Clips July 22, 2003

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips July 22, 2003

ARTICLES

U.S. Internet Gambling Crackdown Sparks WTO Complaint
Private-sector IT execs see diminished cybersecurity role
A major DHS cyber security post remains vacant 
Analyst: Crime pays for identity thieves
SCO wants licensing fees from corporate Linux users
I.B.M. Explores Shift of White-Collar Jobs Overseas
Senate seeks TIA halt
D.C. readies new telecom network
House, Senate split on DOD IT
NMCI innovation center forming
E-mail trauma goes beyond spam, survey concludes 
Commerce issues plan to reorganize technology agencies 
Biotechs' Lobbying Begins to Pay Off
Hollywood and tech industry forge working relationship
Throwing the book at spam
Broadband business is booming
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Associated Press
U.S. Internet Gambling Crackdown Sparks WTO Complaint
Mon Jul 21, 5:09 PM ET
By Brian Krebs, washingtonpost.com Staff Writer 

The World Trade Organization (news - web sites) today said it will appoint a three-member panel to determine if U.S. efforts to crack down on offshore Internet gambling operations violate international trade accords.


The WTO announcement comes in response to a challenge filed by Antigua and Barbuda, a Caribbean island nation that is a major nexus for the Internet gambling industry. U.S. laws that ban the transfer of funds to offshore gambling operations and make it difficult for non-U.S. firms to obtain gaming licenses violate trade agreements ensuring market access to "cross-border services," the complaint said.


Internet gambling became a major part of Antigua and Barbuda's economy during the 1990s, when up to 100 different online gaming companies employing more than 5,000 people operated in the island nation. Today, there are fewer than 40 Internet gambling companies located on the islands employing half as many local residents. Island officials attribute the industry's decline in part to the U.S. crackdown.


Antigua and Barbuda strictly regulates its online wagering industry, said chief foreign affairs representative Ronald M. Sanders. The U.S. policy is draining a significant source of the government's revenue, he said.


"We didn't look for this fight, but my government is very mindful of its responsibility to our people to maintain their jobs and to defend our small and vulnerable economy," Sanders said in an interview following the WTO hearing.


Antigua and Barbuda began seeking investments from online casinos a decade ago, Sanders said, as a way to reduce the country's dependence on tourism, which remains highly vulnerable to hurricanes and fluctuations in the global economy.
U.S. trade authorities maintain that online gambling services are not within the scope of U.S. trade commitments. U.S. officials also have argued that online gambling services are a haven for money laundering that supports terrorism.

U.S. trade officials did not return calls seeking comment, but in a statement before the WTO today, one official expressed confidence that the U.S. would prevail in the dispute, saying online gambling services "present psychological dangers to some segments of society, as well as creating serious social problems and law enforcement difficulties."

Under WTO rules, both sides in the trade dispute have 30 days to agree upon the appointees to the three-member board. The board's decision could come as early as six months later, and the decision may be appealed. Any ruling by the appellate board, however, would be binding, and could force the U.S. to change its trade policies with respect to online gambling.

Some 54 nations, mostly in Europe and the Caribbean, have legalized regulated online gambling, according to the Interactive Gaming Council. Already, there are signs that other countries may take sides against the United States. Several nations, including Taiwan, Mexico, Canada and the EU states, said today they would reserve their right to join the dispute on the side of Antigua and Barbuda.

Within the United States, five states have outlawed certain aspects of Internet gambling, and most state laws that prohibit some types of online wagering generally apply to Internet gambling as well.

Faced with an industry that is almost entirely based overseas, U.S. law enforcement has turned to Congress for help. Last month, the House of Representatives voted to ban credit card payments to online casinos. The U.S. Justice Department (news - web sites) maintains that the Wire Act already prohibits the transfer of funds to overseas gambling operations.

The online gambling industry remains one of the Internet's few cash cows, with much of its success owed to an increase in demand from U.S. consumers. Since the mid-1990s, Internet gambling operators have established nearly 1,800 online wagering sites operated from outside the United States, according to a report last year by the U.S. General Accounting Office (news - web sites). Global revenues from Internet gambling are projected to exceed $5 billion this year, with 50 to 70 percent of that revenue from U.S. customers, the GAO said.
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Boston Globe
BC, MIT decline to name students in music-use case
By James Collins, Globe Correspondent, 7/22/2003

Boston College and the Massachusetts Institute of Technology, citing concerns about student privacy, moved yesterday to quash subpoenas issued by the recording industry to discover the identities of students the industry says are illegally distributing copyrighted music.

The moves represent one of the first major obstacles for the recording industry in its campaign against ordinary computer users who share copyrighted music. Jonathan Lamy, a spokesman for the Recording Industry Association of America, said he was disappointed and vowed legal action to obtain the information.

''These universities have chosen to litigate this in an attempt to deny copyright holders the right so clearly granted in Congress,'' Lamy said, referring to the colleges' refusal to release the names of the students.

MIT and Boston College yesterday said that they support the rights of copyright holders and would comply with any subpoena that addressed their concerns about the proper notification of students and was filed ''properly'' in US District Court in Massachusetts, not in Washington D.C.

The RIAA has filed at least 871 subpoenas in US District Court in Washington this month, demanding information from universities and Internet service providers about users of the Internet file-sharing network KaZaA. MIT and Boston College said they are required under the Family Education Rights and Privacy Act to notify students before they release personal information such as names and addresses.

''MIT of course has a policy of complying with lawfully issued subpoenas,'' the school's information services director, James Bruce, said in an e-mail statement. But Bruce said that MIT had been advised by counsel that the subpoena was not in compliance with court rules concerning the proper venue for such a filing and ''did not allow MIT time to send any notice as the law requires.''

The recording industry's strategy -- pursuing both high-profile users with hundreds of megabytes of music as well as small-time downloaders -- is intended as a wake-up call to Internet music enthusiasts like Alexa Bedell-Healey, a Wellesley College sophomore who downloads a ''fair number of songs'' from her dorm room computer. But, like many students on college campuses in Boston, yesterday, the 19-year old said she's going to keep downloading.''I would definitely have to know someone who got one'' of the subpoenas, said Bedell-Healey, who lives in Needham. ''No, definitely not going to stop until I know someone who's getting sued.'' The RIAA has not specifically said what damages it will seek. But under federal law, it can ask for $750 to $150,000 for each illegally shared song.

The industry is demanding information from Boston College about three students, including two who used the screen names ''TheLastReal7'' and ''Prtythug23,'' who shared music using KaZaA, a program developed by Sydney, Australia-based Sharman Networks Ltd.

In a subpoena addressed to MIT, the association is demanding the name, address, and phone number of a student who used the nickname ''crazyface'' to download at least five songs, including Radiohead's ''Idioteque'' and Dave Matthews Band's ''Ants Marching.''

In each subpoena, the recording industry organization provides a KaZaA screen name, an Internet Protocol, or IP, address, and a list of songs it says were shared from the location. Service providers are then asked to release the names of the users whose computers are associated with the addresses.

Northeastern University, the birthplace of the original peer-to-peer music program, Napster, received at least one subpoena; students there seemed indifferent about the record industry's latest effort. ''Even if I told my roommates about it, I don't think they they'd care,'' said Justin Ries,, 20, a third-year student from Eatontown, N.J.

About 150 of the subpoenas were addressed to Verizon Communications Inc., which said Friday that it will release the names and addresses only after exhausting all legal challenges. Comcast, which did not say how many subpoenas it had received, plans to comply fully with the requests, a spokeswoman said.

Some educational institutions named by the recording industry, including Northeastern and Loyola University Chicago, said they will comply with the subpoenas.

Loyola traced the address given by the record industry group to a dorm room occupied by two summer school students and notified them of the subpoena, said spokesman Nick Mariano.

At Northeastern, officials have contacted the student in question and are planning to release the information unless he or she raises a formal objection, said spokesman Glenn Hill.

Denise Mattson, a spokeswoman for DePaul University in Chicago, said the school has been unable to determine who was using the computer listed in the subpoena.

Under a provision of the 1998 Digital Millennium Copyright Act, passed by Congress to combat music piracy, music companies may issue the subpoenas without a judge's approval. Verizon has challenged that aspect of the law, saying it violates users' rights to due process and privacy. A judge ruled in January, however, that subpoenas do not require a judge's signature; Verizon again appealed.
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Computerworld
Private-sector IT execs see diminished cybersecurity role
A major DHS cyber security post remains vacant 
By DAN VERTON 
JULY 21, 2003

WASHINGTON -- This Friday marks the end of the 30-day period in which the U.S. Department of Homeland Security hoped it would hire a leader for its cybersecurity division. But there are serious doubts about whether the DHS will be able to hire the right person this week or even in the foreseeable future. 
According to the former top cybersecurity adviser to the president, a high-level source in the DHS and IT industry executives, many of the most qualified candidates have been turned off by what they perceive as the administration's surprising change of heart on cybersecurity. 

"The elimination of the presidential position [of cybersecurity adviser] sent a message that the White House no longer cares about this issue," said Richard Clarke, former chairman of the President's Critical Infrastructure Protection Board. "They will eventually find someone who will agree to do it anyway, but they will be so hamstrung that it will take at least a year to regain the capability that we had in 2001." 

Clarke is now chairman of Arlington, Va.-based Good Harbor Consulting LLC [QuickLink http://www.computerworld.com/careertopics/careers/consulting/story/0,10801,82965,00.html
]. 

A former senior administration official who requested anonymity said many of the candidates who possess the skills necessary to do the job are senior executives in the private sector who are concerned about a lack of authority in a position that will require a significant amount of cross-agency collaboration. 

In addition, many are wary of what the official characterized as "an axis of evil" comprising the National Economic Council, the Office of Science and Technology Policy and the Office of Management and Budget (OMB) -- agencies that have sought to redirect the administration's attention to other priorities. 

A senior DHS official, who also requested anonymity, said two candidates have been identified for the position and have said they are willing to accept the job. However, the official said that Robert P. Liscouski, assistant secretary for infrastructure protection at the DHS, seems to be holding out for a high-profile executive with impeccable qualifications. 

The person who steps up to the challenge will likely do so out of a sense of duty and patriotism, not because of the way the DHS is managing the effort, according to a half-dozen senior IT industry executives interviewed for this story. 

"For a person to take this job, they have to be comfortable with the laissez-faire approach toward IT security, which I'm not comfortable with," said John Copeland, chairman and chief scientist at Lancope Inc., an intrusion-detection system vendor in Alpharetta, Ga. 

"I think I could be more effective outside the government," Copeland said. "The people who are really qualified are probably in positions where they are really accomplishing things. You're not going to find an effective security manager who's out of work and looking for a job. You have to entice them." 

The Chain of Command 

Maria Cirino, co-founder and CEO of Guardent Inc., a managed security services firm in Waltham, Mass., said it would take a direct line to Homeland Defense Secretary Tom Ridge for her to consider such a position. The departures of Clarke and his successor, Howard Schmidt [QuickLink 38015], were sealed when it became clear that their positions "were being relegated to window dressing," said Cirino. At best, the administration's current position on cybersecurity is hypocritical and will change only with a catastrophic incident, she added. 

Jerry Harold, co-founder of security consulting firm NetSec Inc. in Herndon, Va., and vice president of its government solutions group, said a lot of questions about the reporting structure would have to be answered before he would even consider the job. 

"I would be four layers down from the secretary but given a mandate to handle national priorities," he said. In addition to having Congress overseeing his activities, Harold said, the undefined relationship with the director of the OMB, who is responsible for overseeing the government's incident response capability, could cause additional political problems. 

"There, I [would be] down at the bottom of the organization as some kind of cog," said Harold. "Security managers in industry have a responsibility to create and enforce policy across the entire organization, and they work from the top of the management chain down. And yet the government has them buried down in the structure where they're little more than a project manager." 

Tom Goodman, vice president of operations at Bluefire Security Technologies, a wireless security company in Baltimore, said that if asked, he would accept the position out of a sense of duty. But he still has concerns about the current reporting structure. 

"Having the ear of the secretary would be enough," he said. "[But] it should not be a dotted line. It should be a direct report, and it should be at the assistant secretary or deputy secretary level." 

David Wray, a spokesman for the DHS, said appointing an adviser for cybersecurity at the assistant secretary or deputy secretary level "would be completely dysfunctional" and out of proportion for what is only one component of critical infrastructure. 

Wray noted that the DHS has made clear its intent to integrate the management of physical security and cybersecurity. 
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Associated Press
Movie Studios Launch Anti-Piracy Campaign 
Tue Jul 22,12:48 AM ET  

By GARY GENTILE, AP Business Writer 

LOS ANGELES - The movie industry is trying a new tactic in its war against people who download pirated copies of films over the Internet  it's asking nicely. 

   

Movie studios will launch a campaign Tuesday that includes television ads and in-theater spots featuring makeup artists, set painters and other crafts people saying that piracy robs them of a living. 


The Motion Picture Association of America has also developed a curriculum on copyrights for use in classrooms by Junior Achievement. The "Digital Citizenship" program covers the history of copyright and culminates with a nationwide contest in which students suggest ways to persuade peers that swapping illegal copies of music and movies is not only illegal, but wrong. 


"I don't expect anyone to have sympathy for me or for other executives," said Peter Chernin, president and chief operating officer of News Corp., whose Twentieth Century Fox studio made the spots. "What we are endeavoring to do is both communicate that it's wrong and also communicate that there are human stakes and that those stakes are not just millionaires making less millions." 


The film and music industries have been aggressive over the past year or so in enforcing their copyrights in the courts as well as lobbying for tougher laws to punish those who swap music and movie files over the Internet. 


While copies of popular blockbusters can be found on the Internet  sometimes days before the movie is released to theaters  computer copies of films are still too large to download easily and are often poor quality copies made using hand-held camcorders. 


Music files, by contrast, are smaller and are CD quality. That fact led to services such as Napster (news - web sites), which was shut down after legal action taken by the music industry. 


Movie studios believe they still have a few years before Internet connections become fast enough to threaten them in the same way. Studios are experimenting with new business models, including making films available legitimately online through services such as Movielink. 


"We're not sitting on our hands like the music business did," Chernin said. 


Ultimately, studios will succeed only if they move quickly to offer legitimate alternatives that consumers want, analysts say. 


"It may just be that consumers aren't quite ready yet to turn to the Internet for movies," said Fred von Lohmann, a lawyer for the Electronic Frontier Foundation. "But when they are, the answer will be to offer them a compelling legitimate alternative, not telling them to behave themselves." 


The 30-second television ad will have its first run Thursday night on all the broadcast networks and most cable channels during their first prime time break, sometime after 8 p.m. The first of several trailers will begin running Friday in most major theater chains around the country. 


The first trailer features David Goldstein, a set painter who says that piracy hurts him more than film industry executives. Each ad ends with the tag line, "Movies. They're worth it." 


The campaign will also include a Web site that outlines the moral implications of illegal downloading as well as the legal and practical consequences. 


"Taking something that doesn't belong to you is wrong," said Jack Valenti, president of the MPAA. "It's in the long term interest of people to understand there is no free lunch."
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Associated Press
Pop icon Michael Jackson comes out against locking up music pirates
Mon Jul 21, 7:29 PM ET

LOS ANGELES (AFP) - Pop superstar Michael Jackson on Monday hit out at a proposed new US law that would make the musical piracy on the Internet punishable by a possible jail sentence. 


The self-styled "King of Pop" feels that, while he would like to see the practice of stealing music off the Internet stamped out, the legislation against the downloading of copyrighted material was too harsh. 


"I am speechless about the idea of putting music fans -- mostly teenagers -- in jail for downloading music," he said in a statement from his Neverland Ranch in the western state of California. 


"It is wrong to illegally download, but the answer cannot be jail. Here in America we create new opportunities out of adversity, not punitive laws, and we should look to new technologies ... for solutions. 


"This way, innovation continues to be the hallmark of America. It is the fans that drive the success of the music business," the "Gloved One" said. 


Jackson's spokesman in Los Angeles said the 44-year-old singer felt that lawmakers are tackling the problem in the wrong way in the proposed law. 


US lawmakers on July 16 introduced into the House of Representatives the Authors, Consumer and Computer Owner Protection and Security law that makes illegal downloading of copyrighted materials a felony offence. 


But while the illegal downloading of music does represent a major problem for the ailing industry, Jackson feels the solution proposed by the legislation is "absolutely inappropriate," Backerman told AFP. 


"He doesn't want to see jails piled up with teenagers. He is proposing a win-win situation for both the audience and the music fans," he said. 


Jackson, who has seldom been out of the gossip pages this year amid a series of very public lawsuits against him, is himself a victim of the music industry's declining fortunes that it blames largely on musical piracy. 


His superstar image has waned since his 1980s heyday, with sales of 2001's "Invincible," which reportedly cost 30 million dollars to produce, pulled in only around five million dollars worldwide. 


The US music industry blames the easy and free availability of download-able music on the Internet for plunging record sales which have prompted industry bosses to urgently seek to crack down on piracy.
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CNET News.com
Analyst: Crime pays for identity thieves
By Robert Lemos 
Staff Writer, CNET News.com
July 21, 2003, 1:10 PM PT

The number of consumers who have fallen prey to identity thieves is severely underreported, market researcher Gartner said in a survey released Monday. 
The research firm estimates that 3.4 percent of U.S. consumers--about 7 million adults--have been victims of identity theft of some form in the past year. Moreover, arrests in identity theft cases are extremely rare, catching the perpetrator in only one out of every 700 cases, said Avivah Litan, vice president of financial service for Gartner.

"The odds are really stacked against the consumers," she said. "Unfortunately, they are the only ones with a vested interest in fixing the problem." 

The release of the survey comes as state and federal governments are trying to stem the problem of identity theft. On July 1, California started requiring companies to report to consumers any incident that may have compromised their personal data. And new national legislation, the Fair Credit Reporting Act, would help protect victims once they determined that their identity had been stolen. 

The Gartner report ups the ante in consumers' battle for protection. While the U.S. Federal Trade Commission's clearinghouse for crimes against consumers has received more than 160,000 reports of identity theft, the real number is much higher, according to the company. 

Gartner interviewed more than 2,400 U.S. adults for the survey in May 2003 and found that 3.4 percent had been a victim of identity theft in the past year. If that fraction holds for the entire United States, then some 7 million adults have had their identity stolen during that time. The company defines identity theft as a financial crime in which thieves represent themselves as the victims by stealing critical private information, such as social security numbers, driver's license numbers, addresses, credit card numbers or bank account numbers. 

Consumers typically learn of identity theft long after the crime has been perpetrated. The FTC found that most victims don't know that their identity has been stolen until more than a year later, on average. 

"It is different from payment fraud, where the thief takes a credit card number and consumers are innocent until proven guilty," Litan said. "With identity theft, it is the opposite: Consumers are thought to be guilty until proven innocent." 

The credit card industry, banks and other financial firms are mishandling the problem, according to the Gartner report. They don't recognize fraud as a crime against their consumers, but rather as an expense of doing business. While credit card fraud is frequently perpetrated without identity theft, the industry doesn't typically distinguish between the two. Gartner found that 5.5 percent of the U.S. adults surveyed, or 11 million nationally, were victims of credit card fraud.

"There is a serious disconnect between the magnitude of identity theft that innocent consumers experience and the industry's proper recognition of the crime," Litan stated in the report. "Without external pressure from legislators and industry associations, financial services providers may not have sufficient incentive to stem the flow of identity theft crimes."
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Computerworld
SCO wants licensing fees from corporate Linux users
Otherwise, SCO said, companies could be in legal hot water 
By TODD R. WEISS 
JULY 21, 2003

The gloves are now officially off -- all enterprise Linux users have to pay The SCO Group Inc. new licensing fees to use Linux, or they could find themselves on the wrong end of a copyright infringement lawsuit. 
That was the ultimatum laid out today by SCO CEO and President Darl McBride, who said that the $3 billion lawsuit against IBM in March was apparently just the start of his company's march to defend itself from what it sees as rampant theft of its Unix System V intellectual property (IP). 

"We agree on the point that this case started out as a contracts case against IBM. As of today, it's a different game," McBride said today in a conference call with reporters and analysts. 

"SCO's Unix IP has been misappropriated into Linux," he said. "SCO is giving customers [of any Linux distribution] the opportunity to run Linux legally." 

Back in May, SCO warned all commercial Linux users that they could be using its code illegally and recommended that they seek legal advice to help decide what to do about the issue (see story). Last month, McBride said, some corporate Linux users contacted SCO and said they wanted to find a "way to work it out" so they could continue to use Linux. 

"We think this allows both parties' concerns to be met," McBride said. 

Lindon, Utah-based SCO also announced today that it has now received copyrights for its System V code (see story). The company had never before officially filed for the copyrights, which it needed to do as a procedural step while it pursues its legal case against IBM, McBride said. In that case, SCO alleges that IBM misappropriated trade secrets related to SCO's Unix products to benefit IBM's Linux strategy. 

The specially tailored SCO UnixWare 7.1.3 licenses will support runtime, binary use of Linux for all commercial users of Linux based on kernel Version 2.4.x and later, according to the company. Buying a license would allow users to comply with SCO's copyrights, the company said, adding that if enterprise Linux users do so, SCO won't pursue legal challenges against them related to the code. Pricing hasn't yet been announced but will be comparable to existing UnixWare licenses, McBride said. 

"Today's announcement is really a new front that we're opening up" with existing enterprise Linux customers, McBride said. "It gets you clean, it gets you square with Linux without having to go into the courtroom." 

Also involved in today's call with McBride was SCO's lead attorney, David Boies, who served as special trial counsel for the U.S. Department of Justice in its antitrust suit against Microsoft Corp. 

Boies said the new licensing offer to existing Linux corporate users comes even though the SCO/IBM case hasn't been decided in any court. 

"It is not necessary to resolve the IBM case" to deal with other issues, Boies said. While the case works its way through the court system, Linux corporate users don't have the right to take advantage of SCO's IP in Linux, he said, adding, "If the conduct is improper, the conduct is improper." 

Analyst Gordon Haff at Illuminata Inc. in Nashua, N.H., said he sees SCO "going after users because if they go after [Linux vendors such as] Red Hat Inc., those guys are going to have to fight them" to defend their businesses. "They can't roll over" and pay the demands like corporate users could, he said. 

"The end users aren't going to be so principled here," Haff said. 

George Weiss, an analyst at Gartner Inc. in Stamford, Conn., said that if SCO is successful in squeezing licensing fees out of users, it would essentially create a new tax on Linux, perhaps upsetting the often-favorable total cost of ownership arguments for using it. 

"SCO is really applying pressure. It's gotten very nervous" among users, he said. "They don't know what to do." 

One part of SCO's argument, though, is that much of the alleged code infringement is related to the latest symmetric multiprocessor (SMP) capabilities in Linux kernel 2.4 and later, Weiss said. If that's the case, then SCO's claims may not affect most enterprise users, who are using Linux more for infrastructure services than SMP. 

"SMP is where the impact could be more in the future. [The SCO threats] could slow the advance of Linux" for higher power uses for now, he said. "It could put on hold a lot of planned purchases."
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New York Times
July 22, 2003
I.B.M. Explores Shift of White-Collar Jobs Overseas
By STEVEN GREENHOUSE

With American corporations under increasing pressure to cut costs and build global supply networks, two senior I.B.M. officials told their corporate colleagues around the world in a recorded conference call that I.B.M. needed to accelerate its efforts to move white-collar, often high-paying, jobs overseas even though that might create a backlash among politicians and its own employees.

During the call, I.B.M's top employee relations executives said that three million service jobs were expected to shift to foreign workers by 2015 and that I.B.M. should move some of its jobs now done in the United States, including software design jobs, to India and other countries.

"Our competitors are doing it and we have to do it," Tom Lynch, I.B.M.'s director for global employee relations, said in the call. A recording was provided to The New York Times recently by the Washington Alliance of Technology Workers, a Seattle-based group seeking to unionize high-technology workers. The group said it had received the recording  which was made by I.B.M. and later placed in digital form on an internal company Web site  from an I.B.M. employee upset about the plans.

I.B.M.'s internal discussion about moving jobs overseas provides a revealing look at how companies are grappling with a growing trend that many economists call off-shoring. In decades past, millions of American manufacturing jobs moved overseas, but in recent years the movement has also shifted to the service sector, with everything from low-end call center jobs to high-paying computer chip design jobs migrating to China, India, the Philippines, Russia and other countries.

Executives at I.B.M. and many other companies argue that creating more jobs in lower cost locations overseas keeps their industries competitive, holds costs down for American consumers, helps to develop poorer nations while supporting overall employment in the United States by improving productivity and the nation's global reach.

"It's not about one shore or another shore," an I.B.M. spokeswoman, Kendra R. Collins, said. "It's about investing around the world, including the United States, to build capability and deliver value as defined by our customers."

But in recent weeks many politicians in Washington, including some in the Bush administration, have begun voicing concerns about the issue during a period when the economy is still weak and the information-technology, or I.T., sector remains mired in a long slump.

At a Congressional hearing on June 18, Bruce P. Mehlman, the Commerce Department's assistant secretary for technology policy, said, "Many observers are pessimistic about the impact of offshore I.T. service work at a time when American I.T. workers are having more difficulty finding employment, creating personal hardships and increasing demands on our safety nets."

Forrester Research, a high-technology consulting group, estimates that the number of service sector jobs newly located overseas, many of them tied to the information technology industry, will climb to 3.3 million in 2015 from about 400,000 this year. This shift of 3 million jobs represents about 2 percent of all American jobs.

"It's a very important, fundamental transition in the I.T. service industry that's taking place today," said Debashish Sinha, principal analyst for information technology services and sourcing at Gartner Inc., a consulting firm. "It is a megatrend in the I.T. services industry."

Forrester also estimated that 450,000 computer industry jobs could be transferred abroad in the next 12 years, representing 8 percent of the nation's computer jobs. 

For example, Oracle, a big maker of specialized business software, plans to increase its jobs in India to 6,000 from 3,200, while Microsoft plans to double the size of its software development operation in India to 500 by late this year. Accenture, a leading consulting firm, has 4,400 workers in India, China, Russia and the Philippines.

Critics worry that such moves will end up doing more harm to the American economy than good.

"Once those jobs leave the country, they will never come back," said Phil Friedman, chief executive of Computer Generated Solutions, a 1,200-employee computer software company. "If we continue losing these jobs, our schools will stop producing the computer engineers and programmers we need for the future."

In the hourlong I.B.M. conference call, which took place in March, the company's executives were particularly worried that the trend could spur unionization efforts.

"Governments are going to find that they're fairly limited as to what they can do, so unionizing becomes an attractive option," Mr. Lynch said on the recording. "You can see some of the fairly appealing arguments they're making as to why employees need to do some things like organizing to help fight this."

The I.B.M. executives also warned that when workers from China come to the United States to learn to do technology jobs now being done here, some American employees might grow enraged about being forced to train the foreign workers who might ultimately take away their jobs.

"One of our challenges that we deal with every day is trying to balance what the business needs to do versus impact on people," Mr. Lynch said. "This is one of these areas where this challenge hits us squarely between the eyes."

Mr. Lynch warned that with the American economy in an "anemic" state, the difficulties and backlash from relocating jobs could be greater than in the past.

"The economy is certainly less robust than it was a decade ago," Mr. Lynch said, "and to move jobs in that environment is going to create more challenges for the reabsorption of the people who are displaced."

The I.B.M. executives said openly that they expected government officials to be angry about this trend.

"It's hard for me to imagine any country just sitting back and letting jobs go offshore without raising some level of concern and investigation," Mr. Lynch said.

Those concerns were pointedly raised on June 18, when the House Small Business Committee held a hearing on "The Globalization of White-Collar Jobs: Can America Lose These Jobs and Still Prosper?"

"Increased global trade was supposed to lead to better jobs and higher standards of living," said Donald A. Manzullo, an Illinois Republican who is the committee chairman. "The assumption was that while lower-skilled jobs would be done elsewhere, it would allow Americans to focus on higher-skilled, higher-paying opportunities. But what do you tell the Ph.D., or professional engineer, or architect, or accountant, or computer scientist to do next? Where do you tell them to go?"

The technology workers' alliance is highlighting I.B.M.'s outsourcing plans to help rally I.B.M. workers to the union banner.

"It's a bad thing because high-tech companies like I.B.M., Microsoft, Oracle and Sun, are making the decision to create jobs overseas strictly based on labor costs and cutting positions," said Marcus Courtney, president of the group, an affiliate of the Communications Workers of America. "It can create huge downward wage pressures on the American work force."

Mr. Mehlman, the Commerce Department official, said companies were moving more service jobs overseas because trade barriers were falling, because India, Russia and many other countries have technology expertise, and because high-speed digital connections and other new technologies made it far easier to communicate from afar.

Another important reason for moving jobs abroad is lower wages. 

"You can get crackerjack Java programmers in India right out of college for $5,000 a year versus $60,000 here," said Stephanie Moore, vice president for outsourcing at Forrester Research. "The technology is such, why be in New York City when you can be 9,000 miles away with far less expense?"

Company executives say this strategy is a vital way to build a global company and to serve customers around the world.

General Electric has thousands of workers in India in call center, research and development efforts and in information technology. Peter Stack, a G.E. spokesman, said, "The outsourcing presence in India definitely gives us a competitive advantage in the businesses that use it. Those businesses are some of our growth businesses, and I would say that they're businesses where our overall employment is increasing and our jobs in the United States." 

David Samson, an Oracle spokesman said the expansion of operations in India was "additive" and was not resulting in any jobs losses in the United States.

"Our aim here is not cost-driven," he said. "It's to build a 24/7 follow-the-sun model for development and support. When a software engineer goes to bed at night in the U.S., his or her colleague in India picks up development when they get into work. They're able to continually develop products."
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Federal Computer Week
Senate seeks TIA halt
BY Matthew French 
July 21, 2003

The Senate is seeking to stop the Defense Department's controversial Terrorism Information Awareness (TIA) program.

The Senate's Defense appropriations bill, passed July 17, contains an amendment preventing DOD from spending any more money on TIA research and development. Sen. Ron Wyden (D-Ore.) proposed the amendment in May. The project  being developed by the Defense Advanced Research Projects Agency  involves collecting and storing myriad data on individuals, then scouring it for patterns or activities that might relate to terrorism. It has spawned congressional and public opposition. "No funds appropriated or otherwise made available to the Department of Defense, whether to an element of [DARPA] or any other element...of the federal government, may be obligated or expended on research and development of the Terrorism Information Awareness program," the amendment read. The Bush administration opposed the amendment, saying it strips the government of "an important potential tool in the war on terrorism," according to a statement. Privacy advocates are closely watching as the bill goes t!
o the 
House/Senate conference committee to see whether the amendment remains in the final version. The House Defense appropriations bill, which passed July 8 with little debate, carried no such TIA provision  leaving the door ajar for some interesting conference committee debates.
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Federal Computer Week
D.C. readies new telecom network
BY Sarah Bailey 
July 21, 2003

Washington, D.C., will activate a citywide emergency response network next month as a result of the federal government's concerns about the city's ability to handle emergencies quickly. 

The fiber-optic communications network, called DC-NET, is modeled after similar systems in Portland, Ore., and Chicago, but the Washington, D.C., system is the first built primarily to protect against terrorist threats. The city's efforts to build a free-standing network separate from the public switched network was in the works two years before the Sept. 11, 2001, terrorist attacks, but the attacks highlighted the importance of improved emergency communications when Washington, D.C.'s telecommunications system collapsed amid an overload of telephone calls. 

"In the D.C. area, we need to be prepared for an attack," said Peter Roy, deputy chief technology officer at the city's Office of the Chief Technology Officer. "Right now we're not. We're working for that."

The new system will allow emergency responders to receive 911 calls faster and will eliminate areas where firefighters' communication systems currently fail, mostly in older buildings with heavy construction and tunnels. In 2001, there were four dozen of these firefighter "dead zones" around the city.

"One of our main reasons for doing this is public safety," said Clay Oliver, project manager for DC-NET. "We want full communications, so one of the first things we did was increase the number of [radio transceiver] towers around the city, and we hooked fiber to 11 transceiver towers. Fire and police department equipment should now receive clear signals all over the city." 

Washington, D.C., has also installed enhanced 911 routers that will accelerate the response to calls. Calls sent to the routers will immediately be transferred to a public safety call taker. A 911 call that ordinarily took five to 12 seconds to reach a dispatcher will now be connected in less than one second, officials said.

Overall, the DC-NET fiber optics will connect to more than 300 buildings in the city, including government offices, data centers, police and fire departments, hospitals, and schools. The network will provide voice and data services. Because the fiber replaces old multifrequency technology, new networks will be 1,600 times faster than before, providing such things as faster Internet and video connections, officials said.

"A big benefit here is helping to bridge the digital divide in the District," said Linda Argo, chief of staff with the Office of the Chief Technology Officer. 

Officials will activate DC-NET in August. The goal is to have three-quarters of the buildings on the network by the end of the year. The project will be completed in the summer of 2004 and is then expected to carry 90 percent of Washington, D.C.'s official telecommunications business traffic. 

Comcast Corp. provided the backbone for the network, which the city will own and operate. The city has $66 million in funding this year for the project. Its total cost is expected to be $93 million. When deployed, DC-NET is expected to save Washington, D.C., $10 million a year.
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Federal Computer Week
House, Senate split on DOD IT
BY Matthew French and Dan Caterinicchia 
July 21, 2003

The fate of a $320 million cut in the Defense Department's information technology budget is now in limbo after Congress passed two widely divergent spending bills.

Earlier this month, the House overwhelmingly passed an appropriations bill that would significantly cut DOD's IT spending. The Senate last week unanimously passed its version of the bill, which did not include any significant overall IT cuts.

"We are concerned about the House appropriations taking some fairly blanket cuts in some pretty important areas such as force protection and transformation programs," said Kent Schneider, president of Northrop Grumman IT's defense enterprise solutions. "We are very interested to see what comes out of the conference committee, and we're hopeful that the Senate can exert some influence and restore some of that funding." 

The House approved a total of $320 million in IT spending reductions that affect all four services: 

* Army: $60 million.

* Navy: $100 million.

* Air Force: $100 million.

* Departmentwide: $60 million.

The recommendations were about $1 billion apart on research and development.

In a statement of policy, the Bush administration expressed concern about the cuts the House proposed. "Reductions of $300 million in information technology spending do not seem prudent at a time when such investment is becoming critical to battlefield success," the statement read.

Each body of Congress, however, passed different but monetarily equivalent $369 billion Defense bills that place a heavier emphasis on joint warfighting, faster mobilization and transformation.

The Senate recommended IT spending closer to the president's request, which was about $28 billion. It also called for overall increases of $1.7 billion in research, development, testing and evaluation.

"I don't think the differences between the House and Senate bills are anything to get up-tight about," said Ray Bjorklund, a vice president at Federal Sources Inc., a market research firm in McLean, Va.

"The House typically has a much broader responsibility and authority for appropriations...and is more picky, trying to ensure good, potential return on investment," he said, whereas the Senate tends to focus on major programs. "I think through the conference processes, you'll see it gets closer to the president's request."

The Army's Future Combat Systems, the cornerstone of its transformation effort, received the full backing of the House and Senate, which recommended fully funding it at $1.7 billion. 

But lawmakers in both houses are demanding that the service break down the "system of systems" into multiple program elements before it will approve future funding.
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Federal Computer Week
NMCI innovation center forming
BY Matthew French 
June 19, 2003

NEW ORLEANS -- The Navy today announced it is forming an innovation center to assist in developing and discovering future technologies for the Navy Marine Corps Intranet environment.

The center, which will be a loose alliance of military and industry players, is designed to use the experience and intelligence of both key sectors to look to the future possibilities of NMCI.

"If we just get out of NMCI what's in the contract, I believe we've failed," said Navy Capt. Chris Christopher, NMCI staff director. "NMCI is worth every penny we've spent so far, but we have to be able to do more."

The center will consist of five parts:

* An annual industry symposium, the first of which was held here this week.

* A product evaluation center, which will test commercial applications to determine their compatibility with the NMCI environment.

* An innovation council, which will tap military and industry minds to determine how existing technology can be used in unplanned ways, and to focus on projects with a two-year time frame.

* A strategic partners forum, which will provide a way for Navy and industry to share an information technology vision over a period of three to five years and consider "over the horizon" issues.

* An NMCI user group, which will rely on the combined brain power of a group of users who can offer suggestions for improvement and communicate directly with Navy or EDS officials developing and managing the network.

"We need to get a feel for the capabilities that are just out of our reach," Christopher said. 

Because the center for innovation is not a physical entity or building, Christopher said, the time frame for its inception remains elusive. The process is ongoing and the components are being formed. He said he hopes the concept will fully become a reality next year.

"As is befitting a network, the innovation center will be virtual," he said.

"Parts of it, such as this symposium, are already under way," Christopher said. "The innovation council has had two meetings and we hope to stand up the evaluation center by the end of the year. The other components -- the partners forum and the user group -- will come when we have more seats cut over and a better grasp of the total user community."
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Government Computer News
07/21/03 
E-mail trauma goes beyond spam, survey concludes 
By Susan M. Menke 

Thirty-four percent of CIOs consider an e-mail outage more traumatic than a car accident or a divorce, according to the findings of a new survey of IT chiefs from around the globe. 

Almost half the respondents said they had difficulty retrieving specific e-mail from backup media, said Jeremy Burton, senior vice president of Veritas Software Corp. The Mountain View, Calif., company commissioned the survey from market researcher Dynamic Markets Ltd. of Abergavenny, Wales. 

IT staff especially consider Microsoft Exchange Server uptime to be mission-critical because their bosses ?aren?t happy if they can?t push e-mail around,? Burton said. 

E-mail has nearly supplanted the telephone in executives? day-to-day work, he said. 

Burton and Veritas? government vice president, Paul Young, both said they no longer check their voice mail messages. ?My secretary listens and then e-mails the list to me? on a mobile device, Burton said. 

E-mail backup and retrieval have become a headache in large Exchange Server environments, the Veritas research found. Only 18 percent of organizations can recover deleted messages more than a year old, according to the survey respondents; 30 percent can recover back one month; and 11 percent can recover only e-mail from the previous week. 

Four percent of IT managers who participated in the survey said it takes them less than an hour to restore service after an unplanned outage, 15 percent said an hour and 41 percent said more than an hour. Nine percent said it takes them 24 hours or longer, and a fifth of the whole group said their jobs would be on the line if an outage lasted that long. 
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Government Executive
July 17, 2003 
Commerce issues plan to reorganize technology agencies 
By Teri Rucker, National Journal's Technology Daily 

The Commerce Department on Thursday proposed legislation that would reorganize the department's technology and telecommunications policy functions.

The proposal would consolidate the Technology Administration, National Telecommunications and Information Administration, National Institute of Standards and Technology and the e-commerce policy functions of the International Trade Administration. The plan requests slightly more than $8 million for the new agency.

"This bill modifies and modernizes the organizational structure of the Department of Commerce to enhance the formulation of technology, electronic commerce and telecommunications policy issues," Commerce Secretary Donald Evans said in a letter accompanying the draft.

He sent the proposal to Vice President Richard Cheney, Republican and Democratic leaders in the House and Senate, and the chairmen and ranking Democrats of the Senate Commerce and House Energy and Commerce committees.

Under the proposal, the new agency would be called the Technology and Telecommunications Administration, and it would be headed by an undersecretary chosen by the president and confirmed by the Senate. The current undersecretary for technology policy, Phil Bond, would serve as undersecretary for the new agency until the president appoints a successor. 

The undersecretary's responsibilities would be to advocate technology and telecom policy at the federal, state and local levels as a way to promote economic growth, job creation, national security and safety, the draft says. "We need to adjust our thinking and adjust our structure to keep pace with the world, our economy and innovation," Evans said in a statement. 

House lawmakers on Energy and Commerce, which would have jurisdiction over a bill to implement the plan, are still studying the proposal. "We are going to look at it very carefully and keep an open mind, but Chairman Tauzin is not making any other commitments at this time," panel spokesman Ken Johnson said of W.J. (Billy) Tauzin, R-La. 

Telecommunications and the Internet Subcommittee Chairman Fred Upton, R-Mich., also is reviewing the legislation but remains undecided about the issue, Upton's spokesman said.
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Washington Post
Biotechs' Lobbying Begins to Pay Off 
Victories Pile Up as Spending On Political Causes Soars 
By Michael Barbaro
Tuesday, July 22, 2003; Page E01 

In August 1999, when the Biotechnology Industry Organization decided to lobby the White House for stronger Medicare drug coverage, the trade group took to the airwaves with an aggressive tactic: a 60-second radio spot, broadcast seven times a day for seven days. Featuring a retired schoolteacher pleading for broader benefits, the radio blitz had all the trappings of a pricey lobbying campaign.

But it wasn't. 

The ad cost just $7,000 and ran on one radio station, WMVY-FM, in one town, Martha's Vineyard, Mass., where then president Bill Clinton was vacationing. "I have no idea whether the president heard it," said the trade group's president, Carl Feldbaum. "But that's all we could afford."

Fast-forward almost four years to June, when the industry trade group did not have to seek out small-market radio stations to reach the president. It simply delivered its agenda to President Bush when he spoke at the group's annual convention. 

Today, the industry's spending power in Washington is considerably stronger and the relatively young business of biotechnology, just two decades old, is beginning to score significant legislative victories, from reform at the Food and Drug Administration to the proposed expansion of outpatient Medicare coverage. 

Between 1998 and 2002, annual spending on lobbying by biotechnology companies, their parent firms and their industry trade group jumped 50 percent, to $33 million, according to an analysis by the Washington-based Center for Responsive Politics. Top companies have established Washington offices to raise their profile among regulators and lawmakers. And dozens of mid-size companies have hired lobbyists here to press their agendas. 

During the same four-year period, the biotech industry more than doubled its campaign contributions to federal candidates, from $3.2 million in 1998 to $7.7 million in 2002, the Center for Responsive Politics found. The organization counted individual, political action committee and soft money donations from a wide range of businesses, including chemical companies with in-house biotechnology units, such as Dow Chemical Co. and BASF Corp. 

Biotechnology executives say higher spending on political causes reflects the sector's shift away from early-stage drug development, conducted without much federal oversight at company laboratories, toward the highly regulated universe of clinical testing and product manufacturing, when patients come into the picture. 

"This is an industry coming into its own," said Vaughn Kailian, vice chairman at Millennium Pharmaceuticals Inc., a Cambridge, Mass., biotechnology company. "The thing that will kill you in the start-up stage is money, not regulatory issues. But the closer companies come to product approval, the more access they need in Washington." 

Despite its gains, biotechnology is hardly a political power broker. The vast majority of biotechs, still struggling to become profitable, cannot afford to hire more scientists, let alone find the salary for a lobbyist. And the industry's campaign donations remain relatively lean. In the 2002 election cycle, for example, the industry gave $7.7 million to federal candidates; its bigger and older brother, the pharmaceutical industry, gave $20.7 million. The biotech industry is still small potatoes compared with the biggest campaign-contributors, lawyers and law firms, who gave $94.8 million in the 2002 election cycle.

Analysts say the industry is simply growing up. For much of the past decade, few biotechnology companies actually delivered drugs to the public. A small club of firms -- Amgen Inc., Genentech Inc., Gilead Sciences Inc. and MedImmune Inc., all profitable and flush with cash -- largely dominated the industry. But the number of companies with more than one drug on the market has grown steadily in recent years, forcing a new generation of executives to navigate thorny issues such as competition from generic drugmakers and liability protection for drugs used after a bioterror attack.

Take Millennium Pharmaceuticals. After its first drug was approved, the 10-year-old company opened a one-man government relations office in Washington to press for broader reimbursement coverage for expensive biotech drugs and to educate lawmakers about gene-based medicine. To pull it off, the company boosted its lobbying expenditures from next to nothing to $1.1 million the same year.

The timing proved fortuitous: Millennium's second commercial drug was approved earlier this year, and the company has built a strong profile among lawmakers, company officials say. But few biotechs can afford that kind of access. Fewer than a dozen of them have offices in Washington.

Most companies rely on the Biotechnology Industry Organization to do their bidding in Washington. The 10-year-old trade group, which has about 1,000 members, has largely succeeded in its goal of raising biotechnology's standing on Capitol Hill. In the past four years, its lobbying expenses have nearly doubled, to $3.5 million, and its campaign contributions have vaulted from $4,500 to more than $166,000.

Regulations -- and the agencies and congressional committees that shape them -- are the major focus of the industry's lobbying efforts, documents filed with Congress show. 

"If you are a tech company with an idea, you build it, get a patent on it and you sell it. But if you are a biotechnology company, you are regulated almost every step of the way," said Walter Moore, vice president of government affairs at Genentech, which spent $1.5 million on lobbying last year.

Genentech pressed for the appointment of a new FDA commissioner after the agency had been headless for nearly two years. Celgene Corp. pushed for stronger Medicare reimbursements for cancer drugs, its main business. And Applera Corp., whose subsidiaries decode genetic information and develop drugs based on the data, supported certain forms of gene patenting.

Executives say their efforts have produced important victories for the industry. When Congress reauthorized the Prescription Drug User Fee Act last year, biotechnology companies, led by the Biotechnology Industry Organization, secured a major increase in the amount they would pay for the agency to review drug applications in return for a bigger FDA workforce and a quicker approval process. 

This year, the industry is taking partial credit for the proposed expansion of outpatient drug payments in the House and Senate Medicare bills now pending in Congress. The reform would offer biotechs greater incentives to develop the kind of expensive but potentially life-saving therapies Medicare has often failed to cover.

Because biotechnology is rooted in complex laboratory science, much of the lobbying is educational. Monsanto Co. of St. Louis., a developer of genetically modified seeds, spends tens of thousands of dollars each year arranging to bring congressional staff members to its farms. "There's only so much education you can do without seeing some of agriculture and biotechnology firsthand by walking through the fields," said company spokesman Brian Hurley.

Monsanto's federal filings reveal another reality about biotechnology's spending in Washington: It strongly favors lobbying over campaign contributions. The company spent $2.2 million on lobbying in 2002, but only $226,000 on campaign contributions, a gap mirrored across much of the industry.

Only 12 companies contributed more than $100,000 during the 2002 election cycle, according to the Center for Responsive Politics. The vast majority gave $1,000 or less, with Republicans receiving more of the total than Democrats.

Despite its shallow pockets, biotech executives have their favorite candidates, who tend to sit on congressional committees that either regulate the industry or fund the agencies that do, according to the Center for Responsive Politics. 

In 2002, Nancy L. Johnson (R-Conn.), a member of the House Ways and Means Committee and chairman of the subcommittee regulating health care, received $88,992 from the industry; Charles E. Grassley (R-Iowa), chairman of the Senate Finance Committee, which regulates Medicare, received $61,799; and Mary Landrieu, (D-La.), a member of the Senate Appropriations Committee and the subcommittee regulating the FDA, received $47,000. 
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USA Today
Hollywood and tech industry forge working relationship
July 21, 2003

SAN JOSE, Calif. (AP)  It's like a shotgun marriage gone oddly harmonious: Hollywood and the consumer electronics industry are now working closer together after a few years of claws-out antagonism in courtrooms and on Capitol Hill. 
It could be the tough economic times or a distaste for further legal showdowns, but many top gadget makers are now trying hard to please the purveyors of entertainment. 

More often than not, that is giving Hollywood's copy-protection interests a virtual seat at the product design table. 

"Without good content there, my products are nothing but furniture or art. So it all falls back on what Hollywood is comfortable with," said Chris Cudina, national sales and marketing manager for Samsung's digital set-top box group. 

Others contend that such coziness sometimes deprives consumers of flexibility  or worse, privacy rights and civil liberties  as entertainment companies exert control over how people use creative works gone digital. 

"The threat of litigation has had a chilling effect on what technologists would be prepared to include in any new devices they release," said Gwen Hinze, a staff attorney at the Electronic Frontier Foundation. 

Consider how one-time rebel ReplayTV backed down. The tech company's new owners said last month that its upcoming digital video recorders will no longer allow people to automatically skip ads or share shows over the Internet. 

Those features on previous models rattled Hollywood, which fears the Napsterization of television programming and contends that the loss of commercial viewership would kill television's bread-and-butter. 

In true form, 28 studios sued ReplayTV's previous owner, SONICblue, forcing the struggling consumer electronics company to pay millions of dollars in legal fees. 

SONICblue sank. It filed for bankruptcy in March and sold ReplayTV to another electronics company, D&M Holdings, effectively making the copyright-infringement lawsuit moot. 

ReplayTV's president, Jim Hollingsworth, called cooperation with Hollywood the best approach to bringing digital video recording technology to market. "You look for complementary solutions rather than riding roughshod," he said. 

D&M's technology adviser Tom McCarthy does not think consumers will lose out: "We'll be in belt and suspenders, but it'll be done in a way where the consumer will feel they can still keep up with their digital lifestyle." 

ReplayTV's startup rival, TiVo, has deliberately tried to avoid rankling Tinseltown. 

TiVo even recruited a TV network veteran to preach to Hollywood the potential benefits of the disruptive technology that lets consumers record programming onto a hard disk and pause or fast-foward through live television. 

"We go to significant lengths to make sure that we stay on the good side of the networks," said Martin J. Yudkovitz, who left his post as NBC's executive vice president to become TiVo's president in April. He said TiVo has stayed away from any file-sharing over the Net or automatic ad-zapping features. 

"At first, when the DVR technology came out, there was a near universal gagging from the networks and the advertisers," said Yudkovitz. "Now TiVo is earning a good-guy image." 

Last year, Scientific-Atlanta became the first cable set-top box maker to launch a model with a built-in digital video recorder. The advanced box, called the Explorer 8000, is technically equipped with a 30-second commercial skip feature, but none of the cable companies  which have the final say on what features consumers would get  are activating that option, said Tony Wasilewski, Scientific-Atlanta's chief scientist. 

Similarly, Motorola, the nation's leading cable box maker, is set to soon introduce a cable box with all the bells and whistles of a digital video recorder and much more. But the 30-second skip technology built into it will probably never see the light of day, said Mark DePietro, a Motorola vice president. 

Spokesman Keith Cocozza of Time Warner Cable  the first U.S. cable operator to introduce a digital video recorder-equipped cable box  said a delicate balancing act is involved. 

"We want to deliver to customers services they want," he said. "But at the same time, we need our content and vending partners, and we need to respect and protect their rights." 

To avoid conflict with Hollywood, Nokia recently added copy-protection technology to its toolkit for developers building mobile phone Internet applications. 

It's a pre-emptive move as cell phones are increasingly becoming vehicles for data, ranging from snapshots to branded entertainment  such as music video clips. 

As they introduce such products as PCs with TV tuners and digital media receivers that let consumers store recorded digital video, many device makers are careful to restrict the number of copies that can be made or shared over computer networks. 

And more often than not, Hollywood representatives are sitting in on the discussions that determine those technical standards. 

Four years ago, the Motion Picture Association of America formed a technology unit to ensure that device makers understood its copy-protection requirements, said Brad Hunt, the association's chief technical officer. 

The two industries argue plenty over the details. Hollywood wants to control distribution as much as possible while the tech industry doesn't want anti-piracy safeguards driving up the price or limiting the appeal of its products. 

Still, a product is more likely to succeed if it gets Hollywood support, said Stephen Nickerson, a managing director of Warner Home Video. 

Nickerson knows. He was an executive at Toshiba and active in discussions between the tech industry and Hollywood studios before DVD players debuted commercially in 1997. 

Consumer electronic companies realized then that they needed Hollywood's backing, and spent five years resolving technical details and copy-protection standards before DVD players hit the market. 

At times, the tech industry has prevailed without Hollywood's blessing. 

The precedent-setting 1984 Sony Betamax case established the legality of VCRs and the right of consumers to record and watch shows at their convenience. The music industry also unsuccessfully tried to squelch MP3 music players, losing in court in 1999 against the makers of Rio, the first commercial MP3 player. 

But major consumer electronics makers would rather not antagonize Hollywood. 

Recent copy-infringement cases have targeted small companies that make bleeding-edge technologies. But can the little guys survive the heat? SONICblue didn't. 

Doug Lichtman, a University of Chicago law professor, was dismayed to see ReplayTV's new owners bow to Hollywood: "It troubles me to see the big player bully everyone else, rather than let the courts decide."
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InfoWorld
Throwing the book at spam
Despite rising calls for national spam legislation, it?s proving tricky to craft loophole-free anti-spam law
By Ed Foster  
July 18, 2003    

There ought to be a law. E-mail users, besieged by a vast array of fraudulent and/or obscene junk messages, often wonder why our lawmakers can?t put a stop to it. 

http://www.infoworld.com/article/03/07/18/28FEspamlaw_1.html?s=feature
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MSNBC
Broadband business is booming 
High-speed Internet access selling better than expected

LOS ANGELES, July 21   Not too long ago, pundits were saying broadband was dead, a proverbial baby washed away with the rest of the tech sector?s recent bubble bathwater. In fact, the number of high-speed Internet adopters is growing faster than many observers had predicted.

     LIKE A LOT OF Internet users, Madhususdan Kalidas, of Toluca Lake, Calif., has the need for speed. And now that his cable operator, Adelphia, is offering a deal on high-speed internet service, he jumped.
       ?I pay about $19.95 per month,? he said. ?This is a promotional offer for three months, and after that it?ll be about 30 bucks which is a very fair deal I believe.?
       There?s about 16 million U.S. households with some form of broadband service now, according to researchers at The Yankee Group. Bernstein analyst Craig Moffett expects there?ll be 66 million by 2008  lured not only by attractive pricing but by the growing number of Web sites that are tailoring their content to the high speed visitor.
       ?Prices have come down to the point where regular dialup service, say AOL plus a second line, is now as expensive or more expensive than the best offers that are available for broadband,? he said.
       Cable operators have the biggest slice of the broadband pie right now, outpacing the phone companies two-to-one in the race for broadband subscribers. They also enjoy fatter profit margins  often exceeding 100 percent.
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