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Volume 3, Issue 177:  Friday, March 16, 2001

  • "Scientists, Engineers Rail at PC Industry"
    ZDNet (03/14/01); Konrad, Rachel

    At this week's Association for Computing Machinery conference, a gathering where academics and researchers could rub shoulders with their commercial counterparts, scientists scathingly rebuked the tech industry for not adapting the computer to the needs of human users. For the most part, those on the scientific side said the techno-centric design of the PC was partially to blame for the current doldrums in the industry. They said complex interfaces and obscure operative commands--such as "Alt-Control-Delete"--barred the computer from reaching more people. Additionally, computer engineers were accused of centralizing most household technology in one small box instead of distributing it to fit the lifestyles of people. Rod Brooks, director for the Artificial Intelligence Laboratory and Fujitsu computer science professor at MIT, said simple consumer robots, such as child dolls that learned simple repetitive functions, were greater long-term advances than the increasing computing power of the PC. Michael Dertouzos, director of the MIT Laboratory of Computer Science said, "We have been building computers for 40 years, but they are not very different at the base level. We're not exploiting this technological revolution. We're hardly scratching the surface."

  • "Clinton Acted Hastily on Computer Export Rules, GAO Says"
    Washington Post (03/16/01) P. E4; Nakashima, Ellen

    In testimony before Congress yesterday, representatives of the General Accounting Office criticized President Clinton's end-of-term order to lessen the restrictions governing the export of high-performance computers to those nations that may pose a national-security threat, including Russia and China. Clinton's decision "fails to address all militarily significant uses for computers at the new thresholds and assess the national security impact of such uses," said Susan S. Westin, managing director of international affairs and trade at the GAO. She recommended a thorough review of the national-security implications to reducing the export controls. The high-tech industry supported Clinton's order, arguing that high-performance computers are widely available and that restricting U.S. manufacturers from global markets only hurts the manufacturers rather than any national-security interests. Westin was less opposed to another Clinton order, which raised the bar on how much processing power computers must have before manufacturers must seek a Department of Commerce license in order to export them. Clinton raised the bar from 28,000 millions of theoretical operations per second (MTOPS) to 85,000 MTOPS. As early as one year ago, the bar was merely 2,000 MTOPS. A 600 MHz, Pentium 3 PC is capable of 1,400 MTOPS. The tech industry, along with many national-security analysts, argued that the bar is unnecessary because high levels of processing power are easy to come by--anyone can link together laptops, for example, to increase their processing power--and because powerful computers are not always needed to design military equipment. For example, a computer with a 500 MTOPS capacity was used to design the stealth fighter.

  • "Bush Budget Jeopardizes Tech Fund"
    Associated Press (03/15/01); Hopper, D. Ian

    The Bush administration wants to review ATP, a Department of Commerce program that provides money to researchers working on emerging technology. The program, which has a budget for the current fiscal year of $145 million, has had a role in developing such technology as digital television, microchips that help analyze genetic material, and cloning. Companies that have received funds from ATP say the money has been crucial in allowing them to proceed with their work, especially in those areas which private-sector investors are unwilling to enter because the research would be unlikely to provide immediate dividends. "We probably wouldn't have been able to develop these kinds of techniques and capabilities without the ATP program," explains Terry Smith of New Jersey-based Sarnoff, which has received about $28.4 million in ATP funding. A spokesperson for Commerce says various reports questioning the program are the reason for the review but cutting the program completely is not an option. However, the program has been a prime target for budget cutters in Congress and survived in recent years only through the vigorous support of President Clinton.

  • "The Man Who Invented Fame"
    Wired News (03/15/01); Manjoo, Farhad

    Noted inventor Dean Kamen did not discuss "It," or Ginger, his much anticipated new creation, during his address Wednesday at the Association for Computer Machinery's ACM1 conference. While Inside Magazine this week claimed that the mysterious invention is a hydrogen-powered, emission-free motorized scooter, Kamen was more interested in talking about FIRST, which stands for "For Inspiration and Recognition of Science and Technology," the organization he founded to support science and technology, especially among students. FIRST sponsors events such as robot-building contests to generate enthusiasm for the sciences in students. He contends that society needs more scientists to deal with the problems the world faces and to confront the consequences that new technology inevitably brings. Kamen also says scientists should be accorded the same respect and awe in society that athletes and movie stars saw. Kamen also demonstrated one of his latest inventions, iBot, a wheelchair that balances on just two legs and can climb up and down stairs.

  • "Foreign Sales of Technology Are No Longer a U.S. Refuge"
    New York Times (03/16/01) P. C1; Arnold, Wayne; Kapner, Suzanne

    As the U.S. economy slows, Asian and European markets will hold back on technology purchases, International Data (IDC) analysts reported this week. IDC predicts that tech markets in Asia and Europe--representing nearly half of all global sales--will decrease considerably in the coming months. Asia, which depends more on exports to the United States, is being hit the hardest, despite analysts' previous predictions that the relatively lagging tech sector there would be impervious to a U.S. downturn. They had reasoned that since the Asian tech sector did not inflate in correspondence to the U.S. tech bubble, it would not be susceptible to the subsequent crash. The numbers, however, have proved the experts wrong, and expectations are still being lowered for this year. IDC now says Asian tech sales will grow less than 10 percent this year, compared to over 16 percent in 2000. Tech sales to Asia are doubly hurt as Asian currencies have weakened against the U.S. dollar. Asian sales are heavily dependent on hardware, which must be priced in dollars, whereas services can be adjusted to the local currency. This makes U.S. products more expensive in markets such as South Korea, where the won has slipped 13 percent against the dollar and led to a meager 2 percent tech sales growth in that country, compared to 47 percent last year. Europe, however, is showing some resiliency to the U.S. slowdown, partly because its market is not as dependent on exports across the Atlantic. As the European Union strengthens internal trade, it becomes more insulated from overseas economic shifts. Still, Martin Hingley, vice president for IDC's European systems, says his company will most likely revise its estimates downward for the continent. China remains one hopeful market for U.S. tech companies' exports, as the government prepares for entrance to the World Trade Organization and aims to make its home-grown companies more competitive through IT.
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  • "High-Tech Industry Joins Clamor to Slash Taxes"
    Los Angeles Times (03/16/01) P. C1; Shiver Jr., Jube

    Lobbyists for the high-tech industry are readying a number of new tax-cutting proposals for Congress, amounting to $300 billion over the next 10 years. One broadly supported piece of legislation is a 20 percent tax credit for telecommunication companies wiring the nation's cities with high-speed Internet access. The industry claims that such an incentive would speed cable modem and DSL services that would in turn stimulate customer purchases of other products. Another aim of the tech industry is the 3 percent federal excise tax tagged onto the phone bill. Proponents of its elimination say the bill could spur the economy by eliminating $55 billion over 10 years in Treasury revenues. The most costly of the new proposals is a redesign of the way companies write-off "high-tech assets." Instead of distributing the cost over three years, companies investing in hardware and other industrial high-tech equipment could write off the entire purchase the first year. This could cost the Treasury $280 billion to $350 billion, half of which would be eliminated from the government's revenue the first year the bill is enacted. This is the one proposal that has support from analysts and industry experts. They say that such tax relief could have real impact on the economy, unlike the other tax cuts. Repeal of the 3 percent phone excise tax and the 20 percent tax credit for telecommunications would have marginal effect, say critics of those bills. Consultant Mike Guertin says phone and cable companies are going to reach out to the communities that will bring them profits, no matter if there is a 20 percent tax incentive or not. "The same foot-dragging is going to happen" if the bill is passed, he says. Instead, Guertin insists that innovative technology and services such as Napster will enliven the tech sector more than any tax breaks.

  • "Who Really is Getting Ripped?"
    Los Angeles Times (03/15/01) P. T1; Wilson, Dave

    The Motion Picture Association of America (MPAA) is mistaken in its dogged pursuit of those who use the DeCSS program to unscramble the encryption code on DVDs, argues columnist Dave Wilson. DeCSS, he explains, is a generally unreliable decryption program that is not nearly as effective as several other decryption tools widely available on the Internet. Furthermore, many of these tools are available from Web sites outside the United States, making enforcement of anti-piracy laws, especially the Digital Millennium Copyright Act of 1998, at best problematic, at worst impossible. However, Wilson questions the wisdom of enforcing this law and other anti-piracy statues for those who simply desire to make a copy of a DVD for their personal use. As an example, Wilson suggests that he might want to copy a specific DVD onto his laptop's hard drive so that he can take out the laptop's removable DVD drive but still watch the DVD as he travels. Under current anti-piracy statues, this would be illegal. Wilson acknowledges that piracy is a great concern for those holding copyrights, but he argues that the MPAA and other industry organizations are taking a backwards approach to the protection of those copyrights. Rather than pursuing the pirates who engage in the copying and widespread distribution of DVDs and other media, they are trying to restrict the use of tools that the pirates but also everyday people use. He likens the MPAA's approach to banning photocopiers so that no one can ever copy a book.

  • "At This Year's Show, Humbled Dot-Coms Eye the Bottom Line"
    Investor's Business Daily (03/15/01) P. A6; Howell, Donna; Seitz, Patrick

    Lower attendance at this year's Internet World Spring trade show was indicative of a subdued atmosphere for dot-com and Web-related companies. Most firms focused wares on providing e-business solutions to retail companies instead of the plethora of Web content and entertainment sites featured last year. This year, only 500 companies showed up to display their products, compared with 900 last year. The steep reduction in numbers was evidence of a humbled sector, even though the Internet industry is growing at about 23 percent a year, according to eBay CEO Meg Whitman, who gave the opening keynote address. She said the dot-com catastrophe has actually served to benefit companies such as hers that have turned good business models against the tide of failing Internet firms. EBay expects to see sales increase 50 percent year-over-year, she said. Other companies are still making their way onto the Web market but are keeping their heads cool and their budgets low. Cycle 23, for example, provides e-commerce software and interfaces for retail Web sites. CEO Grace Decker says her company is among a host of Internet companies looking to cash in on brick-and-mortar stores instead of dot-coms because it is a much more stable market.

  • "ICANN Struggles for Consensus"
    Interactive Week Online (03/13/01); Gruenwald, Juliana

    ICANN's proposed deal with VeriSign has sparked much debate. The deal would give VeriSign and its investors a better idea about the kinds of services it would be able to provide in the future. "Having certainty and clarity gives us comfort," says VeriSign CEO Stratton Sclavos. Being able to presume that VeriSign will retain control of the .com domain provides the company with a long-term strategy, says Sclavos. However, some ICANN board members are not happy with the deal. "This has been negotiated by the staff without the direction of the board," says ICANN board member Amadeu Abril i Abril. This occurs too often and others will "lose faith in the process" if ICANN continues to act in this manner, says Abril i Abril. Some board members, including Abril, remain unsure that VeriSign should be permitted to retain its control over .com and were upset that they could not alter the deal. The board should get feedback from the Domain Name Supporting Organization (DNSO), according to several ICANN board members. However, there is not enough time to provide the appropriate feedback, according to a number of DNSO members. The ICANN board also elected to examine technical difficulties and other concerns relating to the internationalization of domain names. The creation of multiple standards could generate confusion among domain name owners, say some board members.

  • "Security Fears for Peers"
    Wired News (03/15/01); King, Brad

    Peer-to-peer technology is gaining momentum, with more and more users banding together to swap digital songs and other files, but both intellectual property companies and governments concerned about security see potential disaster ahead. Besides the threat of viruses and other malware being spread through such networks, the rise of decentralized networks like Gnutella and Freenet create concern that damaging illegal activity will be nearly impossible to trace. Gordon Mohr, CTO at digital-cataloguing company Bitzi, says copyright owners and worried governments are going to start focusing on ISPs to track individuals instead of regulating centralized servers such as Napster. Already, a French court has ruled that its country's laws are applicable to providers of Web content, implying that any jurisdiction has sway over what goes up on the worldwide Internet. While attempts to provide security through such controlling measures appeals to copyright holders and governments, it is a big red light to privacy advocates. A recent International Data report says privacy will be a $9 billion business by 2004. Hushmail executive Genevive Vancleave maintains that, despite governments' concern with security, consumer concern over privacy is going to win the day, because businesses listen to consumers "and it's businesses who pay governments' bills." Still other experts say the advent of instant messaging changes the face of file sharing. Because instant messaging eliminates the need for standard protocols, it will be the main focus of future peer-to-peer networks, as is being seen with Aimster, the company that runs on AOL's AIM system. Such a shift would alleviate some concern over worldwide networks with no security controls because they are clustered in smaller, more exclusive networks.

  • "Tech Sector Layoffs: Not What You Think"
    E-Commerce Times (03/15/01); Blakey, Elizabeth

    Although layoffs are occurring across the board in the tech industry, from dot-com pure-plays such as Amazon to manufacturing stalwarts such as Intel, different reasons underlie the cuts depending on each company. Dot-com startups and companies gasping for air in the troubled tech waters are laying off workers out of absolute necessity--lack of new funding means that they have to cut costs and hope to weather out the storm. However, for those corporations that provide the foundation of the tech industry, layoffs represent another type of necessity--maintaining profitability for their investors. John Challenger of Challenger, Gray, & Christmas says companies are not just cutting back to enhance their value cosmetically, but are laying off people to stay above the profit line. Of the big tech companies' employee reductions, he says, "Unlike in privately held companies, investors are a driving force behind the decisions made at these publicly held companies. So, cutting jobs is not just for show." International Data analyst Jonathan Gaw says layoffs may not even be in the best interests of these companies in the long term, because rehiring costs when the economy picks up are going to be expensive. He says the current big-name layoffs are part of a domino effect caused by the dot-com hysteria and subsequent crash.

  • "Gadget Wars"
    Economist (03/10/01) Vol. 358, No. 8212, P. 59

    Now that computers have saturated life at home and in the workplace, they are beginning to change the handheld consumer-electronics market, a market long dominated by answering machines, cordless phones, walkmen, handheld video games, and still and video cameras. PC technology has spurred new portable devices in the forms of MP3 players, Internet radio, Palm Pilots, and other gadgets, which now comprise nearly 10 percent of consumer-electronics market. Although that is still a small slice of the pie, PC-based devices hint at radical future changes--a shift in mass culture from 20 years of entertainment being dominated by video players and walkmen to the supremacy of the Internet, DVD players, and new Web-based devices. The manufacturing parameters of the consumer-electronic marketplace are also changing. Analog devices created a marketplace that became dominated by mass production at the lowest cost, a paradigm that saw huge, mostly Japanese conglomerates such as Sony and Panasonic win out. Gadgets that are digital-analog hybrids have begun carving out a marketplace that prioritizes software over hardware, which has allowed tiny firms such as Sonicblue to lead the MP3 field and has also squelched attempts by Japanese giants to compete without resorting to Microsoft's or someone else's software platforms. Outsourcing of manufacturing has also leveled the playing field between Internet startups and manufacturing veterans. However, the jury is still out on whether Internet firms will be able to reach beyond the 10 percent of tech-savvy consumers and develop easy-to-use PC-based gadgets for John and Jane Doe, nor do experts know whether consumer-electronics firms that have moved their resources into PC-research will be able to harness new technologies to maintain their dominance.

  • "Reinventing Research"
    InformationWeek (03/12/01) No. 828, P. 50; Ricadela, Aaron

    Although the current economic downturn has prompted many firms in the tech sector to lay off workers and cut spending, many leading tech firms are not reducing research and development expenditure at all. "You never save your way out of a recession," says Intel CEO Craig Barrett, whose company is not planning to cut its research and development budget, even while other departments at the leading chipmaker tighten their belts. Without new products, Barrett contends, it is very difficult to emerge from financial difficulties. Meanwhile, at Sun Microsystems, research and development funds are slated to increase 20 percent for its fiscal third quarter, even though the firm has already warned investors to expect lower profits over the same period. IBM, which leads all U.S. firms in the number of patents received, continues work on Blue Gene, a supercomputer for the biotech field that will be able to perform over 1 quadrillion floating point operations per second. Firms realize that the key to successful research and development is both to meet the needs of customers--or, as Microsoft does, to meet the needs of its own products--and to be first to bring new technology to the marketplace. Observers point to the struggles of Xerox, home of the world-famous Palo Alto Research Center (PARC), as an example of how research and development, even when successful, can disappoint the bottom line. PARC is the birthplace of such critical technology as Ethernet, the graphical user interface, and the client/server architecture. However, PARC and Xerox could never combine these inventions into a successful commercial product such as a PC, and the firm is now struggling to stay afloat in its niche market--copying machines and printers. Still, Xerox is raising PARC's budget, while seeking an outside investor to support the lab, hopeful that the next wave of invention to emerge from its researchers will bring the company back to the top.

  • "Robots"
    BusinessWeek Online (03/19/01); Kunii, Irene M.; Port, Otis

    A recent robotics show in Japan saw the debut of the Sony Dream Robot (SDR), a 50-cm tall robot that performed before enthralled crowds. Sony robotics engineers Tatsuzo Ishida and Yoshihiro Kuroki designed the SDRs, part of a strong movement in Japan toward developing advanced and perhaps even human-like robots. Long a staple of science fiction, robots are enjoying a new popularity, not only among teenagers who want a robotic puppy, but with the military, which wants robots to assume some of a soldier's functions, with industry, which thinks that robots would be ideal for heavy labor, especially in hazardous areas, and with several nations' governments, which think robots could perform socially useful tasks. In Japan, for example, the government foresees robots that could care for the rapidly growing elderly segment of its population. The Japan Robot Association says such service robots will number 11,000 by 2002, with 65 percent of those performing tasks in nursing homes in hospitals. Health-care robots could be a $1 billion market by 2010, the association predicts. However, designing a robot is a very difficult task. Engineers must find ways to program robots to do what humans do by instinctive thinking--simple tasks such as walking while not running into any objects. Despite the challenge, Japanese robotics experts predict that, within the next two decades, households will have more than one robot that can respond to voice commands, learn tricks, and perform tasks both mundane and remarkable. Japan is the unquestioned leader of the robotics field, with companies such as Matsushita, Sony, Omron, and even automakers Honda and Toyota working on projects. Robotics work is also ongoing elsewhere, including a project in evolutionary robotics--robots that learn as they age--at the Massachusetts Institute of Technology. Another trend in robotics is taking shape at the Los Alamos National Laboratory, where Mark W. Tilden is working on robots that look nothing like humans but are able to perform remarkable tasks. For example, one spider-like, solar-powered robot has learned to follow the sun in order to recharge its energy.

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