Clips April 15, 2002

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips April 15, 2002

ARTICLES

Entertainment industry decries film 'piracy'
US Funds Research on Facial Recognition Technology 
How to Fix the Dot-Government 
Fix for Security Delays Might Be Close at Hand
Airport Owners to Seek U.S. Funds for Security 
Navy eyes NMCI extension
U.K. eyeing Internet privacy protections for workers
Keeping Watch Over Instant Messages
Treasury seeks to boost rate of e-filing
Music piracy costs Tempe firm $1 million 
Chinese Accused of Stealing Secrets 
EMC Files Patent Infringement Suit Against Hitachi 
Defense Industry Has Old Roots in Silicon Valley 
MetroTech Preps Workers For Biotech Jobs 
A New Plan To Provide Broadband 
Electronics: Industries are at odds over Senate bill requiring safeguards in
digital devices.
Broadcasters slow to embrace the technology, but it is used in production by
filmmakers
Wristwatch tracks diabetics' blood sugar
Web sites re-spin your used music CDs
Experts debate biggest network security threats
OMB floats e-gov 'branding' strategy
Vast county centralizes online
Ashcroft orders more info sharing
IT contract overlap under scrutiny
Report Charts Patterns in Complaints About Internet
Lift-off for low-cost satellite broadband
Smart cards head for Hong Kong
Net cited as marriage wrecker
Youngsters targeted by digital bullies
Britons dash for broadband
When games stop being fun
Smarter profiling at the border is needed, experts say 
RFID: From Just-In-Time to Real Time
*********************
Nando Times
Entertainment industry decries film 'piracy'
By GLORIA GOODALE, Christian Science Monitor 

LAS VEGAS, Nev. (April 12, 2002 11:43 a.m. EDT) - Fifteen-year-old Sherie Tree
(not her real name) is "obsessed" with "Moulin Rouge." So when the
Oscar-nominated movie turned up on the free file-sharing Internet service
Morpheus, she used her high-speed DSL phone line to download it.

Now she watches it - over and over again - on her computer. To this Los
Angeles- area teen, downloading a movie is simply using technology at hand to
quickly enjoy something she's interested in - no different from turning on the
TV or radio. But to the entertainment industry, she - and unknown thousands of
computer-savvy people who do the same thing - is nothing short of a pirate,
robbing the movies' "owners" of their rightful revenues.

"It's a huge problem," says Peter Chernin, president of News Corp. Ltd., the
parent company of 20th Century Fox studio. "We have young people everywhere who
think this 'file sharing,' as they call it, is just fine. Any college with a
(high-speed) T1 line makes this possible; It's happening all over."

According to the Motion Picture Association of America (MPAA), the industry
already loses more than $3 billion annually to the sale of illegally copied
videotapes. Now, with an estimated 350,000 digital movie files being downloaded
daily for free, and with that number expected to climb to a million by year's
end, digital film piracy is Hollywood's next nightmare.

"If we don't think through how to protect digital entertainment material," says
Richard Parsons, who'll take over as chairman of media conglomerate AOL Time
Warner next month, "this entire business could be pirated away."

The film community watched closely as the music industry challenged and
ultimately shut down Napster, the Internet music file-sharing site.

"With Napster," says Fritz Attaway, executive vice-president of the MPAA, "we
learned that we have seen our future, and it's terrifying."

Not only does the absence of a universally agreed-upon solution for digital
piracy threaten the economic health of the movie industry, but worries about
wholesale theft hamper the rollout of new digital technologies that consumers
have long been promised, such as high-quality digital cinema in movie theaters
and digital broadcasting for television.

Hollywood has marched on Washington, seeking relief. At the end of March, Sen.
Ernest Hollings, D-S.C., introduced the Consumer Broadband and Digital
Television Promotion Act, which demands new hardware and software, from TVs to
CD players to computers, to block unauthorized copying of copyrighted works.

"We are taking a multipronged approach," News Corp.'s Chernin says, "with legal
action and a legislative approach."

But more than Hollywood studios have something at stake in the debate over
digital-video piracy.

"Consumers, on a daily basis, are losing personal-use rights that they expect
and cherish," says Joe Kraus, co-founder of DigitalConsumer.org, as well as the
Internet business Excite.com. The Internet pioneer details the most recent
rights that have been taken away by legislation, most recently by the 1998
Digital Millennium Copyright Act:

- The 1992 Audio Home Recording Act legalized the right to copy music for
personal use, but the 1998 legislation makes it a crime to extract music from
copy-protected CDs. Thus, you cannot duplicate a CD to create an extra copy to,
for example, use in your car.

- The U.S. Supreme Court has ruled that it is legal to tape broadcast TV shows,
but new HDTV standards will make it illegal to copy a digital broadcast without
the permission of the TV station.

- It is now a crime to sell a DVD player that allows you to fast-forward
through ads at the start of a DVD with content that companies have denoted
"must-see."

"Historically, there has been a balance between the rights of copyright holders
and citizens that has generally served us well for over 200 years," Kraus says.
Copyright holders have the right to make a profit on their product, and
consumers have the right, once they've purchased content, to use it in
"noncommercial, flexible ways."

Kraus points out an important precedent that he says is being ignored in the
current debate. The concept of copyright, he says, is relatively new and was
hotly debated during the early days of the U.S. Constitution.

"Thomas Jefferson realized that the foundation of innovation and progress in a
democracy is a strong flourishing set of ideas," the consumer activist says.
"No ideas are conceived in a vacuum."

Early patents were a solution devised to create an incentive for invention. But
they created a monopoly for only a limited amount of time, Kraus says.

"In exchange, the person has to give it back to the common. They don't get
exclusive rights forever," he said. "The reason copyright exists is not to
protect artists but to benefit the citizenry."

Kraus adds: The danger here "is that in an effort to find a new business model,
what the entertainment industry wants to do is eliminate the notion of
personal-rights use and use technology to control content completely."

But the MPAA doesn't see the issue this way.

"This is the first I've ever heard that there's an inalienable right to
fast-forward a film," says the MPAA's Attaway. "But this is a marketplace
issue. Consumers will make their interests known, and studios will respond to
those interests."

The technology companies that may be asked to create the new hardware and
software solutions to piracy also would like to see the marketplace, not
government, handle the problem. Technological invention is impossible to
foresee, they argue, and specific legislation would impede the innovation that
is the industry's lifeblood. Recently, computer maker Gateway Inc. came out
against the Hollings legislation and in support of consumers' rights to
download digital content. The company's Web site now offers free music for
downloading, and all 277 Gateway stores will hold clinics this weekend on how
to download digital files and "burn" CDs.

In Senate hearings last month, Intel Corp. vice president Leslie Vadasz went so
far as to say "government intervention would create irreparable damage."

Beyond that, point out industry observers, Hollywood has a history of fighting
new technologies (videotape, the VCR, the cassette tape, among others) that
later have become lucrative sources of new revenues for it.

Some suggest that this institutional conservatism blinds Hollywood to solutions
that are already available. The head of IBM's business development for
digital-rights management in Europe reminded the Senate commission that the
military has solved the problem of how to protect sensitive digital data.

Recently, IBM introduced encryption software it says will solve the problem of
illegal copying. Many observers say secure encryption software and hardware are
available, but an inability to agree on standards has kept Hollywood from using
them.

The culture of the entertainment industry must change from one of total control
to adaptability, says Dave Cavena, who led IBM's digital-cinema division for 10
years and now is an independent consultant on digital-piracy issues.

"At some point, studios will have to find an economic model that will drive
them toward same-day release (of movies) on all media: the Internet, cable
(TV), theater" to reduce the incentive for pirates to steal the material before
the studio can make it widely available.

A closer look at Sherie Tree, that Los Angeles teen, may provide an object
lesson to the industry, Kraus says. Yes, she downloaded "Moulin Rouge" onto her
computer. But she also put down $19 of her allowance money to buy the DVD when
it finally became available. And she dragged friends and family to the
multiplex on repeated trips to watch the film at $9 a sitting. Her original
"free" download resulted in a considerable number of purchases.

"The fundamental question," Kraus says, "is do you treat all consumers like
potential thieves, or treat them with dignity and give them their rights ...?" 
*******************
Reuters
US Funds Research on Facial Recognition Technology 
Fri Apr 12, 5:20 PM ET 

WASHINGTON (Reuters) - Federal spending on facial recognition technology
doubled in the past five years to more than $10 million, even before the Sept.
11 attacks generated new interest in the technology as a security measure, a
congressional study obtained on Friday showed. 

  
Four departments -- State, Justice, Energy and Defense -- reported spending a
combined total of $10.7 million in fiscal 2001 up to June 30 for research and
development of the technology, which turns an image of a face into a digital
code. A computer may then be used to compare the converted image with others in
a database. 

In fiscal 1997, the four said they had spent a combined total of $5.6 million,
the General Accounting Office (news - web sites), the audit arm of Congress,
said in the survey dated March 14 that was requested by House of
Representatives Majority leader Dick Armey, Republican of Texas. 

The survey was conducted in August so the figures do not reflect spending after
the September attacks. 

"Following the terrorist attacks on September 11, 2001, federal interest in
biometrics technology, especially facial recognition technology as a security
measure, appears to have increased," the study said. Biometrics involves the
use of a person's physical characteristics such as fingerprints, hand geometry,
iris scan or facial recognition to check identity. 

Although no agency reported using funds for deployment of it through January,
the State Department's Bureau of Intelligence and Research said it planned to
work with the Bureau of Consular Affairs to integrate the technology into a
counterterrorism database in the current fiscal year, which ends Sept. 30. 
********************
Wired News
How to Fix the Dot-Government   
 2:00 a.m. April 15, 2002 PDT  

SAN FRANCISCO -- Norman Lorentz, the first ever chief technology officer for
the Office of Management and Budget, seemed right at home among the dozens of
tech chiefs gathered here last week for the InfoWorld CTO Forum, the world's
only conference that's designed by CTOs, for CTOs, as its promoters proudly
proclaim. 

Although Lorentz now works for the public, heading the tech efforts of one of
the largest public institutions on the planet -- the U.S. federal government --
he's had a long history of managing tech in the "private sector" and he still
speaks in that hard-to-decipher, inside-baseball argot peculiar to tech
executives.

He uses terms like "deliverables," "initiatives," "portfolios," "facilitate,"
and "G to C," "G to B" and "G to G" (for government-to-consumer,
government-to-business and government-to-government). That kind of talk may now
be out of fashion in some circles, but it's still chic among the tech set, and
the executives here were mostly charmed by Lorentz's jargon-laden ideas for
refashioning the federal government. 

That's because Lorentz insisted during a speech to the techies that he looks to
private-sector CTOs as his models for the work he does at the government. The
federal government is often criticized for being slow, "bureaucratic," choking
on red tape and gummed up with redundant, inefficient processes -- but the
problems can be fixed with just a bit of business-savvy, Lorentz said. 

Lorentz is the former CTO of the Postal Service, and it was during his tenure
there, he said, that he realized government could learn a thing or two from
tech businesses. 

"Government truly can be transformed using the same approaches that we take in
the private sector," he said. He added that the president is "in alignment with
the idea" that citizens should have the same easy online relationship with
government agencies that they have with businesses. 

To that end, Lorentz is charged with spending a lot of money -- $48 billion in
2002, $52 billion in 2003 -- to solve a huge "change management problem" at the
government. He lamented that the federal Internet is now composed of "islands
of automation," a morass of 22,000 websites that don't quite talk to each other
in any meaningful way. 

To any outsider, even the experts gathered here, fixing such a mess seems a
gargantuan, thankless task, especially in these times of increased government
scrutiny. (Nobody wants to be on watch when the government sends out greeting
cards to hijackers.) 

So how does Lorentz plan to instill efficiency into an organization notorious
for anything but? 

One of his ideas is to outsource. Instead of creating brand new sites for
government recruiting or procurement, or the host of other functions the United
States intends to put online, Lorentz thinks it would be wiser to pay
experienced companies to do the work. 

"Why would we want to do it all internally if we could have, for example, a
Monster gov recruitment site, or if we could 'private label' a Travelocity" --
to handle government travel -- "or an eBay" to do the government's purchasing,
Lorentz asked. 

He conceded there may be privacy or security concerns with handing over
possibly sensitive functions to a third party, but Lorentz suggested that if
such circumstances arise, some ventures could be created in the mold of the
United States' national laboratories, which have private and public components.
For instance, Sandia National Labs, which works on the nation's nuclear
weapons, is a private corporation owned by Lockheed Martin, but is essentially
managed by the Department of Energy. 

But Lorentz made clear that these were merely his ideas and he gave no details
of specific technologies he plans to use. When asked by someone in the audience
what he thought of open-source software, Lorentz did say he thought open
software would work well for the government but that it had to be proven as
reliable. 

And he said he was neither opposed to nor pushing for a national I.D. card, but
there are probably some instances when a voluntary system might work well to
"facilitate the speed" of some processes. 
***********************
Los Angeles Times
Fix for Security Delays Might Be Close at Hand
Travel: Fingerprints digitalized on identification cards or passports can be
verified in a second, decreasing the wait at checkpoints, experts say.
By MICHAEL CONLON
REUTERS

April 15 2002

The need to positively prove identity in the world left changed by Sept. 11 is
driving technology designed to help people clear security checkpoints at
airports and elsewhere.

One of the methods to which experts have turned also is one of the oldest--the
fingerprint.

Giesecke & Devrient, a German firm, recently unveiled a "smart" identity card
that will contain two of the owner's digitalized fingerprints on an embedded
chip. The company has been hired to use the technology to give the entire
population of Macao--540,000 people--counterfeit-proof identity cards that will
speed up processing at border points in the territory on the southeast coast of
China.

The firm also says it has a contract with Egypt to provide a comprehensive
identity system for each of that nation's 42 million citizens older than 16.

A Swedish company, Fingerprint Cards, recently announced that its technology,
which allows fingerprint information to be incorporated in a bar code, will be
used in a system being developed for airline check-in and boarding.

At the same time, documents as familiar as the passport also are undergoing
changes. U.S. passports are being made with digital photos that are embedded
into the paper itself, making it virtually impossible to switch one photo for
another.

The British government recently announced it was considering adding a smart
card to British passports. It would include such things as fingerprints and
iris scans, which use the eye as a positive method of identification.

The concept of a national identity card is still controversial in some
countries.

President Bush has said he does not back one for the United States, but efforts
are underway to use fingerprints and other information on state driver's
licenses, which could have the effect of creating a de facto national identity
card.

One of the reasons fingerprints are in the fore is that, when digitalized, they
can be verified very quickly, in less than a second, said Winnie Ahn, marketing
specialist for SecuGen Corp., a biometric technology vendor based in Milpitas,
Calif. Fingerprints also have been long known to be unique identifiers, and the
technology employing them the most mature, making it relatively cheap for
widespread use, she said.

Ahn said digitalization allows fine data points and spatial aspects of a print
to be recognized, so that the complete print with all its curves and whorls
does not have to be stored. She said fingerprints are used in more than 40% of
biometric identification systems.

Not everyone can be fingerprinted. In cases where skin is worn smooth or
calloused, identification can be difficult.

People in those situations will require supplemental information on
identification cards or other systems, she said.

There is continuing demand among business travelers for some way to speed up
processing for those who pass through airport checkpoints most frequently.

The National Business Travel Assn. said its recent survey of 200 corporate
travel managers found that two of every three favored some sort of "trusted
traveler" identification system that would make moving through airport security
as fast as before Sept. 11.

In a similar survey in January only half of those questioned thought business
travelers deserved such favored treatment.

At the same time, the survey found that 40% of those contacted were considering
reducing the number of out-of-town meetings if security processes continue to
slow travelers, and 56% said they might make more conference calls for the same
reason.

A majority of the travel managers surveyed said, however, that a strong
economy, and not improvements in security technology, is the most important
factor that will push business travel back to pre-recession levels.

In the meantime, 35% said they expected it to be nine months to a year before
business travel recovers to levels of two years ago; 25% said they thought it
would be six to nine months.
***************
Washington Post
Airport Owners to Seek U.S. Funds for Security 
By Sara Kehaulani Goo
Washington Post Staff Writer
Saturday, April 13, 2002; Page A09 


The organization representing the nation's airports said its members will seek
billions of dollars from the federal government for airport security
improvements, including funds to replace National Guardsmen with local
law-enforcement officers, install bomb-sniffing equipment and build facilities
for new federal screeners.

The airport expenses are the latest in a series of unexpected costs to hit the
Transportation Security Administration and illustrate the enormous difficulty
of replacing a privately run airport security system with one operated by the
federal government. 

The TSA now pays as much as $260 million per month for contracts to provide
passenger screening at security checkpoints, more than four times what the
airlines paid before Sept. 11. In addition, agency officials now think they may
have to hire 60,000 security workers, far higher than the 28,000 originally
predicted. And bomb-detection equipment is expected to cost billions of dollars
more than originally estimated.

Leading lawmakers, including Rep. John L. Mica (R-Fla.), chairman of the House
aviation subcommittee, said the TSA's budget request could easily reach $10
billion for the current and next fiscal year. He predicted that Congress would
approve the money. "There's no choice" in Congress's ability to fund airport
security, Mica said. "This is not something we even debate about. Congress
instituted this. Now they have to pay the piper."

Airports are still tallying the bill but the request by the 429 airports to the
federal government will reach "billions," said Richard Marchie, vice president
for technical and environmental affairs at Airports Council International, an
organization representing owners of more than 400 airports in North America.

The authority that runs Dulles International Airport said it will spend $132
million this year to build a larger baggage-processing area to accommodate
bomb-sniffing machines.

The agency that runs Baltimore-Washington International Airport said it will
spend $6.3 million on additional security equipment, personnel and police
officers salaries this year, and expects to spend an additional $5.3 million
next year.

The airport authority that manages Reagan National Airport and Dulles said it
will spend $7.5 million to hire a consultant to study ways to improve security.

Marchie said airport managers are worried they are being forced to spend
millions of dollars to improve security at their airports in accordance with
the new aviation security law passed last fall. Yet, the TSA has not asked
Congress for enough money to pay for it all.

Last month, the TSA requested $4.4 billion in a supplemental request to
Congress for the current fiscal year without much detail of what those costs
will include. But more than half of that request is already committed to new
explosives-detection machines.

TSA spokesman Jonathan Thompson said there is $175 million in the Federal
Aviation Administration's airport-improvement program to fund security costs.
He said that while that money won't cover all the expenses, it will help
airports defray some of the costs. An FAA spokeswoman, Laura Brown, said it's
possible airports could apply for additional funding through the
airport-improvement program.
*******************
Federal Computer Week
Navy eyes NMCI extension

The Navy has not yet passed the first milestone for its Navy Marine Corps
Intranet, but officials are already investigating the possibility of extending
the current contract, the Navy's new NMCI program manager said.

The Navy is considering modifying the NMCI contract with EDS so that the start
date would coincide with passing the first major milestone, which could come as
soon as next month.

NMCI director Rear Adm. Charles Munns, in his first public speech since being
named to the post in February, said April 11 that the Navy would like to have
some time to use NMCI before officials have to consider entering into the
contract's three-year option period.

NMCI is a five-year contract valued at $4.1 billion, with an additional
three-year option that brings the total value of the contract to $6.9 billion.

NMCI officials said that the idea behind the extension is for the Navy to start
the five-year contract period at the time when NMCI passes its first milestone.
Otherwise, the Navy would have to make a decision about the three-year option
about two years after it gets all of NMCI's seats rolled out. Munns said the
target date for that is December 2003.

The contract extension would enable the Navy to use the NMCI network for more
than two years before having to address that issue.

EDS officials said that they had not heard of the idea, but they said the
company likely would be receptive to the concept.

Munns, speaking at Armed Forces Communications and Electronics Association's
Navy Information Technology Day in Vienna, Va., reiterated that the Navy
expects to complete testing by the end of the month and hopes to pass its first
milestone next month. 

Munns met with Pentagon officials April 12 to discuss the process for reviewing
the test results. The test results will provide data for Pentagon officials to
determine whether NMCI can move forward.

The law authorizing NMCI stipulated that the Navy would roll out a certain
number of seats to prove the feasibility of the concept. Under a September 2001
agreement, John Stenbit, Defense Department chief information officer, and
Michael Wynne, deputy undersecretary for Defense for acquisition and
technology, must give their approval to allow the Navy to order the additional
100,000 seats.

Meanwhile, the Navy has named Capt. Craig Madsen as its NMCI program manager.
Madsen will work out of the Space and Naval Warfare Systems Command in San
Diego.
*****************
Computerworld
U.K. eyeing Internet privacy protections for workers

WASHINGTON -- Businesses in the U.K., including U.S. firms with branch offices
there, may soon face limits on their ability to monitor employee Web surfing
and e-mail activity under a new privacy code due to be released by a government
body in the next two months.

The U.K. privacy protections also illustrate the sharp difference in privacy
approaches that exist between the U.S. and European nations, many of which have
stringent privacy rules. 

The code, which sets out workplace privacy rights, will call for employers to
spell out their monitoring policies to employees and conduct monitoring that is
"proportionate" to the risk posed by the employee activity. 

Here are two examples of how the standard could be applied: 


If employees write 10 e-mails a day on average, but one employee is writing 200
e-mails, that would give an employer grounds to look at the content of those
e-mails, David Clancy, a strategic policy officer at the Information Commission
in London. 

Employers with sensitive information to protect, such as the secret ingredients
of a soft drink, could reserve the right in their monitoring policy to check
all communications -- such a policy would be proportionate to the risk, said
Clancy. "The risk is that the business would collapse if the recipe was loose,"
he said.
The code would also call on companies to give consideration to an employee's
privacy rights, said Clancy, because there "is a blurring between work and
personal communications, especially with the growth of people working away from
the office and the use of mobile communications." The mixed nature of messages
can cause problems when a message to the human resource department, while
work-related, is "quite often highly personal and private," he said. 

But a major U.K. industry group, the Chartered Institute of Personnel and
Development, called the code "unrealistic and inappropriate" and said it will
halt virtually any employee monitoring and create new risks for businesses. 

The code "does not allow any covert monitoring" of such activity as telephone
calls and Internet use "unless criminal activity has been identified and the
police are involved," said Diane Sinclair, the lead advisor on public policy at
the London-based personnel management group. 

The code is the Information Commission's interpretation of the Data Protection
Act. The code isn't a law, but if a company doesn't follow the code, it risks a
legal challenge from an employee. 

Companies operating in the U.S. are allowed to monitor workplace computer
activity without restriction, said Christopher Wolf, an Internet law expert at
Proskauer Rose LLP in Washington. In short, U.S. law, which is backed by court
rulings, makes clear that "he who owns the computers gets to see what is going
on with their computers," he said. 

But U.S. businesses in England will have comply with the privacy code. Although
companies with servers located in the U.S. might have the capability of
remotely monitoring a workstation in England -- and may technically be able to
get away with it -- they could face legal risk if they do so, said Wolf. 

There have been high-profile cases in the U.K. of employees who have been
dismissed for surfing the Internet, said Carolyn Jones, who heads the Institute
of Employment Rights in London. She argued, however, that the boundary between
family and the workplace is no longer what it was and that there should be some
flexibility. 
******************
New York Times
Keeping Watch Over Instant Messages

Many people who use instant messaging may consider their conversations as
private and fleeting as a phone call. But employees at Sonalysts, a software
and consulting company in Waterford, Conn., know otherwise. 

At the company's annual meeting last year, Randy Dickson, a systems analyst,
drove home the point that even a few quips flying among instant messagers could
be picked up by the company's computer surveillance. He displayed a document
that showed a conversation by two employees, whose names were blacked out. 

There were just a few lines of text, but the gist was clear. The room became
quiet. Here were the words of two employees using what Mr. Dickson called "less
than professional" language to talk about a third colleague  all recorded for
posterity. 

"Instant messaging is very loose and chatty, almost like a conversation," Mr.
Dickson said. Those exchanges were evidence, he said, that people divulge more
than they should  and that without persistent monitoring, the company could be
at risk. Secret projects could be leaked and offensive language could be
forwarded inside and outside the office.

Sonalysts, which uses software developed by Vericept, of Englewood, Colo., is
ahead of most of its peers in logging and monitoring instant messages, but over
the last several months, scores of companies have taken a similar tack. They
are discovering that instant messaging  once the province of chatty teenagers 
has invaded the work place. Jupiter Media Metrix says more than 15.6 million
people send instant messages at work.

To visualize instant messaging, think of a typed conversation, in which
snippets of text are rapidly exchanged over the Internet, with each snippet
appearing on the recipient's screen as soon as it is sent. Unlike e-mail
messages, which are automatically stored in servers and in-boxes, instant
messages disappear when a messaging session is closed. The software was
originally designed not to store anything  a boon to users who are overwhelmed
by accumulating e-mail messages. 

"The I.T. people don't realize that this whole instant-messaging community is
spreading like crab grass," said Glen Vondrick, president and chief executive
of FaceTime Communications, in Foster City, Calif., which makes a product
called the IM Auditor.

Free services like America Online's Instant Messenger give companies the most
grief, analysts say, because they are not designed to be controlled by anyone
but end users. Ignoring their impact is like "playing with a loaded gun," reads
the headline of a report by Gartner, the market research company in Stamford,
Conn.

Some companies and government offices have simply banned the software. But many
others have concluded that real-time messaging is here to stay and that just as
e-mail and Web monitoring became common in the work place, instant-message
monitoring will, too. 

Some have invested in systems like Lotus SameTime, from I.B.M., and
Communicator Hub IM, from Communicator Inc., which run from central servers.
Others rely on the free systems that are already so popular, and have installed
software that intercepts messages. That software includes products from
FaceTime, Vericept and ICaughtYou, in Bonita Springs, Fla. 

Either way, the nature of instant messaging could change drastically. Those who
use it compare the specter of being spied on to someone's tapping phone
conversations. Now, they say, they may have to go back to playing phone tag. 

But in regulated industries, like finance and health care, the monitoring may
not cause much of an uproar because it is a given that companies must archive
and review all written correspondence. Although the Securities and Exchange
Commission has said nothing about instant messaging, many compliance officers
at financial institutions have started to interpret the agency's rules on
electronic correspondence to include messaging, leading to a windfall for
software developers.

FaceTime has opened a sales office in New York to handle requests from Wall
Street companies. Lotus has received so many inquiries from its SameTime
customers that it has teamed up with other software companies that build custom
monitoring tools. And in February, Microsoft said it was integrating an
archiving product from IMlogic, in Boston, into its next-generation Windows
messaging software.

A few recent horror stories have spurred employers to act. 

One embarrassment involved Sam Jain, chief executive of eFront Media, a defunct
company that had been the hub of a network of Web sites. A series of messages
Mr. Jain wrote about his employees in I.C.Q., a messaging program owned by
America Online, were reportedly taken from Mr. Jain's computer logs last year
and posted on a Web site (with a vulgar address) that highlights crumbling
companies. 

Some messages about a business partner were flagrantly offensive, and most of
the discussion was laced with profanity. Mr. Jain said some of the messages had
been doctored, but many executives soon left the company, in part because of
the revelations, and eFront soon folded.

Another case last summer revolved around an instant message about PeopleSoft
that was sent by Frank Slattery, a money manager at Azure Capital Partners in
San Francisco. The message, intended for a handful of friends in the investment
business, asked about a rumor that PeopleSoft was being investigated by the
S.E.C.

That day and the next, PeopleSoft's stock tumbled 27 percent. Although it is
impossible to make a direct connection, the company blames the message. It
turned the note over to the S.E.C. and demanded a retraction, which Mr.
Slattery supplied immediately in another instant message. The rumor had no
validity, PeopleSoft said.

Mr. Slattery, who could not be reached for comment, no longer works at Azure.
The S.E.C. would not comment.

Beth Cannon, chief technology officer at Thomas Weisel Partners, a merchant
bank in San Francisco, said that after the PeopleSoft incident, her firm began
blocking instant messaging with an early version of FaceTime. But on Sept. 11,
many people said that instant messaging would have come in handy when the phone
lines were down, said Pamela Housley, director of compliance. "This is a useful
tool that people need," she said.

About the same time, FaceTime came out with its archiving and monitoring
product, and Ms. Housley decided it was safe to permit instant messaging as
long as it could be logged. This month, employees who want to use a system like
AOL's Instant Messenger are being asked to register their buddy names with the
compliance office. Keyword filters, Ms. Housley said, will help the compliance
team "pick out messages that might be problematic." 

What is "problematic" differs from company to company, but software developers
say their products have already helped customers avert disasters and catch
employees engaged in foul play. Jack Palmer, chief executive of ICaughtYou,
says his software was used by a government agency to catch an employee who was
dealing drugs. Michael K. Reagan, senior vice president for marketing at
Vericept, said a large telecommunications company used its software to detect
that a disgruntled former employee was planning an act of vengeance against the
company. 

The monitoring is legal, lawyers say, as long as employers make it clear they
will be monitoring messaging. At Sonalysts, Mr. Dickson's unsettling
disclosures appeared to be an effective way to alert employees that their
messages were being watched. Soon after the annual meeting, he said, he saw his
name appear in an instant message from a colleague and an ex-employee. The
ex-employee had written, "Hi Randy. How are you? I hope you're listening." 

"I wrote him back and said, `Hi, I am listening,' " Mr. Dickson said. 

He has not heard much from him since.
******************
USA Today
Treasury seeks to boost rate of e-filing

WASHINGTON  To the millions who'll get snagged Monday in post office gridlock
rushing to meet the annual income tax filing deadline: Next year will be better
as more people switch to electronic filing.

That, at least, is the hope of U.S. Treasury Department officials seeking to
turbo-charge the slowing growth rate in electronically filed returns. Seventeen
years after e-filing was introduced, nearly two-thirds of this year's 130
million tax returns still will be mailed. The government says that's no way to
be doing business in this electronic age. Two key proposals are in the works to
boost e-filing numbers next year and beyond:

An extra 15 days  until April 30  to e-file and pay.


Free e-filing. It now costs $13 on average. Compare that to the 57 cents
postage needed to mail a 2-ounce paper return. The charge for e-filing goes not
to government but to tax-preparation firms authorized by the IRS to transmit
returns. Often, the cost of filing is rolled into the price of tax-preparation
services, or do-it-yourself tax-prep software. But the drag it creates on
e-filing growth is clear: Taxpayers wanting to do business with the IRS
electronically have no option but to pay a commercial gatekeeper. 
The free-filing proposal is aimed at taxpayers like Barbara Troike, 64, of
Sandusky, Ohio. She prepares returns for herself and a half-dozen relatives.
Though she does the work on a computer and could easily e-file the returns, she
refuses to. Says Troike: "I don't think anyone should have to pay to file."

Assistant Treasury Secretary Mark Weinberger agrees. "It shouldn't be more
costly for taxpayers to file electronically than to file on paper," he says.

A new USA TODAY/CNN/Gallup Poll of 440 taxpayers who mail returns says 16% do
so primarily to avoid the cost of e-filing. And the estimated 14% annual growth
in e-filing this tax season is only half the growth rate in 1997.

Government officials recognize that without a new blast of oxygen from
somewhere, the e-filing growth engine will sputter and die well short of the
e-filing goal set by Congress of 80% of returns by 2007.

President Bush, the nation's first MBA chief executive, proposed changes this
year as part of a broader electronic government initiative. He initially
recommended the free filing for 2004, but government officials and
representatives of the tax-preparation software industry have met in four
sessions recently to develop a different plan. Their plan would be a low-cost,
not free, option that they would like to institute by 2003. Conflicting goals
could scuttle an agreement.

Foe of free filing on way out

Since the introduction of e-filing in 1986, private companies have had the
monopoly on e-filing with the IRS, and the tax-software industry has lobbied
strongly  and successfully  to retain the status quo.

Until the Bush proposal revived the discussion, IRS Commissioner Charles
Rossotti had quelled it with congressional testimony in 2000 unequivocally
ruling out change on his watch. Rossotti's five-year term ends later this year.
Bush will appoint his successor.

Stephen Holden, a former IRS administrator who helped develop e-filing, says
software industry opposition effectively ended earlier discussions of change.

"No organization argues in favor of the taxpayers' interests on this," says
Holden, now an information systems professor at the University of Maryland,
Baltimore County.

At stake for the industry is not only the revenue from filing fees and software
sales, but also a valuable connection to taxpayers who later may buy
financial-management software or non-tax financial services  consumer loans,
mortgages, investments and insurance.

The industry's main argument, the one that resonates best with its supporters
in Congress, is that the IRS would unavoidably be creeping into the
traditionally private domain of tax preparation. With that change, says Bernie
McKay, vice president at software firm Intuit, comes a conflict for the IRS
between maximizing tax collections and helping taxpayers pay the lowest tax
possible.

Further, says McKay, a free e-filing option for everybody is unnecessary. Some
firms now offer bare-bones preparation and e-filing for less than $10, which
McKay defends as a reasonable charge for upper income taxpayers.

The cost of e-filing, including tax preparation software, like other tax
preparation fees, are deductible for taxpayers who itemize  but not until the
next year. Fees paid this year to file 2001 returns are deductible next year
when taxpayers file 2002 returns.

McKay's firm, which publishes the popular Quicken TurboTax, again this year
will allow about 1 million taxpayers with incomes below $25,000 to prepare and
file returns free through its Web-based software.

Holden, the Maryland professor, says the Bush proposal doesn't expand the IRS'
role. The IRS already provides paper forms and instructions and offers a
limited form of direct e-filing by telephone keypad, he notes: "The whole
notion that government can't offer free e-filing is indefensible."

Still, Holden says, the government can't be cavalier about the financial
well-being of the industry if it wants e-filing to achieve its potential.
Industry know-how has brought the system this far, and electronic preparation
remains a bargain to taxpayers compared with high-priced accountants, he says.
"IRS and the industry need one another badly," says Holden.

Since Bush's proposal in February, industry and IRS representatives have been
discussing creation of a joint Web site. Starting next tax season, the Web site
would be a clearinghouse for e-filers. But the two sides offer conflicting
visions on how it would work.

Intuit's McKay says each participating tax-prep firm would offer through the
site a link to its lowest-cost e-filing option. Not on the table in the
industry-IRS discussions is Bush's proposal for a universal free filing
alternative, says McKay.

Treasury's Weinberger says that won't fly. The Bush administration supports the
idea of electronic links from the proposed Web site to private firms' sites.
And, he says, private firms would be permitted to pitch their tax-preparation
services to site users.

But to comply with the president's proposal, says Weinberger, every
participating firm would be required to provide a free filing option for every
taxpayer  just like the option available to paper filers, he says.

Failing agreement with the industry, he says, the IRS could provide a free
direct filing service on its Web site, as many state tax agencies do. It's an
option that would delay free e-filing at least until 2004, he says.

Extra 15 days looks golden

About 45 million taxpayers will file electronically this year. For them,
benefits include swift refunds  less than two weeks  and a nearly immediate
acknowledgement that the return has been received and that the arithmetic is
correct. For the IRS, e-filing reduces the cost of processing and storing paper
returns.

Bush's proposal to boost e-filing by giving taxpayers an extra 15 days next
year is virtually without controversy. It's already started to move in Congress
with bipartisan backing. The proposal is meant to address the lack of incentive
to e-file for those taxpayers who owe the government money.

Those who owe money  about 30% of filers  tend to file late in the tax season,
and it makes little difference to them how long it takes the IRS to process
their returns. The government strategy to sweeten the deal: Give them extra
time to square up, on the condition they do it electronically.

But even if the Bush administration can implement its proposals for boosting
e-filing next year, significant obstacles to public acceptance remain. Among
them:

Distrust. Lingering public suspicion about Internet security continues to make
e-filing a hard sell. Not helping is the IRS' long history of computer
troubles, none of which have been related to e-filing. The IRS has processed
250 million e-filed returns over the years without a security breach, but that
seems lost on taxpayers. 
"I see too many stories about people getting ripped off over the Internet,"
says Natasha Gillenwater, 44, a Las Vegas teacher. She picks up her family's
return from the accountant each year and carries it to the post office.

Tax expert Jeremiah Doyle, a Mellon Bank executive in Boston, shares
Gillenwater's skepticism. Doyle prepares his return on a computer, then prints
and mails it. Doyle says he's heard too many stories about Internet security
breaches to believe the IRS is immune. "I'd rather wait until things are more
settled" before e-filing, he says.

Indifference and inertia. According to the poll, the largest portion of
taxpayers who mail returns, 25%, say they simply leave the decision to their
tax preparer. 
In a report last summer, an IRS advisory committee gave high marks to the
e-filing efforts of big, tax preparers like H&R Block and Jackson Hewitt. As a
group, the mass preparers e-filed 83% of clients' returns in 2000, the report
said. But the report advised more missionary work with smaller tax-preparation
firms, like that of David Jabara, a CPA in Wichita. Jabara says he views
e-filing favorably. But, he says, few of his 700 clients ask to have their
returns e-filed.

"They like seeing their return, they like signing it, and they like putting it
in the mail," he says.

Antipathy. One thing you're unlikely to see from the IRS is a marketing pitch
urging taxpayers to e-file because it makes life easier for the agency. Holden
says IRS market research in the late 1990s showed people less likely to e-file
if they knew it helped the IRS. 
Says Holden: "It was almost out of spite. People felt that if it's good for the
IRS, it can't be good for me."

Even with the Bush proposals, the climb to the goal of 80% e-filed returns in
2007 is steep. From the current level, e-filing would have to grow at 20%
annually.

Treasury Department lawyer Chris Smith says the Bush proposals would bring the
2007 goal within reach. "Our odds would increase greatly," says Smith.
*****************
Arizona Republic
Music piracy costs Tempe firm $1 million 
By Christine L. Romero
The Arizona Republic
April 11, 2002 12:00:00


In what may be the first case of its kind, Integrated Information Systems Inc.,
a Tempe-based high-tech firm, said Wednesday that it has agreed to pay a $1
million settlement to the recording industry for pirated music.


The 400-employee company violated copyright laws when some of its employees,
unbeknownst to management, ran a dedicated computer server that allowed
co-workers to download thousands of digital songs, or MP3 files, said Bill
Mahan, Integrated's chief financial officer.

The pirated music included songs by the Police, Ricky Martin, Aerosmith and
Sarah McLachlan.

The Recording Industry Association of America challenged the company after an
anonymous tip.

When the company realized its employees were illegally copying music, Mahan
said, it decided to pay the $1 million out-of-court settlement rather than face
the prospect of even higher legal bills. The company also agreed to destroy the
digital music files.

Pirated music, not including online copies, costs the $37 billion global music
industry an estimated $4.2 billion annually, said Amanda Collins, a music
association spokeswoman. She said musicians should be paid properly for their
work.

Mahan said the employees involved violated his firm's ethics policy. He
suggested that his firm is not alone in the misuse of computer equipment. "I
bet this happens in 50 to 70 percent of the companies our size in Phoenix." 

When the music association got the tip in August, the company was worth about
$40 million. Now its worth has dropped to about $8 million because of a slump
in information technology.

Mahan said he believes the music industry was unforgiving in its approach to
his company. "They thought they had found a fat cat and had no mercy," he said.

Matt Oppenheim, the music association's vice president for business and legal
affairs, said: "This sends a clear message that there are consequences if
companies allow resources to further copyright infringement. We applaud IIS for
accepting its responsibility and working actively with us to settle this case
out of court."

Integrated's lawyers, Mahan said, believe this is the first settlement of its
kind.
******************
Associated Press
Chinese Accused of Stealing Secrets 
Fri Apr 12, 9:04 AM ET 
By JEFFREY GOLD, Associated Press Writer 

NEWARK, N.J. - The three Chinese nationals accused of stealing trade secrets
from Lucent Technologies also victimized four other companies, according to a
new indictment against them returned Thursday.

  
The three men, including two scientists who worked at Lucent's Murray Hill
headquarters, now face 24 counts, including the original conspiracy charge, 14
counts of possessing trade secrets, and nine wire fraud counts.

They were first charged in May with plotting a joint venture with Datang
Telecom Technology Co. Ltd., of Beijing.

The trio planned to become "the Cisco of China" by selling a clone of Lucent's
PathStar data and voice transmission system to Internet providers in that
nation, prosecutors claimed.

The new indictment said trade secrets were stolen not only from Lucent, but
from companies that licensed portions of their software to Lucent or sold
Lucent custom circuit boards for use in the PathStar server.

It named as victims Telenetworks, a unit of Next Level Communication, of
Rohnert Park, Calif.; NetPlane Systems Inc. (formerly Harris & Jeffries Inc.),
a subsidiary of Mindspeed Technologies, of Dedham, Mass.; Hughes Software
Systems Ltd., a division of Hughes Network Systems Inc., of Gurgaon, India; and
ZiaTech Corp., a subsidiary of Intel Corp., of San Luis Obispo, Calif.

Lucent fired the scientists after their arrests in May. Hai Lin, 30, of Scotch
Plains, and Kai Xu, 33, of Somerset, had been on the Lucent staff developing
PathStar for the telecommunications giant that was once part of AT&T Corp.

The third man, Yong-Qing Cheng, 37, of East Brunswick, was fired after his
arrest from Village Networks, an optical networking vendor in Eatontown. He had
worked as a consultant to Lucent on PathStar.

All have pleaded innocent and are free on bail.

Despite the additional charges, Assistant U.S. Attorney Scott S. Christie said
he would not seek to delay the trial, scheduled for Sept. 24.

Cheng lawyer James A. Plaisted said the trial would likely come later. He said
that defense lawyers expected the additional charges because the U.S.
attorney's office had said it would make more specific accusations.

Xu lawyer Paul Fishman said his client continues to maintain his innocence.

The conspiracy charge carries up to 10 years in prison and a $250,000 fine, as
does each of the trade secret possession counts. Each wire fraud count carries
up to five years in prison and a $250,000 fine.

Datang has asserted it "always follows the laws and regulations about
intellectual patents."

The three defendants, all legal U.S. residents, formed a company called
ComTriad in January 2000. It formed a partnership controlled by Datang called
DTNET about February 2001, which was funded with $1.2 million from Datang, the
indictment said.

Prosecutors have said a substantial amount of the PathStar source code was sent
to Datang.

Lucent said it discontinued the PathStar system in early 2001, shortly before
discovering the theft and alerting authorities.
****************
Reuters
EMC Files Patent Infringement Suit Against Hitachi 
Fri Apr 12,10:20 AM ET 

BOSTON (Reuters) - EMC Corp. , the world's No. 1 maker of data-storage systems,
on Friday accused Japanese electronics giant Hitachi Ltd. and Hitachi Data
Systems of infringing several software patents, as EMC is relying more heavily
on software sales to restore sagging profit margins. 

  
EMC said it filed complaints with the International Trade Commission and the
U.S. District Court in Worcester, Massachusetts. EMC claims Hitachi and its
U.S. data-storage unit, HDS, have infringed six software patents. 

EMC said it is asking the ITC to block imports of Hitachi's infringing
software. Hitachi officials were not immediately available for comment. 

Competitors such as HDS and IBM Corp. have slashed prices on hardware to steal
some of Hopkinton, Massachusetts-based EMC's leading market share. 

Last year, software sales accounted for $1.56 billion, or 22 percent, of EMC's
$7.1 billion in revenue. 

Meanwhile, EMC's hardware sales have slipped dramatically because of stiffer
competition and sharply reduced spending by corporations on data-storage. 

In 2001, EMC controlled about 30 percent of the data-storage software market,
compared with HDS' 2 percent, according to market research. 

EMC spokesman Mark Fredrickson said Hitachi uses software claims and its
infringing products to overcome the market's natural preference for EMC
products. 

"They want to shift the discussion off software to get into their
price-per-pound hardware (strategy)," Fredrickson said. 

EMC said it spent nearly 4 years trying to resolve the patent issues amicably
with Hitachi. 

EMC said the patents included in the complaints relate to its key data
replication products, SRDF and TimeFinder, which allows corporations to protect
vital data in the event of catastrophe or other unplanned events. 
***************
Reuters
Defense Industry Has Old Roots in Silicon Valley 
Sun Apr 14, 2:02 PM ET 
By Andrea Orr 

PALO ALTO, Calif. (Reuters) - When the United States went to war, Silicon
Valley mobilized. High-tech companies that had been selling to consumer markets
adapted their products for new use in weapons, tanks, remote sensing devices
and microwave telephone systems. 

  
This is not the story of the current war in Afghanistan (news - web sites), nor
even the Gulf War (news - web sites) -- famously high-tech for the
precision-guided smart bombs that were broadcast on CNN as they hit their
targets -- so much as it describes what happened years ago at the start of the
Second World War. 

Silicon Valley was more a valley of apricot orchards than office parks back
then and "cutting-edge technology" described things like oscillators that today
are a basic component of all sorts of household devices like radios and
television sets. 

But the wartime economy opened major new markets for some young companies like
Hewlett-Packard Co. . 

HP had just delivered one of its first orders of oscillators to Walt Disney Co.
for use in the movie "Fantasia," when it received a big order from the Defense
Department for oscillators to be used in military radar. 

A decade later, defense contractor Lockheed Aircraft Corp. bought a 275-acre
tract of land in the valley as the future site of the Missile Systems Division
of the defense contractor that is today Lockheed Martin . 

In the book "Beyond the Horizons: The Lockheed Story," Walter Boyne described
how Lockheed's work building superior high-altitude and high-speed aircraft
required new laboratories to recreate the atmospheric conditions in which the
planes would operate. 

"Implicit in their creation was an unprecedented requirement for new electronic
and optical testing equipment, Boyne wrote. "One incredible by-product of this
demand for intellectual resources was the growth of what is now called the
Silicon Valley." 

War in the year 2002 is not likely to have the same transforming effect on an
industry whose products are entrenched in people's everyday lives. 

But what company would not mind a little extra business from a reliable
customer, especially when a persistent recession has eroded fat profit margins
and left many calculating unemployment benefits instead of stock options? 

Vice President Dick Cheney (news - web sites) seemed to understand the appeal
of such a pitch earlier this year when, during a trip to California, he made a
stop in San Jose and told a crowd of people employed in the high-tech industry
how their efforts could be put to a higher good. 

Cheney spoke of precision-guided missiles, and unmanned aerial vehicles that
can be controlled remotely. He even sounded a little bit like a Silicon Valley
marketing executive when described how data typically "travels up and down an
organization" but is not shared with other agencies. 

These restrictions on important government data could explain why as recently
as this month, one of the hijackers suspected in the Sept. 11 attacks was still
on the Federal Aviation Administration (news - web sites) newsletter mailing
list. 

"We need a comprehensive secure system that allows intelligence to be shared
among the relevant officials," Cheney said, reminding his audience how the
defense industry's requirements for technology extend beyond the battlefield
all the way to the back office. 

Whether his talk was a pep rally or a work order remains to be seen. Military
analysts and consultants express reservations that war could be the next big
thing for Silicon Valley. 

Not only is the scale of this region's commercial production too large to be
easily swayed by a new source of business, but it is unclear whether the
Defense Department is on the cutting edge of technology the way it fancies
itself. 

"The military is recognizing that information technology is helping them do
their jobs," said Ray Bjorklund, vice president of consulting services at
Federal Sources Inc., a Washington, D.C., consulting firm. 

"But the government also has a reputation for being a bit slow in embracing new
technologies. People often say they are 18 months behind the private sector.
I'd say its more like a 12 to 14 month lag time." 

The Defense Department does not break out its spending on military technology,
but Bjorklund says the best way to measure it is in the category, "Command,
control, communications, computers, intelligence, surveillance and
reconnaissance," or C4ISR. 

He says this area of spending has grown pretty much in line with overall
defense budget increases, but adds, "I think we're starting to see a slight
increase in additional spending in C4ISR." 

Still, he warns that doing business with the Federal Government is very
different from doing business in the private sector since government agencies
often need equipment built to their own specifications, and require companies
to go through lengthy competitive bidding processes. 

For companies accustomed to the fast pace of doing business in Silicon Valley,
this can be an adjustment. 

"It takes a lot of hard work, a lot of walking the hallways of the Pentagon
(news - web sites)," Bjorklund said. 
*****************
Washington Post
MetroTech Preps Workers For Biotech Jobs 
Monday, April 15, 2002; Page WB1 

If it's not one thing, it's another.

So goes the philosophy at MetroTech, a government-sponsored program that moves
people into information technology jobs. During boom times, the $20 million
initiative paid to train unemployed workers in computer programming, networking
and other skills if local businesses agreed to hire them afterward.

But when the bottom dropped out of the information-technology labor market,
many companies refused to bring on junior employees who had little paid
experience.

Now MetroTech is switching gears to appeal to a different kind of employer: the
dozens of biotechnology firms that have sprouted up across the region.

"We've seen some changes in the IT field," director Bill Carlson said. "At the
same time, we were hearing about a growing demand on the biotech side. We're
certainly not the [entire] solution to the biotech workforce shortage, but we
want to be part of the solution."

The program is open to businesses in the Washington area that want to hire
workers dismissed through no fault of their own or those who want to improve
their skills to move into the information-technology or biotech sectors. Recent
community college and university graduates also may be eligible to participate.

Carlson said MetroTech already has signed contracts with six biotech employers.
He is negotiating with two more businesses to find workers to fill animal care,
laboratory and drug manufacturing jobs in the region.

For Charles River Laboratories International Inc., a Massachusetts-based firm
with outposts in Frederick and Gaithersburg, the program is already paying
dividends.

Charles River and MetroTech together find college graduates to for the firm's
corporate response team. The scrubs-clad workers spend about 20 percent of
their time in a classroom at Charles River. Otherwise, they serve as a kind of
"super temp," cleaning the labs, analyzing data and caring for animals.
Participants earn $30,000 a year, plus benefits. They win the chance to apply
for other jobs within the firm after a year of service.

"You don't have to have a particular background to have a career in this
industry," said Kimberlyn Cahill, a manager for training and employee
development at Charles River. "These workers are not out there. We have to
train them ourselves."

MetroTech pays other biotechnology companies to teach new workers to use
equipment and to perform tasks that are unique from lab to lab  an important
option for firms that have painstakingly developed their own scientific
procedures and ways of working.

"The training for bioscience has to be more flexible than anything else because
the skills required vary from company to company and lab to lab," said Duc
Duong, a biotechnology expert at DDI Associates in Rockville who has advised
MetroTech leaders.

In Frederick County, the site of about 30 biotechnology firms, the talk is
about "finding bio bodies" to fill jobs, said Linda Checchia, a MetroTech
staffer.

Checchia has hatched plans for a bioscience job fair April 23 at Frederick
County Community College. She also works with officials at Montgomery College
to enroll workers-in-training in management and lab courses there.

BioReliance Corp. was one of the first biotech firms to work with MetroTech.
The Rockville firm now employs 10 lab workers in various stages of training.
The workers, who mostly are recent college graduates, are learning basic health
and safety issues, database technology, and good lab and manufacturing
practices, said Mary Ann Sleece, human resources director there. They earn
about $29,000 to start.

Other local firms that have partnered with MetroTech include Frederick's
Biological Mimetics Inc., which sought lab technicians, and Columbia's Novavax
Inc., which was in the market for programmers and network engineers, Carlson
said.

MetroTech organizers hope to marry their two interests in the growing area of
bioinformatics, which blends biology with computerized analysis of data. In
fact, Carlson said, they hope to persuade some laid-off information technology
workers to ply their database skills in service of biotechnology firms
analyzing human and plant genes.

For more information on the upstart biotechnology program, employers and job
seekers alike can visit www.metrotechbiojobs.com

Survey Says

Slightly more than half of technology leadership posts are filled by candidates
from within a company's own ranks, according to a recent study by RHI
Consulting.

A poll of more than 1,400 chief information officers at firms with 100 or more
employees indicated that 53 percent of information technology managers were
promoted from within.

The strategy "can be a tremendous tool for motivating and retaining top
talent," said Katherine Spencer Lee, executive director of RHI, a California
temporary and permanent job placement firm, in a statement.

Carrie Johnson's e-mail address is johnsonca@xxxxxxxxxxxxx She is away this
week. Join her April 22 at 11 a.m. at WashingtonJobs.com at
www.washingtonpost.com for an hour-long chat about technology work.
*****************
Washington Post
A New Plan To Provide Broadband 
By Ellen McCarthy
Washington Post Staff Writer
Monday, April 15, 2002; Page E05 


When Pete Aquino and Peter Stevenson returned to Northern Virginia after
running a telecom company in Venezuela for five years, they expected access to
all the luxuries that modern technology can offer.

They were disappointed with what they found.

"We couldn't get DSL; our cable service was terrible. It was all very
frustrating," Aquino said. "So we started investigating why broadband hadn't
developed in the U.S."

Aquino and Stevenson decided that the slow-and-steady broadband installation
model they used in Venezuela could be effective in the United States.

Leap Frog Networks, the third start-up the two have worked on together, is
focused on bringing high-speed Internet service to underserved areas one at a
time to avoid the huge capital investments that have crippled other telecom
companies.

To keep costs low, Aquino and Stevenson plan to lease existing networks that
are not being used. They also said they will replicate a method of broadband
installation used in Europe that is less expensive than traditional techniques.

Leap Frog plans to raise enough capital to build networks for an area with
300,000 to 500,000 homes. Once a network is complete and the investment is
recovered, the company moves on to another area.

"The financial markets are cautious in funding traditional overbuilds because
of the substantial up-front capital expenditures and time to realize positive
cashflow," said Tom Davidson, co-chairman of the telecommunications and
information technology section of Akin Gump Strauss Hauer & Feld. "I think what
they are trying to do is fill a niche where there is unsatisfied demand for
broadband services."

The company is negotiating for a license to operate an existing network in
Northern Virginia -- Aquino and Stevenson won't say with whom -- and hopes to
begin additional construction by the end of the year.

"No matter how much pressure counties have put on [broadband] providers, it has
been really slow," Aquino said. "If it's left to the telephone and cable
companies, they may do it, but it'll take a long time."
********************
Battle Stirs Over Copyright Laws
Electronics: Industries are at odds over Senate bill requiring safeguards in
digital devices.
By JUBE SHIVER Jr.
TIMES STAFF WRITER

WASHINGTON -- Although they are heavily dependent on each other, the people who
make DVD and CD players and the people who produce DVDs and CDs are preparing
for a showdown.

As consumers switch to digital forms of entertainment, Hollywood is pushing
Congress to pass laws that make it more difficult to copy movies and music. But
consumer-electronics manufacturers warn that there is no such thing as a
perfectly secure system.

The arcane world of copyright law rarely triggers such uproar. But intense
lobbying by Walt Disney Co. and other entertainment firms--which collectively
gave nearly $38 million to politicians in the last election cycle--has sparked
a movement on Capitol Hill to boost copyright protection. The studios and
record labels fear a day when consumers swap perfect copies of blockbuster
movies online as easily as some now trade bootlegged music.

Last month, Sen. Ernest F. Hollings (D-S.C.) introduced a bill that would, for
the first time, make it a crime for anyone to sell, create or distribute
"digital media devices," such as computers, TV set-top boxes or DVD players,
unless they contain government-approved technology to thwart unauthorized
copying. In effect, the Consumer Broadband and Digital Television Act would
make equipment manufacturers responsible for safeguarding the content their
gear plays.

The bill faces an uphill battle. But equipment makers, consumer groups and
lawmakers are bracing for a bruising political fight.

"This is a shot across the bow," said Gigi Sohn, co-founder of Public
Knowledge, a Washington watchdog group that follows intellectual-property
issues. "I do not support piracy. But you don't punish technology to get at bad
[consumer] behavior."

At stake are billions of dollars in digital entertainment sales and the future
development of the Internet, cable TV and other communications networks capable
of delivering digital content to consumers.

Supporters and opponents of Hollings' bill agree that getting Hollywood to put
its valuable wares on the Internet could trigger a wave of spending by
encouraging consumers to buy more movies and music, more robust computers and
faster Internet connections.

Already, computer CD recorders have become standard equipment on new PCs. And
DVD players are the fastest-growing consumer electronics product in history,
with worldwide shipments expected to exceed 35 million this year, according to
research firm Cahners In-Stat/MDR in Newton, Mass.

But consumer groups, equipment makers and other opponents said that if the
Hollings bill passes, consumers who want new digital entertainment services
will need government-approved devices-- ranging from copy-proof MP3 players to
car stereos and PCs that will automatically manage how many times, if any,
copy-protected digital content can be copied.

"Rather than finding a workable market solution, an imprudent [federal] mandate
could require millions of dollars in engineering changes that, in the end, will
be passed on to consumers," Rep. Anna G. Eshoo (D-Atherton) told her colleagues
in a letter last week.

Jack Valenti, president of the Motion Picture Assn. of America in Washington,
said the industry needs greater protection. He said piracy saps $3.5 billion
from the motion picture industry annually and discourages studios from
releasing more digital content.

"The copyright industry [for entertainment and publishing] is America's
greatest trade asset, providing more than 5% of the nation's gross domestic
product," Valenti said. "The movie industry alone has a surplus balance of
trade with every single country in the world. No other industry can claim that.
It is very important to find some way to protect these valuable works in this
digital age."

Besides imposing a new security standard on electronic equipment, the Hollings
bill would make it unlawful to import software or hardware without
government-approved security features. The government's anti-piracy standard
would be imposed within 18 months of the bill's passage unless the industry
agreed on alternative anti-piracy technology.

Record companies already are trying out several anti-piracy technologies to
protect music CDs.

Last spring, country singer Charley Pride became the first artist to
acknowledge selling a CD with copy-protection technology aimed at thwarting
digital duplication. Music on the disc can be played on CD players but not on
personal computers. Several big record labels, including Vivendi Universal unit
Universal Music Group, also have embraced copy-protection technology.

Major film studios, meanwhile, have been in talks with computer and
consumer-electronics companies for more than a year to come up with an
industrywide copy-protection standard. Their task is more difficult because
they are seeking an anti-piracy solution that would secure unprotected
television content sent over the air, such as the hospital drama "ER."

Studio officials met in Menlo Park, Calif., in September with a number of
entertainment and technology officials, including John Chambers, president of
computer networking giant Cisco Systems Inc. and Valenti. But Hollywood
executives said Hollings' bill is needed to reach an accord.

"There is a reason cases get settled on the courthouse steps: Without the
stimulus of an impending decision by an [independent arbiter], the parties
would go on arguing forever," said Preston Padden, Disney's executive vice
president of government relations. "We are the people who wanted to get this
done yesterday. After all, it is our movies that are getting pirated."

Silicon Valley companies also are victimized by piracy and lose about $2.6
billion annually in the U.S. from unauthorized copying of software, according
to the Washington trade group Business Software Alliance. But the firms said
Hollywood's efforts to win greater copyright protection through legislation are
misguided.

"Industry will come up with a much better solution than one mandated by
Congress," said Robert Holleyman, president of the Business Software Alliance.
"If there was a silver bullet that would defeat piracy, we would be for it. But
the Hollings bill is not the answer."

Because the ubiquitous personal computer has a flexible design that makes is
possible to make exact copies of almost any digital data without degradation,
many technology experts, such as Princeton University computer science
professor Edward W. Felten, believe it is impossible to develop a mass-market
anti-piracy technology that can't be defeated.

Hollywood has been spared the Napster-like, mass-market sharing of videos that
has hit the music industry. That's because only 10 million American households
have the high-speed Internet connection needed to quickly download a
feature-length film. Using a standard dial-up modem, downloading a movie could
take as long as a day.

Nevertheless, the movie industry faces a growing threat from Web-based services
that let consumers download unauthorized copies of movies for free. And
Valenti, aware of the threat, said he is hopeful of reaching agreement on a new
copy-protection technology in the next few weeks.

"I'm not looking for perfection," he said. "But what we are looking for is
[sufficient] copyright protection ... so that we can offer our products to
law-abiding consumers at a fair and reasonable price."
************************
Digital Revolution Taking Place Behind the Scenes
Entertainment: Broadcasters have been slow to embrace the technology, but it is
being used in production by filmmakers and advertisers.
By JON HEALEY
TIMES STAFF WRITER

April 15 2002

Five years into the digital transformation of television, most viewers still
don't see a change on their screens.

The digital TV revolution is making its mark, though--in movie theaters, Web
sites, office buildings and malls.

The high-definition digital cameras and production equipment that were supposed
to deliver a new generation of TV have quickly found their way into filmmaking
and advertising, despite their slow adoption by local TV stations. And though
relatively few households have splurged on expensive digital TV monitors and
receivers, millions of consumers will go to theaters this summer to see movies
shot with digital camcorders--many of them built for TV news crews. The
high-definition productions on display will range from "Star Wars: Episode II
Attack of the Clones" to film clips of runway models, which shoppers at shoe
and clothing store Kenneth Cole in New York's Rockefeller Center view on
flat-panel screens.

A growing number of TV shows are being produced in high-definition video too,
even though less than 1% of all homes are equipped to view them.

Many film and video producers would have gone digital even if the federal
government hadn't ordered TV broadcasters to make the leap. But equipment
suppliers say the digital video trend has received an important boost from the
mandate on broadcasters, just as the TV industry is benefiting from the digital
experimentation being done by others in the video arena.

"There is an issue of critical mass. I'm not sure this would be happening if
not for the digital-TV transition," said Stuart English, a marketing vice
president at Panasonic's broadcasting equipment division as he stood among an
array of digital editing and distribution equipment at the National Assn. of
Broadcasters convention in Las Vegas last week.

A key new market has been film and television production, in which
high-definition gear is starting to take the place of 16-millimeter and
35-millimeter film.

Hoping to cut costs, TV networks "said to their producers, 'We would like you
to produce more in [high-definition digital] because there's a cost savings,'"
said Bob Kaufmann, owner of Video One Inc., a video-equipment rental firm in
Van Nuys.

Kaufmann's crew is working on the television pilot "In My Opinion," a situation
comedy being shot in high definition for Warner Bros.

To the Hollywood production community, he said, the main appeal of
high-definition video is that it can look like film.

William Meurer, owner of Birns & Sawyer, a Hollywood equipment company, said
about 20% of his rental cameras are digital, and they're the ones in greatest
demand.

That demand extends beyond high-definition to conventional digital cameras such
as Canon's XL-1, which was designed for news crews but has been adopted by such
noted filmmakers as Steven Soderbergh.

"The beauty of digital is that it has lowered the barrier to entry in
Hollywood," Meurer said. "At the end of the day, everybody would rather shoot
film except George Lucas. But the reality of people's lives is, 'Hey, I can get
an XL-1 camera, I can get a couple of my buddies, go to a friend's place and
make a film.'"

Digital video equipment made its debut in the mid-1990s, when companies
including Sony, Panasonic and Canon offered digital versions of the camcorders
they sold to consumers.

These cameras promised better quality than analog products and enabled users to
edit footage easily and cheaply on personal computers.

In 1997, the Federal Communications Commission ordered commercial TV stations
to begin broadcasting in digital by May 2002. The new digital broadcasting
standard included a range of formats, letting station owners decide whether to
offer richer, more cinematic images (high definition) or maintain the current
picture quality (standard definition).

The commission's order didn't require stations to produce shows in digital,
just to transmit them that way.

Still, broadcasters couldn't deliver news, sports and other videotaped programs
with better picture quality unless they used digital cameras and production
gear, particularly high-definition equipment.

Manufacturers started adapting their digital video gear to support
high-definition television and other new TV formats.

For example, Panasonic gradually extended its DVCPro line of cameras, which
were marketed for use by roving television news teams, to include versions
offering enhanced picture quality and, later, HDTV.

Broadcasters bought standard-definition digital cameras as a money-saving
alternative for their news crews and invested relatively little on HDTV gear.
They were spending $1 million or more per station to transmit programs in
digital, but not the additional millions required to equip their studios for
high definition.

And as the advertising slump deepened last year, the stations' investments in
the technology slowed even further.

"Our sales are down dramatically," said Robert J. Estony, communications
director for Ikegami Electronics, a major supplier of video cameras. "We sell
to networks, and the networks aren't buying."

Gordon Tubbs, assistant director of the broadcast division at Canon USA,
agreed.

"The digital transition at the TV station level ... has been very slow to
occur," Tubbs said. "It makes our business very slow."

Panasonic took a step back 18 months ago to reevaluate its business strategy.

English said he told his colleagues at the time that "TV is killing high
definition" and that the company should focus on other outlets for the
technology.

In particular, Panasonic and other manufacturers found a small but rapidly
growing market among filmmakers, TV studios, commercial directors and
corporations for high-definition equipment. To move those markets along,
companies have customized their products to meet the different sectors' needs.

A good example is Sony's decision in 2000 to build a high-definition video
camera that captured images 24 times a second, mimicking the 24 frames of film
shot by movie cameras. The move helped spur interest in high-definition video
among filmmakers and TV production houses.

Panasonic followed suit last year, adapting its 60-frame-per-second
high-definition cameras to the slower rate preferred by filmmakers.

Paul Liao, Panasonic's chief technical officer and president of Panasonic
Technologies, said 60 frames a second is great for recording sports and other
programs that have long been shot on video.

"What we really didn't appreciate the way we should have is that cinema
quality, which is 24 frames per second ... makes such a big difference. People
are used to things that are captured on film."
*******************
USA Today
Wristwatch tracks diabetics' blood sugar

A wristwatch that continuously monitors blood sugar levels without the need to
draw blood goes on the U.S. market on Monday.

The GlucoWatch Biographer takes readings through the skin at 20-minute
intervals over 12 hours. When blood glucose levels rise or fall past pre-set
levels, an alarm goes off to alert the wearer to take corrective action.

This is the first device on the market that can take real-time glucose readings
without piercing the skin, says Rhoda Cobin, president of the American
Association of Clinical Endocrinologists. "It's a whole new category," she
says. "It will be very helpful, particularly for people who need to test at odd
times, who have to take continuous readings, or overnight."

Glucose levels can change in a matter of minutes, depending on food intake,
medication or exercise, says GlucoWatch inventor Russell Potts. "If you only
make one measurement in 12 hours, which is what most people do, you can't know
what happened when you ate that third slice of pizza."

The device costs $595 and the sensors, which have to be replaced every 12
hours, sell for $69.75 for a package of 16. Insurance does not reimburse for it
yet, but the company is hoping that will change.

The Food and Drug Administration approved the watch last year, but it has taken
until now for the FDA to sign off on the manufacturing processes. Other
companies are developing similar products.

The GlucoWatch won't replace traditional fingerstick blood monitoring, nor is
it the simplest thing to use. It can be worn only for 12 hours, requires a
three-hour warmup, needs to be calibrated using a standard blood glucose meter
and skips readings if the wearer sweats.

"It's used to detect trends and track patterns, to supplement and not replace
finger sticks," says Craig Carlson, an executive with the watch's manufacturer,
Cygnus Inc., of Redwood, Calif. "Its true value is that it provides more
information for people to make decisions on how to control their glucose
fluctuations."

In development more than 10 years, the GlucoWatch is not yet licensed for use
in children, though a lookalike gadget had a minor starring role on the arm of
Kristen Stewart, who plays daughter Sarah in the film Panic Room.

Parents of diabetic children hope it soon will be available to kids, says Sonia
Cooper of Boulder, Colo. Her son Matthew, 12, took part in a clinical trial of
the GlucoWatch last summer and was allowed to keep the one he used. "It's a
backup" to regular blood monitoring, she says, and is especially helpful
overnight, when blood sugars can drop precipitously, causing life-threatening
seizures.

Presently, the watch is for adults only and will be sold directly by the
manufacturer to consumers who have a doctor's prescription. For more
information, go to www.glucowatch.com or call 1-866-GLWATCH (459-2824).
******************
USA Today
Web sites re-spin your used music CDs
By Jefferson Graham, USA TODAY

Those old CDs gathering dust on your shelf might be worth something.

Spun.com will give you from 10 cents to $5 for records by Gloria Estefan,
Alicia Keys and many others, in credit that can be used in exchange for new or
used CDs, DVDs or video games of your choice. The national chain Wherehouse
also will trade in your CDs online. Or, if you prefer cash, Usedmusicexchange,
secondspin.com and cashforcds.com will cut you a check.

"Prices for new CDs are going up all the time," says Nick Love, 19, a college
freshman in Bucyrus, Ohio, who has traded CDs several times this year with
Spun. "Even if they (Spun) don't pay top dollar, it's still better than having
something I don't like anymore lying around. And it's a lot cheaper to buy CDs
this way." An aspiring musician, Love refuses to download on principle,
preferring to save cash with pre-owned CDs.

While used merchandise has been readily available on the Web for years  eBay
built it into a huge business  these online pawnbroker equivalents have made it
easier for you to sell your discs to them with instant quote features that tell
exactly how much they'll pay, sight unseen. Many sites also will mail you a
postage-paid box to send them the goods.

"They've really simplified the process," says Larry Gerbrandt, an analyst with
media research firm Paul Kagan Associates, who has traded CDs and DVDs with
Spun. "Not only does Spun send you the box, they even include a mailing label
and tape to seal it shut."

The more product and wider selection these sites have, the more they can sell,
which is why they aggressively purchase used merchandise. For example, a random
search found that several top items the sites were offering to buy weren't
available for sale used. Prices are adjusted daily depending on supply and
demand.

"Think of the normal mom-and-pop neighborhood used-CD store," says Steve
Grundy, 40, of Chicago, who founded Spun in 1999 with brother Andy. "They tend
to get product from customers who are a few blocks away. We buy from all over
the country and sell it everywhere. So we have a much larger stock, and
customers are more likely to find what they're looking for."

Record industry shipments dropped 4.1% in 2001, according to the Recording
Industry Association of America (RIAA), which blames the decline on digital
downloads and CD burning.

Consumers also are bypassing new CDs by purchasing previously owned copies.
"They sound just as good as the new ones and sell for under $10," Love says.
"Maybe if more people bought used CDs, the record companies would wake up and
lower their prices."

Stan Bernstein, who set up cashfor cds.com to help stock his Morninglory Music
new and used stores in the Santa Barbara, Calif., area, says that because of
downloads and CD burners, "people don't buy as many CDs, but they do want to
buy used ones. We sell more used than new."

Djangos, which sells new and used records in 17 retail stores across the
country, also sells online. Some 70% of its business is in used merchandise. It
doesn't currently buy used CDs through its Web site but expects to by June.

The company plans to do it differently than such sites as Spun and Wherehouse,
which change price quotes by the minute, depending upon how many copies they
have of a certain title. For example, Eric Clapton's 461 Ocean Boulevard might
be worth $5 on Thursday, but $3 on Friday if more come in.

"If we say an album by Macy Gray is worth $5, I don't want someone coming on
five minutes later and getting quoted 50 cents," says Djangos president Steve
Furst. "If we have to buy 2,000 copies, we will, because we have stores to sell
it in as well." (Djangos is in Chapter 11, financially restructuring after a
failed merger attempt with CD Warehouse.)

Sites such as Amazon and Half.com also offer the ability to sell your unwanted
old media, but the process is different. In effect, you become a merchant,
posting your goods on the site, waiting for an order and payment, and mailing
the product to your customer.

Numbers for online used-music merchants are currently small  under the 200,000
minimum monthly visitors necessary to register on Jupiter Media Metrix's
charts  but Spun CEO Bill Keenan says sales have grown from $70,000 a month at
the end of last year to $225,000 monthly now. "In today's environment  in a
music business that people think is going to die in two weeks  we think those
numbers are pretty good." He predicts he'll break even by the end of the year.

The RIAA, which has been crusading against unauthorized digital downloads and
CD burning, has no problem with the sale of used CDs. "We follow the doctrine
that the original purchaser can resell the product if they bought it," says the
RIAA's Jonathan Lamy.

But Gerbrandt says the growing popularity of sites such as Spun, coupled with
the widespread use of home CD recorders, could have a huge impact on future
sales. "I've got all these CDs. As long as I don't care about the cover art, I
could copy my entire CD collection in my CD burner at $1 a disc (the cost of
blank media) and trade the originals to Spun. If enough people did that, it
could kill the catalog market."

Nonetheless, "I've heard a number of retailers comment that they believe used
CDs actually help to support the front-line business," says National
Association of Recording Merchandisers chief Pamela Horovitz. "Price-sensitive
consumers will take a chance on a title they aren't familiar with, because they
know that if it turns out that they don't like it, or get tired of it, they
have the 'safety valve' of selling it as a used CD."

Book authors, on the other hand, are up in arms about used copies of their
latest works being sold alongside new copies online. Last week, a writers group
criticized Amazon.com's practices, saying it encourages customers to buy the
cheaper product and robs them of potential royalties.
********************
USA Today
Experts debate biggest network security threats
By Dan Verton, Computerworld

Recent findings that insiders constitute the primary threat to enterprise
security are being challenged by experts who insist the greater threat to
security remains external.

Only 38% of respondents to the latest computer crime survey sponsored by the
FBI and the San Francisco-based Computer Security Institute said they detected
insider attacks during the preceding 12 months. That's down from 49% reported a
year ago and 71% reported in 2000.

Moreover, two federal CIOs, speaking at a recent conference sponsored by the
Tiverton, R.I.-based National High Performance Computing and Communications
Council, said their agency statistics show that external threats far outweigh
internal threats to their IT infrastructures.

"Our biggest threat is external," said NASA CIO Lee Holcomb, acknowledging that
the agency recently had 250 systems compromised externally in a matter of three
weeks because of vulnerabilities that had gone unpatched.

Insider activity is "much less severe than external" attempts to breach
security, agreed Laura Callahan, CIO at the U.S. Department of Labor. She added
that since Sept. 11, the agency has made a concerted effort to create what she
called an internal "neighborhood watch" to ferret out suspicious activity.

But the insider threat has become more cunning and sophisticated, said Robert
Wright, a computer security expert at the FBI's National Infrastructure
Protection Center. "Insiders are not just employees anymore," Wright said,
adding that "new technology makes insiders more dangerous than ever."

According to Wright, the most effective insiders are often "keyholders"  those
who have access to internal systems based on contract or partnership
arrangements with an organization.

More important, the technology that malicious insiders now have at their
disposal may make them harder to detect and more efficient, said Wright. New IT
tools that can be employed to steal corporate data include key-chain-size hard
drives, steganography (concealing data within a digital image) and wireless
technology, said Wright.

Others agree that the internal threat warrants continued emphasis.

"I don't believe that many corporations know that the majority of attacks occur
behind the firewall," said Mike Hager, vice president of network security and
disaster recovery at OppenheimerFunds Distributor in New York. "And most still
believe the firewall will stop them."

Steven Aftergood, a defense and intelligence analyst at the Federation of
American Scientists in Washington, is also skeptical about the comments of the
U.S. Labor Department and NASA CIOs.

"I would respond with two words: Robert Hanssen," Aftergood said, referring to
the arrest last year of the career FBI agent who is now considered to be the
most damaging mole in the history of the intelligence community.

"The record seems clear," said Aftergood. "The most devastating threats to
computer security have come from individuals who were deemed trusted insiders."
*****************
Federal Computer Week
OMB floats e-gov 'branding' strategy

The Bush administration is urging managers who are developing the e-government
initiatives to consider contracting with Web portal companies to host
government Web sites, rather than investing the time and money needed to build
them from scratch.

Some of the 24 e-government initiatives  which aim to improve interaction with
the federal government for citizens and federal employees  resemble services
offered by the commercial sector, Mark Forman, associate director for
information technology and e-government at the Office of Management and Budget,
said April 11.

Managers of the initiatives should consider asking those Web portal companies
to build the online equivalent of a storefront for the government, he said.
"For all practical purposes, it would have the look and feel as if it were a
government site," Forman said.

He left open the possibility that agencies could negotiate co-branding
agreements, under which the Web portal company's logo would be displayed on the
government site.

Under such co-branding agreements, the client  in this case, the government 
can pay a lower cost for developing the site.

The e-government initiatives that are best suited to this approach include the
e-Travel, e-Learning and Recruitment One Stop projects, all of which involve
creating Web portals similar to those offered by companies such as Orbitz LLC
and Monster.com, according to Forman.

The Office of Personnel Management, the lead agency on the e-Learning and
Recruitment One Stop initiatives, plans to inquire about vendors' interest in
co-branding when it releases its soon-to-be-completed request for information
for the initiative.

The team is working closely with contracting officials and experts for what may
be a new way of partnering with industry, an official close to the initiative
said. 

Some agencies already have agreements with vendors to host online learning
portals, including the General Services Administration's Online University,
which is available to all agencies. VCampus Corp. hosts the online university,
and the company's logo is clearly highlighted on every portion of the site. 

The GSA/VCampus online university is "clearly a co-branded site," Forman said.
And displaying a logo or noting that a site was built by a private company is
not equivalent to placing advertising on the site, he said.

But co-branding, like advertising, could raise objections because the practice
could be considered an implicit government endorsement of one vendor's solution
over another, said a lawyer who works with government and industry on
e-commerce issues and who asked to remain anonymous.

OMB has had trouble securing funding for the e-government initiatives, with
little or no funds being appropriated for the projects. Offering a vendor a
co-branding opportunity may be the only way to gain access to the commercial
portals, the lawyer said, without paying a lot of money.
***************
Federal Computer Week
Vast county centralizes online

Leaders of a sprawling, 18,000-square-mile county in Nevada have turned to
online software to offer the county government and its residents better
service.

Nye County, Nev., the third largest county in America, is standardizing its
business systems and services with the help of online solutions from HTE Inc.,
something that will provide the county government with its first-ever
integrated financial reports from its four agencies.

The move to online services also will enable the Nevada county to provide a
much better level of service to its residents, according to Joni Eastley, vice
chairwoman of the county government's board of commissioners. People now have
to travel as much as four hours across the region to do business with the
government.

"There are still some areas in the county where people don't have adequate
sewage and running water, let alone telecommunications," Eastley said. "It's a
vast geographic area, so if we can't get the people to the services, we figured
we needed a way to get the services to the people."

Eastley's eventual goal is to get as many towns as possible throughout the
county to buy their own suites of HTE software and then set up local offices
that can mirror services that the central government provides.

Instead of driving 200 miles to a government office, a person would only have
to drive to a local town office and use a terminal there to access the
appropriate service, such as county job applications and building permits.

Town officials also would be able to compare their own finances and budgets,
which they would put together with HTE software, with what the county and other
towns are reporting, Eastley said.

Florida-based HTE specializes in providing IT solutions to governments and
utilities as well as offering e-government access to citizens and businesses.
It has about 2,200 customers nationwide.

Robinson is a freelance journalist based in Portland, Ore. He can be reached at
hullite@xxxxxxxxxxxxxxx
*****************
Federal Computer Week
Ashcroft orders more info sharing

Declaring that "information is the friend of prevention," Attorney General John
Ashcroft has instructed six federal law enforcement and intelligence agencies
to do a better job of sharing information as they fight the war against
terrorism.

Information from databases, such as names of terrorism suspects, fingerprints,
photographs and biographical data, should be regularly available to a wider
range of law enforcement agencies, Ashcroft said.

However, the directive, issued April 11, deals primarily with developing
policies, guidelines and standards for sharing information. It does not make
money available to buy new data systems or order specific agencies to begin
sharing information with other agencies.

The order does not specify deadlines, milestones or reporting requirements. 

"It's a necessary step toward better sharing," said Steven Aftergood, director
of the Federation of American Scientists' Project on Government Secrecy. "One
of the lessons of Sept. 11 was there was inadequate information sharing among
federal and state and local law enforcement agencies."

Ashcroft's instructions are aimed at the FBI, the Immigration and
Naturalization Service, the Drug Enforcement Administration, the U.S. Marshals
Service, the Justice Department's Criminal Section and the newly created
Foreign Terrorist Tracking Task Force.

A Justice announcement notes that the instructions follow an Ashcroft order
last fall for most of those agencies to "review their policies and procedures
to ensure information sharing, information analysis and coordination of
activities" with other federal, state and local agencies "to prevent acts
threatening public safety and national security."

This time, the attorney general directed:

* Agencies to establish procedures to share terrorist information that resides
in federal law enforcement databases.

* The FBI to establish procedures to regularly obtain fingerprints and other
information on suspected terrorists from other agencies, including the
military.

* The Justice Department to devise ways for state and local law enforcement
agencies to access "secure but unclassified" data in a Web-based system.

* The Foreign Terrorist Tracking Task Force to identify the information and
datasets it needs to fulfill its mission.
*****************
Federal Computer Week
IT contract overlap under scrutiny

Examining the potential duplication of information technology offerings at the
General Services Administration should be expanded to include all federal IT
contracts, officials said at an April 11 House subcommittee hearing.

Many in government and industry have expressed concern about the potential
duplication of offerings between GSA's Federal Technology Service and Federal
Supply Service, and whether that duplication is keeping agencies from getting
the best value out of their IT contracts. 

However, until an independent study is completed at the end of the month, not
enough data is available to do more than express an opinion, said David Cooper,
director of acquisition and sourcing management at the General Accounting
Office.

"There is no information that will tell you whether we are in fact getting the
best value," he testified at a hearing of the House Government Reform
Committee's Technology and Procurement Policy Subcommittee.

And although GSA's contracts are the most popular in government, the same
questions arise when considering the overlap among all the IT contracts
available to agencies across government, experts testified. Other
governmentwide contracts include the National Institutes of Health's Electronic
Computer Store II and the Transportation Department's Information Technology
Omnibus Procurement II.

Initial reviews by GAO and the GSA inspector general showed that the overlap
comes mostly in the area of IT services offered on the FSS schedules and the
FTS governmentwide contracts, and it is hard to compare services, even when
offered by the same vendors, Cooper said. "Overlap is not synonymous with
duplication," he said.

GSA is developing new metrics to measure the impact of its vehicles on
agencies' missions and has commissioned Accenture to perform a study of any
overlap between the services. The results of these steps could be used to
expand the review to the rest of government, Cooper said. 

GSA's new metrics are intended to get beyond sales figures to the monetary and
resource savings agencies realize by using the FSS and FTS contracts, said
Stephen Perry, GSA's administrator. 

The metrics are under development, but initial ideas include measuring the cost
to agencies and the benefits they received by going through the various GSA
vehicles in comparison to the time and money they would have spent procuring
the IT products and services on their own, he said.

"The goal ought to beÖto make sure [agencies] can fulfill their missions," said
Rep. Tom Davis (R-Va.), chairman of the subcommittee.

However, it will not be easy to put metrics in place to measure the impact on
agencies because so much of the information will have to come from the agencies
themselves, and they are often unwilling to share that kind of information with
GSA, Perry said.

In January, GSA also signed a contract with Accenture to study the potential
overlap between the two services and the agency and vendor opinions on that
overlap. Accenture will hand over the results of the study April 30, including
"strategies to improve GSA's performance," said Dwight Hutchins, a partner in
Accenture's U.S. federal government practice.

The subcommittee must wait for the results of the Accenture study before
suggesting any other action at GSA, but the information and concerns raised at
the hearing could prompt a broader review of governmentwide IT contracts, said
Davis' spokesman, David Marin.
********************
New York Times
Report Charts Patterns in Complaints About Internet

One of the few organizations that actually wants to hear complaints from
Internet users released a report last week about the grumblings it has
collected online.

The group, the Internet Fraud Complaint Center, is a partnership of the F.B.I.
and the National White Collar Crime Center, which began serving as a
clearinghouse for reports of Internet fraud in May 2000.

Last year, 49,711 complaints of all kinds were made through the organization's
Web site (www.ifccfbi.gov). About one in three, or 16,775 in all, resulted in a
fraud referral to law enforcement or regulatory agencies across the nation.

Nearly 43 percent of fraud complaints last year related to online auctions; 20
percent involved failure to deliver goods or to pay as promised in nonauction
sales.

Almost one complaint in six involved what is known as the Nigerian letter
fraud. The recipient is offered a chance to get a fat commission for helping
the sender transfer millions of dollars illegally out of Nigeria; instead, the
sender is trying to induce the recipient to send money, supposedly to help pay
bribes or other fees or to show good faith, with an empty promise of
reimbursement as soon as the imaginary millions are safely transferred.

John Kane, research manager for the National White Collar Crime Center, said
that hardly anyone  less than 1 percent of those who report it  actually falls
for the scheme. Those who did suffered a median loss of $5,575 as punishment
for their greed and had little hope of seeing justice done. According to the
F.B.I.'s Web site, victims of the scheme, which migrated to the Internet from
regular mail, get little sympathy from the Nigerian government because they
went into it thinking they were helping someone break Nigerian law.

Mr. Kane said complaints doubled from the first quarter of 2001 to the last,
perhaps reflecting greater awareness of the organization as much as fraud
activity. But he said they just scratched the surface.

"We haven't widely publicized the existence of the Internet Fraud Complaint
Center," Mr. Kane said. "The problem is much larger out there than is even
reported to us." 
*******************
BBC
Lift-off for low-cost satellite broadband

It will be trialled throughout Britain but will only be available through
internet service providers (ISPs). 

BT will be selling the service to ISPs for £15 a month, which is likely to mean
an end-cost of £20 - £30 for consumers. 

This makes it considerably cheaper than other satellite products on the market.
However, eager surfers may still need to raid their piggybanks, as the cost and
installation of the satellite dish will be around £400. 

ISPs reticent 

There are also concerns that few ISPs will go for the service. 

According to BT, there has been "some interest" from ISPs and it is expecting
more in coming months. 

However, its own ISP, Btopenworld, will not be offering the service, citing
limited resources as the reason. 

"We already offer a 2-way broadband service but the pricing means it isn't
really a consumer product," said a BTopenworld spokesperson. 

"We have decided not to look at a satellite service for consumers at this
time," he added. 

Freeserve has also decided not to offer it to customers. "We don't think this
is a mass market product," said a Freeserve spokesman. 

Not so fast 

"There are more cons than pros with it compared with landline services. It is
400% more expensive to connect and half as fast. On top of that, there is no
return path other than by telephone line," he added. 

BT admits that the service is inferior to its traditional ADSL broadband
service. 

"It is not true broadband, but it will give much faster internet access to many
people who could otherwise be denied," said chief executive of BT Wholesale
Paul Reynolds. 

The biggest drawback, other than the speed, will be that is only works one way.


No games 

Users wishing to download music, photos and other large files may find it
useful but BT admits that it is not designed for online gaming, one of the
biggest applications of broadband. 

Moreover, those wishing to upload material to the internet will have to do so
via a conventional phone line. 

Anyone wanting faster speeds will have to pay a premium. 

Despite its problems, satellite broadband services could be useful for rural
residents desperate to get their hands on a high-speed net service, said Ovum
analyst Tim Johnson. 

"It fills in the gaps other broadband can't reach," he said.
*******************
BBC
Smart cards head for Hong Kong

An embedded computer chip on the card will hold personal details such as name
and date of birth, as well as a digital copy of both thumbprints. 

But the plan has raised concerns about personal privacy and the potential
threat from hackers. 

"We need to have some safeguards," said Sin Chung-Kai, a Hong Kong legislative
councillor involved in information technology issues. 

"My biggest reservation is individual privacy," he told the BBC programme Go
Digital. 

"We are asking the government to minimise the data it wants to install on the
chip and to use the highest encryption technology to protect the data on the
chip." 

Data on a chip 

The new smart ID card is set to be introduced from next year. Officials
estimate that distributing the cards to all Hong Kong's 6.8 million residents
will cost $400m. 

The plastic smart cards will be about the size of a credit card. A microchip on
them will hold details such as gender, pictures and residential status. 

Due to privacy concerns, the Hong Kong authorities backed down over proposals
to have the cards carry medical and financial records. 

In addition, other uses for the cards, like driving licence, library card and
an electronic wallet, will be optional. 

Despite these concessions, some groups are wary of the potential threat to
individual privacy. 

"Each government department usually only has access to information with that
department," explained Mr Sin. "But the smart ID card empowers a law
enforcement agency to gain access to information kept by other departments." 

Border traffic 

One of the main reasons for introducing the smart cards is to keep tabs on
Chinese migration to Hong Kong. 

The cards will help speed up border checks. Every day, around 200,000 people
travel across the border between the former UK colony and the Chinese mainland.


With the smart card, residents will be able to use self-service kiosks that
match the digital biometric data on the card against their fingerprints. 

Although Hong Kong was returned to China from Britain in 1997, tight border
controls remain and Beijing is anxious to control migration to the territory 

And despite the concerns of civil liberties groups, the concept of smart cards
is gaining momentum in Asia, Europe and the US. 

Last year, Malaysia introduced an optional smart card that works as a driving
licence and contains passport information. 

Finland has already introduced an optional smart ID card and Japan is planning
to do the same next year.
*******************
BBC
Net cited as marriage wrecker

One in 10 people who go to Relate blames the internet for their rocky
relationship, said Chief Executive Angela Sibson. 

"People are spending too much time on the internet and that is time they are
not giving to their partner," she said. 

But it is not just addiction to surfing that is causing problems. 

There is plenty of temptation online that is causing people to stray, said Ms
Sibson. 

"The internet is a gateway to other relationships. They can be very potent and
break up existing relationships." 

Virtual love more fun 

Online infidelity is much easier than a real affair she pointed out, as the
perpetrator is sitting in their own house and does not have to come up with
excuses for meeting their new love. 

Virtual relationships can also seem a lot more fun. 

"You can be who you want to be on the net and you don't have to face up to the
responsibilities of a real-time relationship," explained Ms Sibson. 

The highest at-risk group are the 25 to 35 year-olds, people who are embarking
on serious relationships but who are also most likely to be regular internet
users said Ms Sibson. 

Advice by email 

Relate advises net-savvy couples to get back to basics with face-to-face
communication and openness about what they are doing online. 

Perhaps ironically it is also hoping to offer an online relationship advice
service in the coming months. 

It follows a flood of e-mails to the Relate website asking for help with
internet-related problems. 

E-mails sent to BBC News Online bear out the danger the net can pose to
relationships. 

"My wife of 10 years had an affair with a guy she met on the internet,
ironically after I had shown her how to use it. We are still together and
trying to sort our life out," one reader confessed. 

Another man expressed his frustration about the amount of time his wife is
online. 

"I use the internet, but I can happily live without it. I just wish this was
the case with my wife," he wrote. 

"When she gets in from work, the PC goes on and it can be five or more hours
before she logs off. Our marriage is suffering as a result, as is her
relationship with her son," he said.
*********************
BBC
Youngsters targeted by digital bullies

Children's charity NCH, which commissioned the research, now wants young people
to be taught how to deal with 21st-century bullying techniques. 

And it wants parents and teachers to be given guidance on how to tackle the
problem. 


Of the 856 people aged between 11 and 19 asked, 16% had received bullying or
threatening text messages, 7% had been harassed in internet chat rooms and 4%
by e-mail. 

NCH cited one 15-year-old boy who had given his mobile number to a friend in a
football chatroom. 

After they fell out, he received text messages threatening to find out where he
lived, beat him up and even kill him. 

Eventually his mobile provider allowed him to change his number, and the
threats stopped. 

Death threats 

The associate director of NCH's children technology unit, John Carr, told BBC
News Online most text bullying was by schoolmates. 

One child at a west London school outlined the kind of threatening messages
that circulate, saying: "I'm going to kill you, watch your step, don't look
back, don't look at me doing this during classes... I'm outside your house, I'm
going to burn your house down." 

Mr Carr called on schools to upgrade and amend existing bullying policies to
ensure they covered the new digital tactics. 

Many schools have banned mobiles from their premises, because of problems such
as bullying and theft - but Mr Carr said this was not enough. 

"Teachers should make it clear that harassing people through text message or
the internet, even if it's outside school hours or outside the gates, is still
a serious matter that will be dealt with." 

Liz Carnell, director of Bullying Online, agreed that parents and teachers
should do more to address the problem. 

She said her charity had started receiving complaints about text bullying
shortly after Christmas 2000, when many teenagers received mobiles as presents.


'Extremely distressing' 

Eventually it received so many complaints of "death threats and hate messages"
that it set up a web page dedicated solely to mobile bullying. 

"It's extremely distressing and some children have become suicidal over it." 

As for the children being bullied, both Mr Carr and Ms Carnell said they should
alert a "trusted adult" as soon as possible. 

Of those who told NCH they had been bullied, a third had told no one, while
almost half of those who did speak out told only their friends. 

Mr Carr said after telling a trusted adult, children should make a note of the
time and date of each message received. 

They should alert their mobile or internet account provider, who may change
their e-mail address or phone number for free. 

If the messages do not stop, both experts said, victims should not be afraid to
go to the police. 

'Extremely invasive' 

Carrie Herbert, from the Red Balloon School, which specialises in dealing with
bullied children, said electronic bullying was even more intrusive than the
more conventional kind. 

"Children who are being bullied in the classroom, in the playground can at
least get some kind of sanctuary at home. 

"With this kind of bullying the text messaging can come up while you are
watching television, while you are having a family meal. 

"It is extremely invasive."
****************
BBC
Britons dash for broadband

The start of self-install broadband and cuts in the price of fast net access
via phone lines seem to have sent Britons rushing to upgrade their net
services. 

Online stores are reporting shortages of the parts people need to set up their
own fast net link, retailers are being inundated with phone calls, and websites
that let people check if broadband is available in their area are being
overwhelmed. 

Some sites are dealing with a big jump in demand now that the announced price
cuts have actually taken effect. 

Steep rise 

It has taken a while but Britain suddenly seems to have got the message about
broadband net connections. 

Although high-speed net access in the UK has been available for almost two
years, it has been slow to gather subscribers. 

Britain regularly appears in the lower reaches of surveys that measure the
number of broadband users in European nations. 

But BT's announcement of DIY broadband that does away with installation fees
and its decision to cut the cost of high speed ADSL connections via the phone
line from April has boosted consumer interest enormously. 

BBC News Online has received e-mails from readers complaining that the BT
website that lets people find out if their exchange is ready for ADSL has been
struggling to cope with the surge in interest. 

Some websites where people swap broadband information, such as ADSL Guide, have
also reported a steep upsurge of interest. 

Net shop 

At the same time, online stores are reporting shortages in the microfilters
that people need to use to convert their phone line into one that can handle
ADSL. 

Also proving popular are the network hubs and routers that let people share
their broadband link, be it cable or ADSL, between several PCs. 

Louise Barrett, spokeswoman for online store Solwise, said its phone lines had
been very busy in the last few weeks, largely with calls from people trying to
get hold of ADSL kits. 

She said that traffic to the Solwise website had been slowly building but leapt
soon after BT announced its price cuts. Once the price cuts took effect, demand
leapt again. 

Now, traffic on its site is five times what it was late last year. 

Solwise sources many of its products from Taiwan and now its website reports
that many of its top selling products are on order, rather than being available
instantly. 

Ironically, Hull-based Solwise cannot get a business ADSL connection because it
falls into the catchment area for Kingston Communications, which currently does
not offer such a service. 

Jonathan Wall, press spokesman for web store Dabs.com said broadband modems had
been selling slowly for a while, but orders were now picking up. 

"February 2002 saw a massive surge in demand," he said. "Sales of ADSL modems
increased from run rates of between two and five units per month per line, to
over 50." 

The Dabs site, too, also reports that customers may have to wait a few days to
get their hands on their coveted kit.
*****************
MSNBC
When games stop being fun

April 12   Dennis Bennett was failing his college classes, his marriage was in
trouble, and he wasn?t being much of a father to his 1-year-old son. But he had
progressed to Level 58 as Madrid, the Great Shaman of the North, his character
in the online role-playing game ?EverQuest,? and that was all that mattered at
the time.

       BENNETT, WHOSE FAMILY life and grades in school have recovered nicely
since he stopped playing the game about a year ago, considers himself a
recovered ?EverQuest? addict, now able to control his desire to immerse himself
in the game?s rich fantasy world. 
        ?The game almost ruined my life,? said the network engineer in southern
Indiana. ?It was my life. I ceased being me; I became Madrid, the Great Shaman
of the North. Thinking of it now, I almost cringe; it?s so sad.? 
        Long a subject of half-serious jokes among devotees of computer and
video games, game addiction is receiving serious attention lately as fantasy
games such as ?EverQuest?nicknamed ?EverCrack? by many playersproliferate. 
        A Wisconsin woman has blamed ?EverQuest? in the suicide late last month
of her 21-year-old son, who had a history of mental health problems and was an
obsessive ?EverQuest? player. The game was also implicated in the death last
year of a Tampa, Fla., infant, whose father allegedly was so devoted to the
game he fatally neglected the child.
      While such cases are rare, mental-health professionals say the fantasy
worlds offered by computer and video games can become the stuff of very real
addictions that destroy marriages and careers. 
        ?It?s a huge and growing problem with older teenage males and young
adult males,? said Dr. Timothy Miller, a Stockton, Calif., clinical
psychologist. ?I?ve seen a number of cases with 17- or 18-year-old males where
they have a broadband (Internet) connection and they basically haven?t left the
house for years. 
        ?I had one young man who was trying to get on Social Security
disability for agoraphobia,? he said. ?He didn?t have a mental disorder; he
just didn?t want leave ?EverQuest? or instant messaging.? 
       Some have suggested that warning labels be placed on ?EverQuest,? which
has more than 400,000 paying subscribers. Scott McDaniel, vice president of
marketing for ?EverQuest? publisher Sony Online Entertainment, said the company
relies on players to employ good judgment.
       ?I guess our standpoint is the same as all kinds of productsyou have to
be responsible in using it,? he said. ?You don?t see disclaimers when you get
in a car saying ?Don?t run over people.? People have to exhibit their own good
sense, and if they have kids, they need to pay attention to what they?re
doing.? 
        Video games played on consoles such as Sony?s PlayStation 2 can become
the object of compulsive behavior, especially among children. But such problems
are usually easily solved through modest parental intervention and the
self-limiting nature of such games, which become repetitive and boring at some
point. 
       
THE LURE OF ?HEROINWARE?
        Online PC games such ?EverQuest,? the new ?Dark Age of Camelot,? or
?Diablo II?dubbed ?heroinware? by some playerscan pose much more complex
problems. Extensive chat features give such games a social aspect missing from
offline activities, and the collaborative/competitive nature of working with or
against other players can make it hard to take a break. 
        Online titles account for a small portion of the overall games
business, but research firm IDC expects online games to account for $1.8
billion in annual revenue by 2005, as Microsoft, Sony and others compete to
push gamers online. 
        Miller cites two defining characteristics of addiction: The person
regularly engages in activity for much longer than originally planned and
?(continues) doing it in spite of adverse consequences.?
       By those standards, most of the players described in online support
groups such as Yahoo?s ?EverQuest Widows? qualify as addicts. 
        ?I have a friend who?s in the process of getting a divorce because of
?EverQuest,?? said Lea, a regular player of the game. ?A guy I talk to has been
through three girlfriends and even more jobs because of the game.? Like other
players, Lea declined to provide a last name. 
        Although Lea said she?s been able to find a workable balance between
?EverQuest? and real-world obligations, she often questions her devotion to the
game. 
        ?I think of quitting all the time,? she said. ?I?m sure there are a lot
of departments I?m lacking in now, like I don?t pay as much attention to my
kids as I should.?
Most online games include copious amounts of chats, allowing players to
interact with each other in the guise of the characters they represent. Dr.
Maressa Hecht Orzack, director of Computer Addiction Services at Harvard
University-affiliated McLean Hospital, said the social aspect is a primary
factor in many game addictions. 
        ?Many of these people are lonely, have never felt like they belonged,?
she said. ?People get a sense of belonging in the game. In some cases, it
provides the only friends they interact with.? 
        Such games also lure players with complex systems of goals and
achievements. ?EverQuest? players engage in activities to develop their
characters from one level to the next and compete to find valuable in-game
elements such as armor and weapons. Players can find themselves wrapped up in
the game for hours as they struggle to gain one more skill or weapon. 
        ?I?d say the most addictive part for me was definitely the gain of
power and status,? said Bennett. ?The way in which as you progressively gain
power you become more (of) an object of awe (to) the other players...each new
skill isn?t enough.? 
        Miller, the Stockton psychologist, saw just how compelling such in-game
goals can be when he tried playing ?Diablo II,? to see what the game was about.
Before long, he found himself in all-night sessions with the game, a habit he
broke by deleting the game from his PC and giving away the CD it came on. 
        ?Each goal leads to another goal, and there are critical choices you
make along the way,? he said. ?You invest a lot of time and thought into
developing a character. You feel like you?ve wasted your time unless you reach
the next goal.?
      Such lures can be insidious, Miller said. ?Here I was in a good position
to understand the problem...and yet I really did have to struggle to beat this
thing,? Miller said of his game habit. ?I can imagine that somebody with less
knowledge of these kinds of issues would really have a hard time understanding
what was happening to them.? 
       
ACKNOWLEDGING THE PROBLEM
        Like most addictions, the toughest part of recovering from game
addiction is often getting the addict to acknowledge there?s a problema task
made all the more difficult by the seemingly innocuous nature of games. 
        Angie said her live-in boyfriend spends at least 30 hours a week
playing ?EverQuest? as a female elfa character choice she finds ?weird and
disturbing?at the expense of housework, family obligations and sometimes work.
?The saddest part of all is the fact that he doesn?t admit that it?s an
addiction and seems oblivious to the damage his personal life is suffering due
to the game,? she said. 
        For players who do admit they have a problem, the most common response
is a guilt-and-purge cycle common to many addictions. While Bennett was able to
kill his character and delete the ?EverQuest? software with no regrets, many
game addicts aren?t as successful. 
        ?The people I?ve seen who quit the game and destroy their
character...almost all come back and play addictively again,? said Lea. 
        For most players, true recovery involves looking at the issues
underlying the game habit, Orzack said. She uses a cognitive-therapy approach
in which players examine the emotional motives that prompt them to play a game
excessively and look for alternate ways to satisfy those needs. 
        ?Therapy takes the issue that there are a lot of other things going
on,? she said. ?The goal is to get people to realize there is something going
on and they need to be in charge of changing it.? 
        Excessive game playing often reflects problems in the home environment,
Orzack added. 
        ?There?s definitely an alienation in some fashion that?s going on
within the family structure or work structure,? she said.
       Nicolas Yee conducted extensive player research on ?EverQuest? while
earning a psychology degree from Hanford College. He found a direct correlation
between the amount of time hardcore players spend in the game and a tendency
toward neuroticism?basically how easily a person gets depressed or goes into
mood swings,? he said. 
        Yee said that while he doesn?t doubt games like ?EverQuest? can become
an addiction, they can also be a productive outlet for dealing with emotional
and behavioral issues. 
        ?Environments like ?EverQuest? can help a person if they?re shy or have
trouble forming social relationships,? he said. ?They have this environment
where they can safely try new things out. They can experiment with being more
vocal, or they can try out a leadership role, which may not be an opportunity
they have in real life. Especially for teenagers, it lets them try out
different roles and identities at a time when they may be really struggling
with those kinds of issues.?
********************
Government Executive
Smarter profiling at the border is needed, experts say 
By Siobhan Gorman, National Journal 

Do you have any specialized skills or training, including firearms, explosives,
nuclear, biological , or chemical experience? 

As part of its post-9/11 efforts to keep would-be terrorists out of the
country, the State Department asks that question of visa applicants--provided
that they are male and between 16 and 45 years old. 

Last fall, the State Department also began insisting that male visa applicants
in that age range submit to more thorough background checks if they are from
any of 26 predominantly Muslim countries including Egypt, Pakistan, and Saudi
Arabia. Meanwhile, the Justice Department has interviewed 5,000 male U.S.
residents of Middle Eastern origin and now wants to interview 3,000 more.

In short, the controversy over whether the federal government should engage in
profiling to determine which foreigners should be allowed to legally enter this
country generally misses a key point: The United States already uses profiling
as a border-control tool. And that is nothing new. Based on the assumption that
it is not in America's national interest to let in countless indigent
immigrants, the State Department's visa officers have systematically engaged in
economic profiling for years--putting the onus on foreigners to establish that
they would not become a burden on the United States.

Yet, because the word "profiling" is associated with allegations of
"driving-while-black" discrimination by traffic cops, it sets off alarms in
Washington. But the real problem, many experts agree, is not that the federal
government is profiling--giving some sorts of people more scrutiny than others
when they attempt to enter this country--but that it may not be profiling very
intelligently. After all, how likely is it that a Saudi man who spent the
summer of 2001 in an Al Qaeda camp learning the basics of bio-terrorism is
going to volunteer that information on a visa application?

Peter Reuter, a professor of public policy at the University of Maryland, says
of the State Department's new bio-terrorism question, "There are two possible
answers: One is `No,' and the other is `No.' With one answer, you're telling
the truth. And with the other, you're lying." Even the State Department
recognizes the limited utility of the answers that its extra-scrutiny visa form
is eliciting: "That's the rub. They can't really be verified," one State
Department official said.

And, of course, two of the recent Palestinian suicide bombers in Israel were
young women. If either had applied for a U.S. visa, she would not have been
subjected to the special scrutiny now given to young Arab men.

According to many analysts, the profiling that would be most beneficial to the
nation's war on terrorism would involve techniques similar to those that police
routinely use in trying to solve a serial murder case. Data about each would-be
foreign visitor's race, gender, national origin, and other traits would be
combined with any known behavioral information, such as previous enrollment at
a crop-dusting school or attendance at an anti-American rally. These factors
could then be weighted in terms of how much each raises or lowers the
likelihood that the foreigner is a terrorist. No single attribute or activity
would designate someone as a terrorist threat, but each warning flag would
increase the odds of being denied legal admittance to this country.

Government officials, while hesitant to openly discuss profiling in which race
or religion might play some role, are clearly interested in improving screening
systems. "We're constantly looking at new technologies and new techniques,
whether it be biometrics or profiling or more-imaginative uses of databases,"
said one State Department official. There's international interest, too. "I
think that [detail profiling] would be a worthwhile cause to engage in," said
Ronald K. Noble, secretary-general of Interpol. "That's the preventative role
that we've been focused on since September 11."

Federal agencies are already looking at technology that, theoretically, would
both merge information on known terrorists and spot suspicious patterns that
would lead to the discovery of others, said Tim Hoechst, senior vice president
for technology at Oracle, a software company that has been tapping into the new
federal homeland security market. According to Hoechst, profiling that could
uncover potential terrorists before they strike is the hottest topic of
conversation. "When you talk about that, the interest is extraordinarily high,"
he said.

"That is really the Holy Grail."

The Traditional Face of Profiling

Any young, single Trinidadian woman with a sister living in, say, Brooklyn,
N.Y., had "nanny" written all over her--meaning that there seemed to be a high
risk she would overstay a tourist visa. Any visa applicant between the ages of
14 and 30 got a close look. And anyone who was unemployed had plenty of
explaining to do. These were some of the criteria that Jessica Vaughan
remembers using as a U.S. consular officer in Trinidad in deciding whether to
issue a nonimmigrant visa. Those were the good old days when consular
officials' primary concern was spotting and turning down would-be immigrants
who were falsely claiming to want to come to the United States for only a short
time. "There's a certain amount of profiling you have to do," Vaughan says.

Foreigners' nationality plays a large role when U.S. officials attempt to sift
out visa applicants who say they merely want to visit but actually want to stay
and work here, says Wayne Merry, a former Foreign Service officer who was
stationed in the Balkans and what was then the Soviet Union. "If you're a drug
smuggler from Sweden, your chances of getting in are almost 100 percent. If
you're a perfectly responsible, God-fearing person from Guatemala, your chances
of getting in are maybe 10 percent," he estimates. "We already profile. Ask
anybody from South America or the Caribbean. We profile all the Southern damn
Hemisphere. We profile all of Africa."

In contrast, before 9/11, the U.S. message to Middle Easterners was: If you
have money, come on in. Because economic profiling failed to keep out the
September 11 hijackers and allowed alleged "shoe bomber" Richard C. Reid to hop
a flight from Paris to Miami, Merry and other analysts say that very different
and more-sophisticated standards are necessary. Anti-terror profiling will
"inevitably be discriminatory to people coming from certain countries," Merry
says. "If you look at all the people associated with Al Qaeda, that's religion.
When it gets to a definition that inevitably centers on religion, it makes
people feel uncomfortable." He quickly adds, "It makes me feel uncomfortable."

In the months since September 11, the State Department and the Immigration and
Naturalization Service have developed a rudimentary profiling system--based on
gender, age, and national origin--that several analysts deride as doing little
to actually deter terrorism. Male visa applicants who are between the ages of
16 and 45 and from the 26 specified Muslim countries must pass FBI background
checks before getting visas. And since January, the State Department has
required all male visa applicants in that age group to answer an extra page of
questions about skills with biological or nuclear weapons and about
international travel. Those applicants also must supply the phone numbers of
schools they have attended and must list any organizations they have joined.

Meanwhile, on April 1, the State Department restricted the travel of aliens
residing in the United States with expired visas if they are from one of the
seven countries considered to be state sponsors of terrorism: Cuba, Iran, Iraq,
Libya, North Korea, Sudan, and Syria. Before April 1, such people could travel
to Canada or Mexico from the United States if they had already applied for a
visa extension. Ironically, under the new regulation, foreigners whom the State
Department considers potentially dangerous might well be more reluctant to
leave the United States--because if they do, they won't be able to return
without a new visa.

Despite efforts to make it more difficult for terrorists to enter this country,
glaring loopholes remain. For example, the U.S. consulates in Saudi Arabia are
still offering the U.S. Visa Express program, which uses 10 private companies
as intermediaries--so that applicants need never see a U.S. official
face-to-face. At least three of the September 11 hijackers were reported to
have received their visas through this program.

Also, even though the federal government is attempting to screen visa
applicants more thoroughly, the citizens of 28 countries (most of them in
Europe) are still allowed to enter the United States without a visa. This means
that half of the approximately 31.5 million foreign visitors who enter this
country legally each year have never had to apply for a visa.

For a would-be terrorist who can obtain a passport from an exempt country,
entering the United States is probably as simple as buying a plane ticket. INS
agents, who serve as the only check on foreigners who legally enter without a
visa, are provided the names of incoming passengers, but those agents have
little way of verifying passengers' identities or otherwise investigating their
backgrounds.

Taking Profiling to a Higher Level

Canadian officials wanted to crack down on the yakuza, a Japanese
organized-crime ring operating in Canada. Kim Rossmo, then a constable for the
Vancouver police, was called in to train border-control officials at the
Vancouver airport to identify yakuza members. "Guess what," he recalls, "was
the first and most important factor: Are they Japanese?" He also told border
agents to be on the lookout for people wearing flashy clothing, women wearing
four-inch heels, and anyone exhibiting certain types of behavior. Targeting
potential terrorists is more complex but follows the same principles, Rossmo
says. "I think profiling is important," he adds. "You just need to make sure
the profiling tools work."

Now the director of research for the Washington-based Police Foundation, Rossmo
recently submitted a proposal to the National Institute of Justice, the
research arm of the Justice Department, for developing a "geographic and
demographic model" of terrorist cells in the United States. If approved, he
says, his 18-month project might give border-control agencies a better idea of
how to weed out terrorists.

The Central Intelligence Agency has considerable information about various
sorts of terrorists, according to Melvin Goodman, a former Soviet analyst for
the CIA. But, he adds, piecing that data together to create useful
terrorism-prevention profiles hasn't been an agency priority: "The question is
how good they are at looking at the stones of the mosaic. We've neglected
analysis."

The terrorism-risk profiling system advocated by many analysts would be similar
to that used by credit card companies in monitoring fraud. In the view of
security consultant Severin L. Sorensen, profiles designed to pick out the
would-be terrorists from the endless stream of foreigners seeking to enter this
country should be based on many characteristics. Each trait would be weighted,
based on the likelihood that it makes someone an increased risk to U.S.
security. A specific visa applicant's status as a cleric, for example, might be
deemed more significant than his age. A Foreign Service officer could decide
how to proceed--whether to call an applicant in for an interview, for
example--based on the applicant's risk-assessment profile.

"What you're really looking for is extremes and outliers," said Sorensen, who
served in the Office of National Drug Control Policy during the first Bush
administration and is now the president of SPARTA Consulting, a physical
security company.

Experts in criminology and terrorism suggest a number of broad categories that
could be incorporated into a detailed terrorism-risk profile. Among the
characteristics that could raise red flags: education (subjects studied and
school location); travel patterns; and links to suspect organizations, such as
radical mosques. Security analysts also advise giving close scrutiny to
naturalized citizens of other countries applying from their adopted homeland;
foreigners applying from outside their home country; and those who are clearly
"visa shopping" (applying at more than one U.S. consulate).

Some characteristics that experts say should be included in terrorism profiles
are particularly controversial: ideology and religious intensity, for example.
In 1990, Congress stopped barring visa applicants based on ideological
statements. Mark Krikorian, executive director of the Center for Immigration
Studies, argues that change "handcuffs consular officers from denying people
visas simply because they're leading the `Death to America' rally in Karachi
every Tuesday or if their sermons at the mosque call for gassing the Jews and
killing the Americans. That's crazy."

Religious intensity, Sorensen argues, should be included as a risk factor
because of the known link between religious extremism of any kind and a
tendency to commit terrorist acts. Another analyst urged that profiles
distinguish between native-born and naturalized citizens of countries that are
U.S. allies. Germany, for example, is a favorite destination of Afghans and
Iranians, many of whom have become naturalized German citizens.

And several experts caution against assuming that certain
characteristics--being female or a refugee, for example--automatically mean
that someone is not a would-be terrorist.

Much of the information that the U.S. government is gathering in the wake of
9/11 is potentially helpful in creating terrorism-risk profiles for use in
figuring out which visa applications should be denied. Interviews with the
prisoners from the war in Afghanistan and with people detained in this country
after the terrorist attacks are an obvious source of vital data.

The INS plans to install an entry-exit system that tracks foreigners as they
come into and leave this country. Former consular official Vaughan said that a
detailed list of people who have overstayed their visas could provide valuable
information about the kinds of foreigners who shouldn't be admitted in the
first place. Meanwhile, she added, U.S. consulates should be collecting more
information abroad about potentially dangerous groups and their members'
characteristics.

Several software companies, including Oracle and Siebel Systems, are retooling
to assess the risk of someone's being a terrorist instead of the probability of
his switching long-distance phone service. Oracle's Hoechst said that if the
myriad federal agencies involved would collect and share the right sorts of
information, his company could build a system that would give border-control
agencies daily warnings about foreigners belonging to certain groups, for
example, or those coming from particular regions of a given country. A
sophisticated profiling system could be up and running in five years, Hoechst
says. "The potential here is extraordinary. It's astonishing what can be done,"
he adds.

Similarly, Siebel Systems has a computer program that, it says, would have
raised enough warning flags about 9/11 ringleader Mohamed Atta that he would
have been barred from legal entry.

One enormous question, however, is what kind of information should be viewed as
a warning flag when policy makers and computer programmers don't have the
advantage of being able to work backward-of knowing that Atta was someone who
should have been kept out. That's where the tech companies punt to the
government. "Determining what those attributes are is going to be pretty key.
It really depends on the policies that organizations like the INS want to
implement," acknowledges Matthew Malden, Siebel's vice president for homeland
security. "We're just a technology company."

Border Security's Third Rail

An Algerian applies for a student visa at a U.S. consulate in London and is
refused. Hearing the verdict, the Algerian bangs on the window of the visa
booth and screams at the official who has turned him down. The consular
officer, distraught that she may have succumbed to her own post-9/11 fears and
prejudices, eventually reverses her decision.

That story line, from an episode of the short-lived television program "The
American Embassy," helped bring the issue of risk profiling into American
living rooms. "It's important for the average citizen to think about where we
draw this [profiling] line, because it has ramifications beyond terrorism,"
notes an aide to a House Democrat.

And if Congress were able to separate the discussion of terrorist profiling
from the explosive topic of racial profiling, Democrats and Republicans might
find substantial common ground. Rep. Barney Frank, D-Mass., a senior member of
the House Judiciary Committee, says that although national origin is a
necessary component of terrorism-risk profiling, it is only one of many
characteristics that should be taken into account when deciding whether a
foreigner should be granted a visa or allowed onto a U.S.-bound airplane.

Would the House Democratic aide, who is strongly opposed to "racial profiling,"
endorse a more sophisticated, statistically based type of profiling? "The
answer is yes," he says, "and law enforcement knows how to do it, but it
requires work and diligence."

Would Republicans go along with this kind of profiling? "I would think so,"
said one House Republican aide. "Certainly the State Department should take a
look at that. Law enforcement would benefit dramatically from being able to
screen people out." He adds that the travel and hotel industries would like it,
too, because it would stave off the possibility of more-drastic government
measures, such as ending the visa-waiver program or denying visas to everyone
from countries on the list of state sponsors of terrorism.

Yet former INS Commissioner Doris Meissner remains cautious and says, "I would
be very, very wary of anything that is nationality-specific. I think that the
guilt by association ... is not American, and it's not effective." And as the
House Democratic aide pointed out, targeting visa applications from young
Middle Eastern males could miss a lot of potential terrorists. "Unless we add
Germany to the group, how many of these [9/11 terrorists] would we have
caught?" the aide asks.

Profiles also run the risk of fostering complacency, said Susan Forbes Martin,
former executive director of the U.S. Commission on Immigration Reform. "We're
always profiling on the last threat rather than the next threat," she argues.
"You're always behind the curve, dealing with the profile you know about rather
than the one you don't." Pointing out that two Palestinian women recently
transformed themselves into bombs, Martin contends that smart, well-funded
terrorists would adjust their plans to avoid being detected by whatever
risk-assessment profiles the United States employs.

And Laura Donohue, a terrorism expert at Stanford University, worries that
profiles foster anti-American hostility among law-abiding foreigners who are
denied entry under the mistaken assumption that they pose a risk. "It's going
to be unfairly levied on people of Islamic faiths. Aren't these the very people
we want to draw in?" she asks. "We need to be very, very careful right now."

But advocates of profiling say these arguments just highlight the need to bring
as many elements as possible into the mix, thus reducing the emphasis on
politically sensitive issues of race and religion. "I can't imagine the logic
of resisting a profiling system for the purposes of a more focused review,"
said Jonathan Turley, a law professor at George Washington University. He said
that if border officials are given a profile based on statistical probability,
they're actually less likely to use stereotypes. And experts who favor
terrorism-risk profiling say that the process should be used in concert
with--not in place of--"lookout" databases, random checks, and common sense.

Despite the queasiness that many government officials still have over the topic
of profiling, September 11 unquestionably changed the stakes in many people's
minds. "Whether or not you can ever take into account ethnicity is related to
the nature of the harm involved," said Rep. Frank, a die-hard civil
libertarian. "I'm willing to accept more government intervention, generally, to
prevent mass murder than to prevent people from smoking marijuana." 
*******************************
CIO Insight
April 12, 2002
RFID: From Just-In-Time to Real Time
By Mark Roberti 

Five years ago, Kevin Ashton, then an assistant brand manager at Procter &
Gamble in London, set out to revolutionize the world's supply chains using a
technology called Radio Frequency Identification, or RFID for short. Ashton was
frustrated because his team had come up with a hot-selling shade of lipstick
that would sell out in an hour, yet not be replaced for a week. When he
discovered a smart credit card with a chip that could be read without being
swiped through a machine, he hit on the idea of using the same kind of chip in
P&G products, to speed corporate response time to the marketplace. Since then,
Ashton has sought to make a lot of people believers in the vision he had that
these chips, connected through a global network, could enable companies to
respond to changes in supply and demandas well to trouble in the pipelinein
real time. "This is bigger than the Internet," he says.

At first, people at P&G thought Ashton was nuts. RFID tagstiny radio-powered
microchips that broadcast a unique serial number, like a talking bar codecost
several bucks apiece in those days, and the idea of putting one on every box of
cereal and bar of soap was preposterous: Profit margins on such products were
measured in cents. But Ashton managed to convince higher-ups at P&G that it was
an idea worth exploring. He then got MIT and some of the world's biggest
companiesincluding Wal-Mart Stores Inc., The Coca-Cola Co., Johnson & Johnson,
PepsiCo Inc., The Home Depot Inc. and Unileverto back his quixotic quest. And
now, from an MIT laboratory in Cambridge, Mass., he's creating converts. Says
Dick Cantwell, vice president of global business management for The Gillette
Co., a backer of Ashton's RFID lab, called the Auto-ID Center: "We see RFID as
the supply chain technology of the future. It's going to revolutionize the way
we track goods from manufacturing to the consumer and even through recycling."
Ashton puts it another way. "Creating a way for companies to use sensors to
identify goods anywhere in the world is a very big deal," he says. "We are, in
effect, creating an Internet of things."

Ashton essentially sees the world as two giant networks. First, there's the
network of goods and services that make up the global supply chain. Second,
there's the network of computers called the Internet. Ashton wants the machines
that make up the world's supply chains to interact with the Net. "Our vision is
a world where by moving atoms you can move bits, and by moving bits you can
move atoms," Ashton says.

But sensors aren't new, and neither is RFID. General Electric Co. has been
using them for years to help its engine customers detect problems before they
cause hazards to users. But thanks to new manufacturing processes, recent
wireless technology and smarter software, the tiny devices are now at the
forefront of an important new trend throughout the manufacturing and consumer
goods industries that is already beginning to accelerate the speed at which
companies can respond to the marketplace. As with microprocessors and lasers in
earlier decades, the novelty is not that these sensors exist at all, but that
they have suddenly become cheap enough to be used in ordinary, everyday
productsand are already starting to save companies a bundle (see "Making Waves"
sidebar). Whether tiny thermometers, mini-microphones, electronic noses,
location detectors, motion sensors or RFID tags, all of them can provide
information about the physical world and represent a whole new level of
automation that experts predict will accelerate the pace of corporate activity,
if not change the face of the economy itself.

Before RFID tags, for example, Associated Food Stores Inc. used to have 127
people spend at least part of their day typing information about truck
locations into a yard management system. That was not only inefficent; it was
inaccurate. The information in the database was wrong 40 percent to 70 percent
of the time. Now each truck contains an RFID sensor that automatically signals
its location in the yard in real-time for a savings to the company of more than
$1 million. The tags made it possible for AFS to get smarter about tracking,
and cut 53 trucks and some drivers from the fleet roster. The tags also helped
to reduce food spoilage caused by goods sitting in trucks that couldn't be
found right away, for additional savings.

Multiply these speed and efficiency bursts by thousands of potential
applicationsand new ones, such as the ability of, say, an RFID sensor to track
a box of Cheerios from factory to kitchen shelfand you're opening up whole new
possibilities for everything from inventory control to customer service to
customized product delivery.

Days to Hours

Think of it this way: The development of RFID tags is, in some ways, an
extension of the decades-old "just-in-time" inventory drive by firms to shrink
multibillion-dollar stockpiles into smaller, cheaper ones. In the 1970s, the
Japanese undercut U.S. car manufacturing's production costs by hundreds of
dollars per vehicle, just by replacing parts' storehouses with systems aimed at
delivering parts to assembly lines as they were needed. With just-in-time
manufacturing, companies cut inventories of parts from weeks to days. Sensors,
backers say, will represent a move from days to hours. "Once all of these
machines start talking to one another, they're going to make commerceand the
worldmove much faster, more efficiently and at speeds that humans alone
couldn't match," says Paul Saffo, director of the Institute for the Future, a
West Coast think tank.

Sound too good to be true? Think again. Ashton and his researchers have gotten
this new "sensor-chain" to work, for the most part, in recent tests. In
October, they wired a P&G factory in Cape Girardeau, Mo., with readers and
slapped RF tags on pallets of Bounty paper towels. They also wired forklifts at
one of Wal-Mart's Sam's Club stores in Tulsa, Okla. The goal was to prove that
the Internet-like RFID infrastructure designed by the Auto-ID Center could, in
the real world, record the movement of goods from the factory to the store with
no human intervention. Consider it a test of the first phase of the Internetbut
instead of proving an e-mail could be sent over vast distances, Ashton and his
team wanted to show that a pallet of paper towels could communicate its
movement directly to computers.

As the paper towels left the factory, readers stuck on bay doors with Velcro
picked up the unique serial number. A day later, the pallet arrived on a truck
at the Sam's Club in Tulsa, Okla. A reader on the forklift immediately picked
up the serial number. A beep on a laptop in the warehouse manager's office
confirmed the arrival of the pallet. The normally understated Ashton calls it
"the ping heard 'round the world."

It wasn't just that readers had successfully read the tag on the pallet. What
was unique in this experiment was that there was an infrastructure that made it
possible. The reader passed the tag's serial number to software that uses the
Net to read electronic product codes through an object name service that works
something like the Net's domain name service. The object name service points to
a database with information written in physical markup language, similar to
XML, that describes the productand, put simply, tells the computers at Sam's
Club that a pallet of paper towels just arrived.

Not everything worked like a charm. In the Sam's Club test, the store's
existing bar code scanners "collided" with the frequencies emitted by the RFID
tags, causing mixed signals and some devices not to respond. In addition,
flawed hardware sometimes kept the RFID readers from picking up all sensors. In
both cases, Ashton says, he and engineers are designing better readers and
tagsand are also trying to fine-tune the algorithms so RFID tags don't suffer
interruptions in signal strength from competing frequencies.

The test has two more parts. In February, the Auto-ID Center cranked up the
information load on the system by tagging cases of P&G's Pantene Pro-V shampoo
and Gillette's Mach3 razors. And in a final phase of the test, scheduled for
this summer, the team will put new low-cost tags, priced at 10 cents each, on
individual boxes of cereal, soft drink bottles and cans of Coke in an effort to
see if it is possible to track individual items from the factory to store
shelvesand see if companies throughout the supply chain can use sensors to
respond to real-time demand signalsrather than basing production on forecasts
that are invariably wrong. "With RFID, the potential exists to never have to do
physical counts of inventory again," says Larry Kellam, P&G's director of
business-to-business supply chain innovation. Kellam says RFID could cut P&G's
total inventory in half, while simultaneously reducing the number of times a
product is not on the shelf. So-called "out-of-stocks" occur about 7 percent of
the time, on average, in the packaged goods industry, according to a study by
PricewaterhouseCoopers. If the trillion-dollar industry could cut that rate in
half, that would free up some $70 billion in savings for other investments.

Another big goal for all manufacturers is to cut supply chain costs. Kevin
O'Marah, vice president of supply chain strategies at AMR Research, says losses
due to stolen, damaged, misdirected or lost shipments amount to 3 percent to 5
percent of total supply chain costs. "Supply chain inefficiencies are still a
gigantic pool of potential value to go after," says O'Marah. "If RFID makes
companies even 1 percent more efficient, you're talking about a huge amount of
money." P&G's Kellam believes his company could save some $400 million annually
if RFID lives up to expectations and reduces inventory by 50 percent.

Of course, there are a lot of skepticsand with good reason. RFID has been
around since the invention of radar during World War II and has been seen as a
promising technology since the 1960s, when the U.S. Department of Agriculture
implanted RFID sensors under the skins of cows to track their movements. The
Pentagon is using RFID to keep track of military supplies sent to Afghanistan.

Still, it is the cost of each tagand some technical glitchesthat have been
keeping sensors out of the commercial mainstream. Even now, some memory-packed
tags can cost as much as $5 each. Simpler, less powerful chips are cheaper, but
price depends heavily on volume. Buy 1,000 chips and they may cost $1 each. Buy
1 million and each may cost 50 cents. P&G produces more than 20 billion items a
year. Putting a 50-cent tag on every item would cost the company $10 billion a
year. RFID backers, therefore, have sought to push the price of each tag to
less than 5 cents.

They're getting close. In the past few months, for example, Ashton's Auto-ID
Center has designed a chip with the minimum components needed to carry a 96-bit
electronic product code. Alien Technology, a start-up in Morgan Hill, Calif.,
will be the first to manufacture RF tags based on the spec. If companies
backing Ashton's research buy tags in bulk from Alien, the price of tags could
fall to three and a half cents by 2005, Ashton says. But cost isn't the only
headache. The lack of standards governing the use of RFID is also a problem.
Companies don't want to invest in a system if their tags can't be read by
trucking companies, retailers and other businesses. MIT is focused not just on
developing low-cost tags and readers but also on formulating global standards
to ensure widespread use.

Says Jack Sparn, CIO of CHEP International of Orlando, Fla., "The problem is
the entire supply chain hasn't bought into it yet," he says. "If you're the
first person with a mobile phone, it's useless. But as soon as everyone has
one, it becomes valuable."
Critical Mass

Consider the railroad industry. About 10 years ago, all the major lines in
North America agreed on a standard for RFID tags and readers. The industry as a
whole spent $200 million to install 3,000 readers, and tag 1.5 million cars and
20,000 locomotives. It has paid off. Fort Worth, Texas-based Burlington
Northern Santa Fe Corp. used to employ an army of some 500 clerks armed with
pencils and clipboards to walk up and down the tracks at its depots and
switching stations to read numbers painted on the sides of its railway cars.
The information was then handed to data entry personnel who would key it in, so
the company's mainframe systems could track cars. Today, all of the company's
rail cars are tagged (about $30 per tag) and it has 443 readers ($50,000
apiece, including installation) positioned at key junctures along 33,500 miles
of track in 28 states and two Canadian provinces. As a result, the company
eliminated all of its trackside clerks in 1997. Now, the system has paid for
itself, and it reads 100,000 tags a day with virtually no errors. Burlington
can provide customers with more accurate data about where their shipments are.
The system also has dramatically reduced track delays. "In the old days, when a
car was out of place, people had to spend hours trying to figure out where it
should be, and that would cause delays throughout the system," says Shannon
McGovern, Burlington's director of network support systems. "Today, that's
almost never a problem."

Bigger Role for CIOs

If RFID catches on across industries, the technology will heap new duties onto
the shoulders of CIOs, Ashton says, namely, the need to help companies start
managing an enormous amount of new information. "The biggest challenge is
deciding what to track, where to track it, and link that back into your
systems," says Simon Ellis, supply chain futurist for Unilever. "That's where
companies will find the competitive advantage. It won't be in the RFID
technology, because that will be a commodity."

CIOs will also have to work with business managers to fine-tune systems. Since
the whole point of RFID is to take people out of the loop, software will have
to capture business knowledge and apply it automatically. At the most basic
level, IT departments will have to work with store managers and suppliers to
determine optimal inventory levels, when to trigger an order for more goods,
and when to drop the price of slow-moving items. "The CIO won't take over the
decision-making," says AMR's O'Marah. "They're going to be the ones who
architect and deliver the infrastructure that allows these automated processes
to be built into the way a business runs."

The trend also has implications for marketing. Tags placed in manufactured
items or packaging could spark opportunities to develop new products and
enhance existing ones. Unilever's Digital Futures Laboratory in Englewood
Cliffs, N.J., showcases a kitchen that keeps a real-time inventory of
foodstuffs and displays a list of "in-stock" items. Invensys, a British maker
of industrial equipment, is working with appliance manufacturers such as
Whirlpool Corp. to develop ovens that cook turkeys based on instructions from
chips in the packaging.

Alien Technology recently won a $120 million contract from the Department of
Defense to combine RFID tags with other types of sensors to pick up vibrations
or detect the presence of chemicals or biological agents. The U.S. military
wants to drop so-called "smart dust" sensors on a battlefield, and by picking
up vibrations and knowing the exact location of a specific tag, generals could
know how many enemies are hiding in a location or whether chemical or
biological weapons are being stored there. RFID tags may even be combined with
tiny microphones that look like seed burrs that could attach themselves to
someone's socks, so the military could listen in on conversations.

All this, of course, raises privacy concerns. Chris Hoofnagel of the
Washington-based Electronic Privacy Information Center, a nonprofit pro-privacy
group, says: "RFID tags, themselves, are passive, but there are going to be any
number of entities who will want to use the information collected to track
individuals or groups. The issue is control: Can you determine when the tag is
active and who is using the information collected? That's going to be the
challenge."

No question there. But Ashton says sensors can also be used to boost security.
One day, Ashton says, RFID sensors may be put in food containers to ensure that
products haven't spoiled or been tampered with. If the sensors become cheap
enough, Alcoa CSI, which makes 50 billion bottle caps a year, wants to put them
in its products.

Will RFID live up to its promise? If companies like Wal-Mart, P&G and Unilever
begin deploying RFID systems next year, they could encourage suppliers to adopt
the technology and, Ashton predicts, the network effect would force more
companies to get on board. "RFID will either take off quickly," says Ashton,
"or it won't take off at all."

Given the benefits companies like Ford and Burlington Northern are getting from
RFID so far, the smart money appears to be on smarter machines.

MARK ROBERTI is founder and editor of RFID Journal, an independent Web site
that covers the development of RFID technology. He has written about supply
chain technologies for The Industry Standard, Business 2.0 and other
publications. Comments on this story can be sent to editors@xxxxxxxxxxxxxxx

Making Waves 

Radio frequency sensors offer companies more information about the physical
world for savings in time and money.

Ford Motor Co.

Before: Assembly-line workers running low on parts would have to pick up a
phone and call the replenishment department to get more, then waitsometimes for
hours.

Now: Ford puts RFID tags on each parts bin. Warehouse operators now know, in
seconds, when supplies run low, and automatically deliver parts as needed to
workers on the assembly line.

Procter & Gamble Co.

Before: P&G used bar codes to track shipments of goods from factory to retail
outlets, but couldn't do much to halt sudden supply shortages on store shelves.

Now: RFID is tracking shipments, and, eventually, individual products, so they
can be stocked on demand in stores. P&G expects to cut its $3.5 billion
inventory in half and cut costs by $400 million a year.

San Francisco Int'l.

Before: Security staff at SFO had to hand-carry passenger bags flagged by an
FAA profiling system to a bomb detection machine, then back to the check-in
counter, causing delays.

Now: RFID tags are put on suspect bags and routed automatically to bomb
detection devices, enabling SFO to cut bomb detections security spending by an
estimated 50 percent.

Top 5 Fastest-Growing RFID Applications

1. Point-of-sale tracking

2. Rental item tracking

3. Baggage handling

4. Real-time location systems

5. Supply chain management
*********************

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