is no miracle. There is no Santa Clause," he said.

  • "Money Problems Doomed Tech School"
    SiliconValley.com (03/07/01); Folmar, Kate; Woolfolk, John

    The board of directors of Masters Institute, a San Jose, Calif., tech school, on Monday voted to shut down the online technical school because of its debt and regulatory problems. The school had accumulated debt between $20 million and $25 million, and federal officials had some concerns about its administrative practices. Earlier in the year, the federal Department of Education conducted a "program review" of the school's practices, in relation to federal financial aid, for the years 1998 through 2000. By October, the federal Department of Education had cut off aid to Masters, which left the school wondering where it would get the $25 million it needed to improve infrastructure for expansion. As recently as Friday, Masters was in the process of securing funding, but the deal fell apart on Sunday. The asset management company Diablo Management Group has taken over the school, and its chairman and CEO, Richard Couch, is now the CEO of Masters. The for-profit school that offered software programming, networking, and other computer courses, as well as two-year and four-year degrees, over the Internet and at its Airport Parkway headquarters, is trying to avoid bankruptcy. Nearly 2,500 students were taking courses at Masters, which had employed 234 staffers.

  • "How Dems Can Regain the Tech High Ground"
    Hill (03/07/01) Vol. 8, No. 10, P. 23; Silverberg, David

    Democrats do not have to concede the high-tech agenda to Republicans, argues columnist David Silverberg, even though President Bush is in position to assume the party's centrist stance on technology issues. The party can show that it is still relevant when it comes to high-tech issues by organizing the forces of high-tech companies that are against Microsoft. There are many high-tech companies that do not like the software giant, although it appears as if Netscape is the only one that will come out publicly. Silverberg thinks that the Democrats have an excellent chance to become the champion of the anti-Microsoft companies, regardless of the outcome of the Justice Department's case against Microsoft. Digital consumers also need a champion, and Democrats would do well to fight on their behalf. Much of the concern of digital consumers has to do with the illegal dealings to which unscrupulous dot-coms have subjected them. Privacy is another issue that Democrats can capitalize on. Silverberg predicts that the issue would give the party tremendous momentum because it would capture the imagination of the general public, unlike duller tech-related issues such as broadband. Sen. Maria Cantwell (D-Wash.) appears to be the party's champion on technology. The reformer has experience with the high-tech industry and already has dealt a blow to Microsoft by defeating Sen. Slade Gorton.

  • "Just Press Print"
    Economist (03/03/01) Vol. 358, No. 8211, P. 73

    Rolltronics in Menlo Park, Calif., plans to use "roll-to-roll" processing to mass produce flexible logic circuits, memory, and other components on thin films of plastic. Roll-to-roll processing is the same manufacturing technique used to print newspapers, coat the insides of potato-crisp bags, and create the transparent plastic "ribbon" connectors inside ink-jet printers or other flexible wiring. Roll-to-roll processing would represent a cheaper, faster, and more flexible alternative to producing electronic devices. Michael Sauvante of Rolltronics says a roll-up computer needs flexible logic circuitry to do actual computing, flexible memory or storage, a flexible power source, and a flexible display. Rolltronics plans to let other researchers solve the problem of a flexible display, which is already the subject of considerable attention. As for a flexible power source, Iowa Thin Film Technologies (ITFT) is using a roll-to-roll process to help several companies manufacture thin-film batteries that can be recharged by flexible solar cells. What is more, Rolltronics has tabbed ITFT to help it come up with flexible logic circuitry and storage. Ultimately, Rolltronics wants to develop a complete flexible computer in a laminated sandwich that would be no more than a couple of millimeters thick.

  • "Disability Laws Take Flight"
    eWeek (03/05/01) Vol. 18, No. 9, P. 50; Vaas, Lisa

    Both federal agencies and businesses that contract with the federal government are rushing to make their Web sites and IT accessible to those with disabilities, as required by Section 508 of the 1998 Federal Rehabilitation Act. Compliance with Section 508, which was passed into law last December, will cost agencies and businesses $100 million, the government estimates. Many businesses will have to redesign their entire site to allow, for example, visually impaired individuals to access non-text content. Businesses that do not comply may lose their government contracts. One such business is Bell Helicopters, which relies on the federal government for a good part of its $500 million in annual revenue. A study conducted by Bell found that fewer than half of its 80,000 Web pages met accessibility standards. Buchanan Associates e-business consultant John Wood, who is working with Bell on meeting Section 508, says the company, like many others, is learning the hard way that Web sites and other IT systems should have the disabled individuals in mind from the beginning of the design process. "A lot of times, developers, they're fairly tunnel vision toward disabled folks using the Web," he says. "A lot of folks don't even know there are devices out there for the blind to read Web pages." Bell is tagging Web pages with metadata to improve disabled individuals' access to those pages. Metadata Management System, a software program from Watchfire, has helped the company scan all of its content and insert the necessary metadata. Woods says the software has cut implementation time by 80 percent. Work is also occurring at federal agencies, including the Health Care Financing Administration (HFCA). Although HFCA has been working to improve access for disabled individuals since before Section 508 became law, HFCA officials continue to implement changes such as fonts that are large enough for senior citizens to read without difficulty.

  • Microsoft Sponsors Live Webcast of ACM1 Conference Next Week

    A live webcast of the ACM1: Beyond Cyberspace Conference will be available to the public, free-of-charge, courtesy of Microsoft. Pre-registration is encouraged for this landmark event, which begins March 12 at 8:30 a.m. PST on and runs through March 14. Webcast participants will be able to see and hear noted industry leaders and visionaries discuss the impact of computing on the future of such diverse fields as astrophysics, biology, education, life sciences, oceanography, and social sciences. Speakers include: Steve Ballmer (Microsoft); David Baltimore (CalTech, 1975 Nobel Laureate); Rodney A. Brooks (MIT AI Lab); Bill Buxton (Alias/Wavefront); Vint Cerf (WorldCom/ICANN); Dr. Ruzena Bajcsy (NSF); Sylvia Earle (National Geographic Society); Shirley Ann Jackson (RPI); Dean Kamen (DEKA and FIRST); Alan Kay (Disney Imagineering); Ray Kurzweil (Kurzweil Technologies, Inc.); Marcia McNutt (Monterey Bay Aquarium Research Inst.); Martin F. H. Schuurmans (Philips Center for Industrial Technology); and Neil de Grasse Tyson (Hayden Planetarium), Michael L. Dertouzos (MIT); with Bob Metcalfe as Master of Ceremonies.
    Pre-register for the live webcast of ACM1 at: http://ms1.digisle.tv
    Access for the ACM1 live webcast will be available at: http://metahost.digisle.tv/microsoft/researchdept_20010312_0314_128.asx

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