Clips April 19, 2002

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips April 19, 2002

ARTICLES

FCC Clears Reimbursement for Internet Relay Calls
Online Privacy Back in Spotlight with Bill
Larry Irving: Digital Divide Lives, Few People Care  
Ashcroft, Ellison Win 'Big Brother' Privacy Awards 
Internet Gambling May Have Hazards 
Mr. and Ms. Geek Go to Washington
Online pharmacy warning
Immigrants link Silicon Valley to global economy
Japan Plans to Tighten Laws on Internet Child Porn 
Intel's quixotic quest for next billion users 
Forman: Feds hungry for change
Colleges make cybersecurity pledge
Pa. eases business registry
Broadband comes to the High Street
Microsoft pictures the future
Amnesty for Russia's net pirates
Maryland measures its e-gov readiness 
A $1 billion, corporate-funded hack? 
AOL struggles with broadband plan 
Intel shows off new mobile chips 
Microsoft to use Bluetooth chips 
Symantec warns of blended security threats
Technology used in war on terrorism



Due to server issues, I have not be able to access the Washington Post?s or New
York Times? Technology Web page for stories since yesterday see
http://www.washtech.com/news/govtit/
http://www.nytimes.com/pages/technology/text/index.html

***********************
Reuters
FCC Clears Reimbursement for Internet Relay Calls 
Thu Apr 18, 3:12 PM ET 

WASHINGTON (Reuters) - WorldCom Inc. and other telecommunications companies won
permission on Thursday from federal regulators to recover costs incurred when
providing relay service from hearing-impaired people who use the Internet to
place long-distance telephone calls. 

  
A person with a hearing or speech disability can place a call using a telephone
or the Internet in which their typed messages are relayed back and forth to the
receiving party by a communications assistant. 

Costs incurred from relaying long-distance telephone calls by service providers
are reimbursed from the Interstate Telecommunication Relay Service Fund, which
is financed by fees charged to telephone carriers which are often passed on to
customers. 

The Federal Communications Commission (news - web sites) at its monthly open
meeting unanimously approved an order granting carriers permission to be
reimbursed from the fund for such calls that originate from the Internet. 

"Now users of TRS (telecommunications relay service) need not restrict their
telephone communications to places equipped with TTYs (teletypewriter/text
telephones) or specialized software," FCC (news - web sites) Commissioner
Kathleen Abernathy said. "All they need is a connection to the Internet." 

In contrast, local relay calls are provided by contractors who are paid by
states. The FCC said its approval of the reimbursement plan would increase
usage of relay services. 
***********************
Reuters
Online Privacy Back in Spotlight with Bill 
Fri Apr 19, 2:32 AM ET 
By Andy Sullivan 

WASHINGTON (Reuters) - A senator proposed a measure on Thursday that would
increase consumer privacy on the Internet, reviving a once-hot issue that has
taken a back seat to security concerns since the Sept. 11 attacks. 

  
Sen. Ernest Hollings hopes to require online businesses to get customer
permission before disclosing sensitive information like bank account details or
sexual orientation. Less-sensitive data, such as purchase or browsing records,
could be shared with third parties unless the customer specifically said
otherwise. 

The South Carolina Democrat's bill promises to revive a debate about how
businesses use customer e-mail addresses, phone numbers, purchase records and
other data collected through their Web sites. 

Lawmakers introduced dozens of bills last year, but industry opposition and a
renewed interest in security after Sept. 11 pushed online privacy (news - web
sites) to the back burner. 

As chairman of the Senate Commerce, Science and Transportation Committee,
Hollings can put the issue back in the spotlight. His committee has hearings on
April 25. 

In a statement, Hollings said the bill would boost Internet commerce by making
consumers less wary of giving out their credit card numbers or other sensitive
information online. 

"Privacy fears are stifling the development and expansion of the Internet as an
engine of economic growth," he said. 

One privacy expert said the bill strikes an admirable balance between customer
and business interests. 

"It actually forces companies to think about their data-collection strategies
pretty carefully," said Larry Ponemon, chief of the Privacy Council, a Dallas
consulting firm. 

Business groups were less enthusiastic. 

"From a fundamental standpoint, we don't think this is necessary. There's been
no consumer demand for privacy legislation, there's been no consumer harm,"
said Joe Rubin, top congressional lobbyist for the U.S. Chamber of Commerce
(news - web sites). 

TWO-PRONG APPROACH 

The bill takes a two-prong approach to data collection, requiring an
affirmative "opt in" from consumers before collecting or sharing sensitive
information such as political or religious beliefs. 

Less sensitive information, such as a list of items purchased, would be subject
to an "opt out" standard, allowing businesses to use the data as they pleased
unless customers specifically forbade them. 

Consumers could sue firms for up to $5,000 per count if they found sensitive
data was misused. 

The bill would override stricter state measures, a key factor for online
businesses who say it would be impossible to comply with a patchwork of state
laws in the borderless world of cyberspace. 

Rubin said online businesses have improved privacy protections on their own,
and sites such as Yahoo Inc. pay a penalty in the marketplace when their data
practices anger consumers. 

Ponemon said an online privacy law would help curb abuses such as those
commonplace after Sept. 11, when Internet companies voluntarily turned over
their customer files to law enforcement agencies. 
**************************
Newsbytes
Larry Irving: Digital Divide Lives, Few People Care

The digital divide still is very much alive, but U.S. corporations and the
federal government have unfairly abdicated their roles in helping to bring the
Internet to U.S. citizens regardless of their race or class, said former U.S.
Commerce Undersecretary Clarence "Larry" Irving.
 
Irving, who made the digital divide a front-and-center issue for the Clinton
administration, said that the Bush administration's elimination or scaling back
of several important programs to close the divide also reveals a basic lack of
desire to make the Internet a ubiquitous tool in the U.S. 

"It's one thing to say that there is a job that should be done and the
government shouldn't do it," Irving said in a speech at the Computers Freedom
and Privacy 2002 conference in San Francisco. 

"It's another to say that ... the divide is solved." 

Irving said that the Bush administration's attitude of "Let's declare victory
and go home ... didn't work in Vietnam and it won't work on this particular
issue." 

"We're a nation online?" Irving said, noting that 60 percent of
African-Americans don't have any Internet access, nor do 70 percent of
Hispanic-Americans. 

He said, however, that while corporations and the government should realize
that they have a role to promote bringing the Internet to all Americans, there
is no compelling interest for either group. 

Corporations, he noted, depend on serving shareholder interests,while the Bush
administration has cut many programs across the board to finance the ongoing
war on terrorism. 

"I don't dispute that Steve Case and Microsoft do things out of the goodness of
their hearts occasionally, but it is not their job to connect people to the
Internet." 

Referring to an earlier conference speaker's assertion that the U.S. should
view the digital divide situation as a "glass that's half-full," Irving said,
"Lady, for the folks who don't have access, it is completely empty." 

Now the chief strategist of the Privacy Council and a board member of several
U.S. corporations and higher learning institutions, Irving related the story of
an unsuccessful business venture he set up with former NBA star Irvin "Magic"
Johnson. 

While there is $1.7 trillion in "black and brown" spending potential, he noted,
it is hard to convince large firms such as Gateway, Dell and Sony to invest in
marketing to minority audiences. This is especially the case, he said, in an
industry that he characterized as "predominantly male, predominantly white and
predominantly geeks." 

Irving also spoke on several other issues, including the continuing trend of
media consolidation. He lambasted the state of competition between the cable
and broadcast industries, saying that they are largely in each other's
pockets." 

He also predicted that media consolidation could lead to mass privatization on
a large scale as media conglomerates such as Walt Disney Co. (with ESPN, ABC
and others), AOL Time Warner and News Corp. continue to buy up newspapers,
television stations and other communications devices. 

"You heard about 'My Own Private Idaho,' now you are going to get it," he said.


He also scolded journalists at major broadcast news outlets for not reporting
fully on media consolidation issues, suggesting that it is because they would
end up reporting criticism of their corporate parents. "I'm not saying
journalists are bad people, but self-preservation is a law that most of us
follow," he said. 

At a conference centered largely on privacy issues, Irving also weighed in on
the Internet privacy debate, suggesting that people should focus more on
"fundamental discourses" rather than theoretical ones. He added that he is not
against taking on a pseudonym when signing up for tools meant to track user
habits. By his supermarket club card, the hale, tall and bald African-American
Irving said, he is a "67-year-old Asian man with a limp." 
*******************
Reuters
Ashcroft, Ellison Win 'Big Brother' Privacy Awards 
Fri Apr 19, 2:34 AM ET 

SAN FRANCISCO (Reuters) - U.S. Attorney General John Ashcroft (news - web
sites) and database billionaire Larry Ellison were named this year's most
notorious American violators of personal privacy by leading advocacy groups on
Thursday. 

  
The annual "Big Brother Awards" are presented to government, corporations and
private individuals who allegedly have done the most to threaten personal
privacy. 

Privacy International, a London-based activist organization made up of privacy
experts and human rights organizations from several dozen countries, presented
the awards at the annual "Computers, Freedom & Privacy" conference here this
week. They were joined by well-known U.S. privacy activists. 

The "Worst Government Official" award went to Ashcroft. Privacy International
said the top U.S. law enforcement officer is responsible for a massive increase
in wiretapping of phones and other electronics and for the imprisonment without
charge of as many as 1,200 people in the United States in the wake of the Sept.
11 attacks on America. 

The "Worst Corporate Invader" honor went to Ellison of Oracle Corp., the
world's leading maker of database software, for his advocacy of a centralized,
Oracle-run government database that could be used as a national identification
system. 

The honors are given out in the spirit of author George Orwell and his warning
about police surveillance in the totalitarian world of his novel "1984." 

"The goal is to name and shame the bad actors," said privacy advocate Jason
Catlett, president and founder of Junkbusters Corp. of Green Brook, New Jersey.


Other awards included "Most Invasive Company," "Most Appalling Project" and
"Lifetime Menace." Each "winner" received a golden statue depicting a jackboot
pressing down on a human head. 

"There's not a lot of surprises here," Evan Hendricks, editor of the
Washington-based Privacy Times newsletter, said of the Big Brother nominees. 

Most recipients fail to pick up the honor in person. 

The "Most Appalling Project" honor went to the Enhanced Computer Assisted
Passenger Pre-Screening (CAPPS) project, a pre-flight screening of airline
passengers set up in the wake of the Sept. 11 attacks. The advocacy group
argues this amounts to discriminatory treatment of passengers based on race or
certain consumer behaviors. 

Privacy International singled out technology developers on the project
including: HNC Software, a maker of fraud detection tools; Acxiom Corp., a
collector of business and consumer data; H Equifax, a credit information
agency. 

Privacy International also hands out similar awards in eight European
countries. 

"What Americans tend to forget is that what happens here in America in terms of
privacy practices and technologies is getting exported to other countries and
undermining their privacy practices," said Stephan Endberg, a privacy
consultant with Open Business Innovation, based in Copenhagen, Denmark. 
********************
San Jose Mercury News
27 arrested in software piracy sting
By Matthai Chakko Kuruvila
Mercury News

 
More than 125 law enforcement officers led by the FBI arrested 27 people
Thursday that officials say made up an international software piracy ring that
has cost Microsoft $75 million in lost sales.

FBI officials would say little Thursday about Operation Cyberstorm, which
involved local, state and federal law enforcement officers as well as
assistance from Microsoft and other software companies.

A press conference is planned today in San Jose that is expected to involve FBI
Director Robert Mueller and San Jose Police Chief William Lansdowne.

Many of those arrested live in Fremont, San Jose and Union City. Most are
Taiwanese, who allegedly duplicated software programs in Taiwan before selling
the products -- such as Microsoft Office 2000 and Microsoft Windows NT -- in
the United States, according to court records.

Law enforcement officials believe that the arrests may have dismantled the
ring, which court records indicate has been under observation for two years.

The 127 agents and detectives fanned out across the region early Thursday
morning, raiding residences as well as businesses. Among the businesses raided
were Samtech Research, Beyond2K and Marlin Trading, all located in Fremont.

Calls to those companies were not returned.

Variety of charges

According to court filings, the 27 were arrested on a variety of charges,
including money laundering, criminal copyright infringement and trafficking in
counterfeit goods.

The head of Microsoft's anti-piracy enforcement department declined comment
until after the FBI's press conference.

``I am aware of it,'' said Rich LaMagna, Microsoft's senior manager of
worldwide investigations. ``But I would rather not comment at this time.''

LaMagna leads a crew of 35 anti-counterfeiting sleuths who launch
investigations, perform surveillance, gather evidence and turn over dossiers to
law enforcement officers for prosecution.

Microsoft's $75 million losses in this case pale in comparison to the estimated
$12 billion a year software companies lose every year to counterfeit software.

Sheila Wu, one of those arrested, allegedly sold or distributed more than 1,000
illegal software packages, including Microsoft NT Server, Microsoft Office and
Microsoft SQL Server, according to an indictment.

Mirza and Sameena Ali, who live in Fremont, allegedly used private mailboxes at
Mail Boxes Etc. stores in Newark and Fremont as the delivery center for the
illicit software shipments. Sameena Ali is listed as the owner and president of
Samtech, which is on Fremont Boulevard, according to indictments that were
unsealed Thursday.

In the indictments, investigators document hundreds of thousands of dollars in
wire transfers involving the Ali family.

The Alis gained notoriety in 1991, when they proposed to build a
16,000-square-foot mansion in Fremont that would have featured a
4,400-square-foot, tri-level master bedroom. But Fremont City Council members
rejected the plan, saying the mansion was too massive for the south Fremont
neighborhood.

According to the indictment, the Alis ``shall forfeit'' a house in Fremont, one
in Pleasanton and ``no less than $20 million'' derived from the piracy ring.

The other suspects

The other suspects are: Sheila Wu, Radu Traian Tomescu, Mohammed Yousef
Chaudry, Leng S. Kouch, Adnan Torlak, Ali H. Khan, Keith Griffin, William
Glushenko, James Wu, Ginger Hsu Yang, Charles Yang, Alice Wang, Tim D. Ly,
Xiaoyu Zhang, Tony Wu, Li Jun Lei, Jimmy Kuo, Simon Kuo, Jerry Kuo, William
Jin, Perry Zheng, James Chellberg, Joanne Chao and Malinda Chan.

Nine of the defendants appeared in a San Jose federal courtroom late Thursday
afternoon. Bail for them was set as high as $50,000. One woman in the audience,
apparently the daughter of a defendant, took out a Bible and started quoting
Scriptures during the hearing.
*******************
Reuters
Internet Gambling May Have Hazards 
Thu Apr 18,10:12 PM ET 
By BRENDAN RILEY, Associated Press Writer 

CARSON CITY, Nev. - Nevada's gaming regulators were warned about numerous
high-tech hazards in trying to monitor Internet gambling activity if it's ever
legalized in Nevada.

  
Marc McDermott, chief of the electronics division for the Gaming Control Board,
said Thursday that there are so many ways to make online bets that stating such
bets are secure is "just a guess to make people happy for the most part."

Nevada regulators are devising regulations that make it the first state to
start legalized Internet gambling  provided there's no conflict with the
Justice Department (news - web sites) or Congress.

A major concern is by Nevada authorities is that online gambling occur only in
jurisdictions where it's approved, but McDermott said, "There's no way to be
absolutely certain where a person is on the Internet."

Nevada-based Control Board staffers testing security of existing Internet
gambling, largely conducted offshore because of the U.S. ban, easily made it
look like they were making online contacts from Canada, he said.

McDermott also said one of the major problems with Internet gambling is
maintaining adequate internal controls to keep out hackers or block in-house
cheating.

He said a recent scam in England cost an Internet gambling operation about $1.6
million before a rigged online blackjack game was spotted.

Hackers trying to get into online casinos' computers can "basically run amok in
your computer" with e-mail viruses and other techniques, he said.

Elaborate security measures such as electronic fingerprint or facial
recognition systems also help  but McDermott said they're expensive and still
susceptible to breakdown due to simple things like "the dirt and crud factor"
in such systems.

The report to the commission follows a Nevada attorney general's analysis last
month that also provided no easy answers to questions about legality of
Internet gambling  "absent congressional guidance."

While acknowledging there are many hurdles, casino executives have said they
see a huge untapped market for licensed Internet gambling.

Experts estimate that revenues from Internet gambling will hit $4 billion this
year, and could reach $6 billion by 2003.
***********************
 Wired News
Mr. and Ms. Geek Go to Washington
A group of high-profile software developers and technologists have announced
plans to form their own political action committee, in response to what they
see as the ill effects of corporate lobbyists on their ability to develop new
technologies. 

Called GeekPAC, the fledgling organization already counts several high-profile
hackers and writers among its numbers, including open-source evangelist Eric
Raymond and technology business writer David "Doc" Searls. 

GeekPAC was conceived by Searls and Jeff Gerhardt, the CEO of a Chicago-area
ISP who also hosts The Linux Show webcast. 

In addition, the two announced plans to form another organization, the American
Open Technology Consortium, or AOTC, which will issue advisory statements but
not perform political lobbying. Among the first AOTC members was Paul Jones,
the University of North Carolina professor best known for UNC's pioneering
Sunsite information server project (later renamed Ibiblio). 

The working draft of a document posted by Gerhardt and Searls and edited by
Raymond last week claims the Internet faces "an attempted takeover by corporate
monopolists using government as their tool." 

The list of grievances cites a familiar alphabet soup of legislation that
hackers hate -- DMCA, UCITA, CBDTPA, CARP - as well as the RBOCs, or Baby
Bells. Gerhardt called the Tauzin-Dingell Broadband Deployment Act currently
before Congress "a bill written by the RBOCs, in an attempt to legislate the
ISP community out of existence." 

At the same time Gerhardt was fuming over Tauzin-Dingell, he said, "Doc heard
about CARP (the U.S. Copyright Arbitration Panel that, under the DMCA, sets
royalty fees on webcasters), and he sent me an e-mail saying that he wanted to
march on Washington. 

"He was not serious I know, but it got a bunch of us thinking. Then came the
Hollings bill, and we reached critical mass. Although we had a few minor
success stories over the years at activism, we really needed a broad-based
coalition that addressed 'geek issues' in general." 

Those issues revolve around a common theme: the fear that federal laws
regarding digital rights management and telecommunications will stop Internet
developers from experimenting with new means of conveying and interacting with
information, in order to protect the bottom lines of a few major companies. 

"Our ideals are very pro business," Gerhardt said. "It's just the businesses we
are 'pro' do not attempt monopolistic land grabs." 

Raymond was more direct. "The technology sector, which is 30 times the size of
big media, is rightly terrified of the kind of ignorant design-by-legislation
we've seen in the DMCA and SSSCA/CBTPDA," he said. "These laws are the worst
kind of market-rigging, a thinly-disguised form of corporate welfare that's
doomed to fail in its stated objectives but could wreck healthy industries." 

Searls said he thinks legislators simply don't understand enough about
technology to realize the full impact of legislation proposed by lobbyists for
entertainment, telecom and other industries. "I just want to bring sense to it
-- that's what lobbyists do," he said. "They corner these people (in Congress)
and get some time with them and say, 'You see this here? This is dumb. This is
smart.'"

The political alignment of conservative Republican Gerhardt, liberal pacifist
Searls, and libertarian gun advocate Raymond might seem like the strangest of
bedfellows, but Gerhardt says GeekPAC members are being asked to unite on
common goals while still maintaining their ideological differences - an
approach he calls "multi-partisan" rather than nonpartisan. 

Raymond said the group is still figuring out how it will carry out its plans to
get in front of legislators and explain the technology developer's point of
view. "Whether we'll execute with the conventional,
hire-lobbyists-and-throw-money approach or be able to evolve more creative ways
to make the community's voice felt in Congress is an interesting question," he
said. 

At least one Capitol veteran thinks GeekPAC has a chance of being heard, even
without piles of money to throw. "I don't think this is a pay-to-play kind of
system," said Rick White, president and CEO of the TechNet lobby and former
U.S. representative for Washington state's 1st district, which includes
Microsoft headquarters. 

"If you're from the representative's home district, it's not too hard to get a
15-minute appointment, whether you're a big contributor or not," he said. 

White said he applauded GeekPAC's formation, stating that Congress might eye
pending laws differently if members had better counsel on their technological
ramifications. 

TechNet has similar concerns over DRM and broadband legislation, he said. "You
don't want the government coming up with a technical standard," he said. 

But, he said, aspiring geek lobbyists will need to take as much instruction as
they give. "Have an open mind, respect the process, try to get rid of your
preconceived notions," he advised. "There's a lot of things in politics to be
cynical about, but you have to avoid the temptation to get too cynical too
soon." 

"A lot of people in the tech community are looking for the formula that
produces the right results," White said. "But it's not something where you pay
your money and put in your input and a result pops out at the other end. People
need to learn to trust you, that your advice is fair and straightforward." 
*********************
BBC
Online pharmacy warning

Hundreds of prescription drugs are available to buy illegally over the
internet, according to a report by monitoring company Envisional. 

The firm says so-called 'Online pharmacies' are exposing consumers to huge
risks and are creating problems for pharmaceutical companies whose products are
being sold on unregulated sites. 

The drugs are being sold to consumers in the UK and around the world without
any attention being paid to local regulations. 

Many sites will deliver drugs direct to consumers, without prescription. 

Envisional says all types of prescription drugs are being sold but most popular
are drugs for sexual dysfunction like Viagra, for hair and weight loss,
pregnancy prevention, depression and sleeping disorders. 

The research showed it was also easy to obtain performance-enhancing drugs used
by bodybuilders and athletes, including banned substances like EPO. 

Huge market 

It is estimated that the market for online prescription drugs will be US$4.4bn.


The report says consumers are not properly aware of the dangers and often
advertisements on the site say the drugs are safe. 

Viagra, for instance, should not be given to men who are taking certain types
of heart medication. 

The problem is unquantifiable - because there are hundreds of sites and this is
growing every day. 

Envisional is calling for international legislation to tackle the problem. 

Chief executive Brian Earle, chief executive of Envisional, said that most
online pharmacies selling drugs without prescription only did so to overseas
customers - thus avoiding jurisdiction in their own country. 

He said: "The pharmacy and prescription system exists for a reason - to protect
consumers from harmful side-effects that they are not trained to understand. 

"If a doctor tells a patient that he cannot be prescribed Viagra because of a
weak heart or other medical condition, that patient can easily obtain the drug
over the internet. 

"There was a proposal that the US Government impose fines on websites that
operate in this way but further investigation is certainly needed. 

"In the UK, advertising prescription drugs direct to consumers is illegal but,
owing to the international nature of the Internet, bodies like the government's
Medical Control Agency (MCA) are often powerless to step in." 

Mr Earle stressed that there were perfectly good pharmacies selling online who
insisted on a prescription before selling drugs.
**********************
Mercury News
Immigrants link Silicon Valley to global economy
By K. Oanh Ha
Mercury News

 
Silicon Valley immigrants play a significant role in building the global
economy, according to a report being released today.

Local immigrant professionals maintain extensive ties to their homes, bringing
business opportunities, technology and networks that link Silicon Valley to
urban centers in countries like India, China and Taiwan, according to a study
by the non-profit Public Policy Institute of California.

``This is very unique to Silicon Valley. You don't see this happening on a
large scale across the U.S.,'' said AnnaLee Saxenian, the study's author and
expert on immigrant entrepreneurship in the Bay Area. ``Places that were
peripheral not so long ago are now closely connected to the world center of
technology here.''

The study is based on a survey of 2,300 immigrants drawn from the memberships
of 17 leading professional associations in Silicon Valley. The survey was
conducted online. Nearly 90 percent of those who participated in the study were
immigrants from India, China and Taiwan.

The study found:

? Eighty-two percent of those surveyed said they share information about
technology with colleagues in their native countries. And 80 percent pass along
information about jobs and business opportunities in America.

? Forty percent reported helping to arrange business contracts in their
homelands. More than a quarter advised or consulted for companies there, while
nearly 20 percent have invested their own money in start-ups or venture funds
in their homelands.

? Indian professionals cited the availability of skilled labor and the low cost
of labor as major reasons for doing business in their native country, while
Chinese immigrants said access to the market was the main reason for
establishing business ties to China.

The findings debunk common perceptions about globalization, said Saxenian, who
teaches regional economic development at University of California-Berkeley.

``When we talk about globalization, we think about multinational corporations
not small start-ups,'' she said. ``The flow of information of people and
capital between Silicon Valley and these places is quite high.''

Of the 600 entrepreneurs in the survey, half have set up subsidiaries, joint
ventures, sub-contracting or other business operations in their homelands.

For venture capitalists like Mark Stevens at Sequoia Capital, U.S. start-ups
that have business relationships in their home countries are attractive
investments. ``They'll use their alumni relationships as a recruiting pipleline
and set-up subsidiaries to take advantage of talent,'' said Stevens, a general
partner. ``And it's much cheaper.''

The transnational business networks also have supplied Sequoia with investment
opportunities. ``We're actually now financing some young relatives or friends
of folks we financed five years ago,'' he said.

Jessie Singh, an immigrant from Punjab, India, is finally achieving his dream
of doing business in his home country. Singh came to the United States in 1986
and now runs a Milpitas tech company, BJS Group. He recently acquired a fiber
optics company and plans to build a manufacturing facility in Haryana, India,
and to hire 100 local residents.

Singh is vying to be the first manufacturer of fiber optical switches in India.
Singh thinks his background will give him an edge in India.

``You understand the local language, their customs and behaviors,'' said Singh.
``You have connections, family and friends. You understand how the system
works. You have a little more power.''

Singh last year arranged for the states of Punjab and California to be ``sister
states'' to pave the way for more trade between them. He's currently working on
an agreement between San Jose State University and Punjab Agriculture
University to create an international business program at the Punjabi school
modeled on the SJSU curriculum.

``We grew up there. We know what it's like to have limited resources,'' said
Singh. ``Here the opportunities are limitless. That's what I'm trying to create
on some level in India.''

The study by the Public Policy Institute also found that three of four Indian
and Chinese immigrant professionals would consider starting businesses in their
native countries in the future.

Despite political tensions, nearly a third reported meeting with their home
country's government officials, even in China. Bobby Chao, an entrepreneur who
immigrated from Taiwan nearly 30 years ago, is a board director of Monte Jade,
a business networking association founded by Taiwanese immigrants in Silicon
Valley. This weekend, he's leading the first Monte Jade delegation to China.

The 30-person group, half of whom are Taiwanese-American immigrants, will visit
many of the largest corporate titans in China. They'll also meet with Chinese
officials to talk about importing U.S. entrepreneurship, investment and
technology into China.

``You have to go beyond the political platform,'' said Chao, who is also
chairman of DragonVenture, a Palo-Alto venture capital firm looking to invest
$60 million over the next five years in Chinese companies. ``The political
platform is always there. You can't ignore it, but people close an eye (to
politics) when we talk about business and economic relationships.''

The business ties that immigrants establish between Silicon Valley and their
homelands not only stimulate economic changes, but also might help cultivate a
new generation of entrepreneurs.

``Because information travels so quickly, people in India are very aware of the
successes of Indians here,'' said Saxenian. ``There's a tremendous amount of
confidence in India that it can be involved in the world economy in a very
successful way. In rural areas, young people now want to work with computers
and be a part of the information technology industry.''
**********************
Reuters
Japan Plans to Tighten Laws on Internet Child Porn 
Thu Apr 18,11:22 PM ET 

TOKYO (Reuters) - Japan, long accused of having a lax attitude toward child
pornography, plans to tighten its laws to make transmission of such material
over the Internet a criminal offense, government officials said Friday. 

  
A landmark 1999 law made it illegal to sell or distribute child pornography in
Japan, but left gaping loopholes regarding online transmission of pornographic
material. 

The move is intended to bring Japan into line with other nations in order to
ratify a Council of Europe treaty on cyber crime that it signed last year, said
an official at the trade ministry, under whose jurisdiction the issue falls. 

"To create homepages containing child porn, and post them on the Internet for
everyone to see, was prohibited by the earlier law but transmitting such data
was not," he said. 

The ministry is discussing the issue with police in the hopes of being able to
submit bills to parliament, perhaps as early as next January, to revise the
laws, the official said. 

Other measures may include prohibiting the downloading child pornography onto
floppy disks and passing them to another person, the official said. 

Despite the 1999 law, Japan is still believed to be the world's largest
distributor of child pornography, and activists say the situation is unlikely
to improve much until public awareness of the issue is raised.
***************************
San Francisco Chronicle
Intel's quixotic quest for next billion users 
Unlikely team trying to invent future

Hillsboro, Ore. -- Humanities majors do have a future in high tech after all. 

In the heart of chip giant Intel Corp.'s research and development group here in
the great Northwest is a small cadre of researchers who don't want anything to
do with math, physics or chemistry. 

They are anthropologists and psychologists who hang out with teenagers in local
hostels, young families in their living rooms, fishermen on their boats in
Alaska, American Indians on Navajo reservations and the poor in Brazil. 

Their mission is to find out how technology can penetrate some of the
unlikeliest places and spell potential future market growth for Intel. 

"Our job is to inject some awareness of real people into the technology efforts
that are going on in (Intel Labs)," said Tony Salvador, an Intel psychologist
who sports a fancy title of Everyday Life Designer. 

The chipmaker is not the only high-tech company that has gone down this road.
Such firms as Hewlett Packard, Microsoft and Xerox have or have had similar
sorts of researchers on staff. But one thing that sets Intel apart is that the
other companies produce end-user products while the chipmaker makes components
most consumers never see, said Nathan Brookwood, an analyst at Insight 64 in
Saratoga. 

One example is Intel getting on board to support Microsoft's tablet PC, a
handheld computer touted in recent years by Bill Gates as the next big thing.
Intel researchers have done their own work in support of the device. 


THE WHOLE PIE
"Intel has always been much more involved in end-products that use their chips
than other semiconductor companies," said Brookwood. The firm's motivation, he
said, is not to just gobble up existing market share, but to grow the whole
pie. 

"One clear downside is that it'll not only help Intel, but also its
competitors," he said. 

Having such researchers on staff is clearly one of the perks of being the
world's biggest chipmaker and having the cash and resources to pay for them,
Brookwood said. 

Salvador said that when he starts a project, he doesn't have any electronic
gizmo or product in mind. 

"We go out and study not necessarily end-users, but people who may be one day
end-users, to get a better understanding of their daily activities, needs,
aspirations and desires," he said. 

Salvador has a doctorate in psychology and admits that there isn't an ounce of
technical sense in his body. Together with about a dozen others in his team, 

the group is the right-brain trust of his company. 

"We don't necessarily make a product. Our job is to influence what technology
gets developed," Salvador said. 

Consider the tablet PC, pen-controlled and wirelessly networked portable slates
that Microsoft's Gates hyped during last November's Comdex in Las Vegas as the
next big wave of computing. Of course, that means chipmakers like Intel would
have to make microprocessors that can run these machines. 

In 1995, Salvador found 10 families with young children and spent evenings with
them, getting a clear picture on their daily routines. 


TABLET PC
He found that while family members spend most of their time in the kitchen or
family room area, the computer was sitting in the den. Salvador's idea was a
portable device that's wirelessly connected to the Internet and could be easily
passed around in the family room, like a tablet PC. 

Salvador acknowledges that the tablet PC idea is not Intel's creation, but his
company definitely supports the movement, especially because the chipmaker
could substantially benefit if Gates' prediction comes true. 

However, not all research leads to specific product development. 

In the summer of 1997, Salvador and John Sherry, an Intel anthropologist,
sought out what they considered the "most anti-PC environment you can think of,
" and landed in an Alaskan fish cannery. 

They found a tender operator who weighs the fish, credits the fishermen and
issues reports to the Alaska Fish and Game Department. 

"The guy . . . had a little PC subnotebook duct-taped to the doorway of the
cabin of this boat," said Sherry. "He said to us, 'I need a PC I can blast with
a deck hose."' 

The researchers walked away with more ideas about not only automating all of
the calculations and reports generated by the operator, but also a dependable
wireless network so he can coordinate all of his fishing boats, Sherry said. 

The latest project is looking at how traveling youths use laptops and wireless
computing. Ken Anderson, Intel's design anthropologist, will spend the next
year hanging out with guests at the Hawthorne Hostel in a trendy southeast
Portland neighborhood. 

"We're using 19th century science to invent the future," Anderson said. "That's
what we do." 

Other than Intel's executives who constantly fly around the world closing deals
and doing business, Salvador, Sherry, Anderson and their group may just be
second in terms of racking up frequent flyer miles. 

Last month, Salvador spent two weeks in Rio de Janeiro looking at ways to bring
computing and Internet access to poor neighborhoods. 


OFF TO MOROCCO
This month, another researcher is flying to Morocco to study ways in which the
same access can be brought to women in that country. And next month, a
researcher is visiting a Navajo reservation in Arizona. 

The projects are all part of what some high-tech companies' executives,
including Intel Chief Executive Officer Craig Barrett, have called an attempt
to put the next billion people online. 

"Making the kinds of observations that we're seeing, especially in the space
like this is relevant to Intel. The bottom line is that it's a bottom- line
question," Salvador said. 

While gadgets become more complicated and the technology marches on, it is
important for new products to remain relevant to people, and the danger is that
what is considered cool by the engineers may be useless for consumers, he said.


"Our job is to make that bridge," Salvador said.
*********************
Reuters
Europe PC Sales Grow Despite Declines in the West 
Thu Apr 18, 5:05 PM ET 
By Lucas van Grinsven 

LONDON (Reuters) - Sales of personal computers in Europe, Middle East and
Africa (EMEA) climbed back into growth in the first quarter, but expansion was
slowed by falling sales in Western Europe, Gartner Dataquest said Thursday. 

  
Sales in Western Europe, where 71 percent of all PCs in the region are sold,
fell for the fourth consecutive quarter, declining four percent in the first
three months of the year. 

Eastern European sales growth continued to be strong, around 15 percent, more
than offsetting the decline in Western Europe. 

In the region as a whole, including Africa and the Middle East, personal
computer makers sold 2.4 percent more PCs compared with the same period a year
earlier. 

The research group said the first quarter looked weak because of a relatively
strong comparable quarter last year, when unit sales grew 6.1 percent. As the
year continues, quarterly comparisons will become more favorable and sales in
Western Europe will return to modest growth. 

Furthermore, sales in the next quarter could be spurred by rising prices, in
contrast to the usual price deflation which rewards hesitant buyers with
cheaper PCs the longer they wait. 

The average selling prices of personal computers began to climb toward the end
of March, but this has not yet had an impact on sales, Gartner said. The group
has started advising enterprises to invest in PCs before they become more
expensive. The industry is used to price declines, and has seen prices of key
components like DRAM memory chips fall by 90 percent last year. But lately
prices for flat screens and memory chips have risen sharply, and the cost of
building a basic personal computer has risen by 11 percent in the last three to
four months, said principal analyst Brian Gammage. 

"Some vendors have not yet raised their prices. They're in denial. But in the
end they will have to, because their profit margins are just 10 percent," he
said. 

DELL TOP GAINER 

Number one Compaq lost share again, falling to 12.7 percent from 14.1 percent
in the first three months of last year. Its fourth quarter share was also 12.7
percent. Runner-up Dell was the top gainer, narrowing the gap to Compaq by
raising its market share to 9.7 percent from 9.2 percent a year earlier. Its
market share was 8.6 percent in the fourth quarter of 2001. 

But its growth has been a bit more muted compared with previous years, because
unit sales in the key German and British markets collapsed by a double digit
percentage, according to Gammage. 

"The fact that Dell still managed to grow sales and market share shows they
have become less reliant on these two markets, Gammage added. "It's good news
for Dell." 

Third-ranked Hewlett-Packard was steady compared with last year's first
quarter, at 8.3 percent, although it gained slightly on the fourth quarter when
it had 7.9 percent and had to share its number three slot with Fujitsu-Siemens.


This quarter, the Japanese-German joint venture lost some ground, falling to
7.6 percent from 7.8 percent, but Gartner said Fujitsu-Siemens appeared to have
"finally halted its downward slide" that has characterized its performance
since the creation of the joint venture in 1999. 

Number five International Business Machines Corp declined further to 4.8
percent from 5.7 percent a year earlier. Its fourth quarter share was 5.1
percent. 

The total number of computers sold was 10.23 million, including desktops,
laptops and small servers. In the comparable quarter last year the total was
9.99 million units, and Gartner said last year's first quarter was unusually
strong due to heavy corporate demand. 
*********************
Los Angeles Times
The Invisible Lightness of Beams
Company promotes Internet access via laser beams that zap through windows.
By ROY RIVENBURG
TIMES STAFF WRITER

April 19 2002

Look! Up in the sky, it's a ... well, actually, you can't see it. But it's
there.

A company called Terabeam recently landed in Los Angeles and announced plans to
"send invisible light beams through the air downtown."

Hoping to meet some UFO wackos, we trekked to a Wilshire Boulevard skyscraper
and passed through a security checkpoint. Ascending to the 20th floor, we were
greeted by humanoid creatures who--to our great disappointment--insisted they
were from a Seattle suburb, not another galaxy. Even so, Terabeam is an odd
enterprise. Founded five years ago by an eccentric inventor, the company
delivers high-speed Internet access via laser beams zapped through office
windows. It might sound like science fiction, but Terabeam is actually
borrowing technology developed by the military during the Cold War, when
submarines used blue-green lasers to chat with satellites.

Now, an infrared version of that system is hailed as the solution to a problem
that has vexed the telecommunications industry for years. In trying to wire the
nation for lightning-fast transmission of movies, voice and other data,
companies such as the now-bankrupt Global Crossing have buried thousands of
miles of fiber-optic cable. But very few customers have been able to plug into
the network. That's because the information superhighway becomes a dirt road
inside most cities. Extending fiber-optic power to individual homes and
businesses means ripping up streets and sidewalks, a time-consuming process
that costs upward of $1 million per mile in downtown areas.

To bypass the roadblock, Terabeam and several competitors are selling "fiber
optics without the fiber." They install space-age laser devices on high-rise
rooftops and windowsills, then beam data through the sky, building to building.
Think of it as an electronic version of the carrier pigeon, except this
"pigeon" hauls enough information to fill a 747 and flies at the speed of
light.

Like many a "revolutionary, paradigm-shattering, we-can-be-filthy-rich"
technology, this one is stained with red ink. Lucent has poured $450 million
into Terabeam, which laid off employees last year; Nortel and Qualcomm are
backing rival AirFiber, also unprofitable.

Meanwhile, questions linger. Will the lasers cook birds in mid-flight? Does the
system work in fog or through dirty windows? And, can a nearsighted person
perform do-it-yourself Lasik eye surgery by staring into the laser?

Terabeam officials have heard these queries before--except the one about
do-it-yourself eye surgery. Company boss Dan Hesse, who previously ran AT&T's
Wireless division, insists the lasers are harmless to birds and humans: "You
can look directly into it for as long as you want with no damage to your eye."

Uh, go right ahead, Dan. We'll take your word for it.

As for fog and other aerial impediments, Terabeam claims to have eliminated all
the bugs. For example, in downtown Seattle, where the company debuted, laser
transmitters were spaced close enough to their targets that the beams could
slice through the city's thick fog.

Even when the Kingdome was imploded, the resulting cloud of dust had no effect
on Terabeam's service, said company spokesman Lou Gellos.

But using infrared lasers can still be tricky. For starters, office windows
come in hundreds of colors and glass styles, each of which diffuses the light
beam differently. Terabeam has a lab that does nothing but test various types
of mirrored glass so that the company's equipment installers can adjust the
laser signal accordingly. Of course, they first have to find the beam, which is
invisible. For that, Terabeam has developed a hand-held beam detector, which is
similar to a stud finder but tracks infrared light.

Terabeam's customers include Microsoft, Seattle University and four of the
city's big hotels, which use the laser feed to give guests super-quick Internet
access.

Speaking of hotel guests, did we mention the Big Brother-style cameras hidden
inside each laser unit? During service outages, the cameras relay pictures of
the nearest laser transmitter to Terabeam headquarters. Thus, when a Seattle
law firm lost service last year, Terabeam trouble-shooters instantly saw the
problem: Someone had thrown a coat over the firm's laser unit.

*

Camera Solves Mystery: a Ship-Related Blip

A similar incident happened in New York City after Sept. 11, when Terabeam
noticed a momentary blip in service between Merrill Lynch's Manhattan office
and a branch across the Hudson River (Terabeam had set up the link after the
attack on the World Trade Center severed underground fiber-optic cables).
Trouble-shooters rewound the camera's tape and saw a Navy cruise ship mast
gliding past, briefly blocking the laser.

Does this mean Terabeam can peep into hotel windows via laser units aimed
toward the building? At first, a company official acknowledged the possibility:
"At some level, yeah, you could see other things [besides the laser unit]." But
then he backpedaled, noting that the pictures are "very grainy black and white"
and usually focused tightly on the laser unit itself.

"These aren't super cameras with telescopes," added spokesman Gellos. "They can
only make out basic shapes." In hotels, only Terabeam's equipment is visible,
he said.

To showcase the advantages of Terabeam's service, Gellos arranged a quirky
demonstration. Sitting in the company's L.A. office, he flicked on a TV screen
linked to Seattle via fiber-optic cable and digital video cameras.

"Anne, are you there?" he said to an empty Seattle office. No reply. A moment
later, she materialized, armed with maracas, four TVs and what appeared to be
the world's largest pingpong paddle.

To show how much data a single laser signal can carry, she turned on her TV
sets, which began playing four different digital movies piped in on the same
invisible light ray that was transmitting her voice and image to Terabeam's
L.A. office. "All of this is coming into my office through this window," she
said, motioning toward a laser unit and the Seattle skyline behind her.

She rattled the maracas for effect, then picked up the giant pingpong paddle
and walked to the laser device. Using the paddle like a portable solar eclipse,
she began blocking the laser beam. At halfway toward total eclipse, the movies
and the videoconference continued flawlessly. But when the beam was 90%
blocked, everything froze. Once the paddle was removed, the movies resumed
exactly where they left off.

*

Service Costs at Least $2,000 a Month

In addition to Seattle, Terabeam operates in Denver, Dallas and now Los
Angeles, charging customers a minimum of $2,000 a month for service. Company
execs originally hoped to be in dozens of cities by this time, but scaled back
drastically as the economy stumbled.

Despite setbacks, the potential market for fiber optics has attracted a variety
of entrepreneurs. Some, like Terabeam, use lasers. Others rely on microwave
signals. Broadband Highway of Encino uses both. And CityNet Telecommunications
runs fiber-optic cable through sewer lines, thus avoiding the cost of digging
up streets.

"Out of your toilet comes high-speed Internet access," says Peter Fuhr, a San
Jose State University electrical engineering professor who worked on wireless
optics for NASA. "It's an interesting idea."

Nobody knows which method has the edge, let alone whether some future
technology might make them all obsolete.

Dave Rutledge, who chairs the electrical engineering department at Caltech, was
hired by a Terabeam competitor to figure out whether the laser idea is just a
passing fad. Forbes magazine sides with the fad contingent. "It sure sounds
neat, but it always does at first," said a May 2000 article critiquing
Terabeam.

Even if the concept proves viable, that's no guarantee it will succeed. As
Rutledge noted: "Sometimes, timing is more important than technology. Is this
the right time? I don't know."

Maybe it would help if the lasers also cleaned the windows of any building they
zapped into.
**********************
USA Today
PC sales show signs of stabilizing

BOSTON (AP)  The personal computer market, devastated by the economic slowdown,
fell again in the first quarter but showed signs of stabilizing, according to a
new report.

Research firm IDC reported Thursday that worldwide PC sales fell to 31,359,000
in the first quarter, down 2.7% from the year-ago quarter and down 8.9% from
the fourth quarter of 2001.

However, PC sales historically decline 10.4% sequentially in the first quarter,
so the latest numbers indicate a stabilization, said Roger Kay, IDC's director
of client computing.

In the United States, PC sales were comparatively stronger, falling 0.4%. Dell
fared the best, rising 19.4% from 2.5 million shipments to just more than 3
million, while Gateway's U.S. shipments fell 30% to 650,000.

"The U.S. went into the recession first this time, and it's also coming out
first," Kay said. "You're seeing better numbers in the U.S. than worldwide in
this particular quarter. It's not as if we somehow go into boom time, but
there's definitely a turn in the right direction."

In December, Kay had predicted a 2.5% decline in the U.S. market for 2002. He
is now expecting 2.5% growth.
******************
USA Today
MasterCard to stop third-party transactions

By Andrew Backover, USA TODAY

A new rule by MasterCard could crimp online commerce by stopping merchants from
accepting credit card payments through third parties, such as the popular
PayPal, USA TODAY has learned.

Unless a settlement is reached, on May 1 Internet merchants and other
mom-and-pop firms that rely on third-party billing could miss out on sales via
the USA's No. 2 online credit card. And MasterCard holders could have a harder
time using their cards at many sites that use PayPal and similar services, says
Gartner analyst Avivah Litan.

"The promise of the Internet was that anyone could set up shop and get paid,"
she says. "It's not a level playing field anymore if this rule goes through."

According to MasterCard, its 15,000 members, such as banks and credit unions,
won't be able to process credit card transactions using third-party services
such as PayPal. They are used most often by small merchants who cannot afford
to take MasterCard, other credit cards or checks.

Even if the MasterCard change goes through, consumers would still be able to
use the card to buy goods from Web sites that deal directly with MasterCard.

The biggest third-party system is PayPal. It has about 13 million registered
users, most of whom are small Web merchants or people who frequent auction
sites.

The change would require those merchants to set up deals with banks so they
could take MasterCard directly. That's a time-consuming and costly process,
especially for small merchants.

The reason for the change, says MasterCard spokesman Alex Lau, is to protect
financial institutions and card holders from fraud and identity theft.

Based on the rule's wording, it could affect other third-party services such as
Yahoo's PayDirect and eBay Payments, Gartner's Litan says. Yahoo could not be
reached. EBay says it does not expect to be affected because its services work
through Wells Fargo.

PayPal is working hard to get an exemption, it says. Catering to small Web
merchants and individuals, PayPal will sign them up with fewer hassles and
lower fees than banks. PayPal uses its agreements with big banks to process
credit card payments for these customers. PayPal has been one of the few
Internet initial public offerings in recent years. It closed Thursday at
$24.46.

PayPal spokesman Vince Sollitto says PayPal is "hopeful and confident" it will
come to new terms with MasterCard. Visa says it still accepts PayPal. American
Express still accepts PayPal and one other service.

The change is likely aimed at porn and gaming sites that have higher
occurrences of credit card fraud and identity theft, Litan says. One in 20
online consumers were victimized by credit card fraud last year, she says.
**********************
Federal Computer Week
Forman: Feds hungry for change

When he joined the Bush administration as its chief e-government architect last
summer, Mark Forman thought one of his biggest problems would be "changing the
culture of the government workforce." He had visions of endlessly prodding
federal employees to embrace information technology and current management
techniques. 

What he discovered was a surprise. 

The federal workforce is "very hungry for change," he told an international
gathering of e-government officials in Seattle April 17. "It was just
everywhere you look. Employees were saying, 'Give us a modern work
environment.' "

That message came through in groups of government workers, via e-mail messages
and "just talking to many, many employees," said Forman, who is associate
director of information technology and e-government in the Office of Management
and Budget.

Repeatedly, government workers told him they are anxious to work
collaboratively and move into a Web-enabled work environment.

"And then you would always see this recurring barrier: 'My supervisor won't let
us do this' or 'We know this is good for the government, but my supervisor
can't figure out how to get it funded,' " he said. 

"There is a layer of supervisors and executives that cannot change very
easily," Forman said. Aging midlevel managers, he discovered, are a major
impediment to e-government progress.

Fortunately, it's at least partially a self-solving problem.

During the next five years, half of all federal government workers will become
eligible to retire. And many who depart will be the obstructing managers,
Forman said in an address.

The people Forman hopes to attract to government jobs "are being taught in
school and college how to do team-based problem-solving and things like that,"
he said. "That's exactly what we want to improve the quality of service and
accelerate response times in the way that government operates."

But will those potential workers be willing to leave the "Web-enabled
environment" of school and the private sector to work in government?

"Government is still living in a paper world  the way we think, the way we
manage," Forman said. That makes it difficult to attract workers accustomed to
an electronic workplace.

A second surprise, Forman said, is that the public is more eager for
e-government than he expected. In the past year, 42 million people have used
e-government to learn about government policies, he said, and 23 million "have
used it actually to comment on policies and regulations." Forman said he did
not expect that much interest in "participatory democracy." 

OMB's office of regulatory affairs is working on ways to involve citizens in
rulemaking by taking advantage of Web technology at the front end and knowledge
management tools at the back end, Forman said.

Citizens already have Web access to read and comment on agencies' proposed
rulemakings. But what does an agency do with 50,000 or 100,000 comments? Forman
asked. "How do you turn that data into information that can be used to improve"
rules and agency enforcement of them?

"Knowledge management," Forman said.

Several agencies have undertaken projects to use knowledge management to
automatically analyze comments on rules so that agencies can incorporate public
comments into rulemaking and enforcement, he said.
*********************
Federal Computer Week
Colleges make cybersecurity pledge

Higher education organizations have joined the fight to secure cyberspace by
endorsing a framework for action.

"Colleges and universities have always played a major role in defending our
country and keeping our economy healthy," said Richard Clarke, President Bush's
cyberspace security adviser, speaking April 18 at a conference on policy
affecting information technology in higher education. "So it's not just about
protecting research going on at your [university]. It's about protecting your
country."

The framework the organizations endorsed will serve as a basis for coordinating
cybersecurity activities at the campus and national levels. It calls for:

* Making IT security a higher and more visible priority in higher education.

* Doing a better job with existing security tools, including revising
institutional policies.

* Developing improved security for future research and education networks.

* Raising the level of security collaboration among higher education, industry
and government.

* Integrating higher education work on security into the broader national
effort to strengthen critical infrastructure.

Clarke further asked colleges and universities to develop their own strategies
to defend "their bit of cyberspace" as the Bush administration works out a
national plan. The framework provides a foundation for those strategies.

"The [framework] is a good first step in that direction," he said at the
Networking 2002 event in Washington, D.C. Higher education organizations also
can contribute research, training and education, he added.

"My only concern would be that once those [strategies] are submitted, there
needs to be discussion and integration [on] state, local and university
[levels]," said Marilu Goodyear, vice chancellor for information services at
the University of Kansas. 

Supporters of the framework include the American Association of Community
Colleges, the American Association of State Colleges and Universities, the
American Council on Education, the Association of American Universities, the
Association of Research Libraries, the National Association of College and
University Business Officers, the National Association of Independent Colleges
and Universities, and the National Association of State Universities and Land
Grant Colleges.

Another effort under way on campuses is the Federal Cyber Service, which
provides scholarships to students studying information technology security.

The National Science Foundation program, launched in September 2001, is
operating at 10 universities. President Bush has requested funding to expand it
to 20 schools and 440 students, Clarke said.

Under the program, with every year of financial support received comes a
commitment to work a year in the federal government. The scholarships average
$30,000.

"It's a terribly small program, I think, right now," Clarke said. "Frankly, 440
students is only going to be the tip of the iceberg of what we need."
*********************
Federal Computer Week
Pa. eases business registry

Hanging an "open for business" sign in Pennsylvania has become a little easier.

The commonwealth is revamping a one-stop business registration Web site, PA
Open for Business (www.paopen4business.state.pa.us), a service that
automatically parcels information to the State, Revenue and Labor, and Industry
departments. Instead of a prospective business owner filling out multiple forms
multiple times with those agencies, site registrants type in information once.

"We're the only state in the nation that interacts with three agencies like
that," said Marty Rupert, project manager. Since the site debuted in September
2001, it has had more than 19 million hits and more than 2,500 business
registrations. 

Use of the site during normal work hours and nontraditional work hours were
"percentage points of being even," he said. "We nailed that part of it: What
constituents wanted  access to government on their time frame."

Even with such success, Rupert said that commonwealth officials are convening
focus groups to improve the functionality and usability of the site, which runs
on Microsoft Corp.'s BizTalk Server 2000 and SQL Server.

Steven Halliwell, an enterprise strategy consultant with Microsoft Consulting
Services, said functionality would be added every three to six months. Planned
for early fall, the site will incorporate the company's .Net framework, which
would enable the application to run more securely, faster and with fewer lines
of code. "Users will definitely experience a big boost in the efficiency of the
site," he said.

Another feature will enable a customer to view and manage their records, he
said. For example, a registrant could change an office address, add additional
sales location, or apply online for a hazardous material permit. The state also
is investigating the participation of another dozen or so agencies to share the
same set of data, Halliwell said.

Other states are watching the site closely. Halliwell said several states have
asked to buy the source code so they could duplicate the service.
******************
Computerworld
ISPs oppose Minnesota Web privacy bill
By BRIAN SULLIVAN 
(April 18, 2002) 

A controversial bill before the Minnesota state legislature would limit how
Internet service providers (ISP) use consumers' private information, and a
lobbying group warned that ISPs will pull out of the state if the bill becomes
law.

The bill would prevent ISPs from collecting data on customers' Web surfing
habits and then selling that data to other companies, said Steve Kelley, the
Democratic state senator who authored one version of the bill. The House and
Senate passed different versions of the legislation and a conference committee
is working on a compromise. 

But opponents hope the bill dies before it ever reaches Gov. Jesse Ventura's
desk. 

The law is poorly organized, poorly worded and could force ISPs to abandon
Minnesota rather than risk legal problems, said Emily Hackett, executive
director of the Washington-based Internet Alliance. The alliance lobbies state
legislatures on behalf of ISPs, marketing and high-tech companies including
@Once, 24/7 Real Media Inc., AOL Time Warner Inc., the Council of Better
Business Bureaus, Encirq Corp., Cox Interactive Media, Juno Online Services,
IBM, Microsoft Corp., WorldCom Inc., Verizon Communications and Yuroka. 

"The way you interpret this law might be very dangerous," Hackett said. "ISPs
would not do business in Minnesota." 

A source at a large ISP agreed with Hackett's characterization. "ISPs would
have to look at doing business in a state that had such an onerous law," he
said. 

"Give me a break," Kelley said. "Let's just make one thing clear, there are 5
million people in the Twin Cities, Minneapolis/St. Paul area. It is the 13th
largest [media market] in the country." Kelley added there are smaller, local
ISPs that could provide Internet service if the national ISPs decide to
withdraw because of the bill. 

Jason Catlett, president of Green Brook, N.J.-based Junkbusters Corp., a
privacy group, also rejected the threat. "That is the kind of statement that
lobbyists always make," Catlett said. "It is a very common scare tactic." 

Both Catlett and Marc Rotenberg, executive director of the Washington-based
Electronic Privacy Information Center, praised the bill. 

ISPs are common carriers such as phone and cable companies, and neither of
those industries can sell consumers' data for profit, they noted. 

"This has a big implication for the national debate," Rotenberg said. 

Catlett said the bill would "close a loophole [in existing laws] that should
have been fixed years ago." He said federal laws have banned ISPs from sharing
their customers' surfing habits with the government and the Minnesota law would
close the door on commercial sharing. 

But Hackett said that argument is meaningless because ISPs don't collect that
data now. She said the law will just make it harder for ISPs to do business. 

"The central problem is that the Internet is not geographic," Hackett said.
"The state of Minnesota is regulating a medium that is by its very nature
global and depends on certain information exchange in order to function." 

Whenever a user goes from one Web site to another, the ISP needs to capture
information to make that transition possible, she said. The Web relies on a
level of interconnectivity and information sharing. 

"I am here and I want to look at this, bring it to me," Hackett said. "As you
are doing it, you have to exchange information." 

Kelley said the bill wouldn't prevent ISPs from operating. 

The bill is aimed at preventing ISPs from selling the surfing habits of users
without their permission, he said. Cable companies can't sell their viewers'
information, phone companies can't sell their users information, and ISPs
shouldn't be able to sell surfing information, Kelley said. 

The shopping habits of consumers are valuable to marketers and companies will
sell that information to make money. But Kelley asked why shouldn't consumers
get something out of that transaction. It is their actions that create the
value so consumers should have control over that information. 

"I don't think it is right for someone with whom I do business to extract value
from my information without my consent," Kelley said. 

Hackett replied that if that is the bill's intent, then it's a waste of time
because ISPs are not collecting that information now. 

But Kelley noted that in the past few years some financially struggling
companies doing business on the Web have changed their privacy policies so they
can sell customer information as another source of revenue. 

But Catlett went further. "So what's her point?" Catlett asked. "When a
lobbyist tells me that you don't have to pass a law because no one would do
this, I don't believe it." 

The only reason to prevent the law is to leave the door open for a future
action, he said. 

There are two versions of the law. One passed by the Democratic-controlled
Senate calls for the law to be enacted with an opt-in provision, meaning that
consumers would have to give permission for their data to be used. 

The other, passed by the Republican-controlled House, calls for an opt-out
provision, which means companies can collect the data unless consumers ask them
to stop. 

Regardless of which bill passes his desk, Ventura, the state's Libertarian
governor, hasn't decided whether he will sign it, according to spokesman John
Woodele. 

"It is a kind of a double-edged sword for the governor," Woodele said. "He
doesn't like government regulation, but the bill does appeal to his Libertarian
side -- the privacy keeping, not providing anyone with an opportunity to get
information on you, not the government or private sources." 
*******************
BBC
Broadband comes to the High Street

The battle for broadband users is moving to the High Street with internet
service provider Freeserve offering ADSL kits direct from shops. 
Consumers will be able to buy a complete broadband connection kit from Dixons,
PC World, Currys and The Link stores across the UK as from 24 April. 

Selling from the High Street worked well in 1998 when Freeserve launched its
dial-up internet service. 

It was the one of the first times net access was offered free and the CD's flew
out of Dixon's stores, quickly making Freeserve one of the leading internet
service providers in the UK. 

Winning partnership 

Freeserve Chief Executive John Pluthero hopes for a similar effect for
broadband. 

"Freeserve and Dixons got the UK's internet market moving for the first time
when we launched and this same combination will have an equally prolific impact
in broadband," he said in a statement. 

The ISP is keen to compete with BT's ISP BTopenworld, which currently dominates
the broadband market. 

In an official complaint to telecoms watchdog Oftel, Freeserve accused BT of
anti-competitive behaviour and giving unfair preference to its own ISP. 

Under Oftel rules, BT must offer wholesale ADSL to any ISP that wants it on an
equal footing. Freeserve says current TV adverts break this impartiality. 

"BT is a wholesaler but the ads are clearly targeted at consumers. It is rather
curious that it is marketing direct to consumers," said a Freeserve
spokesperson. 

The investigation is still "on-going" according to an Oftel spokesperson. 

Growth to continue 

In a speech to the Social Market Foundation, an independent think-tank,
Director General of Oftel David Edmonds stressed the importance of competition
for a healthy broadband market. 

Mr Edmonds said the UK is competing well on the global broadband stage. 

"We are rapidly approaching half a million UK consumers signing up for
high-speed services," he said. 

"I am confident that growth will continue." 
**********************
BBC
Microsoft pictures the future

Microsoft is working on ways to make digital images as easy to change and
improve as text. 
Scientists at the software giant's Cambridge research lab in the UK are
developing tools that automate many of the complex tasks needed to enhance or
edit amateur digital photos or images. 

The tools can automatically trace outlines, seamlessly cover marks or
blemishes, and fill in backgrounds when pieces of an image are removed. 

The researchers are also working on similar tools that automate the editing of
video clips. 

Tool talk 

Professor Andrew Blake, head of the image research group at the Cambridge lab,
said many popular software packages made it difficult for people to make
improvements to their digital images. 

His group is working on the equivalent of the automatic grammar checkers
available in many word-processing packages. 

He said many popular image programs were versions of those used by professional
graphics designers and demanded that people use complex commands or fiddly
techniques to improve images. 

Far better, he said, was to get the computer to help with tasks that would
otherwise involve making changes one pixel at a time or hours spent mastering
the menus and options in the software. 

"We want something that produces a reasonable effect for really not very much
work," he said. 

Picture slices 

One tool produced by the group is called "jetstream". It automates the drawing
of contours around pieces of an image. 

Often marking the edges of an element within an image has to be done pixel by
pixel to ensure that the true outline of the object is traced. 

By contrast jetstream works out by itself where the edges of an image lie. 

"Jetstream explores all the possible slices that a knife might make when
removing the excess from an image element," said Professor Blake. 

By looking forwards and backwards along potential contour lines, the computer
works out the most likely route for the edge. 

Users can redirect the contour path with clicks of a mouse. 

"It checks branches of curves and evaluates curves against the evidence of the
image itself," he said. 

Crop and fill 

Professor Blake's group is also working on ways to seamlessly fill in the hole
left behind when one part of an image is removed. 

Filling these gaps can leave a "shadow" of the cropped element making it
obvious that something has been removed. 

Tools that help fill the holes can take a long time to work, introduce
artefacts or blemishes, and perform worst when trying to replace big chunks of
images. 

The Microsoft team has come up with a tool called "patchwork" that tries to do
a better job. 

"The program looks in different areas of the image to see which piece of
texture it can steal to fill in the hole," said Professor Blake. 

The researchers are also working on tools that can be used to edit and improve
digital home video footage. 

One tool can be told to follow the movements of one element in a video clip,
such as a child or a water-skier, and then crops the footage to keep that
element in the centre of the footage. 

Although only at the experimental stage, the tool can significantly shrink
video clips, yet retain their most interesting parts, said Professor Blake. 

The still image tools being worked on by the image research team will find
their way into a future release of Microsoft's Picture It! software.
********************
BBC
Amnesty for Russia's net pirates

Microsoft has declared a five month amnesty for Russian and Ukrainian internet
cafes and computer clubs caught using pirate software in a bid to encourage
them to switch to legally licensed programmes. 

"The majority of these clubs have a tough time finding the money to pay for
licensed software," says Eugene Danilov, manager of the strategic projects
department of Microsoft CIS office in Moscow. 

"Internet cafes are very important to provide access to the net and promote
communication and education, particularly among the young." 

"Without licenses, these cafes are at risk from the police who use the lack of
legal software to pressure them into paying bribes," he continued. 

Making waves 

The amnesty is good news for surfers such as 24-year-old Anna Golovatiouk at
the TimeOnline café, Eastern Europe's largest internet café with more than 200
terminals, just beside the Kremlin. 

Ms Golovatiouk is from the far east of Russia, six time zones away from Moscow,
and arrived here last summer to look for work.


Without access to the internet she could not afford to phone home to her family
and friends. 

"For me it's very important," she says. 

"I use the internet every couple of days. I couldn't possibly afford my own
computer and internet access at home. 

"I even found my job as a fashion designer on the web." 

Growing business 

More than half the users at this café, which uses licensed software, are
students. 

Young professionals account for a further 30% of users, according to TimeOnline
which charges up to $2 an hour for access to the web. 

Guy Eames, general director of TimeOnline, says that many young Russians can
afford such fees, and that business is growing. 

The café, which opened just over a year ago, is open 24 hours a day, 365 days a
year. 

"Internet cafes are immensely important for Russians and the growth of the
internet here," he said. 

"This is where people try it out for the first time and if they didn't have
cafes they basically wouldn't be online at all." 

Numbers remain low 

Some 4.3 million Russians regularly use the web, just 3% of the population,
according to official statistics released by the Communications Ministry in
February. 

Microsoft decided on the blanket suspension of legal action after a number of
clubs and cafes pleaded for the software giant not to prosecute, and pledged
they would acquire legitimate user licenses. 

Some cafes, struggling to make ends meet, have also asked to postpone payments
to help spread costs during the transitional period. 

Piracy problems 

Counterfeiting is big business in Russia, which is awash with high quality
faked copies of music, videos, and software as well as food and clothes. 

The criminal gangs that run the trade are well financed and highly organised
with many of the fakes produced in Russia and Central Asia using high tech
equipment that costs hundreds of thousands of dollars. 

Experts estimate that as much as 90% of the computer software in use in Russia
alone is counterfeit and that losses to copyright holders run to 100s of
millions of dollars annually. 

Government 'reluctance' 

The Russian government has frequently announced efforts to clamp down on the
illicit trade. 

But little has changed in the open markets and subways of the capital where
counterfeit goods are brazenly sold in public. 

"Though the laws exist to stamp out the problem they are not properly
implemented because protecting intellectual property rights is not a high
priority for the government," says Alexander Shelemekh, of the Moscow-based
Coalition for Intellectual Property Rights. 

Some suggest that is because the government believes Russians benefit from
piracy. 

Full priced CD's, videos and software are well beyond the financial means of
most ordinary people in a country where the average monthly salary is about
$100. 

"The other problem is that the authorities simply don't have the financial
resources to seriously tackle the counterfeit trade," Mr Shelemekh. 

Revenue drain 

Despite the lack of real progress the Russian government has strong financial
reasons to take IP protection seriously. 

A Deloitte and Touche survey estimated losses to international product
manufacturers on just 22 items to be worth $473m. 

Lost tax revenues to the government were put at $174m. 

The survey stressed that these estimates were "conservative" reflecting the
"lower limit" of possible tax losses. 

Scaled up to include all goods commonly copied, the survey suggested that
government losses may top $1bn annually. 

But rather than relying on government intervention, Mr Shelemekh also urges
foreign companies and right holders to take action themselves. 

"Copyright holders should take a more proactive stand to use the laws that
exist through the courts and not just wait for the government to solve this
problem for them," he says. 

When put to the test, the law can work, he believes.
*******************
Government Computer News
Maryland measures its e-gov readiness 
By Susan M. Menke 

Maryland Lt. Gov. Kathleen Kennedy Townsend yesterday announced results of a
survey that shows that 64 percent of the state?s households and 89 percent of
its businesses have computers, and 42 percent of the businesses conduct
transactions online. The eReadiness Maryland study found that most use dial-up
Internet connections, whose speed drops from 52.6 Kbps down to 23.2 Kbps in
some areas because of aging copper telephone wiring. 

Thirty-two percent of the companies surveyed had T1 or faster lines, and 11
percent had digital subscriber lines. DSL and cable modem availability were
scattered, with some areas having neither. The study found ?a huge
concentration of network connectivity in the Washington area? and less in
Baltimore and elsewhere. 

The eReadiness survey covered 1,422 Maryland households and 1,126 businesses.
The Maryland Technology Development Corp. and the Ohio Supercomputer Center
measured the speed of dial-up service statewide by attaching notebook PCs to
telephone lines at multiple locations 24 hours per day. The notebooks were
programmed to download various sizes of files via FTP, Hypertext Transfer
Protocol and Simple Mail Transfer Protocol. 

The Commerce Department?s Economic Development Administration gave the
eReadiness study $100,000 in federal funding, matched by state and nonstate
sources. Visit www.marylandTEDCO.org for more results.
********************
MSNBC
A $1 billion, corporate-funded hack? 
 Lawsuit claims News Corp. division cheated Vivendi pay-TV 
 By Bob Sullivan
MSNBC 
 
April 19  It sounds like a script once rejected by Hollywood. The plot revolves
around two of the world?s biggest multinational corporations, locked in an
all-out war over the future of pay-TV, and its promised billions. The
competition is so ruthless than eventually, someone cheats. One company hires
hackers to break the other?s secret codes, then publishes the secret on the
Internet, inviting piracy. Suddenly, the victim company?s pay-TV is free, and
its only asset is worthless. Too ruthless to be true? Not according to a
lawsuit filed in California last month.

       CONSIDER IT A NEW FORM of corporate espionage. Stealing your
competitor?s secrets to cash in on them is as old as commerce itself. But
stealing your enemy?s secrets and giving them away, thereby diluting or
eliminating their value? That seems to be a new corporate weapon born of the
Internet age.
       Publishing the Colonel Sanders? secret recipe online would be one thing;
but publishing the keys to a pay-TV kingdom is quite another. 
       Hacking pay-TV systems has been sport for hundreds of thousands of video
pirates around the world for more than a decade. All that stands between a TV
viewer and free programming is a ?smart card? inserted in a DirecTV-style
set-top box. Crack the secret code in the card, make your own version, and TV
is free. In fact, during a day notoriously known as ?Black Sunday? in the
piracy community, DirecTV effectively zapped some 200,000 piracy cards around
North America by sending destructive computer code at them.
       However widespread, TV piracy has always been viewed as the work of
hobbyists. Until last month.
       In a lawsuit filed March 11 in California by French-based Canal Plus
Technologies, a division of Vivendi Universal, the company claims just such
chicanery by a division of Rupert Murdoch?s News Corp., named NDS. Canal Plus
says NDS hired a team of hackers who broke its smart card codes, then
distributed the secret on a well-known piracy Web site. The impact on Canal
Plus was staggering  sources inside the firm suggest somewhere between half and
three-fourths of all Canal Plus users in Italy were pirates, for example.
       The lawsuit is proceeding apace. Just yesterday, a California judge
granted Vivendi?s request for an accelerated discovery schedule.
      NDS said in a statement last month that the charges are baseless, and in
fact were used recently as leverage for merger talks. The company declined to
say more to MSNBC.com.
       
?TOO FRIENDLY? WITH PIRATES
       But sources in the computer underground say NDS has at times been ?too
friendly? with pirates. In fact, there are accusations that NDS employs many
computer hackers, including the hacker who developed the the first widely-used
counterfeit smart card in the early 1990s. 
       NDS has reportedly admitted to partially funding another underground Web
site, Thoic.com, but said it did so only for intelligence-gathering purposes.
       In a deposition last week, consultant Oliver Kommerling  who has worked
for both Canal Plus and NDS  directly accused NDS employee Chris Tarnovsky of
ensuring the smart card code was published on piracy Web site dr7.com in March
of 1999. Kommerling?s ?whistleblower? testimony carries significant credibility
because NDS owns 60 percent of his security firm, ADSR. In his statement to the
court, Kommerling said he feared repercussions for speaking out. He wouldn?t
offer additional comments to MSNBC.com, other than to say in an e-mail, ?As I
said in my statement about the pressure.....In fact, this has already started.?
       
FEARED FOR HIS LIFE
       But the stakes may be even higher. In a declaration filed with the court
by Canal Plus security manager Gilles Kaehlin, Kaehlin says Tarnovsky admitted
NDS was behind the smart card hack, and that he was prepared to tell the truth
in court. But, the filing says, Tarnovsky refused to be the the whistle-blower
on NDS? illegal activities, ?because he feared too much for his life and that
of his family,? Kaehlin said.
       None of Canal Plus? allegations have been proven, and NDS has offered a
plausible alternative explanation  that their rival?s smart cards were simply
easy to hack, and that?s why the pirates had a field day. But the case is the
first high-profile, public look inside a world many computer security experts
once only talked about in hushed voices. While graffiti-style Web-page hacks
and other nuisance attackers get most of the press attention, high-stakes
hacking  information-age corporate espionage  has been going on silently for
some time. It?s carried out by criminals too smart to get caught, with too much
money and stock value at stake for corporations to come clean when victimized.
       
VEIL OF SECRECY
       There is only a trickle of information available on digital corporate
espionage. The most authoritative seems to be an annual survey conducted
jointly by the Computer Security Institute and the FBI. Released April 7, the
anonymous survey of 500 companies and government agencies revealed once again
that cyber espionage is soaring  theft of proprietary information cost the
group some $170 million.
       But little is known about what kind of information was actually lost.
       ?People have struck up online friendships with employers and then lured
them into conspiracy to commit espionage. People have put bounties on laptops
of executives. People have disguised themselves as janitors to gain physical
access,? said Richard Power, editorial director for the institute.
       But would they steal a rival?s proprietary product and give it away,
just to make it worthless?
      ?Do not underestimate stupidity and greed. Look at Enron,? Power said.
?If company executives could participate in that kind of activity and cover it
up it is quite plausible they would engage in the kind of activity charged in
this case.? In fact, Power said, the only thing unusual about this case is the
fact that the victim has gone public.
       
SIMILAR TO DOS ATTACK
       The idea of diluting a rival?s value isn?t completely without precedent,
said Tom Talleur, another cyber-espionage expert with KPMG Consulting Inc. Five
years ago, rival Internet service providers would bombard each other with
traffic in a denial-of-service attack to make surfing sluggish, and thus entice
customers to switch. Two years ago, an Internet hosting provider was accused of
hacking into a competitor?s customer database, publishing the data online, and
then e-mailing the customers with the claim their competitor wasn?t secure. The
claim was never proven.
       ?Internet technology is so ubiquitous, all you?ve got to do is sit down
and think about ?How can I destroy my competitor?? and you can do it,? Talleur
said. ?This is not a far-fetched notion. I?ve seen competitors do this to each
other. It?s not far-fetched at all.? 
       Ira Winkler, chief security strategist at Hewlett-Packard Co., said it
is standard corporate practice to disassemble competitors? products immediately
after they arrive on the market  and what happens to that information is a
legal question that?s yet to be settled. 
       ?Once a car is sold to the public every car manufacturer in the world
knows the first buyers are competitors, who tear the car apart bolt by bolt and
see how it works,? Winkler said. ?There are more than enough indications this
has gone on. Reverse-engineering your competitors? practices is standard
practice.
       ?If industries start doing this as general practice, put on their
corporate Web site ?Here?s how to steal services from my competitor,? well, is
there anything illegal about detailing how you can rob a bank? No, but do you
want to be known for that??
       The court of public opinion may very well be the ultimate arbiter. Canal
Plus and Vivendi have even bigger problems right now than hackers. Vivendi
Chairman Jean-Marie Messier was already under fire because the firms? slumping
stock price, but things got nasty this week when he fired popular Canal Plus
chief executive Pierre Lescure. Lescure founded Canal Plus and his ouster was
viewed as disloyal; it even prompted broadcast interruptions by protesting
Canal Plus employees. Its even become an issue in the French presidential
campaign. 
       All the chaos adds fuel to claims that Canal Plus lawsuit is really just
sour grapes, a desperate move by a company that?s simply being beaten in the
marketplace.
       But if Canal Plus lawyers follow through on their promise to march a
series of underground computer hackers to the witness stand in California, all
to make ugly claims about who really funded their work, News Corp. might suffer
an even more serious blow to its reputation.
       ?Any company found guilty of performing this kind of piracy would be
putting great deal of its reputation on the line,? said Bill Malik, an analyst
with KPMG. ?Corporate integrity is primary, especially when you?re not talking
about some physical goods, you?re talking about something like content.?
************************
MSNBC
AOL struggles with broadband plan 
 Company rethinks key merger goal 
 By Julia Angwin and Martin Peers
THE WALL STREET JOURNAL 
 
AOL Time Warner Inc., whose online service is struggling to hold on to
customers who want high-speed Internet access, is rethinking its cornerstone
strategy of promoting such broadband access nationwide. The move calls into
doubt one of the main goals of the merger that brought the Internet and media
colossus into existence.

      CO-CHIEF OPERATING OFFICER Robert Pittman, tagged last week to take over
the America Online division, said in an interview that he has told employees
the unit should focus on persuading its existing customers to retain their
$23.90-a-month America Online accounts even when they sign up for
$40-to-$50-a-month high-speed Internet access from rival cable companies.
America Online?s traditional dial-up service makes the company more money  so
what?s the hurry?

      ?A lot of companies go broke trying to speed up the consumer adoption
curve,? Mr. Pittman said. He said he is encouraged by how many America Online
subscribers hold on to their service after they have switched to a high-speed
connection even though the company hasn?t been actively marketing that option.
       When America Online bought Time Warner last year, investors were
thrilled by the prospect of the nation?s largest online service merging with
the second-largest U.S. cable operator to bring high-speed Internet services to
the masses who still labor with slow dial-up connections on telephone lines.
Mr. Pittman promised to use that platform to pipe Time Warner?s ?treasure
trove? of movies, music and magazines to consumers around the world.

       But the merged entity has struggled in the area that was meant to be its
growth engine. America Online has rolled out its high-speed Internet service on
Time Warner?s cable lines, but it hasn?t been able to persuade any other cable
concerns to roll it out as well. As a result, as many as one in four sign-ups
for competing cable firms? new Internet services is a former America Online
customer. Now the treasure trove seems more inaccessible than ever.
       The once fast-growing America Online unit has seen its growth collapse
as advertising dried up and new subscribers proved more elusive than ever. In
the first quarter of this year, analysts expect that America Online was by far
the worst-performing division within AOL Time Warner. The market value of AOL
Time Warner has shrunk to $97 billion, compared with $335 billion for the two
companies when the deal was announced in January 2000. While most media stocks 
such as Viacom Inc.  are rising in anticipation of an improved ad market, AOL
is in the doldrums, trading around $21, a three-year low. The stock plunge has
devastated morale internally, rendering worthless the millions of stock options
granted most employees at the time of the merger.
       The stock free-fall has been so great that some even question whether
the company shouldn?t spin off America Online. ?By now, every investor
recognizes that Time Warner made a very large mistake by merging with AOL in
early 2001,? said Doug Kass, a hedge-fund manager who owns shares of AOL. Mr.
Kass said a spinoff would create more value for both companies, although there
so far appears to be little support for such a move either at the top ranks or
the company or among big shareholders.
       AOL Chairman Steve Case denied that the change in broadband strategy
undercut the premise of the merger, which was more about delivering a broader
choice of digital services to consumers. ?The promise of the merger remains
intact. We just hit a speed bump,? he said.
       Richard Parsons, the chief executive-designate, also disputed the notion
that the merger has failed, calling broadband ?one string of a multistring
bow.?
       But the sound of clients deserting America Online remains dissonant.
Consider Fred Fischer and his wife, Heather. They were loyal America Online
subscribers with a dial-up connection until the day a small high-speed Internet
service came knocking. The Chicago couple weren?t big fans of America Online?s
chat rooms or instant messaging, and they disliked being bombarded with
advertisements when they logged on to America Online. So they switched.
      ?The catalyst was purely speed,? said Mr. Fischer, a 39-year-old
portfolio manager with a Chicago money management firm, who now is a subscriber
to RCN Corp.?s high-speed Internet service.
       Unless America Online can stem the tide, such defections could threaten
the future of its business. High-speed services still provide Internet access
to just a small minority of Web surfers, but the number of customers is
growing, despite the hefty cost. More than 10 million consumers have signed up
to pay at least $40 a month, for service from a telephone firm or as an add-on
service to a cable-television account. Broadband will account for 40% of online
households by 2006, compared with 15% now, according to a study by Jupiter
Media Metrix. And so far, this growth isn?t helping America Online much: Its
customers make up a small fraction of high-speed clients, while they comprise
roughly half the traditional dial-up market.
       For the past year, America Online has been promoting its broadband
services through endless pop-up ads on the online service, TV ads in selected
markets and direct mailings to clients. Callers to its customer-service center
also often hear a pitch for broadband when they call.
       AOL had hoped that cable concerns would cooperate by agreeing to carry
America Online on their lines. But, so far, none have. AT&T Corp.?s cable
division has signed an agreement with EarthLink Inc., the third-largest
Internet provider in the U.S., while Comcast Corp. has forged a deal with a
midsize provider, United Online Inc. But America Online so far only has access
to its sister company, Time Warner Cable.
       Talks with most of the top 10 cable operators have stalled mainly over
the cable industry?s demands on two key points: whether the cable operator gets
any share of AOL?s advertising revenue generated from the high-speed business;
and who ?controls? the customer.
       The most sensitive issue of all may be the cable sector?s desire to
retain its customers. Cable executives worry that if consumers can jump between
high-speed America Online on either cable or telephone companies? DSL
high-speed services, they will have no loyalty to cable  much as satellite TV?s
ability to offer cable programming has enabled satellite operators to skim off
roughly 17 million households in the past few years.
*****************
MSNBC
Intel shows off new mobile chips 
 
Banias processor an ?entirely new micro architecture?
SEATTLE, April 18   Intel has produced its first prototypes of the upcoming
?Banias? processor, the company?s first chip purely designed for use in mobile
PCs, the company announced at WinHEC on Thursday.

       INTEL LABS PRODUCED the first test version of the chip during the past
week, Intel President Paul Otellini said in a speech at the Windows Hardware
Engineering Conference. Banias systems, including Intel?s Odem chipset, will
come out in early 2003 and feature 802.11b ?Wi-Fi? wireless networking, long
battery life and uncompromised performance, he said.
       ?It is the first bottom-up product designed for notebook computers that
does not compromise computers,? Otellini said
       Banias is an ?entirely new micro architecture? employing different
circuitry, Otellini said in an interview after the speech. The system?s 802.11
support initially will come with separate chips, but those will gradually be
integrated with the other chipset components, he said. 
       Banias will compete with new processors from Advanced Micro Devices and
Transmeta, which have energized the market for laptops with chips that consume
less power. Banias can run the same software programs as the Pentium 4 or
Pentium III, but from a design perspective, it differs from those chips. 
       To cut energy consumption, Banias automatically shuts off its different
subcomponents when not in use. Although it?s designed for notebooks, the chip
will also appear in thin ?blade? servers. 
       Banias isn?t the only chip fresh out of Intel. Otellini showed off a
silicon wafer with ?Madison? chips, the third generation of its top-end 64-bit
Itanium family. ?This is one of the first Madison wafers. We?ve had this
silicon for about a week,? Otellini said.
      Intel did not demonstrate Madison working in an actual computer or
disclose when the chip would be delivered. The chip will be based on the same
designs as McKinley, a new version of Itanium coming this quarter, but it will
have 6MB of high-speed ?cache? memory built in. Intel spokesman Seth Walker
said the chip is due in 2003. 
       McKinley, which Otellini said will go into production ?midyear,? is
built on a 180-nanometer process and has about 220 million transistors. Madison
is built on a 130-nanometer process and has about 500 million transistors, he
said. 
       Otellini also said that Intel?s hyper-threading technology, which lets a
single processor act in some ways like two, will debut in desktop Pentium 4
systems in 2003. Hyper-threading currently is available only on Intel?s top-end
Xeon version of the Pentium 4 and is enabled in servers but not workstations.
The technology allows two different applications to use different components of
a microprocessor simultaneously.
      For the first time publicly, Intel demonstrated Pentium 4-based desktop
computers with hyper-threading, showing air-cooled systems with 3GHz processors
running Microsoft video encoding and decoding software. The
hyper-threading-enabled system runs about 20 percent faster than its comrade,
according to Otellini. 
       Intel, which has acquired several communications chip companies in
recent years, says it believes the computing and communication industries will
converge in coming years. 
       Boosting this trend in 2003 will be a new chip from Intel that combines
newer ?2.5G? GPRS (General Packet Radio Service) cell phone communication
abilities, memory, and a central processing unit that can run Microsoft?s
Windows CE .Net operating system, the company said. (MSNBC is a Microsoft - NBC
joint venture.)
      The phone chip will combine an XScale processor, Intel?s StratFlash flash
memory, and its MicroSignal digital signal processor, Otellini said. It?s
planned to be in phones by 2003. 
       The 2.5G phones, which provide faster networking speeds than the
second-generation, or 2G, phones in widespread use today, are still in their
nascent phases of adoption, Otellini said. ?We?re aiming ahead of the curve in
terms of where the market is going,? Otellini said. 
       Intel is engaged in an arms race with Texas Instruments, Motorola and
others to become the dominant power for chips in cell phones and handhelds.
Both TI and Motorola have far longer histories than Intel in this business, but
Intel claims that its extensive manufacturing expertise and strength, not to
mention its huge flash memory business, will work to its advantage.
********************
MSNBC
Microsoft to use Bluetooth chips 
 ASSOCIATED PRESS 
 
SEATTLE, April 18  Microsoft Corp. said Thursday it plans by year?s end to
start selling keyboards and computer mice that use the Bluetooth wireless
technology, a major step towards its adoption as a standard.

       BILL GATES, Microsoft?s chairman and chief software architect, also
announced that several companies are using its Mira technology, demonstrated
earlier this year, to make wireless touch-screen monitors for Windows XP. They
are expected to be available by year?s end.
       ?The PC will be used for a wide range of things it?s never been used
used for in the past,? Gates said at the company?s 11th annual Windows Hardware
Engineering Conference in Seattle. ?It?s revolutionary, the range of things
you?ll be able to do with it.?
       (MSNBC is a Microsoft - NBC joint venture.)
       The keyboards and mice will work up to 30 feet away from a computer with
a plug-in Bluetooth adapter. Next month, Microsoft expects to release a
software development kit that will help other companies create
Bluetooth-compatible devices for its latest operating system, Windows XP.
       Bluetooth is designed to eliminate the wires connecting computers,
related hardware like printers and handheld gadgets. Developed by a group of
cell phone and computer companies, the technology has been held back for years
by the high cost of the chips needed to include it in devices, but those prices
have come down.
       Price estimates for the keyboards and mice have not been released.
       Apple Computer Inc. released Bluetooth software and an adapter for its
computers in March.
       Microsoft announced Thursday that four more companies  Fujitsu Computer
Products of America Inc., NEC Corp., Toshiba Corp. and Wistron Corp.  are
working on Mira wireless monitors, which owners will be able to carry and use
all over their home.
      Royal Philips Electronics, Panasonic Tatung and other companies are also
developing them.
       Philips is partnering with Microsoft to develop remote controls for the
monitors.
       The monitors will use the wireless standard known as 802.11b, or Wi-Fi,
already widely adopted as a way of networking computers.
*********************
CNN
Symantec warns of blended security threats

Security threats today are extremely nimble," says Leigh Costin, Asia-Pacific
regional product manager for Symantec's enterprise solutions range. "There are
toolkits out there now which enable rapid virus development and multifaceted
attacks. Security systems often don't have enough integration between firewall,
antivirus, and intrusion detection."

Costin was speaking at the Asia-Pacific launch of Symantec's Gateway Security
appliance, which aims to integrate various security aspects into a single
hardware device to be placed at the edge of a company's network. The appliance,
which costs from $11,562, combines firewall, antivirus, intrusion detection,
content filtering, and VPN capability.

Security threats today are extremely nimble," says Leigh Costin, Asia-Pacific
regional product manager for Symantec's enterprise solutions range. "There are
toolkits out there now which enable rapid virus development and multifaceted
attacks. Security systems often don't have enough integration between firewall,
antivirus, and intrusion detection."

Costin was speaking at the Asia-Pacific launch of Symantec's Gateway Security
appliance, which aims to integrate various security aspects into a single
hardware device to be placed at the edge of a company's network. The appliance,
which costs from $11,562, combines firewall, antivirus, intrusion detection,
content filtering, and VPN capability.
*********************
Nando Times
Technology used in war on terrorism

By DAFNA LINZER, Associated Press 


(April 19, 2002 8:26 a.m. EDT) - In the towns that dot the Pakistani mountains
east of the Afghan border, small shops that seemingly offer residents little
more than dusty packs of cigarettes and canned goods are stocked with one more
essential - computers with Internet access.

It is from this area, in northwest Pakistan, that U.S. intelligence in recent
weeks has picked up on increased communications among al-Qaida members,
according to U.S. officials.

Shortly after Sept. 11, intelligence experts argued that America should have
been infiltrating groups such as al-Qaida instead of sinking its budget into
satellite imagery, communications interception and reconnaissance equipment.
But as the war on terrorism enters its seventh month, America's technological
expertise may be paying off as it tries to root out a computer-savvy foe.

"Abu Zubaydah used the Internet from Faisalabad in Pakistan when he was
captured," said Vince Cannistraro, a former CIA counterterrorism chief. Abu
Zubaydah, the no. 3 in Osama bin Laden's terrorist organization, is the highest
ranking al-Qaida member in U.S. custody.

He was caught by Pakistani and U.S. authorities in a joint raid on a hide-out
in Pakistan on March 28. Pakistani intelligence officials have said quietly
that a mobile phone call Abu Zubaydah made to al-Qaida leaders in Yemen led to
his arrest.

When the suspected kidnappers and killers of Wall Street Journal reporter
Daniel Pearl sent e-mails that included his photographs in January, U.S.
investigators traced the communication to an Internet service provider in
Karachi whose computer logs led them to a key suspect.

Fahad Naseem denied sending any e-mails on Jan. 27 and Jan. 30, the same dates
that the Pearl photographs were sent. But the records showed otherwise and when
police confiscated his computer they found the e-mails on his hard drive. He
was arrested Feb. 3, three days after the second e-mail was sent.

During interrogation, Naseem gave police the names of three other suspects,
including Ahmed Omar Saeed Sheikh, the British-born militant thought to have
orchestrated the kidnapping.

Knowing where Pearl was abducted helped narrow the search. But with al-Qaida
cells allegedly operating around the globe, the search can be much harder,
especially when the Internet offers so many ways to hide.

Providers of free e-mail, such as Yahoo! and Hotmail, require no real
information from a user. Messages can be kept secret with encryption, a digital
technology that encodes the information on one end and reads at another using a
special algorithm.

Even messages that seem meaningless to terrorism trackers can be treacherous.
Experts have said that al-Qaida may be using steganography, a process that
hides one message within another or somewhere in a picture file.

"You need some kind of intelligence, such as in the Pearl case," said Chris
Aaron, the editor of Jane's Intelligence Review. "In the past, the focus was on
identifiable targets such as Iraq or Russia, whereas when dealing with a target
such as al-Qaida, it's harder to know what to target. You still need the human
intelligence in order to know what to target." 

Electronic mission aircraft being used in Afghanistan can detect, pinpoint to a
certain area and jam satellite uplinks. But unless the call is intercepted,
there is no way to know if the satphone user is an al-Qaida member in a cave or
a journalist calling in a story from a valley nearby.

The transmissions coming from Northwest Pakistan, where many of bin Laden's
foot soldiers are believed to have fled, may be more definitive.

"There is a concentration of al-Qaida in Pakistan along the border areas and if
Internet use there is up, it's only because of the large numbers of al-Qaida
there," Cannistraro said.

And the signs that supporters are trying to keep the organization alive are
growing

The FBI's cybersecurity unit posted a bulletin on its Web site in January
warning that "a computer that belonged to an individual with indirect links to
Osama Bin Laden contained structural architecture computer programs that
suggested the individual was interested in .... dams and other water-retaining
structures."

The National Infrastructure Protection Center's site also said that "al-Qaida
members have sought information on water supply and wastewater management
practices in the U.S. and abroad. There has also been interest in insecticides
and pest control products at several web sites."

In early February, the London-based Al-Quds newspaper published excerpts from
an Arabic-language Web site that claimed to represent al-Qaida. An article on
the site, hosted by Geocities, which is owned by Yahoo! Inc., bragged that the
group carried out the Sept. 11 terrorist attacks, warned of further violence
and outlined an ideological future for the organization.

The author of the article had not been previously identified, but intelligence
experts say that the writer may be less important than the message.

"This a blueprint for the future of al-Qaida, and it indicates that there are a
lot of people out there still ready to support its aims," said Yigal Carmon,
the former head of Israeli counterterrorism and the president of MEMRI, a
research institute which translates, disseminates and analyzes Arab media.

Al-Qaida operatives were computer savvy before PCs were household fixtures in
the United States - something which has helped them and helped the United
States.

In 1995, authorities in the Philippines seized a computer from Ramzi Yousef -
the mastermind of the 1993 World Trade Center bombing - and found a treasure
trove of information and plans, including one to attack a nuclear facility in
the United States.

A computer purchased by a Wall Street Journal reporter in Afghanistan included
the movements of an al-Qaida operative which were similar to those of Richard
Reid - accused of trying to ignite explosives in his shoes during a
trans-Atlantic flight in December.

Ahmed Ressam, convicted of plotting to bomb the Los Angeles airport in 1999,
said during court testimony that the one thing a colleague needed to pack when
heading off to Afghan training camps was a computer.

"Internet communications have become the main communications system among
al-Qaida around the world because its safer, easier and more anonymous if they
take the right precautions and I think they're doing that," Cannistraro said.
****************


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