Clips October 21, 2002

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips October 21, 2002

ARTICLES

Broadband believer: FCC's chair presses for big leap for U.S. high-speed 
Internet
Report Says Hundreds of Navy Computers Missing
Webcasters Saved From High Royalties
Internet Merchants Fight Fraud
Technophobia Makes WorldCom Probe Harder
Dad's 'Immoral' Poem Exiles Son
Lancaster Man Arrested in Probe of Web Sex Predators
Wall St. Leans Toward Linux
Marketers hit Internet users with pop-up spam
Judge: Disabilities Act doesn't cover Web
Small Net service providers target niche
Sydney-based Islamic Web site to be taken down
Federal move sought to combat growing 'spam' e-mail woes


************************
Seattle Times
Broadband believer: FCC's chair presses for big leap for U.S. high-speed 
Internet
By Jim Landers
The Dallas Morning News

WASHINGTON  Michael Powell professes boundless faith in broadband. The 
chairman of the Federal Communications Commission sees high-speed Internet 
access transforming modern civilization with the impact that gunpowder had 
on warfare centuries earlier.

When he curls up in bed with his broadband-linked laptop, trying to guess 
the would-be assassin on Fox television's "24" or ordering household 
repairs, he envisions a leap in history.

"I'm closing the time and distance so that as things occur to me, the tool 
to put them into action is a lot closer to me physically," he said in an 
interview. "I do think there is something right about a government policy 
that embraces the notion that if we can put together the citizenry of 
America in an interconnected fashion, that America will be better."

So get on with it, grumble the phone companies.

"We've had plenty of time for study and debate," said Tom Tauke, a senior 
vice president at Verizon Communications. "Now it's time for action."

An Internet true believer and target for criticism, Powell personifies both 
as he guides the FCC toward breaking a longstanding legal and regulatory 
logjam over broadband access.

At its base, the tussle is over arcane topics such as defining 
broadband  information service or telecommunication service?  and who gets 
access to the phone lines and cables reaching consumers' homes.

But the stakes are enormous. Moving Americans from poky dial-up connections 
to fast, always-on Internet access will unleash tremendous innovation and 
growth, advocates say, and nurse sick Information Age industries back to 
health.

With the Internet bubble popped, the tech sector is down by $2 trillion on 
Wall Street. The ventures owe banks, suppliers, government auctioneers and 
each other another $1 trillion. A half-million employees are out of work. 
Telecommunications CEOs are among the most brazen of the corporate 
buccaneers facing jail time.

Union workers, suppliers and warring executives all say broadband is the 
best hope for bailing them out. Trouble is, they disagree  with remarkable 
rancor  about how to coax consumers aboard.

The companies are suing the FCC and each other. Whatever the FCC does seems 
likely to generate more lawsuits and more evidence that there is no 
consensus on how to move ahead.

"To this day, I cannot get over the personification, the passion, the good 
versus evil," Powell said. "This is basically a trillion-dollar, 
sophisticated industry, and you would think this was a squabble among 
3-year-olds about who gets to sit at the table."

Dimensions of the market


About 10 million U.S. households had broadband access as of mid-2001. But 
50 million relied on dial-up connections. One of the few points of 
agreement in the broadband debate is that the move to high-speed access 
will remain slow till the FCC clears away a dense fog of regulatory ambiguity.

That puts the spotlight squarely on the 39-year-old Powell and his 
broadband initiative: four proposed rules that, taken together, will 
establish the competitive landscape for phone and cable companies to offer 
broadband access. He expects a vote by early 2003.

The old Bell regional companies, such as SBC Communications and Verizon, 
and their allies say that Powell holds the key. Economist George Gilder 
wrote in The Wall Street Journal: "With Congress and the courts hopelessly 
deadlocked, only George W. Bush and Michael Powell can save us from the 
telechasm."

Powell  a former antitrust lawyer, the son of Secretary of State Colin 
Powell and a free-market champion  says he's no savior. "But I'm going to 
do my damnedest to play our part in improving the conditions that will 
allow us to save ourselves from the telechasm," he said.

Scott Cleland, chief executive officer of the Precursor Group 
investment-research company in Washington, D.C., predicted that Powell 
would deliver clear rules for a new broadband marketplace.

"Chairman Powell has laid out a market-forces agenda and will implement it 
in the coming months," Cleland said. "The stakes have increased, and 
telecom regulation needs to have more economic rationality. There's a lot 
of regulatory disincentive for investment. ... He's got the plan, the 
approach, and he's got the votes."

An information service


Powell has already led a majority of the four commissioners across one 
hotly contested aspect of his rule-making initiative. Last winter, the FCC 
voted to define broadband supplied by cable modem as an information rather 
than a telecommunications service.

The commission also tentatively decided that broadband delivered over the 
phone lines via DSL technology is also an information service, though the 
question will come before the FCC again when the rest of the initiative 
comes to a vote.

The distinction is huge.

Owners of a telecommunications service network, such as those run by the 
Baby Bells, must open up their lines to other companies' services on a 
so-called common carrier basis. The FCC and the states determine an 
allowable wholesale price that the network owners can charge. They also 
have to collect universal service fees to subsidize service for remote 
areas and for those who otherwise could not afford service.

An information service faces no such mandates. That's why the ruling 
regarding Internet-over-cable was such a big win for the cable companies. 
The FCC has the ability to require access to the cable network for 
competing companies, but it's an option, not an obligation.

Here is where the arguments start.

If cable escapes such obligations for broadband, the Bells argue, they 
should escape as well.

Free us, say the cable companies, but not the Bells.

Force them both to share their lines, cry consumer groups, competing phone 
companies and Internet service providers.

The FCC staff could even find a middle ground by forcing both the Bells and 
the cable companies to share their systems with at least some competitors 
for a price that the agency would help determine.

In this ambiguous environment, Powell and others say, is it any wonder that 
the phone and cable companies have slowed their broadband investments?

What critics say


Critics of Powell respond that there is no ambiguity, that broadband via 
cable or phone line is like local telephone service: Network owners are 
born monopolists. They'll get rid of competitors, then hit consumers with 
high prices.

"You learn in Economics 101 that monopolists never innovate and never 
bother with incentive costs. I don't know how relieving the Bells is going 
to lead to more broadband deployment," said Lawrence Spiwak, a former FCC 
attorney who is now president of the Washington-based Phoenix Center for 
Advanced Legal and Economic Studies.

This fight was joined long ago for local telephone service. From AT&T to 
WorldCom on down through the competing local phone companies, SBC and the 
other regional Bells have been assailed as unwilling to share their networks.

Even Powell has asked Congress to raise the limits on fines the FCC can 
levy against the Bells for their stalling tactics, because getting hit with 
$1 million penalties hasn't changed their behavior.

But Powell's critics foresee the chairman doing far too little to level the 
broadband playing field. Indeed, Powell found himself in front of the 
Senate Commerce Committee soon after putting his rule-making initiative out 
for public comment.

Administer the law and leave the policy-making to us, said Chairman Ernest 
Hollings, D-S.C.

"I think you'd be a wonderful executive vice president of a chamber of 
commerce, but not a chairman of a regulatory commission at the government 
level," he told Powell at the March hearing.

Political background


Powell joined the FCC as a Republican commissioner in 1997, after working 
as a top staffer for antitrust chief Joel Klein in the Clinton administration.

He's a favorite of heavyweight Republicans John McCain in the Senate and 
Billy Tauzin in the House.

President Bush seemed to endorse Powell's broadband initiative at his 
Baylor University economic summit in August.

"The Federal Communications Commission is focusing on policies to encourage 
high-speed Internet service for every home and every business in America," 
the president said. "The private sector will deploy broadband. But 
government at all levels should remove hurdles that slow the pace of 
deployment."

This irks some conservatives, such as former FCC Commissioner Harold 
Furchtgott-Roth, for reasons just the opposite from Hollings' complaint of 
over-reaching.

Furchtgott-Roth, now with the American Enterprise Institute, attacks the 
broadband initiative as market-meddling industrial policy.

Powell says it requires a push from the government to accelerate 
broadband's deployment.

"You can put your head in the sand and be a libertarian and say, 'Leave it 
to the market.' But it's not a market!" he said. "It's not really a market 
because major elements of its economic viability rest in the hands of 
regulators, for good or for wrong.

"I'm a free-market guy who completely accepts that we're kidding ourselves 
if we think we have a free market in communications."

Powell says it's also naive to think Microsoft or another company will 
invent a new, instantly popular technology that will drive consumers to 
demand broadband over dial-up access.

"It's more like we're handing creative minds a new palette of paints. What 
they will paint is not clear, and it may be many years (before they are)," 
he said.

This is where Powell finds himself in bed with his laptop. His off-line 
bedtime reading runs to histories of technology and intellectual thought, 
an eclectic universe that includes, among others, Leonardo da Vinci and 
Albert Einstein.

Fiber-optic cables and wireless transmissions moving at the speed of light 
will ultimately deliver broadband to every business and every household, he 
said.

And that's when consumers will be able to find answers, order products or 
do any of a million other things as quickly as they think of them. Nothing 
in this universe is going to be any faster than light.

"My flip statement is, if Einstein is right, we're done," Powell said.
***************************
Reuters
Report Says Hundreds of Navy Computers Missing
Fri Oct 18, 6:06 PM ET
By Jim Wolf

WASHINGTON (Reuters) - The U.S. Pacific Fleet's warships and submarines 
were missing nearly 600 computers as of late July, including at least 14 
known to have handled classified data, an internal Navy report obtained on 
Friday said.



The fleet, based in Pearl Harbor, Hawaii, sought to prevent release of the 
Naval Audit Service report, even though it was not classified.


"A release of this information could negatively impact national security," 
wrote Rear Adm. Jonathan Greenert, the fleet deputy commander in chief. His 
comments, dated Sept. 6, were contained in an appendix of the report.


The audit service found "a serious risk that PCs containing sensitive and 
classified information have been lost or compromised, which presents a 
threat to national security and a potential embarrassment to the Department 
of the Navy."


All 595 of the missing laptop and desktop units featured removable hard 
drives, had been leased to the Navy, and were capable of processing 
classified information, the investigators said.


The report, published in its final form this month, was obtained first by 
Defense Week, a trade paper publishing its story on Monday. Defense Week 
made excerpts available to Reuters.


The Navy declined comment on the current status of the missing computers or 
any other aspects of the matter.


The audit dealt with only a small fraction of the Navy's computers. The 
Atlantic Fleet was not examined. And in the Pacific Fleet, shore facilities 
-- where most computers are located -- were not surveyed.


"At least 595 personal computers (PCs), including at least 14 reported to 
be used for classified purposes, and possibly more, remained missing as of 
23 July 2002 from afloat units" of the Pacific Command, the report said.


"Data was not available as to how many of the remaining PCs were used for 
classified processing," added a footnote, leaving open the possibility that 
many more or all of those missing might have handled secret information.
**************************
Los Angeles Times
Webcasters Saved From High Royalties
Legislative relief stalls in the Senate, but record labels give small 
Internet stations a break by deferring most of what is owed them.
By Jon Healey
Times Staff Writer

October 19 2002

Record companies agreed Friday to defer most of the royalties they're owed 
by small Internet radio broadcasters after Congress failed to pass a bill 
authorizing a discount for those stations.

The move by the Recording Industry Assn. of America saves a number of small 
Webcasting businesses from certain doom Sunday, when four years' worth of 
back royalties would have been due. Although the labels and artists are 
entitled to collect tens of thousands of dollars from popular small 
Webcasters, the RIAA asked each station simply to make a down payment of 
$2,500 or less.

Nevertheless, a wide array of Webcasters and over-the-air broadcasters 
remained unhappy and continued to press for change. They still want 
Congress to overhaul the way royalties are set.

In last-minute maneuverings Thursday, former broadcaster Sen. Jesse Helms 
(R-N.C.) raised an objection that derailed a bill for small Webcasters 
passed by the House this month, according to sources who backed the bill. 
As a result, the Senate recessed without voting on the legislation.

Helms spokesman Joe Lanier said the senator didn't want the Senate 
"rubber-stamping a bill written by the recording industry in the dead of 
night." Several religious broadcasters and other Webcasters from North 
Carolina were "very unhappy they did not have a voice in the process," 
Lanier said, adding that the bill's proposed royalties were exorbitant.

The dispute centers on the royalties that Internet broadcasters must pay to 
labels and artists for the songs they transmit. The rates were supposed to 
be based on the deals individual Internet stations had struck privately 
with the record labels.

But only one such royalty agreement qualified: a deal between the RIAA and 
online powerhouse Yahoo Inc. It became the basis for the rates set in July 
by the librarian of Congress.

Small Webcasters said the rates, which amounted to $100 per year per 
listener, were ruinously high in light of the prolonged advertising slump. 
They predicted that free Webcasts, once commonplace on the Internet, would 
all but vanish as only media conglomerates would be able to offer them.

In response to pleas from small Webcasters, House Judiciary Committee 
Chairman F. James Sensenbrenner Jr. (R-Wis.) pushed a bill through the 
House that called for royalties of 8% to 12% of a Webcaster's revenue or 5% 
to 7% of its expenses, whichever is higher. It also required annual minimum 
fees of $2,000 to $5,000.

By contrast, the librarian of Congress had set royalties for commercial 
Webcasters at 0.07 cent per song per listener, regardless of how little 
revenue they had raised.

The measure would apply to Webcasters with less than $1 million in revenue 
since November 1998 and whose revenue remains below $500,000 in 2003 and 
$1.25 million in 2004. Those eligibility limits would put some mid-size 
companies in a bind: too large to qualify for the discounted rates but not 
big enough to attract the advertising needed to cover the per-song fees.

Webcaster David Landis, founder of Los Angeles-based station 
Ultimate-80s.com, said the rates for small Webcasters were "extremely 
expensive, but the alternative is far more detrimental." Without the 
discount provided in the legislation, he said, he'd owe $25,000 in back 
royalties for two years of Webcasting. With the bill, he said, he'd owe 
about $7,000.

When the bill foundered, the RIAA decided Friday to ask for only a portion 
of the royalties as "another example of our commitment to the Webcasting 
industry," said John L. Simson, executive director of the RIAA's royalties 
unit.

Although the RIAA is still eager to see the bill pass, critics -- including 
college radio stations and Webcasting hobbyists -- want more relief.

Some large Webcasters, the National Assn. of Broadcasters and religious 
broadcasters also are seeking changes to ensure that the provisions for 
small Webcasters wouldn't affect their businesses.

Some of the strongest proponents were artists' unions and trade groups, who 
are slated to receive 50% of the royalties paid by Webcasters. The bill 
would put that split, which was originally mandated by federal regulations 
and contracts, into federal law.
*******************************
New York Times
October 21, 2002
Internet Merchants Fight Fraud
By BOB TEDESCHI

INTERNET merchants, weary of a near constant barrage of credit card fraud 
that costs them more than $1 billion each year, are joining forces in hopes 
of helping one another identify users of stolen credit cards, catch 
criminals and perhaps soothe the fears of millions of potential online 
shoppers.

A group of the Web's biggest e-commerce companies, tentatively called the 
Internet Merchant Fraud Roundtable, has formed over the last year, with the 
goal of creating a database that merchants could use to block potentially 
fraudulent transactions and help snare people who commit credit card fraud. 
The group hopes to have the database set up by the first half of next year.

"We're trying to construct a neighborhood watch," said George Redenbaugh, 
the manager of risk management and customer privacy at Hewlett-Packard, and 
one of the organizers of the round table. "It may turn out to be something 
we can't pull off, to be quite candid with you, but we're trying to work 
this out."

While many consumers are still wary about providing their credit card 
numbers to make purchases online, it is merchants who typically bear far 
more of the financial risk. A cardholder's liability is usually limited to 
$50 or less if someone else uses the account fraudulently. But merchants 
are usually obliged to reimburse credit card issuers for the actual cost of 
the goods sold.

One of the core challenges for the group, which Mr. Redenbaugh says 
includes representatives from about 65 companies, is how to share 
information about potential or probable credit card thieves without 
violating the privacy of legitimate users.

Mr. Redenbaugh and another key organizer of the round table, Tom Sullivan, 
the director of e-commerce fraud protection at the online travel company 
Expedia, said the group envisions creating a database of information on 
credit cards that have been stolen, and perhaps other information that 
could tip off other merchants to a possibly fraudulent transaction. 
Round-table participants would capture limited amounts of data about 
suspected frauds  data that would not include names, addresses or other 
personally identifiable information.

"We'd never attempt to do this if we didn't have the blessing of 
independent privacy authorities," said Mr. Sullivan of Expedia. "We've had 
early discussions with some, and haven't been discouraged by what we've 
heard. As this program develops, we'll continue to work with those experts 
and if we can't meet their requirements, we simply won't continue on."

One privacy expert who was briefed on the effort is Larry Ponemon, the 
chairman of the Ponemon Institute, an information-management research and 
consulting firm.

"The verdict is still out," Mr. Ponemon said. "But what I like about this 
group is that they really care about privacy, and they're building it in at 
the right place  the beginning of the process  even if it could be limiting 
to them."

While no e-commerce merchant group has tried to address credit card fraud 
on such a big scale, there is precedent for a similar type of information 
gathering. CardCops, a credit card fraud watchdog company, has created a 
database of what it believes are stolen credit cards, and offers that 
database on CardCops .com free to users who can check to see if their 
numbers have been stolen.

According to Dan Clements, CardCops's chief executive, the database, which 
typically contains about 100,000 card numbers at a given time, is compiled 
from Web sites he said were frequented by card thieves. Mr. Clements said 
that to avoid violating the privacy of a credit card holder, only the 
16-digit account numbers are carried in the database. He said it was nearly 
impossible to trace the number to a person's name without other information 
and that he cleared his methods with Visa before moving forward with his 
service.

In the near future, Mr. Clements said, his company would start offering 
that database for a fee to merchants, who would be able to sift through it, 
checking for possibly stolen cards while they process transactions on their 
sites. As such, Mr. Clements said, his service provides a glimpse into how 
the Internet Merchant Fraud Roundtable database could work.

"It's a really needed thing for merchants," Mr. Clements said of the round 
table, "because the banks aren't reacting quickly enough to fraud." There's 
a lag, sometimes as much as 120 days, from when a fraudulent card is 
reported to when the issuing bank cuts it off, he said.

"In theory," he added, "merchants could put that information into a 
database so the others don't get hit in two hours."

Mr. Clements said he did not feel a competitive threat from the round 
table. "We all want the same thing  a safer online shopping experience," he 
said. "We welcome their effort."

Notably, when merchants sell goods to people who hold stolen credit cards, 
they are typically liable for the fraudulent charges  not the credit card 
issuer, and not the consumer. Mr. Redenbaugh is among those who say 
credit-card issuers are not working quickly enough to cut off stolen 
cards  a charge that issuers dispute  and he offered an example of how that 
hurts merchants. A pornography site based in Gibraltar was hacked, he said, 
and a large portion of credit cards were stolen from the site's files.

"We reported that to the predominant bank involved and asked them to stop 
it because we kept seeing these cards coming back," said Mr. Redenbaugh, 
who would not identify the bank. Based on its own procedures for screening 
fraud, Hewlett-Packard rejected those cards, "but the bank kept approving 
them for authorizations," he said. "It took them over a month and a half to 
cut off the cards. Those cards may have been used on dozens of merchants' 
sites who didn't figure this out."

The round-table organizers said that for any fraud database to be big 
enough, it would have to include information from a broad array of 
merchants. Because merchants would probably not entrust this effort to an 
ad hoc group or a single member company  and because no merchant would want 
the responsibility of overseeing such a system  organizers said they had 
begun to create a formal business entity to govern the round table.

That alone will take months, Mr. Redenbaugh said. Round-table 
representatives have had merger discussions with the Merchant Fraud Squad, 
an online fraud prevention organization of which Expedia was a founding 
member. "They've lost a lot of premium merchants over the years that are 
now part of our group, so hopefully we can reinject some energy into that 
organization, and also leverage its basic structure," Mr. Redenbaugh said.

If the formal group goes forward with the database effort early next year, 
Mr. Redenbaugh said, it will probably contract with an outside technology 
firm to handle that responsibility.

Such a step is critical, said Robert Leathern, an analyst with Jupiter 
Research, an Internet consulting firm. Mr. Leathern said the concept of 
creating a cross-industry fraud database "is a good idea, as long as they 
themselves are secure and the privacy of card holder information is 
correctly attended to."

"My concerns," he said, "are that if this type of system is hastily or not 
carefully enough constructed, it will simply add additional cost and 
another point of potential compromise of private information."

Mr. Leathern added that such an effort could help reduce some of the fears 
consumers have when buying online. According to a recent Jupiter report, 
such fears accounted for $8 billion this year in forgone e-commerce revenue.

While catching credit-card thieves is not the primary mission of the round 
table, Mr. Redenbaugh said the group had been working with federal 
law-enforcement agencies to determine how it can pass along information to 
help track down criminals. "Law-enforcement people are very busy people 
these days," he said, "so you have to have a case with significant value to 
get their attention."

The round table has scored some early successes on that front, Mr. 
Redenbaugh said. Earlier this year, five merchants helped alert the Secret 
Service to a fraud ring in Maryland that was stealing credit card numbers 
offline and shopping online. Members of the ring, who were arrested, 
apparently included employees of a package-delivery company, who diverted 
the goods from the addresses of the legitimate card holders to warehouses.

Mr. Redenbaugh would not identify the merchants or the delivery company, 
but he said the gang members received prison sentences of one to 10 years. 
Individual merchants would not have been able to show law enforcement 
agencies the scope of the problem, he said. By working as a group, "we 
helped put those people behind bars."
***************************
Reuters
Technophobia Makes WorldCom Probe Harder
Fri Oct 18, 8:07 AM ET
By Jessica Hall

PHILADELPHIA (Reuters) - Though he ran one of the world's largest Internet 
companies, former WorldCom Inc. Chief Executive Bernie Ebbers was a 
well-known technophobe who never used e-mail and rarely touched a computer.

That's making it tough to discover whether he played any role in the 
alleged falsification of the telecommunications firm's financial records, 
sources close to the company said.


Former WorldCom executives allege that orders to falsify financial records 
came from the highest levels.


But Ebbers left no paper trail, or trace of his daily dealings on computer 
files. He dealt with a small circle of top executives, rarely meeting 
directly with underlings. He often held private strategy meetings with 
former Chief Financial Officer Scott Sullivan at which no minutes or 
records were kept, WorldCom (WCOEQ.PK) (MCWEQ.PK) executives said.


"There's no smoking gun e-mail. There's no paper trail. He didn't use 
e-mail and never took notes. If people had questions for him, they'd fax 
them to his secretary and he'd call them back or scribble a reply," said 
one WorldCom executive.


That poses a problem for prosecutors and federal investigators, who have 
culled many of their findings on the $7.68 billion accounting scandal from 
e-mails among WorldCom's financial team and boxes of documents from the 
company.


Prosecutors are uncertain if they will have enough evidence to bring 
charges against Ebbers, but the federal and regulatory investigations 
continue, the sources said.


"We think Bernie Ebbers is up to his eyeballs in this," Ken Johnson, 
spokesman for the House Energy & Commerce Committee, said in an interview 
with Business Week.


The committee is one of several bodies investigating accounting problems at 
WorldCom and fellow telecommunications firms Qwest Communications 
International Inc. (NYSE:Q - news) and Global Crossing Ltd. (GBLXQ.PK).


WorldCom, which transmits about half of the world's Internet traffic, said 
it is cooperating with investigators.

Ebbers' lawyer, Reid Weingarten of Steptoe & Johnson LLP, has said the 
investigations will uncover "not a shred of credible evidence that Bernie 
Ebbers had a thing to do with those (accounting) decisions."

"YOU AREN'T GOING TO CHURCH WITH A CROOK"

In July, Ebbers, exercising his constitutional right against 
self-incrimination, refused to answer questions in a hearing before the 
U.S. House Financial Services Committee.

But he told the congregation at his Easthaven Baptist Church in 
Mississippi: "I just want you to know you aren't going to church with a 
crook ... no one will find me to have knowingly committed fraud."

WorldCom, the No. 2 U.S. long-distance telephone and data services company, 
filed the world's biggest bankruptcy case in July amid $40 billion in debt 
and huge accounting misstatements.

The Clinton, Mississippi-based company fired Sullivan as the accounting 
scandal broke. He was accused of manipulating WorldCom's expenses, and thus 
its earnings, so the company could meet Wall Street expectations. Sullivan 
has been indicted in New York federal court on fraud and conspiracy 
charges, and he is fighting the allegations.

Four former WorldCom executives have pleaded guilty to participating in 
that manipulation and have agreed to cooperate with authorities probing the 
case.

"We hope to get everybody in upper management who was involved in this," 
said Mississippi Attorney General Mike Moore, who is working with the 
Manhattan U.S. attorney' office in the investigation. "We're edging up the 
line. We'll see where it takes us."

EBBERS DELEGATED

Of course, it's possible that Ebbers did not know the details of the 
accounting problems at the sprawling company, which had $35 billion in 
revenues last year and operations in 65 countries. He typically delegated 
responsibilities and deferred questions on arcane technical or financial 
issues to his right-hand experts.

"The man was a phys. ed. (physical education) major. He didn't get knee 
deep into financial issues. He might have known about capital spending and 
revenue issues in general, but he was not one to dissect line items on a 
balance sheet. He delegated everything," said one WorldCom executive.

When asked a financial question at Wall Street conferences or shareholder 
meetings, Ebbers would joke "Uh, that's a Scott question" and relinquish 
the podium to Sullivan.

"Bernie was a deal-maker. But the day-to-day operations were not his thing. 
He didn't know how to run a company. He knew how to build a company," a 
WorldCom executive said.
**************************
Associated Press
Oregon Man Fined For Spam E-Mails
Fri Oct 18,11:49 PM ET
By PAUL QUEARY, Associated Press Writer

SEATTLE (AP) - An Oregon man was ordered Friday to pay nearly $100,000 in 
the first case brought under Washington's tough law against "spam" e-mails.



Attorney General Christine Gregoire's office estimates that Jason Heckel, 
28, of Salem, sent as many as 20,000 unsolicited e-mails to Washington 
residents in 1998, trying to sell a $39.95 booklet called "How to Profit 
from the Internet."


The case was the first brought after the Legislature banned commercial 
e-mail with misleading information in the subject line, invalid reply 
addresses or disguised paths of transmission.


Judge Douglass North ordered Heckel to pay a $2,000 fine and more than 
$94,000 in legal fees.


Heckel didn't appear in court. In a written statement he said he never 
intended to break the law, and that he made only about $680 from book sales.


Heckel's lawyer Dale Crandall said he plans to appeal, and argued that 
state anti-spam laws violate the U.S. Constitution's protection of 
interstate commerce.


"It would create a patchwork of laws that would be impossible to keep up 
with," Crandall said.


Gary Gardner, executive director of the Washington Association of Internet 
Service Providers, one of the anti-spam law's backers, said he hoped the 
fine is the beginning of a new push to enforce the law.


"Our goal was never to make any money on this stuff," Gardner said. "It's 
to put these people out of business."
***************************
Wired News
Dad's 'Immoral' Poem Exiles Son

An Egyptian appeals court has confirmed the guilty verdict in the case of 
Shohdy Naguib Surur, who was sentenced to one year in prison in June for 
posting his father's poem on the Internet.

But Egypt's first Web prisoner of conscience is still at large -- in Moscow.

Shohdy's father, the revered Egyptian poet Naguib Surur, who died in 1978, 
wrote the satirical poem after Egypt was defeated in the 1967 war against 
Israel. He condemned the Egyptian government and politics, using explicit 
sexual imagery and colloquial street Arabic. The poem was never published 
in Egypt but has been disseminated there through underground cassette tapes 
of Naguib Surur's readings.

Three years ago, Shohdy posted the poem on a U.S.-hosted website he managed 
at the time. The poem is now available on the Index on Censorship site.

Shohdy was earlier charged in an Egyptian court with possessing "immoral 
booklets and prints." Egyptian officials presented the case as a 
pornography violation, but there is no doubt that the case is politically 
motivated.

Shohdy, who was born in Moscow to a Russian mother and an Egyptian father, 
is one of Russia's online pioneers. A few years ago he moved to Egypt where 
he worked as a webmaster for the English-language newspaper Al-Ahram.

He was arrested in November and held for only a few days. After the trial 
in June, he was released on bail to wait for the appeal. Using his double 
citizenship, Shohdy returned to Moscow, where he remains.

"I have no illusions whatsoever regarding the justice system in Egypt," 
Shohdy said. "In the safety of exile and with an unlimited access to the 
Internet, I am having great fun discrediting and exposing the unlawful 
regime."

In Shohdy's absence, the appeals court confirmed the verdict of one year in 
prison last week -- cementing his status as the first person in the world 
convicted in court for publishing poetry online.

In August, a few dozen Internet activists, journalists and friends of 
Shohdy's picketed the Egyptian embassy in Moscow. They also delivered a 
letter to the embassy secretary that supports Shohdy and freedom of 
expression signed by more than 300 people.

"First of all, the picket was an attempt to attract attention to the 
problem of censorship on the Net," said Russian Internet activist Nastik 
Gryzunova. "Shohdy is a victim of persecution, no matter whether is he in 
jail or in exile. We know that censorship on the Internet is not solely an 
Egyptian problem."

A similar petition was delivered to the Egyptian embassy in Paris. A 
handful of international human rights organizations, including Reporters 
Without Borders and Amnesty International expressed their support for Shohdy.

Shohdy's 11-year-old daughter, Donia, still lives in Cairo. But given the 
situation, Shohdy won't be able to visit her there for many years.

"Until recently a sentence passed in a misdemeanor case like mine would 
have been dropped after five years, but now the law has been tailored to 
prolong the validity of any sentence to up to 30 years," Shohdy said. "This 
news made me laugh," he joked bitterly, "because in 2032, Naguib Surur's 
centenary will be celebrated, and I have no doubt that a monument will be 
inaugurated in Cairo."

Those who know Shohdy have joked about a phrase commonly used under the 
Soviet regime when someone emigrated from Russia: "He chose freedom."

For his part, Shohdy chooses freedom by remaining in Russia.
**************************
Los Angeles Times
Lancaster Man Arrested in Probe of Web Sex Predators
By Wendy Thermos
Times Staff Writer
October 19 2002

A 44-year-old Lancaster man was arrested in Las Vegas during an FBI sting 
aimed at sex predators who prowl the Internet for child victims, 
authorities said Friday.

Earl Roy Harvey has been charged in federal court with crossing state lines 
with the intent of engaging in sex with a minor, said FBI Special Agent 
Daren Borst.

The alleged "victim" in the case was an undercover FBI agent posing as a 
14-year-old boy in Internet chat rooms.

Harvey's Oct. 11 arrest was part of a six-year-old FBI project, called the 
Innocent Images National Initiative, whose goal is to snare adults who use 
the Internet to share child pornography or solicit sex with minors. "It's 
been very successful," Borst said.

Harvey is alleged to have begun communicating with the fake victim on Sept. 
20, and to have suggested meeting for sex after only a few chat sessions. 
Agents arrested him at an undisclosed location after he drove to Las Vegas.

Harvey did not seek to verify the boy's identity. "Sometimes they want a 
phone call, and if they do, we arrange that," Borst said.

About a dozen law enforcement officials raided Harvey's Lancaster home 
Tuesday night. They refused to disclose what had been taken.

The FBI says it has been putting more resources into fighting 
Internet-aided child pornography and child sex exploitation in recent 
years. From 1996, when the Innocent Images program began, to 2001, the 
number of online child-sex cases investigated by the bureau increased from 
113 to 1,559.
***************************
Federal Computer Week
E-gov lays security net
Efforts form homeland security foundation
BY Dibya Sarkar
Oct. 21, 2002

By most accounts, homeland security is the top concern among mayors and 
other local officials, who say they have no choice but to shift funds for 
overtime costs, preparation and training, and enhanced security measures at 
the expense of other programs. Those expenses, coupled with the troubled 
economy and promised federal dollars that haven't yet arrived, may force 
municipalities to scale back or even scrub some programs.

There is a bright side, however. Instead of being a casualty of budget 
cuts, e-government initiatives will play an integral role in enhancing 
hometown safeguards, some local officials contend.

Last year's Sept. 11 terrorist attacks spurred municipalities to begin 
electronically monitoring water systems, install facial-recognition 
technology in business districts and promote interoperable voice and data 
radio communications systems. Police, fire, ambulance and other emergency 
personnel hope to have more technological tools at their disposal to help 
protect citizens from criminals and natural disasters, as well as terrorist 
attacks.

Officials equate the current situation to the Year 2000 date change, which 
forced governments to update strategies and upgrade deficient equipment, 
laying a foundation for e-government. Today, e-government initiatives are a 
foundation for better homeland defense, said Costis Toregas, president of 
Public Technology Inc., the technology division of the National League of 
Cities (NLC), the National Association of Counties and the International 
City/County Management Association.

The Year 2000 problem, for example, prompted governments to throw out 286 
MHz and 386 MHz machines and buy Intel Corp. Pentium-equipped computers 
running Microsoft Corp. Windows, which are both necessary for e-government, 
he said. "The preparation we've made for e-government  portals and seamless 
relationships with customers and so on  will, I think, be the building 
blocks for homeland security."

Toregas argued that effective homeland security will have to be done at the 
local level and that e-government initiatives can be an effective tool in 
those homeland security efforts.

"You can't secure the nation from Washington [D.C]. You can't even secure 
the nation from the state capital," Toregas said. "You have to secure the 
nation at the local level, at the water ponds, at the bridges, at the 
fields. Those are the responsibilities of local government. And that's why 
homeland security, in order for it to be effective, has to start by being 
defined as a series of decentralized action nodes with perfect information 
links."

But it won't be easy. Information has to flow seamlessly up and down the 
organizational chain, something that has not yet been achieved.

NLC President Karen Anderson, mayor of Minnetonka, Minn., said homeland 
security and e-government feed off each other. "E-government is certainly 
advancing the ability of cities to connect with citizens and get 
information out to citizens, keeping citizens informed quickly on homeland 
security issues," she said. The terrorist attacks "and now the new emphasis 
on homeland security, [are] encouraging and giving an incentive to local 
governments that were considering doing more with e-government.

"It's been a good wake-up call to move cities along," Anderson said.

Mayor Scott King of Gary, Ind., also said e-government initiatives are a 
way to advance homeland security efforts.

"I think it's given it, though, a bit more of a weighted focus on issues 
related to public safety," he said. For example, he said that he and the 
city's police and fire chiefs recently met with a technology company 
specializing in data compression for public safety issues. He said such 
technologies coupled with, for example, geographic information systems data 
could help support public safety and other governmental functions.

"I think the ironic thing is the federal government's capacity is so 
hideous," King said.

"I think this is really going to be a grass-roots [effort]  you know, the 
cities showing Washington how to do this," he continued.

Mark LaVigne, spokesman for the Center for Technology in Government (CTG), 
an Albany, N.Y.-based applied research center, said e-government 
initiatives had pushed state and local governments to focus on creating 
solid and reliable infrastructures, common standards and better business 
practices. Homeland security is accelerating and intensifying the 
importance of those practices.

"The technology focus of homeland security is a less visible focus than 
providing a new licensing procedure on the Internet, but it's still vitally 
important," he said. "It's ensuring that governments have a sound critical 
infrastructure. It's a focus or a review of the business practices and 
policies that govern the way a government agency or law enforcement agency" 
works.

"E-government is happening, but homeland security is putting these things 
on the front burner," LaVigne added. "They're more 
[government-to-government] e-government than [citizen-to- government] or 
[government-to-citizen] e-government, but it's still as vitally important."

But more work still needs to be done. CTG recently surveyed municipalities 
in New York and found that most were working on e-government initiatives, 
but few were working together or sharing useful practices. Furthermore, 
many were still at the information stage in terms of their Web sites.

Yet all officials said e-government and homeland security at the local 
level will suffer without federal financial assistance, forcing local 
officials to prioritize their programs.

"Certainly the e-government improvements and the technology improvements 
that are being put in place...will serve our cities and towns well in any 
case," Anderson said.

"Cities are going to have to decide individually whether they want to cut 
back on existing services and existing public safety dollars, or are they 
going to simply forget about homeland security. And my guess is it will be 
a mix," she said.

***

E-gov evolution

This year, a survey by Gartner Inc. found that 80 percent of state and 
local government officials said that homeland security would be one of 
their major technology initiatives for next year. Fifty-five percent said 
they would spend money on e-government projects.

Rishi Sood, a Gartner principal analyst of state and local governments, 
grouped homeland security into what he called "transformative services" 
that contribute to the continuing evolution of digital government. 
"Transformation is really talking about more things than just the online 
component," he said. "It's talking about jurisdictions getting together and 
building a singular application so that they can share information across 
the enterprise."
************************
Federal Computer Week
Officials push ACE for Homeland
BY Judi Hasson
Oct. 18, 2002

Officials planning the new Homeland Security Department are considering 
expanding the Customs Service modernization system to use in the 
multi-agency fight against terrorism.

The multibillion-dollar program  the Automated Commercial Environment (ACE) 
-- was designed to put Customs on one unified network connecting every U.S. 
border and port entry point. But now, officials are considering expanding 
the project so it could be shared with other agencies that would become 
part of the new department.

"While this was sized for Customs in mind, some of the capacity could be 
shared," said S.I. "Woody" Hall, the chief information officer for Customs. 
"The infrastructure piece can be used for anything.... The savings comes 
from everyone deciding to do it the same way and to build off the same base."

Officials from the 22 agencies that would become part of the new department 
are meeting weekly at the Office of Homeland Security to come up with plans 
for the agency, whose creation still must be approved by Congress.

Early in the process, Customs Commissioner Robert Bonner began pushing the 
idea of sharing his agency's database and infrastructure with the new 
department, Hall said.

For example, Hall said, ACE will be able to receive the manifests from 
ships as they depart from overseas ports, and Customs inspectors will be 
able to look for irregularities.

But the same system could be used by the Transportation Security 
Administration, which wants airlines to transmit their lists of passengers 
flying to the United States from overseas.

"We're trying to anticipate the creation of a department and to cooperate 
voluntarily so if we do create a new department, we are ready to go.? If 
the department doesn't come to pass, we've improved our ability to 
communicate," Hall said.
*************************
Federal Computer Week
Customs' radiation checks lacking
BY Judi Hasson
Oct. 18, 2002

Despite efforts by the Customs Service to step up the detection of smuggled 
nuclear devices, the agency still has not installed radiation-detection 
equipment at every U.S. border crossing and port of entry, according to the 
General Accounting Office.

In a report delivered to Congress Oct. 17, GAO said that Customs' primary 
radiation-detection equipment  radiation pagers worn by most border 
inspectors  may be inappropriate for detecting the deadly radioactive 
components for a nuclear weapon.

"Customs has not yet deployed the best available technologies for detecting 
radioactive and nuclear materials at U.S. border crossings and ports of 
entries," said the report to the House Energy and Commerce Committee's 
Oversight and Investigations Subcommittee.

Since 1998, Customs has provided more than 4,000 pagers to its border 
inspectors and plans to deliver another 4,000 by September 2003. However, 
the radiation devices are not widely viewed as search instruments but 
"rather as personal safety devices to protect against radiation exposure," 
the report said.

Customs Commissioner Robert Bonner told the panel at a hearing that Customs 
has ratcheted up efforts to detect contraband before it gets to U.S. 
borders. In a series of policy changes, he said cargo is inspected at the 
port of departure, and shippers soon will be required to provide lists of 
their cargo electronically at least 24 hours before their vessels leave a 
foreign port.

"An important part of our strategy to address the nuclear and radiological 
threat is pushing our zone of security outward so that American borders are 
the last line of defense, not the first line of defense against such a 
threat," Bonner said.

The goal, Bonner said, is to prevent terrorists from using cargo containers 
to conceal nuclear weapons or radiological materials by deploying 
"sophisticated automated targeting technology to identify high-risk 
containers, those that may contain terrorist weapons or even terrorists."

There is still a long way to go, according to Rep. Billy Tauzin (R-La.), 
chairman of House Energy and Commerce Committee.

"Four hundred and one days have passed since the attacks on [Sept. 11], yet 
our ports and borders are not significantly more secure against nuclear 
smuggling than before the attacks," Tauzin said.
*************************
Government Computer News
Adobe e-forms will hold data offline

By Susan M. Menke
GCN Staff

Adobe Systems Inc. today extended its electronic forms line with Document 
Server for Reader Extensions. The server software will preserve data 
entered in form fields in Adobe Portable Document Format, so that citizens 
and agency users can continue working on the PDF forms offline. That 
eliminates the print-and-mail steps that are holding up progress of the 
Government Paperwork Elimination Act, Adobe officials said.

The server software can assign usage rights to a PDF form, for example, 
letting users of the free Acrobat Reader software affix digital signatures, 
sticky notes and other information to the forms they fill in. Document 
Server for Reader Extensions can integrate forms data in Extensible Markup 
Language with back-end databases. Priced around $75,000 for 10 forms, it 
will run under Microsoft Windows NT 4.0 Server, Win 2000 Server, and Sun 
Solaris 7 or 8. The Reader Extensions product will be available by year's end.

Other software announced today includes Adobe Form Server, Workflow Server 
and Output Server. They are rebranded products from Adobe's acquisition of 
Accelio Corp., formerly JetForm Corp. More information appears at 
www.adobe.com.
*******************************
Computerworld
Wall St. Leans Toward Linux
Firms replace Unix, Windows to save money, add flexibility
By LUCAS MEARIAN
OCTOBER 21, 2002

With a handful of key Wall Street brokerage firms acting as icebreakers, 
Linux is quickly gaining ground on Unix and Windows as a mission-critical 
operating system within the securities industry. The attractions: its 
flexibility across systems and the savings it yields through the use of 
commodity hardware.
"The list of people in the queue who are saying 'When I have a new project, 
I'm going to use Linux' is larger than we can handle," said Rick Carey, 
chief technology architect at Merrill Lynch & Co. in New York. "I'd say it 
will be significant over the next year. A majority of new projects are 
interested in Linux."

While Cary said he still prefers Microsoft's performance for some 
functions, such as desktop applications, he said the cost of running Linux 
is typically a tenth of the cost of Unix and Microsoft alternatives.

Since the beginning of the year, Carey has been immersed in a Linux rollout 
for mission-critical applications, including a mainframe-based 401(k) 
application that generates about 200,000 statements every quarter.

Merrill Lynch also runs Linux on 50 dual-processor Intel boxes that are 
clustered together to perform complex analytics related to foreign exchange 
options. Most of Carey's work has been on creating Linux prototypes and 
ensuring compatibility with other systems.

Merrill Lynch is in good company, with other New York-based firms such as 
Morgan Stanley Group Inc., The Goldman Sachs Group Inc., Credit Suisse 
First Boston Corp., and ETrade Group Inc. in Menlo Park, Calif., all 
deploying Linux systems.

According to a report released earlier this month by market research firm 
TowerGroup, some of the brokerages are deploying trading applications on 
Linux, "while second-tier brokers have not progressed beyond using it to 
deploy file/print servers as they wait for [independent software vendors] 
to begin supporting [Linux]."

Recent concerns in the areas of security, disaster recovery and business 
continuity are also pushing brokerage houses to fall back on the 
reliability and robustness of their old mainframes, which can run Linux 
more cheaply than Unix, according to Dushyant Shahrawat, a senior analyst 
at TowerGroup and author of its latest report on Wall Street and Linux.

Shahrawat said Linux is making headway in brokerages because the 
money-flush firms have always been among the earliest adopters of 
technology. Also, as an open system, Linux works well across the variety of 
systems normally found in sprawling financial services operations.

"They've got NT boxes, Java running on Unix, lots of mainframes, and 
they're tired of having to support applications on them. Now out comes a 
platform that runs on all of them. That's a very compelling value 
proposition," Shahrawat said.

ETrade made a fundamental change in its operating system strategy by 
deploying 90 IBM xSeries 330 servers running Linux last January. The 
open-source, standards-based platform held the promise of cost savings, 
according to Josh Levine, ETrade's chief administrative officer.

Using Intel-based servers and Linux has saved the online discount brokerage 
"millions of dollars" in software costs, said Levine.

TowerGroup estimates Linux is currently deployed on 7% of all servers in 
North American brokerage firms. Linux use will grow at an annual rate of 
22% in the securities server market between 2002 and 2005, outpacing growth 
in Windows 2000, NT and Unix deployments, TowerGroup said.
**************************
USA Today
Marketers hit Internet users with pop-up spam

NEW YORK (AP)  As if junk e-mail and pop-up ads weren't annoying enough on 
their own, now there's pop-up junk e-mail.

A developer of bulk-mail software has figured out how to blast computers 
with pop-up spam over the Internet through a messaging function on many 
Windows operating systems. The function was designed for use by computer 
network technicians to, for instance, warn people on their systems of a 
planned shutdown.

The pop-up messages appear on recipients' computers in separate windows, 
similar to pop-up ads that appear when a user goes to a Web site.

But there's a difference: Anyone can send the messages, and there's no need 
for the user to have an Internet browser open.

Gary Flynn, a security engineer at James Madison University, where several 
messages were received, calls the technique worse than e-mail spam.

"This pops up on the screen," he said. "It's almost like somebody barging 
in your office and interrupting you."

Zoltan Kovacs, founder of the company that makes the new software, 
officially condemns spamming but acknowledges some customers buy it for that.

"If some people use it for bad things, they should take their own 
responsibility, but it's their own problem," Kovacs said.

He said his tool can help system administrators send alert notices to 
network users more efficiently.

However, his Web site touts the software's advertising and marketing 
potential. He said he has sold more than 200 copies since his $699.99 
product was released two months ago.

The new spam technique, first reported by Wired.com, represents the latest 
attempt to bypass the increasingly sophisticated e-mail spam filters 
employed by leading Internet service providers and individual users.

It also circumvents state and other laws designed to curb junk e-mail, 
Kovacs said.

Kovacs said his company is based in Romania. A demo copy of the software 
contains a Plantation, Fla., address, but he said that was old. Kovacs 
refused to discuss his location, other than saying he is in the United States.

In recent weeks, Internet users have reported receiving pop-up messages 
such as one touting university degrees without classes or books.

Security firm myNetWatchman.com, which monitors some 1,400 computer 
networks worldwide, also detected unsolicited connection attempts of the 
pattern used by Kovacs' software, DirectAdvertiser.

Unlike e-mail, recipients can only receive messages if their computers are 
on while the messages are being sent. And the software can only send 
text  not images or clickable links as are found in pop-up ads and e-mail.

The software itself does not hack into computers. Rather, it uses the 
Messenger service that comes turned on by default with many Windows 
systems, including 2000 and XP, said Philip Sloss, an independent security 
consultant in San Diego.

Messenger, not to be confused with the MSN Messenger instant-messaging 
program, is meant for system administrators to broadcast service notices.

But if a system administrator can use Messenger, so can someone connecting 
through the Internet from the outside, said Lawrence Baldwin, president of 
myNetWatchman.com.

Flynn worries that hackers might one day use the technique to persuade 
users to change their passwords or otherwise compromise security.

Users can disable Messenger through their operating system's control panel, 
although doing so could interfere with some anti-virus and other 
applications that send such messages. Kovacs even provides instructions on 
his Web site.
***************************
CNET News.com
Judge: Disabilities Act doesn't cover Web
By Declan McCullagh
Staff Writer, CNET News.com
October 21, 2002, 11:17 AM PT

A federal judge ruled Friday that Southwest Airlines does not have to 
revamp its Web site to make it more accessible to the blind.
In the first case of its kind, U.S. District Judge Patricia Seitz said the 
Americans with Disabilities Act (ADA) applies only to physical spaces such 
as restaurants and movie theaters and not to the Internet.

"To expand the ADA to cover 'virtual' spaces would be to create new rights 
without well-defined standards," Seitz wrote in a 12-page opinion 
dismissing the case. "The plain and unambiguous language of the statute and 
relevant regulations does not include Internet Web sites."


If Southwest had lost this case, and the decision had been upheld on 
appeal, the outcome would have had far-reaching effects by imposing broad 
new requirements on companies hoping to do business online.

Access Now, an advocacy group for the blind, and a blind man named Robert 
Gumson filed the lawsuit in an attempt to compel Southwest to redesign its 
Web site to make it easier for blind people to navigate. They admitted that 
it was possible for the blind to buy tickets on Southwest's site, but 
argued it was "extremely difficult."

Gumson, who said he had a screen reader with a voice synthesizer on his 
computer, asked the judge to order Southwest to provide text that could 
serve as an alternative to the graphics on its site and to redesign the 
site's navigation bar to make it easier for him to understand. He and his 
lawyers also asked for attorneys fees and costs.

The ADA says that any "place of public accommodation" must be accessible to 
people with disabilities. The law, enacted in 1990, lists 12 categories, 
including hotels, restaurants, shopping centers, universities and bowling 
alleys.

Seitz said that because Congress was so careful to specify what kinds of 
physical spaces are covered by the ADA, it's clear the act does not apply 
to the Internet. She noted that the World Wide Web Consortium had drafted 
accessibility guidelines, but said the document was over three years old 
and there is no indication that the guidelines are "a generally accepted 
authority."
*********************
CNN Online
Small Net service providers target niche
Some back special interests; others offer discounts
Monday, October 21, 2002 Posted: 9:12 AM EDT (1312 GMT)

NEW YORK (AP) -- George Prusak has shopped around for online access, trying 
large Internet service providers like America Online, EarthLink and AT&T.

When he saw an ad for one billed as "America's Union ISP," the president of 
the Colorado Postal Workers Union couldn't resist trying just one more.

"There's absolutely no difference just because it's union-hosted or 
EarthLink or AT&T," Prusak said. "I prefer to support labor unions, and 
that's what this does."

The Unions-America ISP has fewer than 1,000 customers, a smidgen compared 
with the millions using Earthlink or AOL, part of CNN's parent company.

But collectively, smaller ISPs -- at least 5,000 in the United States -- 
are holding their own, in some cases grabbing veteran users from larger 
providers.

In many respects, getting on the Internet is much like buying a car. A new 
Mercedes and a used Hyundai both cruise the same roads. The difference is 
with the add-ons, the Net equivalent of power steering, CD players or 
roadside assistance.

Some ISPs target certain regions or special-interest groups like unions, 
environmentalists and gun owners. A few are devoted to specific viewpoints, 
such as opposition to abortion.

Some promise to screen for pornography. All Nations Online offers dating 
and community forums for Jews and Russians.

Some offer house calls
Many are mom-and-pop operations, with a few thousand customers at most. 
They are generally cheaper and promise hometown relationships -- an ISP in 
Barbourville, Kentucky, even makes house calls for tech support.

For Timothy Johnson, starting the Unions-America ISP was about giving 
Internet users union-trained, union-wage customer support representatives. 
Though the ISP is not directly affiliated with any labor group, he's hoping 
to pitch union members, one by one.

"We just started 25 months ago, and we are now in over 180 cities across 
America," he said.

J.R. Cunningham started a Macintosh-centric ISP, MacOL, after an ISP he was 
using told him: "Call back Thursday when the Mac guy is in."

AOL remains by far the largest service provider, with 26 million U.S. 
subscribers and a consumer market share of 31 percent, according to 
International Data Corp. MSN follows at 10 percent. Other large ISPs 
include EarthLink, Prodigy and United Online, which operates as NetZero and 
Juno.

Size has its advantages.

AOL and MSN can make deals for exclusive content and features, such as 
parental-control software. EarthLink can devote resources to controlling 
junk e-mail and blocking pop-up ads. Larger ISPs have redundancies in case 
of local network failures.

Tom Andrus, an EarthLink vice president, acknowledges the company has had 
complaints -- since addressed, he insists -- about placing customers on 
hold too long. But smaller ISPs, he said, sometimes have troubles, too.

"It's more about being the right ISP than the size," he said.

AOL's Nicholas Graham said its size permits separate toll-free numbers 
depending on the nature of a support question, allowing specialists to 
resolve problems faster.

Daryl Schoolar, a senior analyst at In-Stat/MDR, says the market shares of 
the giants have been declining slightly -- but the gains are with regional 
telecoms offering high-speed DSL service, not so much the mom-and-pop 
operations.

But with relatively low overhead and advertising costs -- many rely on word 
of mouth -- a smaller ISP can find a comfortable niche, IDC's Steven Harris 
said.

An ISP has to lease lines to get customers to the Internet, and if it's a 
dial-up service it needs a bank of modems for customers to call in. ISPs 
typically bundle access with e-mail accounts and Web hosting.

An ISP may contract out portions of the service, like tech support, or all 
of it to a "virtual ISP" provider that handles the back-end infrastructure.

Some tap into existing businesses. An ISP run by the North County Times 
near San Diego saves overhead by hooking into the billing system for 
newspaper delivery. Colorado's Jefferson County Public Schools sells 
employees subsidized dial-up access to the school network.

Small players struggle
Still, smaller ISPs have struggled. Some were bought by rivals or larger 
companies like EarthLink. RxCentric Inc. is no longer actively marketing 
its Doctors Net Access ISP, saying competition is too intense.

Jon Hurst, senior technician with Computer Cafe, a small ISP in Tullahoma, 
Tennessee, said his customers are sometimes tempted by flashy TV ads and 
promotional CDs. Computer Cafe's CDs are much simpler -- the title is 
handwritten onto the disk.

Others concede certain markets.

Many ISPs find it too costly to maintain enough phone numbers for traveling 
customers to dial in for free.

The biggest challenge will come when more residential users demand 
high-speed access, something many smaller ISPs cannot economically provide.

David Robertson, president of Stic.net in San Antonio, Texas, said ISPs 
like his will have to counter by focusing more on value-added offerings, 
such as spam filtering and training for newcomers.

Not all ISPs are interested in serving every type of Internet user.

Hawaii-based FlexNet won't offer tech support whatsoever, desiring only the 
most experienced users for $10 per month. An ISP operated by the Mendocino, 
California, school district provides support only during business hours.

"Some people leave because we can't answer the phone on Saturday," said 
Rennie Innis, the Mendocino ISP's manager.
****************************
Sydney Morning Herald
Sydney-based Islamic Web site to be taken down
October 21 2002

A Sydney-based Website, allegedly promoting extremist Muslim views, will be 
taken down.

The Australian newspaper reported today that the Australian Federation of 
Islamic Councils said the Islamic Youth Movement, which runs the site, had 
agreed to remove the Web magazine, The Call of Islam.

However, the site remained active as of this morning.

The Call of Islam site includes interviews with al-Qaeda leader Osama bin 
Laden and Abdullah Sungkar, an alleged founder of Jemaah Islamiyah - the 
group suspected to be responsible for the October 12 Bali blasts.

The newspaper reported that the youth movement had failed to comply with 
previous requests by moderate Muslim leaders that specific articles be 
removed from the site.

A spokesman from The Australian Federation of Islamic Councils, Kuranda 
Seyit, told the newspaper he believed the site was inciting hatred during a 
particularly sensitive time.
***************************
Sunspot Online
Federal move sought to combat growing 'spam' e-mail woes
Amount has doubled in past year, causing home, workplace trouble

San Antonio Express-news
Originally published October 20, 2002



For anyone with an e-mail address, "spam" is a four-letter word that cannot 
be ignored.

Since last year, the average amount of spam, unsolicited commercial e-mail 
delivered to consumers, has doubled, said Jared Blank, senior analyst with 
Jupiter Research, the Darien, Conn.-based business research company.

"Spam is an annoyance that will get more annoying over the next few years," 
Blank said.

Last year, consumers received an average of 1,300 spam messages. By 2007 
that figure is expected to skyrocket to 3,900, Jupiter reports.

Spam is clogging computer networks, slowing down businesses and creating 
problems at home and in the workplace. Twenty-five states have enacted laws 
to ban spam and levy fines against spammers.

Meanwhile, the spam problem continues to grow. In September last year, spam 
accounted for 8 percent of e-mail volume. A year later, that had reached 38 
percent, said Linda Smith Munyan, spokeswoman with Brightmail. The San 
Francisco-based company supplies anti-spam services to many of the largest 
Internet service providers and large corporations that track spam volume.

"Spam is really threatening e-mail as a viable communications tool," Munyan 
said.

Spam costs companies millions of dollars each year in time and bandwidth 
costs, fraud and lost business e-mail, she said.

Most spam messages concern chain letters, pyramid schemes, get-rich-quick 
schemes, ads for pornographic Web sites, offers of bulk e-mail services for 
sending spam, stock offerings and quack health-care products.

Consumers have learned to deal with spam the same way as junk mail, said Blank.

"They delete it," Blank said. "It's part of the cost of having this 
technology."

The Coalition Against Unsolicited Commercial Email (CAUCE) at www.cauce.org 
disagrees. Representatives of the organization have urged Congress to amend 
federal law prohibiting unsolicited commercial faxes to include unsolicited 
commercial e-mails.

Those efforts have failed.

Laws will not eliminate the spam problem but will reduce it to a manageable 
level, said John Mozena of CAUCE.

The Federal Trade Commission has made battling spam a priority, staff 
attorney Brian Huseman said. No federal law prohibits unsolicited 
commercial e-mail, but the FTC Act prohibits unfair and deceptive trade 
practices.

Under that law, Huseman said, the agency has taken more than 120 actions 
this year against spammers.

The FTC receives more than 50,000 messages from consumers forwarding spam 
to the agency every day.

"We're one of the few places that actually wants to receive spam," Huseman 
said.

Since the FTC spam database was created in 1998, it has collected more than 
18 million spam messages, Huseman said. Those messages have become a 
searchable database that allows the FTC to identify trends and repeat 
offenders and take action against spammers.

This month, consumer groups asked the FTC to issue a new rule to reduce spam.

The groups said they want the FTC to make it "deceptive and therefore 
unlawful" to send commercial e-mails that misrepresent the sender or 
content of a message, that don't provide reliable contact information, or 
are sent to an individual who has opted out from the sender's list.

FTC officials said they would review the request.
***************************

Lillie Coney
Public Policy Coordinator
U.S. Association for Computing Machinery
Suite 510
2120 L Street, NW
Washington, D.C. 20037
202-478-6124
lillie.coney@xxxxxxx