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Volume 3, Issue 274: Wednesday, November 7, 2001

  • "Nine States Rebuff U.S.-Microsoft Accord"
    Wall Street Journal (11/07/01) P. A3; Wilke, John R.

    Half of the states suing Microsoft have agreed to settle along with the Justice Department, leaving the remaining nine states to pursue court proceedings alone. On Tuesday, extended talks resulted in a tweaking of the settlement to provide added protection from Microsoft retaliation, further disclosure of source code, and clearer wording that ensures PC makers can endorse other companies' software on top of Windows. The states not satisfied with the settlement, including Connecticut and California, will begin preparing proposed remedies while readying for further concessions from Microsoft. Such concessions should include better enforcement provisions and even more protection from retaliation, according to Connecticut attorney general Richard Blumenthal. Microsoft lawyer John Warden largely rejected the idea of more settlement talks.

  • "Hewlett Family to Vote Against Compaq Deal"
    Los Angeles Times (11/07/01) P. C1; Wilson, Dave

    The proposed merger of Hewlett-Packard and Compaq Computer, which is proving unpopular with many investors, must now contend with a new, possibly decisive, opponent: The Hewlett family, which has publicly announced its intention to vote against the transaction. The embarrassment this announcement represents could unravel the deal, but both companies say they are firmly committed to completing the acquisition. Walter Hewlett, son of the late co-founder William Hewlett, said the deal was too uncertain and that HP would create more shareholder value by operating independently. "I believe the extensive integration risks associated with this transaction are not worth taking," he said in a statement. The deal was worth $25 billion the day before it was announced, but as of yesterday was downgraded to roughly $21 billion. The Hewlett family owns 5 percent of HP; a spokesman for the Packard family, which owns 10 percent, says it is still undecided. Analysts say that aborting the merger would hurt both HP Chief Executive Carly Fiorina and Compaq Computer.
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  • "Europeans Unmoved by U.S. Proposal"
    New York Times (11/06/01) P. C6; Meller, Paul

    European antitrust regulators said the U.S. settlement with Microsoft had no immediate bearing on their case, while Microsoft CEO Steve Ballmer said the company was now looking for a settlement in Europe as well. A European Commission spokeswoman called the European case factually and legally different from the U.S. case. The Europeans charge Microsoft for illegally gaining market dominance for low-end servers, or workstations, through its monopoly on desktop software. Regulators are also targeting Microsoft's practice of bundling free software with Windows in order to wipe out competition.
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  • "Requests for Skilled-Worker Visas Fell Short of Limit"
    Washington Post (11/06/01) P. E12; Johnson, Carrie

    Despite the increased cap on H-1B work visas from 115,000 per year to 195,000, the demand for the visas and highly-skilled workers did not meet the cap's expectations, the Immigration and Naturalization Service reported yesterday. The H-1B visa allows employers to request workers with a bachelor's degree or higher from foreign countries to work in the United States for up to six years. The figure released by the service, however, did not include 29,000 applications it was unable to finish reviewing before Sept. 30 or the 30,000 applications it received between March 2000 and Sept. 30, 2000. The National Association of Manufacturers says that although the number of visas requested did not meet the cap, many employers in the manufacturing industry were still seeking high-tech workers despite the economic downturn, especially during the first three quarters of 2001. However, Rep. Tom Tancredo (R-Colo.) has introduced a bill that would roll back the visa limit to 65,000 a year, and then tie future visa limits to the unemployment rate.

  • "High-Tech Lobbyists Keep Heat High Under Stimulus Bill"
    Newsbytes (11/05/01); MacMillan, Robert

    Many high-tech groups are pushing for technology tax breaks and other incentives in the proposed Congressional stimulus package. One of them is the Alliance for Small Business Investment in Technology (ASBIT). ASBIT members include Intel, Gateway, the Computing Technology Industry Association, and the National Association for the Self Employed. ASBIT says the package should increase first-year depreciation allowances for IT equipment that become quickly outdated. In addition, the group says small business expensing limitations should be increased to $50,000 with a phase-out of $400,000. The House-passed bill provides an extra 30 percent in first-year depreciation for assets with lives of 20 years or less, but ASBIT says the wording discourages investment in short-lived products. It recommends tripling the bill's current depreciation amount. ASBIT also says the expensing limits and phase-out are inadequate for boosting investment.

  • "Companies Shy Away From the Penguin"
    CNet (11/07/01); Non, Sergio G.

    Goldman Sachs' first corporate IT spending survey found a surprising lack of interest in Linux at the enterprise level, despite the cost benefits the open source system offers in tough economic times. The survey also found that only 3 percent of IT managers expected to use Linux as the main server operating system during the next three years, compared to 60 percent going with Windows. Linux also ranked just above supply-chain management as the lowest spending priority for the 100 IT executives in Fortune 1000 companies. Chad Robinson, senior research analyst for IT executive consultancy Robert Frances Group, says Linux adoption varies largely from company to company, but also is more predominant in technologically progressive industries such as finance. He says, "Many of our clients consider Linux to be a very real option for cost savings. There's a definite ROI."

  • "Public Role on Web Matters Debated"
    Associated Press (11/05/01); Jesdanun, Anick

    The ICANN At-Large Study Group charged with recommending a structure for public-participation has formally endorsed its proposal to reduce elected ICANN board-seats from 50 percent of total seats to 33 percent, and allow only domain name owners to vote after paying a "membership" fee that will cover voting administrative costs. At Large Study Group Chairman Carl Bildt argues that such changes are necessary to end the debate over public participation. Elected ICANN board member Karl Auerbach has threatened to resign if the proposal is adopted. Experts expect ICANN to postpone any decisions regarding the issue from its California meeting next week to its March 2002 meeting in Ghana.

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    "Survey: New Economy Poised for Growth"
    United Press International (11/06/01)

    Opportunities for growth in the New Economy still exist, according to an annual survey from the Milken Institute, and California, Massachusetts, Colorado, Connecticut, and Maryland are the states in the best position to take advantage of it. Milken's New Economy Index ranks states based on 12 areas that it believes are the keys to New Economy growth, including venture capital investments, business starts, IPO proceeds, the number of patents issued, and the percent of advanced degrees. Milken's Ross DeVol says highly ranked states were able to efficiently turn research into commercial successes, thus boosting their economies. DeVol warns not write off the New Economy. He says, "The Internet and technology will continue to improve productivity, and those regions that can take advantage of high-tech will be rewarded." Other states that did well in Milken's study included Delaware, Texas, and Arizona, while New Mexico fell from 10th last year to 21st this year.

  • "Germany to Screen IT Workers--Europe"
    Australian (11/06/01) P. C2; Shankar, Jay

    The Sept. 11 terrorist attacks in the United States have prompted German Interior Minister Otto Schilly to call for beefed-up screening procedures for Indian work visa applicants. The country is concerned that terrorists could use the relaxed visa requirements for Asian IT professionals to sneak in as hi-tech workers. Security is not the only concern engendered by the visa program: Opposition parties and labor unions are criticizing immigration in general. But no one can deny that Germany must expand its IT workforce; German companies say they require some 75,000 additional computer experts. German officials report that 10,000 visas, or green cards, were issued in 2000, 2,046 of which went to Indian IT graduates. The interior ministry's Rainer Lingenthal says that permanent citizenship may be granted to green card holders, provided they prove they have no connections to terrorism. Migration legislation is also being improved by German authorities, according to Schilly.

  • "Indian IT Firm for Non Dummies"
    Wired News (11/03/01); Joseph, Manu

    Infosys is offering American and European university students the opportunity to come to India and participate in internships for real-time projects rather than dummy projects. Working on real-time projects is far more valuable to students, notes Alisa Tongg, assistant director in the office of preprofessional advising at MIT. In the words of one Infosys intern, University of Chicago student Smitha Seshari, being recruited for a real-time project is "a validation of my competence." There were some 800 international students applying for 24 vacancies in the 2000-2001 school year. Almost half of the interns recruited so far hail from North America, which is responsible for 73 percent of Infosys' revenue. The chance to go to India is a major draw for students, but demand has proven so high that some of next year's interns will be assigned to Infosys offices in Britain, Japan, and the United States.

  • "Students Downgrade Their Desires"
    Financial Times--Inside Track (11/07/01) P. 12; Wendlandt, Astrid

    With IT job prospects gloomy because of the slump in the technology sector, many computing students have changed their original plans for joining the workforce after they graduate from college. A sense of adventure and a desire to join trendy startups has been replaced by a more sobering need for job security, focusing on finding work in large, established companies. Nor will finding such a job be easy. "I know it's going to be difficult to get a job because I will be competing against experienced people who have been made redundant," explains University of Manchester student Pritesh Mistry, referring to the IT layoffs and budget cuts over the past six months. Another sector students such as Mistry are targeting is investment banking, where IT is expanding. Students are also learning transferable skills that can open up their employment options. Entry-level IT positions are particularly hard to come by because many companies cannot afford to train new employees, according to recruiters. Executive Network director Terry Toms notes that applicants are lowering their salary expectations as well.

  • "Darpa Kick Starts Wearable Computer Initiative"
    EE Times Online (11/02/01); Merritt, Rick

    The wearable computing business could receive a significant boost from the Defense Advanced Research Projects Agency (DARPA), which plans to spend "tens of millions of dollars" over the next five years on an e-textiles initiative that would encourage the development of new wearable systems made of fabric. Although DARPA is likely to put the new wearable systems to military use, such as in parachutes that generate solar power or track satellite signals, much of the developments could become commercial products. The developments could involve new kinds of yarns, fabric interconnects, and CAD tools for weaving into textiles that are essentially a printed-circuit board, which will include sensors, actuators, photovoltaic devices, batteries, and storage. Connecting devices and fabrics, reinventing networking, and a lack of a silicon equivalent in textiles will be some of the challenges that companies face. Although wearable computing is a struggling business that sold about 2,000 systems valued at about $20 million last year, the technology has a strong advocate in Georgia Institute of Technology researcher Thad Starner, who maintains that it is not merely another form of a desktop computer, and has the potential to make every portable consumer electronic product obsolete. "The real problem is not the hardware, but getting people used to the concept that this is like a suit and it has to be tailored to the individual," says Starner.

  • "'White Hat' Hackers Threaten Information Anarchy"
    Newsbytes (11/06/01); McWilliams, Brian

    Computer security experts are at odds over conflicting proposals from Microsoft and "white hat" hackers to either repress or foster open discussion about security weaknesses. A security expert going by the alias "HellNbak" says if Microsoft is able to curb the free flow of information about server weaknesses, it would leave legitimate security experts in the dark and empower malicious hackers. HellNbak launched a campaign recently to counter Microsoft security response center chief Scott Culp's effort to stop what he calls "information anarchy," or the open broadcast of software security flaws. Although giving potential tools to hackers, the open discourse revealing software vulnerabilities gives a heads up to system administrators as well, says SecurityFocus CTO Elias Levy. Microsoft is expected to press its case for withholding security vulnerabilities at its Trusted Computing conference this week. The company also plans to file a proposal with the Internet Engineering Task Force.

  • "Western Economy Feeling Pain of Tech Bust"
    Reuters (11/05/01)

    The economy of the Western United States, home to many high-tech companies, has been hit harder than the rest of the country by the downturn in the technology sector, according to a paper authored by Mary Daly of the Federal Reserve Bank of San Francisco. Daly writes that job growth in the West is on an even keel with other regions for the first time since the last national recession in 1990-1991. She pegged 2000 employment growth at 3.5 percent, but in May-December of this year that number fell at an 0.5 percent annual pace. The technology growth slowdown has also extended to the construction, shipping, warehousing, and trucking industries. Furthermore, Daly says that both the manufacturing and service arenas are experiencing a simultaneous decline.
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  • "Firms Wrestle With Effects of Reservists' Call-Up"
    Investor's Business Daily (11/07/01) P. A10; Howell, Donna

    Technology firms are dealing with the issues caused when their staff in the military reserves are called to duty, taking with them key information and leaving hefty responsibilities. Most firms surveyed by Watson Wyatt & Co. said they either did not know how the effects of Sept. 11 would affect them or expected to be hurt financially somehow. Many military reservists are over 30, and 37 percent are employed in professional or tech sectors, according to a study by the Californian National Guard division. About 60 percent of the companies surveyed by Watson Wyatt said they would compensate for the pay disparity between what reservists receive from the military and what they usually earn. Companies are having varied success in filling knowledge gaps. Bisk Education public relations director Steve Valley, who is also a Florida Army National Guard reservist, said he was able to keep tabs on his workplace situation through email while helping to secure the nation's airports last month.

  • "Anti-U.S. Hackers May Step Up Attacks--FBI"
    Newsbytes (11/05/01); McWilliams, Brian

    The FBI's National Infrastructure Protection Center (NIPC) issued an advisory on its Web site stating that "the potential for future [distributed denial of service] attacks is high." Anti-American protesters have pledged to deface the Web sites of the Department of Defense and other critical infrastructure organizations. Network infrastructure operators were advised by the NIPC to "take a defensive posture and remain vigilant at a higher state of alert." This would require checking their systems for "zombie" software as well as following guidelines from the Computer Emergency Response Team. The NIPC warning did not specify any networks that are under threat of attack, nor did it name any parties or individuals that are under suspicion. An NIPC spokesperson did not comment on whether any DDoS attacks may be in reprisal to an indictment filed against Doctor Nuker, a Pakistani hacker who allegedly breached a Web site operated by the American-Israel Public Affairs Committee.

  • "E-Congress: Possible? Yes. Likely? No."
    Roll Call (11/05/01) Vol. 47, No. 32, P. A-1; Keller, Amy

    Congressional experts have begun to float the idea of a virtual Congress, in which lawmakers turn to the Internet to deliberate and vote. The idea comes in response to the anthrax scare on Capitol Hill, and the need to plan for a worst case scenario that would prevent lawmakers from meeting at a central location in Washington. James Snider, a Markle Fellow at the New America Foundation, has been an advocate of an e-Congress for weeks and now believes such a contingency plan should be in place for remote deliberation. However, the idea of a cyber-Congress has found plenty of critics, including George Washington University political science professor Christopher Deering, who has philosophical concerns about having a virtual government because it would make political officials even more inaccessible. David Grier, GWU associate professor of computer science and international affairs, argues that by using the Web, "you lose a lot--you lose tone of voice, you lose immediate reactions." Other critics believe a virtual Congress would not work because the Internet could be wiped out in an attack on the electrical power system, and because some lawmakers are not Web-savvy and would resist the technology. However, advocates of a virtual Congress maintain that the Internet held up during the Sept. 11 attacks, and that authentication technology would secure a cyber voting system. Advocates also add that other technologies, such as biometrics and videoconferencing, could be used.

  • "Zeroing In"
    InformationWeek (11/05/01) No. 862, P. 50; Scott, Karyl

    Researchers in academia, industry, and the government are collaborating to develop new methods to protect information and data networks from the increasing threat of cyberattacks by ever more cunning hackers. The University of California at Davis is working on a system that can forecast computer-based attacks with predictive-analysis methods; computer-science professor Matt Bishop, who is creating the mathematical models to evaluate system and network vulnerability, says the system assumes that breaches will take place, but is designed to trap the hackers in a place where they can do the least amount of damage and where they are themselves vulnerable. Meanwhile, Columbia University's Intrusion Detectors project aims to create a global distributed data-mining system that can detect hacker attacks and fraud, challenging the assumption many businesses have that security must be handled internally. The Defense Department is funding research from Raytheon to develop a 3D visualization tool to inspect network perimeters. Microsoft is investigating the possibility of watermarking digital content, while MIT's Media Lab has a pair of initiatives that use printer technology to hide copy-protected material. These are examples of short-term projects. Long-term projects include one at Los Alamos to generate unbreakable electronic messages using quantum physics.

  • "Aftermath: Rethinking 'Place' in Business"
    Smart Business (11/01) Vol. 14, No. 11, P. 30; Tedeschi, Bob

    The tragedy of the terrorist attack on the World Trade Center has given Internet technology more business value then ever before. Experts now see the technology as vital if central physical workplaces are no longer considered to be the best place to meet or house important information. The markets have already responded by transferring money from airline stocks to tech companies that allow businesses to hold presentations over the Internet, use videoconferencing equipment, and store data off site. Similarly, the idea of making applications accessible over the Internet instead of having to install software on the desktop is no longer considered Internet hype. "These approaches and technologies will absolutely become more ingrained in the fabric of organizations now," says Gartner analyst Maurene Caplan Grey. Location is already irrelevant at the telecommunications company Alltel, which has provided employees with a more secure instant messaging system based on 2Way technology. Meanwhile, more sophisticated face-to-face business interaction tools are on the way, such as software that produces virtual deal rooms so parties can enter into sensitive discussions about mergers and acquisitions and conduct due-diligence meetings.
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