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Volume 3, Issue 268: Wednesday, October 24, 2001

  • "Valley's Recovery Outlook is Gloomy"
    SiliconValley.com (10/23/01); Sylvester, David A.

    Hobbled by the economic slowdown and the Sept. 11 terrorist attacks, Silicon Valley is not expected to bounce back until the second half of 2002, according to experts. Corporate profits have been falling since spring 2000; these in turn have sparked layoffs and spending cuts. Companies reporting losses and profit declines include Compaq Computer, Sun Microsystems, Intel, Apple Computer, and Microsoft. Sales have fallen 22 percent and $9.3 billion has been lost, according to the third-quarter earnings results of 181 companies in the valley. Last year saw a profit of $3.4 billion, in comparison. Thomson Financial/First Call expects a 58 percent drop in profits for tech companies on Standard & Poor's 500. PC and semiconductor manufacturers have been hit the hardest: The global chip industry is expected to suffer a 30 percent decline, while Gartner Dataquest VP Charles Smulders predicts a 6 percent fall-off in computer shipments this year and no more than 3 percent growth next year.

  • "EFF Lobbies Against New Zealand Copyright Law"
    Newsbytes (10/23/01); McGuire, David; Creed, Adam

    Despite the urging of leading U.S. technology companies, the Electronic Frontier Foundation (EFF) is lobbying New Zealand to not pass proposed new digital copyright laws that would be similar to the U.S.'s Digital Millennium Copyright Act (DMCA). The EFF is working to counter the influence of Microsoft, which has formally asked New Zealand to further protect digital copyrights as that country considers updating its Digital Technology and Copyright Act of 1994. However, the EFF and other U.S. groups have argued that DMCA goes too far in protecting the rights of copyright holders, and is pushing New Zealand to pass less stringent copyright protections. EFF's Fred von Lohmann says, "Very few people have paid attention to the fact that the DMCA story is an international story." Microsoft wants new laws that force ISPs to remove pirated material from their networks and that provide copyright protection to "temporary copies" of digital files.

    To read more about DMCA cases, visit http://www.acm.org/usacm.

  • "Techs Broadside Anti-Piracy Plan"
    ZDNet (10/22/01); Borland, John

    On Monday, a group of leading technology companies held a press conference in which they detailed their firm opposition to a proposal backed by Sen. Ernest Hollings (D-S.C.) and Walt Disney to install anti-piracy safeguards in consumer electronics devices. IBM, Compaq Computer, and Microsoft are among those firms that are against the measure. Under the proposed legislation, the technology industry would only have 18 months to formulate a copy-protection standard before the government imposes one of its own; the sale of any "interactive digital device" that lacks the anti-piracy technology would be illegal, as would the removal of such technology. The as-yet-unintroduced bill sparked immediate criticism from civil libertarian groups such as the Electronic Frontier Foundation and technology trade associations. Computer Systems Policy Project executive director Ken Kay called the bill "an unwarranted intrusion by the government into the commercial marketplace." Thus far, only Disney has publicly endorsed the bill. Other studios and agencies, such as the MPAA, champion some of the ideas behind the bill but have not directly come out in favor of it.

  • "Software Companies Look Beyond Traditional Borders"
    Financial Times (10/23/01) P. 28; Merchant, Khozem

    Indian software companies are weaning themselves from the faltering U.S. market and turning to Europe instead. Already, about 25 percent of Indian software exports go to Europe today, up from virtually nil in the early 1990s when nearly everything went to the U.S. Cultural perceptions and language barriers may prove a hindrance to some companies' entrances, however. Despite the German government's efforts to attract more software engineers, Indian programmers still remain reluctant to go to the country because it is perceived as racist. Moreover, German firms prefer long-term business relationships, unlike the convenient short-term contracts Indian outsourcers typically sign with U.S. companies. Britain, which now has the largest presence of Indian IT in Europe, will likely remain in that position because of historic ties and common language.

  • "Israeli Tech Firms May Benefit"
    Associated Press (10/23/01); Keyser, Jason

    After being hammered by a year of Israeli-Palestinian fighting and the global recession, Israel's high-tech industry hopes that the state of anxiety generated by the Sept. 11 attacks will be a boon for business. "To our clients remote access is very important, especially if you want to work from home, especially under the extreme security measures we're seeing now," says AppSwing's Rinat Gersch. Other firms expect their security expertise and security-conscious products will arouse interest. Israel will also grant exemptions from capital gains taxes to foreigners who invest in Israeli capital venture funds, according to Israeli Finance Minister Silvan Shalom; the move is part of an attempt to bring investors who left the market over the last year back into the stable. ING Barings Israel's head of investment banking Michel Habib expects Israeli companies to seek out funding from European capital markets while the American sector recovers.

  • "Fiber Optics May Speed PCs"
    CNet (10/18/01); Spooner, John G.

    Computer chip researchers are investigating ways to manufacture chips based on optical connectors instead of copper or aluminum wires. Chipmakers face serious hurdles to ratcheting up processor speed because it requires substantially more power, which in turn causes all sorts of complications with signal interference, overheating, and limitations on battery life. Not only would optical connectors between chip components dramatically lower the power required, but they would also be considerably faster than chips based on metal wires. Researchers at Intel, MIT, and Stanford University are developing smaller and cheaper laser transmitter and receiver parts to be used in fiber-optic chip applications. Analysts say the conversion to optical signals between chip components is more than five years off, and that optical technology actually residing on the chip is at least 10 years away.

  • "APEC Leaders Plan Using IT to Fight Terror"
    InfoWorld.com (10/21/01); Williams, Martyn

    Leaders at the Asia-Pacific Economic Cooperation forum this week condemned the terrorist attacks against the United States and pledged to build new networks linking customs agents and immigration authorities in their countries. These networks would allow officials to better enforce laws and find criminals while easing the flow of goods and travelers. Such networks would make it possible for customs officials "to better enforce laws while minimizing the impact on the flow of trade," APEC said in a statement. State heads from Russia, the United States, China, and other Pacific Rim countries also promised to enhance the strength of critical systems using technology, including telecommunications, health, transport, and energy.

  • "Security-Conscious Firms Go Under Wraps"
    USA Today (10/23/01) P. 1B; Lieberman, David

    Government agencies and private companies are trying to figure what is safe to post on the Internet without risking security, but some advocates of public accountability say that many in the latter group are just using the Sept. 11 terrorist attacks as an excuse to not disclose information about declining business in a weakening economy. The Environmental Protection Agency has already removed data about hazardous chemicals used at different plants in the United States, and the harm that a chemical spill would have on the surrounding communities. The Department of Transportation has taken some maps off its sites, including those showing locations of gas pipelines and statistics revealing America's most congested highways. In the private sector, defense contractors have been ordered to keep quiet by the Pentagon, drawing criticism that the public will have no way to evaluate the effectiveness of certain weapons if this continues, as happened during the 1991 Gulf War, when it was later discovered that the much-touted Patriot missiles were in fact highly inaccurate. Other companies are removing travel itineraries from their sites, and executives of Middle-Eastern descent are taking pictures of themselves off business Web sites, fearing that people may target them for retribution.

  • "XP Meets Pockets of IT Resistance"
    IT Week Online (10/22/01); Bennett, Madeline

    Microsoft's new Windows XP operating system will bring a number of new Microsoft initiatives to home users, but those same interactive and Web services features should be shunned by businesses. For one, XP's instant messaging and videoconferencing tools are not compatible with most firewall setups and even Microsoft has not marketed XP Professional as a replacement for Windows 2000. One IT manager interviewed by IT Week said his company had decided not to commit their future IT purchases to Microsoft but explore other options that offered greater security and less costs. According to that person, Passport was too great a liability since a user's entire digital record would be available should their single account password be hacked.

  • "Silicon Name Computes Only in Valley"
    Investor's Business Daily (10/23/01) P. A8; Deagon, Brian

    Many U.S. states or cities, hoping to gain a higher profile in the technology sector, have adopted monikers with the word "silicon" in them, but so far California's Silicon Valley remains the only significant success story. The colorful names include Silicon Beach (Florida), Silicon Prairie (Chicago), and Silicon Bayou (Louisiana). Unfortunately, these nicknames are seen as little more than publicity stunts. Much more than a clever title is needed to become a formidable tech center. "The underpinning is having good universities, a critical mass of companies, skilled workers, and entrepreneurial spirit," says Michaela Platzer of the American Electronics Association. Regions that are exhibiting fast growth because of such concentrations include Colorado, Washington state, Virginia, Texas, Georgia, and Washington, D.C.

  • "U.S. Forces Pack Pocket Computers in Afghanistan"
    Wall Street Journal (10/23/01) P. B1; Tam, Pui-Wing

    Handhelds are finding use as tactical and logistical tools in the U.S. military operations in Afghanistan. Some of the pocket computers are brought by soldiers and sailors from home, while others are specially developed by the military to withstand environmental stress. On the USS McFaul, the handhelds are being used to coordinate inspections, download email, and access the day's roster of operations via infrared interface. Other capabilities include tracking troop movements, laser targeting, and carrying encrypted mission data. Meanwhile, the Space and Naval Warfare Systems Center, along with third-party vendors, are designing software that will enable the devices to keep tabs on personnel, map out enemy positions, and carry out heat-stress surveys. Most of the handhelds are built by Palm and Handspring, while the specialized devices are being manufactured by Paravant Computer Systems, Microsoft, and Symbol Technologies, among others.

  • "Smart Use of Tax Dollars Best Boost for National Security"
    SiliconValley.com (10/20/01); Gillmor, Dan

    San Jose Mercury News Technology columnist Dan Gillmor recommends that the country invest in three key areas that will yield long-term security: The creation of a national broadband network, a stronger public health infrastructure, and energy independence. The broadband network, Gillmor writes, will allow the communications grid to continue functioning in the event of a natural or man-made disaster, and offer more flexible avenues of employment and education that would boost the economy. Fiber-optic connections should be linked to every home and office, according to Gillmor, who advises that its maintenance be left to the companies rather than the government. Meanwhile, he argues that the public health system must be more robust in order to deal with terrorist-related outbreaks. Gillmor also writes that there should be more reliance on conservation and renewable sources of energy as well as decentralized, micro-power plants. He believes that these investments should be made with tax dollars, but urges the government to rescind the recently passed tax cuts, which only benefit the wealthy.

  • "Microsoft Explores Legal Options Against Hacker"
    Reuters (10/22/01); Zeidler, Sue

    On Monday, Microsoft declared that it is mulling its legal options and investigating an anonymous hacker, "Beale Screamer," who compromised its digital rights management software last week, enabling users to distribute online songs free of restrictions. The hacker breached Windows Media audio version 7, but Microsoft group product manager Jonathan Usher said the damage was minimal. Users of Screamer software must buy a digital music file in order to use it; the software strips the locks off the file. Microsoft has been expecting hacks such as Beale Screamer's, and Usher said the company has been upfront with its content partners that "no technology and no DRM is 100 percent secure."

  • "Online Agitators Breaching Barriers in Mideast"
    Washington Post (10/24/01) P. A10; Dobbs, Michael

    Saudi political dissidents and other persons persecuted by the Saudi government have taken to the Web to broadcast their views. Although Saudi Arabia has only permitted Internet access since 1999 and routes all traffic through central servers, it is already losing control over what its residents see and listen to. Saudis that want to participate in anti-government conversations online or view dissident views can do so anonymously, often using technology and services from U.S. companies. More ominously, U.S. officials have said the al Qaeda network uses the Internet to disseminate information, such as Mohammed Atef's threat against the United States last week, which was then relayed throughout the Web by supporters. Foreign-based operations, such as the Islamic Observation Center in London, seem to freely serve as nodes for information to be dispersed throughout a global network since they are out from under the control of repressive Mideast governments. However, Yasser al-Sirri, director of the Islamic Observation Center, was recently arrested for his group's role in relaying Atef's message.

  • "IT Spending To Jump, Survey Says"
    Government Computer News Online (10/22/01); Daukantas, Patricia

    IT spending will climb 15 percent next year, according to a survey by the Government Electronics and Information Technology Association (GEIA). The survey also found that the September 11 attacks have changed the ways the government will spend the money. IT security and wireless telecommunications will take priority in budget plans, the GEIA says. Overall, agencies will spend $49 billion on IT in fiscal 2002, the GEIA predicts. The civilian and defense sectors will divide funds almost evenly, at $24.2 billion and $25 billion, respectively. Some $2.5 billion of civilian spending is earmarked for electronic transactions, according to Mary B. Freeman, federal market research manager for Verizon Communications. She adds that the Defense Department has allocated some of its command and control funds for 2002 for IT spending. By 2007, the annual government IT budget will balloon to $65 billion in today's dollars, GEIA forecasts.

  • "WebDAV Protocol Comes of Age"
    InfoWorld (10/15/01) Vol. 23, No. 42, P. 37; Moore, Cathleen

    The Web-based Distributed Authoring and Versioning (WebDAV) protocol has started to surface in software, servers, applications, and operating systems, signaling its maturation. WebDAV enables the Internet to be used for collaboration and distributed file sharing. ICD's Bill North says that business users are likely to reap the most benefits from WebDAV. Observers note that remote workers can use WebDAV-enabled systems and software to share documents, edit the content of a document management system, and carry out virtual product development. Basing its WebFile Server (WFS) software on WebDAV, file management software supplier Xythos made the system interoperable with all operating systems and platforms, says Xythos VP Jim Till. Meanwhile, Oracle's Internet File System (iFS) features WebDAV support and by year's end the company will launch its WebDAV-enabled Oracle 9iAS Portal product, Release 2. Other companies releasing products that support WebDAV include Apple, Adobe Systems, and Microsoft.

  • "Laws Without Borders"
    Red Herring (10/15/01) No. 106, P. 25; Lawlor, Julia

    The final process of writing the Hague Convention on Jurisdiction and Foreign Judgments in Civil Matters has been postponed because a number of interests are concerned about the treaty. The Hague treaty seeks to harmonize laws related to the Internet on a global level, in an effort to level the playing field on such matters as libel, copyright, patents, and trademark. When one of the 53 nations involved in the treaty creates an Internet-related law, all of the other nations would be required to take a similar stance on the issue, with the only exception being court decisions that say a particular judgment is counter to public policy. Free-speech advocates oppose the treaty because they could lose their freedom of speech rights on the Internet if another nation decides to extend a more restrictive policy to the Web. ISPs do not favor the Hague treaty because they would be subject to lawsuits for providing a channel for defamation, hate speech, and copyright infringement; and entertainment companies have switched sides on the treaty, now that they realize they could be easy targets for lawsuits as well. "This effectively globalizes every country's laws that restrict publication on the Internet," says open-source advocate Richard Stallman, president of the Free Software Foundation. "So everybody gets the worst of everything." There is still a possibility that the treaty could be scrapped altogether.
    Click Here to View Full Article

  • "Pay Stubbed"
    Interactive Week (10/15/01) Vol. 8, No. 40, P. 31; Duvall, Mel

    An overabundance of IT professionals due to the economic recession has not led to lower salaries, but salary increases and bonuses are definitely falling, according to an Interactive Week survey of 2,500 IT workers. The survey finds that networking managers, e-commerce managers, and executive managers have been hit the hardest. Pay increases this year ran between 1 and 5 percent, with 1.9 percent being the average. Security administrators had much higher increases, in comparison. Meanwhile, recruiting firms have suffered; many surveyed managers say they have stopped using such companies except to fill specialized positions. But although workers are receiving less perks, they do appreciate that their jobs are more secure. Over 25 percent of the respondents expect additional layoffs in the coming months, however.
    Click Here to View Full Article

  • "Intellectual Property Is Not a Toy"
    Business 2.0 (10/01) Vol. 2, No. 8, P. 90; Keegan, Paul

    Denmark toymaker Lego is struggling with how to approach hackers and the open source community that have taken an interest in its new high-tech robotics kit, Mindstorms Robotics Invention System. So far, Lego has stood by as hackers tinkered with its software, which has improved the smart toy, and made it even more popular. However, Lego feels that is must do something now that one hacker, German researcher Markus Noga, has created his own operating system, LegOS. Not only does the new operating system compromise the company's brand name and ability to provide tech support, rivals could use the technology to build their own imitation products. The dilemma is another variation of the debate between Microsoft, which maintains that companies must protect their copyrights and patents, and the open source community, which believes software develops better and faster when everyone has access to its code. Some experts suggest that Lego could learn something from observing Palm, which gives away its source code to outside programmers to create applications, but protects its OS because the company sees it as essential to its long-term business model. Lego could let hackers continue to tinker with its software, but set up a standard for bootleg Mindstorms software, experts say. Lego says LegOS looks so much like Legos that it is now considering suing Noga to protect its trademark.

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