Clips 3/1/02

[Lillie Coney <lillie.coney@xxxxxxx>]

Computer World
Wall Street looks to fend off cyberterrorism
By Lucas Mearian 

(Feb. 28, 2002) NEW YORK -- Wall Street IT executives are hammering home the
point that hacking and cyberterrorism is a mounting threat best fought by the
private sector and government through creation of a centralized way of alerting
and disseminating information about attacks -- most likely via a private Web
site. 

Stephen Clifford, managing director of interactive marketing at Salomon Smith
Barney Holdings Inc. in New York, echoed the concerns of countless IT managers
when he told attendees at the Security Industry Association's Internet Trends &
Strategy Conference here: "What keeps me up at night is security and keeping up
with the hackers out there." 

A panel made up of representatives of the U.S. Secret Service, the National
Infrastructure Protection Center and the Financial Services Information Sharing
and Analysis Center (FS/ISAC) pressed attendees at a cyberterrorism workshop to
work toward a common goal of sharing information about probes and attacks on
their technology infrastructure. 

The FS/ISAC, a New York-based private organization, charges companies a minimum
$7,000 annual fee for alerts and access to information about hacking and
cyberterrorism threats. 

Stanley Jarocki, vice president of IT security engineering at New York-based
Morgan Stanley and chairman of the FS/ISAC, said there is a marked difference
between hackers -- who play games -- and cyberterrorists, who are supported by
governments and have almost unlimited resources to do damage to the financial
services' communities infrastructure. 

Jarocki said companies must either join the FS/ISAC's service or create a
secure, central Web site on which they can share information anonymously. 
C. Warren Axelrod, director of information security at the Pershing Division of
Donaldson, Lufkin & Jenrette Securities in New York, also pointed out that the
biggest cyberterrorism threat comes from "someone infiltrating your
organization and using that power to do damage." 

"The ways firms can protect themselves is to share the information with each
other without broadcasting it," Axelrod said. 

Bob Weaver, an agent with the U.S. Secret Service's New York Electronic Crimes
Task Force, agreed. He said almost 70% of the more than 900 people the agency
has arrested in New York in connection with intranet attacks, "are insider
threats." 

Weaver recommended that companies adopt background checks for employees based
on the sensitivity of the position within the organization. 

"On the backside of this is negligence suits by insurance companies, based on
the fact that you didn't have due diligence or best practices in place," he
said. 
**********************
Washington Post
Digital Signature Technology Wins Agency's Seal of Approval 
Energy Dept. Uses E-Authentication To Send Proposal 
By Cynthia L. Webb
Washtech.com
Friday, March 1, 2002; Page E05 

When Energy Secretary Spencer Abraham sent President Bush his formal
recommendation to use Yucca Mountain as a nuclear-waste storage site, he sent
the president an e-mail.

Not just an ordinary e-mail, though. This one used "digital signature"
technology and had an attachment that, when printed out, would be a 9,500-page,
4-foot-tall document weighing 80 pounds -- the product of 24 years of research
on how the U.S. could store nuclear waste.

"We know of no other Cabinet official in this administration or previous
administrations who has sent such a massive recommendation to the White House
for consideration using these means," Energy Department spokesman Joe Davis
said. The agency decided to go the electronic route to "be the first to do it
and send a signal to everybody else that they should be thinking of this."
Sending the document electronically saved the department nearly $1 million in
copying costs, Davis estimated.

The department did make a few paper copies of the massive document for its
archive, but the data was recorded on compact discs and in PDF format, which
preserves the appearance of a document. It is available to the public online
via the agency's Web site.

Just think before you start printing it out.

The use of digital signatures to certify a document's authenticity is not a new
technology, but it is still not widely used, said Scott Angel, a partner with
management consulting firm Deloitte & Touche in San Jose.

VeriSign Inc., a Mountain View, Calif.-based company with a large presence in
Virginia, provided the digital signature technology used in the document. 
VeriSign issued Abraham a digital certificate, the equivalent of a fingerprint
that authenticates him as the owner of an online document. While the
certificate was used to send the nuclear waste proposal, Abraham could also use
it to authenticate other online documents, said John Weinschenk, vice president
of VeriSign's enterprise marketing group.

The use of a digital signature to sign and issue a formal recommendation is
closely tied to one of Abraham's old pet projects. As a senator, he helped
write the Electronic Signatures in Global and National Commerce Act. That bill,
a federal mandate for online contracts and signatures, was signed into law in
July 2000.

Davis said he did not know if the department would accept digitally signed
documents from businesses and individuals. He said the agency will decide
whether it will use the technology again on a case-by-case basis.

VeriSign -- best known for the Internet domain-name registration services that
it took on when it acquired Network Solutions Inc. of Herndon in 2000 -- sells
similar digital authentication services to other federal and state agencies,
including the Labor Department and the Securities and Exchange Commission. 

The company's enterprise services division is estimated to account for
two-thirds of VeriSign's overall revenue in 2002, spokesman Patrick Burns said.
The 2,900-employee company, however, does not release exact revenue figures for
particular service areas.

VeriSign started a public-sector group in January to target new government
customers, such as the Energy Department. The Sterling-based unit has about
eight workers and expects to double in size by next year, said Barry Leffew,
the unit's vice president.
********************
Washington Times
GOP set to filibuster on voting-reform bill
Stephen Dinan 
THE WASHINGTON TIMES 
Published 3/1/2002 

Senate Republicans and Democrats couldn't break their impasse on election
reform yesterday, setting the stage for a showdown vote today as Democrats try
to break the Republican filibuster on the bill.

Republican leaders say they have the votes to sustain the filibuster and are
willing to halt the bill altogether, after Democrats moved Wednesday to delete
anti-fraud provisions that Republicans consider essential.

At issue is an amendment offered by Sen. Charles S. Schumer, New York Democrat,
that would let first-time voters verify their vote by signing their name. The
bill as written requires first-time voters to present either a photo I.D. or a
preprinted form such as a utility bill.

"You can either have the Schumer amendment and no bill, or the bill as
originally agreed upon, and no amendment," said Sen. Christopher S. Bond,
Missouri Republican, who pushed for the identification requirement as a way to
stop fraudulent voting. 

Republican leaders said the party is united behind maintaining the more
stringent verification process.

Even if senators get past the fraud flap, there are other potential sticking
points.

Sen. Conrad Burns, Montana Republican, has filed an amendment to require
registrars to clean the voting rolls of anyone who hasn't voted in two
consecutive federal elections, or four years. The bill currently gives four
elections, or eight years. A similar amendment failed two weeks ago, 40-55, but
could gain more Republican support because of the debate over fraud .

Senate Majority Leader Tom Daschle, South Dakota Democrat, said he will try
today and, if necessary, on Monday to break the filibuster. If there is no
compromise by then, he said he will pull the bill and move on to other issues.

Foremost on that list is campaign-finance reform. That means Senate Republicans
have until Monday to try to win small changes to the bill.

The staffs of Sen. John McCain, Arizona Republican and a key backer of the
bill, and Sen. Mitch McConnell, Kentucky Republican and the bill's primary foe
in the Senate, will hash out a list of changes Mr. McConnell has requested.

Mr. McCain has said he will accept minor changes, passed in another bill, but
can't accept major changes or changes to the current bill, since sending it
back to the House could mean the bill would die for lack of action.

Among the changes Mr. McConnell wants are an increase in the amount of "soft
money" state parties are allowed to collect and annual inflation adjustments on
the amount of money political action committees are allowed to raise.
****************
Federal Computer Week
State awards info-sharing pilot program 
BY Judi Hasson 
Feb. 28, 2002 

The State Department announced Feb. 27 that it has awarded a contract to
Accenture to develop a pilot program for a worldwide information-sharing
system.

The company will develop a 20-week pilot project that will be launched in India
and Mexico later this year. 

Congress has appropriated $17 million for the first two phases of State's
information-sharing initiative  a prototype and the pilot. The prototype was
completed in January, under a contract awarded to Accenture, Science
Applications International Corp. and SRA International Inc., with IBM Global
Services enlisted to lead the development effort.

Technology experts estimate that it will cost less than $200 million to fully
implement the project, known as the Overseas Presence Interagency
Collaboration/ Knowledge Management System.

The system would take advantage of existing information scattered in various
databases but not tied together in a single network. Linking those databases
would offer embassy officials a wealth of information to consider when doing a
background check on a visa applicant or communicating for other purposes.

Testifying Feb. 25 before a congressional committee, State's chief information
officer, Fernando Burbano, said the department is putting in place "networks,
systems and desktop tools that our diplomats and analysts need."

"The department is helping to facilitate the creation of common classified and
unclassified technology platforms to connect U.S. government personnel overseas
with one another, with their local and international counterparts, and with
Washington," Burbano told the House Government Reform Committee's Technology
and Procurement Policy subcommittee.
******************
New York Times
February 28, 2002
Contract Offers Look at How Global Played Influence Game
By JOSEPH KAHN

WASHINGTON, Feb. 27 ? Even as Global Crossing ran into financial trouble last
year, the Pentagon relaxed the security requirements for a planned military
communications network in a way that allowed the company to remain in the
bidding for the lucrative contract.

Although the Defense Department and Global Crossing say there was nothing
inappropriate about the way the bid was handled, the company's success in
navigating the Pentagon's procurement system illustrates how Global Crossing, a
onetime stock market wonder that filed for bankruptcy protection last month,
became a formidable player in Washington. 

The Pentagon picked Global Crossing last July as the winner of the three-year
contract to develop a network to link 6,000 scientists working on military
projects. The contract was valued at $137 million initially and up to $450
million with options. 

The losing bidders ? including the telecommunications heavyweights AT&T
(news/quote), Sprint, MCI-Worldcom and Qwest ? protested, saying that Global
Crossing, which is incorporated in Bermuda and is a newcomer to the military
industry, did not have secure American operations or workers who had received
requisite background checks to manage sensitive information, as the contract
specified.

The Pentagon agreed to reopen the competition. But Pentagon officials confirmed
this week that when they asked for new bids, they dropped the demand that
workers who manage the network have clearances to deal with secret information.
That removed an obstacle for Global Crossing, the only competitor that did not
meet the initial standards.

Until late January, when Global Crossing's bankruptcy filing put the Pentagon
contract decision in temporary abeyance, the company was again considered the
front-runner. One snag since the filing has been an offer to acquire Global
Crossing made by two Asian corporations, companies that some members of
Congress view as having ties to the Chinese government.

A Pentagon spokesman said that dropping the security-clearance provision was
merely a technical change. The original criterion did not match other security
requirements for the network, which is deemed "sensitive but unclassified," a
relatively low- level designation. But the other bidders argued that it was
additional evidence of the special consideration they say Global Crossing
received from its carefully cultivated Washington connections.

In the 2000 elections, Global Crossing and its executives contributed $2.8
million to candidates and political parties, more than the Enron Corporation
(news/quote) and more than all but 22 other American companies. It recruited
political, government and military officials to burnish its reputation,
including William S. Cohen, the former defense secretary, who is now on Global
Crossing's board.

Whether or not Global Crossing's contributions and high-level contacts had any
bearing on the contract review, competitors and some independent experts who
follow government purchasing called the change in the security criteria
unusual. The research network itself is not new, and the security standards
were well established, they said. Moreover, the Pentagon still specified that
the network be able to handle sensitive information.

"Under the circumstances, I would say that this is unusual because they changed
the requirement having to do with personnel, but not the underlying requirement
for secure telecom transmissions," said Ray Bjorklund, a vice president of
Federal Sources Inc., which monitors and consults on government contracts.

Mr. Bjorklund said the Pentagon might have been less likely to make such a
change to protect the bid of a relatively untested company if Global Crossing
had not hired former military officials.

Global Crossing recruited Mr. Cohen to serve as a director last spring, when
the company was first competing for the military contract. Last fall, as the
rebidding was under way, the company hired John McDuffie, a retired Army
general who had been the director of logistics for the Joint Chiefs of Staff,
to build its government markets unit.

"They learned very quickly how to work in Washington," Mr. Bjorklund said. "You
need to be able to work the halls here and put your best foot forward."

A spokesman for Mr. Cohen, who has a consulting firm in Washington, the Cohen
Group, said the former secretary did not help the company compete for the
military contract. Mr. McDuffie worked only briefly for Global Crossing before
leaving for another job. He said in an interview that he did not lobby the
Pentagon, a practice barred by ethics rules for a recently departed official.

Such rules did not cover Lodwrick Cook, Global Crossing's co-chairman and a
prominent Republican contributor. Mr. Cook, a former oil company executive, is
a friend of former President George Bush. In 1998, Mr. Bush made a speech in
Tokyo on behalf of Global Crossing and ? at Mr. Cook's urging ? pocketed shares
of stock instead of an $80,000 fee. Mr. Bush's holdings were later estimated to
have grown to about $14 million.

As Global Crossing fought for the contract last October, Mr. Cook arranged a
meeting with John P. Stenbit, the assistant secretary of defense for command,
control, communications and intelligence, to press the company's case. The
lobbying, which was first reported by Time magazine, was confirmed by a company
spokeswoman, who described it as an effort to defend the company's bid.

Defense Department officials said that politics did not play a role in their
decision on the contract. Global Crossing submitted the low bid, the officials
said, and the Pentagon might have been forced to pay more for higher security
standards.

Still, there is little question that Global Crossing and its founder and
chairman, Gary Winnick, viewed close relations with both Democrats and
Republicans as a commercial necessity.

Shortly after Mr. Winnick started Global Crossing in 1997, he retained Terry
McAuliffe, a top fund-raiser for President Bill Clinton, to scout business
opportunities; Mr. McAuliffe now leads the Democratic National Committee. Mr.
Winnick gave Mr. McAuliffe the chance to turn a $100,000 investment in the
start-up company into $18 million after it went public.

Through Mr. McAuliffe, Mr. Winnick became acquainted with Mr. Clinton. The two
played golf together in 1999, and Mr. Winnick pledged $1 million for the
president's library in Little Rock, Ark.

During the 2000 elections, the company provided $250,000 to each party for its
conventions, and it has split its donations to members of Congress almost
evenly between the parties.

"The understanding when you give campaign contributions like that is that they
may come in handy down the road," said Larry Makinson of the Center for
Responsive Politics, a nonpartisan group that monitors political giving. "To
the extent that political figures weigh in on contracts, the role of campaign
contributions is crucial."

In 1999, the company staked its future on a 13,000-mile underwater optical
cable linking the United States and Japan, but faced competition from a
consortium of rivals led by AT&T. The company hired Anne K. Bingaman ? a former
assistant attorney general and the wife of Senator Jeff Bingaman, Democrat of
New Mexico ? as a chief lobbyist, paying her $2.5 million in the first half of
1999, according to lobbying records.

The company also leaned on Senator John McCain, the Arizona Republican who was
then the chairman of the Senate Commerce Committee, to plead its case with the
Federal Communications Commission, which regulates cable licenses. Global
Crossing has given Mr. McCain $31,000 since 1998, more than it contributed to
any other member of Congress. Mr. McCain wrote the F.C.C. urging it to
encourage more competition in developing undersea cables, which was Global
Crossing's priority. 

Mr. McCain, who has led the effort to overhaul campaign finance laws and ban
soft-money contributions from corporations, acknowledged last week that he was
"tainted" by Global Crossing's giving.

The company's efforts paid off. Ms. Bingaman helped persuade the Justice
Department to begin an antitrust investigation into whether the AT&T consortium
was anticompetitive. The inquiry ended inconclusively but delayed the licensing
process for Global's rivals. The F.C.C. also issued rules seen as making it
more difficult for consortiums like AT&T's to dominate overseas
telecommunications traffic.

After President Bush took office, the company continued its political giving
despite a sharp downturn in its business. It made $724,000 in political
contributions in 2001, including $100,000 for the Republican Party.

When Commerce Secretary Donald L. Evans chose companies from a long list of
applicants to join him on a trade mission to Russia last year, Global Crossing
was among a dozen that made the cut. Both the Commerce Department and Global
Crossing said that political contributions did not play a role in deciding
which companies were invited.

Now, with Global Crossing in bankruptcy proceedings and the Securities and
Exchange Commission investigating its accounting practices, its friends in
Washington are less visible. But the company's political expertise could
continue to pay dividends. Unlike Enron, which gave more to Republicans, Global
Crossing's bipartisan largess meant that neither Democrats nor Republicans
could score political points by investigating its operations. To date, its
executives have not been asked to attend a hearing or produce documents for
Congress.
******************
Reuters
N.J. Mobster Pleads Guilty in Unique Gambling Case 
Thu Feb 28, 5:13 PM ET 
By Christine Gardner 

NEWARK, N.J. (Reuters) - Reputed mobster Nicodemo Scarfo Jr. pleaded guilty to
illegal gambling on Thursday in a New Jersey federal court, ending the case
that inadvertently produced a first-time ruling supporting the government's
right to spy on personal computers. 

According to the plea agreement, Scarfo, 36, of Belleville, N.J., agreed to
serve a minimum 33 months in prison and not to contest a longer term that may
be imposed when he is sentenced June 10 by U.S. District Court Judge Joel
Pisano. 

Scarfo, who remains under house arrest until the sentencing, also agreed to two
to three years supervised release following the jail term. He may also be fined
as much as $250,000, or twice the gross proceeds from the illegal bookmaking
operation he admitted he ran between 1998 and 1999 from his Belleville office. 

By pleading, Scarfo avoided a lengthy trial and maximum eight-year prison term
on an extortion charge, which the government dropped in exchange for the plea,
his attorney, Vincent Scoca, said. 

The case began as a commonplace bookmaking case until defense attorneys
demanded disclosure of FBI (news - web sites) secret surveillance of the office
computer Scarfo used to keep track of bets. Then, as the first such case in
federal courts, it drew national attention to the issue of computer privacy
rights versus law enforcement's right to use secret computer technology. 

Acting under a search warrant, agents broke into Scarfo's office in 1999 and
installed a so-called "key logger" device on the computer which cracked into
encrypted files. Defense attorneys argued the search was an illegal wiretap
that violated Scarfo's constitutional privacy rights. 

Prosecutors said "national security" was at stake and invoked the federal
Classified Information Privacy Act to keep details of the surveillance secret. 
After six months of legal wrangling, in December, U.S. District Court Judge
Nicholas Politan ruled in the government's favor. 

Scoca had planned an appeal but Thursday said it was "moot" in view of the
plea, which Assistant U.S. Attorney Ronald Wigler called "just and fair." 
The case was important in bringing privacy rights issue to light, Scoca said. 

"I think it raised public concern about government intrusion into the lives of
individuals and the technology they used," he said. 

David Sobel, general counsel at the Electronic Privacy Information Center in
Washington, D.C., which supported Scarfo's position, said "I think this case
gave us the first glimpse of very sophisticated government investigative
techniques that are likely to become more common. Increasingly, the courts are
going to be confronted with the privacy and constitutional issues raised by the
use of these advanced new techniques. 

"What the Scarfo case shows is that the techniques are going to be classified,
which makes a full examination of how they work much more difficult." 
*****************
Newsbytes
ICANN Stepping Up Hunt For New 'Dot-Org' Operator  
By David McGuire, Newsbytes
WASHINGTON, D.C., U.S.A.,
01 Mar 2002, 1:20 AM CST

Internet addressing authorities next month will kick off the search to find a
new home for the dot-org Internet domain. 

At its meeting in Ghana, the Internet Corporation for Assigned Names and
Numbers (ICANN) is slated to establish the policies and procedures it will use
to choose a new operator for the domain, which serves as the online home for
thousands of non-commercial organizations. 

At the end of this year VeriSign, which manages the worldwide registries for
dot-com, dot-org and dot-net will cede control of dot-org back to ICANN. 

Under a contract between ICANN and VeriSign finalized last year, VeriSign
agreed to surrender backend management of dot-org in exchange for a contract
that gave the company near-permanent stewardship of the more widely used dot-
com domain. 

Under the terms of that contract, VeriSign will surrender management of dot-org
on Dec. 31, making arrangements to transfer the registry to a new operator
picked by ICANN. 

Although anybody can register a dot-org address, the domain has traditionally
served as the online neighborhood for non-profit organizations and other non-
commercial groups. 
Public interest groups are watching closely to see whom ICANN chooses to
operate the domain. 

"This is an incredibly important place in the name space for non-commercial
(entities)," Center for Democracy and Technology (CDT) Associate Director Alan
Davidson said. 

Davidson applauded ICANN for putting dot-org on the agenda in Ghana. 

"They need to make progress, because ICANN is up against a pretty tough
timeline now." 
Information about dot-org reassignment is at
http://www.icann.org/accra/org-topic.htm . 

Reported by Newsbytes.com, http://www.newsbytes.com . 
01:20 CST 

(20020301/WIRES ONLINE, LEGAL, BUSINESS/ICANN/PHOTO)
*******************
MSNBC
California candidate spams again
 GOP gubernatorial hopeful Bill Jones sends mass e-mail
Feb. 28  California Republican gubernatorial candidate Bill Jones, whose
chances to win the state?s Tuesday primary are apparently fading fast, sent
spam e-mail across the Internet on Wednesday. The e-mail irritated anti-spam
activists in part because it was sent by less-than-scrupulous means  the spam
company took advantage of security vulnerabilities of a computer in Korea to
launch the e-mails from there. This is Jones? second spam campaign  he sent out
a similar e-mail in December.

CAMPAIGN SPOKESPERSON Darrel Ng admitted the campaign hired an outside vendor
to send the e-mail, but said he couldn?t identify the company. He defended the
practice, saying it wasn?t spam, but rather just the exercise of free speech.
   But others were sharply critical of the mass e-mail campaigning.
   ?Whoever sent this spam on his behalf used an open relay in Korea,
essentially exploiting a security vulnerability, tantamount to hacking of a
computer located in another country,? said Neil Schwartzman, chair of the
Canadian branch of the Coalition Against Unsolicited Commercial Email.
Schwartzman lives in Montreal, but received Jones? campaign note anyway. ?How
dumb is that??
   Internet users around the country received the note as well, despite claims
within the note that it was sent only to a targeted list of addresses.
   ?Your e-mail was selected off the Internet based on your voter
demographics,? the spam said.
   Ng said he regretted that the e-mail was sent so widely.
   ?We hired a vendor who told us it would be going to people who had expressed
an interest in politics in California,? Ng said. ?And that?s who the messages
were sent to ... It would appear that the targeting wasn?t as tight as we would
have hoped and we do apologize to those who received the email inadvertently.? 
The rest of the note was an appeal to California voters to show up at Tuesday?s
polls and support Jones campaign. The latest polls suggest Jones has fallen far
behind Businessman Bill Simon and former Los Angeles Mayor Richard Riordan,
according to The Associated Press.
   ?This is a new and unique experiment,? the e-mail said. ?For the first time
in history I am trying to make the Internet the vehicle to provide information
to the people of California  NOT 30 second TV ads. 
   ?So while other candidates for Governor are spending over $10,000,000
dollars on 30 second TV ads, I am trying something new. What?s new is this  I
am only going to provide you with the facts on my record. Please go to my Web
site.?
The note was particularly irksome to Brian O?Neill of Columbus Ohio, because of
the tactics used by the spammer to evade anti-spam technologies. While spam is
generally not against the law, many Internet service providers take measure to
prevent spam traffic on the networks.
?I see that you have to go through a server in Spain for this with faked
headers (e-mail addresses). I would have expected you to keep it in America,
after all wouldn?t that have been the patriotic thing to do? Of course, very
few American networks will allow this kind of trash,? O?Neill wrote in a letter
sent to Jones? campaign and forwarded to MSNBC.com. ?And you sent it through an
Asian network through an open relay. An open relay is kind of like seeing
someone left their front door open, so that makes it perfectly acceptable to go
in and steal their VCR. I expect nothing less from a politician, of course.?
   Tom Geller, executive director of anti-spam group SpamCon Foundation, raised
an even more worrying issue for Jones? campaign. He says it appears the
third-party company which sent Jones? spam frequently sends out advertisements
for pornography Web sites, creating an uncomfortable business association for
the current California secretary of state. 
?When I got the Bill Jones spam, it directed me to a page on (a Spanish Web
host),? Geller said. ?A pornographic spam received Oct. 29 had a similar URL
and similar M.O. It appears that the Jones campaign is using the services of
pornographers (or suppliers to pornographers) to push the message out.?
   Ng said he didn?t know if the e-mail marketing firm the campaign used was
involved in promoting pornography.
   ?That?s not a routine question we would ask,? he said.
   This isn?t the first time a U.S. politician has turned to spam as an
inexpensive campaign tactic  but the method has not yet been successful. For
example, two years ago, a spam sent by Georgia gubernatorial Steve Langford
backfired badly, reported political trade magazine Campaigns & Elections. 
   But Jones campaign defended the practice in December after Jones? first
spam. Spokesperson Beth Pendexter said then that recipients had the choice to
?opt-out? of future mailings. It was not immediately clear if any recipients
who opted out still received Wednesday?s note.
   Spam is becoming more than just an annoyance. Last week, AT&T admitted mail
delivery on its WorldNet service was slowed for two days because of a spam
attack. According to antispam company Brightmail Inc., nearly 20 percent of all
e-mail in cyberspace is now spam.
   State and federal legislators have attempted to pass laws limiting spam, but
without much success. 
   At any rate, legal experts have said in the past that campaign spam would
most likely be protected by the First Amendment as political speech.
******************
Federal Computer Week
States round up 511 resources 
BY Dibya Sarkar 
Feb. 28, 2002 

Eight states, from Alaska to Maine, are pooling resources and expertise to
develop a 511 voice-enabled phone service for travelers.

Led by the Iowa Department of Transportation (www.dot.state.ia.us), the
multistate consortium received $700,000 from the Federal Highway Administration
to help pay for system design and software development. Each state also is
providing a 20 percent matching fund that should boost total funds to nearly
$900,000.

John Whited, the Iowa DOT's project manager of advanced transportation
technology, said the participating states currently deliver traveler
information in various forms, including via the Internet and telephone hot
lines. 

He said the states would use Voice XML (Extensible Markup Language) standards
and technology to create a voice-enabled traveler service similar to what Utah
unveiled in December. Once connected with that system, callers find information
by speaking keywords instead of punching numbers.

Whited added that by outsourcing calls to call centers in participating states 
thus spanning several time zones  high call volumes during peak times can be
shifted throughout the system, reducing congestion and costs.

In addition to Iowa, the participating states are Alaska, Kentucky, Maine,
Minnesota, New Hampshire, New Mexico and Vermont. Kentucky, which has
established a 511 system in the northern part of the state  in the Cincinnati
metropolitan region  joined the consortium most recently. 

In 1999, Iowa was among four states  Minnesota, Missouri and Washington were
the other  that formed a partnership to develop the Condition Acquisition and
Reporting System. CARS gives access to data on road conditions, work zones and
incident management information collected via the World Wide Web. He said the
511 consortium was built on that initial partnership and is always seeking new
members. 

Iowa, which currently offers a toll-free telephone number and a Web site for
road conditions and construction, plans to unveil a 511 system next winter,
Whited said. He added that the system also could provide information on special
events, trip planning and local tourist sites. He said each state would deploy
the 511 service in some form within a year. The Federal Communications
Commission designated 511 as a traveler's information number in July 2000, but
it allowed each state to develop its own system. The FCC plans to review the
national progress of 511 in 2005.

In related news, Virginia recently launched 511 service in the western part of
the state, providing traffic and road condition updates from both landline and
wireless phones. The system eventually will be deployed statewide.

Virginia's system is built on an Internet-based telecommunications network by
Tellme Networks Inc., which helped develop Utah's voice-enabled 511 system.
******************
Reuters
Nokia, Texas Instruments, 15 Others in China Tie-Up 
Thu Feb 28, 5:56 AM ET 

BEIJING (Reuters) - Finnish mobile phone giant Nokia (news - web sites) , Texas
Instruments and 15 other Chinese and foreign firms said on Thursday they had
formed a company to develop software, semiconductors and multimedia
electronics. 

Nokia and Texas Instruments, along with Korea's LG Electronics , would each
hold about a 13.5 percent stake in the consortium, to be called Commit Inc, the
companies said in a statement. 

Commit, which would have an initial investment of $28 million, would develop
software and design semiconductors for multimedia electronics products, it
said. 
At a news conference, one executive declined to give specifics on the products
the consortium would make. 

But the statement said: "Functions such as Internet surfing, mobile
communications, mobile offices and video processing will be expected on a
single terminal, such as a PDA (personal digital assistant) or even an MP3
player." 

The China Academy of Telecommunications Technology and China PTIC Information
Industry Corp would each own a stake of about 13.5 percent, while the remaining
shares would be held by seven other Chinese companies and five other foreign
companies, the statement said. 
*******************
New York Times
March 1, 2002
CD Technology Stops Copies, but It Starts a Controversy
By AMY HARMON

The recording industry has begun selling music CD's designed to make it
impossible for people to copy music to their computers, trade songs over the
Internet or transfer them to portable MP3 players.

Until now, most of the protected discs have been distributed in Europe, with
little publicity. But the strategy has already provoked a reaction there. There
are also objections from American music lovers who fear that they will be
unable to use the increasingly popular portable MP3 devices or burn their own
CD's to copy music that they have legally purchased.

The practice is also drawing the ire of several consumer electronics
manufacturers, including Sony Electronics, which says it cannot guarantee the
audio quality of these CD's on its players, and Apple Computer (news/quote) and
Sonicblue (news/quote), whose sales of popular portable music players might
suffer if copy-protected CD's became the norm.

But the record companies, who largely blame piracy via computers and the
Internet for the 10 percent decline in United States music sales last year, are
defending the practice and planning to put more protected CD's into the
American market.

"If technology can be used to pirate copyrighted content, shouldn't technology
likewise be used to protect copyrighted content?" wrote Hilary B. Rosen,
president of the Recording Industry Association of America, in a response
yesterday to a query from a member of Congress. "Surely, no one can expect
copyright owners to ignore what is happening in the marketplace and fail to
protect their creative works because some people engage in copying just for
their personal use."

The individual labels are being secretive about their market tests.
But Macrovision (news/quote), one company supplying the industry with the new
technology, said several CD's bearing its copy-protection system had been
released by major labels in the United States and were being sold in record
stores across the country.

"It doesn't have a big label on it saying `copy protected,' " said Brian
McPhail, vice president and general manager of Macrovision's consumer software
division. "But some of these have been pretty high distributions."

The executives at the Universal Music Group, part of Vivendi Universal
(news/quote), have been the most outspoken proponents of copy-protected CD's.
Universal said it planned to release its second copy-protected CD in the United
States later this month: "Enter the Life of Suella," the debut album of Pretty
Willie, a St. Louis hip-hop artist.

"Assuming the technology continues to work, we plan to do more," said Larry
Kenswil, president of the eLabs division of Universal. "The bottom line is that
there's a lot of copies of our music out there in the world right now where no
one is getting paid, and it's going to take technology to stop that."

But the technology creates problems of its own. A side effect of several of the
anticopying technologies is that they prevent CD's from being played at all on
some computer CD-ROM drives and DVD players designed to play standard CD's.

"More Music from the Fast and the Furious," released by Universal in December,
will sometimes not play correctly on Macintosh computers, and people who listen
to the CD on a computer hear poorer sound than they would on a CD player. A
small warning on the label says it is copy-protected. It says: "Playback
problems may be experienced. If you experience playback problems, return this
disc for a refund."

In Europe, where Sony Music ? despite the objections of Sony Electronics ? has
released about 70 titles with antipiracy technology, the CD's are labeled "Will
not play on PC/Mac." BMG, part of Bertelsmann, was forced to drop copy
protection on two CD's it released in Europe when consumers complained that the
music would not play on their CD players.

But even if the technology evolves to work with more machines, it will continue
to thwart what many consumers have come to regard as a fundamental right: the
ability to copy music they have legally purchased for their personal use.

Music fans whose parents once copied LP's to cassette tapes now take for
granted the idea that they can copy the contents of their CD's onto their hard
drives. They can then make custom mixes of their music or transfer songs to
portable MP3 players for their personal use. They can also burn CD's to sell
illegally or log on to Internet services that let millions of strangers share
unauthorized copies of their music.

What bothers some consumers is that the technology does not discriminate
between legal and illegal behavior.

"Being treated like a criminal makes me want to act like one," said Ron Arnold,
39, of Royal Oak, Mich., who has 1,137 songs on his portable iPod player ? all
of them paid for, he said. Mr. Arnold is one of hundreds of frustrated music
fans who have registered complaints at the www .fatchucks.com Web site, which
keeps a list of CD's that consumers know or suspect are copy-protected.

Many consumers who have purchased copy-protected CD's may not even know that
their discs have the technology. The Macrovision technology, for instance,
works by inserting distortions into the music; the company says the changes
cannot be detected on an ordinary CD player. But those distortions make
clicking and popping sounds when the files are transferred to a computer.

Sonicblue, the maker of Rio MP3 players, said it could easily produce software
to enable consumers to copy songs from the protected discs onto their players
but did not want to risk prosecution under the Digital Millennium Copyright
Act, which makes it illegal to break copy-protection systems.

The company finds the situation particularly frustrating because Diamond
Multimedia Systems (news/quote), which Sonicblue subsequently acquired, won a
closely watched 1999 court battle with the recording industry in which the
United States Court of Appeals for the Ninth Circuit ruled that the Rio did not
violate copyright law because consumers had a right to "space shift" music they
owned.

The record companies say they are working with technology companies to create
more sophisticated strategies that will allow each consumer to transfer one
copy of the music on a CD to a computer, and perhaps to a portable player as
well. The next generation of copy-protected CD's may also include music videos
and liner notes to sugar-coat the new restrictions for consumers.

But for now, the advent of silvery discs that do not quite act like CD's have
angered Sony Electronics and Philips Electronics (news/quote) (part of Royal
Philips Electronics), which co-developed the compact disc format, first
introduced in 1983.

"We do not approve the use of the CD logo on such products," said Rick Clancy,
a spokesman for Sony Electronics of America. "It puts us in a position where we
can't guarantee the playability or sound quality of discs that may be used with
our devices."

The written statement from the recording industry was prompted by a complaint
about copy protection by Representative Rick Boucher, Democrat of Virginia. He
said he believed that the companies were "seeking to use their copyright not
just to obtain fair compensation but in effect to exercise complete dominance
and total control of the copyrighted work."

He added, "I have told the heads of the major labels I think this is a major
mistake that will engender a major public backlash."

That may be why the labels are not divulging much about their activities. A
spokesman for BMG would say only that the company had so far released "a
handful" of copy-protected titles in Europe, but he did confirm that one of
them was "World of Our Own" by Westlife, an Irish band. Athena Espiritu-Santo,
28, who bought the CD at a store in San Francisco as an import, had already
figured that out.

When the CD would not play in the CD-ROM drives of her computers, either at
work or at home, where she usually listens to music, friends told her that it
was probably copy-protected. Still, she does not want to return it. 

"That would mean I wouldn't have my Westlife CD," said Ms. Espiritu- Santo, a
legal assistant, "and they're kind of hard to find here." So she just listens
to the CD in her car.
***********************
Newsbytes
File-Sharing Could Mean Revenue For Everyone - Kazaa  
By Steven Bonisteel, Newsbytes
WASHINGTON, D.C., U.S.A.,
28 Feb 2002, 2:14 PM CST

The Australian distributor of file-sharing software known as Kazaa says the
battle lines between copyright holders and consumers who want to swap digital
music and video online could be erased if governments instituted compulsory
licensing schemes that touch all technology companies benefiting from the
peer-to-peer explosion. 

What's more, Sharman Networks declared this week in a letter to Senate Foreign
Relations Committee Chairman Sen. Joseph Biden, D- Del., unleashing
all-you-can-download digital content on the Internet could beef up much-needed
consumer demand for broadband services and infrastructure in the U.S. 

Penned by Philip Corwin of the high-powered Washington law and lobbying firm
Butera & Andrews, the Sharman letter followed what the Australian company felt
was a roasting for P2P companies in front of Biden's committee Feb. 12. 

Coinciding with the release of a report titled "Theft of American Intellectual
Property: Fighting Crime Abroad and at Home," the committee hearing that kicked
off that day looked like a love-in for powerful media and software companies
but had no representation from new-technology companies such as Sharman, Corwin
wrote. 

"We are deeply offended by the gratuitous accusations made against Kazaa by
witnesses before the committee, including ludicrous attempts to associate an
extremely beneficial, next-generation software program with organized criminal
gangs and even terrorist organizations," the letter said. 

Sharman Networks was little-known - even in Australia - before it purchased the
Kazaa business from Consumer Empowerment BV of the Netherlands, which created
the FastTrack P2P platform also used by the file-sharing programs Grokster and
Morpheus. 

Consumer Empowerment and the companies behind Grokster and Morpheus had already
been named in copyright-infringement lawsuits launched by major record
companies, movie studios and music publishers before Sharman snapped up Kazaa
early this year. 

In Sharman's letter to Biden, Corwin said Congress should "step in and halt the
'whack-a-mole' litigation excesses of the music and movie industries through
new legislative initiatives that compel content availability, while
establishing a compensation scheme that requires a contribution from all the
many industry sectors beyond P2P software that benefit from content
availability." 

Repeating a theme from the FastTrack-based companies' defense in their U.S.
lawsuits, Corwin argued that the P2P companies are being hounded by copyright
holders while many other companies profit from online file-sharing activity. 

He wrote: "The players who form the links of this long and interdependent media
file value chain clearly include computer hardware manufacturers; consumer
electronics manufacturers; storage device and media manufacturers; cable,
telephone, and wireless telecommunications firms; and providers of 'ripping'
and media player software." 

Corwin argued that the Audio Home Recording Act, which provides for royalties
on digital audio recorders and recording media that are then paid to content
creators, would serve as a model for a new and broader "Intellectual Property
Use Fee" (IPUF). 

"Applied to a much broader base of parties, (an IPUF) could provide a
significant new revenue stream to copyright owners to compensate them for the
inevitable 'leakage' resulting from Internet distribution," he wrote. 

"We ... realize that some would prefer a market solution negotiated by private
parties, yet the content marketplace is already a landscape littered with
content and broadcasting oligopolies, performance rights organizations
operating under antitrust decrees, and myriad compulsory licenses facilitated
by complex royalty collection and distribution schemes. 

"Whatever the difficulties may be in pursuing this concept, they are nothing
compared to the present practices of the content industries that are stifling
innovation, retarding the necessary rollout of broadband, and threatening the
innovative freedom of the information technology industry." 

The Sharman letter also objected to testimony before Biden's committee from
Recording Industry Association of America President Hilary Rosen, who blamed
file-sharing technology like Kazza for tumbling music sales. 

Rosen repeated that claim again today in testimony before the Senate Committee
on Commerce, Science and Transportation. But Sharman's lawyer argued that the
numbers show that sales of full- length CDs actually increased in 2001 despite
a weakening global economy. 

Plummeting sales for CD singles and audio cassettes have more to do with the
record industry's own marketing decisions than online music sharing, the letter
said. 

"Overall recording industry sales would probably have been substantially higher
if the industry had not unilaterally decided to severely curtail its own
release of CD singles and audio cassettes," Corwin wrote, adding that
file-sharing could be seen as a "probable consequence of the industry's singles
cutback, rather than a cause of any decline in sales." 

Reported by Newsbytes.com, http://www.newsbytes.com . 
****************
Sony Licenses Music for Song-Swapping CenterSpan 
Thu Feb 28, 6:48 PM ET 
By Sue Zeidler 
LOS ANGELES (Reuters) - CenterSpan Communications Corp. on Thursday said it
struck a deal to distribute Sony Music Entertainment's music on its
peer-to-peer service, marking the first time a major record label has licensed
its content to a file-sharing company. 
CenterSpan agreed to pay Sony Music, a unit of Sony Corp (news - web sites),
about $2 million in cash plus 283,556 shares and a warrant to buy 189,037
additional shares of its common stock at an exercise price at $8.11 per share,
according to a filing with the Securities and Exchange Commission (news - web
sites).
 
CenterSpan's stock on Thursday closed up almost 41 cents at $8.75 on Nasdaq. 

Internet content distributor CenterSpan bought controversial Napster (news - web
sites)-like audio and video Web site Scour.com in 2000 after Scour declared
bankruptcy in the wake of a copyright infringement lawsuit. 

CenterSpan in April 2001 launched a free trial of a new secure service known as
C-Star CDN, including the underlying peer-to-peer technology of Scour that
allows users to trade encrypted files authorized for copying by copyright
holders. 

The agreement lets CenterSpan provide music from Sony Music Entertainment
artists to online service providers seeking to offer their subscribers
streaming and downloadable music. 

A CenterSpan spokesman said the company is also talking with other major
recording labels, movie studios as well as online subscription services, such
as Pressplay. 

"This deal continues the experimental phase the music industry is going through
as it tries to figure which digital distribution model is going to work," said
PJ McNealy, analyst with GartnerG2. 

Napster, a once-popular peer-to-peer service that was also idled due to a
copyright lawsuit, has signed a conditional licensing deal with MusicNet, a
major label-backed subscription service. 

When the deal between MusicNet and Napster was announced, several of the big
labels involved in the venture said they would not license their music to
Napster unless they were satisfied it had created a secure service that
compensates artists fairly. 

Analysts expect Napster's deal will be abandoned because Napster is currently
negotiating settlement and future licensing terms individually with each label
involved in the copyright infringement lawsuit who are the partners in the
MusicNet venture. 

Portland, Oregon-based CenterSpan on Thursday also reported a fourth-quarter
net loss from continuing operations of $6.4 million or 73 cents per share,
compared with a net loss of $2.2 million or 35 cents per share. 
*********************
Reuters
Vatican Warns of Dangers of Cyberspace Faith 
Thu Feb 28, 2:36 PM ET 
By Stephanie Holmes 

VATICAN CITY (Reuters) - The Vatican (news - web sites) warned on Thursday of
the dangers of cyberspace spirituality, saying the Internet should not be used
as a religious supermarket. 

The buy-and-sell ethics of the Internet have spilled over into matters of
faith, the Vatican said as it released two short documents, "Ethics in
Internet" and "The Church in Internet." 

"Some visitors to religious Web sites may be on a sort of shopping spree,
picking and choosing elements of customized religious packages to suit their
personal tastes," one of the documents said. 

The barrage of choices offered online leads believers to adopt a consumer
approach to faith, it said. 
And it was big business, who benefited most from the creation of a virtual
planet, who should take responsibility for their sway over the Web, the
document said. 

"It is important that these corporations be encouraged and helped to use their
power for the good of humanity." 

The Vatican is eager to embrace the evangelical advantages offered by the
Internet, enabling it to spread its message across the globe, but is worried by
a lack of moral guidance. 

The Vatican has its own Web site (www.vatican.va) but the documents reminded
believers that virtual religion was no substitute for the real thing. 

VIRTUAL FAITH 

"There are no sacraments on the Internet; even the religious experiences there
available by the grace of God are insufficient apart from real-world
interaction," it said. 

Describing the giddy range of experiences offered online, it compared the
Internet to a mind-altering substance with "near-narcotic effects." Priests
should seek to untangle people from virtual communities to real belonging, it
advised. 

While condemning political regimes that block free access to the Internet, the
Vatican also appealed for limits to prevent violence and hatred being
perpetuated online. 

"While respect for freedom of expression may require tolerating even voices of
hatred up to a point, industry self-regulation should establish and enforce
reasonable limits." 

The United Nations (news - web sites), the document recommended, should act as a
watchdog to protect the dignity of online readers. 

Despite plans to train priests and religious leaders to surf the Web, the
Pope's aides make no secret of the fact that he still favors old-fashioned pen
and ink when preparing his speeches. 
********************
Washington Post
Hiring of Foreign Workers Frustrates Native Job-Seekers 
By Carrie Johnson
Washington Post Staff Writer
Wednesday, February 27, 2002; Page E01 

At a time when few technology companies are hiring and many have laid off
hundreds of thousands of workers, the government issued tens of thousands of
coveted H-1B visas that allow foreign workers to hold jobs in the United States
for up to six years.

American tech companies have insisted for years that the visas are essential to
their ability to hire the right people for key jobs, and they have persuaded
Congress to increase the number of visas in the H-1B program several times. But
many out-of-work American engineers and their advocates see it as a giveaway of
jobs to less-expensive foreign labor.

Government statistics on foreign workers are incomplete. But the Immigration
and Naturalization Service said this week that 28,000 skilled foreign workers
were approved for visas during the last three months of 2001, down from 50,000
during the same period a year earlier, when employers were rushing to submit
applications before a fee increase took effect.

The 28,000 are in addition to the 163,000 applications the INS approved in the
fiscal year that ended Sept. 30 -- including six months when, economists say,
the recession was in full force.

Immigration analysts suggest that tens of thousands more workers entered the
country in the past fiscal year to work for research institutions, colleges and
other employers that are not included in INS statistics.

The H-1B visas -- more than half of which have been used to fill engineering,
programming and other computer-related jobs -- allow U.S. companies to sponsor
skilled workers from overseas to work here for at least six years. Employers
are supposed to certify that they cannot find qualified Americans to fill the
jobs, but critics of the so-called high-tech visa program say such rules are
routinely flouted.

Georgetown University scholars estimate that as many as 710,000 H-1B permit
holders are in the United States. About 9,500 H-1B employees work in Northern
Virginia alone, according to a report issued by George Mason University in
December.

The latest figures have reignited a debate over immigration limits, especially
among trade groups that represent minority and older workers. Last month, the
Coalition for Fair Employment in Silicon Valley began a campaign to increase
the number of African Americans in technology jobs, pointing to businesses'
dependence on foreign labor as one reason blacks have failed to advance in the
field.

"It's impacting workers of all races," said John Templeton, founder of the
coalition.
Groups such as the Black Data Processing Associates and the Institute of
Electrical and Electronics Engineers-USA offer support to members who were laid
off in the past year and have yet to find new jobs.

"The principle behind the H-1B visa is they [foreign workers] would not be
taking the place of permanent residents," said Ned Sauthoff, past president of
the IEEE-USA. "We know that unemployment in fields that we foster has more than
doubled. There's capacity there that's not being applied."

Mark Krikorian, executive director of the Center for Immigration Studies, a
group that lobbies for reduced immigration, said of companies' H-1B use: "It's
already too much."

But firms such as Texas Instruments Inc. say that seeking overseas employees is
necessary, even during periods of slow economic growth. Paula Collins, a
lobbyist for the Dallas manufacturing company, said it needs more electrical
engineers than it can find in the United States.

Texas Instruments hired 178 H-1B holders in 2001, a decline from 225 the
previous year. That reflected changes in the economy, Collins said. The company
has brought in about 35 foreign workers through the program so far this year.

Employers such as Texas Instruments say it will take time to fill the pipeline
with qualified American candidates as demand for technology professionals
grows. Employment forecasts by the Bureau of Labor Statistics indicate that the
number of technology-related jobs in the United States will rise from 3.3
million in 2000 to 5.5 million in 2010.

What's more, the H-1B program's boosters say, computer firms are not the only
ones to use the visas. Traditional manufacturing companies and those in the
financial services, consulting, health care and biotechnology sectors also rely
on overseas workers.

"There was always this misperception that the H-1B program was exclusively a
tech program," said Sandy Boyd, an assistant vice president at the National
Association of Manufacturers.

The program's critics, including Rep. Tom Tancredo (R-Colo.), who has
introduced legislation to reduce the number of H-1B visas, remain unconvinced.

"We're certainly in a position to rethink the idea and have them prove for us
the need was still there in light of the hundreds of thousands of people who
are unemployed or underemployed," Tancredo said.

One such person might be Chris Williams.He has a master's degree, a family of
six and a dozen years of experience at firms such as IBM and Perot Systems.

What he doesn't have is a job.

Since last May, Williams has searched fruitlessly for a management-level
position. He recently began teaching five courses at a Denver technology
school, for 75 percent less than he earned on his previous job.

The slowdown in technology spending and the waves of layoffs prompt Williams
and others to ask why companies imported so many foreign workers during the
recession.

"That's what happens when you get a mix of politics and labor and economics,"
said Williams, 38.

Williams said he's being recruited fromsuch countries as Switzerland, Germany
and India. "Yet it's hard to get the time of day in Denver," he said.

Meanwhile, advocates for overseas workers say they, too, have suffered in the
economic slump. Amar Veda, a New Jersey computer programmer, said many of his
friends are unemployed and some have left the country because they could not
find jobs.

"See all the job ads?" said Veda, an official of the Immigrant Support Network,
a group of H-1B visa holders. "Many of them now say they want five, six years
of U.S. experience. They also specifically state the people have to have a
green card or citizenship. It's a very lamentable situation."
***********************
Los Angeles Times
Pirates Make New Use of Old Technology
By JON HEALEY
TIMES STAFF WRITER

March 1 2002

While record companies and film studios train their legal fire on Internet
file-sharing networks such as Napster and Morpheus, online pirates have been
making heavy use of a 14-year-old technology invented to help far-flung
researchers gather online to chat.

Internet Relay Chat has become the tool of choice for many consumers who make
unauthorized copies of music, movies, pictures, books and software online.
Taking advantage of ultra-fast Internet connections at universities and
corporations, pirates use IRC channels to distribute increasingly high-quality
copies of films--including some apparently made from the studios'
high-definition masters.

Ken Jacobsen, director of worldwide anti-piracy efforts for the Motion Picture
Assn. of America, said his organization has yet to sue anyone using the
channels but has referred some of the evidence it's gathered to law
enforcement. The switch to IRC demonstrates the fluid nature of piracy on the
Internet. As copyright holders start to rein in one illegal distribution
channel, others steam ahead.

Internet Relay Chat hasn't attracted a mainstream audience because it's much
harder to use than such wildly popular file-sharing services as Morpheus and
the free version of Napster. Users must find and sign on to a channel, then use
specific and not necessarily intuitive commands to search for and download
files.

Nevertheless, IRC has become a rich source for a variety of published material,
including movies that have yet to be released commercially on VHS or DVD. Some
of these files come from camcorders sneaked into a cinema and pointed at the
screen, but others are "ripped" from DVDs sent by studios to film industry
professionals voting on the Oscars.

Bruce Forest, an online piracy expert at consulting firm KPE, said he's
recently started seeing extremely high-quality movie files on IRC channels,
offering more picture detail than the files made from DVDs. These include
copies of movies yet to be released on DVD, such as "A Beautiful Mind" and
"Lord of the Rings."

He speculated that the source was someone with access to the film libraries of
the major studios.

Vidius Inc., an Internet security company, has found a handful of extremely
high-quality movie files on IRC channels that apparently leaked out of an
editing or mastering house, said Derek Broes, Vidius' chief operating officer.

Jacobsen said he hadn't heard any reports of high-definition movies making
their way onto IRC. But noting how large such files would be--about 1.5
gigabytes, or 500 times the size of an MP3 music file--he said, "There's very
few people that are going to be able to download it."

In a related issue, the Morpheus peer-to-peer network remained out of
commission Thursday, two days after it inexplicably collapsed. Steve Griffin,
chief executive of Morpheus' parent company, said the company hoped to have new
software by the end of the week that would enable users to resume their file
sharing.

A federal judge in Los Angeles is scheduled to hear a motion by Morpheus'
lawyers Monday to dismiss part of the copyright infringement lawsuit brought
against the company by studios and record labels.

In addition to seeking legal remedies, studios and record companies have been
slowly developing legitimate, fee-based alternatives to the free sources of
music and movies online. Sony Music Entertainment on Thursday became the first
major record company to strike a deal with a file-sharing service, giving
CenterSpan Communications permission to distribute encrypted songs by Sony
artists.

CenterSpan is a wholesaler, selling other companies a secure peer-to-peer
network that lets subscribers copy music and movie files from each other's
computers. The company agreed to pay Sony at least $2 million over the next two
years, give it about 5% of CenterSpan's stock and provide warrants for roughly
3% more.

Although the deal is effective immediately, CenterSpan has yet to find any
buyers for its peer-to-peer technology. By contrast, Napster Inc. has already
started trials with its new, secure peer-to-peer network but hasn't won any
deals yet. 
*******************
Los Angeles Times
Urgent Action Sought on Piracy
Internet: Entertainment execs ask Congress to set deadline for standard in
anti-copying technology.
By JUBE SHIVER Jr.
TIMES STAFF WRITER

March 1 2002

WASHINGTON -- Alarmed by rampant online pirating of music and videos, Hollywood
executives urged Congress on Thursday to set a deadline that would force the
bickering entertainment and electronics companies to develop an anti-piracy
standard--before the government does it for them.

Walt Disney Co. Chairman Michael Eisner and News Corp. President Peter Chernin
told the Senate Commerce Committee that their industry is losing money to
unscrupulous Internet users and professional thieves who can make perfect
digital copies of digital TV, film, music and other works at the click of a
computer mouse.

"The pressure of a timeline for eventual government action is critical to
getting the private sector to do what is needed," Eisner told the panel. Sen.
Ernest F. Hollings (D-S.C.), the committee's chairman, has proposed setting a
date by which Congress would require digital device makers to install
government-approved anti-copying technologies. The government standard would go
into effect if industry executives fail to agree on an alternative protection
scheme.

The Capitol Hill battle over a digital anti-piracy technology is the latest
fallout from Napster and other computer file-sharing services, which have
allowed Web surfers to copy music and videos for free.

Experts estimate that more than 1 million movie files are copied daily online.
The problem has mounted with the spread of personal computers and a federal
government mandate that the nation's broadcasters transition to a digital
broadcast system by 2003.

But finding a solution has not been easy, given that computer users can make
perfect digital copies of films and music and zap them to millions of people
around the world over the Internet.

For starters, the entertainment and technology industries are bitterly divided
over whether to give consumers or producers the power to decide what can and
cannot be copied digitally. For years, consumers with analog equipment such as
audio and videotape recorders have had the freedom to make personal copies of
albums and videos.

The consumer electronics industry argues that overly restrictive digital
anti-piracy methods could thwart innovation and dampen the consumer market for
digital fare. But entertainment companies insist the protection is needed and
have pushed without success for more control over digital works.

"Negotiations are at an impasse," News Corp.'s Chernin told the Senate
committee. "If we cannot arrive at a voluntary industry consensus very soon,
broadcasters will be forced to ask for legislation."

Legislation may not be a panacea, however. Many technology experts believe it
is virtually impossible to develop a mass-market digital anti-piracy technology
that can't be defeated by computer experts or hobbyists.

"The perfect copy protection technology doesn't exist," said Edward W. Felten,
a computer science professor at Princeton University. Felten, who attended
Thursday's hearing and is an expert on anti-piracy technologies, said the
Internet and personal computers are so flexible that they can be easily
modified to circumvent most digital anti-copying methods.

If an accord between Hollywood and Silicon Valley is reached, entertainment
executives said they would be more willing to supply high-quality digital fare.
Experts say that would help accelerate adoption of two key Information Age
technologies: high-speed Internet access and digital television.

But many consumer groups as well as some politicians, oppose a
government-mandated anti-piracy standard, saying it could erode long-held
consumer rights--such as privacy and the fair use of copyrighted material.

"Copy protection must be effective ... but it must permit consumers to continue
to make recordings for their personal use within their homes just as they have
come to expect in the analog world since the advent of the VCR," said written
testimony by James E. Meyer, an executive with Thomson Multimedia, RCA's parent
company. 
******************
Oops! Britney worm wriggles on Net
By Reuters 
March 1, 2002, 5:35 AM PT
http://news.com.com/2100-1023-848655.html 

Britney Spears can add one more notch to her soaring global popularity: The
perky pop star has become the inspiration for a potentially destructive e-mail
worm wriggling through cyberspace, security experts said Friday. 
The bug, labeled variously as "VBS/Britney-A" and "VBS-BRITNEYPIC.A," is
considered low-risk because it infected a small number of computer users in
Europe after it was initially detected Thursday morning, computer experts said.

But because the worm carries an attachment masquerading as a picture of the
20-year-old pop idol, security officials were still on alert Thursday. 
"Because this says 'Britney Spears,' we thought this may have potential to
spread," said Natasha Staley, a spokeswoman for British computer security firm
Sophos Anti-Virus. 
The name "Britney Spears" is consistently one of the most popular search terms
on Internet search engines, and the massively successful singer has been the
inspiration behind scores of fan sites. 
Britney, J.Lo and Anna

Spears is the latest female celebrity to be used by virus writers who hope to
ensnare scores of would-be victims. Singer/actress Jennifer Lopez was the
subject of a minor e-mail virus threat last year. 

The reigning queen of celebrity e-mail bugs is still Russian tennis star Anna
Kournikova, computer experts say. 
Last May, the so-called Anna Kournikova e-mail worm had a nasty run in the wild.
In that case, the worm crippled computer servers and slowed Internet traffic
around the world, after unsuspecting computer users clicked on an e-mail
attachment thinking they would see a photo of the tennis star. 

The author, a Dutch man, was eventually arrested and sentenced last September
to 150 hours of community service. Raimund Genes, European president of
computer security firm Trend Micro, said the Britney Spears virus is much less
sophisticated than the Kournikova worm--possibly the reason for its relatively
slow infestation. 
Genes said the worm carries an attachment labeled ".CHM," which doesn't look
like a photo attachment and could tip off computer users that it's a hoax. 

According to Sophos, the Britney bug spreads via the popular Microsoft Outlook
e-mail program as well as through Internet Relay Chat channels on the Internet.
As with Kournikova, it could overload computer servers and slow Internet
traffic. 

Story Copyright © 2002 Reuters Limited. All rights reserved. 
********************

Lillie Coney
Public Policy Coordinator
U.S. Association for Computing Machinery
Suite 507
1100 Seventeenth Street, NW
Washington, D.C. 20036-4632
202-659-9711