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Clips May 14, 2002

Clips May 14, 2002

ARTICLES

SONICblue Seeks Reversal of Data Collection Order
Group Targets Digital TV Piracy
ISPs Seek to Void Ruling on Police Searches
Turkey Mulls Strict Net Bill
Former corrections officer sentenced for misusing FBI system
VeriSign Used False Ads, Suit by Rival Asserts
Plagiarism-Detection Tool Creates Legal Quandary
Pentagon Commitment Helps Advance E-Learning Standard
Out of Silicon Valley, and Looking Homeward
Kazaa, Verizon propose to pay artists directly
Two Virginia Universities To Join Forces Against Cybercrime
Questions Raised by E-Mail on Energy
High Court Takes a Step Toward Net Porn Rules
Defining 'best value'
OMB checks card use
Museum's Cyberpeeping Artwork Has Its Plug Pulled
RealNames online 'keyword' system shuts down
Intellectual property rights issues hamper contracting process
Defense research agency seeks return to 'swashbuckling' days
Homeland security effort boosts e-gov initiatives
Digital divide between agencies remains wide
Computer-based artificial societies may create real policy
Jews shopping online to support Israel
There's no place like home





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Reuters
SONICblue Seeks Reversal of Data Collection Order

SANTA CLARA, Calif. (Reuters) - SONICblue Inc. on Monday moved to overturn a court order for it to spy on users of its digital recording devices and share detailed viewing data with major studios and television networks, saying the order would violate privacy rights.


Santa Clara-based SONICblue called the May 2 order from Central District Court Magistrate Charles Eick "breathtaking and unprecedented" and said the directive to track what television viewers watch "violates consumers' privacy rights, including those guaranteed by the First and Fourth Amendments."

The plaintiffs in the case, including film studios Paramount, Universal, The Walt Disney Co. and Metro- Goldwyn-Mayer Inc. , as well as TV networks CBS, ABC and NBC, have argued they need the data, including details on what commercials viewers skip and what files they transfer across the Internet, to build their copyright infringement case against SONICblue.

"The information that has been ordered to be collected and disclosed to plaintiffs is at the core of consumers' expectations of privacy," said SONICblue, which in the past has acknowledged it has the right to collect such data under its sales contracts, but chooses not to do so.

At the heart of the matter is the company's ReplayTV (news - web sites) 4000 product, which allows viewers to digitally record programs and, if they wish, to skip over commercials. The device also has a high-speed Internet port that allows users to download film files.

The studios and networks claim those features threaten to deprive them of the means of paying for their programs since they allow ads to be cut out and premium programs on subscription services, such as HBO, to be forwarded to non- subscribers.

SONICblue also protested against the order for effectively forcing it to redesign its product for the express purpose of collecting data to be used against it.

Barring an outright reversal, the company asked for three modifications to the order, including:

-- allowing consumers to opt in or out of the collection;

-- allowing data to be collected only in aggregate and not person-to-person, form; and

-- making any surveillance narrow in scope and limited in duration.

If its appeals are denied, SONICblue will have 60 days from May 2 to design new software that will allow it to track what its customers are watching.

The company said the modifications will require about $400,000 in development costs and will take four months to complete without error.

The lawsuit is part of a broader campaign by the studios, and TV networks to a lesser extent, to combat what they say is video piracy that costs them billions of dollars each year in lost sales in advertising and subscription-based programming.
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Los Angeles Times
Group Targets Digital TV Piracy
Technology: Studios and companies seek to put electronic locks on broadcasts, limiting what viewers can do with recorded media.
By JON HEALEY
TIMES STAFF WRITER

May 14 2002

In the name of fighting piracy, a group of Hollywood studios, technology companies and consumer-electronics manufacturers wants to slap electronic locks on free, over-the-air television programs that viewers record digitally.

The proposal is just one of a bundle of restrictions on digital TV signals that the group is considering for digital TV sets, computers and other devices. The restrictions, which are being fought by a few companies and consumer advocates, could spell trouble for viewers as they upgrade from analog TVs and VCRs to their digital successors, such as DVD recorders.

For instance, a viewer who digitally records "The West Wing" on his or her living room DVD recorder may be unable to play the disc on one of today's DVD players. Stopping digital TV piracy is part of a broad effort by the studios, record companies and other copyright holders to limit what viewers can do with media in the digital age. These companies argue that piracy poses an extraordinary threat, but critics say the studios, labels and publishers are trying to stifle innovation and roll back consumers' rights.

The main goal of the studios, TV manufacturers and computer companies in the Broadcast Protection Discussion Group is to prevent programs aired on digital TV stations from being transmitted over the Internet. Online file-trading networks already make a substantial number of TV shows available for free, but the studios fear that digital TV will make it even easier for pirates to record, copy and share programs on the Net.

That's why the studios say they're reluctant to let broadcasters air their most valuable movies in high-definition TV, the richest form of digital signal. Set manufacturers, in turn, blame the shortage of compelling HDTV programming for the sluggish sales of digital TV receivers, which are in fewer than 1million homes today.

The Broadcast Protection Discussion Group's latest draft proposal, released Saturday, would require devices that receive digital TV broadcasts to protect them with an approved anti-piracy technology before sending them over a digital connector to be displayed, recorded or stored. The proposal is still being debated within the group, with a final version expected this month.

After that work is finished, a separate group will try to come up with a way to make sure that manufacturers equip their new sets, recorders, cable TV boxes, satellite receivers, computers and related devices with the technology.

That effort is likely to involve lobbying Congress for a mandate affecting all devices capable of receiving, displaying or recording digital TV signals.

The only anti-piracy technologies on the initial approved list are ones that scramble the digital TV signal electronically. And the only digital TV programs that would not have to be scrambled after they're received are those that aren't marked by the broadcaster for protection or that aren't moved digitally from device to device.

A likely result, critics say, is that DVD recorders will automatically scramble the programs they record from local digital channels. And a scrambled disc won't play on any of the tens of millions of DVD players that consumers already have purchased, including the growing number in cars.

Instead, those discs will play only on a new generation of DVD players and recorders that include one of the approved protection technologies.

Michael Epstein, a senior researcher at Philips Research Labs, acknowledged that consumers could avoid the scrambling problem by using an analog connection between their recorder and their digital set. But most consumers would connect their recorders to the digital output on a cable TV receiver, unwittingly triggering the scrambling function.

"More than likely, people wouldn't understand what they would have to do" to rewire their entertainment centers and solve the problem, Epstein said.

Joe Kraus, founder of advocacy group DigitalConsumer.org and of Excite.com, said a more fundamental problem is the assumption that all retransmissions online have to be stopped, rather than just the ones that violate copyright law. His privately funded group wants to exempt fair uses, such as including excerpts from a digital TV broadcast in a homework assignment submitted by e-mail.

The problem is that it's next to impossible to design a protection technology that can tell the difference between fair use and piracy. But, Kraus countered, "we don't prevent anybody from driving because some people drive drunk."

He added: "Technical measures like this rarely prevent piracy, but burden consumers, stifle innovation and generally are bad ideas."

Chairmen of the discussion group and the Motion Picture Assn.'s representative on the panel could not be reached Monday for comment.
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Reuters
ISPs Seek to Void Ruling on Police Searches
Mon May 13,11:18 PM ET

SAN FRANCISCO (Reuters) - Web giant Yahoo! Inc. and several Internet trade associations filed papers Monday seeking to overturn a court ruling which they said could fill the offices of Internet companies with police officers overseeing the execution of search warrants.


In an amici curiae brief filed with the 8th Circuit Court of Appeals in St. Louis, the Internet group said a Minnesota court ruling requiring police officers to be physically present for search warrants would threaten client privacy, slow the searches and disrupt business.

"A large Internet service provider can receive literally thousands of search warrants and other requests for information during the course of a year," the brief said.

If the Minnesota ruling is allowed to stand, "it is entirely possible that at any given time a dozen or more law enforcement officers would be on the premises of a given service provider," it said.

The Minnesota case involved a search warrant that was issued on Yahoo! in connection with a child pornography investigation. The warrant was faxed from Minnesota to Yahoo's headquarters in Santa Clara, California, where employees pulled up the requested information and sent it back to local prosecutors.

The defendant in the case subsequently sought to have that evidence suppressed, arguing that his Fourth Amendment right against unreasonable search and seizure was violated because it was conducted by civilians.

The judge in the case agreed, saying that that a law enforcement officer should have been present at Yahoo! while the search was being conducted. His ruling directed all future such searches to be supervised by law enforcement personnel.

UNREASONABLE BURDEN

The U.S. government has already challenged the ruling, saying it puts an unreasonable burden on law enforcement in an era when Internet companies span the globe.

The Internet group, which includes the Computer and Communications Industry Association, NetCoalition and the United States Internet Service Providers Association, further argued in their brief that the ruling would do nothing to extend Fourth Amendment protections.

"The police officer waiting in the lobby while the technician works away on the computer does not in any way safeguard anyone's Fourth Amendment rights," the brief said.

The group's lawyer, Jonathan Band, said the Minnesota ruling would also disrupt normal business operations at Yahoo! and other companies while having a "chilling effect" on their subscribers, who could be concerned that a constant police presence would impinge on their privacy rights.

"A lot of people in the industry have been concerned about this decision ever since it came down," Band said Monday.

"We're saying that this ruling is bad public policy. It's wasteful, it is going to be a waste of government resources, and of law enforcement resources that should be out there catching real criminals."

He added that the ISPs were concerned that the burden could increase as the number of search warrants -- already up sharply in the wake of the Sept. 11 attacks -- will grow even faster under the new Council of Europe Cybercrime Convention, an international treaty which requires the U.S. government to obtain information from Internet service providers at the request of foreign governments.

"You could have countries halfway around the globe requiring these searches, and we would have to comply," Band said. "All the work is going to be done by the service providers, and their technicians and engineers. Having police present will add no value."
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Wired News
Turkey Mulls Strict Net Bill

ANKARA, Turkey -- A media bill to go before the Turkish parliament Tuesday could cripple the Internet industry, harm the nation's struggling economy and hobble free speech on the Web, observers say.

The bill would expand already stringent regulations on all forms of media and would require websites to submit two hard copies of pages to be posted on the Internet to a government agency for prior approval.

It also would require those who wish to open a website to obtain permission from local authorities, and to inform them every time the site is changed.

Those who don't comply or are found in violation could face fines ranging from about $95,000 to $195,000, enough to financially devastate most Web content and service providers in a country where per capita income is less than $2,200.

The legislation comes at a time when European Union-hopeful Turkey is struggling to meet Brussels' political criteria for membership, including overhauling its often dismal human rights record and expanding civil liberties.

Dozens of journalists, politicians and intellectuals have been jailed under already draconian laws curbing free speech, and some fear vagaries in the proposed legislation could be used as tools for political prosecution.

The burdens proposed in the bill would cause an exodus of Turkish websites abroad and deal a major blow to content provision and Internet expansion, said Savas Unsal, CEO of Superonline, Turkey's biggest ISP with 950,000 dial-up and 2,500 corporate subscribers.

Unsal said a lack of Turkish language content would further widen the nation's digital divide in favor of the rich, who are educated enough to take advantage of the Internet in English.

"We don't want to provide access to just the elite," Unsal said. "We want the government to let us do our jobs and open the gates to technology and the future."

The bill focuses mostly on print and broadcast media, Unsal said, and the Internet provision was tacked on as a result of e-mails and Internet news critical of the leaders of the nation's three-party coalition government.

"It was a quick and dirty job done by people who don't understand the Internet or what they're asking," he said.

Unsal also said the bill is incompatible with Turkey's European Union membership bid, which requires more press freedom than exists under current law.

European Union representatives have said the bill would harm democracy, and that it runs counter to the government's publicly stated goal of loosening the country's constitutional restrictions on speech and expression.

The bill was killed last year by President Ahmet Necdet Sezer, who blasted it in his veto statement, saying parts of the proposed law were not "compatible with democratic traditions, basic rights and freedoms or constitutional principles."

If parliament members pass the bill again without change, though, Sezer's hands will be tied. He'll have to accept the law, and his only recourse will be to refer it to Turkey's constitutional court.

The court's decision could take from a few months to a few years, hampering Internet growth in a country where Unsal says it already has been slowed by economic crisis.
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Government Computer News
Former corrections officer sentenced for misusing FBI system
By Wilson Dizard III

Gary Piedmont of Reynoldsburg, Ohio, was sentenced to 30 days of community confinement, a $5,000 fine and a year of probation for using the FBI's National Crime Information Center system to check whether a warrant had been issued for a friend.

Piedmont formerly was a supervisor at the Franklin County Corrections Center. While working there he met Melodie Lynn Calomeris, who was housed there pending her transfer to a federal prison, according to a summary of the matter agreed to by prosecutors and Peidmont before sentencing. Piedmont employed Calomeris, also known as Melodie Lynn Stillwell, as a housekeeper after her release.

"The Probation Office was in the process of issuing an arrest warrant for Calomeris for violating her supervised release," according to a statement by Gregory Lockhart, U.S. Attorney for the Southern District of Ohio. "The Marshals Service and the Franklin County Sheriff's Office investigated and found that Piedmont had used the system to check on the warrant."

Piedmont checked the NCIC nine times in May 2000 to see if the warrant had been issued, authorities said.

Piedmont's sentencing by Magistrate Judge Terence P. Kemp of the U.S. District Court for the Southern District of Ohio was based on criminal information filed by the U.S. Attorney's office and Piedmont's guilty plea.
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Reuters Internet Reports
VeriSign Used False Ads, Suit by Rival Asserts
Mon May 13, 5:12 PM ET
By Andy Sullivan

WASHINGTON (Reuters) - Internet domain-name seller VeriSign Inc. was hit with a lawsuit filed on Monday by a rival that charged VeriSign with using false advertising to steal customers.


BulkRegister, a domain-name seller based in Baltimore, said it had sued VeriSign in federal court to stop a direct-marketing campaign that sought to trick owners of domain names into switching their accounts to VeriSign.

VeriSign's campaign has also drawn protests from other domain-name sellers, which allow Internet users to reserve names like www.example.com on a yearly basis.

According to BulkRegister and other name sellers like GoDaddy Software, VeriSign has since April been mailing out thousands of "domain name expiration" notices that imply that domain-name owners could lose control of their name if they do not return the form along with $29 by May 15.

As a result, domain-name owners could end up renewing their names prematurely, paying higher annual fees and suffering with inferior customer service, said Tom D'Alleva, vice president of marketing for BulkRegister.

The practice could also render the customer's Web site useless because it could disrupt other services like Web hosting, D'Alleva said.

"I don't understand why a major company would indulge in this," D'Alleva said.

The notices violate a U.S. law that requires mail solicitations to be clearly marked, said Patrick O'Brien, a lawyer who filed the suit for BulkRegister.

A VeriSign spokesman declined to comment on the litigation, and said he disagreed with BulkRegister's assessment of its marketing campaign.

The once-hot domain name market has cooled since the height of the dot-com bubble, when names such as www.business.com fetched prices as high as $7.5 million.

Despite the introduction of new "top level" domains like .biz and .info, the total number of domain names has shrunk by 6 percent from its 2001 peak to 29.5 million, according to "State of the Domain," an industry report.

VeriSign, the No. 1 domain-name seller, recently announced layoffs of 10 percent of its work force after posting a quarterly loss of 9 cents per share. Its stock closed at $10.01 per share Monday, off 85 percent from its 52-week high of $67.94.

A Canadian company last month agreed to pay $375,000 to settle Federal Trade Commission charges that it duped Internet domain-name holders into needlessly buying similar-sounding names.
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Chronicle of Higher Education
Plagiarism-Detection Tool Creates Legal Quandary
When professors send students' papers to a database, are copyrights violated?

By ANDREA L. FOSTER

When electronic tools to ferret out student plagiarism hit the market a few years ago, colleges saw them as easy-to-use and affordable. But now some college lawyers and professors are warning that one of the most widely used plagiarism-detection services may be trampling on students' copyrights and privacy. And many campus officials are starting to wonder whether some of the high-tech tools they are using to detect dishonesty clash with students' legal rights.

The service creating the stir is Turnitin.com (http://www.turnitin.com), which says it has about 400 colleges in the United States on its client list. A paper submitted to the service is checked against a database of manuscripts -- estimated at more than one million -- and a database of books and journals, as well as more than a billion Web sites. Phrases that seem to be unoriginal are flagged for professors to check.

A campuswide subscription to Turnitin.com costs $1,000 to $10,000 a year, depending on the size of the college. The service also is sold to individual professors and academic departments.

What makes it effective -- but also controversial -- is that it keeps the papers that colleges submit for inspection, in order to enlarge its database. Most other plagiarism-detection services, like Copycatch and Eve2, allow professors to run student papers through a computer program that checks for material copied off the Internet or for collusion among students.

Since those services don't retain the submissions, the pool of manuscripts that papers are compared with is likely to be smaller than Turnitin.com's, says Louis A. Bloomfield, a physics professor at the University of Virginia, who passionately defends both types of plagiarism-detection services. He created a computer program that finds shared passages among submitted papers but does not save them in a database.

Lawyers say the problem with Turnitin.com is that student papers are copied in their entirety to the services' database, which is a potential infringement of students' copyrights. (An author doesn't need to file for a copyright; the law automatically bestows on authors the rights to their written works.) And the copying is sometimes done without students' knowledge or consent, which is a potential invasion of their privacy.

Those concerns contributed to the decision by officials at the University of California at Berkeley not to subscribe to Turnitin.com, says Mike R. Smith, assistant chancellor for legal affairs: "We take student intellectual-property rights seriously, and that became one of the trouble spots for us in moving ahead with this proposal."

Rapid Growth

Berkeley's decision is noteworthy because Turnitin.com had its genesis there. John Barrie founded the service, in 1998, on the basis of software he had begun developing four years earlier while he was a graduate student at Berkeley.

Turnitin.com has grown rapidly, and Mr. Barrie says his company recently won a contract with Britain's Joint Information Systems Committee to serve more than 700 higher-education institutions in Britain, starting in September.

The committee, which declined to confirm his assertion, promotes the use of technology in higher-education institutions. Mr. Barrie won't reveal how much money Turnitin.com will earn from the British contract.

At Indiana University-Purdue University at Indianapolis, officials considering a deal with Turnitin.com are mindful of students' privacy and copyrights, says Kenneth D. Crews, a professor at the Indiana University School of Law, who is director of the IUPUI Copyright Management Center.

The university ought to go ahead with a contract only after impressing upon faculty members the importance of notifying students at the start of the course that their work may be submitted to Turnitin.com, which would retain it, he says.

"Let them know what you're doing and give them a chance to opt out," the professor says. In fact, he adds, some professors may feel more secure using the service only after obtaining a definitive go-ahead from students.

College lawyers say they are unaware of any lawsuits filed by students claiming copyright infringement or invasion of privacy because professors submitted their papers to Turnitin.com. But Rebecca Moore Howard, an associate professor of writing at Syracuse University who is an outspoken critic of all plagiarism-detection services, says it's only a matter of time before a student accused of plagiarism takes such action. "Student work is being contributed to the site for others' use without students' permission, and that's pretty shaky ground," says Ms. Howard.

"I have encouraged our faculty not to use [Turnitin.com] for that reason."

Ms. Howard says students whose papers are submitted to the service could argue that their rights are being violated under the Family Educational Rights and Privacy Act, which bars colleges from releasing personal information about students without their consent.

Indeed, LeRoy S. Rooker, director of the U.S. Department of Education's Family Policy Compliance Office, says there is no exception to the act that would permit colleges to turn over student papers to an outside vendor without students' written permission. "You can hire a vendor to check for plagiarism," he says. "But once they do that, they can't then keep that personally identifiable document and use it for any other purpose."

Warning Students

Turnitin.com's founder, Mr. Barrie, is aware of colleges' skittishness over violating students' legal rights. As a result, the company encourages professors to warn students that copies of their papers will be checked and kept by the plagiarism-detection service, and to request that students themselves upload their work to the company's database. In that way, students cannot later argue that their papers were submitted to Turnitin.com without their knowledge. About 70 percent of the papers received by the service each day are uploaded by students, he adds.

He calls the privacy allegation "petty criticism" and contends that colleges are not violating FERPA by submitting papers to Turnitin.com because the work is not distributed elsewhere.

The procedure, though, raises questions about whether students feel coerced into submitting their papers to the service, and what would happen if they told their professors that they objected to handing over their work because doing so would undermine their legal rights.

Mr. Barrie responds that professors can explain to students why that assertion is wrong -- as he argues -- or just tell them, "Write as much creative stuff as you want -- just don't do it at this institution."

"It's analogous to football players saying, 'I'm not going to abide by the referee,'" he says.

He also denies that the company is infringing on student copyrights -- even if the students aren't forewarned that their papers will be handed over to Turnitin.com -- arguing that the service is simply making "fair use" of student works.

It's an unusual rationale for commercial activity. Traditionally, the "fair use" exception to copyright law is cited by scholars who copy passages from books for their research, or by instructors who copy magazine articles for classroom use.

"In no way do we diminish students' ability to market their work," says Mr. Barrie.

"Since we vet for originality, it increases the marketability of the work and increases the confidence a publisher might have in publishing that work."

Under copyright law, the fair-use exception is easier to justify if freely distributed copies of a document are not expected to threaten its commercial value.

Dan L. Burk, who is a professor at the University of Minnesota Law School who specializes in intellectual property, says of Mr. Barrie's fair-use defense: "That's baloney."

As many as three factors undermine the argument, the professor says: The students' papers are completely copied. They are often creative works, as opposed to compilations of scientific facts. And they are being submitted to a commercial enterprise, not an educational institution. "To run a database, you've got to make a copy, and if the student hasn't authorized that, then that's potentially an infringing copy," says Mr. Burk.

That's one reason Turnitin.com has not been popular among faculty members at the University of Minnesota-Twin Cities, which has a one-year trial subscription to the service that is set to expire in August. Only 40 professors have signed up for the service, says the assistant vice provost, Linda K. Ellinger.

Success Stories

Still, some professors and college administrators staunchly defend Turnitin.com and say they aren't worried that subscribing to the service might subject them to lawsuits.

"I view Turnitin.com as an agent for the university," says Nicholas S. Aguilar, director of student policies and judicial affairs at the University of California at San Diego. "It's no different than having a teaching assistant review students' work and confirm whether it's authentic."

San Diego requires professors to inform students that they will be required to submit their papers to Turnitin.com as part of the grading process. And if a student refuses to comply? "We leave it up to the instructor to determine how to treat that," says Mr. Aguilar.

The university is in the first year of two-year contract with Turnitin.com and is pleased with the results of the service.

"Anecdotally, I'm getting feedback from instructors that they are seeing significantly fewer instances of papers that contain plagiarized text," says Mr. Aguilar. He adds that the university has assurances from Turnitin.com that it will not use students' papers for any purpose other than to validate their originality.

Duke University's College of Arts and Sciences, too, has had its legal concerns satisfied by Turnitin.com. "They sent us a lengthy document that said they weren't infringing, since nothing goes out of the database without students' express permission," says Michele Rasmussen, assistant to the dean.

But, since August, when the college began subscribing to the service, fewer than 15 professors have used it, she notes. "We're not sure if faculty are not willing to use it, or faculty have not caught on to it."

Duke advises professors to submit only those papers that they suspect might be plagiarized. And it's up to professors to decide whether to warn students about the potential use of the service. The college "expected a vocal reaction" from students and was surprised when that didn't happen, Ms. Rasmussen says. "Maybe if the usage was higher, we'd be getting more of a reaction."

In fact, Duke's student newspaper, The Chronicle, endorsed Turnitin.com in an editorial, calling the service "unobtrusive" and arguing that it "comes the closest to maintaining academic honesty without damaging the trusting environment that administrators have attempted to foster."

Sheldon E. Steinbach, vice president and general counsel of the American Council on Education, scoffs at the notion that students' privacy might be violated when their papers are uploaded.

"If a system is being employed to try to promote academic integrity, and sustain the value of a degree from being diminished by fraud, I don't quite see where there's a FERPA claim," says Mr. Steinbach.

Similarly, Virginia's Mr. Bloomfield says it would be an injustice if Turnitin.com was forced to stop providing its service because of a legal complication.

He suggests that students who object to having their papers become a part of a commercial database be offered alternative, in-class assignments. Or perhaps copyright law should be amended to accommodate a plagiarism-detection service like Turnitin.com, Mr. Bloomfield suggests.

After his own computer program flagged 157 papers at Virginia for suspected plagiarism, the professor turned the cases over to the university's honor committee in April 2001. Forty-three of the students were found guilty after a trial or admitted plagiarism, and 88 were cleared; trials are pending in most of the remaining cases.

He says Turnitin.com and other plagiarism-detection services do more than just ferret out plagiarists: They improve the higher-education system by helping to attach more meaning to students' grades, and they make dishonest students realize that it doesn't pay to use any means necessary to get ahead.

"If copyright problems make it difficult to ensure the integrity of the classroom, how does this benefit society? How does this benefit the students?" he asks. "What important right of students is being preserved by barring a service from retaining a copy of their paper?"
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Washington Post
Pentagon Commitment Helps Advance E-Learning Standard
By Ellen McCarthy

Michael Parmentier almost gushes about the potential benefits of online learning. He envisions a world where pieces of information -- no matter how detailed or obscure -- are instantaneously available, packaged and delivered for easy absorption.

Next week, Parmentier's vision will come a step closer to reality. An initiative spearheaded by the Department of Defense to make various online training technologies work together has quickly produced an unofficial set of standards for the industry.

"When we first tried to use distance learning, every time you changed a chip or part of the system, we'd have to recreate all of the content," said Parmentier, director of readiness training policy and programs for the Defense Department. "We knew that if we could create an agreed-upon platform, we wouldn't have to keep changing the content that had been created."

In November 1997, Parmentier's office quietly put out a notice that it would hold a meeting in Rosslyn to discuss the need for standards among electronic-learning technologies. More than 400 people showed up and "they just wouldn't go away," he said.

That meeting spawned a collaborative effort by government agencies, private companies and academic institutions to develop standards for not only the military but all e-learning systems. Rather than independently creating its own set of standards and requiring that vendors adjust their products accordingly -- as was often done with other technologies -- the Pentagon let industry experts guide the project.

It set up shop in Alexandria and secured $6.5 million in federal money to fund the testing and development of e-learning standards, now called the Advanced Distributed Learning initiative, or ADL. The initiative's goal was to create a set of basic principles for content and software providers so that information created for one unit or organization would be accessible on any other e-learning system.

While other sets of standards emerged before the Defense Department's initiative was launched, no one organization had the influence to set an industry-wide standard. For many software and content providers, the military represents a large, coveted client with too much clout to ignore.

"Once there is a first big buyer in any industry, a standard emerges. The DOD is the single largest trainer in the world -- they were that huge buyer," said Elliott Masie, president of the Masie Center, a think tank in Saratoga Springs, N.Y. "They were seen as being honest, independent. And everybody wanted the same objective -- content that was reusable and could be personalized."

Masie, who served as a consultant on the project, believes that without the Pentagon's involvement, comprehensive industry standards would still be 10 years away. Rather than starting from scratch, the ADL standard took its cues from existing sets of standards and developed a more thorough set. Because of the group's rapid and inclusive efforts, he said, even other standards that are still in use have been largely marginalized.

"They've created an environment, where if you're in the business, you would be a fool not to address the standards they've come up with," Masie said. "Not that they were meant to become a bully customer, but it was just rational -- no other single player had the clarity to do this."

Robby Robson, chair of the Institute of Electrical and Electronics Engineers' Learning Technology Standards Committee, argued that while the Defense Department's e-learning initiative has been a success, it is more a compilation of existing specifications than the creation of new standards.

"Their role has been making these things that all the other organizations developed practical. . . . They created a working model," Robson said. "They certainly aren't making accredited or legal standards. What they've done is in essence is say, 'Here is all the work that all these people did and we have real business cases and real needs, so let's go out and get it done.' And more power to them, because they did it."

The ADL project counts industry leaders such as Electronic Data Systems Corp., Click2learn.com, IBM Global Services, Microsoft Corp. and SkillSoft Corp. among its partners.

The ADL work, and the span of its influence on e-learning, has not been without criticism from some players in the sector. While vendors have little choice but to make their products fit the ADL standard (named the Sharable Content Object Reference Model), some say they are too focused on tracking content and cannot yet guarantee that all systems deemed compliant will actually work together.

Amar Dhaliwal, vice president of engineering at ThinQ Learning Solutions Inc., said his company moved quickly to make its content management and delivery products compliant when ADL's standards were first released in 2000. Next week, when the new version is released, it will do so again. To do otherwise, he said, the company would risk losing the confidence of both government and corporate clients.

"The standards are still relatively young, and as they go through different versions, there are significant gray areas. Someone can be creating content that is compliant but it still might not fully work on all learning management systems," Dhaliwal said.

Regardless of its kinks, few in the e-learning world deny that the initiative will continue to have a profound effect on the industry.

"The eventual advantage is that we're going to provide a digital knowledge environment where chunks of knowledge are going to be shareable and reusable. If they exist somewhere, you will be able to find them," said the Pentagon's Parmentier. "Eventually we'll have a world where knowledge flows like water or electricity."
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Washington Post
Out of Silicon Valley, and Looking Homeward
By Richard Morin and Claudia Deane

Engineers and entrepreneurs from India and China who work in Silicon Valley are quietly fueling a high-tech revolution in their native countries in ways that challenge traditional notions of a "brain drain," according to a new study by the Public Policy Institute of California.

AnnaLee Saxenian, a professor of city and regional planning at the University of California at Berkeley, calls these highly trained foreign-born professionals "agents of global economic change." She found that many of these immigrants regularly return to their native countries to talk tech, advise local businesses or consult with government officials about business or technology.

Last year, Saxenian surveyed 2,273 members of the 17 leading technology and business professional associations in the San Francisco Bay Area. Overall, about 9 in 10 were born outside the United States. Of these tech workers, 43 percent were born in India, 30 percent in China and 12 percent in Taiwan. The rest were from other countries.

Saxenian found evidence of a reverse brain drain. Nearly three-fourths of the Indian respondents and two-thirds of the Chinese said they knew between 1 and 10 immigrant professionals who had returned home. About 3 in 4 survey participants said they would consider starting businesses in their native countries.

Half of all Silicon Valley foreign-born professionals said they traveled to their native countries for business at least once a year. Some make the trans-Pacific hop so often that they're called "astronauts," Saxenian wrote, "because they appear to spend their lives in airplanes."

According to her study, 8 in 10 reported that they shared information about technology with colleagues in their native countries. Four in 10 said they helped to arrange business contracts back home. One-third said they meet with government officials and more than 1 in 4 served as an adviser or consultant for a company in their country of birth, she found.

"The 'brain drain' from developing countries such as India and China has been transformed into a more complex, two-way process of 'brain circulation' linking Silicon Valley to select urban centers in India and China," Saxenian concluded.

BIBLIOPHILES: The precocious New America Foundation has just agreed to a deal with Basic Books to publish jointly up to 10 books a year covering public policy and current affairs. Until now, fellows at the three-year-old think tank primarily have relied on op-eds and magazine articles to express their deep thoughts.

The joint book imprint is "in contrast to the way Brookings and the American Enterprise Institute do it, which is through in-house imprints," said Ted Halstead, New America's president. "Those books typically don't get into Barnes & Noble, typically are not reviewed in major papers and are published at a net cost to the institution."

Basic Books and New America each will have veto power over book proposals, and will jointly negotiate each author's advance. Basic will provide New America support for its editorial work.

"New America offers great resources, like an office and time and a place to be, and then we bring our publishing resources to bear," said Liz Maguire, associate publisher and editorial director at Basic Books. "We're hoping to sign a good handful of books by the end of the year."

THE OVERSEAS MARKET: Speaking of books, the Hudson Institute has a bestseller on its hands -- in Japan.

A new collection of essays called "The Re-Emerging Japanese Superstate in the 21st Century" is at No. 2 on the nonfiction list of the Nihon Keizai Shimbun, a leading financial daily, according to Hudson Vice President Kenneth Weinstein.

The essays center on "the future of Japan, and some argue that Japan's real outlook is not as gloomy as most observers believe," Weinstein said.

The new book, which takes its title from Hudson founder Herman Kahn's "The Emerging Japanese Superstate," published in 1970, is in its fourth printing since late March. There are 28,000 copies in print.

DEAN SEARCH: Well, one thing remains clear: The dean of Washington think tank presidents is named Ed.

But it's neither Edwin J. Feulner Jr. of the Heritage Foundation nor Edward H. Crane of the Cato Institute, both at roughly 25 years of service, as we reported last week.

"I'm sorry to disappoint 'the Eds' at Cato and Heritage, but neither is the dean of Washington think tank presidents. The clear leader is Eddie N. Williams, president of the Joint Center for Political and Economic Studies, who is serving his 30th year," reports Liselle Yorke of the Joint Center. Williams "came to the Joint Center in 1972, two years after its founding in Washington, D.C. . . . I hope this puts the debate to rest."

Perhaps. Any other contenders?

CANDID QUOTE OF THE WEEK: "I have been asked to talk about my book, a subject about which I have become somewhat weary," said Bernard Lewis last week at the Ethics and Public Policy Center. A preeminent Middle East scholar and longtime Princeton professor, Lewis recently published "What Went Wrong: Western Impact and Middle Eastern Response," a well-timed book on Islam and the West. "I shall endeavor not to communicate my boredom to the audience."
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USA Today
Kazaa, Verizon propose to pay artists directly
Jefferson Graham

Jim Guerinot, a board member of Don Henley's and Sheryl Crow's Recording Artists Coalition and the manager of No Doubt, Beck and The Offspring, is such a fan of digital music that he has ripped his CD collection into MP3s and listens to them on his portable Apple iPod on his daily bicycle commute to work.

But you won't find any of his artists' work posted on Pressplay, the Net subscription service backed by their record labels. He removed them, he says, because the acts weren't getting paid.

The record industry has responded to the immense popularity of file-sharing and trading of copyrighted material by suing to close the operations down. But as one swap site shuts, others take its place, and more people are downloading now than ever.

An unlikely alliance of swap-service Kazaa and telephone and Internet giant Verizon is floating a proposal to break the logjam of lawsuits: Computer manufacturers, blank CD makers, ISPs and software firms such as Kazaa will pool funds and pay artists directly.

"Historically, there's been a clash between the content community and new technology, back to the player piano," says Verizon vice president Sarah Deutsch. "We're proposing the idea of a copyright compulsory license for the Internet, so peer-to-peer distribution would be legitimate and the copyright community would get compensation. It's hard to get the genie back in the bottle."

Kazaa lobbyist Phil Corwin says a $1-a-month fee per user on Internet providers alone (it's unclear whether costs would be passed along to subscribers) would generate $2 billion yearly: "We're talking about a modest fee on all the parties who benefit from the availability of this content."

Recording Industry Association of America president Hilary Rosen calls the proposal "the most disingenuous thing I've ever heard. It's ridiculous."

But Guerinot isn't ready to dismiss it out of hand: "Any model that starts to accommodate monetizing the artists is worth looking into."

Guerinot is upset that the labels have tried to combat technology with alternatives that have been widely rejected by the public. MusicNet and Pressplay offer limited downloads, but not in the preferred MP3 format, and they usually can't be transferred to portables or burned to CDs.

"It would be like me opening a video store, charging 10 times what others were charging and only offering videos in the Beta format," Guerinot says. "In any business, when you have billions of downloads occurring, you don't say we're going to ignore that market and try to create something else. You serve your customers."
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Washington Post
Two Virginia Universities To Join Forces Against Cybercrime
By Brian Krebs

Two Virginia schools on Tuesday will launch a $6.5 million project to help sort out the myriad legal, technical and policy challenges involved in steeling the nation's most vital computer systems against cyber-attack.

The Critical Infrastructure Protection Project - to be housed at the George Mason School of Law in Arlington - is a collaborative effort between GMU's National Center for Technology and Law and researchers and academicians at James Madison University.

The project will be lead by John A. McCarthy, a former member of a Clinton administration team that facilitated government and private-sector collaboration in preparing key computer systems for the Y2K conversion.

Among the more pressing problems the new center will tackle are legal issues that have stymied plans to establish more fluid and open information-sharing networks between the public and private sector.

Tech companies have indicated they would be more willing to share information with the government if they could be assured that data would not be leaked to the public through the Freedom of Information Act.

Lawmakers in both the House and Senate are pushing legislation that would guarantee such protections.

But consumer and privacy watchdog groups say FOIA case law adequately protects any of the information concerning cyber-security issues that should legitimately be withheld from the public. Rather, they argue, the legislation could end up exempting companies from legal liability for security lapses.

"The information-sharing plan has been on the table for six years and we still haven't come up with a workable solutions because of legal obstacles," McCarthy said. "We hope that by putting our third-party hat on we'll be able to bring together the right constituencies to broker lasting and useful solutions to long-term problems."

The center also plans to offer congressional testimony and become the central clearinghouse for data and research on cybersecurity and critical infrastructure protection.

"We want to become the center that researchers and government leaders can come to that centralizes a lot of data and findings on cybersecurity," McCarthy said. "Right now, that data is all over the map, and we're planning to bring that together in one place."

In addition, the group plans to work with other schools to coordinate research and development on cyberterrorism issues.

The program is being paid for through the National Institute for Standards and Technology (NIST), an arm of the U.S. Department of Commerce.

The $6.5 million was allocated under the FY2002 Commerce-State-Justice appropriations bill, which funds the center for the next two years.

Rep. Frank Wolf (R-Va.), chairman of the U.S. House Subcommittee on Commerce, Justice, State and Judiciary, and author of the original funding measure, is looking to give the center more money through the appropriations process, an aide said.
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Los Angeles Times
Questions Raised by E-Mail on Energy
Policy: Message gleaned from administration energy task force staff member leads Democrats to voice suspicion over meaning.
By RICHARD SIMON
TIMES STAFF WRITER

May 14 2002

WASHINGTON -- An e-mail from a high-ranking staff member of the Bush administration's energy task force said officials were "desperately trying to avoid California" in a report dealing with the energy crisis last year, Rep. Henry A. Waxman (D-Los Angeles) said Monday.

The e-mail, obtained under the Freedom of Information Act by watchdog and environmental groups and also provided to Waxman, was largely redacted and neither administration officials nor the congressman could say specifically what the task force staffer was discussing.

But Waxman seized on the missive to turn up the heat on the White House to release all documents relating to the task force's discussions about California's energy crisis. Waxman said the e-mail, along with the recent release of documents showing Enron sought to manipulate the California energy market, "underscores the need for the administration to provide a complete accounting of its understanding of and approach to the energy crisis."

"It is important to know what, if anything, the administration knew about Enron's efforts to manipulate the California energy market," Waxman said in a letter to Vice President Dick Cheney, who chaired the task force.

The e-mail was sent May 4, 2001, by Karen Knutson, deputy director of the energy task force, to Environmental Protection Agency official Jacob Moss. It raised concerns about putting into the report a paragraph "emphasizing environmentally difficult issues about expediting permitting to deal with a crisis."

"We are desperately trying to avoid California in this report as much as possible," it continues. "Can you make the same point without going into California?"

Knutson could not be reached for comment, and administration officials could not say what it was about California that she sought to keep out of the report. But they defended their actions on California's energy crisis.

"Congressman Waxman has confused the Bush administration with the lack of action taken by the Clinton administration," said Energy Department spokeswoman Jeanne Lopatto. She said the Federal Energy Regulatory Commission, on Bush's watch, imposed electricity price controls and launched an investigation into whether Enron and other power sellers sought to use their market power to drive up prices.

The task force report released last year features California prominently, using the state's problems to bolster its arguments for building more power plants.

Waxman said the e-mail appeared to have come to light through an "inadvertent failure on the part of EPA to redact information it had intended to redact."

He said it raised questions about whether the widespread deletion of information from thousands of pages of documents turned over by federal agencies were the result of the administration's claims that disclosure would chill frank and open discussion or were intended to avoid embarrassment.

Cheney spokeswoman Jennifer Millerwise called Waxman's letter "another in a long list of politically motivated letters that Congressman Waxman regularly sends out."

She said the purpose of the administration's national energy plan was "to develop a strategic, long-term energy policy for the country ... not to focus on short-term problems specific to a state."

Waxman's letter was the latest salvo in a yearlong effort by congressional Democrats to force the administration to make public details of private meetings held with lobbyists during drafting of the energy plan.

The battle was fired up last week with the release of internal Enron memos that detailed an array of Enron price-manipulation strategies. Two Senate committees plan hearings on the memos Wednesday.

Sen. Byron L. Dorgan (D-N.D.), chairman of the Senate subcommittee on consumer affairs, said he plans to grill the authors of the Enron memos to "try to figure out who was involved in creating the strategies" and how far up in Enron's management knowledge of the strategies reached.

Dorgan said he also expects to question an official from FERC, probably its chairman, Patrick H. Wood III, to find out "what it knew and what it didn't know and why."

"It was a horrible failure on the part of regulators," Dorgan said in an interview Monday. "FERC was sitting on its hands."

Sen. Barbara Boxer (D-Calif.), a member of the subcommittee on consumer affairs, cited California's budget problems Monday in urging Wood to act swiftly to complete its price-manipulation investigation and provide refunds and renegotiated energy contracts, "so other vital services, such as health care and education, do not have to be cut to continue to pay for manipulated electricity prices."
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Los Angeles Times
High Court Takes a Step Toward Net Porn Rules
Justices: The cautious and complex ruling says a strict standard can be applied to online sites to shield children. However, free-speech challenges to the 1998 law remain.
By DAVID G. SAVAGE
TIMES STAFF WRITER

May 14 2002

WASHINGTON -- The Supreme Court breathed new life Monday into a law designed to shield children from pornography on the Internet, ruling that the "most puritan" community may decide what is harmful to minors, even if a Web site based elsewhere is prosecuted based on this strict standard.

On an 8-1 vote, the court reversed a lower court's ruling that had struck down the Child Online Protection Act because it relied on "community standards" for deciding what is "patently offensive" for minors under age 17.

But the cautious and complex ruling stops well short of upholding the 1998 law, which has never been enforced and will not be, at least for now. The court sent the case back to the lower court to address other free-speech challenges, which could take years. The case illustrates the difficulty that the federal government has encountered in trying to corral portions of the unruly Internet without trampling the 1st Amendment.

"The scope of our decision today is quite narrow," Justice Clarence Thomas wrote. "We hold only that [the Child Online Protection Act's] reliance on community standards to identify 'material that is harmful to minors' does not by itself render the statute" unconstitutional under the 1st Amendment.

Magazine and book publishers must live with this "community standards" rule, Thomas said, and the 1st Amendment does not create a special exemption for commercial Web sites.

"If a publisher chooses to send its material into a particular community," he wrote, "it is the publisher's responsibility to abide by that community's standards."

But the justices, while concurring in a lopsided vote, were unusually divided in their opinions. Paradoxically, several in the majority did not appear to support the notion of allowing local standards to govern the Internet.

In the end, the court neither upheld the law nor allowed it to be enforced. Instead, they sent the matter back to the lower court in Philadelphia to consider other free-speech challenges to the law.

Nonetheless, Monday's decision takes a step, albeit a tentative one, toward allowing the first federal restrictions on what can be transmitted via the Internet.

In its short history, the Internet has been championed as a truly free flow of communication and information. But with that freedom has come a large volume of hard-core pornography, much of which can be accessed by children and teenagers. In 1998, there were about 28,000 adult sites promoting pornography on the Web.

Shielding Children From Online Porn

Congress has been determined to block children from clicking onto sexually explicit Web sites.

In 1996, the Communications Decency Act made it a federal crime to send sexually explicit messages or communications to anyone under age 18.

A year later, however, a unanimous Supreme Court struck down that law, saying it was too broad and vague. It raised the specter that someone could be prosecuted for sending an e-mail or posting a provocative photo that was subsequently brought up on a minor's computer screen thousands of miles away.

Undaunted, Congress in 1998 adopted a narrower, more specific ban on computer transmissions that are "harmful to minors."

The Child Online Protection Act applied only to material posted on the Web "for commercial purposes." This excluded e-mails as well as Web sites that are entirely free. It is not clear, though, whether the law meant to include sites that are free to users but make money from advertisements.

The new law lowered the age of protected minors to those under 17.

It also adopted a new, three-part definition of what is banned. It covered "sexual acts" and "lewd exhibitions" that the "average person, applying contemporary community standards, would find, taking the material as a whole and with respect to minors, is designed ... to pander to the prurient interest and ... lacks serious literary, artistic, political or scientific value for minors."

The law also sought to shield Web sites that screened out minors by, for example, requiring them to supply a credit card number.

Nonetheless, before it could go into effect, the American Civil Liberties Union went back to court in Philadelphia to challenge it as unconstitutional.

The ACLU's clients included Salon magazine, which feared it could be prosecuted because of its sexual advice column, and the owners of a gay and lesbian bookstore, which posted material on its Web site. While neither site sought to appeal to minors, their sponsors say they could not easily prevent them from tapping into the sites.

When freedom of speech is at issue, the Supreme Court has been willing to block new laws based on how they might be used, even when no one has been prosecuted.

Last month, the justices struck down a portion of the Child Pornography Prevention Act of 1996 that made it a crime to own or sell "computer generated" children engaged in sexual acts, saying it could apply to animated figures or purely imaginary scenes.

Similarly, the ACLU said the Child Online Protection Act should be struck down before it goes into effect because it could chill communication on the Internet.

Its lawyers argued the 1998 law had the same flaw as the 1996 version. Since Web sites cannot know who will access their material, they are held responsible if minors click on to it, they said.

'Most Puritan' Community Is Cited

A federal judge in Philadelphia agreed and blocked the law from taking effect. The U.S. appeals court there ruled the law unconstitutional because it would allow the "most puritan" community in the nation to regulate the Internet.

For example, prosecutors could bring charges in Provo, Utah, against a San Francisco-based Web site, the appeals court judges said.

The Justice Department appealed in the case of Ashcroft vs. ACLU, 00-1293, and won a reversal.

Those who fear prosecution for distributing pornography "need only take the simple step of utilizing a [different] medium that enables it to target the release of its material," Thomas wrote.

Despite the near-unanimous vote and Thomas' strong words, most of the justices did not appear to agree on what was said. Only Chief Justice William H. Rehnquist and Justice Antonin Scalia joined Thomas' opinion in full.

Justice Sandra Day O'Connor signed it but said she believed there must be a national standard for what is harmful to minors. Justice Stephen G. Breyer wrote a separate opinion making the same point.

Three others--Justices Anthony M. Kennedy, David H. Souter and Ruth Bader Ginsburg--voted with the majority but joined a separate opinion casting doubt on the constitutionality of the law.

Justice John Paul Stevens dissented and said the law should be struck down.

"It is quite wrong to allow the standards of a minority consisting of the least tolerant communities to regulate access to relatively harmless messages in this burgeoning market," he said.

Both Sides in Debate Claim a Victory

Reflecting the split outcome, both sides said they were pleased.

Barbara Comstock, a Justice Department spokeswoman, said officials there were "pleased the Supreme Court has vacated the decision" of the lower court. It takes a step toward "keeping our nation's children safe from viewing the pornography for sale on the Internet."

Meanwhile, the ACLU's lawyer, Ann Beeson, said she was pleased the court did not allow the law to go into effect.

"The court clearly had enough doubts about this broad censorship law to leave in place the ban, which is an enormous relief to our clients," she said.

When the case goes back to Philadelphia, the ACLU lawyers will renew the main argument that the effort to restrict content on the Internet is hopelessly flawed.

Since sponsors of Web sites do not know who is downloading their material, they should not be punished if a minor accesses it, they say.

Further, if this restriction becomes law, it will force Web sites to post only material that is suitable for minors, and the 1st Amendment does not allow the government to impose such a restriction on American adults, they argue.
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Federal Computer Week
Defining 'best value'

Federal employee unions and other groups that oppose increased outsourcing of government services are losing ground fast. Although they may not like the direction things are going, they had better pay attention.

Bush administration officials say the decision to change the rules for competing work between the public and private sectors as recommended earlier this month by the Commercial Activities Panel is not intended to increase outsourcing, but to define a fairer process for measuring the costs of commercial-like services.

Yet most people agree that addressing problems in the current process, defined by Circular A-76, will likely make it easier for vendors to win bids for government work. Industry has long complained that A-76 does not accurately account for agency costs and that it favors low-cost bids, which flies in the face of the government's interest in so-called best-value proposals.

Clearly, the White House intends to take a more business-like approach to delivering government services. In cases where commercial firms can provide comparable services at a lower cost, industry will likely win hands down. It's trickier when it comes to evaluating bids for best value, rather than lowest cost. In these cases, commercial firms try to prove that they can provide better service at a comparable cost, or higher, if warranted.

The concept of best value, though, raises another issue that should not be forgotten: Government is not a business.
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Federal Computer Week
OMB checks card use

Regardless of whether they have been cited for abuses, all federal agencies have until June 1 to submit a review and remedial plans for government credit card use to the Office of Management and Budget.

OMB sent a memorandum April 18 requesting the plans and will use the information to determine the next course of action. The call comes after months of publicity surrounding the SmartPay cards because of credit card abuses at certain agencies, said Joseph Kull, deputy controller of OMB's Office of Federal Financial Management.

Speaking May 7 at the 2003 Visa Government Forum in Washington, D.C., Kull said the now notorious example of a government employee at the Space and Naval Warfare Systems Command using a government-issued card to buy breast implants for his girlfriend "brings tremendous pressure on the program" and paints a picture of an "irresponsible government," although the cards mostly have benefited agencies since the program's launch in 1989.

The federal government spent almost $14 billion in fiscal 2001 with the cards.

OMB will be reviewing the agencies' plans, but it's too soon to tell if quarterly reports on the purchase cards will be required in the future, Kull said, adding that he'd like to see agencies with good programs rewarded. "Not everyone should bear the same level of burden," he said. Excusing agencies with well-run programs from submitting reports would be an "incentive for good management."

Sue McIver, director of the General Services Administration's Services Acquisition Center, which oversees the SmartPay program, said she agreed with agencies, such as the Defense Department, that publicize egregious card abuses and prosecute offenders. This "lets others know those actions won't be tolerated."
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New York Times
Museum's Cyberpeeping Artwork Has Its Plug Pulled
By MATTHEW MIRAPAUL

An Internet-based artwork in an exhibition at the New Museum of Contemporary Art was taken offline on Friday because the work was conducting surveillance of outside computers. It is not clear yet who is responsible for the blacking out the artists, the museum or its Internet service provider but the action illuminates the work's central theme: the tension between public and private control of the Internet. The shutdown also shows how cyberspace's gray areas can enshroud museums as they embrace the evolving medium.

The work in question is "Minds of Concern: Breaking News," created by Knowbotic Research, a group of digital artists in Switzerland. The piece is part of "Open Source Art Hack," an exhibition at the New Museum that runs through June 30. The work can be viewed as an installation in the museum's SoHo galleries or online at newmuseum.org. Although the installation is still in place, and the work's Web site remains live, the port-scanning software that is its central feature was disabled Friday evening and was inactive yesterday afternoon.

Port scanning sounds like a cruise-ship captain's task. The term actually refers to a technique for surveying how other computers are connected to the Internet. The software essentially strolls through the neighborhood in search of windows that have been left open. Merely noticing where they are is no crime. Things get dicier, though, if what is seen is conveyed to a ne'er-do-well relative, who then breaks in somewhere, rearranges the furniture and makes off with a gem-encrusted putter.

One court has ruled that port scanning is legal so long as it does not intrude upon or damage the computers that are being scanned. Internet service providers, however, generally prohibit the practice, which can cause online traffic jams. That prohibition appears to be what led to the shutdown.

After the Knowbotic work started its peeping, the Internet service provider for one of the targets of the scan complained to the museum's Internet service provider, Logicworks. In turn, Logicworks notified the museum that port scanning violated its policies. On Friday, Lauren Tehan, a museum spokeswoman, said the museum was seeking a creative technical solution to keep the work online.

That effort did not succeed. Ms. Tehan said the museum, at Logicworks' request, shut down the work after the museum closed on Friday evening. On Saturday morning, Christian Hübler of Knowbotic Research said the group realized the port-scanning software had been disabled and decided to move the work's Web site to an Internet service provider in Germany. Ms. Tehan said that the museum suggested a way to put the work back online but that Knowbotic rejected the proposal.

The dispute calls attention to one of the very points the piece is intended to make. Because the lines between public and private control of the Internet are not yet clearly defined, what artists want to do may be perfectly legal, but that does not mean they will be allowed do it.

Before the New Museum exhibition opened on May 3, Knowbotic Research had already decided to remove the most troublesome features of the port-scanning software. Mr. Hübler said the group changed the work after consulting with a lawyer who specializes in Internet law. "I wanted to know the situation I'm in," Mr. Hübler said, "because when I work with the border as an artist, I want to know at least what the border might be."

When it is functioning, "Minds of Concern" resembles a slot machine. Viewers are prompted to scan the computer ports of organizations that protested in February against the World Economic Forum. While colored lights flash, a list of the vulnerable ports and the methods that might be employed to "crack," or penetrate, them to gain access to private information scrolls across the bottom of the screen. No internal information is exposed, but the threat is suggested.

European digital artists are more politicized than their American counterparts, and "Minds" is designed to advance a social agenda. By choosing to explore the computers of anti-globalization groups instead of Nike or Coca-Cola, Knowbotic is warning those groups that they are at risk of losing sensitive data.

But to present the work at the New Museum, Knowbotic had to defang it. At first, the group reviewed the 800 tools in the port-scanning program and removed 200 it deemed intrusive or malicious. After consulting with a lawyer, the group then encrypted the name of the organization being scanned because it was unsure if publishing the information was illegal. In place of the name on the screen, one saw the phrase "artistic self-censorship."

The group's disappointment in having to scale back the work was obvious in a message to an electronic mailing list: "Due to the ubiquitous paranoia and threat of getting sued, the museum and the curators made it very clear to us that we as artists are 100 percent alone and private in any legal dispute."

There is a sense of a missed opportunity here. The dozen works in "Open Source Art Hack" are intended to prompt discussion about the public versus the private in cyberspace while demonstrating how artists "hack," or misuse technology, to creative effect. Port-scanning software, for instance, is meant to be used for reconnaissance, yet Knowbotic has made it a political tool.

But "Minds of Concern" is also the only online work in the exhibition to operate in a legal gray area. In its fully functional state, it had the potential to cause a ruckus that might have yielded some black-and-white rulings. But instead, the exhibition commits no real transgressions.

Steve Dietz, the new-media curator at the Walker Art Center in Minneapolis, was one of the exhibition's curators. Its goal, he said, "was more nuanced than bringing cracking to the dull havens of a museum."

"Being bad and doing something illegal hold very little interest for me," he said, "but being tactical and creative hold a great deal.`

Artists like to be bad, and although museums are sometimes their targets, they can also serve as shields when artists become controversial. A recent example was the exhibition "Mirroring Evil: Nazi Imagery/Recent Art," for which the Jewish Museum, not the participating artists, took most of the heat.

As museums embrace cyberspace, its fuzzy rules are posing unfamiliar problems, and "Minds of Concern: Breaking News" is a case in point. As for how well those issues can be raised within a museum's walls, Lisa Phillips, director of the New Museum, said: "That really is the dilemma. We can only go so far."
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USA Today
RealNames online 'keyword' system shuts down

NEW YORK (AP) RealNames is shutting down its alternative naming system for the Internet after Microsoft decided to stop incorporating the system in its Internet Explorer browsers.

The decision means that users who had reached certain Web sites through shortcuts from RealNames will need to type in the full address or use a search engine. Users who had typed in Chinese or Japanese addresses may find their sites unreachable.

The shutdown takes effect June 30, when the current partnership between RealNames and Microsoft ends. RealNames laid off its 83 employees Friday, though some will serve as consultants during the transition.

Although the RealNames system was designed independent of any specific browser, it needed a major platform like the Microsoft browser to make it possible for users to recognize keywords.

Normally, to reach the Web site for Eastman Kodak, users would type in "www.kodak.com" in the address field of their browsers. RealNames allowed users of Microsoft's Internet Explorer to reach the site simply by typing "Kodak."

Critics have questioned the proprietary nature of the RealNames system, which essentially runs on top of the Internet's existing domain name system built on open standards.

Plus, many browsers now incorporate search functions, so that typing "Kodak" into other browsers would also get Kodak's site. After RealNames shuts down, Microsoft will simply have those keywords go to a search engine as well.

The biggest impact may be on non-English users who had relied on RealNames to link foreign language keywords with Web addresses that use English characters understood by the Internet domain name system.

VeriSign, which has been offering foreign names ending in ".com," ".net" and ".org," now must find another company to fill the void. VeriSign spokeswoman Cheryl Regan said the company was exploring its options.

RealNames and Microsoft disputed the reasons for the shutdown.

RealNames founder Keith Teare blamed it on Microsoft wanting more control over the searching process.

Microsoft spokesman Matt Pilla said the system created some user confusion someone typing "San Francisco realtor" got a site on loans, not a broker.
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Government Executive
Intellectual property rights issues hamper contracting process
By Maureen Sirhal, CongressDaily

Industry and Bush administration officials on Friday told a House panel that federal procurement officers require more training on the intellectual property (IP) issues involved in government contracts if they want to attract more commercial firms for information technology work.

The increasing role of technology in homeland security means that government agencies will need to outsource more projects to private firms. But many major IT firms fear that they will lose their intellectual property rights while doing business with the government.

"The pervasive view in my experience," said Richard Carroll, CEO of Virginia-based Digital Systems Resources, "is one of 'We paid for it, we own it.'" In other words, he told members of the House Government Reform Subcommittee on Technology and Procurement Policy, "the government owns the intellectual property rights to any research and development funded with government dollars."

If that mindset makes commercial firms fear government work, experts said efforts like homeland security might suffer because agencies will not be able to procure the best technologies.

The law that sets the framework for the transfer of government-developed technologies to the commercial sector instructs agencies to gather only the minimum IP rights necessary for a given project. But some firms are reluctant to relinquish rights to work on projects that they could not benefit from it in the marketplace. Meanwhile, procurement officers are inclined to negotiate contracts that give agencies all the IP rights for research that they fund.

Jack Brock, managing director of acquisition and sourcing management at the General Accounting Office, said that a GAO study released Friday found that companies generally are reluctant to contract with the government because of IP concerns that stem in part from "poor definitions" of the government's needs. Firms also perceive government contracting officials as inflexible.

Ben Wu, the Commerce Department's deputy undersecretary for technology, and industry panelists said the biggest problem is that procurement officers are unaware of the flexibility they do have in negotiating IP licenses with contractors. Inadequate training and expertise on IP issues also leave them uncertain of how much authority they have to negotiated deals, panelists said.

Subcommittee members questioned whether current procurement law should be changed.

Tony Tether, director of the Defense Advanced Research Projects Agency, said that while the law has worked "reasonably well," it does result in IP licensing agreements that are "largely determined by regulations." He noted that the law also fails to address a large part of intellectual property: trade secrets.

Wu, however, said that "current policy is sufficient and allows for trade secret protection," and that modifications would be a "major policy shift." He said some of the problems with the law might be the result of poor implementation, which is tied to employee training.

Panelists supported a suggestion made by Subcommittee Chairman Tom Davis, R-Va., to designate training for procurement officers dealing in specialized IP areas.
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Government Executive
Defense research agency seeks return to 'swashbuckling' days
By William New, National Journal's Technology Daily

The Defense Advanced Research Projects AgencyDARPA, originally ARPAwas created in 1958 as the U.S. response to the Soviet launching of the Sputnik satellite. The agency, which among other things developed the technologies leading to the commercialization of the Internet, works to create cutting-edge military technologies.


DARPA Director Anthony Tether was appointed June 18, 2001, and has worked in government and the private sector, serving previously as director of DARPA's Strategic Technology Office from 1982-86. Tether recently spoke with William New of National Journal's Technology Daily.

Q: How does DARPA relate to the Department of Defense?

A: We're a defense agency. We report to the secretary of Defense, as does the Army or the Air Force. ... What this secretary of Defense [Donald Rumsfeld] has done is, from a policy viewpoint, he has decreed that 3 percent of the Defense Department [budget] would go into what is known as the science and technology budget. He also has decreed that 0.8 percent, or roughly 25 to 30 percent of the S&T budget will go to DARPA.

He wants ... an organization that constantly brings forth new things that other people aren't doing. And that's generally DARPA.


Q: You've been here about a year. What were your goals coming in, and are those evolving?


A: Well, the goals I had coming in ... were two things. One was that [the top defense officials] all looked upon DARPA as an organization that was always doing the craziest things. But they felt that DARPA, over the last administration, had really lost a lot of its forward-looking luster.

What they wanted was to not transform DARPA to anything new, but to transform it back to something old. But they wanted it to become like it was in the early '70s and '80s, where it was a swashbuckling place, where program managers were constantly getting the director in trouble with ideas and never taking "no" for an answer.


The other thing was space. DARPA was born in the space age. The other goal was: Go do innovative things in space.


DARPA really does not have an organization in a classical sense. It's 140 program managers all bound together by a common travel agent. Our program managers are only here for four to five years. [Program managers] come up with an idea, they create the program plan, they compete internally for the money. We don't do anything within DARPA; we contract all our money out. They go out and get contractors who execute that plan.

Q: Are you trying to create the next Internet?


A: We're even doing better than that. ... We still have the original ARPA/DARPA thrust of creating a cognitive computer system.


Now we cycle forward 30-some-odd years. In 1965, there were like 50 transistors on the chip. We are approaching a billion transistors on a chip, a chip being something like a third of an inch by a third of inch. This approaches the density of cells in your brain.

Q: How will you make your mark on DARPA?


A: It's the easiest place in the world to change. The reason is we turn over people at a rate of 25 percent a yearwhich means after I've been here a year, 25 percent of the agency will be people that I personally had a hand in hiring. ...


Q: How has DARPA's mission changed since Sept. 11?


A: DARPA's only real stated charter is to prevent technological surprise. That has not changed, except we have modified the vision so that now we feel our job is not to just prevent technological surprise, but to create technological surprise.


DARPA was [already] working the terrorism and counterterrorism problem. We were developing the capabilities to be able to take inputs, financial transactions, and come up with networkswho's talking to whom.

We also had behavioral-science types of projects where we were trying to predict what a group would do. We also had efforts in foreign-language translation. We had people who were already interested in the subject; we just put them together in the same location and found an office director [former Reagan White House National Security Adviser John Poindexter].

We are going to develop the capability to detect, track, figure out intent and pre-empt terrorists.

Q: What do you need Congress to do?


A: We need Congress ... to understand that patience does pay off. Having an organization like DARPA, it's constantly developing new capabilities that may not turn into real capabilities for five years, 10 years or more.
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Government Executive
Homeland security effort boosts e-gov initiatives
By Teri Rucker, National Journal's Technology Daily

"E-gov"--shorthand for the information technology-based initiative intended to make it easier for individuals to access government services, while also cutting costs--has been expanding throughout the past decade, as the Internet has reached into the homes of rank-and-file citizens. But it is receiving heightened attention since the Sept. 11 attacks.

OMB is overseeing electronic government efforts at the federal level, and Mark Forman, associate director for information technology at the Office of Management and Budget, recently told a House subcommittee that e-government plans are integral to homeland security.

"Today, the federal government has only scratched the surface of the e-government potential," Forman told the subcommittee. "Basic management principles tell us that government operating costs will go down and effectiveness will go up if we make it simpler for citizens to get service."

The Bush administration has budgeted $50 million in fiscal 2003 for 24 e-government initiatives designed to eliminate redundant, non-integrated business operations and to make agencies more responsive to U.S. citizens.

But, to implement these changes, officials first must overcome several barriersincluding conflicting agency cultures, as well as a lack of both resources and a trust in existing electronic systems, according to a recent GAO study.

For e-government to be effective, Forman said, the government must ensure that citizens feel safe using the Internet. He added that agencies would provide that sense of safety by incorporating privacy and security protections, providing public training and offering e-authentication.

The administration's proposed fiscal 2003 budget also outlines many problems with e-government implementation, grading each agency on its e-government performance. None of the agencies received a passing score, nine earned a yellow mark--which means that some of the criteria have been met--and 17 agencies rated a red score, indicating at least one serious flaw in its practices.

For example, the budget document contended that management of information technology investments is the Energy Department's "weakest link," and because the agency is consolidating its IT portfolio under a chief information officer, it was "impossible to evaluate compliance with e-government standards."

The Sept. 11 terrorist attacks also put the spotlight on protecting the nation's critical infrastructure, including its information technology systems. But a spokeswoman for the Commerce Department's Critical Infrastructure Assurance Office said that budget was not divided into specific components.

However, agencies charged with overseeing the nation's energy and food supplies are given funds to combat terrorism under the Bush budget. The budget allocates $451 million to the Health and Human Services Department for this purpose; the Agriculture Department would receive $195 million, and the Energy Department, $194 million.
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Government Executive
Federal buildings told to improve security of air systems

By Shane Harris
sharris@xxxxxxxxxxx


The Health and Human Services Department has recommended that federal agencies tighten physical security around building air intake and ventilation systems to minimize the threat of chemical, biological and radiological attacks.


The guidelines on protecting buildings from airborne agents are part of the department's continuing efforts to protect public health since the Sept. 11 terrorist attacks and the ensuing anthrax scare, according to HHS Secretary Tommy Thompson. "These guidelines offer practical advice to building owners, managers and maintenance staffs on the steps they can take to protect their ventilation systems," he said in a statement.


The new recommendations suggest that building managers ensure that access to internal operations systems and building design information is restricted and that they assess the emergency capabilities of those systems. Building managers should also inspect air filters to ensure they're performing correctly and adopt more preventive maintenance procedures, the guidelines state. Still, building managers should not be overly cautious, the guidelines warn. For example, maintenance personnel should avoid possibly detrimental measures like permanently sealing outdoor air intakes.


"This guidance offers reasonable and practical measures to reduce the likelihood of a contaminant attack and to minimize the impact if one occurs," Office of Homeland Security Director Tom Ridge said in a statement. Ridge's office offered input on the recommendations, which were prepared by the Centers for Disease Control and Prevention's National Institute for Occupational Safety and Health, with the cooperation of more than 30 federal agencies and state and local professional associations. The guidelines were also distributed to private companies.


The guidelines attempt to offer practical advice for buffering existing security systems or adding ones where none exist. On some level, all buildings have similar needs, they say. "Preventing terrorist access to a targeted facility requires physical security of entry, storage, roof and mechanical areas, as well as securing access to the outdoor air intakes of the building," the guidelines say.


Yet each building's security needs must be addressed individually. Most buildings could use low-cost security measures, such as locks on doors to mechanical rooms. Other, more expensive steps, such as installing X-ray equipment to examine packages, should be considered only if further steps are warranted, the guidelines say.
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Government Executive
May 10, 2002
Digital divide between agencies remains wide
By Carl M. Cannon, National Journal

World-changing marvels to us are only wallpaper to our children.
--Bruce Sterling, science fiction novelist and technology writer.


The federal government often doesn't change the wallpaper until it's so old it's peeling off the walls. Waiting until then may seem to be less expensive, but it's really not.

It's May now, the beginning of fire season out West. At the National Interagency Fire Center in Boise, the pilots are readying their fleet of spotting planes. Actually, "fleet" is probably not the right word: Three planes--a King Air B-90, a Super King B-200, and a new Cessna Citation Bravo, the Forest Service's first jet--patrol the skies. The area they cover is truly vast. Not just the huge U.S. forests of Alaska and the Western states, but all of North America. "We've been to fires in Ontario, Canada, and as far south as Guatemala," Woody Smith, an electronics technician in Boise said on May 8 while one of the planes was spotting fires in New Mexico. "We could use a little more help, sure."

Those planes carry infrared cameras that can spot an 8-inch "hotspot" from 14,000 feet. They typically detect 10 to 15 fires while flying their grids--although Smith has spotted as many as 30 in one night. That's the good news. The bad news is that the planes have no satellite uplink and no computer network into which they can download this information. The flight crews relay the information to the fire bosses the same way they have since the Vietnam War: They land the planes near the fires and hand the film to an infrared interpreter. It can take from 30 minutes up to four hours to get the information where it needs to be.

Here's how the U.S. Air Force does a similar task: It launches General Atomics Aeronautical Systems-built Predators or Northrop Grumman-built Global Hawks over the skies of Afghanistan and Pakistan at altitudes of up to 60,000 feet, keeps them up for days on end, and transmits the pictures they take via satellite to ships in the Persian Gulf. Both types of planes are drones, meaning they're unmanned. The high-flying Global Hawk jets are equipped with on-board computers, which control--and even land--the planes. The Predators are steered by controllers on the ground, who can direct them to fire weapons at military targets.

On Capitol Hill, the current buzzword for such state-of-the-art hardware and the accompanying computer systems is "transformational" technologies. They surely are. But what should Americans think, then, about that retro fire-fighting gear in Idaho? Why can't Predators fly over the national parks and zap small fires with chemical retardants before they grow into dangerous wildfires? Science fiction writer William Gibson once explained it this way: "The future is here. It's just not equally distributed." Gibson was referring to the "digital divide" between well-off Americans and the underclass, but his point has a broader context, which was brought into clearer focus on September 11, the day the gulf between military technology and, say, the Immigration and Naturalization Service's passe record-keeping system suddenly seemed dangerously wide.

'Sideways' Scenarios

When Sterling uttered his lyrical phrase about wallpaper, he was addressing the National Academy of Sciences' convocation on technology and education. It was the first year of the Clinton administration. The Internet was still a cool thing to invoke. Aware that Washington policy makers were pretty chary of applying high-tech solutions to traditional social ills, Sterling was positively evangelistic about the possibilities of a technological future. The author of Zeitgeist and other books told the assembled wonks that although novelists and futurists tended to weave best-case or worst-case scenarios, in real life there are mainly "sideways-case scenarios." He noted that the Internet began as a Cold War military project but flourished as a tool for scholarly research, commerce, and play.

"It was designed for purposes of military communication in a United States devastated by a Soviet nuclear strike--originally, the Internet was a post-apocalypse command grid," Sterling said. "And look at it now! It's as if some grim fallout shelter had burst open and a full-scale Mardi Gras parade had come out. Ladies and gentlemen, I take such enormous pleasure in this that it's hard to remain properly skeptical. I hope that in some small way I can help you to share my deep joy and pleasure in the potential of networks, my joy and pleasure in the fact that the future is unwritten."

That's one vision. But following Sterling to the dais that day--it was May 10, 1993--was a tall, thin figure with a somewhat darker worldview: William Gibson himself. The leader of a generation of "cyber-punk" writers, Gibson is the originator of the term "cyberspace," which he coined in his acclaimed 1984 novel, Neuromancer. By then, Gibson had given considerable thought to the technology Al Gore once dubbed the "information superhighway." And he knew enough to be concerned.

"Realistically speaking, I look at the proposals being made here and I marvel," Gibson said wryly in response to the computer-in-every-classroom talk that dominated the seminar. "A system that in some cases isn't able to teach basic evolution--a system bedeviled by the religious agendas of textbook censors--now proceeds to throw itself open to a barrage of ultra-high-bandwidth information from a world of Serbian race-hatred, Moslem fundamentalism, and Chinese Mao Zedong thought."

Thus did the world's foremost science fiction writer reveal his skepticism about human nature and his prescience: The sectarian fanatics who attacked the United States eight years later, killing some 3,000 people, communicated with each other through cyberspace, researched potential targets in cyberspace--and continue to spew their hatred through cyberspace. The murderers of Wall Street Journal reporter Daniel Pearl had a free Hotmail account. The point is that technology itself is not a force for evil or a force for good. "It's just a force," says Gregory Fossedal, chairman of the Alexis de Tocqueville Institution, "that is determined by the good or evil of human beings who use it."

There is also a parallel conundrum associated with technology: In a free-market democracy with a tradition of individualism (the United States), the very factors that help produce a stunning gusher of innovation--unfettered intellectual freedom, a profit motive, the fact that no one is really in charge--also serve to impede government's ability to deploy such technologies to their maximum efficiency.

After America was attacked, President Bush and the top officials of his government reordered their departments, their priorities, and their very lives for the purpose of stopping terrorism. They reflexively turned to cutting-edge technology to help them. "We think there's a market for these products that are either on the research board or in the back of your mind--or down the road," Office of Homeland Security Director Tom Ridge told the Electronic Industries Alliance on April 23. "Biotech, infotech, you name it. We're going to look to the technology sector."

Ridge is certainly correct to turn to Silicon Valley for help in solving the nation's problems. But as it happens, incorporating technology wisely was already Washington's challenge before September 11. There are numerous technologies that, if deployed by government, would improve the quality of life, preserve natural resources, save money, address seemingly intractable social and economic problems and, in the process, fundamentally alter the nature of the debate on age-old Washington political questions.

Consider the forest fires that those pilots in Boise are supposed to battle with their 1960s technology. In 1988, after a devastating wildfire ravaged one-third of Yellowstone National Park, the nation debated the wisdom of the Park Service's "let it burn" policy. In truth, that policy--whatever its ecological merits--has long been the de facto policy for the Forest Service and the Bureau of Land Management in dealing with most major fires. These agencies simply lack the wherewithal to put out large fires in roadless areas. But the technology to fight them may already exist.

Today, during a big fire, Forest Service crews utilize pictures from National Oceanic and Atmospheric Administration satellites to help set their perimeters. But much greater technology is on hand. The oceanic agency's future NPOESS sensors and NASA's existing Hyperion sensors are capable of using hyperspectral imagery-colors not discernable by the human eye. This means these satellites could determine the water content, and thus the flammability level, of the nearby flora. They could measure wind direction and thereby predict where a fire would be in an hour.

In addition, the Defense Department has recently signed contracts with Lockheed Martin and TRW to launch a fleet of satellites that could change everything. It's called the SBIRS High and SBIRS Low programs. (It's pronounced "sibbers," and stands for Space-Based Infrared System). SBIRS Low will consist of some two dozen TRW satellites with amazing capabilities. Their primary mission will be to detect missile launches, but these fast-moving birds could do much more. They could not only identify a fire as soon as it broke out, they could conceivably identify the human who started it.

But they could do all this only if the Air Force agrees to share satellite time, if the Forest Service buys the computers to process all this information, and if it trains its people to use them--and so forth. "That's where you'd need an advocate in the agencies," says Richard Dal Bello, executive director of the Satellite Industry Association. "Is there somebody there who knows enough to get it done? Is there anybody in Congress who cares? That's the human dimension, where the magic we call politics comes in."

Would this be expensive? Yes, but how much does a forest cost? Or a human life? In 1994, nine smoke jumpers and five members of a Colorado "hotshot" crew were killed when a small 50-acre blaze blew up into a 2,400-acre wildfire on a July afternoon on Storm King Mountain. Those firefighters had basically the same equipment (axes, saws, shovels, and parachutes) as the 13 smoke jumpers who died in Montana's infamous Mann Gulch fire--in 1949. Add to the cost of human lives and wildlife and timber this number: $1 billion. That's how much the federal government spent fighting forest fires in 1994 without computers.

Getting Smart

So-called "smart cards," which contain chips or microprocessors, have offered a technologically feasible way to keep track of visitors to the United States for more than five years. By including biometric information, smart cards could provide much more security, as fake-proof identity cards, for everything from driver's licenses to passports and visas. Until recently, civil libertarians chaffed at the idea of national identity cards, and state legislatures balked at the cost. That may be about to change. On May 1, two Virginia congressmen, Republican Tom Davis and Democrat James P. Moran, introduced a bill directing states to turn their driver's licenses into smart cards. "We think what happened September 11 makes a compelling case to do it now," Moran said.

There is more where this came from. Existing technology could give Americans smart cars, smart roads, smart energy meters--and much smarter consumer medical devices. David J. Farber, a University of Pennsylvania professor who is an expert in engineering and telecommunications, said one example of a medical advance that is already feasible would be a chip embedded in the arm of a person with Type I diabetes. Such a chip could modulate the flow of insulin into the body far more precisely than today's insulin pumps. It could also record and transmit minute-to-minute data about blood-sugar levels, and dial 911 if a patient fell into insulin shock.

In an interview, Farber suggested that if Congress had more diabetics, federal money for such systems would be plentiful. That's probably not precisely the problem, but he is onto something about technology and Capitol Hill. The most recent edition of Vital Statistics on Congress shows that only one member of either the House or the Senate has an aeronautics background, nine have engineering backgrounds, and 17 have backgrounds in medicine. (Only one senator, Democrat Maria Cantwell of Washington state, worked for an Internet company.) By contrast, 218 of the 535 members are lawyers.

It stands to reason, therefore, that policy makers shy away from technologies that give off even a whiff of Big Brother--and few of the new potential technologies are as benign as Farber's diabetes chip. "Satellites and computers have given us the ability to look at things and deduce what's going on in a way that was never possible before," Farber said. "If you looked at all the information available about people--where they spend their money, who they talk to, who they meet, what they're reading, where they are at any given time--you could prevent a lot of crime, and probably terrorism.... But it's not an inexpensive proposition, and most Americans wouldn't enjoy being looked at all the time. A lot of things you could do, we aren't doing, because of the Constitution."

Yet, paradoxically, some of Americans' most cherished freedoms are at a crossroads--and technology may be their salvation. The enduring image of the 2000 presidential election is of beleaguered voting officials peering in confusion at mangled voting cards, the detritus of ancient, low-tech voting machinery that has no more place in modern America than spats and spittoons.

"I mean, that's the right symbol!" said former House Speaker Newt Gingrich, recalling those infamous hanging chads. "The average [error] rate in voting in America is 1.6 percent. The average [accuracy] rate for an automatic teller machine is better than 6-sigma, which is 99.9999. It's better than that. Now, is there a hint here? We're not talking about the future. We're talking about bringing government into the 21st century. That's all we're talking about. Just catch up with all the things that occur in the consumer world and occur in the business world today."

Gingrich's current passion is how transformational technologies in general, and nanotechnology in particular, are the key to maintaining American pre-eminence. In speeches and interviews emphasizing the need for Washington to embrace a high-tech future, he's been known to casually suggest a tripling of the education budget. "We are on the verge of creating an extraordinary explosion of new solutions that will dramatically improve our lives, our communities, and the delivery of societal and governmental goods and services," he said at a recent American Enterprise Institute seminar. Yet official Washington often resists technological solutions. This is most problematic when government is the only entity that can viably fund them.

Public education is an example of a program so big only government can really pay for it. But bigness itself is part of the problem. Although reading and comprehension test scores, especially among minority students, have been mired for a generation, the education establishment is too unwieldy to quickly embrace high-tech solutions. One of the most promising technologies emerged from studies into the workings of the brain by Michael Merzenich of the University of California (San Francisco) and Paula Tallal of the Rutgers University neuroscience center in Newark, N.J. After discovering what portions of the brain are responsible for learning, recognition, and memory, Merzenich coupled this research with modern computer technology and launched Scientific Learning. The company, based in Oakland, Calif., has produced a sophisticated learning program that routinely raises student reading and comprehension skills by a full grade level in six weeks. A 6-year-old sits at a computer, puts on headphones, and does five separate exercises (disguised as computer games) for 20 minutes each. There are up to 900 levels for each exercise, which the computer automatically calibrates to the individual student as it runs through the progressions. The repetition would wear out a teacher, but the computer doesn't mind.

The program is beginning to catch on as a teaching tool, but only on a painstakingly slow, district-by-district basis. Will the Education Department bless it? Company CEO Sheryle J. Bolton, citing the accountability provisions passed in this year's so-called No Child Left Behind education bill, hopes so. "We'll see," she said. "But `No Child Left Behind' certainly fits our mission statement."

Paul Saffo, a director at the Institute for the Future in Menlo Park, Calif., says that for technology to slowly work its way up to the national level in this way is now the norm. "There used to be a trickle-down effect in technology," he said. "The government got the best stuff first--the astronauts got what they needed, and then the rest of us got Tang for breakfast. It doesn't work that way anymore. Now a 15-year-old buys a supercomputer before his father--even if his father is a colonel in the Pentagon--gets his hands on it. I'm not kidding. That supercomputer is called Sony PlayStation 2. It's so powerful, if it was made in this country you probably couldn't export it."

John Markoff, who covers Silicon Valley for The New York Times, once dubbed this phenomenon the "inversion" of the computer business. Saffo calls it the "bubble-up effect" and says he noticed it when he and some other futurists toured the Navy aircraft carrier USS Enterprise. It may have the same name as the famous ship of Star Trek, but the carrier is hardly space-age. "We realized," Saffo said, "that with our PalmPilots and laptops we had more computer power in our backpacks than they had on their whole ship."

The reasons for this include cumbersome procurement rules, the amount of money the government is willing to pay--and, mostly, the scale of the worldwide consumer market. The Pentagon might buy a couple hundred thousand supercomputers, but Sony is selling millions. Also, the government's real need is not handheld hardware; it's the development of massive, self-organizing systems that constitute a new science in itself. This discipline is known variously as "complexity science," or "complex adaptive systems," or sometimes just plain old "chaos" theory.

One Santa Fe, N.M., company, BiosGroup, specializes in developing "self-organizing systems" that solve the problem of informational bottlenecks. Even before September 11, this firm had landed several government contracts--DARPA, the Defense Advanced Research Projects Agency, is particularly interested in applying complexity science--but now, even laypeople in Congress understand how crucial it is. "We had enough information [about the September 11 terrorists]. It was staring us in the face," says James W. Herriot, vice president for science at BiosGroup. "But somehow, nobody connected the dots together. We have billions of parts of information, but not enough human brainpower to sort through it all. There are lots of intelligent people in government, and they know that the system we have is a disaster. It won't be fixed by cutting the INS in half, although that might be politically satisfying. It will be solved by engineering systems according to this new science."

Still another factor relates to government's failure to embrace state-of-the-art technology: the tricky nature of making decisions in the fishbowl of an open democracy. "It's not that government is uniquely unwise, it's that they're more accountable for failure," says Esther Dyson, chairman of EDventure Holdings. "If a business tries something and it doesn't work, they go on. If government does it, they get exposed and ridiculed--voted out of office. The stakes are different in government."

Dyson found this out the hard way after she served as the first chairman of ICANN, the Internet Corporation for Assigned Names and Numbers. It is a nonprofit set up to bring order to the granting of Web addresses, but it received continual criticism from every direction. Asked how it would be possible to get government to be less risk-averse, Dyson turned the question back onto her questioner--onto the media. "For one thing, you guys have to stop jumping on them," she said. "Politics should be less vicious, and there needs to be more understanding that we need courage and experiment and innovation in government as well as in the private sector." Gary Chapman, coordinator of the 21st Century Project at the Lyndon B. Johnson School of Public Affairs at the University of Texas, echoes this point. He also maintains that government has problems that private-sector executives can't begin to imagine.

"The chief problem that government has is the same problem the phone companies have: They can't deploy systems that break, or which at least have a high degree of risk of breaking," Chapman said. "Not only do government systems typically have to work tolerably well, they have to serve everyone equitably and they have to be semitransparent in terms of their development, budgets, and accountability."

Overcoming Skepticism

These two points underscore the reality that there is no exact private-sector equivalent to midterm elections and the Electoral College. Take the corporate average fuel economy standards, known as CAFE. Automakers' light trucks are now required to average 20.7 miles per gallon, while their passenger cars must average 27.5 mpg. Those standards haven't been raised in a decade, because of the clout of the Big Three automakers and their unions based in the battleground state of Michigan. In the wake of September 11, there were calls, even from conservatives, for stepped-up energy conservation, which the administration skirted by embracing fuel-cell research, a promising but far-off antidote. Refusing to raise CAFE standards was a purely political decision. It was not a science-based decision--for the simple reason that the technology to vastly increase conservation is already here. It was on display three months ago at the Detroit auto show. There, Honda unveiled its Civic Hybrid, a car that averages 50 mpg.

Sometimes the problem isn't politics. It's a lack of imagination. DNA forensics is a glaring example, and a classic case of Bruce Sterling's sideways-case scenarios. In 1975, an Oxford-trained English biochemist named Alec Jeffreys attempted to clone a mammalian single-copy gene. He failed, but he did manage to devise a method of detecting single-copy genes. By September 1984, still pursuing biomedical research, Jeffreys, then at the University of Leicester, successfully tested a system of probing for genetic sequences in human DNA. The implications were immediately obvious. "It was clear that these hyper-variable DNA patterns offered the promise of a truly individual-specific identification system," he wrote.

Cops on both sides of the Atlantic began using DNA evidence in the prosecution of rape and murder suspects. But with little federal guidance, law enforcement authorities in the United States had no standardized rules for collecting such evidence. Requirements varied from state to state, as did the willingness to use DNA evidence as a tool for proving the innocence of some jailed defendants. Some courts and prosecutors have been so hostile to using DNA to help defendants that private do-gooders have filled the breach. In Kentucky, a retired Presbyterian minister raised $5,000 for a DNA test of a convicted rapist named William Thomas Gregory, who'd always proclaimed his innocence. Gregory was telling the truth. Two years ago, the test confirmed his innocence and he was released--the first Kentucky inmate to be freed by DNA evidence. The Innocence Project, started in 1992 by defense lawyers Barry C. Scheck and Peter J. Neufeld, has been instrumental in freeing more than 100 inmates. In Virginia, authorities are proud of their state-of-the-art Biotech Two forensics laboratory in Richmond, but it took a large donation from crime novelist Patricia Cornwell to build it.

Virginia has the best DNA database in the country because a 1990 law required DNA samples from every felon admitted into the state's penal system. In most places, backlogs are the rule. New York City has more DNA evidence sitting, untested, in "rape kits" in police stations' evidence rooms than in its lab--meaning that untold numbers of rapists and killers are roaming the streets for want of a single lab test. National Organization for Women President Kim Gandy terms this situation a "national disgrace," and she's not alone. In its fiscal 2003 budget, the Bush administration asked Congress for a 100 percent increase in federal funds to help local police departments reduce this backlog. Several lawmakers, led by Rep. Jerrold Nadler, D-N.Y., want more. On March 13, Nadler proposed increasing the current $50 million a year earmarked for this purpose over the next two years to $250 million.

This would be a good start, as is the FBI's national database, CODIS. But what a technologically savvy federal government would have done is construct a new lab with a dedicated supercomputer that would clear up old cases, reconcile claims of innocence with the evidence, and match up new DNA evidence from current rape cases in real time.

If Congress had a sense of irony, it could name such a facility the Buckland-Pitchfork DNA Laboratory, after the two Britons whose stories rival any plot a science fiction writer could weave. Rodney Buckland was the feeble-minded 17-year-old freed for rape and murder after Alec Jeffreys's lab established that DNA from semen on two 15-year-old girls was not his. Colin Pitchfork, a local flasher, was the one who was nabbed after English detectives required 5,000 men in three villages to submit to DNA tests.

There are all kinds of reasons, not the least of which is the Fourth Amendment prohibition against unreasonable search and seizure, why cops in the United States couldn't round up 5,000 men for DNA testing. There are also legitimate reasons, aside from technophobia, why juries don't automatically believe the government's forensic experts. It has been left to the nation's front-line prosecutors to tackle this skepticism head-on. One of them, San Diego County Deputy District Attorney George "Woody" Clarke, has come up with an admonition that could be posted in procurement offices and appropriating committees across Washington.

"Anything done by humans is subject to error," he says. "The technology itself is never wrong."
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Nando Times
Computer-based artificial societies may create real policy
By CHRISTIAN BOURGE, United Press International

WASHINGTON (May 12, 2002 3:35 p.m. EDT) - Agent-based modeling is an emerging computer technology that holds promise as a powerful tool for analyzing policy problems - and experts in the field believe it has the potential to fundamentally change the way social scientists and economists test theories, examine data, and create new policies.

But proponents of these software-based models - which accurately simulate how people and events interact, and can accurately predict the outcomes of systems or policies that may be put into place - say that despite the wealth of potential applications, and the immense growth of this new science in recent years, think tanks and policy researchers have been less than enthusiastic in their embrace of this new technology as a research instrument.

"It is fair to say that at this point this is a new way to do business and the full ramifications for policy are not fully developed yet," Robert Axtell told United Press International. Axtell is a fellow in economic studies at the Brookings Institution's Center on Social and Economic Dynamics, and a prominent researcher in the area of agent-based modeling.

"There are, however, some models that seem to be extremely salient for policy makers, but it is unclear how agent modeling can outperform a standard statistical model of analysis."

At its most basic, agent-based modeling uses a software program that autonomously decides what courses of action the individual players in the program will take in any situation being simulated. Researchers are using such programs to develop independently functioning artificial societies, to test theories about problems as diverse as the disappearance of long-vanished civilizations and why genocidal behaviors develop within existing societies, and to test theories about how best to police civil conflicts.

In such an artificial society program, individual artificial persons - or agents - are given set roles, and are programmed to exhibit a number of possible changes in their behavior. As the program runs, the software is designed to randomly decide what changes will occur and which agents will make them in a given situation.

The overall idea is for the artificial society to run within the computer as a real society would, with each agent (person) acting independently and reacting to any number of stimuli or situations that are designed to mimic real influences on human decisions.

By programming any number of possibilities into the software based upon the data gathered about a specific policy problem, and examining the different potential outcomes that emerge, proponents of the technology believe that policy analysts can use the tool to actually create and test potential policy solutions to real-world problems.

"Agents are good because your agents are designed to represent the behavior of observed social actors, individual firms or departments," says Scott Moss, director of the Centre for Policy Modeling at Manchester Metropolitan University in the United Kingdom. "You can design an agent to impart their behaviors in an way in which they interact with other social entities. You cannot do that with conventional economics or social science, and it can inform the range of options or range of possibilities on a given initiative that policy makers might take."

For example, if there are several competing potential changes that policymakers can institute in the U.S. social security program, researchers can take all existing information about the individuals and institutions affected by the government's program - retirees, the federal treasury, those who care for the aging, portions of the society that rely upon the spending of the retired, and others - and design a program where all the observable reactions that each individual agent can have are programmed into the software-based society.

The program is then run, with each agent reacting to whatever changes are made. The potential outcomes - market, governmental or otherwise - can then be analyzed to decide which policy change would be the most effective.

Axtell believes that agent-based modeling is a tool that has unlimited potential for assessing policy decisions.

"Policymakers seem to be very amendable to this because they can see it and ask 'What if you change X, Y or Z?' and we can say, we don't know but we can try it," said Axtell.

One simulation designed by Joshua Epstein, a colleague of Axtell's at Brookings, used existing anthropological and meteorological data to come up with plausible reasons why the Anasazi Indian tribe abandoned the Long House Valley in Arizona around AD 1300.

Other researchers have created artificial societies that mimic securities markets and real trader reactions. When run they produce the significant ebbs and flows in market dynamics that traditional economic theory models have been unable to accurately reflect.

"From a pure scientific point of view there are a handful of models where you can show agents will replicate well known history or representative data," said Axtell.

Though proponents of the technology are the first to point out that agent-based modeling is not meant to function as a predictive tool, they believe that the technology can be used to anticipate events that might arise from given situations, and to test theories about what policy decisions will work best to fix a societal problem.

But traditional social scientists, especially policy analysts in the think tank world, have been less than receptive to the technique, for a number of reasons.

Ben Goodrich, a trade analyst at the Institute for International Economics, and not a current user of this technology, told UPI that though he finds the potential for agent-based modeling quite interesting, he views it only as a simulation tool to be included in the arsenal of techniques used by economists. He said that is not a replacement for the type of empirical modeling that is the standard technique in social science research.

"I don't really consider it to be a complete substitute for the more empirical models that we use in economics and political science, that are completely driven by actual data," said Goodrich. "I think this is a complement for existing tools more than a substitute for them. Those (existing) methods are (actually) improving dramatically as a result of technology."

Moss says that part of the reason agent-based modeling remains little used by policy analysts is that they do not understand its full potential, and are skeptical because the modeling community on the whole is not properly testing its findings to demonstrate their validity. He added that the research of Axtel, Epstein and others who are prominent in the application of the technology, is the exception to this rule.

Moss is involved in an agent-based modeling project sponsored by the European Commission, which is examining the behaviors of stakeholders in water resource management in various regions across Europe.

He says the software model being used and the outcomes being simulated are being validated by the individual stakeholders who are being modeled. The stakeholders give feedback on the legitimacy of the circumstances modeled, and on whether the behavior that emerges in the program accurately reflects their own.

Moss says he believes that agent-based models can have their greatest impact, and can best reflect reality, if the models are checked against existing data and against the judgments of experts in the field.

Disagreements within the agent-based modeling community, about the direction and future of the technology, are also holding the policy world back from adopting the technique.

Stephen Bankes, a senior computer scientist with the Rand Corporation, says that a significant problem hindering the wide application in policy work of agent-based modeling and simulated artificial societies is that there is no dominant methodology for creating these programs. Instead, there are many competing techniques. This prevents the critical comparison of different approaches, and the debate over the value of different studies and outcomes that would follow.

"You have to have similar methodologies," said Bankes. "You have to be able to create mechanisms that will create many different alternative versions of the model. The policy people have been very slow to adopt it, but I think it is for legitimate reasons."

Axtell agrees. "If you have really good, empirically accurate models, they are much harder for those not disposed to the methodology to reject," he said.

Bankes says he believes that if this problem can be overcome, the potential for the technology as a policy tool is immense.

"It could be revolutionary simply because so much social science has been limited by the available models up to now," said Bankes.

He believes that the social sciences have been waiting for a change that will allow them to go in directions they have been unable to follow in the past and that "there is a reasonable chance that agent-based modeling is it." He cautioned, however, that this potential revolution could be decades in the making.

Currently Bankes, Axtell, and a few colleagues make up the handful of people in the think tank world who are using this technology to examine policy issues. There are many reasons for this but both men say the major ones are the steep learning curve for mastering the technique, and the differences between agent-based modeling and the established research methods in various fields.

They also believe that American social scientists have sparse training in the computational methods needed to design these systems.

Axtell says, however, that there are pockets where the techniques have been accepted, especially among people who do applied social science work.

"Most will view this as a challenge to how they were trained in graduate school," said Axtell. "But in general, people who do applied work, those who work with data and have a lot of computing skills, seem be more amendable to this modeling approach than those who are pure theorists."

The field is growing despite these stumbling blocks. Just a few years ago there were only a few dozen researchers doing policy-centered agent-based modeling, but now the community has reportedly grown to more than several hundred, with journals for the publication of studies and graduate students doing theses on the topic. Those students will also be able to find jobs, said Axtell, but those jobs will probably be at universities rather than think tanks.

Axtell believes that one of the reasons that think tank policy analysts are not yet interested in agent-based modeling is that few tanks actually do the type of long-term research for which the software is best suited.

Goodrich says that the work done by Axtell and other researchers is stepping beyond existing empirical modeling because it attempts to mimic reality in a way that more established techniques are unable to. At the same time he said that it is important to note that "you can't, strictly speaking, prove much with a simulation."

"In order for these agent-based models to be a tool for public policy, they need to help think tank scholars or academics or government workers understand why and when things occur, so they can successfully enact government policy to change things," said Goodrich. "I think that this is a tough hurdle to overcome."

He added, however, that these types of simulations are useful because they could enable researchers to brainstorm policy fixes and then test their validity with empirical modeling. In addition, he says that in many cases where empirical models are not possible - such as accurately analyzing events in the securities market - "having a simulation that supports a particular theory is better than nothing."

According to Bankes, Axtell and Moss it is the ability to create different societal models that gives agent-based modeling its strength. They believe that it is the power to develop and compare competing artificial societies - with different potential outcomes that can be examined to find the best possible solution - that can turn the think tank policy analysts into ardent supporters of such research.
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Nando Times
Jews shopping online to support Israel
By CATHERINE LUCEY, Associated Press

PHILADELPHIA (May 11, 2002 9:04 p.m. EDT) - When Jane Scher told other guests at a bat mitzvah that she had ordered a gift from an Israeli shop, they became interested.

So Scher, who lives in San Diego, created a Web site with over 100 links to stores in Israel.

American Jews looking for ways to help Israel have started using sites such as Scher's to buy books, jewelry, crafts or flowers, giving a boost to Israel's economy, which has lost major tourist revenues during escalating violence in the Middle East.

"I think all of us feel like if only there's something we can do," said Scher, 45. "If a million Jews spend $100 in Israel that's $100 million for Israel. We don't need to be helpless. We actually can participate in a constructive way."

Baruch Hadaya, 52, owner of Hadaya, One of a Kind Jewelry, in Jerusalem, said his Web site was getting about 1,200 hits a month before Scher started www.shopinisrael.com. Last month, after he was listed on Scher's site, he got 9,500 hits.

"I'm not sure I'd still be in business without them," he said. "I was dying, I was going out of business."

After the Israeli-Palestine clashes began in September 2000, the number of tourists visiting Israel dropped by more than half in 2001 from 2000 levels. There is an American warning against travel to Israel and once-busy stores and hotels are doing a fraction of their previous business.

"They have the right to support their people, and so should the Palestinians have the right to support their people," said Faiz Rehman, spokesman for the American Muslim Council. Palestinians "want to, but they can't. Their efforts here are discredited. The government accuses their charities of having ties to suicide bombers."

Rehman said the U.S. government has created a fearful atmosphere and that Palestinians are afraid to support their people. "People from other communities are hesitant to come forward and help, there's an atmosphere of fear," he said.

Scher said her not-for-profit site, which went up 11 weeks ago, is getting thousands of hits a day.

The Philadelphia Jewish Federation has had links to Israeli stores on its Web site for about six months and now has a link to Scher's site.

"There's a bakery in Jerusalem that provides rolls to hotels. At one time they employed 15 or 18 people and produced thousands of rolls," said Irv Geffen, the federation's vice president for marketing. "They were employing, in November, two people and were producing 50 dozen a day."

Geffen says he has bought jewelry for his wife online and plans to purchase more as Mother's Day gifts.

"The jewelry is lovely," he said. "Every time I physically go there, I buy jewelry."

The United Jewish Committees' Web site also has links to Israeli shopping sites.

"I think you see people being apprehensive" about traveling to Israel, said Richard Pearlstone, chairman of the group's marketing committee. "There are people who believe this is one of the ways to show support for the Israelis."

During the Six Day War in 1967 and the Yom Kippur War in 1973, thousands of Americans went to Israel to work and take over civilian jobs.

"It's not the same as when hundreds of thousands of soldiers are at Israel's borders and, therefore, Israel needed bodies," said Philip Rosen, chairman of American Friends of Likud. "At this stage, Israel doesn't need bodies to help out. What they need is other kinds of support."

Avra Kassar said she recently ordered flowers for her daughters-in-law through Scher's site.

"I have family and friends with children in the army," said Kassar, who lives in La Jolla, Calif. "This is an opportunity for me to do something so small in comparison with what they are doing."

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Sydney Morning Herald
There's no place like home

Australian software houses are finding the United States a land of opportunity too tempting to ignore, writes Glenn Mulcaster

When the founders of Tower Technology moved their headquarters from Sydney to Boston, they hired lots of people with American accents. Sydneysiders Pat Hume and Frank Johnson have been living in Boston for more than six years and have picked up the local jargon when they talk about the opportunities for Australian software houses that move to North America.

They talk turkey with big customers at head offices in the US, they have regular dialogue with market analysts such as Giga, Gartner and Delta. They can talk closely with North American financial advisers, who helped plan for an IPO that was postponed because of the persistent hangover of the tech stock crash in 2000.

But more importantly, they are selling more software in the world's largest market where Hume feels like a child in a lolly shop. "The US is an exciting place to be," she says. "We encourage every Australian software company to come here."

The paradox is that the larger, highly segmented US software market is less competitive, they say.

Their software helps companies manage electronic documents in their corporate databases. "When we win a contract in the US, we find that we are up against three or four competitors," Hume says. But in Australia there can be up to 20 contenders for the business. Every multinational is playing there and it is highly competitive.

"In comparison, the US is such a big market," Hume says. "We are like kids in a candy store."

But they insist that Tower Technology would never abandon its roots. "We would never do the major development work anywhere but Australia," Hume says. "Australia has a very good intellect and a very good work ethic."

Their model has been tried before and is encouraged by the Australian Trade Commission, especially for software companies starting their export drive.

"I totally agree on the need to appear American or at least an international company," says Peter Lewis, a senior trade commissioner at Austrade's office in San Francisco.

He believes this can overcome any perception of geographical issues, real or imaginary. "In general terms, unless an Australian company is exporting koala pelts or Steve Irwin dolls, we suggest they need to appear international or American," he says.

"Most of the successful Israeli and Indian companies in technology here, you wouldn't even know they were not American . . . until you go to their website and see R&D is based in Haifa or Bangalore."

He says Austrade recommends setting up a foreign head office with senior management based in the US but R&D in Australia. He also highlights some Australian technology companies that have effectively used the foreign-base method to start out:

Internet search company Looksmart; Atmosphere Networks, from Perth, which sold to Ditech for $90 million in 2000; Perth's Shasta Networks, sold to Nortel for $360 million in 1999; and Norwood Systems, also from Perth, now with a London headquarters after securing $US60 million in venture capital.

Hume and Johnson set up Tower Technology in the late 1980s, naming it after the Australia Square Tower in George Street, Sydney. They are married and have two children, aged 11 and 9, now at school in the US.

They began the US operation in 1995, initially hiring a local to work in Boston, but realised it would only work if they too were there on the ground. Hume and Johnson agree that to run a successful business, "it is essential to be at the coalface overseas".

"It makes sense to be where the biggest market is," Johnson says, "and we have contact with the head offices of the companies that buy our software."

They couple say it helps them make more informed guesses about product direction.

The company holds a quarterly product development committee meeting, which usually lasts three to five days, wherever the sun is shining at that time of year. Representatives of each region - Europe, Asia-Pacific, the Americas - vote on the aims for product development.

"In terms of technology leadership, a lot of the early development work goes on in the US," Hume says. The committee meetings often show that software buyers in the three regions are fairly closely aligned but sometimes there can be a 12-week lag in adoption of a technology.

"But with the Internet, the lag is becoming less and less," Johnson says. "The Internet is making everybody much faster and better informed about what is going on."

Tower does a lot of trade shows, focusing on "vertical" markets such as banking, insurance and government sectors, even though its product is applicable across the whole range of business - it is essentially a horizontal piece of software not restricted to one segment.

The average installation of Tower Technology software includes a $US1.5 million up-front purchase price, a maintenance contract of about 20 per cent per year, plus other services.

Another low-profile Australian software house selected Chicago as its US base, after an acquisition. Pete Draney, managing director of LANSA, reckons his company is perceived as a multinational software house with a widely scattered workforce. The headquarters near Chicago, at Oakbrook, Illinois, boasts about 125 staff.

Its first North American office was set up there in 1989 with an independent business partner that helped to sell LANSA software in the US on behalf of the Sydney-based software arm of Aspect Computing.

LANSA's flagship product is used to develop systems on the AS/400, a mini-computer from IBM widely used in manufacturing companies.

Draney says Aspect bought out the US partner in 1996 and renamed it LANSA Inc.

"In hindsight, Chicago was best for us - a travel hub, access to reasonably priced skilled resources, a large local customer and business partner community," Draney says.

LANSA's R&D is still performed in Sydney, where there are 60 staff. It has 50 sales and technical support personnel in Europe and eight people in Asia-Pacific in sales and support.

LANSA is privately owned by Draney and Lyndsey Cattermole. They sold their company, Aspect Computing, to KAZ Computer Services this year.

Draney maintains his day-to-day responsibility as managing director of LANSA, while Cattermole retains her role with Aspect.

KAZ was founded by Peter Kazacos, a software engineer who worked on the foundation of the LANSA product as an Aspect employee in the late 1980s.

A name change, comprehensive product revamp and management turmoil have not hurt Melbourne company Managesoft, a software company with a patchy history.

It changed its name from Open Software Associates last year, after managing director, John Cromie, moved from Australia to New Hampshire.

However, Cromie quit at the end of last year and returned to Australia for personal reasons.

Managesoft appointed an American software executive, Walter Elliott, to take his place only a few weeks ago.

Managesoft helps network managers control software in large corporate environments.

Managesoft's New Hampshire office was set up in 1993 to complement its office in California.

Andrew Hewitt, managing director of Managesoft's Australian operations, says it is important to have a manager on the ground in the US.

"It has always been our view that if we wish to succeed as an international software supplier, we have to succeed in the US market," Hewitt says, "for the

obvious reasons of the dominant size of that market within high-tech and computing."

He says Managesoft has won significant US accounts such as Merrill Lynch, Texas Instruments and Philip Morris. Big users in Australia include ANZ Bank and Mayne. "We treasure our Australian roots and expect to always maintain our software 'factory' here. The move was simply a matter of putting the leader where the most strategic action is taking place."
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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