Clips May 15, 2002

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips May 15, 2002

ARTICLES

Shipping insecurity Hodgepodge system guards the nation's seaports
TSA preps $1B-plus IT buy
Congress Moves to Lift Intelligence Spending
Project seeks to put sensors on cell towers to thwart terrorism
Judge Orders VeriSign to Stop Advertising Campaign
Firms weigh in on national plan
Napster founder, key execs quit; bankruptcy looms
Apple Introduces Server Computer
GAO raps ACE management
Americans make life decisions on the net
Scots online archive planned
Cisco Introduces Software to Protect Networks
What your mechanic is really doing
Surfers Flock to Web for Mother's Day Gifts
Missile shield put on the fast track
Parents can soon 'touch' the unborn
Fire, infrastructure offices launch information-sharing effort
Customs modernization not ready for implementation
Nintendo announces online gaming plans
Star Wars' creator George Lucas overestimated digital switchover, critics say
Programmers Get Comfortable Online
Wearable computers enhance the world
Reliability seals build trust for Web merchants
SOFTWARE REVIEW: On virtual safari
Researchers say robots may lift nursing home spirits
On the internet, time is money
Ottawa to crack down on cyber crime
Wireless theft up
Charges laid against online pharmacy
Microsoft: Disclosures could help hackers
Cost-containment mentality rules IT usage
A Sour Note for Mac Users
Senate moving toward action on privacy bill

****************
San Francisco Chronicle
Shipping insecurity
Hodgepodge system guards the nation's seaports, and in post-Sept. 11 world, 
that has officials worried

Every day, 800,000 cargo containers pass through the nation's seaports.

Only 2 percent of those containers -- which are used to transport 
everything from imported car parts to running shoes -- are opened and 
inspected by U.S. Customs Service inspectors on site.

And therein lies a problem: Port authorities, federal officials and 
business executives, jolted by the terrorist attacks of Sept. 11, are 
worried that all those uninspected containers could carry deadly cargo, too.

A major attack on a U.S. port would have a huge effect on the national and 
international economy because some 90 percent of U.S. imports move by sea. 
While authorities have ramped up airport and airline security, far less 
attention has been paid to the nation's 185 seaports, where responsibility 
for overseeing security is fragmented.

The new Office of Homeland Security and the Department of Transportation 
provide federal oversight. The Coast Guard patrols and occasionally boards 
suspect vessels, while the U.S. Customs Service inspects targeted 
containers. Local city and port police patrol port land and private 
security firms guard some maritime terminals.

But security varies widely from port to port and even within ports, where 
marine terminals are often leased and run by private companies with their 
own ideas about how things should work.

"There are a lot of ideas out there and a lot of guys coming out of the 
woodwork selling them," John J. Hyde, director of security and compliance 
for Maersk Sealand, the world's largest shipping company. In the meantime, 
Hyde said, companies and port authorities are left devising their own 
strategies.

Oakland's APL Lines has spent $1 million on additional security this year, 
said William A. Hamlin, president of the North America region. The money 
covers additional security guards at terminals, creating the new position 
of vice president of port and container security, sharply restricting 
vessel tours and tightening access to marine terminals by truck drivers and 
APL's own personnel.

"I can't even get into my own port without (proper) I.D.," Hamlin said.

But experts say portside antiterrorism efforts are still in the early 
stages. Congress has earmarked just $93.3 million for port security. The 
American Association of Port Authorities says the nation's deepwater ports 
need at least $700 million this year to meet new security needs.

Even on a stopgap budget, some changes are afoot.

Next month, customs inspectors in Oakland will get a speedy new X-ray 
machine that Coast Guard spokesman Steve Baxter says "is the size of a PG&E 
truck." The machine, which drapes one metallic arm over the 20- to-40-foot 
containers used in ocean shipping, will enable inspectors to check "10 
times as many containers as we do now," without having to open them, Baxter 
said.

Opening, unloading and reloading one container can take a work crew five to 
six hours, he said -- the main reason why inspectors open just 2 percent of 
incoming containers. Opening many more would cause container gridlock.

The price for increased port security will be high, said Ray Boyle, general 
manager of maritime operations for the Port of Oakland, which handles 96 
percent of all container cargo in Northern California.

Boyle estimates that added security will cost the port an additional $2 
million to $3 million in labor costs this year. Throw in extensive video 
surveillance, enhanced lighting, fencing and other physical improvements, 
and Oakland's costs could soar to as much as $75 million during the next 
several years, he said.

Two port security reform bills are now before Congress.

In December, the Senate passed a bill sponsored by Sen. Ernest Hollings, D- 
S.C., that would allow the Coast Guard to turn away cargo that originated 
from foreign ports that are deemed insecure, require the Customs Service to 
open at least 10 percent of incoming containers and authorize $150 million 
to buy 100 mobile X-ray machines.

The House is considering a bill sponsored by Rep. Frank LoBiondo, R-N.J.,

that would require security checks of ship crews, issue identification 
cards to port workers, deny entry to vessels from suspect foreign ports and 
budget $75 million annually for the next three years for port security.

Regardless of what changes are made, "We have to balance national security 
with commerce," said Lt. Cmdr. Jeff Carter, a Coast Guard spokesman in 
Oakland.

"We could shut down commerce, which would be an option, but not a very good 
option when you consider how much commerce moves through here."

Security begins well before a ship arrives at dockside. With new software 
programs, shippers can use the Internet to constantly monitor their goods 
in transit.

Solectron Corp., a San Jose company with $18 billion in sales of electronic 
parts and services last year, spent an unspecified sum to install software 
from Arzoon Inc., a San Mateo company.

"We started more from an inventory and supply control place, looking for 
visibility en route," said Jim Molzon, Solectron vice president for global 
logistics. "We find it has security uses as well. If something's gone 
wrong, we can see it right away."

At portside, inspectors target containers that seem out of the ordinary. 
Shippers with no history with U.S. authorities and containers originating 
in nations with established or suspected links to terrorists are prime 
candidates for inspection, according to Steve Baxter, chief Customs Service 
inspector at the Port of Oakland.

In the long term, experts say, a sea change in port security is needed to 
wash away the patchwork system that's in effect now.

Customs Commissioner Robert C. Bonner has proposed sending U.S. customs 
inspectors to major trading ports such as Hong Kong, Singapore and 
Rotterdam, Netherlands, and inviting foreign customs inspectors to work in 
U.S. ports. A pilot program began early this year with Canada. Canadian 
inspectors now work in Seattle/Tacoma and New York/New Jersey, and American 
inspectors are assigned to Vancouver, Montreal and Halifax, Nova Scotia.



--------------------------------------------------------------------------------
Port security at a glance
THE ISSUE: Authorities are concerned that terrorists could use ship cargo 
containers to transport or explode weapons in U.S. cities.

THE PROBLEM: With just $93.3 million earmarked for seaport security, only 2 
percent of incoming containers are opened and inspected. Port authorities 
say they need at least $700 million to do the job right.

THE AUTHORITIES: Oversight is divided between the Coast Guard, the U.S. 
Customs Service, port authorities, private security firms, local police 
departments, the new Transportation Security Administration and the Office 
of Homeland Security.
***********************
Federal Computer Week
TSA preps $1B-plus IT buy

Asked to build an agency from scratch in a matter of months, the 
Transportation Security Administration in June plans to award a five- to 
10-year contract for a nationwide information technology infrastructure 
that could be worth $1 billion or more, a source said Tuesday.

TSA is expected to release a draft statement of objectives for the setup of 
its infrastructure  everything from data centers to seat management to 
telecommunications  as soon as Wednesday, the source said.

Since its creation in November, the fledgling agency has been constructing 
its organization from the ground up. Its actions have been largely guided 
by the rules of the Aviation Transportation Security Act, particularly the 
costly mandate that all checked bags be screened by explosive-detection 
machines by Dec. 31, Transportation Department Inspector General Kenneth 
Mead testified at a House Appropriations Committee Transportation 
Subcommittee hearing April 17.

To get the job done, TSA received $2.4 billion for fiscal 2002, and the 
Bush administration is asking Congress to double the agency's budget for 
fiscal 2003. Already, TSA has requested $4.4 billion in emergency 
supplemental funding. And it will likely run out of money by the end of 
this month, Mead said.

The new IT task order will fall under an existing governmentwide 
acquisition contract, most likely the Transportation's Information 
Technology Omnibus Procurement or National Institutes of Health's Chief 
Information Officer Solutions and Partners contract, the source said.

In April, TSA awarded a much smaller, sole-source contract to Unitech Inc. 
to complete a model for a standard airport technology architecture, which 
will be rolled out at TSA headquarters and 17 airports, including 
Baltimore/Washington International, by November.

Under the $16.1 million contract, UNITECH also will develop training 
solutions for the agency.

TSA wants to establish a secure network from headquarters to airports and 
between airports; that enables capabilities including e-mail, information 
sharing and training; and that ultimately incorporates surveillance cameras 
and security equipment, according to UNITECH.

"This expanding partnership demonstrates how TSA can successfully 
collaborate with private industry in developing our organization and 
carrying out its mission," Pat Schambach, TSA's associate undersecretary 
for information and security technology, said in a UNITECH news release.
************************
Washington Post
Congress Moves to Lift Intelligence Spending
Hill Also Told of Afghan War Cost: $17 Billion
By Walter Pincus and Dana Priest

Congress is moving to dramatically increase spending on intelligence in 
response to last year's terrorist attacks, with new money slated for hiring 
additional CIA spies and analysts, modernizing the National Security Agency 
and enhancing research and development of satellite equipment that can 
detect factories making chemical, biological or nuclear weapons.

The intelligence budget is not publicly released. But the Senate 
intelligence committee last week approved President Bush's budget request 
for fiscal 2003, which will increase the total amount spent by the 
Pentagon, CIA and other intelligence agencies to nearly $35 billion, 
congressional and administration sources said.

That represents an increase of $2 billion to $3 billion over this year, and 
comes on top of $1 billion in additional money requested by Bush -- and 
approved by Congress -- shortly after the Sept. 11 attacks on New York and 
Washington.

The new money illustrates the reversal of fortunes for the intelligence 
agencies over the last eight months, as the country seeks to detect and 
destroy terrorist networks and to prevent new attacks. The largest part of 
the budget remains under the control of the Defense Department, but the new 
money also suggests the growing confidence Congress and Bush have placed in 
CIA Director George J. Tenet.

Meanwhile, the Defense Department has informed Congress that the war in 
Afghanistan has cost $17 billion since it began in October. About $3.7 
billion was spent on classified surveillance, reconnaissance and 
intelligence, and another $1.76 billion paid for precision guided munitions 
such as laser-guided bombs, Joint Defense Attack Munitions and cruise missiles.

But the largest amount of the money went for the basics: $4.7 billion for 
sending troops and equipment overseas, and maintaining ships and aircraft 
used in the war against al Qaeda and the Taliban, said Defense Department 
Comptroller Dov S. Zakheim.

CIA watchdogs say that without a thorough outside review, more money for 
intelligence will not fix the shortcomings of the system that were exposed 
on Sept. 11. Congress has yet to complete its investigation of the 
intelligence agencies' monitoring of al Qaeda leading up to the attacks. 
"What we've gotten so far is perfunctory and largely redundant," said 
Steven Aftergood, director of the Project on Government Secrecy and a 
longtime CIA observer.

Although the exact sizes of the funding increase and the overall 
intelligence budget remain classified, the Senate intelligence committee, 
in a report accompanying its spending authorization bill, "compliments the 
administration for requesting high levels of resources . . . for fiscal 
year 2003 and beyond."

The House intelligence committee has yet to produce its intelligence 
authorization bill.

The National Security Agency, which intercepts electronic communications, 
received one of the major increases under the Senate bill -- nearly $1 
billion to continue modernizing its computerized analytical systems. 
Another boost of nearly $500 million went to the CIA to continue expanding 
its "human intelligence," or spy training and operations.

The bill also put a priority on developing and buying satellite and 
analytical equipment to detect the development of chemical, biological and 
nuclear weapons. The National Reconnaissance Office, the National 
Intelligence Mapping Agency and the Defense Intelligence Agency would share 
this responsibility.

These so-called MASINT capabilities -- for measurements and signatures 
intelligence -- involves being able to detect traces of chemicals or 
pollution emitted from smokestacks, for example, that would indicate the 
presence of substances used in the production of weapons of mass 
destruction, said John Pike, a specialist in satellites associated with 
Globalstrategy.com, a Virginia research organization.

The Senate panel's report suggests that aspects of the intelligence system 
may change as a result of the new terrorism threat. For instance, the legal 
division between foreign and domestic intelligence-sharing and surveillance 
may continue to narrow as the CIA and domestic law enforcement agencies 
seek ways to better track terrorist networks. The report instructs the CIA 
director to "develop and provide" to federal, state and local officials "a 
list of known or suspected international terrorists" and terrorist 
organizations.

The CIA director will retain the authority to decide what information 
should be passed to domestic agencies, intelligence officials said, adding 
that one obstacle to more information-sharing is that most local law 
enforcement personnel do not have security clearances.

Several measures in the bill also seek to make it easier to circulate 
information and analysis among intelligence agencies. A newly formed 
Terrorist Identification Classification System, which is operated by the 
CIA, would catalogue and store information on known or suspect terrorist 
groups or individuals and be easily retrieveable by appropriate agencies.

The bill also envisions the possibility that spy satellites may be used to 
look down on suspected terrorist activities in the United States -- which 
currently requires a special waiver. It requires the CIA director to detail 
the changes being considered to lift or streamline the prohibitions on 
domestic satellite spying.

The bill would also give the CIA primary jurisdiction over the newly 
created Foreign Terrorist Asset Tracking Center, which is currently under 
the Treasury Department.

It would require new reporting on foreign companies involved in 
proliferation of weapons of mass destruction that raise money in U.S. 
capital markets. While much of the reporting requirement would remain 
classified, the committee asked that an unclassified report be made public.

In what could be the first indication of a move to give the director of 
central intelligence more control over intelligence operations, the panel 
asked the director to set "common standards and qualifications for 
individuals performing intelligence functions throughout the [intelligence] 
community."

The committee, the report noted, is interested "in ensuring that the 
director vigorously exercise his authorities and prerogatives as head of 
the intelligence community." Currently the Pentagon has predominant control 
over many intelligence operations.
*********************
Nando Times
Project seeks to put sensors on cell towers to thwart terrorism
Special Report: America Responds
By Scott R. Burnell, United Press International

OAK RIDGE, Tenn. (May 14, 2002 9:58 p.m. EDT) - The tens of thousands of 
cell phone base stations across the country could host a network of sensors 
to detect and track airborne chemical, biological or radiological attacks, 
Oak Ridge National Laboratory researchers said Tuesday.

A proposal called SensorNet involves chemical and biological detectors 
being developed for the U.S. Army, as well as existing software for 
predicting the size and movement of contaminant clouds, said Richard Reid, 
a group leader in the Systems Engineering and Technology Group at the 
laboratory. Reid explained that a meeting with a cell-phone technology 
provider just prior to Sept. 11 gave birth to the idea of linking detectors 
through the cellular network's monitoring equipment. The terrorist attacks 
speeded up the development process.

Detector technology can identify chemical agents in less than 30 seconds 
and spot biological agents in less than a minute in most cases, Reid said. 
Radiation detectors also are envisioned in the SensorNet plan, he said.

"We would have access to almost every single (cell phone tower) site in the 
United States," Reid said. "Our goal is, from detection through 
identification to getting the word to whatever command and control center 
you have, to take less than five minutes."

Using existing sites has several advantages, Reid told UPI, starting with 
avoiding the need to go through local licensing procedures. The cell towers 
also have extremely accurate timekeeping capabilities SensorNet could tap 
into, simplifying the process of determining the initial release site and 
tracking the spread of contaminants, he said.

As with any early-warning system, Oak Ridge researchers have worked to 
eliminate the possibility of mistakenly identifying a contaminant where 
none exists, Reid said. Having a densely packed detector network in urban 
areas would help eliminate false positives or malicious false alarms. 
Isolated alarms that do not spread to other detectors would be easier to 
spot as anomalies in such a situation, he said.

The proposal could prove useful in some situations, but would not replace 
existing methods for spotting the most likely attacks, said Michael Powers, 
a research associate at the Chemical and Biological Arms Control Institute 
in Washington.

"I'd be skeptical of such an idea until the sensors are proven," Powers 
told UPI. "Small-scale trials would be fine, but they might point out 
shortcomings in the network."

For example, cell phone antennas almost always are outdoors, and most 
terrorism scenarios involve indoor release of chemical agents or microbes, 
he said. A lack of details on the detectors' biological agent capabilities 
means much more study is necessary, he said.

Part of the ongoing homeland security debate includes discussions over the 
best way to fund a detection network, Powers said. The emphasis today seems 
to be on creating hospital-based systems that track actual cases.

The one area where a SensorNet arrangement could shine, Powers explained, 
would be in case of an attack involving dispersal of radioactive elements, 
such as with an isotope-coated "dirty bomb." If terrorists spread the 
materials without explosives, such a network might be able to spot the 
attempt before it did much harm, he said.
*********************
Reuters Internet Reports
Judge Orders VeriSign to Stop Advertising Campaign
Tue May 14, 7:12 PM ET
By Andy Sullivan

WASHINGTON (Reuters) - A U.S. court on Tuesday ordered Internet naming 
giant VeriSign Inc. to immediately cease a direct-mail campaign that used 
what a rival called deceptive advertising to poach its customers.


Domain-name seller BulkRegister sued VeriSign in Baltimore on Monday, 
saying the company sent thousands of "renewal notices" to BulkRegister 
customers that sought to trick them into unwittingly transferring their 
accounts to VeriSign.

In a preliminary hearing, U.S. District Court Judge Frederic N. Smalkin 
agreed with BulkRegister, saying that VeriSign likely engaged in deceptive 
behavior.

"The plaintiff has shown ... that the current 'renewal' notice sent by 
defendant to plaintiff's domain-name registrants is misleading and likely 
to cause confusion among such registrants," Smalkin wrote.

Smalkin ordered VeriSign to immediately stop sending the notices to 
BulkRegister customers.

VeriSign has been mailing out thousands of "domain expiration notices" 
since March 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.

Those who reply actually authorize VeriSign to take control of the account 
from the existing name seller, according to small type on the back of the 
form.

"This campaign is part of their core marketing strategy," said Tom 
D'Alleva, vice president of marketing for BulkRegister.

D'Alleva said BulkRegister hoped to secure refunds for the consumers, 
require VeriSign to send out corrective advertising, and win punitive damages.

A VeriSign spokesman declined to comment on the case but said the company 
would comply with the court order.

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

Tuesday's injunction only applied to BulkRegister customers, but D'Alleva 
said he has been getting calls from other companies over the last two days 
offering their support.

VeriSign enjoyed a monopoly through much of the 1990s, but it has been 
facing stiff competition in recent years from sellers like Go Daddy 
Software who charge as little as $8.95 per year to reserve a name, compared 
with VeriSign's $29 fee.

The domain-name market as a whole has cooled as well, with total 
registrations sinking 6 percent to 29.5 million in the past year, according 
to "State of the Domain," an industry report.
*******************
USA Today
E-mail and the mangling of the English language

By Sameh Fahmy, Gannett News Service

In her 26 years of teaching English, Shannon McGuire has seen countless 
misplaced commas, misspelled words and sentence fragments.

But the instructor at Louisiana State University in Baton Rouge said her 
job is getting harder every day.

"I kid you not, the number of errors that I've seen in the past few years 
have multiplied by five times," she said.

Experts say e-mail and instant messaging are at least partly to blame for 
an increasing indifference toward the rules of grammar, spelling and 
sentence structure.

They say the problem is most noticeable in college students and recent 
graduates.

"They used to at least feel guilty (about mistakes)," said Naomi Baron, 
professor of linguistics at American University in Washington, D.C. "They 
didn't necessarily write a little better, but at least they felt guilty."

Ironically, Baron's latest book, Alphabet to E-mail: How Written English 
Evolved and Where It's Heading, became a victim of sloppy proofreading.

The book's title is capitalized differently on the cover, spine and title 
page. "People used to lose their jobs over this," she said. "And now they 
say 'whatever.' "

"Whatever" describes Jeanette Henderson's attitude toward writing. The 
sophomore at the University of Louisiana at Monroe admits that her reliance 
on spellcheck has hurt her grades in English class. "Computers have spoiled 
us," she said.

But the family and consumer sciences major believes her future bosses won't 
mind the mistakes as much as her professors do.

"They're not going to check semicolons, commas and stuff like that," 
Henderson said.

LSU's McGuire said she teaches her students to use distinct writing styles 
that fit their purpose.

She emphasizes that there's the informal language of an e-mail to a friend, 
but there's also the well thought out and structured academic or 
professional style of writing.

Baron stressed that it's not just e-mail and instant messaging that are 
contributing to slack writing habits.

Society as a whole is becoming more informal. Casual wear at work used to 
be reserved for Friday, for example, but is now commonplace at most 
offices. There's also a greater emphasis on youth culture, and youth tend 
to use instant messaging more than adults do.

Baron said the English language has been neglected at different points in 
history but always rebounds. During Shakespearean times, for example, 
spelling wasn't considered important, and early publishers rarely proofread.

Baron said there will likely be a social force that recognizes the need for 
clear writing and swings the pendulum back. She said increasingly 
competitive universities could begin to look at college application letters 
more closely, which would force students to clean up their writing.
**********************
Federal Computer Week
Firms weigh in on national plan

The information technology and communications sectors May 13 formally 
submitted their input on the latest version of the plan for securing the 
nation's critical infrastructure.

Richard Clarke, President Bush's cyberspace security adviser, is leading 
development of the national plan. A new version, which the administration 
expects to release this summer, will fully include the private sector for 
the first time. The first national plan, released in January 2000, focused 
primarily on the federal government's critical infrastructure protection 
(CIP) priorities.

Industry groups, including the Cellular Telecommunications and Internet 
Association and the Information Technology Association of America, serve as 
sector leads for the IT and communications sector under Presidential 
Decision Directive 63.

President Clinton signed PDD-63 in 1998, requiring agencies and industry to 
protect the information systems that support the nation's critical 
infrastructure, such as banking and transportation.

Input from the industry groups ranged from identifying problems to a 
discussion of the possible next steps. Ideas include:

* Identifying a series of "first principles" to guide any action taken by 
the sectors to respond to the CIP challenge.

* Noting that the IT and communications sectors must not only protect their 
own operations, but also consider that every other sector relies on the 
infrastructure provided by these two sectors.

* Examining the differences between the regulated communications sector and 
the unregulated IT sector, and considering the role government must play in 
helping to protect each.

* Recognizing that the IT and communications markets are in constant flux, 
and considering steps to protect the infrastructure in that environment.

Clarke and members of the CIP Board, formed by Bush in October, earlier 
this month launched a series of town hall meetings to be held across the 
country to gather input from every part of the private sector. The first 
meeting will be May 16 in Denver, with meetings May 30 in Chicago, June 6 
in Portland, Ore., and June 18 in Atlanta.
******************
Mercury News
Napster founder, key execs quit; bankruptcy looms

Napster founder Shawn Fanning quit the revolutionary online file-swapping 
service he created in his Boston dorm room in a mass exodus Tuesday that 
almost certainly signals the end for the once-feisty music service.

Fanning, Chief Executive Konrad Hilbers and three other senior executives 
resigned after infighting on the board led to the collapse of negotiations 
between Napster and German media conglomerate Bertelsmann.

Drained of cash, after a bruising two-year battle with the record industry, 
and unable to launch a pay version of its once-wildly popular service, 
Napster will be forced to file for bankruptcy, said Hilbers who came from 
Bertelsmann.

``I have proposed a deal to the board that I find the best solution to a 
difficult situation at Napster. The majority of the board has turned it 
down,'' Hilbers said in an interview with the Mercury News. ``I don't 
really want to lead the company toward the alternative -- which in my mind 
can only be bankruptcy. So I have resigned.''

The looming bankruptcy of Napster marks a denouement for a technology that 
former Intel Chairman Andy Grove once dubbed `the next killer app.'' 
Napster ignited an undiscovered passion for digital music. And in its 
heyday, it attracted more than 60 million registered users who traded music 
across the Internet.

Music-lovers cheered the underdog Napster as it challenged the Big Five 
record labels' claim over the rights to songs.

In the end, money proved Napster's undoing.

Sources close to the negotiations said the two Napster board members 
appointed by the Hummer Winblad Venture Partners, an early round investor, 
insisted on terms that would recover the fund's $15 million investment -- 
and indemnify them from potential damages from future lawsuits.

Board deadlock

Napster lost its ``poker game'' with Bertelsmann. As deadlines passed, the 
deal terms deteriorated. Ultimately, the four-member Napster board 
deadlocked on Bertelsmann's buyout offer, the source said.

Bertelsmann, which had invested $85 million to help Napster make the 
transition to a paid service, proposed an outright buyout two weeks ago 
that would have protected its investment. It would have paid $16.5 million 
and assumed the debt to take over Napster.

After Napster's board rejected that deal, Bertelsmann came back with a less 
palatable deal, one that would have failed to erase $11 million owed to 
Napster's unsecured creditors.

``The deal would have allowed us to keep the company's assets including its 
employees in the long term,'' Hilbers wrote in a letter to employees. 
``Unfortunately the board has chosen not to pursue this deal.''

Bertelsmann issued a statement Tuesday confirming that Napster shareholders 
were unable to reach agreement.

``We continue to believe in the value of peer-to-peer technology. We are 
hopeful that Napster's brand and technology will be able to realize its 
potential as a compelling consumer proposition,'' the statement said.

Napster director John Fanning, uncle of Napster's co-founder, filed suit in 
March in an attempt to wrest control of the board from Hummer Winblad. The 
elder Fanning tried to replace founding venture partner John Hummer and 
one-time Napster chief executive Hank Barry with Joseph ``Yosi'' Amram and 
Martin Kay.

After a short trial in Wilmington, Del., on Tuesday, Chancery Court Judge 
William Chandler ruled that the original board members were not validly 
removed.

``This was the last hope for the company,'' John Fanning told Bloomberg 
News, as he emerged from court.

He predicted Napster would be liquidated.

Lillian Stenfeldt, a bankruptcy specialist for the Internet law firm of 
Gray Cary Ware and Freidenrich in Palo Alto, said some companies use 
bankruptcy as a way to prepare a company, entangled in litigation, for 
sale. A bankruptcy filing would freeze any litigation. And plaintiffs 
seeking court-imposed damages would be forced to stand in line, along with 
other creditors, to collect from the proceeds of a liquidation sale.

``Any buyer of a company that has pending litigation, if they're 
sophisticated, would consider it as a condition of a purchase,'' said 
Steinfeldt. ``The final condition being a bankruptcy filing so they can buy 
the assets and have a cleansing effect of all the liabilities.''

But if Napster is poised for another miraculous recovery, the signs were 
nowhere in evidence at its Redwood City offices.

Several Napster employees could be seen leaving, carrying cardboard boxes 
stuffed with papers, books and movie posters.

Goodbyes said

Co-workers said goodbye in the parking lot, under the watchful eyes of two 
lawyers, dressed casually and sitting in the shade at the company's rear 
employee entrance.

Employees were given the option of taking a voluntary severance package -- 
or taking a week of unpaid vacation, in hopes of an 11th hour rescue.

Meanwhile, a flock of key employees followed Hilbers out the door, 
including Jonathan Schwartz, the company's general counsel; David Phillips, 
vice president of service and product management; and Milton Olin, 
executive vice president.

``It's a disappointment to everybody,'' said Alex Rofman, employee No. 48 
who took the buyout. ``We had worked hard to offer a consumer-friendly 
service. It's incredibly disappointing. People here still believe in the 
potential of Napster to run as a fee-based service. The technology is 
great. We had built a brand new system, we completely rewrote the system 
and it worked. It's unfortunate.''
**********************
Los Angeles Times
Apple Introduces Server Computer
Associated Press

Stepping beyond the sluggish desktop market, Apple Computer Inc. introduced 
a server computer.

Apple has little experience with servers, but the company hopes the effort 
will pay off.

Called the Xserve, the rack-mountable server starts at $2,999. Apple shares 
were up $1.67 to close at $25.61 in Nasdaq trading.
*********************
Federal Computer Week
GAO raps ACE management

A critical Customs Service modernization program is in need of better 
project management, according to a General Accounting Office report 
released May 13.

The multi-year, multi-billion dollar Automated Commercial Environment (ACE) 
is an import processing system and the first project under Customs' 
modernization program.

In its report, GAO called ACE a "high-risk endeavor" because of the 
project's size, complexity and the agency's plan to speed deployment of the 
system by one year, among other reasons.

Important ACE management controls are not in place in four areas, according 
to GAO. They are:

* Enterprise architecture  It has not been updated and extended to include 
ACE engineering tasks.

* Human capital  The Customs Modernization Office is managing ACE, but does 
not have the people in place to perform critical system acquisition functions.

* Software acquisition management  Customs has not established software 
acquisition process controls that are recognized as best management practices.

* Cost estimation  Customs has not validated its ACE expenditure plan cost 
estimates.

GAO made several recommendations to improve ACE management. For instance, 
it recommended that before building each ACE software release, Customs 
certify to its House and Senate appropriations subcommittees that the 
enterprise architecture has been sufficiently extended; and immediately 
develop and implement a Customs Modernization Office human capital 
management strategy.

In written response to the report, William Riley, director of Customs' 
Office of Planning, said the agency will continue to take "prudent steps to 
address the risks" associated with ACE. Specifically, he said the agency 
plans to double the size of the Customs Modernization Office, is improving 
its cost-estimation capability, and is extending the existing enterprise 
architecture plan to ACE, among other actions.
***********************
BBC
Americans make life decisions on the net

Research by US-based think-tank Pew Internet found that millions of 
Americans are turning to the web for help about getting a job, moving home 
and choosing a school for their children.

Nearly half said that the internet played an important role in one of the 
15 major decisions they had made.

This included helping a loved one deal with illness or get important 
financial advice.

Changing jobs

Eleven million US internet users said that the internet played a crucial 
role when choosing a school for their children, while eight million turned 
to the net when looking for a new place to live.

The study found that 41% of internet users received additional education or 
training in the past two years and nearly a third used the net to do so.

Of the 28% of internet users that changed jobs within the past two years, a 
quarter reported that the net played an important part in their career change.

But while the internet is proving vital to decision-making it has little 
sway over relationships or legal decisions.

Offline romance

Only 15% of those starting or ending a relationship cited the net as a tool 
in that decision.

No one in the group of internet users who got divorced used the net to help 
them through it.

Despite the proliferation of legal advice online, only 13% of those 
involved in a lawsuit or other legal action used the net for help with 
their cases.

Attitudes to the internet appear to be getting more positive with only a 
tiny number (1%) worried about computer viruses, pornography or gambling.

Despite a glut of surveys about internet addiction, only 2% of those 
surveyed felt that someone close to them was spending too much time online.

Pew interviewed 1,415 internet users during January.
*******************
BBC
Scots online archive planned

Academics are trying to gather together as many examples as possible of how 
people north of the border write and speak in their own tongue.

The results will be placed in an electronic archive - the Scottish Corpus 
of Texts and Speech (SCOTS) - which will be made available to the public 
and academics alike over the internet.

The project will initially examine two different varieties of the language, 
Scots and Scottish English.

But it is hoped that the project will eventually expand to include Gaelic 
and non-indigenous languages such as Punjabi, Urdu and Chinese.

The aim is to allow the most detailed analysis yet of the differences 
within the Scots languages.

"At the moment we have got very little knowledge about these languages," 
said language expert Dr Fiona Douglas, of the University of Glasgow.

"If you take Scots and Scottish English, it is quite hard to work out where 
one variety ends and the other starts.

Sliding scale

"That may be a social issue, but it is also an individual issue."

She said that Scots and Scottish English represented the two extremes of a 
"linguistic sliding-scale".

She said that Scots had different choices - depending on their social 
class, education and location - about where they fell on that scale.

People could also move back and forward along the scale as they used 
different forms of speech, such as the change which occurs between people 
at work and at home.

"Further complications are presented by the lack of an agreed standard 
spelling system for Scots," said Dr Douglas.

"By building the corpus we will be able to investigate these language 
varieties with an accuracy hitherto impossible."

She said that those behind the project were trying to contact "the real 
people out there who use the language".

A publicity drive has been launched to find different texts - which can 
encompass both the spoken and the written word - from across Scotland.

Literary work

"We are hoping that we will get text from a very wide variety of sources," 
she said.

"We are looking for text that people wouldn't always collect, such as 
ephemera like emails.

"In terms of language use, that sort of thing is equally as interesting as 
great literary works."

The project is bringing together linguists and those working in information 
technology.

The collaboration involves the division of informatics at the University of 
Edinburgh and Glasgow University's department of English language and 
STELLA (Software for Teaching English Language and Literature and its 
Assessment) project.

The two main aims are to place the written and spoken texts into an 
electronic format, and then to enable the public to analyse the information 
over the internet.

This will allow scholars and students to investigate the languages of 
Scotland in new ways, while also providing a source of information for 
future generations.

This pilot study, which is funded by the Engineering and Physical Sciences 
Research Council, will also be examined as a possible model for other 
languages.

Edinburgh University's Henry Thompson said: "This pilot project will assess 
both the availability of material and the degree of effort needed to 
collate it and present it in a coherent and consistent form as an online 
language resource."
********************
New York Times
Cisco Introduces Software to Protect Networks

SAN JOSE, Calif. (Reuters) - Cisco Systems Inc. (CSCO.O), the No. 1 maker 
of gear that directs Internet traffic, on Tuesday announced new software 
designed to protect against network failures on its high-end routers.

The San Jose, California-based company said the software, called Globally 
Resilient IP (Internet Protocol) and available starting next month, 
eliminates data or information loss on the network due to circuit failure 
or human error on its high-end 12000 Series routers.

``Even though a fault occurs in the network, packets (of information) 
continue to be forwarded and go to the user,'' said Sangeeta Anand, Cisco 
vice president of product marketing for the Internet technology division.

A router is a machine that connects two computer networks for the 
transmission of data and information, while packets are tiny chunks of 
digital data that have been divided up in order to more efficiently route 
data over the Internet.

Officials at Cisco rival Juniper Networks (JNPR.O) said they have had 
``zero packet loss'' on their routers since they first shipped product in 
1998. They announced last month that a higher-speed T-series router with no 
data loss is now in use by telephone carriers.

Also last month, France's Alcatel (CGEP.PA) (ALA.N) said its nonstop ACEIS 
router for telecom customers would be available in the next few months.

Frank Dzubeck, a strategy consultant to the telecom industry, said Cisco's 
product is available across a broader product line as well as for large 
corporate customers, also called the enterprise segment.

Gartner Dataquest analyst Tim Smith said eliminating information loss is 
part of the ongoing shift to the IP-based networks.

``It's been kind of a maturation process that's been going on for several 
years and this is another important step along that road,'' he said.

However, Smith said the technology currently only has value on an all-Cisco 
network. If other routers are used in the network, the full benefit is 
probably not achieved.

The technology would work best on a private corporate network, which tend 
to be all one vendor, he said.

Dzubeck, president of Communications Networks Architects in Washington, 
said customers have long wanted no data loss throughout all networks.

``They did the right thing, but why didn't they do this two years ago? 
There's no rocket science in this stuff,'' he said.

To ensure the performance, Cisco said its platform is built with a 
redundant processor -- so if one fails the second one kicks in.

On Cisco's 10000 and 7500 Series routers, the interruption in testing 
averaged 1 to 2 seconds, and 7 seconds, respectively, she said.

Anand said the software is available as an upgrade for customers as well as 
on newly installed routers.

Cisco hopes to leverage the ability to protect against information loss as 
a competitive advantage with large corporate and telecommunications 
customers, officials said.

The new technology will allow telecom customers to better provide service 
based on improved network availability, resulting in higher revenue, lower 
costs and increased customer satisfaction, Cisco said.

It will also enable large corporate customers to avoid revenue loss due to 
network outages while increasing productivity by eliminating or reducing 
downtime, Cisco said.
*******************
BBC
What your mechanic is really doing

In-car tracking systems are usually intended to keep tabs on stolen cars, 
but the technology can have additional benefits, as one Manchester man 
recently found out.

The man, known only as Mr G, purchased a global positioning satellite 
system called TrakM8 from Dorset firm Interactive Projects.

TrakM8 can be set to send an SMS text message to a mobile phone for a 
variety of purposes such as if the driver has broken down or is in other 
difficulties.

It also has a feature that alerts the driver via SMS when the car is going 
above the speed limit.

Caught out

This feature proved revealing when Mr G took his car in for a routine service.

When the car should have been in the garage, he received a series of SMS 
messages telling him that his BMW was actually speeding through the streets 
of Manchester.

"Someone was obviously driving it with some welly and I wasn't too happy as 
it was a new car," said Mr G.

"I called the garage with some pretty angry messages and the service 
manager couldn't believe it and nearly died of embarrassment," he explained.

"The really funny thing was that he had fitted the system two days earlier,"

Satisfying moment

This added benefit of the TrakM8 system could prove useful for people keen 
to keep an eye on their mechanic's use of their car, said Karen Knapton of 
Interactive Projects.

"We would have loved to see the service manager's face when he was shown 
the action replay of the abused car," she said.

"It must have been one of those satisfying moments.

"We all know this kind of thing happens but it's great to be able to prove 
it," she said.
********************
New York Times
Surfers Flock to Web for Mother's Day Gifts

NEW YORK (Reuters) - Surfers at home flocked to the Web during the week 
ending May 5 to send flowers, gifts and online greetings in anticipation of 
Mother's Day on May 12, according to Internet audience measurement service 
Nielsen//NetRatings.

Traffic to FTD.com (http://www.ftd.com) skyrocketed 238 percent this past 
week to 190,000 Web surfers, as shoppers logged online to send special 
floral arrangements and gifts.

1800Flowers.Com (http://www.1800flowers.com) drew more than 324,000 
surfers, jumping 92 percent in traffic, compared with 169,000 visitors the 
previous week.

Both FTD and 1800Flowers.Com attracted a predominantly female audience, 
with a gender split of 61 percent female/39 percent male and 63 percent 
female/37 percent male, respectively.

``Specialty gifts and flowers sites attract shoppers online during special 
occasions throughout the year, making shopping easier for surfers to find 
that perfect gift with an array of unique presents and easy delivery,'' 
NetRatings analyst Dawn Brozek said.
*******************
Government Computer News
State awards $160 million support contract to CSC

By Wilson P. Dizard III
GCN Staff


The State Department has awarded Computer Sciences Corp. a $160 million 
contract for IT services and products.

The contract is a follow-on to a contract CSC has held since 1996 to do IT 
support work for the department, a company spokesman said.

Under the pact, CSC will provide a variety of services to support systems 
and telecommunications at more than 260 locations worldwide, the company said.

About 300 CSC employees would carry out the work in Washington, overseas 
embassies and other posts. The company said it would work with 23 other 
contractors to provide public-key infrastructure, biometric, 
enterprise-level telecom, Web site design, logistics support and records 
management services.

The contract has one base year and four one-year options.
******************
MSNBC
Missile shield put on the fast track
Work on silos to start as soon as possible, agency head says

WASHINGTON, May 14   Work on underground silos for missile interceptors 
will begin in Alaska on June 14, the first day the government will be freed 
from a 1972 treaty that bans major missile defenses, the head of the 
Pentagon's Missile Defense Agency said Tuesday.

      WITHDRAWAL FROM the treaty also gives the U.S. military more freedom 
to explore the use of additional radars as part of a missile defense 
system, Lt. Gen. Ronald Kadish said in an Associated Press interview. For 
example, a ship-borne Aegis radar will be used in a July missile intercept 
test.
       The timing of the actions suggests an urgency within the 
administration to get moving on a missile defense system.
       In January President Bush gave the required six months' notice of 
U.S. intent to withdraw from the Anti-Ballistic Missile treaty, despite 
strong objections by Russia and doubts among U.S. allies.
       The radar test "was specifically prohibited by the treaty, so it's 
never been done before," said Kadish, a three-star Air Force general.
       He answered questions in his office, which is adorned with models 
of military aircraft, including one of a modified Boeing 747 designed to 
shoot down missiles in flight with a laser.

IMPORTANT CROSSROADS
       Withdrawal from the ABM treaty puts Kadish's agency at an important 
crossroads. It opens new possibilities for missile defense technologies but 
without a blueprint for how the pieces might be put together.
       Because of the treaty restrictions, the military has steered clear 
of certain technologies for many years, but "now we're going back and 
retracing those steps," he said.
       The work in Alaska on underground silos for missile interceptors is 
an example of a project that would have collided with ABM restrictions. The 
plan is to build five missile interceptor silos and associated 
communications systems this summer so that by September 2004 the site, at 
Fort Greely near Fairbanks, could be available in an emergency.

'ONLY A MATTER OF TIME'
       The United States currently has no land-, sea- or space-based means 
of shooting down long-range missiles. Kadish said he has no doubt that the 
United States one day will be threatened with a missile attack.
       "It's only a matter of time, from my point of view, that we'll be 
facing this threat, up close and personal, I'm afraid," he said.
       Kadish could look out his office window on Sept. 11 and see flames 
and billowing clouds of smoke from the airliner attack on the Pentagon.
       The Fort Greely site in Alaska is intended for use mainly as a 
testing ground for land-based interceptors. It is part of a broader 
Pentagon effort to expand the scale and types of missile defense testing.
       "We've been criticized for a long time for not doing realistic, 
robust testing, and this is part of our plan to do that," Kadish said. 
"It's expensive, but it's the right thing to do."

BILLIONS FOR MISSILE DEFENSE
       The Bush administration's proposed 2003 defense budget contains 
$7.8 billion for missile defense, and projected spending for the four years 
beyond that exceeds $30 billion in total. The Congressional Budget Office 
estimates that the cost could reach $64 billion by the year 2015.
       Kadish said he is convinced the cost is worth the benefit of having 
a means to defend against long-range missiles, even though missile defense 
work will have to continue indefinitely.
       "Over time, once you start building a defense system of this 
nature, you're never done," he said. "You should never be done. If you are 
done then one of two things happened  either you no longer need the system 
or the threat has stayed still. In the history of war and military affairs, 
threats never stay still."
       Russia, which objected to Bush's decision to withdraw from the ABM 
treaty but ultimately accepted the move, does not dispute that long-range 
missiles are a threat to the United States and other countries. But it 
prefers to emphasize political efforts to stop missile proliferation.
       In Moscow on Tuesday, U.S. Undersecretary of State John Bolton and 
Russian Deputy Foreign Minister Georgy Mamedov met to discuss the two 
countries' strategic priorities. The Foreign Ministry said they focused 
particularly on "regulating their future relations in the area of missile 
defense."
***********************
MSNBC
Parents can soon 'touch' the unborn

May 14   Chubby cheeks. A cute button nose. Tiny fingers and toes. A 
newborn can turn the sanest adults into cooing, babbling fools. Expectant 
parents who can't wait to feel their baby's touch soon may be able to 
preview that sensation while the child is still in the womb, thanks to 
computer software developed by a New Mexico company that adds a touch-like 
component to 3-D ultrasound technology.

      THE e-TOUCH software, developed by Novint Technologies Inc., a 
private Albuquerque, New Mexico-based company, replicates the sensation of 
touch through a special stylus traced over the ultrasound image of the 
unborn child. The software also helps enhance the 3-D picture, said Novint 
founder Tom Anderson.
       "You can actually see what the baby looks like much more clearly," 
said Anderson, 27, whose wife is expecting their first child in July. He 
has already spent many hours touching his son's image.
       "It feels a little bit squishy ... similar to skin. You can feel 
along the surface and feel a little bit of pressure and contour," said 
Anderson.
       Touch technology may have important medical applications. For 
example, it can help in monitoring a fetus' development.
       "If a baby has an anomaly, it might help the parents to know how it 
is shaped," said Jan Easton Carrasco, president of New Mexico Sonographics.

VARIOUS MEDICAL APPLICATIONS
       Other uses for the equipment could include evaluating breast tumors 
or colon polyps, reducing surgical errors by essentially allowing a doctor 
to practice before performing an operation, or in the training of medical 
residents.
      "The sense of touch is tremendously important from a surgical 
standpoint," said Dr. Glenroy Heywood, a surgeon with the University of New 
Mexico Hospitals who is working to develop applications for the software.
       Used together with a CT scan or MRI image, the software lets a 
physician feel textures and surfaces of the patient's body, similar to what 
occurs once an operation is already under way.
       "As surgeons we depend a lot on what we feel," said Heywood, a 
specialist in gastrointestinal oncology. "If you feel a tissue, you can 
tell if it's a malignancy or a non-cancerous or benign problem such as 
inflammation."
       Touch technology eventually could even reduce the use of animals in 
medical research, Heywood said.
       Anderson helped develop human-computer interfaces while working as 
an engineer at Sandia National Laboratories in Albuquerque, New Mexico. He 
licensed the technology when he left to form Novint.
       The company, with 10 employees and revenues of $600,000, is working 
on a variety of touch applications, including automotive ergonomics, 
computer gambling, and underground oil and gas exploration.
       Anderson said he expects to reach revenues of $1 million this year 
and hopes to take the company public in a few years.
**********************
Government Executive
Fire, infrastructure offices launch information-sharing effort

The National Infrastructure Protection Center (NIPC) and the U.S. Fire 
Administration (USFA) on Monday launched an information-sharing partnership 
to better inform the nation's "first responders" to emergencies of 
potential terrorist threats.

Officials said the Emergency Fire Services Information Sharing and Analysis 
Center would allow the NIPC to transmit information on critical threats to 
law enforcement networks, national fire associations, 50 state fire 
marshals, and more than 32,000 fire and emergency medical departments.

The USFA can provide NIPC with "expert interpretation on raw, sensitive 
threat intelligence, and help us turn it into useful information that first 
responders can directly act on," NIPC Director Ron Dick said. 
"Collectively, the eyes and ears of our best-trained safety professionals 
in each community will serve as the sensors for a national early-warning 
system to alert us to an attack on the emergency-services infrastructure 
itself."
*********************
Government Executive
Customs modernization not ready for implementation

From National Journal's Technology Daily


Improvements are needed before a long-awaited modernization of the nation's 
commercial-import processing system can be implemented, the General 
Accounting Office concludes in a new report.

The Customs Service is in the early stages of a multi-year, 
multi-billion-dollar project called the Automated Commercial Environment 
(ACE) that aims to improve the flow of goods into the United States.

In its report on the second phase of the project, "Customs Service 
Modernization: Management Improvements Needed on High-Risk Automated 
Commercial Environment" (GAO-02-545) GAO found that ACE is a "high-risk 
endeavor" in part because the system is large and will have a significant 
impact on the existing organization, creating technical and management 
complexities.

Another problem is that Customs "severely" underestimated costs in its 
first stage. Furthermore, Customs is behind on system design, worker 
training, software-acquisition management and cost estimation, the report said.

GAO recommended that Customs' chief information officer take action on 
those areas before beginning detailed design and development on the project.
**********************
CNN
Nintendo announces online gaming plans

LOS ANGELES, California (Reuters) -- Video game maker Nintendo Co. Ltd. 
will introduce an online element for its GameCube this fall in North 
America, executives at its U.S. unit said Monday, marking a cautious entry 
into the fledgling market for online console games.

Nintendo said it will offer dial-up and high-speed Internet adapters for 
the GameCube in the fall at a suggested retail price of $34.95, after 
launching the product in its home market this summer with a price tag of 
3,800 yen ($29.74).

Rival game console makers have already announced similar plans. Microsoft 
Corp.'s Xbox has a built-in broadband adapter and Sony Corp. plans to offer 
an adapter with both dial-up and broadband ports for $39.99 in August.

The first game to be available for online play will be Sega Corp.'s 
"Phantasy Star Online."

Sega said the game is expected to come out this fall in the United States, 
following the initial launch in Japan this summer.

Online gaming has been a major market for PC games for years but has been 
slow to catch on for the console market.

Sega was ahead of the rest of the industry by building a dial-up modem into 
its now-discontinued Dreamcast, released in 1999, but limited sales for 
that console left the online effort a money-losing venture and prompted the 
company to withdraw from the competitive market for game hardware.

Nintendo is staking out a more cautious online strategy.

The company, which is the leading game maker for children and has a virtual 
lock on the market for handheld games, is considering a number of online 
projects but will not have any games ready for the fall launch, executives 
said.

Publishers will be able to use the online feature for their games and keep 
any additional fees charged to users as a result, but online gaming for the 
GameCube will remain largely an extension of the console play, the company 
said.

"Nintendo's position is that online is a feature to extend the console and 
the gameplay, but in and of itself online does not make a game," Jim 
Merrick, a technical director for Nintendo's online efforts said.

Future of gaming?
Perrin Kaplan, a Nintendo vice president, said the company will not collect 
any additional revenue from online games and will not charge an access fee.

Game publishers themselves will be responsible for operating the online 
networks on which their games run, Nintendo said.

Nintendo will also promote its Internet adapters as add-ons for specific 
games when that makes sense but does not plan a major marketing blitz 
around the GameCube's Internet capabilities, executives said.

"We do believe online gaming will be viable at some point but we don't want 
to club the consumer in the head with it either," Merrick said.

Also, Nintendo said on Tuesday it had sold 400,000 GameCube consoles, or 80 
percent of its launch stock, in its first week in Europe.

GameCube launched in Europe on May 3 as Nintendo shipped 500,000 units for 
its debut. The company said it was delivering daily shipments to retailers, 
many of which have sold out of GameCubes, while another 500,000 are 
expected to be shipped over the next seven weeks.

"It has been, without doubt, a very successful launch, and this is set to 
continue as we bring in more stock on a regular basis in the forthcoming 
weeks," said Andy Williams, Nintendo UK general manager, in a statement.
***********************
Nando Times
'Star Wars' creator George Lucas overestimated digital switchover, critics say
 By DAVID GERMAIN, AP Movie Writer

SAN RAFAEL, Calif. (May 14, 2002 4:29 p.m. EDT) - George Lucas abandoned 
film for digital cameras on his new "Star Wars" movie, but theaters have 
not followed his lead.

Back when he showed his previous movie, "The Phantom Menace," using digital 
projectors at four theaters in 1999, Lucas expected the industry to be much 
further along by now in switching from reels of celluloid to the new 
technology, which uses digitally stored images.

He hoped that as many as 500 theater screens would be equipped with digital 
projectors in time for "Star Wars: Episode II - Attack of the Clones," 
which opens Thursday. Instead, only 60 to 70 digital projectors are in 
place domestically, most of them newly installed as "Clones" approached.

Digital projection is the only way to see the film as he intended, without 
degradation from transferring the images to film, Lucas says.

The director hopes to book all the existing digital projectors for the 
movie, but on the rest of its 6,000-plus screens, "Clones" will be 
projected off conventional film transferred from Lucas' digital final cut.

Studio and theater executives say digital technology is not ready for mass 
use, and that complex questions remain on setting industry-wide standards, 
avoiding piracy and financing digital-projection systems, which can cost up 
to $150,000 for each screen.

Lucas says the new format is cheaper and easier on viewers' eyes because it 
eliminates the pops and scratches from film wear and tear. He accuses the 
industry of resisting change the same way it snubbed talking pictures until 
"The Jazz Singer" signaled the end of the silent era.

"That was a film with Al Jolson in it, a big movie star. It became a big 
hit movie, and everybody said, 'Ooh.' They jumped on the bandwagon," Lucas 
said in an interview last week at his Skywalker Ranch headquarters. "That 
is the way these things have a tendency to go. They are fought and fought 
and fought until finally, they can't fight anymore."

The seven major studios formed a group last month to study ways to fight 
piracy of digitally encoded films and establish standards so competing 
projection systems can operate interchangeably. The industry wants to avoid 
mistakes made when digital sound was introduced in the 1990s and theaters 
were saddled with the expense of three different systems.

"George is a pioneer of this industry, so it makes sense for him to lead 
the way," said Jim Gianopulos, studio co-chairman for 20th Century Fox, 
which distributes the "Star Wars" films. "But it is something that's a very 
substantial undertaking. People want to do it in a proper way."

Theater chains balk at the price, saying the expense must be shared by 
studios that would save millions on the cost of printing and shipping bulky 
film reels. Films can be distributed by satellite or on tape or disc for 
digital projectors.

There's also a sentimental attachment to film among many in the industry. 
And some insist digital images are cold and cannot yet match the rich color 
and contrast of celluloid.

The new projection format may be suitable for films created digitally, such 
as "Attack of the Clones" or the computer-animated tales "Toy Story 2" and 
"Monsters, Inc.," said John Fithian, president of the National Theatre 
Owners Association. But traditional film projectors remain the best way to 
show most movies, he said.

"You don't transition to an entirely new system for one movie. You do it 
when it's better for the entire industry. That's just not the case yet," 
Fithian said.

Frank Stirling, executive director of Boeing Digital Cinema, said 
acceptance of digital projection is coming gradually. The company, a unit 
of the airplane and aerospace giant, just installed 22 digital projectors 
at U.S. theaters in time for "Star Wars" and hopes to have 100 of the 
systems in place by year's end, he said.

"Change is always a challenge for any industry, particularly with new 
technology," Stirling said.

Rick McCallum, producer of the current "Star Wars" trilogy, said he hopes 
savvy filmgoers seek out "Attack of the Clones" in digitally projected format.

"If those theaters start doing two or three times the business they do with 
regular film, theater owners will wake up and see that people do care," 
McCallum said.
*******************
TVinsight
Programmers Get Comfortable Online
By MATT STUMP

Over the past few years, many major cable programmers have beefed up their 
online presence by adding video and audio content on pace with the steady 
uptick in broadband penetration.

And as broadband becomes more popular, much of the streaming activity 
occurs on the sites of major content players  whether they're movie 
studios, cable or broadcast programmers, music labels or sports leagues.

Cable-network engineers  who now boast several years of experience in 
encoding, storage and managing content-delivery networks, as well as asset 
management and digital rights-management tools  have grown more comfortable 
within the Internet-protocol video and audio space.

So what's held back an even greater supply of content from the IP-video 
world? It isn't technology, or even the cost of that technology. The 
bugaboo is the business model.

ESPN'S 'IP VIDEO'
ESPN has been one of the streaming-media leaders. The sports programmer 
feeds its video content to two different online initiatives: ESPN 
Broadband, available solely to its cable affiliates; and ESPN.com on the 
public Internet.

ESPN takes video from the broadcast router and delivers it via broadband, 
said director of broadband technologies Ed Davis.

"We make [Moving Picture Expert Group] versions of those files that the 
multimedia editorial staff then previews, and generates our clips," he said.

Those staffers then produce the clips, adding metadata information. From 
there, the files are transcoded, then converted to Microsoft Corp.'s 
Windows Media Player format or Real Networks Inc.'s RealPlayer format. ESPN 
Broadband offers clips at two speed  600 kilobits per second and 800 kbps, 
said Davis.

"At this point, it becomes IP video," he said.

At present, ESPN offers broadband content in the Windows Media format only. 
(ESPN.com offers both the Windows and Real formats.)

After the broadband clips are created, they are sent to streaming company 
Aerocast, a firm backed by Motorola Inc. and Liberty Media Corp.

We deposit that in one place, and they in turn take the video and 
distribute it to streaming servers inside cable Internet data centers," 
Davis said.

Comcast Corp. and AT&T Broadband are presently downloading ESPN's video at 
a handful of their headends through Aerocast, via the public Internet.

"We receive notification that the video is there and ready, then we update 
the broadband application," Davis said.

When new broadband subscribers hit the site, ESPN Broadband will test their 
PC, then send them any necessary plug-in information to ensure a quality 
experience, Davis said.

"Sometimes the barrier for entry can be: 'Where do I get this plug-in?' " 
he noted.

By downloading IP video to a server within a cable system in advance, "We 
can give you two to three times better quality because of the local link 
from the local server," said Davis. "The actual application lives on our 
servers, but the content lives on servers in the cable headends."

ESPN downloads new clips hundreds of times a day, Davis said. It typically 
takes 10 minutes to get the video from the broadcast router to the point at 
which ESPN Broadband subscribers may access it. Clips are from one to three 
minutes in length, he said.

ESPN went with Microsoft because "our application is pretty robust, and 
we're pushing the envelope a little bit," Davis said. "We wanted an 
environment with the most control over the player and the way it integrates 
with the application."

Aerocast uses Windows Media, he added.

ESPN's narrowband dot-com site uses a similar strategy. It also pulls video 
from the broadcast router, but it then generates video clips for 
connections at 56, 100 and 300 kbps, in both Windows and Real formats. Six 
versions of each clip are produced.

"We send the video through the public Internet to Digital Island [Inc.], 
and Digital Island hosts and streams the assets," Davis said.

ESPN's editing suite is staffed 24 hours a day, seven days a week. 
Narrowband clips average between 30 seconds and 60 seconds in length, he said.

Over time, the editing has become more automated, which cuts down the time 
and expense of handling so many clips  and so many different formats  each 
day, Davis said.

Since all of ESPN's streamed content is its own, digital-rights management 
has not yet become a major issue. Should that day arrive, ESPN can use a 
DRM solution that Microsoft has already built into Windows Media.

"A lot of effort goes into leveraging the work in one group for another 
group," Davis said. The same system that produces clips for broadband and 
online use could be employed for video-on-demand, he said.

"Our goal is to be able to do either and be prepared for either," he said. 
That could mean someday streaming IP or MPEG video to set-top boxes.

35 FEEDS FOR CNN
Cable News Network uses some of the same strategy to process MPEG video 
into IP for posting on CNN.com. Some 35 news feeds arrive at CNN Center, 
said senior vice president of Internet technologies Monty Mullig.

The video is saved, catalogued and edited at 56, 100 and 300 kbps in three 
formats: Real, Windows and Apple Computer Corp.'s QuickTime, Mullig said. 
All encoding is automated, using software from Anystream Inc.

At that point, CNN.com's editors decide what to post to the site.

CNN sends about 200 video clips per day  typically at two to three minutes 
in length  to AOL Time Warner Inc. sibling America Online. The ISP then 
ships the content to edge servers throughout its national backbone 
infrastructure  the same network that delivers the rest of AOL's audio and 
video content to hundreds of servers, Mullig said.

In late March, CNN instituted "CNN NewsPass," levying a $4.95-per-month 
charge for access to its video clips. CNN video also is available through 
Real's $9.95-per-month RealOne service.

Real also distributes CNN's QuickCast and Uncut. Quickcast is an updated 
hourly newscast, while Uncut features longer-length video, such as a 10- to 
15-minute interview with a head of state or a press conference. CNN said 
it's negotiating with third parties about distributing the same video.

Since CNN's content is now a paid service, its video-streaming volume  now 
in the range of 15 million streams per month  is likely to fall off.

"It will drop off a lot," Mullig acknowledged, and it'll take time to build 
it back up.

Users can access the video clips either from links within stories or via 
NewsPass. And Mullig said CNN has developed its own proprietary DRM 
technology to insure that only paid subscribers can get its online video 
content.

In the past, the Web site was at break-even, said Mullig. The move to a 
subscription model is an effort to climb back to that point by adding a 
second revenue stream to advertising.

"We think it does have tremendous revenue potential," Mullig said. "It's a 
relatively young medium. The technology is by no means mature, and new 
opportunities continue to arrive."

MTV Networks puts between 8,000 and 10,000 pieces of distinct content 
online, said MTVN chief technology officer Nick Rockwell, who's responsible 
for the MTV Music Group as well as Nickelodeon, TNN: The National Network 
and TV Land.

Most of that content comes in doses of 30 seconds or less. But they have 
staying power: Each month, the network adds a few hundred clips to an 
ever-expanding library.

"They go up and they stay up," Rockwell said.

The means are similar to those employed by ESPN and CNN. Video clips from 
on-air tapes are encoded at 320 kbps, in both Real and Windows Media formats.

We use Surestream [Inc.] for Real and Intellistream [Technology Inc.] for 
Windows," Rockwell said. "The server and client negotiate the final speed."

Content is sent out via MTVN's principal delivery network, Akamai 
Technologies Inc.'s network of 2,200 data centers around the world. The 
programmer has also used Williams Communications Group Inc.'s network, as 
it was a client of iBeam Corp., which Williams now owns.

MTVN has developed in-house digital asset management tools, said Rockwell.

"DAM frankly is not that challenging a problem," he said. "The next step is 
an enterprise asset-management approach," which the company is testing, he 
said.

In terms of digital-rights management, MTVN has used Microsoft for a 
handful of pay-per-download promotions in the past, and has tested Real's 
DRM system, Rockwell said. But MTVN, per se, is not in the pay-per-download 
or streaming business, like pressplay or MusicNet Inc.

On that front, MTVN will follow the lead of the major music labels.

"It's an area that's going to be very important," Rockwell said. "But we're 
not typically the content owner, so it's appropriate for us to follow on DRM."

In the future, Rockwell said, "we're are in an optimizing mode. The 
distribution area is where we're very focused."

More links are developing between online and linear content. For example, 
MTV2's Control Freak allows viewers to vote via the Internet for videos 
they'd like to see on the TV network.

"It's actually completely automated between the online votes and the 
play-out control," said Rockwell. "That's interesting in an MSO world. It 
opens up a lot of possibilities. It's very powerful, and potentially 
transformative."
********************
CNN
Wearable computers enhance the world
'Augmented reality' provides overlapping vision

NEW YORK (AP) -- Step outside and look at the world. In Manhattan, you'll 
see a cityscape of buildings and traffic.

If you're a firefighter, a police sharpshooter or a tourist hankering for 
Chinese food, you'd want to add information to that streetscape.

Soon you'll have that option -- without opening a map or guidebook.

An emerging technology known as "augmented reality" will allow people 
peering through computer-fueled goggles to overlay virtual images atop 
those of the real world.

For a firefighter, the computer-aided streetscape might show locations of 
stored chemicals and sprinkler connections -- vital details in a fire.

For the cop, the goggles could relay aerial surveillance images of a 
berserk gunman, helping the officer to get a bead on the bad guy.

For the tourist, the glasses might show a virtual arrow and neon message 
reading "Joe's Shanghai, turn right, walk three blocks."

For now, augmented reality -- a clever amalgam of computing, Global 
Positioning System (GPS) navigation and a device that tracks a person's 
head movement -- lives mainly in the cluttered realm of university research 
labs.

The systems are supposed to first determine the user's exact location and 
field of vision. Then, depending on the program running on the hard drive, 
the computer augments the scene with images -- a yellow building label for 
the firefighter, a blinking red dot for the sharpshooter, a cafe's menu for 
the tourist.

Researchers at Columbia University are fashioning some of the innovations. 
There, users can strap on a backpack frame bristling with 25 pounds of 
antennas, batteries and computing gear and take a tour of the upper 
Manhattan campus.

Instead of seeing only the university's Greek revival halls and tree-draped 
plazas, the computer goggles superimpose images of long-demolished 
Victorian buildings that housed an insane asylum predating the school. 
Building name tags pop up and disappear when you turn your head to gaze 
around the campus.

The project, created by Columbia's schools of computer science and 
journalism, has a more pressing purpose than mere campus orientation.

High-tech Marines
The lead federal agency funding this is the U.S. Navy's Office of Naval 
Research, which is spending $2.5 million a year on augmented reality research.

Spurred by the deaths of U.S. soldiers in Somalia in 1993, the Navy wants 
scientists to develop a belt buckle-sized computer and slim pairs of 
computer glasses to help the Marines fight better in cities.

The Navy is also developing a version for amphibious landing craft that 
aims to guide invasion forces through minefields, fog and other hazards.

In Singapore, developers are building an augmented reality system for a 
military defense of that city-state. And in Britain, researchers want to 
use it to "see" buried pipelines during construction projects.

Other research projects under way across the United States and elsewhere 
aim to use augmented reality to aid everything from surgery to jet engine 
repair.

Columbia computer science professor Steven Feiner, who gets about $150,000 
per year of the Navy's funding, is developing the visual interfaces seen by 
wearers of the computer goggles.

The clunky backpack system built by Feiner and his students is cobbled 
together from a laptop computer and a pair of GPS satellite receivers -- 
one developed by the Russian military -- along with a head tracking device, 
a high-speed wireless Internet connection and a tiny video camera.

Not for consumers -- yet
When the wearer's location tells the computer to augment the scene with an 
image, it pops up on a pair of Sony goggles with a see-through liquid 
crystal computer display.

"We are not implying that someone should walk around with something that 
weighs even half of this," Feiner said, giving a tour of his lab, with 
mannequin heads scattered among computer parts and workstations. "Being 
able to look at stuff, and seeing information in context with that stuff, 
that's what it's all about."

Augmented reality should be ready for consumer use in a decade or so, 
Feiner said.

First, U.S. soldiers will be trying it on for size.

One impetus for the Office of Naval Research's Battlefield Augmented 
Reality System, known as BARS, was the 1993 battle of Mogadishu, where 18 
Americans -- and hundreds of Somalis -- died in fierce urban combat.

A three-dimensional cityscape is one of the most treacherous battlefields, 
laced by tunnels and sewers from below and buildings from above, with 
clutter and traffic on the street level. Enemy forces can be tough to 
distinguish from friendly ones. Snipers and mines could be anywhere.

In the Mogadishu battle, U.S. soldiers on a critical rescue mission got 
lost in the city's sandy alleys because street signs had been taken down.

In future city battles, U.S. soldiers with augmented reality viewers will 
see labels on buildings and streets and also active details, like areas of 
sniper fire and locations of friendly forces, said Lawrence Rosenblum, 
director of virtual reality research and systems at Naval Research 
Laboratory in Washington, D.C.

"All of a sudden he can be really involved in what's happening, and know 
what's going on around him," Rosenblum said. "We're taking that 
information, giving it to him in a way that's never been done before. 
That's got to make him better."
******************
Nando Times
Reliability seals build trust for Web merchants
By NOEL C. PAUL, Christian Science Monitor

(May 13, 2002 12:45 p.m. EDT) - When JustStrings.com debuted on the 
Internet in 1997, the company faced a significant hurdle: convincing 
prospective customers that it was not a scam.

Skeptical consumers consistently tested the company's reliability.

"We had people call on the telephone to make sure we were a reliable 
business," says Michael Jones, the firm's chief executive officer. "Some 
would investigate us with questions over e-mail."

A year later, JustStrings, which sells 8,000 varieties of strings for 
musical instruments, found an immediate solution to its credibility 
concern: The Web site began displaying a reliability seal from the Better 
Business Bureau (BBB) OnLine.

Since then, the company has consistently received unsolicited e-mails from 
first-time customers praising the seal. "Not knowing anything else about 
the business, the seal gives them a comfort level," says Jones.

Americans are turning to the Internet to make more of their purchases. More 
than 85 percent of U.S. adults with Internet access have bought a product 
online, according to polling firm A.C. Nielsen.

But, broadly speaking, consumer trust in the Internet remains low.

A recent survey by Consumers Union found that only 29 percent of Americans 
trust Internet sites that sell products. The measure falls well below the 
public's level of trust for the federal government, small businesses, and 
large corporations. (The survey took place immediately after Enron's collapse.)

The BBB's reliability program, experts say, is one of the most prominent 
efforts yet to bring a new level of standardization to the Internet.

Nearly 11,000 sites display its seal, up from just 700 in 1997. Interest in 
obtaining the seal soared in the late 1990s as the dot-com implosion sent 
sites scrambling to convince consumers of their survivability.

It is among several programs run by consumer groups that audit sites' 
customer-service policies and award seals of approval to those that adhere 
to the best standards of customer service. Other groups assign performance 
ratings based on customer feedback.

As a whole, they represent Internet advocates' most visible attempt to make 
the Web a more reliable place for consumers to make purchases after half a 
decade of Internet failures and dissatisfied consumers.

"We had a Darwinian sweep of economic reality go through the Web," says 
Beau Brendler, director of Consumer WebWatch for Consumers Union. "Web 
sites are learning to pay more attention to issues of credibility and 
reliability."

The first Internet sites to sell products online created patterns of 
customer service - generally lax - that are just now being reversed.

These sites were often designed by computer programmers rather than 
marketing executives, experts say. The designers frequently attempted to 
draw customers with technological bells and whistles while excluding the 
kind of practical information - return policies, for example - that's 
generally easy to find in a bricks-and-mortar retail setting.

"Disclosure happens naturally in the physical world. When there's no 
disclosure online, it creates a sense that the consumer is being 
hornswoggled," Brendler says.

The BBB initiated its reliability program in 1996, after witnessing the 
emergence of hundreds of Web sites that were making outrageous service 
claims. It refined its rules just last year.

To display the group's reliability seal, companies must adhere to five 
requirements: truthful and accurate product information; the disclosure of 
contact information; clear privacy and security statements; clearly stated 
prices, shipping information, and refund policies; and availability of a 
money-back guarantee or dispute resolution.

The BBB's seal satisfies many consumers' Web site concerns. More than half 
of America's Web users would be "extremely likely" or "very likely" to buy 
from an online company they did not recognize if the company carried the 
BBB's reliability seal, according to a BBB-sponsored study by research firm 
Greenfield Online.

So far, the program has received significant support from large companies 
such as Microsoft and AT&T, which stand to profit from a surge in online 
commerce.

Smaller companies that work with a large number of out-of-state customers - 
such as car dealers, mortgage brokers, and Realtors - have bought into the 
program as well, according to Steve Salter, BBB OnLine's director of 
operations.

Other third-party oversight programs recognized by experts as legitimate 
include TRUSTe - an independent, nonprofit privacy group - and WebTrust, 
run by the American Institute of Certified Public Accountants. (Experts 
recommend clicking on seals to verify that they are linked to the program's 
own Web site, because some companies display the icons fraudulently.)

Bizrate.com, Dealtime.com and Epinions.com accumulate customer ratings of 
thousands of Internet products and Web sites.

Despite the proliferation of such programs, some observers question their 
ability to crack down on offenders. Yahoo!, for example, which bears a 
TRUSTe seal, recently changed its privacy policy so that all of its users 
would automatically be sent communications from its affiliated companies, 
forcing consumers to opt out of a service many had already rejected.

TRUSTe criticized the move but did not revoke its seal, says Rob Leathern, 
an analyst with research group Jupiter Media Metrix.

Even with seal programs, consumers remain wary about sharing their personal 
information online. Among online users, 70 percent are concerned that their 
privacy is at risk on the Internet, while only 31 percent have actually 
read Web sites' privacy policies, according to Leathern.

That gap between perception and behavior shows that Web sites may have a 
hard time overcoming the stigma of lax security. Many consumers choose to 
do business on sites run by familiar companies.

"There's a flight to quality on the Web," says David Alschuler, senior vice 
president of e-business for the Aberdeen Group, a Boston-based consulting 
firm. "Consumers are looking to Web merchants who are better known and have 
a physical presence."
*******************
Nando Times
SOFTWARE REVIEW: On virtual safari
By LARRY BLASKO, Associated Press

(May 13, 2002 5:33 p.m. EDT) - Animals often fascinate the preschool set, 
and Knowledge Adventures' new title "Jump Start Animal Adventure" is a nice 
alternative to dragging a toddler around the local zoo.

Available for both Mac and PC platforms, one of the most charming 
characteristics of "Animal Adventure" is its $19.99 price.

A unit of Vivendi Universal Publishing, Knowledge Adventure has been doing 
educational software for 20 years and it shows. The characters are hip, the 
players aren't patronized and the information is delivered vividly and 
creatively.

Almost every item on every screen reacts to a passing cursor and both the 
static art and animation are detailed in exactly the style that the age 
group appreciates - much more Disney's "Lion King" than National Geographic.

Players use a world map to select one of the four animal habitats offered, 
the African Savannah, a northwest United States tidal pool, a temperate 
forest and a tropical rainforest.

The aim is to identify and take snapshots of various animals, as well as 
play any of 16 arcade-style games. All of that goes toward earning points.

The arcade games are mostly eye-hand coordination with the mouse. Wrists 
that have been 5-years-old 11 times were challenged at the lowest 
difficulty level, so there's probably no danger of the activity being too easy.

One of the most amusing features of the software is the music. Animals in 
various habitats rock and rap as they explain their characteristics. A 
rhino and the bird that keeps it insect-free do a charming duet on 
symbiosis, and don't miss "Echolocations" by Batney Ears.

While they're being amused, the little heads are picking up concepts like 
herbivores, carnivores, omnivores. Many parents will agree that any way you 
get concepts and facts to stick and become useful is worthwhile.

System requirements PC: Pentium (or equivalent) 233 megahertz or faster 
16-speed CD-ROM drive 64 megabytes RAM, 16-bit color.

For the Mac, Power Mac G3 233 megahertz or faster, System 8.6, 9.1.2, OS 
10.12. Same CD and memory requirements as the PC and thousands of colors.

Either installation will want to see Quicktime 5.0 and will supply it if 
necessary. It takes about 30 megabytes of hard disk space.

Knowledge Adventure products are widely available at retail. And you can 
find them on the Web at www.jumpstart.com - a good place on the Web for 
kids to hang out, whether they buy the products or not.
*******************
Nando Times
Researchers say robots may lift nursing home spirits
 By SCOTT R. BURNELL, United Press International

WASHINGTON (May 14, 2002 9:25 p.m. EDT) - A robotic baby seal called "Paro" 
has helped improve the quality of life for both clients and staff at a 
Japanese elder day-care facility, researchers reported Tuesday.

Scientists from Japan's Intelligent Systems Institute and University of 
Tsukuba modeled their work on animal therapy, researcher Kazuyoshi Wada 
told a session at the 2002 International Conference on Robotics and 
Automation.

It is well documented when cats and dogs are brought into nursing homes, 
patients' stress levels, blood pressure and social interaction often 
improve. But using robots can alleviate a medical staff's worries about 
possible animal drawbacks, such as infections and injuries, Wada said.

"Our goal is to give joy and relief to people through interaction (with the 
robot)," Wada said.

Paro is a fairly simple creation with a few novel twists to appear more 
true-to-life than current entertainment robots, such as Sony's AIBO. A 
combination of airbag-based pressure sensors and artificial fur creates a 
soft, pliable surface allowing Paro to sense when it is being petted. The 
end of Paro's power cord is shaped like a baby's pacifier, which is placed 
in the robot's mouth while it recharges.

The design team studied the robot's interaction with 26 elderly women for 
five weeks. Groups of up to eight interacted with Paro for about 20 
minutes, up to three times a week, Wada said. Results were monitored for 
both the clients and their health-care support staff, he said.

After sessions with Paro, the women exhibited consistently better emotional 
states and they reported feeling more vigorous, even if their "before" 
moods were good to begin with, Wada said. He added staff members reported 
fewer symptoms of job burnout.

The idea of replacing animals with responsive robots is a very thoughtful 
improvement, said Dr. Loren G. Lipson, chief of geriatric medicine at the 
University of Southern California's Keck School of Medicine. The results 
the team reported should improve as robotics engineers create more lifelike 
actions for their devices, he said.

"One of the pros is it will work for a lot of people," Lipson told United 
Press International. "The negative is that often the responses aren't going 
to be as loving as an animal's potentially would be, because you'll get a 
stylized series of performances."

That drawback might be less apparent to elderly patients not quite in touch 
with reality, Lipson noted. Some nursing homes have even had success using 
children's dolls in therapy situations, he said.

The robot's maintenance requirements are very low, to avoid adding 
responsibilities to already-overworked staff, said Takanori Shibata, an ISI 
researcher who helped design to robot. Paro has a single on-off switch, and 
can be cleaned with a spray bottle, he told the conference session. The 
team hopes to make a commercial version available by the end of the year, 
Shibata said.

Paro has about half the computing power and movement ability of Sony's 
AIBO. Sony has sponsored research into how people react to its product over 
time, but has not looked into therapeutic applications for the dog-like 
robot, said Jon Piazza, spokesman for the AIBO line.
*******************
Euromedia.net - United Kingdom
On the internet, time is money
5/13/02

As more and more internet content providers seek to generate additional 
revenue streams by charging you, the user, to view their content, it seems 
that devising new ways to relieve you of your money is where the real 
creative energy is being applied today.

That's not looking at what you are prepared to pay for, note, but designing 
the nuts and bolts of the technology that will allow you to pay anything at 
all.

Some are opting for the straightforward annual subscription model. The UK's 
Financial Times, for instance, has recently announced that it is to 
introduce two subscription access levels, one of E120 per year, and another 
of E320.

Sums such as these present no problems payment-wise, as they are large 
enough to warrant the use of a credit card. The only question remaining is 
whether or not users are prepared to pay them.

But the Financial Times specialises in offering high-value information, and 
users will sign up largely with the intention of profiting financially from 
that information. It will be easy for subscribers to calculate their return 
on investment.

As such, the really interesting figures for ft.com will not be the 
subscription up-take so much as the renewal rate after the first year.

But most internet content providers are not so unrealistic as to think that 
users will want to commit to their service for a whole year, or indeed part 
with such sums of money in a single transaction.

Instead, what they want is a means to charge the user small amounts, 
content-unit by content-unit. Furthermore, such an online pay-per-view 
(PPV) scheme must offer the user convenience, security, and preferably, 
anonymity.

There has been much activity of late in the micro-payment systems arena. 
Some schemes are utilising mobile phone text messaging capabilities to 
generate a password for access to content, with a small payment being made 
through the phone network's billing infrastructure.

But one of the latest micro-payment systems to enter the market is called 
Pico-Pay and works on a completely different principle. In fact, it does 
not require the user to pay in money at all, but to pay in time instead.

"Our intention was to develop a general purpose micro-payments gateway for 
all forms of low cost content," Con Zymaris, manager of the Australia-based 
Pico-Pay service, said in an e-mail.

Pico-Pay works by steering the user through a payment gateway that consists 
of a number of text adverts  "ClickVerts" as the system refers to them.

These ClickVerts are selected by a category matching system linked to the 
type of content the user has requested. Each advertiser decides how much a 
user's time is worth to them  say $0.20 (E0.22) for 20 seconds. The user 
knows how much the content costs  say $1.00 (E1.10) for a music download.

The user builds up the requisite credit by viewing a series of 
advertisements, and the funds are transferred to the content provider 
accordingly.

"We hope to be able to attract a lot more advertising spend from the 
marketers, and have the internet become buoyant once more with revenue," 
says Zymaris.

So, free content for the user, a bucketful of revenue for the content 
provider, click-throughs for the advertiser and everybody is happy.

Too good to be true? Well, it probably is, yes.

Pico-Pay is the latest variant in a long line of schemes where content is 
free to view and paid for by the advertisers. This is, after all, how 
internet content sites have worked (or are failing to work) in the majority 
of cases.

It is novel, though, in the sense that it does personalise the process. It 
allows the user to define the course of the revenue stream and decide who 
exactly pays whom.

But there are of course problems when the user is "contracted" to view 
advertisements in this way.

If a user is "forced" to view an advertisement to build up credit, will 
they be as receptive to the message as they would if they had followed up 
on the advertisement through their own free will?

It is unlikely that the advertisers would think so. And unfortunately, they 
are the ones being asked to foot the bill.

It also falls into the trap of treating the click-through as an end in 
itself to the advertiser. It isn't. It is whether or not the punter spends 
money on the goods or services that are on offer that counts.

But that isn't to dismiss Pico-Pay out of hand, far from it. It isn't 
difficult to imagine such a scheme becoming popular in a smaller scale 
content provider's market, and the niche user-group it attracts. The 
independent sector of the digital music publishing industry springs to 
mind, for example.

It may even be that the technology has caught up with the concept. As 
broadband rolls out it could be that the internet as a truly interactive 
advertising medium finally comes into its own.

With faster connection speeds, there is nothing to prevent advertisements 
from becoming mini content sites in themselves, offering a truly 
interactive and compelling experience for the user. The only limits would 
be the creatives' imagination.

But the problem with interactive advertising, however innovative, is 
ensuring that people interact with it. It doesn't matter what riches await 
in the room if nobody bothers to open the door. Systems such as Pico-Pay 
could push people through that door.

The race seems to be on to become the single "micro-payment standard" that 
will dominate online transactions.

But maybe systems such as Pico-Pay will demonstrate that there is room for 
plurality in payment systems, as well as opinion and content on the 
internet: a niche payment system for niche markets, and there is nothing 
wrong with that.
********************
CNET
Ottawa to crack down on cyber crime
By BRUCE CHEADLE -- Canadian Press

MONT TREMBLANT, Que. (CP) -- Canada will introduce new Internet legislation 
next fall to give police more tools to fight cyber crime, including 
terrorism, Justice Minister Martin Cauchon said Tuesday.

Cauchon and Solicitor General Lawrence MacAulay wrapped up a two-day 
conference of G-8 justice and interior ministers with broad calls for 
greater international crime-fighting co-operation.

The most specific measure was a consensus to develop an international 
databank on child pornography, although details were scant.

Overcoming privacy hurdles will be the subject of months of deliberations 
by G-8 bureaucrats.

Cauchon spoke of the "intolerable" child porn industry, saying images of 
victims must be centrally available to police in many countries in order to 
track both victims and perpetrators.

"These images are in fact scenes of crimes being committed," said Cauchon. 
"There's a common will to proceed quickly.

"But of course (G-8 working groups) will have to look at the structure, 
look at the concerns of the member states."

In the meantime, the Group of Eight leading industrialized countries will 
move to enact the Council of Europe Convention on Cyber Crime, the first 
international treaty dealing with crimes committed on the Internet.

"Criminals are using the Internet to plan and commit crimes and, in doing 
so, they leave an electronic trail behind," said Cauchon.

That trail, however, is fleeting and fragile.

The problem of police pursuit is two-fold: companies are not compelled to 
turn over information to authorities in most cases, and Internet providers 
often discard E-mail traffic in as little as one week.

To solve these problems, Ottawa will work co-operatively with industry -- 
everyone from banks to telephone companies to Internet service providers -- 
to find a consensus on preserving data, including billing information and 
routing.

Then, the government will bring in legislation that will likely lay out 
rules for police to compel companies to produce data, or to preserve 
specific date indefinitely while an investigation continues.

The link between cyber crime, terrorist acts and terrorist financing was 
also a central theme of the conference here -- one of several ministerial 
meetings being held in advance of the G-8 leaders summit in Kananaskis, 
Alta., June 26-27.

MacAulay said all G-8 countries are onside in the effort to track and 
suppress terrorist financing. More than $100 million US has been frozen 
through orders of more than 151 countries.

"We agreed more can be done," said MacAulay. "We must forfeit their assets."

One troubling offshoot of the attack on terrorism's cash flow is the 
possibility of more organized criminal behaviour to help pick up the slack.

MacAulay downplayed the connection between organized crime and terrorism, 
although he had opened the conference by trumpeting his concern.

"We agree this is not yet critical issue within our countries," MacAulay said.

"However, as we continue to cut off sources of funding for terrorists we 
will have to be on guard to the possibility of terrorists seeking new 
sources of funds, such as through organized crime."

The first collective meeting of the G-8 justice and interior ministers 
since the terrorist attacks of Sept. 11 did not attract an all-star cast.

U.S. Attorney General John Ashcroft and Roberto Castelli, Italy's justice 
minister, were the only senior political ministers attending from outside 
Canada.

France, Japan and Russia sent bureaucrats, while Britain and Germany sent 
parliamentary secretaries.

The G-8 ministers of finance, environment, labour and energy have already 
held separate pre-Kananaskis meetings and G-8 foreign ministers will 
convene in June at Whistler, B.C.
**********************
CNET
Wireless theft up
By MYKE THOMAS --CALGARY SUN

CALGARY -- Wireless communications technology has spawned a new breed of 
criminal with the ability to empty your bank account and steal confidential 
information, all without your knowledge.

Computer-savvy thieves are taking advantage of a general lack of knowledge 
by users of wireless devices, including cellphones and hand-held units with 
Internet and e-mail access.

"Because it's wireless, many people think their communications can't be 
tapped, like a landline, but that's not true," says Const. Gerry Bailey, a 
crime prevention specialist with the Calgary Police Service Crime 
Prevention Unit, adding if signals are not encrypted, anything in the 
airwaves can be monitored. "Wireless devices can be hooked up to a laptop 
and, with simple modifications and the proper software, people can sit 
outside a building and pick-up information from wireless signals."

Bailey says programs are available that allow crooks to determine 
passwords, allowing them to get into your e-mail account and supposedly 
secure Internet sites.

"Security is only as strong as your password and there are all kinds of 
password hackers out there," he says. "In Canada, it is illegal to 
alternate, change or use someone else's password, but the problem is 
proving it, putting the bad guy behind the computer. Wireless (technology) 
makes it difficult."

Of particular concern are disposable cell phones, now available in the U.S.

"All people have to do (to get the phones) is give a name and address, 
which are easy to fake, making it almost impossible to trace callers, 
leaving all kinds of doors open (to criminals)," says Bailey.

The disposable phones are not yet available in Canada, but Bailey feels 
it's only a matter of time and when they do arrive, he says tighter 
controls, such as photo ID, should be put in place, making it easier to 
catch criminals in the act.

Encryption and software that detects hacking can keep your information 
confidential and keep crooks out.

"If you're using wireless technology, make sure it is encrypted to at least 
128 bits," says Bailey. "And there are a lot of programs available that can 
stymie hackers. The best way to find them is with a search engine, like 
Google."
*******************
CNET
Charges laid against online pharmacy
By HELEN BRANSWELL -- Canadian Press

TORONTO (CP) -- The Ontario College of Pharmacists has cracked down on an 
Internet pharmacy, laying charges against one of its directors, a doctor 
and a pharmacist in the process.

The move -- the first by the college and perhaps the first in Canada -- 
will be welcomed by health care professionals who worry that the booming 
business of selling prescription medications over the Internet is putting 
some drugs into the wrong hands and endangering the health of consumers.

"The snake oil salesmen of the future are already on the Net and probably 
doing very well," said Dr. Peter Barrett, past president of the Canadian 
Medical Association, which has been critical of online drug sales.

"And so you have to be careful because we don't know whether these actually 
are accredited pharmacies. Is the product that they're sending you indeed 
up to snuff?"

The college announced Tuesday that it had laid a variety of charges against 
The Canadian Drug Store Inc. and one of its directors, William Shawn, 
alleging it was operating an unaccredited pharmacy without registered 
pharmacists on staff.

The Toronto-area operation is alleged to have filled prescriptions written 
by American doctors for U.S. residents. Cross-border drug sales are big 
business for online pharmacies operating from Canada, where cheaper drug 
prices and the low Canadian dollar lure American customers.

Charges were also laid against registered pharmacist Stephen Bederman, Dr. 
Stanley Gore and drug wholesaler Rep-Pharma Inc. Those three parties didn't 
work for The Canadian Drug Store Inc., but are alleged to have been 
involved in supplying it with prescription and non-prescription drugs and 
with facilitating delivery of those drugs to U.S. residents.

The charges were laid under Ontario's Regulated Health Professionals Act, 
the Drug and Pharmacies Regulation Act and the Pharmacy Act, all of which 
are policed by the college of pharmacists.

Health authorities and regulatory bodies have long been concerned about the 
sale of prescription drugs over the Internet.

While site practices vary, some simply require would-be buyers of diet 
medication, for instance, to fill in a form dealing with their health 
history and weight. These forms are then reviewed by a doctor, a 
prescription is issued and the medication is sent by mail.

Such a system offers no protection for the consumer -- who may never 
receive anything for his or her payment, may receive out-of-date or 
counterfeit drugs, or may receive the product purchased.

As would-be purchasers are not seen by the prescribing doctor, there is 
nothing in the system to prevent an anorexic from claiming to have a weight 
problem and obtaining diet pills that no family doctor would prescribe if a 
face-to-face meeting had been held.

In fact, Consumer Reports magazine did an investigation of several online 
drug sites in 1999. A senior editor managed to get seven different 
prescription drugs -- to help lose weight, quit smoking, fight depression 
and osteoporosis, among other things -- without seeing or speaking with a 
doctor.

The site which sold him Zyban, a medication to help smokers quit, was 
undeterred by the fact that he admitted in his application that he did not 
smoke.

The lure, for many customers, is the chance to buy drugs which they would 
either be too embarrassed to get from their family doctors -- Viagra is a 
popular seller -- or which their family doctor might not agree to 
prescribe, for instance, a diet pill for someone who really just needed to 
improve his or her diet and go to the gym more often.

But such drugs require a prescription for a reason, health authorities 
insist. And consumers are taking their health into their hands when they 
circumvent the system -- and its safeguards -- to get prescription 
medications from dealers who don't know their medical histories and often 
don't ask.

"The reason these are prescription drugs is that these drugs can do good 
things but they also can do potential harm. You have to be counselled in 
terms of 'will they help your particular situation?' And secondly what 
about drug interactions and precautions that you need to take?" Barrett said.

"We're here to protect the public and we can do that," added Deanna Laws, 
registrar of the college of pharmacists.

"We can protect them against bad practitioners and bad places of practice, 
at least in the pharmacy world. But we can't protect them against themselves.

"If people are going to go into some these sites and give all kinds of 
personal information and personal health information without knowing that 
the site that they're dealing with is legitimate or that the practitioner 
that they're getting meds or services is in fact a bono fide pharmacist, 
it's pretty hard to protect them against that."
*****************
CNET
Microsoft: Disclosures could help hackers
By D. IAN HOPPER -- Associated Press

WASHINGTON (AP) -- Antitrust remedies that nine states are seeking against 
Microsoft Corp. would harm consumers by raising prices and stifling 
innovation, a University of Virginia economist said Wednesday.

Kenneth G. Elzinga, testifying as an expert witness for Microsoft, said 
many of the penalties proposed by the states are unrelated to the 
violations of antitrust law that a federal appeals court found and appear 
designed more to protect Microsoft's competitors than consumers.

The nine states refused to go along with a settlement the Justice 
Department reached with Microsoft last year. Among other things, they want 
the company to release a version of its Windows operating system that will 
permit computer manufacturers to replace Microsoft features with competing 
products.

But Elzinga said that proposal would "essentially eliminate, or at least 
cripple" Windows. Other penalties proposed by the states, he argued, "will 
reduce Microsoft's incentives to innovate, will raise its costs of 
production and will prevent it from engaging in activity that tends to 
lower prices and improve quality."

Elzinga is one of Microsoft's final witnesses as the software giant wraps 
up its defense against the states' request for tougher penalties.

Jim Allchin, who oversees Windows for Microsoft, testified Tuesday that 
hackers, virus writers and software pirates could run rampant if Microsoft 
disclosed the technical product information that the nine states have 
requested.

Allchin said such disclosures "would make it easier for hackers to break 
into computer networks, for malicious individuals or organizations to 
spread destructive computer viruses and for unethical people to pirate" 
Microsoft's flagship software.

The states want the disclosures so competitors' software can work as well 
with Windows as Microsoft's own products. The overwhelming market share of 
Windows gives Microsoft a leg up on other software makers, they say.

A lawyer for the states, Kevin Hodges, pointed out that many of the most 
destructive computer attacks in recent years have targeted Microsoft 
products regardless of whether Microsoft disclosed particular technical data.

"I guess it's a matter of how hard you make it," Allchin replied. "We have 
to work on our reputation for security in the marketplace."

The states gained new hope Tuesday when the judge overseeing the case 
agreed to let them present more information on their demand that Microsoft 
release a "modular" version of Windows.

Lawyers for the states asked U.S. District Judge Colleen Kollar-Kotelly to 
allow them to call an extra witness to show that such a version of Windows 
is feasible, despite Microsoft's objections.

Kollar-Kotelly berated the states for the late request, calling it an 
ill-conceived "tactical decision." Nevertheless, she decided to let the 
witness, independent software tester James Bach of Front Royal, Va., testify.

"I think that the information should be submitted to the court, that I 
should have it," Kollar-Kotelly said.

States' lawyer Steven Kuney said Bach will argue that Microsoft's XP 
Embedded operating system shows that Microsoft can make a modular version 
of Windows. XP Embedded is designed for small, limited-function devices 
like cash registers and automatic teller machines.

Many Microsoft witnesses, including Chairman Bill Gates, say that Microsoft 
is unable to make a modular Windows because the different features -- like 
the Internet browser and media player -- are dependent on each other.

Microsoft earlier specifically targeted the penalty proposal in a motion 
that asked the judge to dismiss it. She has not ruled on the request.

Bach's testimony, which includes a video, will come after Microsoft rests 
its case next week. The states finished their case in April, and 
Kollar-Kotelly was reluctant to let the states add on another witness.

The original judge in the antitrust case ordered Microsoft broken into two 
companies after concluding that it illegally stifled competitors. An 
appeals court upheld many of the violations but reversed the breakup order 
and appointed Kollar-Kotelly to determine a new punishment.

States that rejected the government's settlement with Microsoft last fall 
and are pressing for tougher penalties are Iowa, Utah, Massachusetts, 
Connecticut, California, Kansas, Florida, Minnesota and West Virginia, 
along with the District of Columbia.
*********************
New Zealand News
Cost-containment mentality rules IT usage
By ADAM GIFFORD

New Zealand executives increasingly view information technology as a way to 
contain costs and boost operations rather than as a source for competitive 
advantage.

This is the finding of International Data Corporation analyst Peter Hind in 
his latest "forecast for management" survey of IT use and trends.

Hind told a seminar in Auckland that IT spending in New Zealand had 
remained steady over the past four years at about 4 per cent of operating 
costs, compared with 3 per cent in Australia.

But as a percentage of turnover, IT dropped last year from 3 per cent to 
2.25 per cent.

Spending on projects, outside the information systems budget, fell from 1.5 
per cent of turnover to less than 0.5 per cent.

"We are dealing with organisations with a cost-containment mentality," Hind 
said.

Asked to rank their top 10 challenges, chief information officers (CIOs) 
rated reducing costs as No 1, on a par with integrating new hardware and 
software.

Meeting user expectations was the third hardest task, and "change 
management' was fourth, up from eighth place last year.

Developing IT investment cases was fifth equal, up from ninth place last year.

"There is a challenge getting money for IT. CIOs want to see immediate 
return on investment," Hind said.

One reason was because CIOs had to increasingly answer to chief financial 
officers rather than chief executives.

"What is happening is business views IT as being less strategic and more 
operational. It is not looking at IT as a panacea for all its problems."

Companies were spending a lot less on hardware and more on contracting out 
work, Hind said.

"In 1994 only 6 per cent of the information systems budget went on external 
staff.

"Last year it was 13 per cent and this year it will be 15 per cent," he said.

Contracting levels were higher than across the ditch, especially in desktop 
management, network and systems support and application maintenance and 
development.

New Zealand firms were also willing to rent applications from an 
application service provider, with 12 per cent of firms taking some "apps 
on tap" compared with 5 per cent last year.

Looking at what technology was bought last year, Hind said wireless local 
area networks, storage area networks and biometric technologies grew 
strongly along with enterprise resource planning and document management.

The number of companies using Linux servers increased from 24 per cent to 
32 per cent, and frame relay also performed well.
*******************
Wired News
A Sour Note for Mac Users
By Andy Patrizio

New copy protection technology for compact discs may be effective in 
preventing the poaching of music, but it's causing problems for Macintosh 
users. And Apple isn't doing much to help fix the problem.
CDs manufactured by Sony seem to be the biggest headache. Not only do many 
discs not play on the Mac, but they cause the machine to lock up and refuse 
to eject the offending disc. Sony uses copy protection from Key2Audio.

This has been borne out in Europe, a popular testing ground for new 
software technology. Around 70 copy-protected discs have been released 
there so far, some of them by Sony, and there have been problems, 
especially for Mac users. Although some discs are labeled "Will not play on 
a PC/Mac," others are not. The user quickly discovers that the disc won't 
play and often can't be ejected.

To make matters worse, Apple's warranty doesn't cover the problem.

In a knowledge-base article, the company acknowledges there are problems 
with discs, specifically Sony's, and offers solutions for ejecting the disc.

But at the bottom of the article is a disclaimer: "CD audio discs that 
incorporate copyright protection technologies do not adhere to published 
Compact Disc standards.... Therefore, any attempt to use non-standard discs 
with Apple CD drives will be considered a misapplication of the product. 
Under the terms of Apple's One-Year Limited Warranty, AppleCare Protection 
Plan or other AppleCare agreement, any misapplication of the product is 
excluded from Apple's repair coverage."

Neither Apple nor Sony returned repeated phone calls seeking comment.

Ted Landau, who runs the Macintosh maintenance site MacFixIt, said he's 
heard of the problem but has yet to see a case where the disc can't be 
ejected. Apple's tips for removing locked up music discs have been around 
for years, he added.

There have been other cases of non-standard discs causing problems. 
Rectangular discs with curved sides work fine in a CD-ROM drive with a tray 
but can jam in a slot-loading drive. In that case, neither the CD-ROM drive 
maker nor the PC manufacturer was held liable, Landau said.

This latest problem seems to have hit England especially hard. The 
comp.sys.mac.misc newsgroup is full of postings from people complaining 
that their systems are locked up. Julian Midgley, campaign coordinator for 
the Campaign for Digital Rights, said he'd heard from several Macintosh 
stores that people were coming in with locked-up computers.

"To release CDs that can cause people's equipment to fail and (make them) 
have to take it in to be repaired, really is waging war on the consumer in 
a way that is unlikely to do the industry any good at all," Midgley said.

The CDR, which opposes any kind of copy protection, has at least been 
pushing to force companies to label CDs as non-playable when they are.

The organization generally focuses on consumer education, but this issue 
may push it into a more activist role. Midgley said the CDR is considering 
taking the fight to trade and computer associations around England.

"They have overstepped the mark with these protections, and it's likely the 
consumer associations will take a hard line on products that break other 
products," he said.

Midgley was surprised by Apple's position, but also more forgiving.
"They will be faced with a large number of machines they will have to 
repair and they want to avoid that cost if they can," he said. "Hopefully, 
Apple will apply pressure to the music labels themselves to stop releasing 
these CDs because it doesn't do them any favors."

CDR maintains a list of which music CDs can't be played on which computers, 
as well as which are labeled and which are not.

Landau blames the labels for not clearly marking their discs as unplayable 
on certain computers.

"I think Apple is just covering its bases with that (disclaimer)," he said. 
"Apple can't be expected to cover under warranty every misuse of the 
computer, and the user isn't exactly at fault in this case because the 
record company is making it difficult for them to realize this is a misuse 
of the computer.

"I hope this backfires on the music industry. This is not a way to treat 
customers. If they have a problem with illegal copying, the solution is not 
to make it impossible to play the CD."
**********************
Computerworld
Senate moving toward action on privacy bill

WASHINGTON -- A controversial online privacy bill is set for key U.S. 
Senate action this week, but the co-sponsor of a competing privacy bill in 
the U.S. House predicted today that sharp differences between the two bills 
make it unlikely either will be approved this year.
The Senate Commerce, Science and Transportation Committee is scheduled 
Thursday to approve the online privacy bill authored by Ernest "Fritz" 
Hollings (D-S.C.), the committee chairman, and send it to the full Senate 
for vote.

But even if Hollings' bill wins full Senate backing, it faces a far more 
difficult challenge reconciling with a House privacy bill recently 
introduced by Cliff Stearns (R-Fla.), according to Jim Moran (D-Va.), one 
of 21 co-sponsors of the House measure.

Hollings' bill is "not going to get out of conference with the House" Moran 
said at a U.S. Chamber of Commerce privacy forum today. "We're trying to 
find a more moderate approach on the House side, but right now we're not 
there. I doubt that we will get a bill passed this year."

There are sharp differences between the two bills in several areas, though 
they agree on some points. For example:


Online vs. Off-line: The Hollings bill only affects online privacy; the 
Stearns bill applies to both online and off-line privacy practices.

Private lawsuits: The Hollings measure allows privacy lawsuits, but the 
Stearns bill does not.

Notice: Both bills mandate privacy notices.

Opt-out/in: The Stearns bill requires "opt-out" for sharing personal 
information; the Hollings bill seeks "opt-in" when sensitive information is 
required, "opt-out" on other occasions.

Access: The Hollings bill requires companies to permit consumers to see 
personal data but also allows them to charge up to $3 for access. The 
Stearns bill doesn't include an access provision.

Preemption: Both bills would preempt state laws.
Neither bill is winning much business support, but the Hollings bill is so 
far getting the most opposition.

The Hollings bill is "a significant danger to the Internet," said Joe 
Rubin, who heads congressional affairs for the Chamber of Commerce. In 
particular, he cited the maximum in $5,000 in damages per company, per 
violation that the measure would allow. The Chamber isn't backing either 
bill and prefers industry self-regulation, he said.

At a Senate Commerce Committee hearing last month on the Hollings bill, 
Barbara Lawler, chief privacy officer at Hewlett-Packard Co., said she had 
"strong opposition" to bill provisions making it easier for people to sue 
over alleged privacy violations.

Also at that hearing, Amazon.com Inc.'s vice president for global public 
policy, Paul Misener, said the bill didn't regulate off-line practices, 
such as the data collected by supermarket scan cards, yet regulated the 
same online personalization services.

The bills are winning some support from privacy advocates, but are still 
running into opposition over some of the provisions, including those that 
would preempt state laws.
*******************

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