Clips February 3, 2004

[Lillie Coney <lillie.coney@xxxxxxx>]

Clips February 3,
2004

Articles

File-swapping appeal begins
'Phishing' Scam Uses FDIC as Bait 
Teen hacker avoids jail sentence
Nebr. lawmakers will soon be "surfing" in the chamber
Toxic Legacy
Election administrator turnover on rise in U.S.
Job shift creates India tech boom
*******************************
USA Today
File-swapping appeal begins
By Jefferson Graham

Should tech firms be responsible for the actions of their 
users?

A federal appeals court is expected to tackle that question Tuesday when
its hears arguments in a case with potentially huge implications for the
tech and entertainment industries. 

The companies that operate the Grokster and Morpheus song and movie swap
services won a surprise ruling in April. A judge said they weren't liable
for copyright infringement  but their users were. 

That was the entertainment industry's first loss in their bid to curb
unauthorized file sharing through litigation. The decision paved the way
for the music industry's lawsuits against individual song swappers 
and the appeal. No decision is expected for months.

Billions of songs and movies are traded without copyright owners'
permission on peer-to-peer sites such as Morpheus and Kazaa. Kazaa is
being sued in a separate case that awaits a trial date. An estimated 60
million people worldwide use such services. 

If the appeal is granted, "every technology company whether you're
Microsoft or Xerox, would be liable for billions of dollars in
lawsuits," says attorney Fred von Lohmann of the Electronic Frontier
Foundation. The advocacy group is representing Morpheus owner StreamCast
Networks.
*******************************
Washington Post
'Phishing' Scam Uses FDIC as Bait 
By Don Oldenburg
Tuesday, February 3, 2004; Page C10 

Jim Morris says he was skeptical last week when he received two nearly
identical e-mails six minutes apart, both purporting to come from the
Federal Deposit Insurance Corp.

"This thing was slick enough that I could easily see someone falling
for it and really getting taken to the cleaners," says Morris, a
savvy computer user who immediately right-clicked the e-mails to access
document properties and see who really sent them. Neither came from the
FDIC.

Morris, co-owner of an environmental consulting firm in Jarrettsville,
Md., had found perhaps the boldest "phishing" expedition so far
to hit the in-boxes of unsuspecting Americans in search of private
financial information.

The spam had an authoritative letterhead and tone, and stated that
Homeland Security Secretary Tom Ridge had advised the FDIC to suspend
deposit insurance on the recipient's bank account due to suspected
violations of the USA Patriot Act. To reactivate the insurance, the
recipient had to verify personal information, including bank account
numbers -- via the link that supposedly connected to the FDIC. The phony
site mimicked the real FDIC home page.

Washington resident Margaret Bressette got a similar e-mail -- hers from
"U.S. Bank." It said her account had been closed after being
"compromised by criminals involved in money laundering, illegal
drugs, terrorism" and said her account would be frozen until she
"verified her identity" by providing credit card and ATM
numbers and PINs. The Web site appeared to be connected with the
legitimate U.S. Bancorp Web site. 

Bressette, a Foreign Service retiree, wasn't fooled by the spam but still
felt relieved when her debit card worked at the grocery store.

Since the Consummate Consumer reported on unscrupulous phone-callers
trying to entice people to divulge private financial information by
impersonating credit-card security agents ("Don't Get Hooked by
Phishing," Jan. 20), so-called phishing scams have spread rapidly in
the bottom-feeder world of spamming.

"They are a growing problem to say the least," says FBI
spokesman Paul Bresson.

Designed to appear as legitimate e-mails from trusted institutions such
as banks, government agencies and online companies, phishing spams and
their bogus Web links are a guise for identity-theft crooks. In the
recent past, they have used mock-up Web sites to resemble those of
PayPal, eBay, Best Buy and Citibank. One even masqueraded as the FBI.
"That just goes to show that they're not going to stop at
anything," says FDIC spokeswoman Elizabeth Ford.

After the FDIC issued a warning last week, 8,000 people who received the
bogus e-mail contacted the FDIC hotline and Web site. Of those, 39 had
provided their personal information, says FDIC spokeswoman Elizabeth
Ford.

Marty Lindner of US-CERT (the U.S. Computer Emergency Readiness Team, a
new partnership between Homeland Security's National Cyber Security
Division and the private sector) says, "There is clearly a market
and people who are willing to click on these things and follow through
with them."

You don't have to fool most of the people to make phishing spams
profitable, says Doug Peckover, founder and president of Privacy Inc.
"We see one in 100,000 to be profitable," he says, explaining
that phishing scammers will spam 5 million e-mail addresses to harvest 50
identities.

"These are two major problems -- spam and identity theft -- that are
suddenly being served up in a very dangerous way," says Peckover,
whose Dallas-based company last month launched a $39.95-a-year service,
My Privacy Policy, that blocks spams and phishing scams. 

Ford advises consumers who were fooled to contact their banks
immediately: "If they gave out their ATM number and PIN, they need
to figure out the best approach with their bank . . . such as closing the
account," she says. "Our main message is that consumers should
never provide personal financial information in response to unsolicited
requests, no matter how legitimate they may appear."

WHERE TO GET HELP

If you provided personal information to the bogus FDIC Web site, contact
your bank immediately. For more information, contact the FDIC's Call
Center at 877-275-3342 or look for updates online at
www.fdic.gov.

Report suspect e-mail and phishing spam to the Internet Fraud Complaint
Center -- a partnership between the FBI and the National White Collar
Crime Center -- at www1.ifccfbi.gov.

Forward suspicious spams to the Federal Trade Commission at
uce@xxxxxxx">uce@xxxxxxxx To file a complaint with the FTC
online, go to www.ftc.gov; by phone, call 877-FTC-HELP. The FTC's
Identity Theft Web site (www.ftc.gov/idtheft) has more information on
phishing and how to protect yourself if you've been victimized. 
*******************************
BBC Online
Teen hacker avoids jail sentence
Last Updated: Monday, 2 February, 2004, 18:06 GMT
http://news.bbc.co.uk/2/hi/technology/3452923.stm

A UK teenager
who hacked into a US Government laboratory's computer network has been
ordered to serve 200 hours community service. 

Joseph McElroy used the lab's computers for films and music taken from
the net. 

Southwark Crown Court waived a demand for £21,000 in damages as it ruled
that McElroy could not pay the fine. 

The June 2002 intrusion by the Exeter University student sparked a
full-scale alert at the Chicago laboratory, which researches high-energy
particles. 

Fearing a terrorist attack, the computer was closed down for three days
and the US Department of Energy, which oversees the safety of the
country's nuclear weapons, sounded a full-scale alert. 

'Green light' 

The 19-year-old from east London had admitted hacking into the Fermi
National Accelerator Laboratory.

He took advantage of a flaw in the lab's authentication system and used
the company's network bandwidth to download and store hundreds of
gigabytes of copyrighted film and music files. 

Judge Andrew Goymer decided against sending McElroy behind bars as he had
not accessed classified material on the network and had not intended to
cause harm. 

He told the student he ought to "think yourself lucky" he was
not going to prison. 

"Computers are an important feature of life in the 21st
century," said Judge Goymer. 

"Government, industry and commerce, as well as a whole variety of
other institutions, depend upon the integrity and reliability of their
computers in order that their proper and legitimate activities can be
carried on." 

The judge said it was important that the "wrong message is not sent
out to anybody else who is tempted to behave in this way". 

But security experts have expressed disappointment at the leniency of the
verdict. 

"The McElroy hacking case highlights an increasingly common practice
in the online world - unfortunately for him, he picked the wrong
bandwidth to steal," said David Williamson, director of sales at
security firm Ubizen. 

"It is very worrying that appropriate compensation or a custodial
sentence has not been issued in this case. 

"Hacking is still illegal and as a self-confessed serial hacker,
McElroy and the hacker community at large will view this outcome as a
green light to break the law."
*******************************
USA Today
Nebr. lawmakers will soon be "surfing" in the chamber
By Scott Bauer, Associated Press
LINCOLN, Neb.  Surf's up, senators. 
Posted 2/2/2004 11:49 PM Updated 2/2/2004 11:50 PM

State senators will soon be able to surf the Internet on the floor of the
legislative chamber. 

The new right doesn't come without some restrictions. A policy adopted by
the Legislature's Executive Board on a 5-2 vote Monday forbids any use of
sound or viewing of video on the computers in the chamber. Nor can the
computers be used for personal or financial gain. 

"No porn channels then?" Sen. Jim Cudaback of Riverdale
jokingly asked. 

"We wouldn't recommend porn channels," replied Lincoln senator
Chris Beutler. 

Even with the restrictions under the new policy, Omaha senator Ernie
Chambers said senators will be free to look at almost anything they want
on the Internet. 

"How are you going to enforce this without someone ratting?" he
asked. 

Enforcement is left to the 10-member Executive Board, which helps set
legislative policies. 

Chambers and Sen. Gene Tyson of Norfolk voted against giving senators
access to cyberspace in the legislative chamber. 

"I don't see the point," Tyson said. If he needs to cruise the
Internet, Tyson said he either does it from his office in the Capitol or
from home. 

Senators should be focused on debate and having Internet access could be
a distraction, he said. 

The lap top computers at the seats of each of the 49 senators on the
floor currently allow access to e-mail and the Legislature's internal
site where bills and amendments can be read. 

It will be a couple of weeks before the computers are configured to allow
for Internet access.
*******************************
Technology -- Internet Report
Spams Drives Wary Shoppers Away from Internet
Mon Feb 2, 2:57 PM ET
By Lisa Jucca 

BRUSSELS (Reuters) - The exponential growth of unsolicited junk e-mail --
spam -- is shaking consumer confidence in the Internet and may hamper
growth of the e-economy, officials on Monday told a global anti-spam
meeting. 

A survey published by consumers group the Transatlantic Consumer Dialogue
(TACD) showed 52 percent of respondents were shopping less on the
Internet or not at all because of concerns about receiving unsolicited
junk e-mail. 


"It is very clear that the majority of citizens are very troubled by
unsolicited commercial e-mails," said the survey, which was released
at a spam meeting led by the Organization for Economic Co-operation and
Development (OECD). 


"It is also very clear that bona fide businesses are losing money
because the disreputable image of spam is making consumers uneasy about
engaging in e-commerce." 


Data from anti-spam software company Brightmail showed spam accounts for
half of all e-mails sent. Filtering and clearing up e-mail inboxes is a
rising cost for business and consumers. 


An overwhelming majority of the more than 20,000 respondents to the TACD
survey said they either hated or were annoyed by unsolicited junk e-mails
and wanted them to be banned. 


"If you continue at this pace, in five years from now I do not thing
the Internet will be very popular," Marc Rotenberg, from civil
liberties group the Electronic Privacy Information Center told the
anti-spam summit. 


The OECD is calling for governments to pool resources to tackle the
scourge of nuisance offers of sex aids and cheap loans which can be used
to spreading malicious viruses. 


According to the American Chamber of Commerce (news - web sites) to the
European Union (news - web sites) the problem cost EU and U.S. companies
more than $11.5 billion a year in lost time and productivity. The United
Nations (news - web sites) Conference on Trade and Development estimates
the global economic impact could reach $20 billion. 


Governments are trying to tackle the problem through a mixture of
regulations, code of conducts for business and advanced technical
solutions. 


"Most governments do view the Internet as a key to global economy.
Spam has certainly the capacity to interfere with that," Peter
Ferguson, chairman of the OECD working party on information security and
privacy, told a press conference. 


Microsoft's Bill Gates (news - web sites) published last year an
anti-spam manifesto and pledged to fight spam through technical
solutions. 


But the TACD survey showed that only 17 percent of respondents thought
their spam filters worked well and 21 percent did not even know whether
their e-mail had a filter. 



*******************************
Computerworld
Toxic Legacy
Improper disposal of obsolete IT equipment is fast becoming a major
liability for corporations. 
Story by Robert L. Mitchell 

FEBRUARY 02, 2004 ( COMPUTERWORLD ) - When Kaiser Permanente began a
program to dispose of its obsolete computer equipment two and a half
years ago, it was motivated more by cost concerns than by the desire to
properly dispose of products with potentially toxic content. 
"My boss was concerned with more space being taken up by excess and
used equipment," says Jim Regan, manager of IT facilities at the
Oakland, Calif.-based health care management company, noting that the
idle assets accrued storage and property tax charges. But he quickly
realized that the disposal of IT waste, which contains many toxic
substances, presented a potentially large and growing liability risk to
Kaiser. 

Growing public awareness of the hazards of e-waste and a rising tide of
regulations have increased the pressure to recycle IT products and set
the stage for higher disposal costs. Meanwhile, low-cost bidders for IT
equipment disposal services may be working through brokers to send
equipment to developing countriesa controversial practiceor to illegal
waste dumps in the U.S. Failure to establish best practices, thoroughly
check out vendors and create an audit trail may leave companies on the
hook for hefty fines, lawsuits and a barrage of negative publicity.

A typical CRT monitor contains three to nine pounds of lead, recyclers
say. And printed circuit boards contain beryllium, cadmium, flame
retardants and other compounds that can contaminate the air and
groundwater and expose humans to carcinogens and other toxins when
equipment is shredded, burned or sent to a landfill. According to the
U.S. Environmental Protection Agency, e-waste is now the fastest-growing
waste stream in the U.S. 

Until now, only electronics manufacturers have been under pressure from
activists and regulators to reduce toxic content in their products and
limit human exposure to toxins used in their manufacturing processes.
That's changing. 

The European Union took the lead on end-of-life issues when it issued two
directives on e-waste aimed at manufacturers early last year. One
requires vendors that sell IT products in Europe to phase out some
particularly dangerous toxins, including lead, mercury, cadmium,
hexavalent chromium and bromated fire retardants, from electronics
products by 2006. The other holds manufacturers responsible for
end-of-life disposal costs for their products. 

Meanwhile, a wave of e-waste regulations is beginning to roll across the
U.S. A new California law assesses an upfront fee for every CRT purchased
to cover recycling costs, bars the export of e-waste and requires a
phaseout of the toxic substances cited in the EU directive. California
and a few other states also have banned landfill disposal of some IT
products, such as monitors. In all, more than 24 new bills are working
their way through state legislatures, according to Gartner Inc., creating
a patchwork of inconsistent rules that organizations must follow and the
potential for stiff fines for those that don't. 

But a more troubling aspect of the issue for Kaiser's Regan came to light
early in 2002, when two activist groups released a graphic and
controversial report on the export of U.S. e-waste to developing
countries. The report, released by the Basel Action Network (BAN) and
Silicon Valley Toxics Coalition (SVTC), asserted that 50% to 80% of
e-waste collected in the U.S. is exported to developing countries. It
included disturbing pictures of children in the Chinese village of Guiyu
playing amid mountains of discarded IT products, and laborers smashing
monitors by hand outdoors and pouring acid over circuit boards to remove
valuable metals. Clearly visible in some of the pictures were the asset
tags of private and public U.S. organizations that previously owned the
equipment. 

Follow-up stories confirming the e-waste situation in Guiyu appeared in
major U.S. newspapers, including The Washington Post and the San Jose
Mercury News. But as the media and activists focused on Dell Inc. and
other producers as the culprits, Kaiser's management saw the potential
for damage to the company's reputation and brand name if its equipment
were to appear in such an expose. Exporting e-waste isn't illegal in the
U.S., but Regan began to get calls from worried doctors in his company's
executive ranks. 

By that time, however, he had already worked out an arrangement with
Redemtech Inc., a Hilliard, Ohio-based recycler that handles the
disposition of obsolete IT equipment. Regan's contract specifies a
zero-landfill policy, includes written assurances that Redemtech's
recycling subcontractors don't export any e-waste products and calls for
documentation of the final disposition of all IT products. Regan uses the
reports to pull assets off the books and to protect the company from
liability lawsuits. "We went into this with a risk-mitigation point
of view. You really have to make sure that nothing on the back end
sullies your reputation," he says. 

Regan may have been ahead of the curve in thinking about these issues,
but considering the volume of e-waste that companies like his
generateKaiser has disposed of 65,000 pieces of IT equipment over the
past two yearshe's convinced that it's just a matter of time before
environmental groups make an example of a large corporate user of IT
products. "Do your homework and make sure you have your back
covered," he advises. 

Dell became such an example on the vendor side. Ted Smith, founder of the
San Jose-based SVTC, says that his organization singled out the PC direct
marketer for criticism last year, issued negative reports on its
recycling policies and picketed company offices and even the offices of
CEO Michael Dell's wife. "We decided that they would make a great
target," he says, noting that since the SVTC campaign, the vendor
has "begun to take these issues more seriously." 

The tactic worked: Dell, IBM and Hewlett-Packard Co. all say they now
offer computer return programs and recycle collected IT products.

Jim Puckett, coordinator of Seattle-based BAN, which opposes the
exportation of hazardous e-waste to developing countries and works
closely with the SVTC, says a high-profile user of IT products will be
his organization's next target. "We're going to start going after
some institutions now and making examples of them in a positive and
negative way. We're going to be putting pressure on the users," he
says. 

Meanwhile, many IT organizations remain ignorant of the legal and
technical issues surrounding proper disposal of IT equipment. "I
still talk to clients on a daily basis and they have no idea what's going
on. You'd think that they would know at this point that you can't just
throw this stuff out," says Gartner analyst Frances O'Brien.

E-waste Economics 

Many IT organizations avoid the problem simply by storing obsolete and
unused equipmenta costly proposition that both manufacturers and
recyclers say will get only more expensive as the costs of both storage
and disposal increase. "The No. 1 solution for IT disposal today is
storage," says Lennie Myers, a vice president at Austin-based
recycler Image Microsystems Inc. 

When it comes time to remove equipment from service, few companies have
budgeted for proper disposal, and fewer still want to convince the chief
financial officer to spend the $30 per PC that O'Brien says proper
disposal of an obsolete PC typically costs. This problem has arisen
because the end-of-life economics have changed. While disposal costs have
increased, the prices of used PCs have dropped to the point where a
typical system has little or no residual value after just 30 months,
according to Dell. In the past, an IT organization could dispose of
equipment after three years and receive a few dollars back, but today,
it's more likely to incur a net cost. 

"There is a de facto motivation for people to cut corners in
managing end-of-life [issues]," says Bob Houghton, Redemtech's
president. 

"You can still get a guy in a little red truck to haul away your
PCs, so nobody wants to focus on this issue," says an IT executive
at a large financial services company, who asked not to be identified.
Without executive sponsorship of a responsible disposal policy, he says,
business units will continue to throw equipment into Dumpsters rather
than incur a $25-per-unit disposal fee billed through an internal,
IT-sponsored program. 

The executive was able to gain support for responsible recycling by
focusing on problems with improper erasure of data on the hard disk
drives of discarded PCs and the risk of noncompliance with Health
Insurance Portability and Accountability Act privacy regulations. Vendors
such as Image Microsystems and Redemtech verify and document disk erasure
as part of their services. Because of the extra costs of responsible
disposal, the executive says, it will take the negative publicity of a
"Martha Stewart type of case" before businesses will fund
proper disposal practices. 

"There are bad things happening. As a corporation, you need to prove
you did due diligence," O'Brien says. That means tracking assets and
having proof of sale or proper disposalsomething most companies don't do.
Despite the risk of negative publicity, it's legal and relatively
inexpensive to work with brokers that export IT equipment overseas. Even
recyclers that say they don't export may send some equipment or
components to downstream brokers that do export it. Or the equipment
could end up in a field somewhere unless you've verified the vendor's
practices and tracked the asset properly, O'Brien says. 

She says one client received an offer to remove 3,000 dead monitors for
$3 each, well under the going rate of $7 to $35. "Three months
later, he got a call from the Department of Environmental Protection
asking, 'Why are your monitors in this field?' " O'Brien says.
Investigators such as the EPA can quickly trace equipment back to its
original owner through serial numbers or asset tags. 

"If we can't prove we transferred that title, we're liable,"
says the financial services company executive. That means paying cleanup
costs and fines. 

Thinking Ahead 

So, what's an IT executive to do? "The best place to [address
disposal of IT assets] is where the competition is, which is
upfront," says Regan. He now includes specific terms for the
disposal of existing IT assets as part of requests for proposals for new
equipment. And he's moving toward more leasing, which takes the problem
off his plate. All of Kaiser's 250,000 IT assets, including those that go
back to vendors or leasing companies, are processed by Redemtech as
they're retired. The vendor collects the equipment, wipes the disks,
refurbishes, recycles or returns the equipment, and provides written
verification. 

"We're looking at a net cost per PC of $18.40, and the monitors are
$23.71 on a net basis. We've budgeted those disposal costs," Regan
says. The total tab for processing 19,906 monitors and 38,204 desktops
over two and a half years is approximately $1.2 million. 

That may sound expensive, but IT organizations should be wary of vendors
that offer disposal services at little or no cost. "They need to be
cognizant of what may be happening to those materials ... and do due
diligence on those vendors," says Tod Arbogast, senior manager of
asset recovery services at Dell. 

Don't sit on IT equipment that has reached the end of its life, says
Wayne Balter, vice president of corporate environmental affairs at IBM.
John Montgomery, chief technology officer at Marine Terminals Corp. in
San Pedro, Calif., says his company had a "warehouse full of
computers" but has gotten rid of them through an organization that
recycles them. Montgomery refreshes 20% of his PCs each year but keeps
monitors longer, which saves money upfront and delays disposal costs on
the back end. He's also gradually shifting to LCD panels, which use less
energy and don't contain the heavy amounts of lead found in CRTs,
although fluorescent backlighting introduces small amounts of another
toxic substancemercury. 

Users may eventually reduce back-end recycling costs by purchasing
products that have lower toxic content at the front end. For example, the
European TCO and Blue Angel certification labels provide assurance that
some toxic materials aren't present in displays and desktops,
respectively. But manufacturers will never be able to completely remove
all toxic content from electronic products. The best approach for IT
products, Houghton says, is to "assume everything is
hazardous."
*******************************
Baltimore Sun
Election administrator turnover on rise in U.S.
Many faced scrutiny because of 2000 election
Associated Press
Originally published February 3, 2004

Turnover among election administrators in the nation's largest counties
since the 2000 presidential stalemate has been unusually high with, by
one expert's count, at least 20 top officials leaving office. 

While individuals have cited various reasons for departing, many have
faced greater scrutiny because of the 2000 race and new demands to fix
long-standing problems, but haven't been given the resources to make
effective changes, said Richard Smolka, an election expert who compiled
the list.

The elections director in Ohio's Cuyahoga County (Cleveland) quit in a
dispute over buying new voting machines; the elections superintendent in
King County, Wash., (Seattle) was fired over missing absentee ballots.
Others just retired. 

"I've heard supervisors tell me that 'I don't need this. I'm not
going to put up with this anymore.' It's kind of discouraging because of
what we do and how much we love it," said Kurt Browning, the
election supervisor in Florida's Pasco County, who has stayed in his
post. 

Some officials also worry that turmoil at the top could make new problems
more likely this November, since local administrators are the ones
responsible for making sure balloting runs smoothly on Election Day.

The 20 jurisdictions where administrators have left include New York
City, and counties that encompass Houston, Seattle, the Chicago suburbs
and parts of the Los Angeles, among others and account for more than 35
million people, according to Smolka, a political science professor
emeritus at American University. 

Few who retired would acknowledge that they left because of the 2000
election. But many say it's been a driving factor for others who've left.

"The administration of elections is becoming so complicated and so
risky for one's reputation and one's integrity. I think we've seen a lot
of people leave for those reasons," said Ernie Hawkins, the
registrar in Sacramento County, Calif., who retired last year after 39
years there. 

Local officials also have complained for months that electoral reform
money promised from the federal government has been slow to arrive,
Smolka said.
*******************************
USA Today
Job shift creates India tech boom
Posted 2/3/2004 12:50 AM     Updated 2/3/2004 10:41
AM
By Michelle Kessler, USA TODAY

Tech companies are hiring again as the economy rebounds  but many of
the new jobs are in India.

Oracle (ORCL) CEO Larry Ellison says his company is hiring faster in
India than anywhere else. Intel (INTC) President Paul Otellini recently
said Intel plans to do most new hiring in India and other Asian
countries. Indian classified ads carry job listings from nearly every big
U.S. tech firm, from Hewlett-Packard (HPQ) to Dell (DELL) to Microsoft
(MSFT).

The shift is boosting India's growing tech industry and helping U.S.
companies save money. But it's squeezing the already tight U.S. tech job
market. More than 200,000 Silicon Valley jobs have been lost since 2001,
says Joint Venture, a San Jose, Calif.-based civic group. Salaries fell
an average 24% from 2000. (Related story: Report: Companies make lots of
pink-slip plans in January)

The economic recovery will help job seekers  but not as much as
usual, says Joint Venture CEO Russell Hancock. "This time is
different," he says. "Other regions are doing what we alone
used to do." The competition will force some U.S. tech workers to
seek jobs elsewhere, he says.

Laxmikant Mandal, 27, headed back to India. The tech engineer moved to
Silicon Valley during the boom, holding jobs at Nortel Networks, Cisco
Systems and Cypress Semiconductor. Laid off in March, he returned to
Bangalore, India, and received two job offers in three months.
Ultimately, he decided to pursue an MBA in Canada. But when he graduates,
he wants to start a company in India. "Bangalore is thriving the way
Silicon Valley was in 1999," he says.

U.S. companies have been moving out of the USA for years. Tech companies
have been especially partial to moving software programming jobs to
India. Forrester Research estimates that 3.3 million jobs will move out
of the USA by 2015. Adding jobs in other countries avoids controversial
layoffs in the USA while shifting a greater percentage of a company's
workforce out of the USA.

Sunnyvale, Calif.-based Network Appliance expects to increase its staff
in India to 300 by 2005. That would mean about 5% of its workforce would
be in India, up from 3% today. (The storage-gear maker is also hiring in
the USA.) The move allows the company to hire top-notch engineers while
saving money, says Senior Vice President Chris Carlton.

India's strong education system and English-speaking workers are part of
the appeal for Dallas consulting firm i2, with 47% of its staff in India.
Adaptec, another storage-gear maker, plans to double its Indian staff to
150 from 75 over the next several years. One benefit: Indian workers are
sleeping when U.S. workers are working and vice versa, allowing for a
24-hour workday, says Vice President Ram Jayam.

India's tech industry is about one-fifth the size of the U.S. tech
industry, says AMR Research analyst Lance Travis. And although the shift
might hurt some U.S. job seekers, it benefits the industry because it
lowers the price of tech goods, says Stephanie Moore of Forrester
Research. U.S. tech workers must adjust to a new reality, Hancock says.
"Silicon Valley used to be the center of the (tech) world, but it's
just not true anymore," he says.
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