Internet Changes Everything

July 25, 2004

Bridging the digital divide

TheStar.com - Bridging the digital divide

LAW BYTES

Global efforts to bridge the technology gap between the developed and developing world focus appropriately on building the capacity of developing countries by providing much needed hardware, software, and skills training. E-commerce development, although a vital global issue, is a long-range goal for those engaged in digital divide work, since for many developing countries basic telephone service and computer availability are more realistic aims for the short-term.

While the legal issues associated with the digital divide may seem like a mere afterthought, an effective, reliable, and internationally consistent legal framework may foster foreign investor confidence and provide tangible benefits once a critical mass of technological infrastructure and skills are in place.

The challenge of bridging the legal digital divide should not be underestimated. Earlier this month I participated in a United Nations-sponsored conference on Asian e-commerce law development and harmonization in Bangkok. It was hosted by the U.N. Economic and Social Commission for Asia and the Pacific, in cooperation with a large number of U.N. agencies, including the U.N. Conference on Trade and Development, the International Trade Centre, and the U.N. Commission on International Trade Law. The conference succeeded in demonstrating both the energy and enthusiasm of the developing world for e-commerce as well as highlighting the difficulty of delivering effective legal training and policy-making skills.

On the positive side, the realization that e-commerce can play an important role in economic development has clearly reached every corner of the globe. Sitting side-by-side with Asian e-commerce leaders such as South Korea and Singapore were representatives from Myanmar to Maldives and Bangladesh to Bhutan, countries rarely seen at e-commerce events.

It was quickly revealed that Asia is not content to sit on the e-commerce law sidelines. While the existence of e-commerce statutes in countries such as India, Malaysia, and Thailand is known, many were surprised to learn that countries such Myanmar and Bhutan have draft e-commerce regulations awaiting enactment.

Although such enthusiasm for e-commerce legislation is admirable, it also points to some significant dangers. While e-commerce legislation is a valuable tool to ensure online contractual certainty, it does not replace the core components of economic development.

In fact, some presentations left the distinct impression that there are countries that have put the cart before the horse. For example, one presentation on Cambodian e-commerce noted that the country faced barriers such as poor infrastructure, weak institutions, low levels of literacy, and poverty. Yet the same presentation stated that the "greatest challenge" is the enactment of an e-commerce law.

Developing countries should be aware that beginning with e-commerce legislation is likely to result in disappointment, not development. The basic information technology building blocks must first be established, an achievement that may then lead to e-commerce and finally to e-commerce legislation.

The conference also highlighted the unfortunate fact that many developing countries are being very poorly advised in this area. Interspersed among the delegates were consultants ready to terrify developing countries that their failure to act promptly on the legislative front would lead to e-commerce ruin. Moreover, the now-discredited Internet self-regulatory visions of the 1990s were also on display. One major multinational company extolled the benefits of a "value driven legal model" that would ensure no new or higher compliance costs to businesses as the best approach to Internet and e-commerce regulation.

Most troubling was the advice provided on the intellectual property front. Rather than focusing on matters of real concern to developing countries such as potential economic benefits from protection of traditional knowledge, the use of open source software, or the emergence of internationalized domain names that will allow people in developing countries to use their native language online, the delegates heard a presentation on the benefits of database legislation and business method patents. Keeping in mind that developed countries, including Canada, have resisted these reforms, they have no place in a discussion on developing country concerns.

The U.N. and the other participating agencies have consistently demonstrated great commitment in seeking to bring information technology law capacity to the developing world. With conferences, training materials, and exchange programs, the obvious desire to assist on this issue is matched only by the interest and enthusiasm from the developing world.

For these initiatives to succeed, however, more than just good materials and good intentions are needed. As a starting point, at least three issues must be addressed.

First, the narrow vision of e-commerce law development that focuses primarily on enforceable online contracts must be discarded in favour of a broader mandate, one that builds a legal framework premised on the actual needs of the developing countries. Broadening the discussion will mean focusing on cyber crime and anti-spam legislation, since certain developing countries risk being cut-off from some Internet communications if they are either viewed as harbouring spammers or as prime sources of fraud. Privacy legislation may also prove essential, particularly for those developing countries hoping to benefit from the global movement toward data outsourcing.

Second, groups whose chief concern it is to address developing country interests should be the primary sources of training and policy advice. That approach will both require a sharp reversal in the intellectual property protection dialogue and action to keep conflicted consultants at bay.

Third, training programs must focus on all levels of the legal environment including policy makers, lawyers, judges, and law students. E-commerce development will not come overnight to the developing world, but when it does, we must ensure that everyone is ready.

July 25, 2004 at 03:27 AM in Internet evolution | Permalink | TrackBack (27) | Top of page | Blog Home

Will Internet satellite fly?

TheStar.com - Will Internet satellite fly?

Launching a satellite must be one of the most stressful events in the communications industry.
Hundreds of people spend years of their lives designing and building these high-tech, solar-powered "birds." They cost millions of dollars, including the launch fees and just-in-case insurance policies. The business plans of a handful of companies are also on the line.

At launch time, you basically cross your fingers and spend the next few hours silently praying that all goes as planned.

"Think of it as a four-year pregnancy and we're now getting ready for the first phase of its birth, which is launch," said Paul Bush, vice-president of corporate development at Telesat Canada, the BCE Inc.-owned company that has brought us six generations of Anik satellites over its 35-year history.

Speaking last week over his mobile phone from the Arianespace launch zone in Kourou, French Guiana, preparing for the launch of Telesat's 15th satellite, Bush was calm. He said there was no nail-biting going on but anticipation was making people anxious.

The launch was supposed to take place a week ago today but an "anomaly" in the launcher discovered hours before lift-off postponed it until Thursday. Bad weather bumped the launch again until Friday, 8:43 p.m.; another launch-pad problem pushed lift-off back a third time to Saturday. They've got one shot to get this Boeing-built satellite into orbit, and nobody wants to take chances. Insurance and launch costs alone account for nearly half of Anik F2's $400-million-plus (U.S.) price tag.

"Boeing and Arianespace literally hold the future of Telesat in their hands," chief executive Larry Boisvert told a satellite conference in March.

Anik F2 was launched at 8:44 p.m. aboard an Ariane 5G rocket. When finally ignited, the rockets slowly lifted off, then sped up rapidly after a few minutes. Within 28 minutes the satellite left the atmosphere and was ejected from the rocket. A large onboard thruster took over and jetted the satellite to its orbital slot about 35,000 kilometres above the Earth's equator.

Once in place, a panel of solar arrays nearly 50 metres across unfolded in the darkness of space. They use the sun's energy to supply power to Anik F2 until it is retired in 2020. Smaller thrusters will spend the next 15 years or so keeping the spacecraft from straying out of its orbital position.

Canadians should care about this moment — about this particular satellite. Anik F2 is more than just the largest and heaviest of commercial satellites in the world, it's also the first to combine cutting edge Ka-band technology with older and less powerful Ku- and C-band transponders.

The latter two will continue to carry Canada's television and telecommunications signals, but the powerful Ka-band "spot beams" will, for the first time, let an Anik satellite deliver two-way, broadband Internet service to any location in North America at a price that's competitive with residential cable or DSL high-speed services.

Previously, you'd have to spend at least a couple hundred dollars a month to get high-speed access to your cottage or rural business. Bush estimates Telesat's consumer high-speed Internet service, which will be sold through a distribution network yet to be announced (but likely to include Bell Canada), will cost only 5 to 10 per cent more than what Torontonians pay for high-speed services from Sympatico and Rogers.

This single bird, fixed in space, will let Ottawa attain its goal of bringing broadband Internet access to every community in Canada. But let's not kid ourselves. When the service is officially switched on this fall, the biggest group to benefit from Anik F2's ubiquitous broadband coverage will be baby boomers who are fleeing our cities en masse and cocooning themselves in rural homes and upscale cottages.

By 2026 half the population will be over 43 and one in every five people will be a senior, according to Statistics Canada. Roughly 7 million Canadians will be in retirement, and they'll be healthier and wealthier than previous generations their age.

Mortgages will be paid off and pensions will kick in. As more move away from the city, either to year-round country homes or summer cottages, they'll want the same amenities they've come to enjoy from urban living. And for those still working toward retirement, having the ability to telecommute — particularly during the summer months — means more time at the cottage.

A recent Royal LePage poll found that a quarter of cottage owners and a third looking to buy a cottage consider Internet access important. But dial-up service no longer cuts it. This reporter gets complaints every week from cottagers who lament the lack of affordable high-speed Internet service outside the city. The frustration is growing.

"What you're seeing in the north of Toronto is not unlike what you're seeing north of Ottawa or Winnipeg. It's this whole phenomenon of recreational properties, where more people are choosing to work and play outside the cities," said Bush. "We think there's pent up demand for those areas of the country using dial up to get online, or who have nothing. If you choose to live outside of an urban area, it doesn't mean you should be offline."

Still, critics of Telesat's broadband satellite plan say the market won't be large enough to sustain the service, and that competing against well-established cable and DSL services will be a challenge, even though those products aren't available outside the city. Indeed, certain areas of the GTA are still not served by Rogers or Bell when it comes to high-speed access.

Bush said all one has to do is look at the direct-to-home satellite market to see the potential for broadband satellite service. There are 25 million direct-to-home subscribers in North America, a market Anik F2 can easily cover.

In Canada, we have about 2.2 million subscribers spread between Bell ExpressVu and Star Choice. Of those, roughly 60 per cent — or 1.3 million — live in rural areas. Over-all, Telesat estimates that about 25 per cent of the population can't get cable or DSL broadband services.

"I think we're where we were with direct-to-home 10 years ago," said Bush. "There were a lot of naysayers then that said this isn't going to take off. But what you actually see is 25 million subscribers. It's a huge business."

It should be pointed out that the modem to be used with Telesat's broadband satellite service is based on the same technology standard as cable and DSL modems.

Once service is connected at the cottage,users can easily hook up Wi-Fi wireless networking gear.

Imagine, sitting with your coffee on the dock. The lake is calm and the sun is shining. Your laptop, rigged with a wireless card, is on your lap and you're . . . well . . . working.

Where do we sign up?

July 25, 2004 at 03:24 AM in Internet evolution | Permalink | TrackBack (25) | Top of page | Blog Home

Banking evolution

TheStar.com - Banking evolution

There were banks. They got computers. And finally . . . The computer is the bank. For good, bad,.

When most of us think of a bank, we conjure up a place — bricks and mortar, mostly — where we sat down to open our account, signed a few papers and walked away with a chequebook in hand. Inside, tellers and a loan manager tapped away at computers — tools of the trade, we thought.

Think again.

In fact, turn that whole image inside out.

Those computers aren't just tools of the bank. Increasingly, they are the bank. And the buildings are the tools we use to access them — ones we are using less and less frequently — as the inner workings of the banking world are transformed in subtle but important ways by those keyboards and screens.

"Many banks don't realize that if I turn off the computer, I don't have a bank," says Gabriel David, managing director of Global Capital Markets at EDS, a technology service company.

Canadians are among the world's top digital bankers. Eighty-six per cent of us have used bank cards to make a purchase in the past year, according to Interac, the association linking the computers of banks and trust companies. In fact, we use debit cards more often than cash.

"A lot of the time, the only time they go to the bank is to do more complicated transactions or purchase a product or to negotiate a loan," says Jeff Van Duynhoven," the vice-president of e-banking at Toronto Dominion Bank.

TD Bank last week announced a deal to contract out its automated banking machines to Hewlett Packard for $420 million. The plan is to use HP's expertise to make the ABMs more user-friendly. But the heart of the computer, where the transactions are processed and digital money moved around, will stay with TD.

"That technology is still core," says Van Duynhoven.

He describes the ABMs, like bank branches, as "access points" to the bank. And that bank, says Joseph Paradi at the University of Toronto, is a computer.

"Without the computers, there are no banks," says Paradi, executive director of the school's Centre for the Management of Technology and Entrepreneurship.

There is more to the transformation of banking than simply the digital transactions of banks' customers. At least, that's what the most successful banks have figured out, says David at EDS.

The smart banks, including giants Citibank, Chase and HSBC, have realized that computers can change not only the way their customers bank, but how the banks themselves can translate tight margins into huge profits, he says.

"The banks are sort of drifting into it rather than by design. It's almost by accident. The ones who do it by design will be the big winners," he says.

In such banks, the computers have been used to integrate all aspects of the banks' operations from the retail side to the corporate side to take advantage of each other's strengths.

For instance, when a branch manager makes a loan, he can use the computer to send the loan to the corporate side of the bank at head office, which can then sell the loan on the market and get the money back to the branches to loan again to someone else, David says.

All the transactions are done digitally, of course, but the key element is that the computers have enabled two previously separate branches of the bank — retail and corporate — to work together in a way that was never possible before. Too few banks, he says, have fully comprehended the potential of that development.

"The retail side runs the retail side and the corporate side runs the corporate side," he says. "The problem is, the two are linked."

Most banks, like their customers, still think of computers as mere tools of the trade, he says. But as anyone who has negotiated a loan recently will attest, computers are not just helping loan officers calculate interest and process loans, they are deciding who will get a loan. And overriding the computer's decision can be next to impossible.

Paradi said leaving such decisions to computers makes sense.

July 25, 2004 at 03:23 AM in Financial Services | Permalink | TrackBack (10) | Top of page | Blog Home

July 24, 2004

Blogging Catches Business Interest

Yahoo! News - Blogging Catches Business Interest

Sat Jul 24, 3:31 AM
Matt Hicks - eWEEK BERKELEY, Calif Webloggers and businesses are increasingly shaking each other's hands and putting a more human face on corporations in the process, say bloggers and their proponents.

The inaugural BlogOn 2004 conference held here on Friday focused on the growing intersection between blogging and business. A series of panels explored how the collaborative form of online publishing could open more of the inner workings of companies to the public.

Blogs, which post content in a simple, diarylike format, have caught on among individuals wanting to share their opinions, report on events, exchange Web links and write about their daily lives.

While today's crop of non-corporate bloggers is often challenging the way corporations communicate with the public by writing instant feedback on products and breaking corporate news, enterprises themselves also are beginning to embrace the technology.

Among them is Microsoft Corp. In April the company unveiled a new blog site for Microsoft developers, called Channel 9, and is already drawing 700,000 unique visitors a month to it, technology evangelist Lenn Pryor said during a conference demo.

The launch of the site has allowed Microsoft employees—from product managers to executives—to talk with developers. Channel 9 has focused heavily on posting short video clips with interviews and demonstrations of products.

But the project, named for the airline audio channel that feeds cockpit communication, hasn't been without its challenges. Chief among them has been making employees understand the conversational nature of social media tools, project leaders said.

"The challenge is, How do you teach a corporation to turn on dime and to talk to your customers?" Pryor said. "This is a tough thing … There's this fine line between controlled messaging and brutal honesty."

Microsoft has about 1,000 internal bloggers, who write without censorship but follow a "basic policy of being smart" about the type of information to disclose when working for a public company, Pryor said.

Read more about the social issues impacting social software.

Microsoft isn't alone. A range of technology companies from Sun Microsystems Inc. to Google Inc. have started corporate and employee blogs.

Though experiments have begun, blogging still is in its infancy within enterprises. The tools vendors themselves have just begun to address the corporate market. For example, Six Apart Ltd., the maker of the Movable Type software, in May began offering more traditional licensing to address the enterprise market.

Reid Hoffman, CEO of social networking service LinkedIn Ltd. and an investor in Six Apart, said enterprises are eyeing blogging and other social software such as wikis for internal collaboration as an alternative to e-mail, which is plagued with problems such as spam.

"We're in the very first steps," Hoffman said. "My guess is we're about six to 12 months away from real hockey stick [of increased use]."

July 24, 2004 at 06:47 PM in Blogging & feeds | Permalink | TrackBack (4) | Top of page | Blog Home

Skype phone service closer

Yahoo! News - Skype phone service closer

Sat Jul 24, 6:46 AM ET

By Dawn C. Chmielewski, Mercury News
Internet telephone upstart Skype on Friday moved one step closer to offering local phone service.

The Luxembourg company finalized deals that will let 7 million Skype users make phone calls from their computers to standard phones for less than 1.5 cents a minute. However, a person using a land line phone will not be able to call Skype users over the service, called SkypeOut.

It's a milestone for Skype, the Internet phone service launched in August by the two technology renegades that created the Kazaa file-sharing phenomenon. The software allows people to place free phone calls anywhere in the world. But previously both the caller and the person receiving the call had to talk over computers that had downloaded Skype's software.

"For Skype it's a big deal, because it takes them out of the computer-to-computer only calling and it puts them into the computer to real-world calling sector," said Ben Silverman, a telecommunications analyst for FindProfit.com, an investor newsletter. "It's significant especially in light of what's been going on."

Said Skype co-founder and Chief Executive Niklas Zennstrom in a statement: "We will now move quickly and offer SkypeOut calls to land line and mobile phone numbers around the world."

The announcement comes at a time of upheaval in the telecommunications world. AT&T announced Thursday it would no longer seek new residential customers. And Verizon Communications introduced its own Internet phone service.

Daryl Schoolar, a senior analyst for researcher In-stat/MDR, said traditional phone companies are under attack from all sides. Once-lucrative long-distance revenue is being undercut by cellular phone plans that don't charge for nationwide calling.

And flat-rate Internet telephone services, such as Vonage and AT&T's CallVantage, are cutting into the market for second home phone lines and advanced calling services, said Schoolar.

The early popularity of Skype, with more than 16.8 million downloads, only fuels such competitive pressures.

On Friday, Skype announced a deal with Level 3, a leading telecommunications wholesaler with a fiber-optic network of 23,000 miles throughout North America and Europe. Level 3 provides what is known as voice termination: taking a phone call placed from a computer and seamlessly connecting it to the local phone network. It's a significant player, with $4 billion in revenue.

Skype also unveiled agreements with Colt, iBasis and Teleglobe to provide the same sorts of call termination services worldwide.

Analysts say it's too soon to predict winners in the fast-emerging realm of Internet phone service, where Skype will compete for business with Verizon, AT&T and Vonage.

"The people they've attracted so far, between this and Kazaa, are people who don't want to pay for something," said Schoolar, the analyst. "It's like inviting 2 million shoplifters into a store hoping to have a sale."

Contact Dawn C. Chmielewski at dchmielewski @mercurynews.com or (800) 643-1902.

July 24, 2004 at 06:45 PM in Telecommunications | Permalink | TrackBack (18) | Top of page | Blog Home

Online Media Drop Gimmicks for Conventions

Yahoo! News - Online Media Drop Gimmicks for Conventions

Sat Jul 24,11:23 AM By ANICK JESDANUN, AP Internet Writer
NEW YORK - Gone from Internet coverage of the political conventions are most of the gimmicks, like 360-degree cameras that Web surfers can control from their homes. Also gone are television-style reports at USA Today's Web site and an original newscast from America Online Inc.

While 2004 brings better use of high-speed Internet connections, Flash animation technology and independent Web journalists known as bloggers, media organizations are largely returning to the basics on the Internet.

They are dropping the bells and whistles in favor of what they do best: covering the news.

Internet media descended on the 2000 conventions declaring a revolution, prompting many pundits to recall the arrival of television at a convention in 1948.

Last time, two online outlets, Pseudo Programs Inc. and AOL, produced original programming from skyboxes typically reserved for broadcasters. Republicans had their "Internet Alley," Democrats their "Internet Avenue" — where online outlets were grouped together in the media center.

Pseudo, out of cash, shut down just one month later. AOL passed on a skybox this year. Next week's Democratic National Convention in Boston won't have an Internet Alley or Avenue (though it will have "Bloggers Boulevard" for the independent bloggers making their debuts).

ABC News is dropping 360-degree images — "gimmicks that turned out to be a waste of time and energy," said Bernard Gershon, general manager for the ABC News Digital Media Group. "Except for the people who created it, very few people looked at it."

Though ABC plans only three hours of broadcast coverage all next week, it will run several more over the Internet, on mobile phones and through the relatively few TV sets capable of receiving digital signals.

The added video coverage, anchored by Peter Jennings, will be available on ABC's site to paid subscribers only, but the feed will be given for free to AOL customers, letting AOL focus on adding online polls, chat rooms and other interactive features for its subscribers.

While AOL's resources were "pretty spread" when it tried original programming in 2000, "now we can concentrate on what we know how to do and work with ABC on what they know how to do," said Lewis D'Vorkin, editor in chief for AOL News.

Not that the conventions will be devoid entirely of the bells and whistles common in 2000. The New York Times' Web site will have 360-degree images, while CNN's convention-floor webcam will offer 24-hour feeds, including those of janitors cleaning up.

But the focus will be on complementing other media, not duplicating or replacing them. MSNBC.com won't do gavel-to-gavel webcasts, and CNN's online video feed will draw upon fewer camera angles, reporters and analysts than its cable counterpart.

"If you're in front of the TV, that's where you should watch it," said Mitch Gelman, executive producer of CNN.com. "What you want to come to online for is for in-depth analysis and complementary elements like quizzes and quick votes."

He said the Web site will also be the place for people at work to catch up on the previous evening's proceedings, through transcripts and video clips available on demand.

USA Today, meanwhile, is dropping TV-style video, choosing not to compete with Web sites of broadcasters, given their extensive access to footage, said USAToday.com's editor in chief, Kinsey Wilson.

The site will instead focus on producing multimedia pieces using Flash, a technology for combining text, audio, photos and video. Its delivery is made easier by the growing availability of high-speed connections in homes.

The Boston Globe's Web site will supplement hometown coverage of the parties, protests and proceedings by asking readers with camera-equipped mobile phones to e-mail photos. Along with other media outlets, it also arranged with delegates to file blog entries.

In fact, blogs are being heralded this year just as traditional Internet outlets were four years ago.

Democrats have given media credentials to more than 30 independent bloggers. Many traditional news organizations, including The Associated Press, will have their own blogs offering analysis and insights. CNN's BlogWatch will review other blogs at the convention.

Sites are also committing less to better respond to news development. The Boston site is dropping prescheduled chat sessions, while the Times is forgoing its twice-daily, 20-minute video segments on politics.

"We wanted the flexibility to tell the story in the best possible way," said Leonard Apcar, editor in chief of the Times site.

With less emphasis on technology for the sake of technology, this year's coverage on the Internet will be mostly about playing to its strengths — reaching the work audience already done with the morning paper and lacking access to television.

"The big difference between here and four years ago is that the gee whiz element of the Internet has ended," said Stephen Bromberg, executive editor for Fox News Channel's Web site. "People now just expect to get the news from the Web site."

___

Anick Jesdanun can be reached at netwriter(at)ap.org

July 24, 2004 at 02:36 PM in Web lifestyle | Permalink | TrackBack (23) | Top of page | Blog Home

States Prepare E-Gov Push

washingtonpost.com: States Prepare E-Gov Push

By Cynthia L. Webb
washingtonpost.com Staff Writer
Thursday, July 22, 2004; 2:53 PM
Tight budgets in Washington are draining vital dollars away from various federal e-government efforts, but a new report predicts that state and local governments are preparing to unleash a wave of technology spending aimed at improving citizen services.

According to the report, released this week by Reston, Va.-based Input, e-government spending in the state and local market will more than double by 2008, with rapid growth predicted for 2006 and 2007. The growth, Input says, will come as more government agencies consolidate their back-office systems and as more citizen services go online.

The market research firm said "state and local e-government growth will be moderate over the next two years as governments exhaust opportunities to further broaden website operations and engage consulting and research efforts to develop comprehensive plans for the next phase of e-government." By 2006, growth will pick up more, the report found. "As governments complete plans and begin widespread integration and process improvement across agencies, services will increasingly be tied to new more fully interactive portals that will be automated for citizens," James Krouse, Input's manager of state and local market analysis, said in a statement.

The second phase of e-government market development "will be led with exploratory research initiatives that outline agency-by-agency process reviews, and develop comprehensive plans for integration and system consolidation. As governments complete plans and begin widespread integration and process improvement across agencies, services will increasingly be tied to new more fully interactive portals that will be automated for citizens," Krouse said.

Washington Technology noted that Input's finding that "[s]tate and local e-government spending peaked in fiscal 2002 at $700 million and then declined about 60 percent over the next year. Spending dropped another 50 percent by 2004, Input's analysis said. The decline was driven by state and local budget shortfalls and disillusionment in the effectiveness of e-gov services, according to the report."

InformationWeek had a slightly different take on the Input numbers: "State and local government spending on E-government topped out at $650 million in 2002, but plummeted nearly 81% to $125 million this year as governments struggled to pay for all types of services as tax receipts and other revenue plunged. But with the economic recovery, spending on E-government projects will slowly bounce back over the next two years, to $150 million in 2005 and $175 million in 2006. Then, spending will quickly accelerate to $300 million in 2007 and $575 million in 2008."

Washington Technology said despite the expected spending uptick, there are potential pitfalls for e-government funding: "Obstacles facing state and local governments in the next phase of e-government development still include budget constraints, the report said. Other obstacles include difficulty producing measurable returns on investment and disagreements where agencies must integrate operations."

An Eye On State and Local E-Gov Work

Detroit Free Press columnist Mike Wendland this week reported on one Michigan county's broad e-government efforts: "[T]ech experts say Oakland County is breaking away from the pack to become one of the nation's most progressive purveyors of digital democracy. In the county, residents can go online to buy park permits, file complaints, pay traffic tickets, order birth certificates and pay current property tax bills – and that's just for starters. Soon, for instance, county courts will be able to hold arraignments entirely online, with prisoners, investigators and lawyers hooked up on high-speed video connections."

According to Wendland, Oakland County has invested more than $100 million so far in the effort. "Officials say it's beginning to pay off big-time, making government workers more efficient and letting citizens go online instead of standing in line. 'Oakland is one of a half-dozen or so places in the country that is considered a leader in e-government,' said Terri Takai, director of the state Department of Information Technology. 'They're really pioneers in this.'"

Fairfax County, Va., located just outside Washington, may not be as savvy as Oakland County with its e-government approach, but county leaders are catching on, particularly with dumping paper for electronic communications, The Washington Post reported last week. "The county may be the region's epicenter of high technology, but its government lags in one pervasive way that it does business: It's awash in paper. The burdens of an excess of paper became clear to Supervisor Linda Q. Smyth (D-Providence) as soon as she took office in January. She says she was inundated with faxes, electronic messages and mail (the post office-routed kind). Land-use lawyers, fellow supervisors, civic groups, the county clerk, even telemarketers were writing. But the same correspondence was arriving on her desk three times, once through each medium. The Board of Supervisors meeting agenda, for example, can run hundreds of pages."

Fairfax County's answer is the Paper Reduction Task Force – a "group of experts from departments as varied as public affairs, archives and information technology that has been meeting to map out change. The goal? To fully usher in the electronic age in Fairfax. ... Other changes are in the works: more printing and copying on both sides of the page instead of one, more correspondence and other county business through e-mail, and more production of big documents on CD-ROM, such as the publication of the Park Authority's recent annual report."

Still Accountable at the Federal Level

Federal e-government spending may be on the back-burner, but agencies are still being held accountable for meeting aggressive e-gov goals.

A report released in March detailed the federal government's progress on e-government initiatives from fiscal year 2003. And the Office of Management and Budget, which oversees e-government reform, recently noted that several federal agencies were making e-government progress.

But clearly, there is major room for improvement. In the latest government scorecard rating, released in June, the performance of agencies in different management areas, the Transportation Department, Environmental Protection Agency and the Small Business Administration all received "green" scores, the highest rating on the OMB's scale for grading e-government work. So too did the Office of Personnel Management and the National Science Foundation, which maintained green ratings they achieved in the previous scorecard.

"One major disappointment is the Department for Homeland Security. It is failing in several areas of the management agenda, and appears to be moving backwards on e-government with its rating dropping from yellow to red. Embarrassingly the OMB itself also failed to improve its ratings, receiving four red scores and a yellow across the management agenda," according to a report from Kablenet.com, reprinted on ZDNET's UK site.

Washington Technology also reported last week on the scorecard's findings. See a Government IT Review I wrote in May on the previous scorecard results.

E-Government Victories

Agencies aren't shy about showing off their e-government progress. On Wednesday, OPM said its USAJOBS Web site had added new features. "With the latest enhancements, job seekers are now receiving expanded information in their job search notices including salary and closing date. This enhanced content gives job seekers more decision making data right in their e-mail," OPM said. For the month of May, OPM said it sent more than 3 million USAJOBS e-mail notices to people. That's a good sign it's a service that is getting used. Meanwhile, in May the SBA started a new Web site that businesses can use to obtain federal government information.

Fancy online tools and sites are not only helpful, but help federal agency sites get good reviews. "Americans are reasonably happy with e-government Web sites, according to the American Customer Satisfaction Index, which gave them an overall score of 70.3 for the second quarter," CMP Media's Transform Magazine reported. E-gov sites bested the NYTimes.com's score of 70, yet not surprisingly fell below the top scores of e-retail sites (84) and travel sites (77). The rankings are based on online surveys voluntarily filled out by site visitors on criteria such as accuracy of information, freshness of content, usefulness of information, ability to accomplish desired tasks and ease of navigation."

Favorite Government Web Sites

Is there a government Web site that you find particularly helpful? Drop me a note telling me why and I will include selected reader comments in an upcoming column. Please include your full name and the city and state you are writing from.

E-Gov's Global Reach

The e-government push is not just an American phenomenon. Thom C. de Graaf, the Dutch Minister for Government Reform and Kingdom Relations and deputy prime minister, posted his e-government plans on a government Web site, according to the EurActiv.com European news portal. De Graaf concluded that "relatively few transactions are being conducted digitally as yet" and "now is the time for local authorities to make the leap from digital information services to digital transaction services. In order to be able to do this they have to establish a link between the electronic front office and back office."

The United Kingdom has been particularly bullish with its e-government efforts. But a recent survey indicates that taxpayers might not notice all the hard work. "Nearly three quarters of the public have not noticed the impact of the investment in the UK's e-Government initiative, while almost half of those who have noticed are unhappy with it, a new report concludes. The survey, undertaken by eService software provider Transversal, has revealed that the majority of UK citizens have a poor perception of e-Government," the Netimperative site reported.

The European Commission has a Web portal that links to information about a number of EU e-government initiatives.

Digital Rx

Back in the USA, there's a federal push for patient health care records to be digitized. Earlier this summer, President Bushannounced that he wants paper records to go by the wayside in 10 years. Yesterday, more details of the president's plan were released. "The plan, while short on specifics, marks the biggest effort by the federal government so far to encourage the use of computer technology to modernize health care, just as other industries have turned to technology to cut costs and improve quality," USA Today reported. "More than 90% of the nation's health care transactions still occur via phone, fax or an exchange of paper. Technology could cut the nation's $1.6 trillion-a-year health care bill by at least 10%, says Secretary of Health and Human Services Tommy Thompson. He added that it might not take 10 years to meet Bush's goal: 'In the next couple of years, we will see electronic health records.'"

Reuters cited an HHS statistic showing that only "13 percent of hospitals and 14 to 28 percent of physicians' practices say they have electronic health systems."

According to The New York Times, "[c]ost has been a big hurdle. Most hospitals do not make money, so they forgo technology investments that seem to have an uncertain return. And until recently, bedside technology has often been expensive and cumbersome. The spread of light, low-cost hand-held computers has changed that – making it much more practical for the government's Centers for Medicare and Medicaid Services to promote standards for ordering and processing electronic prescriptions."

Federal Computer Week reported this week that a federally funded program in California, Arkansas, Massachusetts and Utah is trying to help doctor's officers move patient records to the digital age.

RIP CAPPS II

The federal government's controversial CAPPS II airline passenger screening program was put on ice last week, with the Bush administration acknowledging the program would have to be retooled before it would be ready to fly. The news was heralded by privacy advocates, who blasted the program for prying too much into passenger data to attempt to spot potential terrorists. (Read my Filter column last week for a rundown of media reports on the program's demise in its current state.)

The Associated Press reported this week that "[t]echnology problems and privacy concerns doomed the passenger prescreening program, while the enormous cost – an estimated $5 billion – has held up progress installing large bomb-screening machines in airports. Rep. John Mica (R-Fla.), chairman of the House aviation subcommittee, worries that the political pressure needed for such initiatives is waning. 'The further away you get from 9/11, the louder the voices become for a normal approach to security,' said Mica." Officials at the Transportation Security Administration said in January that the prescreening project – called Computer-Assisted Passenger Pre-screening System, or CAPPS II – could be up and running this summer. But the agency never was able to allay concerns about privacy, and last week acting TSA Administrator David Stone said CAPPS II would be 'reshaped and repackaged.'"

Wired News posted a feature article looking at former Army spy Bill Scannell's efforts to discredit CAPPS through a Web site he set up called BoycottDelta.org – a site he set up after news leaked that Delta was among several airlines that turned over passenger data to the government so it could test CAPPS II technology. "He created the firestorm," Lee Tien of the Electronic Frontier Foundation, told Wired. "Beginning with Boycott Delta, he sort of showed that there was a huge reservoir of bad feelings about these passenger-screening programs."

With the cancellation of CAPPS II, the big loser may be Lockheed Martin Corp., which has landed a $12 million contract from the Department of Homeland Security to help with the screening program. According to a report from Federal Computer Week, "Suzanne Luber, a spokeswoman for the Homeland Security Department 'declined to speculate whether the $12 million CAPPS II contract to Lockheed Martin Corp. would be revised. There is no projected timeline for the completion of the revamped program, Luber said."

The Nine Lives of E-Voting

E-voting reformers are starting to see some payoff from their efforts to get high-tech voting machines to produce paper receipts for every vote. Advanced Voting Solutions Inc. of Frisco, Tex., "has agreed to load election security technology from VoteHere Inc. on some of its machines to test the encrypted vote verification system in the fall election. The Bellevue, Wash., company has developed software that produces an encrypted receipt that could let voters verify that their ballots were accurately counted," Government Computer News reported this week.

CNET's News.com explained more: "The companies will team to integrate the technology into AVS's WINvote touch-screen voting terminal and will test the device during the November election. Rather than allow for a centralized re-count, the system gives voters the ability to check their vote online by matching a coded number on a receipt with the same number in a database."

Back in Washington this week, a House panel "struggled with the questions of how to set standards for acceptable error rates in voting technology and how to achieve those standards. Government officials, computer scientists and technology vendors agreed that it is too late for legislation or technology to have much of an impact on the 2004 election," Washington Technology reported.

In other e-voting news, Ohio is the latest state to hand down strict e-voting guidelines. "Three counties that were considering electronic voting machines made by Ohio-based Diebold Inc. cannot switch by November because tests have shown security problems, Secretary of State Kenneth Blackwell said Friday," the AP reported.

IRS Security Slip

More taxpayers than ever flocked to the Internal Revenue Service's Web site this past tax season to file their taxes electronically. But now the agency is getting blasted over security gaffes. "Private contractors revamping IRS computers committed security violations that significantly increased the possibility that private taxpayer information might be disclosed, Treasury Department inspectors say. An investigation by the department's inspector general for tax administration found that employees working for contractors, or an experienced hacker, could use the contractors' computers to gain access to taxpayer data," The Associated Press reported.

Federal Computer Week had more details: "The report, with the contractors' names and other sensitive data removed, revealed that root access privileges had been granted unnecessarily to about 50 contractor personnel. Root access permits users to make changes to computer systems without detection. Other contractor employees had violated IRS security procedures by installing e-mail and instant-messaging software on IRS computers. In some cases, the report says, contractors blatantly circumvented IRS policies and procedures, even when IRS security personnel pointed out the inappropriate practices. The IRS has more than 900 contracts with private contractors and consultants who perform many tax administration activities."

In other IRS news, the agency is touting its new taxpayer database program capable of processing 1040EZ forms for the first time, Government Computer News reported. "For the first time in 40 years, the IRS is processing returns and issuing refunds on a new computer system," said IRS Commissioner Mark Everson, according to GCN. "While long overdue, this is an important first step in modernizing our return processing technologies."

A Welcome Win for EDS

EDS's performance on the massive Navy-Marine Corps Intranet project has been in the spotlight over the past year, as the program incurs cost-overruns and complaints from some quarters about the system's performance (See my June 24 Government IT Review for more background.) But the company has received a welcome contracting win: EDS stands to reap some $93 million over the next decade by offering employee travel services to the Agriculture Department, Washington Technology reported. "The Agriculture contract is the first under the E-Travel vehicle for EDS. According to EDS officials, the department is the largest agency to make an E-Travel award to date. EDS's e-travel system, called FedTraveler.com, handles planning and authorizing of travel, reservation and fulfillment services, approval of travel expenses, and reporting and auditing of travel expenses," the article said.

EDS is scheduled to report its second-quarter earnings next Wednesday.

E-mail government IT tips, comments and links to cindyDOTwebbATwashingtonpost.com

© 2004 TechNews.com

July 24, 2004 at 01:41 PM in Internet evolution | Permalink | TrackBack (24) | Top of page | Blog Home

In a Wireless World, Hearing Is Believing

washingtonpost.com: In a Wireless World, Hearing Is Believing

By Rob Pegoraro

Sunday, July 25, 2004; Page F06
The appeal of a wireless media receiver -- a box plugged into your stereo to play the music saved on your computer -- got a simple demonstration after I recently moved. I had dozens of boxes to open and unpack and needed a soundtrack for the work, but all the CDs were still imprisoned in cardboard.

Fortunately, I had already set up the stereo, the computers and the WiFi access point. All I had to do was plug in two media receivers that I'd been testing, Apple's AirPort Express and Slim Devices' Squeezebox, and I had my digital-music library blasting through the speakers.

But unlike my earlier experiences with this type of hardware, these two devices actually worked, more or less, out of the box. The AirPort Express and the Squeezebox have their faults, but they get most of the basic tasks done; if you could just combine their best parts, the results would be close to perfect.

I tried the Squeezebox first, a $279 black box with a small antenna for its 802.11b WiFi receiver, plus analog and digital audio-output jacks to connect to a stereo. (A $199 version supports only wired networks.)

Setting it up involved installing its SlimServer software on my computers -- it runs on Win 98 or newer, Mac OS X and Linux and is also available as source code for use on other platforms. After this software is loaded, you'll need to let it index your music collection; when you add or remove a song from a computer, you must repeat this chore, since SlimServer can't track those changes automatically.

Then I used the Squeezebox's remote to point it to my wireless network (a relatively straightforward process, except for the irritating labor of typing out a 26-character WiFi encryption key on the remote's numeric keypad).

The Squeezebox never dropped a connection when networked to a Mac desktop. But it failed with numbing regularity when paired with a Windows laptop, even when I moved both devices to a friend's wireless network.

I've heard from enough happy Squeezebox owners to think that this problem must be rare. Still, you'd do well to give this thing a thorough test before its vendor's 30-day money-back guarantee expires.

The Squeezebox plays MP3 and Windows Media Audio music files, as well as the MP3 streams broadcast by many Web radio stations. The SlimServer software can also read AAC files created by Apple's iTunes program, but since it sends them to a Squeezebox as bandwidth-hogging uncompressed audio, don't expect reliable play over WiFi.

Slim Devices' system doesn't accept song downloads bought at such stores as iTunes, Wal-Mart or Napster. This isn't Slim Devices' fault -- this Mountain View, Calif., firm (www.slimdevices.com) has yet to get the necessary programming information from Apple and Microsoft, the creators of those sites' copy-controlled music formats -- but it's still a major hindrance.

While Slim Devices works on this point, it ought to address a few other issues. The Squeezebox crashed a few times, requiring a forced reboot. Its bright, two-line LED display is impossible to miss but difficult to read, with characters maybe half the size of those on a DVD player's readout. And the way to view the artist and album of a song, instead of just its title, is less than obvious (pressing the "Now Playing" button won't do the trick).

I had no such problem with Apple's AirPort Express -- it includes neither a status display nor a remote control. I had thought those omissions would negate the utility of this tiny gadget, but after a week of living with it I've changed my mind.

The beauty of the AirPort Express -- $129, plus a $39 bundle of analog and digital audio cables -- is its slick integration with Apple's iTunes software. Installing this device can be tricky: Its setup software works only on Mac OS X 10.3, Win 2000 or Win XP, and XP users may need to download a semi-obscure Microsoft WiFi software update. But once it's on your WiFi network, there's no other program to run; just select your AirPort Express from a drop-down menu in the iTunes window to send your songs to the stereo.

You can do this with your computer's MP3 and AAC files -- including purchases from the iTunes Music Store -- and even those on other computers at home, if you employ iTunes' music-sharing feature to broadcast their collections across your network. The AirPort Express also plays MP3 Web-radio streams. And its fast 802.11g WiFi receiver never dropped a connection, even when I tried to jam the wireless network with massive file downloads.

(Without the audio-cable bundle, the AirPort Express can serve as a tiny WiFi access point or extend the range of Apple's AirPort Extreme WiFi routers.)

But, alas, there is that no-remote-control thing: Unless you have a deep set of playlists or Web-radio picks, or you don't mind leaving a laptop in the living room full time, you'll get a lot of exercise running over to the computer each time you cue up a different set of songs.

Apple says it's aware of this; Greg Joswiak, the company's vice president of hardware product marketing, even went so far as to note that the AirPort Express's USB port would be a convenient way to add this missing capability.

Knowing how obvious this feature is, and how relatively simple it should be to implement, it doesn't seem like any real risk to buy an AirPort Express now. But it may be a real pain -- this device has been on sale for only a week, but it has already sold out through much of next month.

Living with technology, or trying to? E-mail Rob Pegoraro at rob@twp.com.

© 2004 The Washington Post Company

July 24, 2004 at 01:37 PM in Wireless | Permalink | TrackBack (30) | Top of page | Blog Home

Beijing blocks overseas websites, shuts local ones in "war" against porn

Beijing blocks overseas websites, shuts local ones in "war" against porn

BEIJING, (AFP) - Beijing has blocked 988 overseas websites and shut down 67 local ones as part of a nationwide campaign to weed out pornographic content on the Internet.
The websites shut down during the July 6-21 special operation included Hong Kong websites. The popular search tool Google was also inaccessible this week.

So far, the Chinese capital has arrested 13 people suspected of operating the websites, the Beijing Youth Daily said.

Police received 10,660 tips from the public, a majority of which were complaints about inappropriate sexual content on the Internet. Other complaints involved pornographic mobile phone short messages, the report said.

The central Chinese government this month launched a "people's war" against pornography on the Internet, giving websites a deadline until September to rid themselves of indecent content or lose their license to publish decent material, such as news.

Officials have so far identified 500 websites across China that carry pornographic pictures and film clips, the China Daily reported.

Hundreds of websites, including the most influential ones, publish "indecent or even pornographic content" to attract users, the Xinhua news agency had reported.

The crackdown on Internet porn reflects two top concerns of the Chinese leadership, about the ethical standards of the young and about the subversive potential of the Internet.

With 80 million registered users in China, the government is finding it increasingly difficult to control the Internet, but that has not stopped it from trying.

State media reported last month that the government had suspended the registration of new Internet cafes, following a three-month sweep in which it closed 16,000 existing ones.

July 24, 2004 at 01:36 PM in Internet evolution | Permalink | TrackBack (9) | Top of page | Blog Home

July 23, 2004

Report Faults Cyber-Security

Yahoo! News - Report Faults Cyber-Security

Fri Jul 23,10:39 AM By Jonathan Krim, Washington Post Staff Writer
The Department of Homeland Security's efforts to battle computer-network and Internet attacks by hackers and other cyber-criminals suffer from a lack of coordination, poor communication and a failure to set priorities, according to an internal report released yesterday.

The report, by the department's inspector general, said the shortcomings of the National Cyber Security Division leave the country vulnerable to more than mere inconvenience to businesses and consumers.

The division "must address these issues to reduce the risk that the critical infrastructure may fail due to cyber attacks," the report said. "The resulting widespread disruption of essential services after a cyber attack could delay the notification of emergency services, damage our economy and put public safety at risk."

Among the report's recommendations is that the division develop a process for overseeing efforts of federal, state and local governments to better protect their systems.

The report cited progress in some areas since the division was formed in June 2003 as part of the federal reorganization that created the DHS. It praised the creation of a cyber-security coordination center called US-CERT, and an alert system that includes a Web site and automated notification to tech-security professionals of security threats making their way through cyberspace.

But the report comes at a time of heightened frustration among technology company executives and members of Congress that cyber-security is not getting enough attention and is poorly understood by some senior department officials. The issue is not just the possibility of a broad cyber-terrorist attack, those people say, but the daily attacks that are costing U.S. businesses and computer users hundreds of millions of dollars a year and countless hours of lost productivity.

"If we are at war, as Bush and [Homeland Security Secretary Tom] Ridge say we are . . . based on this report, we are clearly not on a war footing on cyber-security, or in DHS," said F. William Conner, chief executive of Entrust Inc., a Texas cyber-security company. "I read about the progress, but they've got the wrong measuring stick. Progress has to be measured against external risk."

Especially irksome to some executives and security experts is that the department has not adopted some of the practices they argue that government agencies, companies and organizations should employ to reduce the risk of cyber-attacks.

"The department as a whole isn't leading by example," said Alan Paller, head of the SANS Institute in Bethesda, a computer security research group. Paller, who praises some of the cyber division's work, said the department should take the lead in using its buying power to demand that software vendors make their products more secure. Paller said the agency is not doing so.

Paul Kurtz, head of the recently formed Computer Security Industry Alliance, a corporate trade group, said the HS was reluctant to participate in a cyber-security exercise sponsored by Dartmouth University, and did so only after pressure from the White House.

Kurtz added that follow-through has been poor on the government's highly touted public-private partnership with industry to address security issues. That effort was part of a White House directive on cyberspace that mandated tighter controls for federal agencies but called for a voluntary plan for the private sector. After a meeting late last year, the partnership yielded five major reports and dozens of recommendations, but little in the way of further action.

"Not enough is happening" even to fulfill the Bush directive, said Rep. Zoe Lofgren (D-Calif)., who represents Silicon Valley.

To try to increase attention on cyber-security, several industry groups are supporting a bill co-sponsored by Lofgren and Rep. William M. "Mac" Thornberry (R-Tex.) that would elevate the director of the cyber division, currently Amit Yoran, to assistant secretary with more direct access to top DHS officials.

But Robert P. Liscouski, assistant secretary for information analysis and infrastructure protection, who oversees the Cyber Security Division, said the notion of separating attention on cyber-threats from overall infrastructure protection would be bad policy.

"Cyber . . . is a very key priority for us," said Liscouski, a former police officer and Coca-Cola Co. security executive. But elevating it to special status "is a step back," he said, arguing that physical and cyber-security are closely connected.

Thornberry said that philosophy is "kind of a dumbing down of our cyber-security efforts. Cyber has some unique features."

Liscouski said he also has to focus on where the greatest threat lies and that overall he thinks the division is making progress.

"The fact that I'm not on the bully pulpit is more a reflection of where our threat is," he said, referring to tech industry's desire that the Homeland Security Department take a lead role in pushing companies to make cyber-security a top priority. "The dominant threat has been a physical threat."

He acknowledged the department's initial reluctance to participate in the Dartmouth exercise because the division was still organizing itself and might not have been able to "engage in a meaningful way." But he said it was highly valuable in the end.

Industry executives say that if, as the administration has said, it wants to rely on their expertise to help formulate cyber-security policy, it should heed their advice now.

Harris N. Miller, head of the Information Technology Association of America, said his group "continues to be concerned that DHS does not have adequate resources devoted to cyber-security and that the cyber-security head does not have adequate visibility within the bureaucracy. Improvements are coming, but slowly. The question is whether the nation can afford to wait."

July 23, 2004 at 10:48 PM in Security | Permalink | TrackBack (20) | Top of page | Blog Home

Survey: ID theft costing UK billions in taxes

Survey: ID theft costing UK billions in taxes - ZDNet UK News

ZDNet UK
July 14, 2004, 17:10 BST
Public sector organisations are losing billions each year due to ID theft, according to a survey by risk management firm SPSS

Billions of pounds of taxpayers' money is stolen each year through ID theft and other fraudulent activities, according to a survey of public sector security analysts and IT managers.

The survey, which was conducted by risk management consultants SPSS, found that only 1 percent of fraudulent activity in the public sector is being detected, which means billions of pounds could be saved each year by tightening up prevention and detection techniques.

Noel Coloe, general manager of SPSS UK, said that public sector organisations need to protect themselves from both internal and external threats.

"In the commercial sector, the increasing prevalence of fraud incidents -- such as phishing scams -- shows all too clearly how criminals will continue to take advantage of technology developments for illegal gain. This survey reveals how fraudsters are apparently also infiltrating the public sector to their advantage," Coloe said.

According to the survey, employees are responsible for around one-quarter of all fraud, but the worrying figure is that 99 percent of fraud in the public sector is never detected.

The government has been fast-tracking its scheme to roll out ID cards, which it said will be used to fight terrorism, but the SPSS survey recognises that ID cards could help combat one of the most common uses for ID theft -- benefit fraud.

"Illegitimate claims for benefits cost the taxpayer around £2bn per year. Given the increasing pressure on Whitehall to improve efficiency and local government to make budgets work harder, the public sector must act immediately to improve detection and prevention of fraud," said Coloe.

July 23, 2004 at 04:01 PM in Phishing & identity theft | Permalink | TrackBack (12) | Top of page | Blog Home

Parking 'smart card' gets overhaul

Yahoo! News - Parking 'smart card' gets overhaul

Fri Jul 23, 4:53 AM ET

By L. Stuart Ditzen, Inquirer Staff Writer
The Philadelphia Parking Authority's "smart card" program, introduced in October as a coin-free method for motorists to buy time on parking meters, has suffered two major glitches leading to lower-than-expected card sales.

But Richard D. Dickson Jr., director of on-street parking for the authority, said the problems are being fixed, and a new marketing program to encourage use of smart cards is to begin next month.

"We believe that once we get these glitches worked out, 40 to 50 percent of our meter revenue will come from smart cards," Dickson said.

Currently, smart cards account for only 1.5 percent of the city's meter revenue, or $192,000 of $12.3 million over the last nine months.

July 23, 2004 at 01:10 PM in Smart Cards | Permalink | TrackBack (19) | Top of page | Blog Home

Nationwide to invest over £300m in retail network

finextra news: Nationwide to invest over £300m in retail network

22 July 2004 - The UK's Nationwide Building Society is to spend over £300m on revamping branches and improving Internet and telephone banking services over the next six years.

Under the initiative, all of the society's branches and agencies will be refurbished. In the first two years, 100 branches will undergo major refurbishments, while a further 85 branches and agencies will be upgraded.

Nationwide says it will also place more Internet terminals in branches to enable members to conduct transactions online and get help from staff. New appointment and call-management systems will be installed in branches and new technology will be rolled out across the society's call centres to speed up service. The company will also invest in staff training.

Earlier this year, Nationwide announced plans for a substantial investment in its UK call centre operations, in contrast to many of its competitors which are shifting work to overseas centres.

Commenting on the £600m investment, Philip Williamson, chief executive, Nationwide, says: "While others are taking their service proposition abroad, or encouraging people to use the Internet instead of branches, we are investing in high streets across the country and in our UK call centres.

"In addition, those who prefer to do business online will benefit from improvements to our Internet bank and from our plans to have Internet terminals in more branches."

Williams says the investment programme is designed to improve ease of access for customers, however they choose to do business.

July 23, 2004 at 08:07 AM in Financial Services | Permalink | TrackBack (8) | Top of page | Blog Home

July 22, 2004

Technorati tracks 3 million blogs

Sifry's Alerts: Technorati tracks 3 million blogs

At 6:38PM PST on July 6, 2004, Technorati tracked its 3 millionth weblog. The growth of the service has been pretty remarkable - here's some stats: We're currently seeing anywhere from 8,000-17,000 new weblogs created every single day.

July 22, 2004 at 10:42 PM in Blogging & feeds | Permalink | TrackBack (27) | Top of page | Blog Home

Japanese turn cell phones into wallets

CANOE -- CNEWS - Tech News: Japanese turn cell phones into wallets

TOKYO (AP) - As it is, you don't leave home without it. In a world of cashless payment, why not simply make your cell phone a wallet?

Japan has long been phasing out the hassle of coins and bills with microchip-laden "smart cards," which let people make electronic payments for everything from lunch to the daily commute.

But even smart cards could be on their way out, their plastic presence overtaken by virtual-wallet technology now available in the everyday cell phone.

Other countries, led by South Korea, already have so-called mobile commerce payment schemes in place that let people punch keys on their cell phones so that the devices trigger transactions.

But a series of phones going on sale this summer in Japan, for use on NTT DoCoMo's wireless network, are the world's first with an embedded computer chip that you can fill up with electronic cash.

To pay, you simply wave your cell phone within a few centimetres of a special display found in stores, restaurants and vending machines around Japan. A fairy-like tinkling sound means your purchase is being deducted from the embedded chip using radio-frequency ID technology.

It's instantaneous.

Unlike infrared or other mobile payment schemes that require clicks on the handset, you don't even need to open your clamshell-shaped phone.

It's an idea that makes sense, given that almost every Japanese has a cell phone and relies on it so much that being stranded in the street without one almost causes panic. There are 81.5 million cell phones in the country of 127 million people.

For the wallet phone tech to really take off, stores, theatres and restaurants that accept electronic payments need to become more widespread. They total around 9,000 in Japan so far and the number is quickly growing.

Computer experts have suggested hackers could develop a way to pickpocket cell phone wallets merely by getting close to people's handsets. That hasn't happened - yet.

Another concern is a telecom company - or a government - could find out too much about your spending proclivities and your physical movements. But other features on Japan's richly endowed cell phones offer marketers plenty of information on consuming habits as it is: almost all phones have e-mail and Internet connections for restaurant searches, ringtone downloads, news and weather.

One Japanese airline lets passengers use the wallet phone to speed up check-ins at airports and next year you'll be able to use the phones to begin paying for train rides and video rentals.

Later this year, Japanese credit-card company JCB Corp. plans to offer a service that will let corporate clients use chip-embedded phones as electronic keys to get into office buildings.

And if you lose your wallet phone?

Well, DoCoMo can lock it. Which means no one else can use it for calls. And no one else would be able to add more money to the cash-dispensing chip.

But whatever money is stored on the phone is like a virtual wad of cash.

July 22, 2004 at 09:09 PM in Financial Services | Permalink | TrackBack (9) | Top of page | Blog Home

Struggling for New Role, AT&T to Stop Marketing to Consumers

The New York Times > Business > Struggling for New Role, AT&T to Stop Marketing to Consumers

By KEN BELSON
Published: July 22, 2004 AT&T Corp., which for more than a century has been synonymous with phone service in the American home, announced today that it will no longer market it services to consumers. The move comes as the venerable company struggles to find a role in the volatile and competitive telecommunications industry that was created from the breakup of the AT&T monopoly in 1984.

The announcement is setback for one of the most significant companies in American corporate history and one of the nation's most storied brands. The company, once known as Ma Bell, in one form or another has been at the center of phone service in America since Alexander Graham Bell invented the telephone in 1875.

In the two decades since AT&T lost its exclusive franchise to sell phone service, the company has moved in and out of businesses at a frenetic pace, trying everything from selling computers to providing cable and wireless services, often with dismal results. While it has maintained a big business in long-distance calling, the collapse of the telecommunications bubble four years ago has hastened its decline as the cost of phone calls have plummeted.

The company made the decision to abandon the consumer market after the government in June reversed rules that helped AT&T provide local phone service at subsidized rates. Without those subsidies, AT&T said it can no longer offer affordable local service to consumers, who are more and more buying packages of phone, data and video services from cable, satellite and phone carriers.

"Whether I'd call it is strategic, financial or practical or pragmatic, the fact is we can read," said David Dorman, AT&T's chairman and chief executive. "American households are buying bundles, and these bundles are getting more complex and sophisticated, and we have to face the fact that without a local component, a basic component, were at a disadvantage."

AT&T will continue selling telephone and data services to corporate users, a business that already generates nearly three-quarters of its revenue. As the battle for the consumer market intensified, the company has tried to reposition itself as the telecommunications provider of choice to corporate America. But this market, too, remains in flux as rivals like MCI and Sprint try to grab big-name customers that demand ever-cheaper service.

Still, AT&T's retreat from the consumer market is a startling admission of defeat for a company that is still the market leader in long distance calling. It still serves about 35 million consumer customers, but is third behind Verizon Communications and SBC Communications. Though AT&T remains a well-known name with American households, it has had a hard time competing with other phone carriers, cable companies and cellular providers, all of which are selling phone service.

AT&T customers are not likely to be immediately affected by today's decision, and the company said it would not turn away new customers who ask for its service. But the company will stop trying to attract new customers or to retain those who wish to defect to other providers.

Additionally, the company will offer Internet phone service to consumers, though it did not say whether it would aggressively pursue that market.

AT&T hopes to build up its corporate business by using money generated by its consumer operations and spending less on advertising, direct marketing and others costs associated with acquiring retail customers. However, industry analysts say AT&T will only be able to harvest these savings for a year or two because the consumer business is deteriorating so quickly.

"It was a matter time before they would have more steady erosion on the consumer side," said Michael Weaver, a telecommunications analyst at Fitch Ratings, which cut its credit rating for AT&T's debt to BB+, a speculative rating, after today's announcement. "It's kind of a race."

That erosion was starkly apparent in the company's second-quarter results, which were also announced today. AT&T's revenue in the period plunged 13.2 percent to $7.6 billion, with sales from the corporate group sliding 12.7 percent compared to the same quarter a year ago. Sales in the consumer group fell 14.6 percent.

The company overall earned $108 million, or 14 cents per share in the quarter, 80 percent lower than in the second quarter of 2003.

In an ironic twist, AT&T's decision to leave the consumer market makes it more likely that the four dominant local phone providers — Verizon, SBC, Bell South and Qwest — can reassert their increasing market power. With the Telecommunications Act of 1996, these so-called Baby Bells were allowed to enter the long distance market and compete head-on with their former parent, AT&T.

July 22, 2004 at 07:26 PM in Telecommunications | Permalink | TrackBack (3) | Top of page | Blog Home

Internet Extortion Foiled

Internet Extortion Foiled

Thursday, July 22, 2004. Page 3.
Internet Extortion Foiled
By Bernhard Warner and Oliver Bullough
Reuters Hard-pressed police forces have scored a significant victory in the battle against Internet crime by smashing a Russian extortion racket preying on British businesses and betting web sites.

A multinational investigation culminated with the arrest this week of the suspected ringleaders -- three men aged between 21 and 24, police said Wednesday. They were held after raids in St. Petersburg and the Saratov and Stavropol regions. Further arrests may be pending.

Police said the gang had unleashed digital attacks over the Internet on dozens of occasions.

"These were the main people behind the organization. They were coordinating it and laundering the money," said a source at the British Embassy in Moscow.

They are accused of threatening to shut businesses down with a massive barrage of data -- a denial-of-service attack -- if they did not pay up. The gang often demanded sums of $10,000 or $20,000 from owners of betting web sites and struck on the eve of big sporting events like Britain's Grand National horse race.

Protection rackets have sprung up over the past few years preying on e-commerce businesses of all sizes.

Investigators around the globe have been building a profile of the culprits -- typically, crooked programmers from Eastern Europe. But until now they have had little luck in tracking them.

The suspects are thought to be part of a larger group. Last November, police arrested 10 members of the group in Latvia -- a breakthrough that eventually led to this week's swoops, police said.

Following a complex trail of wire transfers and e-mail correspondence, police tracked the trio to their hometowns. One, a 21-year-old from the Saratov region, was a part-time student who worked in a computer shop.

"Two of the suspects were technically proficient. The third was the money man," said a spokeswoman from Britain's National Hi-Tech Crime Unit.

The three men could be charged under new federal computer crime and extortion legislation, officials said. The British police spokeswoman said it was unlikely Britain would seek extradition.

July 22, 2004 at 07:22 PM in Online crime | Permalink | TrackBack (29) | Top of page | Blog Home

Microsoft to fund anti-phishing group

Microsoft to fund anti-phishing group

By Dinesh C. Sharma, CNET News.com
The software giant will donate money and make a full-time analyst available to an agency dedicated to fighting phishing

Microsoft on Wednesday announced that it will donate $46,000 (£24,981) worth of software to an agency fighting phishing and will make a full-time analyst available to the group.

The recipient of these contributions is the National Cyber-Forensics & Training Alliance, an organisation set up jointly by the FBI, the National White Collar Crime Centre, Carnegie Mellon University and West Virginia University.

"It is basically a place to all get together to share information about consumer fraud and phishing," said Stirling McBride, a senior investigator in Microsoft's Internet Safety Enforcement group, the team from which the full-time analyst will be drawn. "Increasingly, we are recognising that cybercrime is not a problem that we are going to solve unilaterally, and law enforcement has come to that same conclusion."

The Microsoft analyst will help the alliance make sense of data related to Internet crime, including violations of the federal Can-Spam Act, as well as phishing, the software giant said. Additionally, the analyst will work with the group to make sure that law enforcement has timely industry data and to help design training programmes for police.

The alliance was founded as part of an effort to build a collaborative environment for fighting Internet crime. In a statement, Microsoft said that such efforts are important.

"The tactics of spammers, hackers and other online con artists are becoming increasingly sophisticated, and as a company, Microsoft is dedicating resources to help law enforcement find those responsible for harming consumers," Nancy Anderson, deputy general counsel for the company, said in a statement.

Phishing has become a significant problem for financial institutions. The practice involves sending phoney emails to customers of banks and other institutions, asking them to update their personal security information. In this manner, phishers steal bank account details, credit card information and Social Security numbers, and they use this data to defraud businesses and their customers.

As incidents of spam, email attacks and phishing increase in number, technology companies are stepping up their efforts to educate consumers, as well as devise ways of preventing such incidents.

Dell has announced an education programme for its customers, and Microsoft is running a cash prize programme to reward people for providing information about writers of malicious software, such as Sasser.

July 22, 2004 at 07:15 PM in Phishing & identity theft | Permalink | TrackBack (12) | Top of page | Blog Home

Rogers to bundle Wi-Fi hotspot access with cell plans

ITBusiness.ca

7/22/2004 5:00:00 PM - Prepare to say goodbye to subsidized handsets, exec says
by Greg Meckbach
TORONTO - Rogers Wireless Inc., which announced its EDGE high-speed data service Tuesday, plans to bundle Wireless Fidelity (Wi-Fi) hotspot access with its personal communications service (PCS) rate plans.

The Toronto-based carrier has not announced pricing plan for the bundles, nor has it set a launch date, but it's unlikely it will be available before 2005, said David Robinson, Rogers Wireless' vice-president of business development.

Combining Wi-Fi with its general packet radio services (GPRS) and Enhanced Data Rates for GPRS Evolution (EDGE) would allow Rogers to offer "3G-like services," Robinson said during a keynote address at the Wireless & Mobile WorldExpo, held Wednesday and Thursday at the National Trade Center.

He was referring to third-generation cellular services, which are supposed to allow transfer rates of 2 Megabits per second (Mbps) to fixed locations and 384 Kilobits per second (Kbps) to mobile users.

EDGE allows data transfer rates of up to 200 Kilobits per second (Kbps), about three to four times the speed of GPRS, which is comparable to dial-up Internet service.

Wi-Fi hot spots, which connect access points to wireless PC cards using IEEE 802.11 standards, are available in public places such as coffee shops, airport terminals, train stations and hotels. They typically let users connect to the Internet at speeds of 1 Megabit per second (Mbps) or better.

But the range of 802.11 is limited to 100 metres. As a result, customers who want network access outside of hotspots need a wireless plan such as Rogers' EDGE, GPRS (available in Canada from Rogers and Microcell Telecommunications) or 1XRTT (available in Canada from Telus Mobility and Bell Mobility).

But mobile workers who want to use Wi-Fi hot spots typically have to sign up for a given period of time with the individual operator and pay through their credit cards.

Robinson said Rogers wants to let customers sign up for Wi-Fi access from hot spots operated by its partners as part of a PCS plan, meaning they would not have to pay hotspot operators separately.

Wai-Sing Lee, an industry analyst for Frost & Sullivan Canada, said a bundled package would discourage subscribers from canceling their Rogers PCS plans and signing up with rival carriers.

"It does make sense for them to bundle everything, because you basically lock in the customer and there's less chance of the customer straying if they find a better service elsewhere."

But he added a recent Frost & Sullivan online survey of U.S. customers indicated most would rather pay for Wi-Fi service separately.

"I'm just really curious as to how much more a person will have to pay for this," he said. "I'd love to know what their footprint's going to be, what their pricing's going to be like and how convenient it's going to be. There are a lot of unknowns here."

Robinson said Rogers is not disclosing details like pricing yet.

Last March, Rogers signed a co-branding agreement with Bell Mobility, Microcell, Telus Mobility, which would allow all four carriers' customers to access hotspots operated by all carriers or their partners. For example, Rogers customers would be able to access a Bell Mobility hotspots as if they were accessing Rogers hotspots. The carriers plan to allow subscribers to roam this fall.

Allan Rosenhek, Telus Mobility's director of business development, said his company "will likely" offer a bundled Wi-Fi and PCS service.

Robinson said during the next six months, Rogers will work on resolving the technical issues involved in both the Wi-Fi networks and the back-end billing services.

Wi-Fi service is a "best efforts" technology normally used by workers with above-average technical knowledge, Robinson said, noting the 802.11 standard was originally designed for wireless local-area networks, rather than public access.

"It was designed to extend (the range of) your blue (Ethernet) cable by 300 feet," he said. "It was never intended for my computer to plug into someone else's network and to do it securely."

During his keynote address, he suggested Rogers would soon charge more for handsets. Carriers typically subsidize customers' handsets, reselling them to customers at a loss of $100 or more per unit.

This means if 1.5 million customers sign up or buy new handsets this year, Rogers profit drops by $150 million.

"The faster we can run away from this (business model), the faster we add $150 million to the bottom line," Robinson said.

July 22, 2004 at 07:02 PM in Telecommunications | Permalink | TrackBack (23) | Top of page | Blog Home

Japanese Carrier Makes Cell Phone Wallet

Yahoo! News - Japanese Carrier Makes Cell Phone Wallet

Wed Jul 21, 9:05 PM
By YURI KAGEYAMA, AP Business Writer
TOKYO - As it is, you don't leave home without it. In a world of cashless payment, why not simply make your cell phone a wallet? Japan has long been phasing out the hassle of coins and bills with microchip-laden "smart cards," which let people make electronic payments for everything from lunch to the daily commute.

But even smart cards could be on their way out, their plastic presence overtaken by virtual-wallet technology now available in the everyday cell phone.

Other nations, led by South Korea (news - web sites), already have so-called mobile commerce payment schemes in place that let people punch keys on their cell phones so that the devices trigger transactions.

But a series of phones going on sale this summer in Japan, for use on NTT DoCoMo (news - web sites)'s wireless network, are the world's first with an embedded computer chip that you can fill up with electronic cash.

The wireless company loaned me a P506iC handset from Matsushita Electric Industrial Co. and I was in business. Well, almost.

First I had to find a machine that's used to stoke smart cards with cash. They can be found in some convenience stores and offices in Japan. You place the phone in a special slot and slip bills into the machine. The phones have a 50,000-yen ($450) limit.

Now you can spend.

To pay you simply wave your cell phone within a few inches of a special display found in stores, restaurants and vending machines around Japan. A fairy-like tinkling sound means your purchase is being deducted from the embedded chip using radio-frequency ID technology.

It's instantaneous.

Unlike infrared or other mobile payment schemes that require clicks on the handset, you don't even need to open your clamshell-shaped phone, the style of choice here.

It's rather fun to pay for things this way.

It's also an idea that makes sense, given that almost every Japanese has a cell phone and relies on it so much that being stranded in the street without one almost causes panic. There are 81.5 million cell phones in this nation of 127 million people.

For the wallet phone tech to really take off, stores, theaters and restaurants that accept electronic payments need to become more widespread. They total around 9,000 in Japan so far, and the number is quickly growing.

To buy a diet Pepsi from a vending machine, I pushed an "electronic payment" button on the machine and pushed another button to pick the soda. When a display the size of a small greeting card lit up with the price, I put my phone next to the display.

Shazaam. The soda pop rolled out, and the display blinked with the amount of money left in the phone.

To pay for my fried-rice lunch at a restaurant in our office building, I brought my bill to the register and told the clerk I wanted to pay electronically. When he rang it up, the little display lit up with the price. I just flashed my phone.

I also played Virtua Fighter arcade games at one of the two Sega amusement centers in Japan where the phone payments work. And I bought gum and bottled tea at a convenience store with the phone.

Like millions of other Japanese, I have a few smart cards. One, the Suica, works as my commuter train pass. The other, an Edy card, works as a wallet at some stores and its "cash" machines are the ones NTT DoCoMo uses for its phones.

I carry my Suica practically every day. But I don't always remember my Edy. So the P506iC wallet phone was handy, indeed. After all, what reporter is without a cell phone these days?

Computer experts have suggested that hackers could develop a way to pickpocket cell phone wallets merely by getting close to people's handsets. That hasn't happened — yet.

Another concern is that a telecom company — or a government — could find out too much about your spending proclivities and your physical movements. But other features on Japan's richly endowed cell phones offer marketers plenty of information on consuming habits as it is: Almost all phones have e-mail and Internet connections for restaurant searches, ringtone downloads, news and weather.

One Japanese airline lets passengers use the wallet phone to speed up check-ins at airports and next year you'll be able to use the phones to begin paying for train rides and video rentals.

Later this year, Japanese credit-card company JCB Corp. plans to offer a service that will let corporate clients use chip-embedded phones as electronic keys to get into office buildings.

And if you lose your wallet phone?

Well, DoCoMo can lock it. Which means no one else can use it for calls. And no one else would be able to add more money to the cash-dispensing chip.

But whatever money is stored on the phone is like a virtual wad of cash. The clerk at the DoCoMo store repeatedly told me not to put any more money into the phone than I could afford to lose.

July 22, 2004 at 01:25 PM in Telecommunications | Permalink | TrackBack (30) | Top of page | Blog Home

Digital TV switchover delayed

Digital TV switchover delayed

LONDON (Reuters) - Television watchers will not be forced to switch over to a digital signal until 2012, two years later than originally planned by the government.
"While the broadcasters have not reached a full consensus on the optimum timetable, some -- including the BBC -- have suggested that 2012 may be the most appropriate date for the completion of switchover," Culture Secretary Tessa Jowell told Parliament on Thursday.

Digital television providers, which offer a wider array of programming beyond the five channels available with an antenna, have been stepping up their efforts to lure new customers in anticipation of the analogue switch-off.

Some regions could see their analogue signals of BBC, ITV, Channel 4 and five, turned off as early as 2007, however, as the switchover is gradually rolled out, she said. The government originally had hoped to finish the switchover by 2010.

The BBC, the publicly funded broadcaster, said last month it would not be against an earlier switchover to digital, but suggested that 2010 would be a "stretch". It has been considering a stand-alone free digital satellite service or partnering BSkyB on its recently announced free venture.

Jowell also served notice that televisions should be marked with dates to indicate when their usefulness will run out as part of an effort to encourage the purchase of digital sets.

"We are therefore engaged with retailers and manufacturers -- who also need to plan ahead -- to see that good clear information is given to consumers currently planning to buy a television or an item of recording equipment," Jowell said.

She asked media regulator Ofcom to devise a plan to ensure that help is provided to "vulnerable consumers", such as the elderly, who may be unable to afford digital upgrades.

"The government's final endorsement of a timetable will be subject to being satisfied that adequate measures are in place to meet this objective," she said.

About half of households already have digital TV in some form. Freeview, a digital service without subscription fees, has boomed, reaching 3.5 million households in less than two years.

Digital satellite service from pay-TV provider BSkyB has about 7 million subscribers, and cable providers NTL and Telewest have another 2.4 million digital viewers.

July 22, 2004 at 01:22 PM in Telecommunications | Permalink | TrackBack (4) | Top of page | Blog Home

Movie, software industries shut out of music piracy fight

TheStar.com - Movie, software industries shut out of music piracy fight

- Record industry to go it alone
- Groups sought intervener status

TYLER HAMILTON
TECHNOLOGY REPORTER
A federal judge has denied associations from the movie and software industries from getting involved in the recording industry's courtroom efforts to crack down on Internet music piracy.

The Canadian Recording Industry Association — a lobby group representing the country's major record labels — is upset over a controversial March 31 decision from the federal court that sheltered the identities of 29 alleged music pirates.

Justice Konrad von Finckenstein ruled that making songs available for sharing over the Internet is not illegal under Canadian copyright law, an opinion that sent shockwaves through the broader intellectual-property community.

The recording association filed an appeal, arguing earlier this month that the judge made "sweeping" errors regarding copyright law and rules of evidence. Five entertainment and software groups, including the Canadian Alliance Against Software Theft, the U.S.-based Business Software Alliance, and the Canadian Motion Picture Distributors Association, applied to intervene in the appeal but were denied the motion Monday, court documents show.

"The questions primarily concern copyright law as applied to recorded music, not to motion pictures or software," wrote Justice John Maxwell Evans from the Federal Court of Appeal.

The involvement of the movie and software industries could have bolstered the recording industry's case by expanding the scope of arguments and revealing a piracy epidemic that isn't confined to digital music.

"The broader representation might have been helpful, but we accept the judge's decision," said Brian Robertson, president of the Canadian Recording Industry Association.

Bob Kruger, vice-president of enforcement for the Business Software Alliance, said he's "absolutely disappointed" and mystified that the court wouldn't want the software industry's perspective.

"I can't see how it would hurt the court to receive this information," he said.

"Especially since some of the language that was used in the (original court) opinion suggests that at least one or two aspects of it has legal relevance beyond music."

The fact the earlier court decision could affect other forms of digital and intellectual property, such as movies, was why Canada's motion-picture distributors sought to intervene.

"We wanted clarification that von Finckenstein's decision did not apply to all recorded works," said Susan Peacock, vice-president of the motion picture association.

July 22, 2004 at 07:47 AM in Business Models | Permalink | TrackBack (13) | Top of page | Blog Home

NHTCU nets phishing gang

finextra news: NHTCU nets phishing gang

06 May 2004 - The UK's National Hi-Tech Crime Unit (NHTCU) has arrested 12 people suspected of conning online banking customers out of 'hundreds of thousands of pounds' through phishing scams.

According to press reports, the suspects, who are all Eastern European, were arrested at addresses in London and Ramsgate in Kent. Police seized computers, passports, chequebooks and bank cards along with a quantity of cocaine.

Police suspect the twelve were recruited by organised crime syndicates in Russia and used as 'mules' to transfer stolen funds out of the country,.

The arrest is the second in a week by the NHTCU for phishing, in which online banking customers are deceived into entering security details at bogus Web sites. Last week the unit arrested a 21-year old man in connection with a scam which tried to trick customers of Web bank Smile into revealing online passwords.

The arrests come as anti-spam outfit Brightmail reports a ten-fold increase in the volume of fraudulent e-mails over the past nine months. The company saw more than 3.1 billion fraudulent spam e-mails last month - five per cent of all Internet e-mail worldwide. In August 2003, Brightmail recorded 300 million fraudulent spams.

July 22, 2004 at 07:38 AM in Phishing & identity theft | Permalink | TrackBack (12) | Top of page | Blog Home

NHTCU and Russian police foil online extortion racket

finextra news: NHTCU and Russian police foil online extortion racket

21 July 2004 - Key members of a Russian gang suspected of running a global extortion racket targeting online bookmakers have been arrested in a joint operation between the UK's National Hi-Tech Crime Unit (NHTCU) and its counterparts in the Russian Federation.

NHTCU says three men were arrested in a series of raids in St Petersburg and in the Saratov and Stavropol regions of southwest Russia.

Bookies in the UK have been subject to attacks and demands for money since October 2003. The extortions, amounting to hundreds of thousands of pounds, took place following denial of service (DOS) attacks on servers and Web sites. The gang then sent e-mails demanding to be paid to stop the attacks for one year, when they would then return for more.

Cash was being transferred by a number of money transfer agencies, which gave information over to the NHTCU.

In Russia, the NHTCU worked closely with computer crimes specialists from the Ministry of Internal Affairs (MVD) to identity the criminals.

Detective Chief Superintendent Len Hynds, head of the NHTCU, says: "The success of this operation is built on the foundation of international partnerships between law enforcement and business...Thanks to the response of all the parties involved, we have helped to dismantle a determined group of organised criminals."

As part of the investigation, 10 members of the gang were arrested in Riga, Latvia, in November last year. NHTCU says, through these arrests officers were able to identify the financial trail which led to the gangsters arrests.

July 22, 2004 at 07:36 AM in Online crime | Permalink | TrackBack (10) | Top of page | Blog Home

July 20, 2004

Not 'networking' as we know it

ITBusiness.ca

by Shane Schick
7/20/2004 5:00:00 PM - Why online tools are making social butterflies in the enterprise.

My colleague Greg Meckbach must occasionally wonder if he should rename his magazine, Communications & Networking. Although it's clear from the moment you thumb through its pages the publication covers everything of interest to systems administrators and Canadian telecom carriers, Greg still gets approached by public relations agencies with story ideas about the other form of networking. This audience for these ideas, which has traditionally conducted their affairs at golf clubs, cocktail parties and gallery openings, might be better served by something called Communications and Hobnobbing.

Over the last year, however, a growing interest around maintaining and expanding personal contacts through the Internet started to keep pace with face-to-face events. "Social networking" according to the online Wiki Encyclopedia, "allows the newly-populous Internet to serve as both a buffer and a safety net for introduction to friends by friends once possible only in person." Friendster is the obvious example, but there are many others, like Meetup or Orkut. There is some really interesting software in this area, particularly the open source Barnraiser.org for creating "digital youth centres" and StumbleUpon.com, a Web discovery service that integrates peer-to-peer and social networking principles with one-click blogging.

The tools behind social networking -- portals, e-mail and instant messaging -- are relatively simple, but the context in which they are used represent a unique style of collaborative content management. This is in part because, like auction sites that depend on reputable buyers and sellers, social networks succeed only by establishing trust relationships among the user base. This is something most business people will be very familiar with, which is why a few services have popped up exclusively for the executive class. As they mature, expect these sites (especially the new entrants) to distinguish themselves by an ever-narrowing set of niches. There will be social networks for accountants, for example, because only one accountant can understand another accountant. IT will be no different.

Vendors must realize this, which may explain part of the reasoning behind Microsoft's recent decision to integrate its Live Communications Server with AOL Instant Messaging, Yahoo! Messenger and its own MSN Messenger. This is a corporate-only play, and reflects an industry-wide expectation that these forms of communication will increasingly take part between offices, not dorm rooms. Researchers at the University of Michigan, meanwhile, are working on Small-World Instant Messaging (SWIM), which builds upon the idea behind social networking by profiling entries in each user's address book according to expertise. SWIM mines users' homepages and browser bookmarks, for example, to construct a keyword vector to represent the user's information identity and then deploys a referral agent that automatically handles the information-querying process. This saves users from asking one friend in their social network a question, only be passed on to someone else.

Enterprises have spent millions of dollars on knowledge management projects to keep their best practices in house, but social networks may take some of the most valuable data to the outside world. Particularly among contract workers and consultants, these networks may represent the only organization to which they feel any real loyalty. It's not just what you know, and it's not just who you know, either. Social networking is proving it's both.

July 20, 2004 at 06:47 PM in Web lifestyle | Permalink | TrackBack (11) | Top of page | Blog Home

RSS Traffic Burdens Publisher's Servers

Netcraft: RSS Traffic Burdens Publisher's Servers

The popularity of RSS feeds is testing the web infrastructure of at least one publisher, which likens the impact of newsreader traffic to a denial of service (DoS) attack.

Infoworld.com experiences a "massive surge of RSS newsreader activity at the top of every hour," according to Chad Dickerson, the CTO of Infoworld. "If I didn’t know how RSS worked, I would think we were being slammed by a bunch of zombies sitting on compromised home PCs," Dickerson writes. "Our hourly RSS surge has all the characteristics of a distributed DoS attack, and although the requests are legitimate and small, the sheer number of requests in that short time period creates some aggravating scaling issues."

RSS, an XML format known as Really Simple Syndication (or Rich Site Summary, as Netscape's early implementation was known), was popularized by weblogs and has since been adopted by many major news sites as an effective method to "push" headlines to readers. RSS newsreaders regulary refresh the feed to update headlines, generating repeat requests for a small number of files containing the feed information.

Both RSS and the competing Atom format store data in XML files that contain headlines and story summaries, and in some cases the full text of an article. The feeds are viewed through desktop newsreader applications such as FeedDemon or NewsGator or web-based services like Bloglines and My Yahoo. Either offers an alternative to e-mail alerts and newsletters, which are increasingly stymied by anti-spam filtering by ISPs and employers. Many newsreaders are set to update feeds at set intervals, regardless of whether the RSS file has been updated.

InfoWorld, which is hosted by Verio, is committed to RSS. But Dickerson says he's spoken with other large media sites that have delayed implementing RSS feeds, citing potential overhead on IT infrastructure. Some major publishers of RSS feeds are high-traffic sites that already use content distribution and caching to manage server load, such as Yahoo.

While a relatively small number of sites are currently seeing RSS traffic on the scale of InfoWorld, that's likely to change as the technology becomes more popular. "If RSS is going to go from fairly big to absolutely huge, we’re all going to need to do a little more work on the plumbing," Dickerson writes.

July 20, 2004 at 02:15 PM in Blogging & feeds | Permalink | TrackBack (6) | Top of page | Blog Home

New Technology Heralds Unlimited Web Sites - ICANN

Yahoo! News - New Technology Heralds Unlimited Web Sites - ICANN

Tue Jul 20, 8:47 AM ETAdd Technology - Reuters to My Yahoo!

KUALA LUMPUR (Reuters) - ICANN (news - web sites), the U.S. body overseeing Web site allocations globally, has launched a new technology that will allow virtually unlimited Internet addresses, its chairman told Reuters on Tuesday.

Vinton Cerf of the Internet Corp. for Assigned Names and Numbers (ICANN) said the next-generation protocol, IPv6, had been added to its root server systems, making it possible for every person or device to have an Internet protocol address.

Rapid growth in the use of the World Wide Web has in recent times prompted concerns about future scarcity of domain addresses, with demand threatening to overload the existing system, the IPv4.

"This is a big, big step," Cerf said, speaking on sidelines of ICANN's annual conference held in the Malaysian capital.

Los Angeles-based ICANN was given the job of overseeing the Internet's naming and numbering system globally by the U.S. government.

Cerf said about two-thirds of the 4.3 billion Internet addresses currently available were used up, adding that IPv6 could magnify capacity by some "25,000 trillion trillion times."

He said the IPv6 system would run parallel to IPv4 for about 20 years to ensure that any bugs or system errors were weeded out.

July 20, 2004 at 11:58 AM in Internet evolution | Permalink | TrackBack (22) | Top of page | Blog Home

Anatomy of a 419 scam

Anatomy of a 419 scam [printer-friendly] | The Register

By Team Register (press.releases at theregister.co.uk)
Published Friday 9th July 2004 13:06 GMT
Exclusive Regular readers will be familiar with our ongoing coverage of variations on the 419 advance fee fraud scam. Occasionally, we report on people who have been suckered by the promise of riches beyond the wildest dreams of avarice - and duly fleeced for their trouble.
Two oft-posed question from readers are "how could they be so stupid?", and "surely everyone is aware of these scams by now?" Indeed, we have been accused in the past of carrying too much 419 coverage.

Sadly, though, it's clear that the 419ers continue to operate with considerable success. The following is an account of how one US citizen (we have called him DG) recently lost $1,000 to a UK-based 419 outfit who used a combination of plausible correspondence, phone calls and a fake bank website to reel in their victim. We have appended the full email correspondence between DG and the 419 gang to the end of this article.

On 22 June 2004, DG transferred his last $1,000 via Western Union to an unknown location within the UK. He believed that the money would be used to set up an account with United Mercantile Credit & Investment Bank (UMCIB) in London into which $8m would then be transferred.

The illicit funds were courtesy of one Moser Gilmore, who had sadly died intestate and left the booty sitting around in a European bank, just waiting for a willing partner to claim his share of the loot. The 419ers initially contacted DG purporting to be investigators looking for Gilmore's relatives - a classic approach.

DG took the bait and offered himself as a willing accomplice in the transfer of the funds. Inconveniently, though, UMCIB required an initial deposit of $8,000 to activate DG's account. DG could not himself raise the required funds but - believing that one of his "partners" - was willing to make up the difference - he duly parted with $1,000.

Shortly thereafter, DG received confirmation from his personal "Relationship Manager" at UMCIB - James Cole - that the $8m was resting in his account. All he now had to do was access it .

DG found this rather more difficult than he had expected, since he was unable to log in to UMCIB's e-banking system. And no wonder, because UMCIB is, of course, a bogus bank. Its website (http://www.umcib.com/) gives 232 Great Eastern Street, London EC2 as its location. The Royal Mail lists no such address and our man on the spot confirms that the street numbers end at 82. Neither is UMCIB registered with the Financial Services Authority (http://www.fsa.gov.uk/register/).

The bank's blurb (http://www.umcib.com/About.htm) makes entertaining reading:

About UCMIB

Since 1994, UMCIB has constantly shown an ability to work as a financial partner and confidante to Heads of States, Diplomats, Businesses, Prominent Individuals, Companies, Conglomerates and Governments worldwide.

Using our specialised London offices and various affiliate offices across Europe, we are well equipped and positioned to meet the international banking needs of our clients offering them utmost confidentiality and privacy for both personal and tax purposes.

Clients interests are our paramount concern.

Clients of UMCIB, do not require authorisation under the Financial services and Markets Act 2000 and as such are entitled and qualify for the Financial services Compensation scheme. Copies of the banks last audited reports are available to clients only and are sent to you via secure courier in your welcome pack containing your account information cards, pin and cheque books.

We offer our clients the use of our exclusive debit cards and ATM cards in over 50 Countries worldwide and access to over 50,000 ATM machines globally.

Credit facilities may be provided but are subject to status and available to customers/account holders only.

We would only deal with a nominated attorney/next of kin of our clients, we do not entertain third party discussions on or about our clients from any Individual or organisation.

All very reassuring.

Interestingly, www.umcib.com is registered to one "Simon Williams" at an address in an Edinburgh housing block (pictured left). The contact mobile phone number for a "Simon Williams" is continually engaged. Local sources confirm that there is no Simon Williams officially registered as a tenant at the address.

The site appears to be hosted in California. We emailed the hosts for their comments but they have not as yet replied to our query.

Calls to UMCIB's number as listed on its website are met with an answerphone. We left a message for Mr Cole asking if he would be interested in handling a large sum of cash we had acquired from an arms deal in Sierra Leone, but he did not return our call.

We therefore decided to ring Mr Cole on his personal mobile and enquire about DG's $1,000 dollars. Cole asked us: "What does he want? Does he want his money back?" When we replied that he would probably welcome that, Cole said: "Ask him to put any complaints down in writing and I will consider it."

We then asked Cole where DG should send his complaint, since the address for UMCIB was clearly false. Cole expressed surprise, but quickly became somewhat frosty when we suggested that UMCIB did not exist at all and was, in fact, nothing more than a front for a Nigerian 419 fraud in which he was a key player. At this point Cole insisted: "I don't know what you're talking about," and rather rudely hung up.

We rang the UK's National High-Tech Crime Unit to get its feedback on the scam, but were told that it does not deal with 419 frauds - these are handled by local forces. In this case, however, since there are neither real premises nor any clue as to where DG's cash was collected, it's difficult to say which local force might be appropriate.

At the time of publication, an email to the Metropolitan Police's SCD6 Economic and Specialist Crime OCU (http://www.met.police.uk/fraudalert/index.htm) outlining the details of the case remains unanswered.

In conclusion, we'd like to reiterate what the Met's site says: "If it sounds too good to be true, then it is!" DG has been taken for $1,000 dollars he can ill afford and has no chance of ever seeing again. He allowed his desire for riches to suck him into a scheme that - even if true - he must have known to be illegal. He has no recourse to law and the 419ers are laughing all the way to their bogus London bank.

July 20, 2004 at 11:45 AM in Online crime | Permalink | TrackBack (26) | Top of page | Blog Home

July 19, 2004

Uncertainty clouds Voice over Internet's future

CNN.com - Uncertainty clouds Voice over Internet's future - Jul 8, 2004
Thursday, July 8, 2004 Posted: 10:26 AM EDT (1426 GMT)
NEW YORK (AP) -- AT&T Corp. says it expects to have 1 million Voice over Internet customers by the end of next year, while cable TV giant Comcast Corp. has said it anticipates offering the service to all its customers by the end of 2006.
A flurry of recent announcements by telecom companies paints the hot technology as the industry's future.

So should consumers ditch their traditional land lines now and opt for the cheaper new service? Maybe not yet.

Voice over Internet may be shaking the foundations of telecommunications, but it's hardly mature, and its regulatory future remains uncertain.

"If you were to look at it in 10 to 15 years time, everyone will be using Voice over Internet Protocol," said Mark Main, senior analyst at Ovum, a British consulting firm. But getting there "will be quite varied, quite torturous and not at all clean."

Voice over Internet Protocol (VoIP) uses technology that packages voice calls as data and sends them over broadband connections.

The technique is less expensive because it avoids some access charges inherent in the traditional phone network, and opens up new features, like Web-based management of voice mail. Such advantages have prompted British Telecommunications PLC to plan on converting its entire network to Internet Protocol technology by 2008.

VoIP obstacles
But some obstacles may delay VoIP's status as a popular consumer phone service:

-- People have to know it exists. A June 24 study by the Pew Internet and American Life project found only 27 percent of U.S. online users have heard of VoIP service; 4 million are considering getting it at home.

-- To get VoIP service, you need a broadband connection.

Even AT&T, which seems to be hoping VoIP will energize its shrinking business, said last week when it introduced the service in 10 states that VoIP "is not a complete substitute for traditional telephone service because it does not serve the needs of millions of Americans who cannot obtain or afford the high-speed Internet connection required."

TNS Telecoms estimates that only 18.1 percent of consumers in those 10 states have broadband. And AT&T's VoIP service isn't open to everyone in those states -- only residents of certain cities.

-- Service is only as good as your broadband connection. If your network hiccups while sending a document or receiving a big movie file, it means a delay that most people would ignore or not even notice. But delays on phone calls are harder to tolerate.

"VoIP probably wouldn't have done real well when the Ken Starr report came out," and data networks were swamped, said Farooq Hussain, a principal at Network Conceptions, a telecom consulting firm.

Such reliability issues have led Carnegie Mellon University to wait to introduce VoIP on campus until it upgrades its network over the next three years, said Joel Smith, the university's chief information officer.

Quality of service
Network problems are more complicated for consumers because they're often buying broadband from one company and VoIP from another.

Regional Bell companies, such as Verizon Communications Inc., are the primary sellers of DSL broadband service, while their competitors in the long-distance and cable TV businesses are the primary sellers of VoIP.

"If you are providing phone services on someone else's broadband access network you have no control over the quality of service," Main said.

That said, some VoIP carriers have struck agreements with broadband providers. A good agreement can mean your call travels only on one broadband network.

A bad agreement -- or no agreement -- means your call could get switched from network to network, which can hurt quality. "It's like hopping on the Acela train versus switching trains four times," said Andy Abramson of Del Mar, California, who owns an advertising firm and runs a consumer VoIP Web journal, or blog.

-- The prices, which start at $19.99 a month, are "competitive, not breathtaking," Main said.

The standard price for VoIP packages from AT&T and Cablevision Systems Corp. is $34.99 a month for unlimited local and long-distance calling, voice mail and call forwarding -- but that doesn't include a broadband connection, which generally costs at least $30 a month. Verizon's local and long-distance packages for traditional calling range from $49.95 to $64.95 a month.

-- A lack of regulation -- and taxes -- are a factor in keeping prices down. That may not last forever.

The Federal Communications Commission is considering whether to treat VoIP as a taxable telecom service or an untaxed data service. Beyond that, "half the states in the country are looking at regulating and taxing VoIP," said Gregory Rosston, deputy director of the Stanford Institute for Economic Policy Research.

If the service does gain a following, taxes on it might increase. "As cell phones have grown, the taxes on wireless have gotten much, much larger," Rosston noted.

-- Voice over Internet service depends on the regular power grid, so if that goes, you have no phone. The traditional phone network has its own power and generally works even in blackouts.

The industry has already tackled some of VoIP's problems, such as connecting calls to 911 dispatchers.

Still, some investors are hanging back.

In one recent report, Banc of America Securities analyst David Barden noted: "This profits-are-huge, the-market's-exploding, the-opportunity-is-ripe-for-picking mantra seems eerily reminiscent of past disappointments."

July 19, 2004 at 09:48 PM in Telecommunications | Permalink | TrackBack (18) | Top of page | Blog Home

Report damns UK political blogs

Guardian Unlimited | The Guardian | Report damns UK political blogs

Ros Taylor
Monday July 19, 2004

The quality of comment and debate on political blogs is often poor or even non-existent, and the jury is still out on whether they will ever make a significant contribution to parliamentary democracy, according to a Hansard Society report out toda

In the frequently damning report, the society says political blogging is still in its infancy. While it still has great potential to engage the electorate, the authors say, blogging forms a very minor part of public debate.

The survey drew on reports by eight members of the public who were asked to monitor several of the best-known political weblogs for four weeks. None felt that their political awareness and participation had been stimulated by the blogs, and only one said they would bother to revisit any of them when the survey was over.

The eight bloggers chosen for the study included Tom Watson - the first MP to start a blog and the winner of the elected representative category in the New Statesman's recent new media awards - and Lib Dem councillor Lynne Featherstone , North Norfolk Conservative parliamentary candidate Iain Dale, Howard Dean, Harry Hatchet, the thinktank collective VoxPolitics and Greenpeace campaigners.

The jurors were impressed by the "look and feel" of the blogs, and found some of their authors witty and insightful. However, they also complained the postings could be tedious, long-winded and opinionated. Most found that their own contributions were ignored.

The report says content is at the root of the problem. "The jurors could not find enough to empathise, or even to disagree with, in what they read." Bloggers, particularly MPs and other elected politicians, must continue to experiment with the format and find ways to "ask" rather than "tell" their readers.

But Professor Stephen Coleman of the Oxford Internet Institute said MPs' blogging efforts would always be treated cynically by the public. "The problem facing politicians who blog is that they are professionally implicated in the very culture that blogging seeks to transcend," he comments in the report. "The public will never relax in their company and will be ever suspicious that today's 'spontaneous' blog entry was yesterday's faxed 'message' from the party HQ."

He said the future of the medium probably lies among the "millions of public-private bloggers" rather than in politicians touting for votes.

The Hansard Society also expressed concern at the possibility that the next general election would inspire a wave of homogenous, party-approved campaign blogs. "Should we ... expect a launch of off-the-shelf party weblogs in the run-up to the forthcoming UK elections, modelled on their American counterparts and run by blogmasters in party headquarters, as it happened in the States?"

The most successful blogs concentrated on "local and specialised content", the authors added. MPs were "broadcasting", but were not yet using blogs to canvass their constituents' views.

July 19, 2004 at 08:44 PM in Politics | Permalink | TrackBack (19) | Top of page | Blog Home

VoIP: The Next Household Word?

Yahoo! News - VoIP: The Next Household Word?

Mon Jul 19,10:25 AM ETAdd Technology - washingtonpost.com to My Yahoo!

By Cynthia L. Webb, washingtonpost.com Staff Writer
More companies and consumers, especially in urban areas, are tapping into VoIP. That's shorthand for "voice over Internet Protocol," which is nothing more than industry lingo for a simple but extraordinary concept: using the Internet to make telephone calls.

Using the Internet instead of the telephone network has its perks, but there are still plenty of stumbling blocks keeping it from becoming the de facto way of making phone calls. The San Jose Mercury News produced a series on the VoIP phenomenon that looks into all these facets. Here, according to the Merc, are some of the advantages: "Software applications can be added to phones, turning them into mini-computers for such tasks as tracking inventory or looking up a number on the company directory. It also offers potential big savings by allowing companies to change the way they manage their phone systems."

And some more: "In addition to voice mail, call waiting and caller identification, Internet phone customers can retrieve voice mail online as e-mail. They also can arrange conference calls with point-and-click ease on their computers and sometimes even pick their area code. Allen Long, president of Long and Associates consulting firm in Castro Valley, said today's Internet phone price savings may shrink, especially if authorities decide to regulate the service. Federal and state regulators are weighing whether to treat the technology as a phone rather than information service. If it's a phone service, the government may require payment of access charges and universal service fees."

The Merc also noted some of the drawbacks, and they are significant. "A traditional phone system for a 50-person company may cost around $30,000. The cost of an Internet telephone system could range from about $35,000 to $75,000 depending on its features, estimated Mike Plumer, senior director of sales for AltiGen. ... With corporate budgets still tight, the price tag of putting in a whole new phone network is holding back many companies from embracing Internet calling when the old system isn't broken," the paper wrote. "Security is another top concern – a company's phone system is vulnerable to the same attacks as its personal computers. Experts even warn about the possibility of 'voice spam' – imagine hearing: 'You have 98 new voice messages.'" The paper also ran a helpful sidebar VoIP's pros and cons.

Another Merc article noted some other potential snags. "[C]onsumer advocates caution that residential customers should weigh potential downsides of the new technology – limited 911 emergency functions, home-alarm incompatibility and dead lines during power outages – before signing up," the article said. "It's very attractive if you're a heavy phone user," Janee Briesemeister of Consumers Union told the paper. "But it comes with some risk in terms of reliability, particularly in an emergency situation."
• San Jose Mercury News: Companies Cautiously Switch To VoIP (Registration required)
• San Jose Mercury News: VOIP On The Verge (Registration required)
• San Jose Mercury News: To VOIP, Or Not To VOIP (Registration required)

CNET's News.com also wrote about potential VoIP problems: "Protecting your home could get tougher, as well. Some home alarm systems have trouble with broadband connections, or their manufacturers don't yet trust the reliability of the Internet. Also, there's still no way to guarantee VoIP phones will work when power is lost, and not all VoIP providers offer 911 service. During a power outage, a VoIP phone is only as good as any battery backups on hand, because delivering power through the broadband connection isn't possible on a wide commercial basis. An emerging alternative broadband-delivery technique, broadband over power line, will solve this problem, but wide deployment is years away."
• CNET's News.com: The Price of VoIP's Thriftiness

The VoIP Wave Machine

Drawbacks aside, some people are expecting VoIP to continue making waves. "Today people look at it almost as a fashion statement, but the reality is that the fundamental shift to [Internet]-based telecommunications will change the face of telecommunications forever," Internet phone pioneer Jeff Pulver told The Washington Post. "The Internet calling experience is still clunky. Sound quality can be spotty, and it doesn't work at all if the high-speed Internet connection is down. But early adopters of the technology are willing to put up with a few glitches in exchange for big savings and the satisfaction of thumbing their noses at the nation's dominant regional telephone companies."
• The Washington Post: Dialer's New Choice (Registration required)

July 19, 2004 at 08:31 PM in Telecommunications | Permalink | TrackBack (9) | Top of page | Blog Home

Body movement to create music

BBC NEWS | Technology | Body movement to create music

By Jane Wakefield
BBC News Online technology staff
Sound engineers could ditch their mixing desks if the work of researchers at Leeds University becomes reality.

Scientists are developing ways of capturing human movement in three dimensions which would allow music to be created with the gesture of an arm.

It would eliminate the need for music technicians to twiddle hundreds of knobs to achieve the perfect sound.

The technique could also be used for scrolling a webpage, especially useful for people with limited mobility.

Tiny balls

The system is being developed at the school of music in the University of Leeds.

Dr Kia Ng of the Interdisciplinary Centre for Scientific Research in Music is leading the project, which captures 3D movements using infra-red light.

The light is projected onto tiny reflective balls attached to clothing and monitored by 12 cameras.

The computer recognises the changing positions of the balls and turns different gestures into instructions for music software.

Musical moves

"Effectively a person could play a note by blinking an eye or moving a foot. The possibility is for anybody to control a musical composition," Dr Ng told the BBC programme Go Digital.

Of course there are risks that the wrong gesture could lead to a bum note, so the system is also going to have a more pre-composed system that can intelligently guess what a series of gestures represents.

"The biggest challenge is to train the system to anticipate movement," said Dr Ng.

"To make sense of a gesture it need to know not only where an object has been and where it is, but also where it will be," he added.

He is hopeful that the system can be put to the test at a live concert by the end of next year.

You can hear more about the research on the BBC World Service programme, Go Digital

July 19, 2004 at 08:22 PM in Security | Permalink | TrackBack (7) | Top of page | Blog Home

The IT in your ID

ITBusiness.ca

7/19/2004 5:00:00 PM - How Canada's e-passports will change the way we look at biometrics
by Shane Schick
First they told us we're not supposed to smile in our passport photos. Then the government made sure we would have every reason to frown.

Without any sign of an impending terrorist threat, the government nonetheless decided this week that all Canadian passports need an upgrade. These include microchips embedded in the passports that will store images and personal information, and presumably biometric features for facial recognition, which Canada agreed to use more than a year ago. The revamped passports, now called e-passports, will be phased in among diplomats early next year.

Officials told the Canadian Press we need biometric passports to "maintain our reputation as a First World nation." Seeing as how the U.S. is not expected to have biometric passports until the end of next year, we are truly No 1. In fact, late last week the U.S. House of Representatives voted for a year-long extension to the deadline for countries to introduce biometric passports for their citizens. This is partly because the technological challenges involved are too great for nations to meet the October 2004 deadline set by Congress in the Enhanced Border Security and Visa Entry Reform Act of 2002.

The dawn of electronic passports shouldn't surprise anyone who has watched the advent of fast-clearing process programs jointly developed between Canada and the United States. We have already profiled NEXUS, which allows regular cross-border travellers to use a smart card linked to a database, and which sometimes includes fingerprint identification. CANPASS-Air, meanwhile, uses iris scanning as part of a similar program at airports. In both cases, enrollment comes at a cost and includes a lengthy background check. This was a precursor to the national initiative (and a troubling sign of things to come -- although we generally agree that health care should be universal, no one seems to have a problem with two-tier border security).

Though it gets lots of attention, biometrics has been a hard sell in the enterprise because most users find it overly intrusive. Apart from data centre facilities, it's not common, but by making it a part of the passport experience the government could pave the way for wider adoption in the private sector. This will only happen, however, if the government proves itself a worthy steward of the data being collected, and the lack of discussion before this decision was made makes many privacy advocates uneasy.

Passport officials insist that they won't create a database with citizens' information, but without the ability to cross-reference and verify certain items, it's hard to understand why such passports would be valuable, let alone more secure. Other public sector projects seem like a natural candidate for integration with e-passports. The RCMP, for example, is working on a $130-million Real Time ID Program which will allow police departments to access criminal databases more efficiently using biometric technologies. As the government puts more and more IT into documents used to travel between countries, the wealth of information potentially available will prove highly tempting.

Memo to Privacy Commissioner Jennifer Stoddart: Why not make these kinds of programs more palatable by encouraging government agencies to publish accessible privacy policies that explain how data will be used? At least then there would be a modicum of accountability and some openness around what can be an unsettling use of IT. If they're going to make it this hard to get across the border, there should be explicit rules around who gets access to personal information. It doesn't seem as important right now, but that's still our territory, and it could use some border protection too.

July 19, 2004 at 08:13 PM in Phishing & identity theft | Permalink | TrackBack (12) | Top of page | Blog Home

Canadian carriers wonder: 3G or not 3G?

ITBusiness.ca

by Shane Schick
7/19/2004 5:00:00 PM - AT&T is expected to launch third-generation cellular services in four American cities. We ask Bell, Telus and Rogers when we can expect the same up here. The answer: sooner than you think.

Canadian wireless carriers say the arrival of 3G services south of the border isn't enough to convince them to make similar investments in high-speed data services here.

Media reports in the United States say AT&T Wireless Services Inc. will launch its third-generation (or 3G) services to transmit e-mail, pictures and video over high speed as early as next week. The rollout is expected to begin in Seattle, San Francisco, Phoenix and Detroit and will include two phone models from Nokia and Motorola, as well as a data card.

Vendors have been promising 3G for years but the concept has been marred by conflicting definitions. AT&T is getting to 3G by adopting Universal Mobile Telecommunication System (UMTS), a standard generally based on Wideband Code Division Multiple Access (W-CDMA).

Rogers Wireless in Toronto, which operates a general packet radio service (GPRS) network, will announce this week the completion of an Enhanced Data rates for GPRS Evolution (EDGE) rollout and the availability of a Sony Ericsson GC82 EDGE PC card. Rogers began a trial of EDGE late last year through a software upgrade on its network in Vancouver. AT&T Wireless already offers EDGE to its customers.

David Neale, Roger's vice-president of new product development, said the company was already confident in the technology but wanted to take the time to gauge the user experience.

"What they were seeing was genuinely three times faster than what they were seeing with GPRS," he said. "That meant people were seeing 90 Kbps quite regularly."

That means IT managers could finally have enough throughput to make desktop applications like Citrix viable, Neale said.

The alternative to EDGE, EV-DO, cranks up the data rate from current U.S. cellular networks (CDMA2000 1xRTT) to a theoretical 2 Mbps and has already been rolled out by Verizon and Sprint in the U.S. In Canada, 1X carriers include Bell Mobility and Telus Mobility, who have so far made no announcements about moving to EV-DO.

"Most carriers are only getting a couple of dollars of their average revenue per user out of data services," said Bell Mobility president Michael Neuman, adding that those services typically include low-bandwidth applications like e-mail and short text messaging. "To put out an even higher-speed network at this point before the adoption rates are sufficient to suggest that very high-bandwidth services are required on a mobile basis would really be putting the cart before the horse."

Telus Mobility spokesperson Julia Quinton said there was no reason to change the status quo.

"We're more than satisfied with what we offer through our 1X network," she said. "Obviously it's fast, at 140 Kbps and of course it's national . . .we're content on that front."

Last year Allen Nogee, an analyst with Scottsdale, Ariz.-based research firm In-Stat MDR, published a report that indicated little demand for 3G services. He said he's seen little since then to change his mind.

"Even if there is somewhat of a demand -- and Verizon is exploiting that with EV-DO -- the AT&T move is a little bit different because it requires all new handsets," he said. "They're only planning coverage in four cities. That would be kind of liming for the first adventurous people that want to shell out their money to get these phones."

EDGE, like UMTS, qualifies as 3G because it fits in with the International Telecommunications Union's definition of services, Neale said.

"Most of the time, what you've got to look at is, what is the benefit to the customer, what's the cost to provide the service," he said. "When you look at the capital cost of deploying EDGE on our existing investment, it was very small for quite a significant improvement."

Neuman said Bell Mobility does have its eye on "medium-speed" data applications like e-mail with heavy attachments and picture messaging, which has become popular. He also pointed to customers like Hamilton Police, which is using ruggedized laptops with Sierra wireless cards that have been installed in every car, as signs that 3G will eventually be ready for prime time.

"Now that they've stepped up to the challenge of determining what their wireless strategy needs to be for competitive or budget reasons, it won't be much of a segue for them to go to even higher-bandwidth applications," he said.

Nogee said the transition has been difficult for all cellular carriers.

"On one hand, they certainly don't want to be left behind," he said. "On the other hand, if they spend all their money on this technology that doesn't become very popular, they've wasted a lot of their resources."

AT&T Wireless's move may only be a contractual concession to Japan's NTT DoCoMo, Nogee added, which has a 16 per cent stake in the firm.

July 19, 2004 at 08:03 PM in Telecommunications | Permalink | TrackBack (10) | Top of page | Blog Home

First Pocket PC virus discovered

BBC NEWS | Technology | First Pocket PC virus discovered

The first virus to attack handheld computers running Microsoft's Windows Pocket PC software has been found.
It is called "Duts", and its existence has been revealed by the Romanian security firm BitDefender.

The company said the virus posed no threat and was produced only as a "proof of concept" by its creators.

The program comes from the same virus writing group that put together similar code that could spread between smartphones running Symbian software.

Polite virus

BitDefender said Duts had been created by someone calling themselves Ratter, who was part of the 29A VX virus writing group.

In a statement, the company said it had written the code to show that it was possible to create programs that could spread via handhelds and mobile devices running the cut-down version of Windows.

BitDefender estimated that there were about 17 million Windows Pocket PC devices in use around the world.

The company said: "The code was first sent to anti-virus experts instead of being released in the wild."

The virus has been written to be polite as it asks permission to spread to a new host when infected applications are being run.

"You're more likely to have a meteorite strike your house than be hit by this virus," said Carole Theriault, anti-virus consultant for Sophos.

"Owners of PDAs running the Pocket PC operating system should not lose any sleep over this virus, although it might be a taste of things to come in the future."

Mobile bugs

The virus is named after a technology called Dust dreamed up by science-fiction writer Greg Egan in his novel Permutation City.

However, the privilege of naming viruses rests with the anti-virus firms, which have decided to call it Duts.

Last month, the 29A group released another proof-of-concept virus called Cabir that was aimed at devices using the Symbian operating system.

Phones vulnerable to this virus include Nokia's 3650, 7650 and the N-Gage gaming/mobile hybrid.

The Cabir virus uses the Bluetooth short-range radio system to spread between devices and disguises itself as a security program. It also asks permission to install itself.

Any device running the Symbian's Series 60 software could be vulnerable but anti-virus firms say there is little evidence that the virus is spreading in the wild.

July 19, 2004 at 07:23 PM in Virus | Permalink | TrackBack (8) | Top of page | Blog Home

July 18, 2004

Tajikistan touches base with the outside world in Internet boom

Yahoo! News - Tajikistan touches base with the outside world in Internet boom

DUSHANBE (AFP) - A future doctor in the impoverished and isolated former Soviet republic of Tajikistan has just touched base with the rest of the world for the first time.

He furrowed his forehead while reading though e-mails at one of the 100 or so Internet cafes popping up across a country that nestles nervously on the northern border of Afghanistan (news - web sites) and remains overrun by drugs and crime.

"I have discovered e-mail," rejoiced Fakhriddin while enjoying coffee in the crowded cafe.

The first Internet cafe opened up here just five years ago. That was two years after the end of a brutal civil war that killed tens of thousands, although figures have never been officially confirmed. Tensions still simmer.

But there is a young hip crowd emerging in this Central Asian nation of few resources ravaged by the dictats of Soviet era planning which is looking West and seeking to emulate its ways.

Fakhriddin is also joining the 80,000 or so other users -- in a nation of seven million people -- in search of a mobile phone to hook up with friends in a country where land lines are miserable.

The confident 19-year-old, sporting a moustache, came from the Tajik provinces that were recently hit by famine to study in the capital.

"Learning things on the computer is interesting and it makes me happy. But they also have games -- and, I am sorry -- sex," he said.

Government estimates say there are now 50,000 people who have access to the Internet in the predominantly Muslim nation, the poorest in the former Soviet Union.

Things suddenly seem to be booming.

There are six mobile operators competing against each other. Local communication officials said a US firm that they fail to identify may soon be joining the fray.

Not all operators can reach across the towering Tajik mountains but young people in Dushanbe -- a war zone not so long ago -- are strutting their stuff with the latest model attached to their ears.

Tajik authorities agreed four years ago that sitting in Central Asia, they were cut off from the world and something had to be done since Moscow was no longer proving help.

So they opened up the Internet market, now being serviced by 10 providers who all agreed to spread their services to the remote, often hardly accessible regions.

"People, especially in large cities, have money they now want to spend," said Tajik communications ministry spokeswoman Lyubov Kovalevskaya.

"But the most important thing is still political stability," she told AFP.

There are, however, signs of frustration. Some Internet providers said they were happy to work in the capital, but that it was just too much trouble trying to stretch beyond the capital into the mountainous regions.

"The government should grant providers more privileges, so that they could work in the economically unprofitable regions and teach the local population computer basics," said Asomiddin Atoyev, chief of the Civil Initiative and Internet Policy Foundation.

"Providers would be working at a loss if they set up computer centers in the countryside," he said.

July 18, 2004 at 09:07 PM in Internet evolution | Permalink | TrackBack (24) | Top of page | Blog Home

PluggedIn: Mobile Phones Aim to Take Load Off Wallets

Yahoo! News - PluggedIn: Mobile Phones Aim to Take Load Off Wallets

Sun Jul 18, 7:28 AM
By Yukari Iwatani Kane
TOKYO (Reuters) - Look inside almost anyone's purse or pocket, and it probably contains at least a mobile phone and a wallet bulging with bills, coins, receipts, credit cards, IDs, train or bus passes and any number of membership cards.

In Japan, that may soon be a thing of the past as the mobile industry aims to combine the two with a small embedded chip that can also store money and personal information.

NTT DoCoMo (news - web sites) Inc.(9437.T), Japan's largest mobile operator, on Saturday became the first operator to launch a wallet phone, equipped with Sony Corp (NYSE:SNE - news) (news - web sites).'s (6758.T) FeliCa smart chip, which can be quickly read by passing it over a scanner.

No. 2 KDDI Corp. (9433.T) plans to launch phones with similar functions next year, while the Japan unit of Vodafone Group Plc (VOD.L) is testing the technology.

"FeliCa is going to be a basic requirement for me when I upgrade my phone," said 31-year-old Norihiko Fujimori, who works for a Japanese Internet startup in Tokyo. "It'll be extremely convenient if my phone can contain everything."

GETTING RID OF COINS AND SHAVING TIME

The concept of a wallet phone is just getting off the ground, but the smart chip technology is not new in Asia.

Tokyo commuters have used "Suica" train passes with an embedded FeliCa chip for nearly three years, and 9,000 convenience stores, restaurants and retail outlets around the country accept pre-paid rechargeable debit cards known as Edy.

East Japan Railway Co.(9020.T), which plans to offer mobile Suica late next year, said it has over 8 million Suica users, while 4.5 million Edy cards have been issued.

"The biggest advantage of Edy is that it gets rid of coins ... and transactions are faster," said Takashi Nakamura, manager at bitWallet Inc., which operates the Edy network.

"Users are also attracted to additional benefits that retailers offer like special discounts, membership points or mileage in the case of ANA (All Nippon Airways Co. Ltd. (9202.T))."

Nakamura said it was too early to consider taking the technology overseas to Europe and the United States, but admitted that bitWallet decided on the name "Edy," which stands for euro, dollar and yen, with global ambitions in mind.

In other parts of Asia, Hong Kong residents use "Octopus" smart cards to access trains, buses, and ferries or pay for merchandise or parking. Singapore also has a similar system.

"I can see phones embedded with FeliCa chips taking off in almost any city with a large population and a need for efficiency," said Kazuyo Katsuma, a Tokyo-based telecoms analyst with J.P. Morgan.

Katsuma added that the relatively cheap cost of both the chip, at a few dollars each, and the initial set-up cost for the retailer, at a few hundred dollars each, are also in its favor.

SMART PHONES AS MONEY, ID, HOUSE KEY

In Japan, expectations are high that FeliCa will change the way consumers and businesses function on a daily basis.

Videogame maker Sega Corp. (7964.T) tested a service in which customers at its entertainment centers can use FeliCa-compatible mobile phones to play games.

Credit card company JCB gave employees mobile phones that could be used as company identification cards and for purchases at vending machines and in the company cafeteria.

Financial services firm Kokunai Shinpan Co. Ltd. and real estate company Hayakawa Fudosan provided residents of a new apartment complex in southern Japan with FeliCa-equipped phones that function as keys to both the main entrance and their homes and can be used to pay bills when swiped against a reader at the building entrance.

Convenience store chain am/pm Japan Co. Ltd., a subsidiary of Nippon Mining Holdings Inc. (5016.T), said it asks Edy users, who sign up for its frequent user club, to provide basic information such as age to identify purchase trends and help with supply decisions.

While some consumers express concerns about carrying phones that contain electronic money and personal information or having their purchases monitored, J.P. Morgan's Katsuma said it was no different than carrying a wallet or credit card.

"Everybody doesn't need to carry them," said Katsuma. "Only people, who are into that sort of thing or are high-end users, should use them. It's like an airline mileage membership."

July 18, 2004 at 05:18 PM in Telecommunications | Permalink | TrackBack (21) | Top of page | Blog Home

July 17, 2004

Living the Broadband Life

The New York Times > Technology > Circuits > Living the Broadband Life

By KATIE HAFNER
Published: July 15, 2004
San Diego
DEBRA GIBB has had a high-speed Internet connection in her home longer than anyone she knows. In late 1996, when Time Warner Cable began trials here for its cable modem service, Ms. Gibb leapt at the chance to become one of the first residential broadband users in the nation. She was beta tester No. 6 in San Diego, she said.

Since then, Ms. Gibb, 47, her husband, Tom, 46, and their teenage twin sons have been in the vanguard of the broadband way of life that now defines this city of 1.2 million people.

Like many San Diegans, the Gibb family use the Net for the same things people elsewhere do - e-mail, shopping, games, trip planning. But they do more of it. Broadband, with its "always on" connection, is so ingrained here that residents can't imagine life without it. For them, the Internet is like hot and cold running water - available 24 hours a day with a flick of the wrist.

San Diego was one of the first cities in the nation to get residential high-speed Internet connections, and some 55 percent of households with Internet access have high-speed cable modem or D.S.L. service - a higher percentage than in any other metropolitan area in the country, according to a survey by comScore Networks, a market research firm. Next in line, according to comScore, are Boston, where 53 percent of wired households have high-speed connections, and New York, with 51 percent.

San Diego and other cities with such heavy broadband use serve as signposts for what other cities might come to expect in a future when such service is an omnipresent and vital part of daily life.

Before getting in their cars, for instance, San Diegans routinely check traffic online. If conditions look unbearable they can use their broadband connections to work from home.

According to comScore, Internet users in San Diego are more likely than others elsewhere to shop online. They spend more money online than Internet users in other cities, and they visit more Web sites.

San Diegans use the Web to read the news, to check the tide's comings and goings and to tap into the surf-cams that line the local beaches so they can find the best waves.

They use the Web to reserve and renew library books and, increasingly, to buy their groceries.

Ms. Gibb, who until recently was vice president for operations at a local telecommunications company, does much of her shopping online, often starting with eBay. She still shops locally, she said, but seldom leaves the house before checking on essentials like a store's hours. She rarely uses her phone book. So steeped is she in the broadband way of life that when traveling, she will not even consider staying in a hotel that does not offer high-speed Internet access.

When the Gibbs were house-hunting three years ago and thinking of leaving Scripps Ranch, a sprawling development of about 12,000 homes at the northeast corner of San Diego, they found a house they loved in Poway, just three miles north.

"Everything about it was perfect," Ms. Gibb said. "It had a great layout, and five acres. Everything." But when they found out that no broadband service was available in the neighborhood, they decided not to buy. "It was like saying there was no electricity," she said.

San Diegans use the Web to buy their cars, and if they could go online to fill their gas tanks, they would. "You can't buy gas online, but you can track gas prices locally," said Mark Juergensen, 43, a Scripps Ranch resident who, like Ms. Gibb, was one of the earliest broadband users in San Diego.

Scripps Ranch was one of the first places in San Diego to get Time Warner's high-speed service, called Road Runner. The average annual income in Scripps Ranch is $73,000, and that relative affluence is one of the reasons it was chosen as a testbed.

For Mr. Juergensen, a software engineer, the benefits of his broadband connection go well beyond online price comparisons. His company is 45 minutes north of Scripps Ranch, in San Clemente, and he is able to work from home two or three days a week. That would not be possible if he had only a dial-up connection. "File sizes have gotten too big," he said. "It's rare I work with anything that isn't 10 megabytes."

July 17, 2004 at 06:17 PM in Web lifestyle | Permalink | TrackBack (19) | Top of page | Blog Home

Brazil Internet Craze Angers English Speakers

Yahoo! News - Brazil Internet Craze Angers English Speakers

By Alberto Alerigi
SAO PAULO, Brazil (Reuters) - Brazil has butted heads with the United States this year on issues ranging from cotton subsidies to the war in Iraq (news - web sites).

But perhaps none of the battles has been so personal as the one being fought on the Internet.

Thousands of Brazilians have become devotees of Orkut (http://www.orkut.com), a popular new social-networking site from Web search leader Google Inc.

Orkut allows members to organize themselves into online communities of friends, and friends of friends, to discuss everything from chess to sandwiches.

But the rush of Brazilians to join Orkut and rival social networking sites has upset some online users, who complain of a proliferation of messages posted in Portuguese, Brazil's native tongue.

Some users have even started communities specifically for people to air their gripes on this issue.

The United States has at least 153 million Internet users, compared with Brazil's 20 million. Still, Orkut said Brazilians dominated its membership roster in June, outnumbering Americans for the first time.

The site says it has more than 769,000 members, making it one of the largest and most popular of its type on the Internet. About 23.5 percent of the users are from the United States, while another 41.2 percent are Brazilians.

Iranians are a distant third place at about 6 percent.

SELECTIVE MEMBERSHIP

Orkut, named after Google software engineer Orkut Buyukkokten, made its debut in January and is still in the testing stages. Part of its allure is its exclusivity -- one can only join at the invitation of another member.

"Orkut maps one's social prestige, and Brazilians are by nature gregarious," said Beth Saad, a professor at the University of Sao Paulo's School of Communications and Arts.

Although more than one-fourth of Brazilians live in poverty, those who can afford Internet access have become avid Web surfers.

In terms of time spent on the Internet, Brazilians edged out the United States in May for the second month in a row, according to Ibope/NetRatings. The market researcher estimates that Internet use for Brazilians averaged 13 hours and 51 minutes in May, eight minutes more than for Americans.

The number of Brazilian visitors to community sites and online diaries rose 14.6 percent to 3.5 million in May from January, Ibope/NetRatings said.

Tammy Soldaat, a Canadian, got a sample of Brazilian wrath recently when she posted a message asking whether her community site on body piercing should be exclusive to people who speak English.

Brazilian Orkut users quickly labeled her a "nazi" and "xenophobe."

"After that I understood why everyone is complaining about these people, why they're being called the 'plague of Orkut,"' she said in a site called "Crazy Brazilian Invasion."

John Gibbs of Mountain View, California, has founded a community called "So many Brazilians on Orkut."

"When the average Orkut user goes to look at community listings to see what's out there, he'll see a list populated with pretty much all Portuguese communities," Gibbs said. "This is highly frustrating since Orkut is not a Brazilian service."

But Mateus Reis, a publicist who lives in Sao Paulo, said users should be free to write what they want, in the language of their choosing.

"Since we can invite anyone we want at Orkut, and my friends are Brazilians, it doesn't make sense talking to them in English," Reis said in Portuguese. "I use the language I know."

His compatriot Pablo Miyazawa has a more moderate view.

"Brazilians have the right to create anything they want in any language they want," Miyazawa said. "The problem is to invade forums with specific languages and write in Portuguese. Brazilians are still learning how to behave in the Net."

AN INTERNET FORCE

The Brazilians' ardor for the Internet extends to other community-based sites, and Web entrepreneurs are catching on to the potential business opportunities.

Lisa Kopp, spokeswoman for Orkut's competitor Friendster (http://www.friendster.com), said Brazilians are "an important group, with millions" of participants among its 7 million users.

Meanwhile, Brazilians account for nearly 211,000 of the 453,600 users of Fotolog (http://www.fotolog.net), which allows people to post a visual diary of their lives.

The site is negotiating with Internet providers in Brazil to offer a Portuguese-language version, said Adam Seifer, who founded Fotolog.

But Saad, the communications professor at University of Sao Paulo, said some of Brazil's exuberance about Orkut -- and the resulting clash of cultures -- is just another fad.

"I think what will happen is what occurred when the Web arrived in Brazil," she said. "There was a huge boom of people creating sites and now the number of active sites being used by Brazilians is a lot smaller than those registered."

July 17, 2004 at 06:05 PM in Internet evolution | Permalink | TrackBack (35) | Top of page | Blog Home

July 16, 2004

ATM skimmers go hi-tech down under

finextra news: ATM skimmers go hi-tech down under

16 July 2004 - Australian police have described an ATM skimming device uncovered in Sydney, which is estimated to have recorded the details of up to 1000 customers, as one of the most advanced to date.

According to Australian press reports the device, which was attached to an ATM in Sydney's Bondi Junction, was thought to have been in operation for three days.

The system uses a pin-hole camera to record the PINs and a magnetic strip reader to copy details on the cards. The thieves can then burn the data onto a magnetic strip card to access bank accounts.

Michael Boutouridis, from the NSW fraud squad, told press the new skimming device was one of the first to have its own memory system and showed that technology used by fraudsters has advanced.

"With the other machines we have found, they would have to remain close by to watch the details...But this one can be used over a long period of time, with the information stored on tape and on chips inside," he says.

Last year Kok Meng Ng, 27, was jailed for an ATM card skimming scam that defrauded 315 Australian bank customers of A$623,426.

Ng was part of a criminal gang that attached card skimming devices and pinhole cameras to ATMs operated by St George Bank, Westpac and Commonwealth Bank. Counterfeit cards were then used to withdraw cash.

July 16, 2004 at 12:30 PM in Phishing & identity theft | Permalink | TrackBack (17) | Top of page | Blog Home

Phishing will cost financial firms $400m in 2004

finextra news: Phishing will cost financial firms $400m in 2004

14 July 2004 - Financial institutions stand to suffer an estimated $400m in fraud losses resulting from phishing attacks in 2004, according to research by Financial Insights.

According to the research, the number of unqiue phishing attacks reported to The Anti-Phishing Working Group increased from just 19 in November 2003 to 1197 May 2004.

Financial Insights says in addition to the management of ID theft cases, institutions targeted by phishers are also incurring additional organisational costs and are suffering from an erosion in customer trust.

Sophie Louvel, research analyst and author of the report, says most of the anti-phishing systems currently available are focused on detection of phishing attacks, but it will require significant and widespread security enhancements to e-mail technology - including sender authentication - to curb these attacks.

July 16, 2004 at 07:49 AM in Phishing & identity theft | Permalink | TrackBack (13) | Top of page | Blog Home

July 15, 2004

Fiat and Microsoft team up to surf Web in car

Fiat and Microsoft team up to surf Web in car

MILAN (Reuters) - Surfing the Web while in a car might not seem the easiest thing to do but Italian carmaker Fiat and software giant Microsoft say they plan to make it an everyday reality.

The two companies said on Thursday they had signed a long-term strategic partnership to make the inside of a car as tech-friendly as a state-of-the-art desk with Internet, phone and digital organiser, but with no need to use your hands.

With the arrival of hands-free sets and Bluetooth wireless technology people are already used to chatting on their mobile phones from the steering wheel.

But the new Fiat-Microsoft venture aims to enable drivers to talk to a computer to surf the Web, tell the sound system to play a different song and even let a garage engineer check out the car's electronic system from afar.

More and more cars, especially at the high-end, are equipped with route mappers and even televisions.

Last month Apple Computer Inc. also unveiled an adapter enabling users of its iPod digital music player to connect them to the stereo systems in some BMW and BMW Mini Cooper cars using standard controls on the steering wheel.

While other mass automakers are stripping down electronic systems -- one of the most complex parts of a car -- Fiat said it was committed to spearheading in-car technology and the deal will likely bring such features to the average driver.

"Fiat Auto has always developed...innovative cars that are affordable to everyone," Pieter Knook of Microsoft's Mobile and Embedded Devices unit said in a statement.

"We are very enthusiastic about working with them and giving people the best and yet most practical solutions...giving them a more pleasant and safer experience".

July 15, 2004 at 11:39 PM in Web lifestyle | Permalink | TrackBack (13) | Top of page | Blog Home

UK companies in 'blissful ignorance' over spyware threat

UK companies in 'blissful ignorance' over spyware threat

By Munir Kotadia, ZDNet UK
Survey: Fewer than one in seven UK companies recognise that malicious emails could expose their networks to a corporate spy, say MessageLabs

UK companies are finally wising up to the importance of deploying software patches and keeping their antivirus signatures up to date, but the increasing threats from Trojans and spyware have still not sunk in, according to a survey conducted by email security services firm MessageLabs.

According to the survey, only one in five companies say the theft of confidential or sensitive information is their main email-based security threat, and just one in seven firms say email provides the potential for industrial espionage.

Natasha Staley, information security analyst at MessageLabs, said companies seem to be missing the link between spam and industrial espionage. She said that although companies know that viruses and spam can be dangerous, they don't see them as a security breech.

"When it comes to industrial espionage and the leakage of confidential information, companies seem to be saying 'I don't think it is going to happen to me. It is something I read about and it sounds pretty terrible, but I'm fairly certain I'm okay'," said Staley.

Graham Cluley, senior technical consultant at antivirus firm Sophos, said the volume of spyware is increasing and much of it is arriving on the corporate desktop thanks to a helping hand from more traditional malware.

"There is a lot of spyware out there and a lot of viruses, worms and Trojans that are interested in spying and collecting information. Email is an avenue for data to leak out and this type of malicious code to get in," Cluley said.

Mark Sunner, chief technology officer at MessageLabs, said this convergence of various email threats has created a "more damaging and complex breed of email security threat", which he believes could "mortally damage" email.

"Almost without exception, every virus we have seen during 2004 has compromised infected machines and allowed them to be remotely commandeered," said Sunner.

However, Sophos' Cluley said the main victims of spyware will be smaller companies that do not have "teams of people dedicated to protecting their computers".

July 15, 2004 at 10:54 PM in Security | Permalink | TrackBack (8) | Top of page | Blog Home

Bush Signs Identity Theft Bill

Yahoo! News - Bush Signs Identity Theft Bill

Thu Jul 15, 5:01 PM ETAdd Technology - washingtonpost.com to My Yahoo!

By David McGuire, washingtonpost.com Staff Writer
President Bush (news - web sites) signed a tough new identity theft bill into law today, legislation passed by Congress in response to evidence that the problem is growing rapidly as more Americans use the Internet to shop and manage their personal finances.

The Identity Theft Penalty Enhancement Act adds two years to prison sentences for criminals convicted of using stolen credit card numbers and other personal data to commit crimes. Violators who use that data to commit "terrorist offenses" would get five extra years.

"Like other forms of stealing, identity theft leaves the victim poorer and feeling terribly violated," Bush said today at a White House signing ceremony. "The criminal can quickly damage a person's lifelong effort to build a good credit rating."

Rep. John Carter (R-Texas), the bill's sponsor, said the signing is "one of the shots taken in a battle that we've got to win."

"It's a crime that we need to address and address seriously both for the protection of the credit of American citizens and for the protection of homeland security," Carter said.

Identity theft topped the list of consumer fraud complaints to the Federal Trade Commission in 2003, accounting for more than half of all the complaints tracked by the agency. The FTC recorded 214,905 cases of identity theft in 2003, up from 161,836 in 2002.

In a report published last September, the FTC estimated that identity theft claimed 9.9 million victims in 2002, costing businesses and consumers $53 billion. The report, based on a telephone survey of more than 4,000 adults, estimated that as many as 27.3 million Americans fell victim to identity theft in the last five years.

Phishing victims alone lost $1.2 billion to identity theft-related fraud between April 2003 and April 2004, and were three times more likely than the average American to have their identities stolen, according to an online survey of 5,000 people conducted in May by Stamford, Conn.-based firm Gartner Research. One of the newest, most virulent forms of ID theft on the Internet, "phishing" scams involve online thieves who dupe consumers into entering personal data on counterfeit banking and e-commerce Web sites.

The law will make it more likely that thieves are prosecuted, said Betsy Broder, assistant director for the Federal Trade Commission's Division of Planning and Information. "A prosecutor is less likely to bring a case if they're not going to get any serious jail time when the get a conviction," Broder said.

"There's a reality in how prosecutors do their business and that reality is that they're going to take the cases that are easiest to prove and carry the most weight," said Carter, a former county judge. "Identity theft was basically being ignored."

The new law could help ferret out larger criminal enterprises because identity thieves often work in groups, said Jim Vaules, vice president and fraud expert at Dayton, Ohio-based archival firm LexisNexis.

"These are networks and often you only have one small tentacle of it in courtroom," Vaules said. "If [prosecutors] have a tool that changes the sentencing guidelines from probation to a prison sentence, it could have significant results in people cooperating with the government and exposing larger parts of the criminal network."

The law also orders the U.S. Sentencing Commission to consider increasing the penalties for employees who steal sensitive data from their own companies.

Michael Wolfe, the co-founder of Vontu Inc., a San Francisco Calif.-based security software company that focuses on preventing internal fraud, said this is an important focus of the law. He said Congress may have to pass legislation requiring companies to take basic steps to protect consumers' personal data.

July 15, 2004 at 10:52 PM in Phishing & identity theft | Permalink | TrackBack (37) | Top of page | Blog Home

AOL, Yahoo And MSN To Integrate Messaging

Yahoo! News - AOL, Yahoo And MSN To Integrate Messaging

By David A. Vise, Washington Post Staff Writer
America Online Inc., Microsoft Corp. and Yahoo Inc. (Nasdaq:YHOO - news) are teaming up to link their separate instant messaging services for use in the workplace, the first major step by the industry leaders to enable computer users to communicate with one another no matter which of the three systems they use.

In an announcement planned for today, the triumvirate will outline a new partnership aimed at spurring greater use of instant messaging at work by tearing down the electronic walls that keep the respective networks separate. To use the new system, companies will have to license new Microsoft network software that will serve as the hub connecting messaging systems operated separately by AOL, Microsoft's MSN division and Yahoo.

"This is a very significant announcement," said Nate Root, a senior analyst with Forrester Research. "The value here is for corporations. Corporations will now have the ability to span the instant messaging landscape."

Instant messaging through computers, phones and other handheld devices is similar to the telephone, in that people communicate with each other directly and immediately. Most instant messages involve short text notes traded back and forth on computer screens, although some systems allow users to talk and see one another through the use of cameras, microphones and speakers or headphones.

The growth of instant messaging has been exponential. AOL officials reported yesterday that the use of instant messaging has doubled over the past year. More than 2 billion instant messages are sent and received on the America Online network daily, surpassing the 400 million e-mails sent daily by AOL users, they said.

For now, the three companies have no plans to permit users outside the workplace to communicate with one another over different instant message systems. America Online maintains a commanding lead among consumers with its AIM and ICQ messaging systems, giving the Dulles company little incentive to open up its network to Microsoft and Yahoo and risk losing market share.

"What this does not do," Root said, "is the holy grail of instant messaging, which is to allow anybody on any network to send a message to anybody on any other network."

Microsoft and Yahoo officials expressed optimism yesterday, saying this first step was likely to lead to new partnerships.

"This lays the groundwork for instant messaging to become as widespread and useful as e-mail is today," said Taylor Collyer, senior director of real-time collaboration marketing at Microsoft. "If you can connect to everybody, it becomes more valuable. I believe this announcement will lead to that happening with instant messaging."

"We have been active advocates and proponents of seeing interoperability enabled beyond the enterprise," said Brad Garlinghouse, Yahoo's vice president for communications products. "This jump-starts that and is indicative of the kind of success we can have working together."

AOL has been struggling to break into the corporate market for instant messaging, and the fresh pact with Microsoft, which will market and sell the new service, is likely to facilitate that process. While AOL is a consumer-based firm, Microsoft has a tremendous presence in the corporate market. Microsoft already has tens of millions of users who communicate over an earlier version of its network software, called Life Communications Server.

As part of the business partnership among the three, Microsoft will receive a license fee from companies for its network software and support, then pay unspecified fees to AOL and Yahoo, officials said.

While analysts said the new partnership is a setback for IBM -- which has its Sametime messaging system in the leading position in the workplace -- they predicted that IBM would seek to cut deals with AOL, Yahoo and Microsoft's MSN division in the coming months. IBM, they said, has time to play catch-up since the Microsoft-led effort with AOL and Yahoo will not be operational before early 2005, analysts said.

"IBM is free to go out and negotiate the exact same deals with Yahoo and AOL, but the MSN Messenger is a wild card," Root said. "Microsoft could delay or deny that link to MSN. Microsoft might have an inherent competitive advantage that IBM can't do anything about."

Thus far, most instant messaging in the workplace has occurred informally and from the bottom up, with individuals, rather than corporate computer systems mavens, driving the activity and traffic. While millions of individuals use AOL's AIM instant messaging service at work, AOL collects no fees for the free service, and corporations often do not control its use.

The new service being touted by Microsoft, AOL and Yahoo would have features, including the electronic recording and saving of instant messages, and the guarantee of secure communications, that the free instant messaging services do not include. The ability to store and retrieve instant messages is critical for businesses placing orders with suppliers, brokerage firms confirming stock purchases to investors and in numerous other commercial transactions and communications.

While consumers have been enthusiastic users of instant messaging, it remains to be seen whether corporations will be willing to spend more on the service. In a recent Forrester survey, about 45 percent of businesses had no plans for formalizing instant messaging in 2004.

July 15, 2004 at 10:41 PM in Portals | Permalink | TrackBack (10) | Top of page | Blog Home

July 14, 2004

Dexit Turns RFID Cards into Cash

RFID Journal - Dexit Turns RFID Cards into Cash

A Canadian company's new service lets consumers make small purchases using a contactless system.
By Jonathan Collins
Dec. 3, 2003 - To create a service that lets consumers quickly purchase goods, start-up Dexit has turned to RFID to underpin its cashless payments system. “We looked at payment technologies, including mag stripe, dynamic barcode, contact cards and others, but only RFID was easy for consumers to use and had a price point that was low enough to be manageable for both consumers and merchants, says Pierre Roberge, Dexit's vice president of technology.

In September Dexit launched its electronic payment service in its home city of Toronto and says it is on the way to reaching twin targets of 50,000 contactless cards and 300 readers in operation in the city by April next year. So far, 150 readers have been installed, with some stores deploying as many as 12 readers.

“We are focusing on our Toronto launch till April 2004,” says Roberge. “Plans are being put in place for our expansion for the remainder of next year.”

Dexit’s goal is to provide a service that complements existing cashless payment methods such as debit and credit by replacing cash payments in transactions too small for those other payment types. “Our main rival is cash. Debit and credit cards penetration in our target market is less than 10 percent of small transactions,” says Roberge. Dexit charges the merchant a fee for each transaction, but the rate is competitive with those for credit and debit cards, according to the company.

After a purchase has been rung up at cash register, a customer can pay using a Dexit tag, a thin 1- by 2-inch plastic tag that attaches to a key ring or cell phone. The customer need only wave the RFID-enabled tag in front of the RFID reader at the register. The company says its system can receive a transaction request and authorise a payment within two seconds—a fraction of the average 30 seconds it takes to carry out a transaction by other methods. “That may not sound like much, but for a coffee shop or newspaper seller that does most of its business between 7 a.m. and 9 a.m., it can make a real difference,” says Roberge.

To obtain a Dexit account, consumers simply sign up for the service. They can then load funds from their Canadian bank account or through preauthorized debit or electronic bill payment. Using electronic bill payment, consumers can replenish their account on the Internet, by telephone or at a bank ATM. The RFID transponder within Dexit tag holds a unique number as well as other data linked to a single customer but contains no personal information, says Roberge. Adding value to the tag costs $1.50 per transaction. Consumers can spend up to $100 per day with Dexit’s tag.

The company says its system uses tags and readers from Inside Contactless, an RFID equipment maker based in Aix en Provence, France.

“Dexit was built around the 14443 protocol, which means a passive tag with a read-range capability up to 10 cm,” says Roberge. He explains that his company’s decision to go with Inside was a practical one. For example, some RFID gear commonly used for contactless payments, such the Texas Instrument system used for the ExxonMobil Speedpass, couldn’t meet Dexit's technological requirements.

“Speedpass is based on an older and proprietary RFID technology,” says Roberge. “We wanted to roll out our offering on something more flexible, more secure and supported by many vendors. We felt that ISO 14443 is future proof, as far as payment application is concerned. The industry validated our research since then."

Roberge found, however, that Inside was the only vendor that could also meet Dexit’s production deadlines.

“Inside was a rarity because its technology was already in the marketplace. Other companies said they had what we needed, but we would find the products were still in their labs,” says Roberge.

In the U.S. several RFID-based payment services already exist. ExxonMobil's popular Speedpass lets customers pull up to the pump, wave a Speedpass key fob past an RFID reader built into the pump and start filling up. Philips 66 and Citgo have followed suit, but analysts have criticised all these deployments for being proprietary systems that require separate tags for each gasoline supplier (see Problems at the Pump. In trial of a system similar to Dexit’s, American Express has been testing its ExpressPay RFID payment product with merchants in the Phoenix area, but the trial’s users consist mostly of AmEx employees (see AmEx Expands RFID Payment Trial.

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July 14, 2004 at 07:10 PM in Financial Services | Permalink | TrackBack (7) | Top of page | Blog Home

Spies drink Coke, wear iPods

ITBusiness.ca

7/14/2004 5:00:00 PM - The military bans novelty phones and MP3 players. The enterprise isn't far off

by Shane Schick

I've taken apart my ballpoint pen. I've turned my backpack inside out. After a thorough examination, I am reasonably sure my bottle of orange juice contains no global positioning chips.
Does this mean I can come to the boardroom?

You can understand why the war on terror would put the international military on edge, but recent prohibitions on cellular technology and certain digital recording devices takes paranoia to a whole new level. It began early this month, when the U.S. army reportedly put a ban on Coke cans that had been specially rigged with cell phones as part of a promotion to win cash and prizes. Meanwhile, across the Atlantic, the British Ministry of Defence said no one would be allowed to bring an Apple iPod into its headquarters in the U.K. or abroad. In both cases, officials said the technology posed the risk of being used to steal data, intercept communications or infect the organization's computers with viruses.

If these policies become more consistent across the public sector, it is easy to see how they would also be co-opted by commercial organizations who value their data, and the IT infrastructure that runs it. As snap decisions go, these bans probably provide some comfort to the people who made them. By acting quickly, they hope to stop problems before they happen -- and it should be emphasized here that there have been, so far, no reports of renegade Coca-Cola soldiers radioing the enemy, or an iPod used to download a NOC list. Unfortunately the policies also expose the naivete of decision-makers who lack foresight about how their network environment will evolve.

The Coke can may be a rare form of promotion, but it's hard to imagine keeping out other forms of cell phones out of various military bases. In some sense, every cell phone is a homing device, and in that respect carries some risk. So are the many personal items that may in time include RFID tags, which won't always be easy to detect. The danger here, if there was one, seemed to be that senior officials believed personnel would not recognize the special cans. I've seen a picture of the can, and you'd have to be a moron unfit to serve in any army not to recognize what you were carrying. If these are potential Trojan horses, they ought to be redesigned.

Banning iPods is another matter entirely, because it points to an issue affecting all kinds of organizations. The good news is that everything is becoming connected to the network -- which is what we want, because it increases access while promising to ease integration issues and boost productivity. The bad news is that it's becoming harder to determine what the "network" consists of, and what devices constitute outsider status. Business applications are becoming more tightly coupled with personal computing devices because it gives users a greater sense of autonomy, but that only makes it harder for IT departments to police what happens in the enterprise. Someone working for the army probably doesn't need an iPod to do their job, but there are a range of other devices -- including pagers, cell phones and a range of smart appliances -- that could eventually see recording capabilities built in. What are you going to do, ban everything but a notepad and pen?

The trouble with bans is that they place enforcement chores on those to institute them, and it is very hard to maintain the necessary vigilance. Training efforts around acceptable use would be one alternative. So would a policy that requires employees to submit a regular inventory of the devices they bring into work (as Draconian as it may sound, it's no worse than being forced to clear everything off your desk for inspection each night, as has become routine in a number of companies). Rogue employees are an ongoing threat, but there should be some flexibility around security that doesn't unfairly penalize the entire organization. There's got to be some way we can work in harmony. Maybe we should buy everyone a Coke.

July 14, 2004 at 07:08 PM in Internet evolution | Permalink | TrackBack (8) | Top of page | Blog Home

Bell adds voice recognition to Dexit service

ITBusiness.ca

7/8/2004 5:00:00 PM - Carrier seeks opportunities to apply network expertise to money transfer

by Greg Meckbach

Bell Canada plans to use biometrics software to allow Dexit customers to add value to their accounts over the phone.

Dexit, which is available primarily in central Toronto, lets users make small purchases from convenience stores and other vendors using radio frequency identification (RFID) tags, which can be attached to their key chains or Telus Mobility cell phones.

Currently, customers must make arrangements with their banks to add money to their cards.

But "within a short number of months," consumers will be able to transfer money to their Dexit cards by dialing an 800 number, said Blair Makin, Bell Canada's executive director of business networking solutions.

During a briefing to IT Business editors Thursday, Makin said the Dexit system will verify customers' identity by recognizing their voices over the phone.

"It will be a simple call to a voice recognition system, to say, 'Hi, it's Martin. Can you put another $20 into my account?' They already know who you are by your voice pattern."

Customers would also be able to check their accounts through the voice recognition system.

Earlier this year, Bell Canada partnered with Toronto-based Dexit Inc. for exclusive rights to market and deploy the card readers to retail outlets. At the time, Dexit had signed up about 225 merchants.

Makin said last year in Canada, consumers paid businesses nearly $3.4 trillion. About 10 per cent of that money was paid in about 60 billion transactions involving small amounts cash.

He added the main reason consumers wait for long periods in lineups at coffee shops and other retail outlets is because they're waiting for customers in front of them to dig out their cash, and for the cashiers to give them their change.

It takes about 1.5 seconds to process Dexit transactions on the Bell network, Makin said. Other forms of electronic payment take 15 to 20 seconds, while cash payments take an average of 45 seconds, Makin added.

"Everyone's gone through the Tim Horton's line, or another coffee shop," he said. "A reason the lines get long is the exchange of cash, counting change and putting the money back."

In an earlier interview with ITBusiness.ca, Dexit CEO Renah Persofsky said the Bell partnership was critical to encouraging adoptin of its micropayment service.

"What we're really doing is working on the consumer side of a ubiquitos play, and on the merchant side we have what I believe to be the best organization to get our merchants deployed," she said, referring to Bell. "They say the last mile is always the toughest and we found the right partner to deliver the last mile for us."

The Dexit partnership is one of several pieces of Bell Canada's strategy to use its telecom expertise to sell services to companies looking for more efficient ways of transferring money.

Another service is the Institutional Trade Management systems (ITSM), which allows large financial service firms to carry 5,000 stock trades per second over Bell Canada infrastructure.

ITMS, launched last month, is designed to integrate institutional investors' systems with those of securities brokers in order to allow them to automate the share trading process.

Most securities trades are handled manually, through faxes, phone calls, or users manually keying in information, Makin said.

"Beyond a few proprietary systems, there is no one single capability to go all the way from an order, from, say a fund company, all the way through to a broker, into the exchange and make the trade."

ITMS manages stock bids and orders from inception through to settlement over Bell's Internet Protocol network. It also allocates cash earned through stock sales to certain accounts.

In most cases, he said, ITMS can be integrated directly into brokers' and institutional investors' existing systems.

With manual systems, 15 per cent of orders to not close within the time specified by securities regulations, and 60 per cent of all transactions are executed with errors.

"We looked at the way all those phone calls and faxes occurred, and we looked at a system that could make that far more efficient and secure."

Although ITMS is used only for stock trades now, Bell Canada plans to let investors conduct bond trading through the system.

-- With files from Shane Schick

July 14, 2004 at 07:05 PM in Financial Services | Permalink | TrackBack (31) | Top of page | Blog Home

HP to overhaul TD's bank machines

TheStar.com - HP to overhaul TD's bank machines

420 million job to take 7 years
Firm to manage network as well

TYLER HAMILTON
TECHNOLOGY REPORTER

The Canadian division of Hewlett-Packard Co. has been chosen to modernize and manage Toronto Dominion Bank's network of 2,400 "green machines" as part of a seven-year, $420 million outsourcing contract.

The deal, hailed by both companies as unique in the Canadian financial services sector, includes an upgrade to the bank's national point-of-sale transaction system, which is used by thousands of retailers across Canada to handle customer debit-card payments.

"The machines will be more modern, will operate a bit quicker. ... The software that controls the machines will allow them to perform functions better," said Chuck Hounsell, senior vice-president of TD Bank Financial Group.

Hounsell said the bank's 10 million customers eventually will be able to customize how they interact with TD bank machines so their most common transactions are presented after a password has been entered. Further out, machines will also be able to instantly scan digital images of cheques being deposited so they can be cleared electronically.

Security and accessibility will also be improved. Over time, the network will be enhanced to accept secure smart cards and higher encryption standards will be used for number pads and card readers. Those with disabilities will get greater wheelchair access and audio features.

Under the deal, 50 TD Bank employees will be transferred to HP, which has partnered with Diebold Co. of Canada Ltd., ACI Worldwide, Phoenix Interactive Design Inc. and Intria Items Inc. as part of the multi-year contract. Diebold will supply and maintain the new ABM terminals as they are deployed across the country.

Paul Tsaparis, chief executive officer of HP Canada, called the deal a "first step" for the company as it tries to win contracts for ABM and point-of-sale systems from the other major banks.

HP is hoping the TD contract will give it momentum as it competes against rivals International Business Machines Corp., NCR Corp. and EDS Inc. for similar outsourcing deals.

"The law of economies of scale really applies in this business," said Tsaparis. "We think other banks will naturally want to join in, to realize the cost benefits."

Jim Westcott, senior outsourcing analyst with IDC Canada, a technology research firm in Toronto, said other ABM outsourcing agreements are out there but none are so comprehensive.

"It's not all new, but the scale of this deal is certainly bigger than what's out there," said Westcott.

"It's really one of the biggest deals we've seen come into the market. ... HP having their name on it is pretty significant for them."

He said managing ABM and point-of-sale networks is not generally considered a "core competency" for banks, adding that HP will likely try to leverage the expertise of the 50 TD employees it picked up in the deal to win other contracts.

Whether HP has success with this strategy depends partly on how smoothly it manages the TD transition. "If they can accelerate that learning curve and get it out to the market faster, they'll have more success. But it typically takes a while to figure things out," said Westcott.

July 14, 2004 at 07:11 AM in Financial Services | Permalink | TrackBack (2) | Top of page | Blog Home

Yahoo Boosts Email Tech with Startup Buy

Yahoo Boosts Email Tech with Startup Buy

ComputerWire Staff
Yahoo (NASDAQ: YHOO - news) ! Inc has purchased San Francisco-based startup Oddpost Inc for a reported $30m, in order to boost its webmail technology portfolio. The move comes as mail is emerging as the battleground between Yahoo and rivals Google, Microsoft (NASDAQ: MSFT - news) and Ask Jeeves (NASDAQ: ASKJ - news) .

Oddpost offers web-based email services that include built-in aggregated news and RSS blog feeds. It also has standard features like spam filtering, as well as odder features such as the ability to randomly generate a "thought provoking" subject line.

The company said its subscribers will be migrated to the premium versions of Yahoo Mail, and will get a year free. Yahoo is in the process of boosting its email services to compete with Google Inc's forthcoming Gmail.

July 14, 2004 at 12:29 AM in Portals | Permalink | TrackBack (13) | Top of page | Blog Home

July 13, 2004

Senate Bill Targets 'Phishers'

Yahoo! News - Senate Bill Targets 'Phishers'

By David McGuire, washingtonpost.com Staff Writer
Internet scam artists who use fake Web sites to dupe people into revealing sensitive financial information could face up to five years in jail and forced to pay $250,000 in fines under a bill introduced late last week in the Senate.

The legislation, introduced last Friday, is designed to fight "phishing," one of the newest and most dangerous forms of online fraud.

In a typical phishing scheme, a scammer sends out an e-mail message disguised to look like an official notice from a respectable business such as a bank or online store. The message tells recipients that their account information has lapsed and prompts them to click on a link to enter it again. Users then are carried to a counterfeit Web page where they are prompted to enter credit card numbers or other private data, unwittingly handing their information over to the thieves.

Phishing threatens the integrity of secure shopping on the Internet and could hurt electronic commerce, said the bill's sponsor, Sen. Patrick Leahy (D-Vt.). "If you can't trust where you are on the Web, you are less likely to use it for commerce and communications," Leahy said in a statement released on Friday.

Phishing scammers already violate a host of identity theft and fraud laws, but prosecuting them under those statutes can be challenging, said Rich Phillips, a Leahy aide. To charge scammers now, law enforcers need to prove that a victim suffered measurable losses. By the time they do that, he said, the scammer has often disappeared.

Phishing victims lost $1.2 billion to identity theft-related fraud between April 2003 and April 2004, and were three times more likely than the average American to have their identities stolen, according to an online survey of 5,000 people conducted in May by Stamford, Conn.-based firm Gartner Research.

"The Internet's becoming a very dangerous place to conduct financial business unless you're willing to scrutinize your activities very closely," said Gartner Vice President Avivah Litan.

The Anti-Phishing Working Group, a group of Internet service providers, banks and other companies that suffer because of phishing, identified more than 1,000 different scams in May, said the group's chairman, David Jevans. The average phishing attempt will reach between 50,000 and 1 million e-mail in-boxes, he added.

Visa USA, whose logo and Web site are often duplicated by scammers, launched an anti-phishing educational campaign earlier this month with the Treasury Department (news - web sites), the FTC, Call for Action and the Better Business Bureau.

The FTC has filed several fraud cases against suspected phishers. Top commission officials have spoken out against phishing but the FTC has not taken a stance on Leahy's legislation, said spokeswoman Claudia Bourne Farrell.

Phillips said that Leahy is hopeful that Congress will approve the bill, but acknowledged that it might not get a vote because before Congress adjourns because of the busy election year schedule.

July 13, 2004 at 09:56 PM in Phishing & identity theft | Permalink | TrackBack (1) | Top of page | Blog Home

File-Sharing Thrives as Net Users Find New Outlets

Yahoo! News - File-Sharing Thrives as Net Users Find New Outlets

By Bernhard Warner, European Internet Correspondent
LONDON (Reuters) - Internet users download twice as many films, games and music as they did a year ago, despite a big crackdown on the activity, according to a study on Tuesday.

Better broadband Internet connections and compression technologies mean larger files can be downloaded more rapidly, creating as big a piracy headache for movie studios as for music labels.

Each day, the equivalent of roughly three billion songs or five million movies zips between computers, according to the study by Cambridge, England-based technology firm CacheLogic.

It estimates Internet users around the globe freely exchange a staggering 10 petabytes -- or 10 million gigabytes -- of data, much of it in the form of copyright-protected songs, movies, software and video games.

The rogue exchanges continue to dwarf the nascent market for legitimate music downloads ushered in by the likes of Apple Computer's iTunes.

The popularity of file-sharing is costing the largest Internet service providers $10 million per year each in bandwidth and network maintenance costs, CacheLogic said.

In the light of its findings, the company also questioned the wisdom of the music industry's crackdown on file-sharers.

"One of the biggest myths put forth by the music industry -- that they are winning the war on file-sharing -- is simply wrong," said Andrew Parker, co-founder of CacheLogic.

"It's a case of displacement," he added. "Users are just moving to new networks."

Music industry trade body the International Federation of the Phonographic Industry (IFPI) defended the legal strategy, saying its own research shows the number of illicit music files on the Internet dipped by 100 million between January and June.

"It hasn't been dramatic, but the number of infringing files has fallen from 900 million to 800 million," an IFPI spokesman said, adding the rise in volume cited by CacheLogic may be down to the increase in film and spoofed song files now online.

SWAPPING TO UPSTARTS

When the music industry began suing the most prolific song-swappers last September, a number of them switched from the most popular peer-to-peer (P2P) networks such as Kazaa to a host of upstarts to shake off the dragnet.

Today, the likes of Bit Torrent and eDonkey have become the P2P networks of choice, particularly for European and Asian file-sharers, CacheLogic said.

The face of file-sharing has changed too. The vast majority of files passing through P2P networks now exceeds 100 megabytes, meaning Internet users are as likely to download larger movie, software and game files as they are the smaller song files.

"It's all about video now," Parker said.

July 13, 2004 at 09:54 PM in Business Models | Permalink | TrackBack (15) | Top of page | Blog Home

Microsoft CEO Touts Security Push at Conference

Yahoo! News - Microsoft CEO Touts Security Push at Conference

By Reed Stevenson
SEATTLE (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) is taking a big step toward boosting the security of its flagship Windows product in August with the release of a major software update, Chief Executive Steve Ballmer said on Tuesday.

Microsoft will release in August, after a two-month delay, an interim update to its flagship Windows operating system called Service Pack 2.

The update, which will make some fundamental changes in how Windows is configured and also provide tools to secure software and information, is more extensive than the regular software updates but falls short of a version overhaul. Microsoft is working on a new version of Windows, code-named Longhorn, that is expect to debut in 2006.

Ballmer told a crowd of hardware, software and consulting companies, which provide the bulk of Microsoft's revenue by reselling its software to businesses and homes, that the world's largest software maker was on track to deliver on its 2 1/2-year-old promise to make its software more secure and reliable.

At the same time, Ballmer said that Microsoft had more to do in order to ensure that its software is secure.

"We've made, I think, at least a year or more of progress on security in the last year, we're not perfect," Ballmer said, "We're not where we need to be."

Redmond, Washington-based Microsoft has made it a top priority to improve the security and reliability of its software, after Chairman Bill Gates (news - web sites) launched its "Trustworthy Computing" initiative in a company wide memo in early 2002.

Microsoft has characterized Service Pack 2 as its most extensive security update thus far for Windows XP (news - web sites). The update for Windows XP Home Edition will be about 70 megabytes and the update for Windows XP Professional will be about 92 megabytes.

"I think from a security perspective its significant," Vincent Gullotto, vice president of the anti-virus emergency response team at McAfee Inc. (NYSE:MFE - news), said of Service Pack 2, "I think a lot of attention has been put into it."

Major worms, such as Blaster, have exploited flaws in Windows -- causing computers to crash and putting them at risk of data loss and highlighting the challenge that Microsoft has in making its flagship product more secure.

Microsoft has encouraged users to sign up for Windows update, a service that automatically downloads patches to keep Windows up to date.

Ballmer said that Microsoft's Windows Automatic Update service has seen a fivefold increase in downloads over the last 10 months, with more than 112,000 servers accessing Microsoft's computers that check for updates on a daily basis.

The Service Pack 2 update will be available to customers for free over the Internet and can also be installed with CD-ROMs. Most new computers sold from the fall will ship with Service Pack 2 already installed.

Separately, Microsoft issued its monthly security bulletin on Tuesday, which warned of seven potential flaws in Microsoft software that could make computers vulnerable to hacking or viruses.

Two of the potential flaws in the July Security Bulletin were rated as "critical."

Mike Nash, Microsoft's vice president in charge of security, also said that Microsoft's latest security product, aimed at securing networks, was now available for purchase.

Internet Security and Acceleration (ISA) Server is now available from Hewlett-Packard Co. (NYSE:HPQ - news), Nash said.

ISA Server 2004 is Microsoft's first major foray into the market for security appliances, which are networked computers, often with self-updating and configuring software, plugged directly into networks to protect them from attacks and allow secure access over the Internet.

July 13, 2004 at 09:53 PM in Microsoft | Permalink | TrackBack (16) | Top of page | Blog Home

VCs Back Ex-Microsoft Execs' Social Networking Experiment

VCs Back Ex-Microsoft Execs' Social Networking Experiment

ComputerWire Staff
A coterie of former Microsoft Corp (NASDAQ: MSFT - news) executives have landed $4.75m in equity funding to develop social networking systems founded on .NET technologies.

Start-up company Graw Group Inc has received the funding from August Capital and Kleiner Perkins Caulfield & Byers.

Graw's senior management lists four former Microsoft managers, spanning the Office, Visio and Publisher business tools products, and MSN.

According to Graw, the company is exploring collaborative software products and services build on .NET and other emerging technologies. Graw is not providing details, although it is believed to be entering so-called social networking - a phenomena today associated with peer-to-peer online communities like Friendster.

Graw plans a public trial of its technology in its Seattle hometown later this year with a national US rollout during 2005.

Investment by August Capital and Kleiner Perkins Caulfield & Buyers sees these two companies again putting money into a venture started by Graw co-founders Jeremy Jaech and Ted Johnson. The venture capitalists also funded Jaech and Johnson's Visio Corp, which was acquired by Microsoft in January 2000.

Jaech served as vice president of Microsoft's business tools division until June 2000 while Johnson was corporate vice president of Microsoft's Business tools division until September 2003. Other ex-Microsoft executives serving with Graw are Peter Mullen, now Graw chief software architect, and Dennis Tevlin, vice president of marketing and business development for Graw.

July 13, 2004 at 08:58 AM in Business Models | Permalink | TrackBack (25) | Top of page | Blog Home

July 11, 2004

US Government Warns on Internet Explorer

US Government Warns on Internet Explorer

ComputerWire Staff
US government cyber sentries have advised PC users to avoid Microsoft Corp (NASDAQ: MSFT - news) 's Internet Explorer (IE), thanks to the browser's latest security vulnerability.

The US Computer Emergency Response Team (US-CERT) has issued a vulnerability note, warning of a problem in IE that potentially allows malicious web site code to execute.

US-CERT said IE does not adequately validate the security context of a frame that has been re-directed by a web server, opening the way for harmful code to execute locally.

The group warned of "a number" of "significant" vulnerabilities in technologies relating to the IE domain/zone security model, DHTML object model, MIME type determination, and ActiveX. As one of many precautions, US-CERT advised users to use a different web browser.

Other precautions include not following unsolicited links, maintaining updated anti-virus software, read and send e-mail in plain text format, and disable Active scripting and ActiveX.

July 11, 2004 at 02:17 AM in Microsoft | Permalink | TrackBack (6) | Top of page | Blog Home

Internet Filters Are: [Good] [Bad] [Both]

The New York Times > Week in Review > Sex and the Supreme Court: Internet Filters Are: [Good] [Bad] [Both]

By JOHN SCHWARTZ

N the surface, the fight over Internet pornography can seem upside down and backward.
In a case decided by the Supreme Court last week, the American Civil Liberties Union had argued that Internet filters are a great way to protect children from pornographic material online. But in a case decided by the Supreme Court last year, the A.C.L.U. argued against a law requiring filters in schools and libraries, and the organization attacked filters in a 1997 paper that said "rating and blocking proposals may torch free speech on the Internet."

The Department of Justice appears to be in the same bind, but in reverse: in this year's case, it argued that filters were not enough to protect children from pornography, while in the library filtering case decided last year, they argued that filters are an effective means of protecting the nation's youth.

The apparent inconsistencies came into focus when the Supreme Court - one player in the online pornography wars that has maintained a consistent stance on filters - handed down its decision in the A.C.L.U.'s challenge to the Child Online Protection Act. That law, which was enacted in 1998, would impose tough criminal penalties on individuals whose Web sites carried material deemed "harmful to minors."

The court sent the case back to the district courts to gather more facts about how filtering technology has changed since the case was first heard, and left in place an injunction blocking enforcement of the law. Justice Anthony M. Kennedy, in the majority opinion, wrote approvingly of the increasing abilities of Internet filters to let in useful bits of data and keep out the naughty ones.

The court showed a similar acceptance of the prowess of filters in last year's case when it supported another law, the Children's Internet Protection Act, with its requirements of filters for almost all schools and libraries. The sticking point for civil libertarians - that adults might not be able to gain access to sites that they are legally entitled to see - was not a big problem, the court said, since the law held that adult patrons could ask that the filters be turned off.

But things aren't that simple, said Ann Beeson, who argued this year's case for the A.C.L.U. The central issue, she said is whose finger is on the mouse, the government's or the parent's.

"When a parent installs a filter that keeps a kid from seeing a bunch of sites that may or may not be pornography, that's parenting," she said. "When a government forces all adults and minors to use filters, that's censorship." So it makes sense that the A.C.L.U. would oppose filter requirements in libraries last year, and sing the praises of filters in this year's case.

The same logic holds for the White House, which said it was simply seeking the best way to keep smut away from young Internet users. "The overarching goal is to prevent children from being exposed to pornography and other indecency," said Claire Buchan, a White House spokeswoman. "And the administration has aggressively pursued a variety of ways to address that issue."

For all the fuss, however, filters alone may never prove to be the solution.

One group of technology and business leaders has been working on something they call the Accountable Net project, which envisions new tools that would help people gain control over their Internet use by blocking the unwanted materials that now plague online life.

"If we treat the entry to our computers the way we treat our own front doors and decide who to let in ourselves, we'll have a better online experience," said Susan Crawford, an assistant professor at Cardozo Law School in New York, and a participant in the project.

David Johnson, a Washington lawyer and another partner in the Accountable Net, said achieving such a goal would involve the cooperation of certain Web sites, which would voluntarily label themselves to make filtering them out more feasible. "My impression is that what they are trying to do is reach paying customers as accurately as possible," Mr. Johnson said, "like everyone else in business." Labeling, he said, could help attract the right customers and avoid inadvertently reaching the wrong ones.

Lawrence Lessig, a Stanford Law professor and an expert in the interplay of technology, law and policy, favors getting Web sites to label their wares but says that many in the continuing debate are still stuck at the poles of the argument - with one side demanding government regulation and the other insisting that government keep its hands off cyberspace. "It's not a binary question," Professor Lessig said. "It's how you marry the two to achieve a policy objective."

The notion of a blend appeals to Donald Telage, who headed a commission appointed by Congress that examined filters and other technologies for protecting children online that Justice Kennedy cited with approval. "What we need to do is find the right combination of law, business incentives and architecture" for each problem that has made the Net a less civil place, he said. "It won't be any one of them. It's a combination."

Copyright 2004 The New York Times Company

July 11, 2004 at 02:15 AM in Internet evolution | Permalink | TrackBack (7) | Top of page | Blog Home

The Future of Ideas

::: the future of ideas ::: by Lawrence Lessig

The Internet revolution has come. Some say it has gone. What was responsible for its birth? Who is responsible for its demise?

In The Future of Ideas, Lawrence Lessig explains how the Internet revolution has produced a counterrevolution of devastating power and effect. The explosion of innovation we have seen in the environment of the Internet was not conjured from some new, previously unimagined technological magic; instead, it came from an ideal as old as the nation. Creativity flourished there because the Internet protected an innovation commons. The Internet’s very design built a neutral platform upon which the widest range of creators could experiment. The legal architecture surrounding it protected this free space so that culture and information–the ideas of our era–could flow freely and inspire an unprecedented breadth of expression. But this structural design is changing–both legally and technically.

This shift will destroy the opportunities for creativity and innovation that the Internet originally engendered. The cultural dinosaurs of our recent past are moving to quickly remake cyberspace so that they can better protect their interests against the future. Powerful conglomerates are swiftly using both law and technology to "tame" the Internet, transforming it from an open forum for ideas into nothing more than cable television on speed. Innovation, once again, will be directed from the top down, increasingly controlled by owners of the networks, holders of the largest patent portfolios, and, most invidiously, hoarders of copyrights.

The choice Lawrence Lessig presents is not between progress and the status quo. It is between progress and a new Dark Ages, in which our capacity to create is confined by an architecture of control and a society more perfectly monitored and filtered than any before in history. Important avenues of thought and free expression will increasingly be closed off. The door to a future of ideas is being shut just as technology makes an extraordinary future possible.

With an uncanny blend of knowledge, insight, and eloquence, Lawrence Lessig has written a profoundly important guide to the care and feeding of innovation in a connected world. Whether it proves to be a road map or an elegy is up to us.

July 11, 2004 at 02:13 AM in Internet evolution | Permalink | TrackBack (12) | Top of page | Blog Home

July 10, 2004

INTRODUCTION TO: "Open Architecture as Communications Policy" (PRESERVING INTERNET FREEDOM IN THE BROADBAND ERA)

Blogs at CIS

Download full book "Open Architecture as Communications Policy"

The papers in this volume are collected from speakers at a forum
held on Capitol Hill entitled Broadband Technology Forum: The Future
Of The Internet In The Broadband Age.1 All of the speakers are active in
the public policy debates, regulatory proceedings and court cases that have
been defining the contours of the next generation of the Internet. The
purpose of the forum was to engage staffers from Congressional offices
and federal agencies in a dialogue over the importance of preserving the
vibrant nature of the Internet.

With that purpose in mind, this volume blends new papers and
comments with several that are half a decade old (ancient by Internet
standards). Taken together they seek to provide a comprehensive basis for
understanding the interaction of technology and public policy in the
development of the Internet. Written at different times and for different
purposes over the past five years, the papers are powerful testimony to the
proposition that open architecture is critical to the success of the Internet.
The end-to-end principle of the Internet and the open communications
networks in which it was incubated are critical building blocks of a dynamic,
innovative information economy.
The papers address three aspects of the environment in which the
Internet was created and flourished – technology, economy and law – three
of the critical modalities of regulation, as Lawrence Lessig called them in
CODE AND OTHER LAWS OF CYBERSPACE.2
PART I: TECHNOLOGY AND POLICY IN THE CREATION OF THE INTERNET
Chapter II is a paper by Robert E. Kahn and Vinton G. Cerf, What
Is the Internet (and What Makes It Work)?, INTERNET POLICY INSTITUTE (1999,
revised 2004). It provides a brief discussion of the architecture of the
Internet through the chronology of the development of its fundamental technologies. Both of the authors were at the center of the creation of the
seminal technologies. They are keenly aware of the role of institutions
and public policies in the creation of the Internet.
Chapter III is a paper by Mark A. Lemley and Lawrence Lessig,
The End of End-to-End: Preserving the Architecture of the Internet in the
Broadband Era, 48 UCLA LAW REVIEW (April: 2001). The paper presents
a discussion of the design principle of the Internet. Not only does it explain
how the design principle operates to promote innovation, but it directly
refutes many of the economic arguments made by those who would
abandon, or allow the network facility owners to abandon, the end-to-end
principle and open communications networks.
PART II: EMPIRICAL STUDIES: THE ROLE OF OPEN ARCHITECTURE IN
STIMULATING INNOVATION
Part II presents empirical studies of the dynamic environment
created by open architecture in digital networks and the negative impact
on innovation of closure and discrimination in communications networks.
Chapter IV presents a paper prepared for the forum by Mark N.
Cooper that takes a broad view of the impact of the Internet. It attempts to
use network theory and recent analyses of technological change to reinforce
the long-standing claim that the open architecture of the Internet represents
a fundamental change and improvement in the innovation environment. It
concludes with an examination of the role of Internet Service Providers in
the spread of the Internet.
Chapter V is excerpted from a paper by Mark N. Cooper, Open
Communications Platforms: Cornerstone Of Innovation And Democratic
Discourse In The Internet Age,” 2 JOURNAL OF TELECOMMUNICATIONS AND
HIGH TECHNOLOGY LAW (1: 2003). It demonstrates the increased possibility
of anticompetitive practices by firms that dominate key points of the digital
communications platform. It links the potential harm back to the network
theory by presenting a case study of the elimination of Internet Service
Providers.
Chapter VI is excerpted from a paper by Timothy Wu, Network
Neutrality, Broadband Discrimination,” 2 JOURNAL OF TELECOMMUNICATIONS
AND HIGH TECHNOLOGY LAW (1: 2003). It attempts to precisely define the
characteristics of the Internet that should be preserved. In contrast to
chapters IV and V, which emphasize the commercial relationships between network owners and Internet Service Providers (ISPs), Wu provides a
detailed study of the customer contract provisions that threaten or infringe
on the freedom for consumers to use the Internet and applications.
PART III: POLICY AND LEGAL FRAMEWORK FOR PRESERVING OPEN
ARCHITECTURE
Part III maps out the current terrain of law and regulatory policy.
The papers share the objective of preserving open architecture. They would
travel somewhat different routes to achieve that goal.
Chapter VII is composed of two papers. It opens with a paper by
Timothy Wu, Broadband Policy: A User’s Guide, Journal OF
TELECOMMUNICATIONS AND HIGH TECHNOLOGY LAW, forthcoming. It reviews
several aspects of the current policy debate and offers a recommendation
of nondiscrimination. The chapter then presents a formal proposal for
network neutrality that was presented to the Federal Communications
Commission (FCC) in an ex parte filed at the FCC by Wu and Lawrence
Lessig.
Chapter VIII combines two documents by Earl W. Comstock and
John W. Butler, Access Denied: The FCC’s Failure to Implement Open
Access as Required by the Communications Act,” 8 JOURNAL OF
COMMUNICATIONS LAW AND POLICY, (Winter: 2000), and the legal brief filed
on behalf of Earthlink in the second case heard by the Ninth Circuit
involving broadband (Brand X v. FCC). Comstock and Butler show why
the FCC has had so much trouble convincing the Ninth Circuit Court of
Appeals that its approach to deregulating advanced telecommunications
networks fits under the statute. Twice the Court found that the obligations
of nondiscrimination and interconnection of Title II of the Communications
Act apply to cable modem service. The detailed recounting of the history
and purpose of the Computer Inquiries that runs through the legal arguments
is a strong reminder that the FCC adopted the correct policy over 35 years
ago when it recognized the fundamental importance of nondiscriminatory
access to the essential telecommunications function of the network on which
applications and services ride.
Chapter IX begins with a letter from Vinton G. Cerf to the head of
the Secretary of Commerce and the Chairman of the Federal
Communications Commission raising concerns about the apparent public
policy shift away from open communications networks. The chapter then moves to a paper by Richard Whitt of MCI that formed the basis for Vinton
Cerf’s comments to the forum. The paper picks up and develops the
distinction between transmission and applications as it is being discussed
in regard to contemporary digital networks. Whitt attempts to synthesize
the emerging thinking about reforming regulation of communications by
moving from the old vertical view, in which industries are regulated because
of their underlying technologies or the services they provide, to a horizontal
view, in which similar functionalities are treated similarly across networks,
regardless of which technology is used.
The remainder of this chapter is composed of the opening remarks
at the forum. FCC Commissioner Michael Copps established the policy
context for the forum by summarizing a speech he had made in October
2003 that asked a critical question “The Beginning of the End of the
Internet?”3 His subtitle identified the critical issues as “Discrimination,
Closed Networks and the Future of Cyberspace.”

July 10, 2004 at 03:59 PM in Internet evolution | Permalink | TrackBack (6) | Top of page | Blog Home

Dems Credential Bloggers; GOP Will, Too

Yahoo! News - Dems Credential Bloggers; GOP Will, Too

Fri Jul 9,11:11 PM
By ANICK JESDANUN, AP Internet Writer
NEW YORK - More than 30 independent Web journalists have been accredited to cover the Democratic convention, and the Republicans said Friday they'll also credential so-called bloggers.

It's the first time bloggers will be joining the thousands of newspaper, magazine and broadcast journalists at the quadrennial presidential-nomination events.

The Democrats initially invited an additional 20 bloggers to their July 26-29 party in Boston, but later rescinded those approvals and blamed a computer gaffe. That prompted complaints of unprofessionalism and favoritism.

Convention spokeswoman Peggy Wilhide said the approval letters that went to the disinvited had been generated by mistake.

Anticipating criticisms that decisions were ideologically based, Wilhide said only two of the 20 credentials rescinded were for "right-leaning" blogs. She pointed to the approval of at least one "right-leaning" blog, Oxblog, though the co-founder who applied, Patrick Belton, is a registered Democrat who considers himself centrist.

Meanwhile, Republican convention spokesman Leonardo Alcivar said Friday that the GOP, too, will credential bloggers — likely 10 to 20. He said Republicans still were crafting the procedures and guidelines for their Aug. 30-Sept. 2 gathering in New York City, but won't reject bloggers based on viewpoint alone.

The independent bloggers will be joining scores of others hired by and accredited through traditional news organizations, including The Associated Press and MSNBC.com.

Some 200 independent bloggers had sought credentials for the Democratic convention. They were screened for their originality, readership level and professionalism, convention officials say.

"Some blogs posted like once a month, so obviously those aren't going to qualify," Wilhide said.

But ultimately, Democrats had to make some tough choices.

For traditional media, both big political parties generally rely on rules established by committees of journalists for getting passes to cover Congress. No such procedure exists for blogs, and convention staffers had to review each blog and apply subjective criteria.

Belton, 28, a doctoral candidate in international relations at Oxford University, said he was "tickled pink" when he learned by phone Thursday he had been accepted. (Notifications were sent by postal mail, but Belton said he hasn't checked his mailbox in days.)

"It will be great fun to participate in the symbolic first convention of the blog," said Belton, who said he's now "trying to scrape the pennies together" for a flight from England.

Bill Ardolino, on the other hand, said he's now out nearly $1,000 for hotel and travel booked after he received an approval letter Tuesday, a day before he was disinvited by e-mail.

Ardolino, 28, runs INDC Journal from Washington, D.C., and acknowledges he's an "outspoken critic" of Democratic nominee John Kerry (news - web sites).

"I certainly have the suspicion that it's because of the nature of my site," Ardolino said. "The whole thing is unprofessional. They've really messed up what could have generated a lot of good will in the blogosphere."

Wilhide would not release a full list of the approved bloggers, but said they included the Democratic-leaning Burnt Orange Report, Daily Kos, Pandagon.net and TalkLeft. Jerome Armstrong of MyDD.com also confirmed to The Associated Press that he had been accepted.

Bloggers will have the same access as traditional journalists within the FleetCenter convention hall, Wilhide said. And bloggers will join radio journalists with workspace in the FleetCenter itself, while other media will be in nearby buildings, she said.

Democrats also will host a breakfast for bloggers on opening day.

July 10, 2004 at 03:46 PM in Politics | Permalink | TrackBack (16) | Top of page | Blog Home

New blog

Turns out that there is just too much data in this blog and my simple attempts at comments both get lost in the morass, and get mixed up in the other content, and frankly I can't easily find them myself!

So I have set up a separate blog "why". Its also accessible from the sidebar way down at the bottom right.

July 10, 2004 at 01:21 PM in @ My Views @ | Permalink | TrackBack (24) | Top of page | Blog Home

July 09, 2004

Michael Powell Joins the Blogosphere

Michael Powell Joins the Blogosphere :: AO

FCC Chairman Powell kicks off his new regular AO blog.
Michael Powell [US Federal Communications Commission] | POSTED: 07.08.04 @08:28
Michael K. Powell
Chairman, Federal Communications Commission
AlwaysOn Blog
July 7, 2004

Traditionally, the economic justification for government regulation of an industry was market failure such as monopoly, negative externalities, or unmet social goals. Government's role in the marketplace should be limited because markets and entrepreneurs develop innovative solutions far more efficiently than regulators can. This is the principle behind opening the communications sector to competition. I am particularly mindful of this principle as new competitive services—VoIP, for example—become viable alternatives for customers.

July 9, 2004 at 11:17 PM in Internet evolution | Permalink | TrackBack (26) | Top of page | Blog Home

FCC Boss Launches Blog Aimed at High-Tech Industry

Yahoo! News - FCC Boss Launches Blog Aimed at High-Tech Industry

Fri Jul 9, 4:09 PM ETAdd Technology - Reuters to My Yahoo!

By Jeremy Pelofsky
WASHINGTON (Reuters) - U.S. Federal Communications Commission (news - web sites) Chairman Michael Powell has started his own Web log, or blog, to reach out to the high-tech community and bypass the scores of Washington lobbyists who typically skulk around his office.

Powell, who wants to avoid regulating new technologies like Web-based telephone service for fear of stifling innovation, said he started the blog to encourage the high-tech industry to get involved because its past practice of flying under the radar to avoid regulations would no longer work.

"Regulated interests have about an 80-year head start on the entrepreneurial tech community when it comes to informing regulators what they want and need, but if anyone can make up for that, Silicon Valley can," he said in his first blog comments posted Thursday morning.

"I am looking forward to an open, transparent and meritocracy-based communication -- attributes that bloggers are famous for!" Powell said, adding he wanted to get out of "the Beltway Washington world where lobbyists filter the techies."

He specifically asked bloggers to send in their thoughts on the coming transition to digital television and possibly using airwave frequencies between television stations for new wireless services.

But, in typical blogger fashion, replies covered subjects well beyond his inquiry, including the FCC (news - web sites)'s recent crackdown on indecent antics on radio and television.

"Simple question for you: Why is Howard Stern's discussion of anal/oral sex fineable, and Oprah's isn't?" asked one Tony Pierce.

The FCC recently proposed fining stations that carried Stern's show that included an explicit discussion of sex. The agency is also looking into talk show host Oprah Winfrey's discussion about sex during her TV program earlier this year.

Regulations limit airing such talks to late-night hours.

Others did stick to the subject, questioning Powell about getting telephone companies to turn on unused fiber optic cable in order to cut prices for high-speed Internet. Some chastised the FCC chief for reaching out only to Silicon Valley.

Andrew Schwartzman, a public interest lawyer who has crossed swords and won a court battle initially halting Powell's attempts to relax media ownership limits, also chided the chairman for not seeking input on other issues.

"I wish he would do the same outreach with the public interest community," he told Reuters. Powell was criticized during the FCC's review of media ownership limits for not holding many official forums for public input on the rules.

Powell attended some discussions but the agency held only one official event. The FCC is now holding official hearings on how radio and television stations are serving their local communities.

FCC officials were not immediately available to comment on how often Powell would be interacting on his blog. It can be found at http://www.alwayson-network.com/

July 9, 2004 at 11:15 PM in Internet evolution | Permalink | TrackBack (22) | Top of page | Blog Home

Bloggers Suffer Burnout

Wired News: Bloggers Suffer Burnout

02:00 AM Jul. 08, 2004 PT
In the days following the U.S. invasion of Iraq last year, a new blog called Whiskey Bar quickly became a popular online destination for opponents of the war. The site's author, who ran the site as a virtual bar with himself as the bartender, encouraged visitors to share their views on the topic at hand.

Over the last six months or so, however, a surge in traffic has transformed Whiskey Bar into something more like a jam-packed nightclub than the cozy neighborhood watering hole the site's owner, known as Billmon, had originally envisioned. His postings often generated hundreds of comments, each of which he moderated.

But running the website soon became a dominant activity in his day, and on June 28, Billmon announced: "Last call." Whiskey Bar would no longer accept comments.

"You've only got so many hours in the day, and like most bloggers, I've got a full-time day job, and something had to give," Billmon said. "In the end, monitoring comments on my blog was becoming a progressively larger part of my blogging time, and I just got to the point where I wasn't able to keep up with it."

Still, cutting readers out of the conversation was a disappointing solution for Billmon, a former journalist who relished the kind of feedback newspaper reporters rarely get.

"When I started out, I really wanted (Whiskey Bar) to be very interactive," Billmon said. "That's one of the most exciting things about blogging, that ability to have dialogue with your readers."

Billmon's inability to keep up with the demands of moderating comments in the face of a job, family and other responsibilities is just one manifestation of a problem increasingly faced by popular daily bloggers: burnout. While they enjoy what they're doing, many find that keeping up with the pressures to post regularly and to be sharp, witty and incisive is often too much.

"When it's fun and it's going really well, you feel (great), and when it's not fun, it starts feeling like ... when you have to go to a job every day from nine to five," said Jason Kottke, the author of kottke.org and remaindered links, popular blogs about technology, culture, photography and other topics. "You start to feel like the readers are depending on you, and ... like you have to post something whether you feel like it or not, and that can be depressing."

Blogging for some is an obvious labor of love, and having a forum that belongs to them and enables them to write whatever they want, and have it seen by throngs of readers, is a very attractive proposition. This is especially true because blogging is a timeless endeavor and one that allows authors to vent about whatever's on their minds.

For Glenn Reynolds, a professor at the University of Tennessee and the author of InstaPundit, one of the most widely read conservative blogs, the best thing about blogging is interacting with his readers.

"There are a lot of smart people everywhere," he said, "and I think it's easy for people who work at universities, where there are supposed to be a lot of smart people, to forget that there are a lot of other smart people out there in all walks of life."

But having such a forum can quickly become a demanding habit.

Several bloggers contacted for this story noted that their readers seem to look at their regular, consistent posting patterns as somewhat akin to a sign of physical health. And any break in that pattern is sometimes seen as a cause for alarm.

"I know that if I go more than about five or six hours without posting, or telling people that I'm not going to be blogging for the rest of the day," said Reynolds, readers e-mail him and say, "You haven't posted anything in five or six hours. Are you OK?"

To one blogger, the author of Counterspin Central, the pressure to keep up led to a recent decision to shut down his blog altogether.

"Just wanted to let everybody know that my family and I are OK. I'm not locked up in Guantanamo or anything," said the blog's author in a posting titled "Last Post," written only days after his previous posting had offered no hint that he was going to disappear. "I just decided for personal reasons that the time was right for me to stop blogging."

Other bloggers feel that even if their readers aren't worrying about their health, they're still expected to be coming up with the next post with little or no delay.

"There's always pressure to have new content up on the site," said Markos Moulitsas Zuniga, author of the anti-Bush blog Daily Kos (Moulitsas Zuniga is married to a regular Wired News contributor). "And it's not like my readers are calling me up and saying, 'What the hell?' But you can sense it. You can sense it when you post something new and 10 minutes later there's 50 comments. You can almost feel they were sitting there waiting."

And that level of expectation can in fact be a self-fulfilling prophesy.

"I never can post something and say I'm done for the day," said Zuniga, "because I'm always thinking about the next post. I'm always feeling like I'm letting people down if I don't have any new stuff up on the site."

For bloggers like Zuniga, this is where burnout begins to creep in.

"I definitely get burnt out," he said. Sometimes "I'll go through the week and I'll go, 'Wow, that was a really bad week.' ... I haven't found a way to control it, to be honest. Either I'm on or I'm not on. I can fake it and maybe people don't notice it, but I know it when I'm not at my best."

Zuniga, at least, has guest bloggers to help him out on weekends. But some other popular bloggers have no one else to turn to when the going gets tough and when the inspiration isn't there.

"There are lulls where nothing seems interesting, where people are just talking about (blogging gadfly) David Winer again, and I say, what the fuck," said Kottke, who himself depends at least in part on the blogosphere for good fodder for his site. "Sometimes it gets harder to find interesting stuff to talk about. There are 3 million blogs, and everyone is talking about everything. It's tough to deal with that sometimes, and you don't want to just be another person talking about the same stuff that everybody else is talking about."

More problematic for Reynolds, however, is that his readers expect him to weigh in on everything. And when he's tired or uninterested, that's not always possible.

"There are times that people want me to have an opinion on stuff that I just don't have an opinion on," said Reynolds. "Because I have a lot of opinions on a lot of things, people are surprised when I don't have an opinion."

Occasionally, then, Reynolds will get e-mail from readers frustrated that he hasn't posted on a topic.

"But usually," he said, "the angry e-mails are from people who just fundamentally don't like me."

July 9, 2004 at 07:31 PM in Blogging & feeds | Permalink | TrackBack (18) | Top of page | Blog Home

Fixing the flaws in Microsoft's big picture

Fixing the flaws in Microsoft's big picture - News - ZDNet

By Rupert Goodwins
ZDNet (UK)
July 8, 2004, 5:51 AM PT
COMMENTARY--In news, nothing gets the juices flowing quite like a genuine leak. You can't always use what you have--documents stolen or mislaid still belong to the company concerned--but sometimes a silver platter descends from the clouds with READ ME carved in foot-high letters. Thus it is with the Project Constellation presentation: an insight into Microsoft's strategic thinking at the highest level.

Project Constellation was the code name for the now-aborted secret takeover bid by Microsoft for SAP--or Mensa and Sagittarius as the document coyly calls them. Revealed in court as part of the ongoing Oracle antitrust trial, the presentation has been heavily edited to remove figures and other specifics. But as a window onto Microsoft's highest levels of corporate consciousness, it's as fascinating as slipping Bill Gates two grains of sodium Pentothal during a Vulcan mind-meld festival. Let's dispose of the code names first.

It doesn't take a genius to spot the true identity of a large company called Mensa that makes a product called Office, nor the real names of the major players in the enterprise applications space: Sagittarius, Ophiuchus, Sirius and Pegasus. Presumably in place so that company officers could discuss the deal outside the boardroom without giving the game away if overheard, the effect is to give the document an air of Golden Age science fiction.

The structure is as you'd expect, but only up to a point. It discusses what a great match SAP and Microsoft would be, as they do such different things and address different parts of the market, and how much scope there is to make economies by removing duplicate R&D and marketing. Passing swiftly over those inherent contradictions, it settles down to the boardroom-pleasing predictions of huge gains from flogging Office on the back of SAP, getting "increased monetization in small and medium business segments" from "more integrated and complete solutions"--in other words, putting all business IT into one package and charging what it likes--a "seamless enterprise application roadmap" (see above) and so on.

It's not until page 20 that any downside is mentioned, under "Issues and Risks". The top issue is that the Unix/Linux side of SAP's business is likely to flee, at speed. Then comes the fact that the deal is likely to take up to a year to conclude, with 'distracting' PR all the while. Mm. Then there's an interesting line--"Mensa has historically had difficulty managing remote R&D": about the only profound observation in the pack.

But something's still missing--or at least, hidden away. That 'distracting' PR--well, you can guess what it is. If Bill Gates buys so much as a can of Coke these days, people pick over the regulatory and monopolistic implications: imagine what howls would rise if Microsoft took aim at the biggest supplier of enterprise applications on the planet. There would be top-level governmental investigations in every market. Microsoft works in a global environment where antitrust is part of their business like disappointment is part of being an England football supporter. But mention is there none--antitrust is an annoyance that can be wished away and presented as bad PR.

It's absolutely true that Microsoft believes wholeheartedly in innovation--on its terms. The Constellation Project presentation listed among the many benefits for the takeover multiple chances to innovate, mostly in the way customers get at their back-end data and in business process customization. That the company could do this anyway by actually supporting the open standards and cooperation that it publicly claims to love, doesn't seem to have occurred to it. To innovate means to own and control.

You can see this every day in what the company does. Steve Ballmer proclaims that antitrust lawsuits stifle innovation on the same day that the company unveils a facelift for MSN Search--a face lifted from Google. That's not what most people would call innovation, but it's the sort that Microsoft believes in most wholeheartedly, and why antitrust is considered so dangerous.

Can this change? It can and it will, and the change will come from an unexpected quarter.

The Microsoft mindset comes in part from its almost cult-like self-belief and hermetic self-containment: it only recruits people who it knows will sign up to the Way, and it puts them on campuses where there's no need to leave. Individual and organizational goals are identical. This leads to personal identification with the company and a fundamentalist attitude to outside criticism: if it's against the company, it's against me and ipso facto wrong.

Cultic thinking rarely survives prolonged contact with the real world--remember Microsoft's 'difficulties in managing remote R&D'? But that contact is increasing exponentially; there are hundreds of MS employees at all levels engaged in blogging, More start each day. That means feedback, and contact with outside perceptions where before there was almost none. Instinctively, the company is nervous about this--there have been some rather public slappings--but equally instinctively it knows that it cannot control it.

The big leaks--the Constellation memos--may be the headline grabbers. The small leaks are more important, because they go both ways. Each new MS blogger is introducing one small dollop of reality back into the company, setting the groundwork for the inevitable revolution. Microsoft is its people, and its people are learning to be free.

biography
Rupert Goodwins is the technology editor for ZDNetUK.

July 9, 2004 at 01:42 PM in Microsoft | Permalink | TrackBack (7) | Top of page | Blog Home

Canada Post buys BCE's Webdoxs

TheStar.com - Canada Post buys BCE's Webdoxs

Canada Post's Epost has acquired the BCE Emergis online bill delivery service Webdoxs for $14.5 million, the crown corporation said yesterday.

Canada Post said its existing Epost business-to-consumer services will be combined over the next six months with those of Webdoxs to offer a single electronic bill payment service.

"Canadians have said that they want a single, universal hub for EBPP (electronic bill payment) services, and the new enhanced Epost service will truly deliver on the value promised by consolidated EBPP," Roger Couldrey, Epost's president, said in a release.

The current Epost and Webdoxs services will continue to operate until the two are combined and will not result in disruption for users of either service, Canada Post said.

Epost's online billing service is available through the Web sites of Canada's major banks and online portals such as Sympatico, MSN and Yahoo. The service is also accessible through Intuit's QuickTax and Quicken personal financial management software.

It's estimated the combined service will have more than 1 million registered users, Canada Post said.

BCE Emergis stock was down 4 cents to $3.70 at yesterday's close of trading.

canadian press

July 9, 2004 at 08:08 AM in Financial Services | Permalink | TrackBack (10) | Top of page | Blog Home

2006 Emerging as Target for Killing Spam

2006 Emerging as Target for Killing Spam

ComputerWire Staff
The International Telecommunications Union yesterday informally threw its weight behind Bill Gates' target of eliminating spam within two years. Delegates to an ITU meeting in Geneva expressed varying degrees of confidence that it could happen.

"We could give ourselves a target of say two years to bring spam under satisfactory control," Robert Horton, the acting head of the Australian Communications Authority and the ITU meeting's host, told delegates.

"This is the target suggested by Mr Bill Gates in terms of the technical capabilities that are required and I think that as regulators we could align ourselves with that target," Horton said. "I believe the world cannot wait longer than that."

The ITU meeting, which concludes this morning, was ostensibly designed to bring telecommunications regulators from member nations together with experts on spam, to bash out ideas for international cooperation on the problem.

Gates first touted the two-year deadline in January at a meeting of the World Economic Forum. He had identified two ideas - computational challenge technology and micropayment-based economic disincentives, as solutions.

But delegates to the ITU meeting this week pushed other ideas. Enrique Salem, who was CEO of Brightmail Inc until its recent acquisition by Symantec Corp (NASDAQ: SYMC - news) , said ISPs throttling the spam passed through their networks is making a meaningful dent in spam.

"We are making progress, the reason I believe that is that spammers are having to send more and more spam to try and still get a return," Salem said. He pointed out that there's an event horizon after which this will no longer be feasible.

"I will tell you that the economics are about to shift," Salem told the ITU meeting. "We can sense it because we see specific data points that at some point they cannot continue to send more and more spam."

Delegates pointed out that the majority of spam nowadays is sent via compromised residential PCs on broadband connections. A representative of DoCoMo said that the company has been deactivating phones belonging to the mobile spammers.

Richard Cox, CTO (Milan: CTO.MI - news) of the SpamHaus Project, said that ISPs and carriers need to be better at responding to abuse complaints, and they need to be supported by laws that allow them to disconnect nodes they find to be compromised.

Cox also said it is too easy for spammers to hide their identities online, and called for domain name registrars to be stricter on accuracy when they gather contact information from their customers.

"Registrars are accepting the most blatant of false information from people registering domains, and we have great difficulty persuading them to do otherwise," Cox said. "We've got to make some fundamental changes to how registrars do business."

Speaking to ComputerWire yesterday, Scott Chasin, CTO of MX Logic Inc, said that two years was also discussed as a tentative deadline for net-wide deployment of the Sender ID email sender authentication spec at a recent meeting of technologists.

"The two-year timeline is running deep in a lot of circles," Chasin said. He said he sees rollout of Sender ID evolving gradually, though there was some discussion about big ISPs enforcing Sender ID support to anybody wanting to send to their users.

Most people involved in the spam debate agree on another Gateism, that there's no "silver bullet" or "magic bullet to the spam problem. Spammers have shown themselves adept at circumventing many types of countermeasure.

"Has anyone got that final ultimate solution to problem of spam?" Cox asked the ITU meeting's delegates. "There is no such solution, if there was, spam would change to get around it."

"Even if we can address spam problem in two years time, there will be some other misuse of the internet coming along," David Brunswick, of Tumbleweed Communications Inc and the Anti-Phishing Working Group, told the meeting.

July 9, 2004 at 07:57 AM in Spam | Permalink | TrackBack (22) | Top of page | Blog Home

July 08, 2004

Excerpts of Ballmer memo sent to Microsoft employees

The Seattle Times: Business & Technology: Excerpts of memo sent to employees

On employees:
"For the company to improve, we need our employees to realize their full potential. We will work this year to bring more focus and rigor to developing our people: as individual contributors, as teammates, as thought leaders and as people leaders. We want all our employees to flourish, but we especially want to ensure that we give all the responsibility and reward we can to employees who can handle more, whether they are right out of college or experienced employees."

On cost-cutting:

"We have as much opportunity to grow as any other company in the world. That's a big statement, but the opportunities we've scoped out are very big. Make no mistake — we must grow our revenues to grow profits. We cannot just cut costs. At the same time, we must ensure a competitive cost structure, or competitors will offer prices, services or innovations that we cannot afford to match. Other companies have been severe in tightening costs the last few years — layoffs, major benefit reductions, etc. We have not done those things and want to be prudent now so we avoid severe measures later."

On the company's cash holdings:

"Some employees have asked why we can't use some of our $56 billion in cash to avoid making the benefits changes. Using the cash reduces profits, which reduces the stock price. The cash is shareholders' money, so we need to either invest in new opportunities or return it to them."

On its stock price:

"Obviously, we all want to increase the value of our stock, and we have the best opportunity to do that since the end of (fiscal 1998). Our stock was around $25 then, as it is now, and we have more than doubled our operating profits since. Shareholders then were betting we would work hard for all these years to make the company worth that mid-'98 stock price. We have done so. I see a number of other public companies or soon-to-be-public companies that will deal, as we have, with flat stock price for a number of years while they build adequate profits for their stock prices. The key now to growing our stock price is growing profits even more. If we grow our profits, our stock price is poised to respond."

On costs:

"Even with the changes we made, our cost per employee will still rise in (fiscal 2005) by 6 percent, and most of that is a significant rise in per employee benefit cost. For example, per-employee healthcare costs — the largest single component of U.S. benefits — skyrocketed 54 percent from (fiscal 2001) to (fiscal 2005), and for (fiscal 2005), the cost of medical benefits will rise by more than $880 per employee."

Copyright © 2004 The Seattle Times Company

July 8, 2004 at 11:00 PM in Microsoft | Permalink | TrackBack (3) | Top of page | Blog Home

Microsoft Tries to Cache $1 Billion

Yahoo! News - Microsoft Tries to Cache $1 Billion

Wed Jul 7,11:23 AM ETAdd Technology - washingtonpost.com to My Yahoo!

By Cynthia L. Webb, washingtonpost.com Staff Writer
Even companies with $56 billion in the bank have to do some belt tightening. The company in question is Microsoft, whose chief executive, Steve Ballmer, outlined the company's plans to cut $1 billion in costs in his annual e-mail message to employees.

Ballmer yesterday "declared that the personal computer industry and his company were still growth businesses, and he predicted that the number of PC's in use worldwide would increase 60 percent, to one billion, by 2010. But Mr. Ballmer left no doubt that Microsoft must behave more like the mature company it has become to reduce the constant scrutiny it faces from antitrust regulators around the world and the pressure it increasingly faces from investors," The New York Times reported. "Microsoft invested when most technology companies shed workers and projects during the industry slump, and as a result its expenses have increased faster than the company's revenues over the last three years. 'This obviously is not a trend we can continue,' Mr. Ballmer wrote to Microsoft's 57,000 full-time workers. 'This year, we are targeting nearly $1 billion in efficiency improvement and cost reduction across the company, primarily by rethinking how we do things.'"
• The New York Times: Amid Belt-Tightening, Microsoft Talks of a Bright Future (Registration required)
• The Seattle Times: Excerpts of Memo Sent To Employees

The Financial Times reported that Ballmer's "pledge to cut costs comes against a background of concerns about security flaws in Microsoft software, delays to the launch of new products and competition from Linux (news - web sites), the open source operating system. Dell, the world's largest personal computer maker, yesterday announced that it is to launch its first Linux-based desktop computers."

The Wall Street Journal in a front page article said "Ballmer's message is the latest sign that Microsoft, high-technology's greatest success story, must cope with slower growth and other issues common to maturing companies. Microsoft is scrambling to instill some of the discipline of older concerns, while preserving the aggressive spirit that led to dominance in personal-computer software. Compounding Microsoft's challenge: The company is battling the competitive threat to its primary software offerings from open-source products. The 'core' issues facing the company, Mr. Ballmer wrote in the e-mail to the company's 57,000 employees world-wide, are largely those that have been put to him by the company's own workers: 'Will we be first with important innovations? Will process excellence lead to greater ability to make an individual difference? Will our focus on costs hurt employees personally and will it hinder new investments? Will we grow and will our stock price rise? Will the PC remain a vital tool, and will we remain a great company?'" While answering each of those questions with a firm 'yes,' Mr. Ballmer's memo acknowledges big hurdles in satisfying software customers, shareholders and employees."

Ballmer also acknowledged the Linux threat in an interview with the Journal. He said "the biggest competitive threat we've had in our business is still there -- and will be there -- in the form of Linux and other open-source products. But I think we have a handle on what it takes to innovate and price and sell and compete quite effectively."
• Financial Times: Microsoft To Cut Costs By $1bn This Year
• The Wall Street Journal: With Growth Slowing, Microsoft Plans Cost-Cutting, Profit Push (Subscription required)

Nevertheless, Ballmer's e-mail message carried an upbeat tone, as did remarks he made in other interviews. Ballmer told The New York Times that "Microsoft was more confident about competing against the rising challenge of open-source software like the Linux operating system, which is distributed free. Microsoft's competitive response is to emphasize what it contends is the lower total cost of owning, maintaining and supporting its Windows operating system." And to the Seattle Post-Intelligencer: "I'm not saying that we should shortchange investment in new areas... But if we're going to do something, let's do it cost-effectively. I want to make sure we have an efficient cost structure precisely so we can afford to invest in all the areas where I see opportunity."

And this comes from the AP: "Ballmer said the world's largest software company cannot be run like the startup it once was. But he added, 'We have to avoid becoming a certain kind of big, process-bound bureaucracy.' Such flexibility is especially important as Microsoft goes up against companies like Apple Computer Inc., whose iPod music player has become a hit while Microsoft has lagged in online music distribution."
• Seattle Post-Intelligencer: Microsoft's Ballmer Pushes Cost Savings
• Associated Press via the San Jose Mercury News: Microsoft Must Stay Flexible, Says Ballmer (Registration required)

While most companies would have to dole out pink slips to achieve $1 billion in savings, Microsoft has a different, albeit hard-to-grasp plan. "Ballmer did not spell out how the cost reductions would be achieved. However, he did suggest that Microsoft could save 'hundreds of millions of dollars' by managing its advertising and marketing more effectively," The Financial Times reported.

Ballmer "urged employees to take more accountability for their work, calling for them to prioritize goals better than in the past and focus on five to seven measurable 'commitments' each year. A Microsoft spokesman said the cuts don't involve any layoffs and that hiring for the current year will be 'consistent' with past years," The Wall Street Journal reported. The article also noted: "Wall Street had been anticipating the cuts but Microsoft, until now, hadn't quantified an amount. In addition to employee-benefits changes, the cuts will come primarily from savings the company will reap by unifying its marketing and advertising across its business units, and consolidating the number of outside partners it uses for event planning, direct mailing and other customer-relations activities, according to a Microsoft spokesman."

About All That Cash

Ballmer also explained why the company cannot tap its cash reserves instead of cutting employee benefits, including changes to its prescription drug and stock discount programs. "Using some of Microsoft's $56 billion in cash to maintain worker benefits, Mr. Ballmer explained, is not an option. 'The cash is the shareholders' money,' he wrote, 'so we need to either invest in new opportunities or return it to them,'" The New York Times said. Bloomberg picked up on this excerpt from Ballmer's memo: "We must ensure a competitive cost structure or competitors will offer prices, services or innovations that we cannot afford to match."
• Bloomberg via the Los Angeles Times: Microsoft CEO Defends Cuts To Worker Benefits (Registration required)

The Seattle Times talked about some of the cuts underway at Microsoft. "In May, as part of a plan to save $60 million, the company trimmed some health-care benefits, reduced new-employee vacations from three weeks to two and stopped giving temporary workers free bus passes. Last week the company stopped providing towels in locker rooms for employees who bicycle to work or exercise during lunch. And yesterday Ballmer confirmed that even Microsoft's vaunted free soda pop may undergo changes," the paper said.

Ballmer waxed philosophical about employee concerns in an interview with The Seattle Times. "Ballmer said Microsoft employees are content and well compensated. From his perspective, employees are not griping as much as they are getting involved in changes at a place they love. 'People aren't saying let's not change, people are saying let's make sure we're getting better,' he said. 'People see this as a change, and they want to know, 'Why, why, is there another shoe that's going to drop? What should I be thinking? Why are you optimistic and at the same time you're working on our cost structure?'" the paper said. Kool-Aid, anyone?
• The Seattle Times: Microsoft CEO Tries To 'Rally The Troops' In Cost-Conscious Time

Expect more news from Microsoft later this month, potentially on a much-anticipated stock buyback plan that could address concerns about what Microsoft is going to do with some of its cash. Ballmer told The New York Times: "By the end of this month, we will try to give a clear strategy on cash to our shareholders." More on this from the Journal today: "In an interview yesterday, Mr. Ballmer wouldn't comment specifically on Microsoft's plans for its cash. But he said the company had previously set expectations among shareholders that pending resolution of several major lawsuits against it, Microsoft would 'try to have something to communicate to our shareholders by our financial analysts meeting' at the end of the month. Last week a U.S. appeals court approved Microsoft's 2001 antitrust settlement with the Justice Department (news - web sites), a ruling that Mr. Ballmer said 'represented the final hurdle' before disclosing more details on its cash plans."

The Long Wait for Longhorn

The Financial Times noted that Ballmer's e-mail addressed worries about the delayed release of the company's next version of its operating system, dubbed Longhorn, from this year to possibly the end of 2005. "We have a lot of hard work yet to do on Longhorn to deliver the right capability," Ballmer wrote. "We decided to release a number of products before Longhorn in order to get it right."

Microsoft's Legal Woes Continue

Despite Microsoft's recent spate of lawsuit settlements, it still faces an antitrust challenge in Europe. "The European judge presiding over Microsoft Corp.'s appeal against antitrust penalties has called a July meeting between the companies involved and regulators, a person familiar with the matter said Tuesday," The Wall Street Journal reported. "Bo Vesterdorf, the president of Europe's Court of First Instance, has invited Microsoft, the company's rivals and European Union (news - web sites) regulators to attend the talks, the person said. An 'informal meeting' will be held at Judge Vesterdorf's Luxembourg-based court."
• The Wall Street Journal: Judge Invites Microsoft, EU Regulators To Meet (Subscription required)

In other legal news for the company, Microsoft's ergonomic keyboard is attracting some more attention. "A federal appeals court ruled Tuesday that a jury should decide whether Microsoft Corp. violated patents held by a small California company when it made v-shaped ergonomic computer keyboards," the Associated Press reported. "TypeRight Keyboard Corp. of Carlsbad, Calif., sued Microsoft in 1998, claiming that Microsoft's keyboard, which splits the layout of keys into two sections and includes a large wrist rest, violated two of its own patents. A federal court in San Diego granted Microsoft's motion for summary judgment in 2000, siding with Microsoft's contention that drawings from a German company that show the basic v-shaped keyboard design predated TypeRight's patents by several years." But the U.S. Court of Appeals for the Federal Circuit in Washington yesterday said a jury should decide the credibility of witnesses who testified in the earlier case, the AP reported.
• Associated Press via washingtonpost.com: Court Overturns Keyboard Patent Ruling (Registration required)

"The court, which specializes in U.S. patent law, didn't preclude a new ruling of invalidity by a jury or the federal judge in San Diego and said Microsoft can continue to argue that there was no infringement," Bloomberg reported. Microsoft is sticking to its guns. "We continue to believe the patents in question are invalid," Microsoft spokeswoman Stacy Drake McCredy told the wire service.
• Bloomberg via The Seattle Times: Microsoft Patent Case Reversed

Finding an Eminent Domain for Kerry-Edwards

This year's presidential campaign has already been touted for being the most wired to date, and not just for the candidates. Internet domain name speculators are hoping that the Kerry-Edwards campaign will pay them thousands of dollars for Web addresses they might want to use. Among them is Kerry Edwards of Indianapolis, who bought his address six years ago just so he could have his name on the Internet. "Yesterday, shortly after presidential candidate John F. Kerry (D-Mass.) announced that Sen. John Edwards (news - web sites) (D-N.C.) will be his running mate, the 34-year-old bail bondsman and owner of Kerryedwards.com said he took down the picture of his child that graced the Web site and put up a for-sale sign. It didn't take long for the phone to ring," washingtonpost.com reported. "'Our campaign did inquire about KerryEdwards.com, but because of the money they were asking for, we took a pass,' said Kerry spokesman Michael Meehan. He said Edwards wanted a five-figure payment." The campaign will continue using www.johnkerry.com for now, the article said. "Other obvious choices for a campaign Web site -- including KerryEdwards04.com, KerryEdwards2004.com, and KerryEdwards-2004.com -- have already been registered, according to publicly available Internet records."
• washingtonpost.com: JohnKerry.com May Have to Do Without 'Edwards' (Registration required)

Google Meet Googles

Google is facing a challenge from the operator of Googles.com, a children's Web site. Operator Stelor Productions Inc. "is trying to block Google, the Internet search-engine giant, from expanding into new businesses aimed at children," The Wall Street Journal reported. "In documents filed yesterday with the U.S. Commerce Department (news - web sites)'s Patent and Trademark Office in Washington, Stelor contends that Google is traipsing on its turf, confusing potential investors and customers. 'Google is unfairly infringing on our trademark rights,' says Steven A. Esrig, president of Stelor, based in Darnestown, Md."

More from the article: "Although the popular Google search engine and the children's site have co-existed for years, Stelor contends that Google 'has been a growing annoyance as the Google search engine has become more and more successful and well-known.'" Google didn't comment to the paper, though with a mammoth IPO on tap, Googles may be stuck on second fiddle for quite some time to come.
• The Wall Street Journal: Children's-Site Owner Complains Google Is Infringing Trademark (Subscription required)

Tarnished Apple?

It seems that some people don't want Apple's digital music project to ripen. "Love the iPod, but don't jump too hastily to fill it with thousands of dollars of iTunes. The tracks are not carbon copies of the CD originals, but compressed versions. The smaller files are handy for speedy downloads, space-saving for storage and perfectly serviceable for listening through ear buds when riding on the subway. Not what you will want, however, when your desktop computer becomes the home jukebox and wirelessly sends these simulacra to the entertainment center in the living room," Randall Stross wrote in a piece in Sunday's New York Times. "This music lite is a response to the data transfer problems entailed in downloading the music that resides on anyone's collection of CD's. With about 10 megabytes needed to store one minute of music, albums eat up space quickly on a hard drive. Credit Apple for Step One: persuading the major music labels to make individual tracks available inexpensively, à la carte. By buying only the hit tracks and ignoring the rest of the album, storage needs drop by 90 percent. Apple has yet to put into effect the second part of the ideal solution: distributing music that is compressed only temporarily, a process called lossless data compression."
• The New York Times: From A High-Tech System, Low-Fi Music (Registration required)

Meanwhile, a recent Reuters article noted that the iTunes digital music download store is absent from Asia. The wire service said "while competition is brutal in the European and North American online music download markets, fee-based services are virtually non-existent in Asia. Few Asian music labels are willing to release digitized music, often fearing piracy. Apple has yet to announce plans for an Asian iTunes online music store, while Sony said on Tuesday it had no plan to build an Asian version of its 'Connect' music stores, although it sells some music online through a PlanetMG.com site in Singapore. But music labels are clamoring for growth in a region dominated by music piracy syndicates."
• Reuters: Fee-Based Web Music Hits Asia. But Where Is Apple?

The iPod is being targeted as a potential security risk for computer networks. "Companies should consider banning portable storage devices such as Apple's iPod from corporate networks, as they can be used to introduce malware or steal corporate data, according to an analyst. Small portable storage products can bypass perimeter defenses like firewalls and introduce malware such as Trojans or viruses onto company networks, research company Gartner said in a report issued this week," CNET's News.com reported.

And there's more trouble in paradise for the iPod. "Apple's sleek digital audio device is one of the most successful tech toys, selling more than 3 million units since November 2001. But its future, with that of other new tech gadgets, could be in trouble if a controversial congressional bill passes. That's according to opponents of the Inducing Infringement of Copyrights Act in the Senate. It would make operators of media-swap networks such as Kazaa and Grokster liable for users' actions. It also would make it easier for entertainment companies to sue tech firms for copyright infringement," USA Today reported. "Opponents say the language is so broad it could apply to makers of MP3 players, such as iPod, and CD and DVD recorders, as well as to media organizations that give consumers tips on using digital content. The recording and movie industries support the bill to help curb piracy."
• CNET's News.com: Analyst: iPods A Network Security Risk
• USA Today: Copyright Bill Poses Threat To iPod's Future

Despite these problems, iPods remain hard to come by, especially the mini versions. People are even making up new words about selling iPods. Richard Doherty, research director of New York-based Envisioneering, told the San Jose Mercury News that Apple has tapped into "unobtainium." "That's when you've identified it and coveted it and you want it, but no one seems to have it," Doherty said. "Indeed, a scarcity of 4-gigabyte hard drives has left Apple's colorful digital music players in such short supply that online buyers are cooling their heels for up to two months before getting their hands on one. Apple's own stores can't keep the credit-card-size mini in stock. When shipments come in, they sell out within a day or so. And don't bother getting on a waiting list -- they've stopped keeping them," the paper said.
• San Jose Mercury News: iPod's Scarcity Adds To Cachet) (Registration required)

Filter is designed for hard-core techies, news junkies and technology professionals alike. Have suggestions, cool links or interesting tales to share? Send your tips and feedback to cindyDOTwebbATwashingtonpost.com. (Yes, those spammers have been having a lot of fun with my e-mail address lately.)

July 8, 2004 at 10:58 PM in Microsoft | Permalink | TrackBack (6) | Top of page | Blog Home

Yahoo Finds Itself Out on the Street

Yahoo! News - Yahoo Finds Itself Out on the Street

Thu Jul 8,11:37 AM ETAdd Technology - washingtonpost.com to My Yahoo!

By Cynthia L. Webb, washingtonpost.com Staff Writer
Yahoo reported record second-quarter revenue and more than doubled its profit from a year ago, but the Street is proving notoriously tough to satisfy.

The Internet search engine company's stock tumbled yesterday in after-hours trading after its results failed to appease investors who are looking for even stronger signs of a tech recovery. The company logged $113 million in profit on $832.3 million in revenue, compared to $51 million in profit on $321.4 million in revenue a year ago.

The San Jose Mercury News noted Yahoo "again raised its financial projections for 2004, projecting revenue will range from $2.46 billion to $2.54 billion. That's slightly more than the $2.41 billion to $2.52 billion estimate it made three months ago. Even with that, the company's stock was down 12 percent in after-hours trading to $28.75 a share." The Associated Pres explained reasons for the drop. "Yahoo has consistently beat its guidance in recent quarters – and Wednesday the company also failed to boost its revenue outlook as aggressively as it has in the past."

The Mercury News further described the reasons for Wall Street's discontent. "Yahoo has emerged from the Internet downturn faster than just about any other large company, consistently beating analysts' expectations as it exploits a surge in online advertising. Its stock has about doubled in the past year. But many investors are now wondering whether the company – whose stock was trading at about 130 times its earnings per share – may be overvalued. Underscoring that sentiment, Prudential Equity Group on Wednesday downgraded Internet portals, including Yahoo, to a 'neutral' rating, pointing to their run-up in stock prices," the paper said. "The view among investors this week was that Yahoo needed to handily surpass analysts' expectations – as it did last quarter – to warrant a boost in its stock price. Instead, the company's numbers came in under what some analysts expected, helping fuel a sell-off on Wall Street."
• San Jose Mercury News: Yahoo Posts Record Revenue (Registration required)
• Associated Press via washingtonpost.com: Yahoo's 2Q Profit More Than Doubles (Registration required)

The Washington Post said "some investors appeared to be looking for the company to do more than merely meet analysts' expectations, as it did yesterday." Piper Jaffray Co. analyst Safa Rashtchy told the paper: "The quarter was very good, but it was below the broader expectations that were out there." And: "Yahoo's strong first quarter 'created the context and expectation that this quarter would have a comparably massive upside,' he said."
• The Washington Post: Yahoo's Profit Soars, But Stock Price Falls (Registration required)

More analysts chimed in: "People are disappointed," Scott Kessler, an equity analyst at Standard & Poor's Corp., told The Wall Street Journal. "Last quarter was such a blowout that the expectations were too high." And Jordan Rohan, an equity analyst at Schwab Soundview Capital Markets, told CNET's News.com: "I believe investors have overestimated the growth in search." Mark Mahaney, an American Technology Research analyst told USA Today: "They had such a killer first quarter that when the results weren't as dramatic, they got clobbered."
• CNET's News.com: Yahoo Profit Doubles; Shares Tumble
• USA Today: Yahoo More Than Doubles Revenue, Profit

A 'Red Hot' Future

Yahoo downplayed financial analysts' reactions. "We don't pay attention to those external expectations," Dan Rosensweig, Yahoo's chief operating officer, told the San Francisco Chronicle. "From our perspective, we are absolutely pleased. We focused on doing what we said we were going to do, and everything else takes care of itself." Yahoo Chief Financial Officer Susan Decker told USA Today: "We try to focus on what we can control, which is how we did, not what analysts expected. It was a record quarter." Yahoo Chairman and chief executive Terry Semel kept things on a high note during the conference call yesterday. "We delivered the best quarter in Yahoo's history," Semel said, as quoted by the Chronicle. "The past year has been a period of unprecedented growth. ... I think we have a fantastic long-term growth potential ahead... Yahoo is on the move."
• The San Francisco Chronicle: Yahoo Hits Another Record

Success, of course, is never guaranteed. "Whether Yahoo will be able to continue its renewed success depends largely on how well it continues to compete with the likes of Microsoft Corp. and Google Inc., which are increasingly going after the same Internet businesses as Yahoo with their Web portals and properties," The Washington Post reported.

Nevertheless, The Wall Street Journal noted: "Yahoo executives remained upbeat, saying that they were even more optimistic about their 2004 growth than after the first quarter. 'Our businesses are red hot,' said Yahoo chairman and chief executive Terry Semel in an interview. 'We feel fantastic and the results are really great.' Advertising-related revenue accounted for 83% of Yahoo's total revenue, roughly the same as the previous quarter. Yahoo's October acquisition of Overture Services Inc. (Nasdaq:OVER - news), which provides ads that appear alongside Web search results, helped boost second-quarter results compared with the year-earlier period. Rival Google Inc.'s planned initial public offering of stock has focused investor attention on the lucrative market for search-related ads. Excluding commissions that Overture pays its marketing partners, Yahoo reported ad revenue of $609 million. Yahoo had projected revenue on that basis of $580 million to $615 million."

And the Journal saw this silver lining: "While some analysts may have wanted more, Yahoo's growth stands in sharp contrast to the spate of earnings warnings issued by other technology companies in the past week. Companies may be holding the line on technology purchases, but Yahoo's results underscore the fact that many are spending on advertising."

It's About Branding

The Financial Times wrote about Yahoo's evolving business. "The factor singled out by Yahoo executives in the latest quarter... was the strong growth of its branded advertising business, rather than the continuing boom in search-related advertising. More than 90 per cent of the 200 biggest brand advertisers in the US who advertised on Yahoo in the first quarter of this year returned in the following three months, Mr Semel said, while the ten biggest consumer goods companies were all customers. This performance, and future bookings by big-name advertisers, suggested they were no longer treating the internet as an experimental medium, he said."
• The Financial Times: Yahoo Boosted By Surge In Ads

Meanwhile, Yahoo continues to be popular with Web users. "Yahoo also continued to attract more subscribers who pay the company for Internet access, expanded e-mail and online matchmaking services. Yahoo ended June with 6.4 million subscribers, up from 5.8 million at the end of March. The company has a long-term goal of 15 million subscribers," the AP reported.

Temperature Check

Yahoo's not the only company that stands to get mediocre notices from investors. "Corporate-software buyers closed their wallets at the end of June, leaving a host of software companies short of quarterly revenue targets and prompting concern that the recovery in technology spending may already be sputtering," The Wall Street Journal reported today. "Warnings that second-quarter revenue and profits would fall short of forecasts came from nearly every corner of the business-software industry yesterday: Siebel Systems Inc., which makes software to track customer information; PeopleSoft Inc., which makes software to manage a range of business functions; BMC Software Inc., a maker of technology-management software; and Filenet Corp., which supplies software to manage the flow of documents. The spate of downbeat announcements followed similar warnings in recent days from Veritas Software Corp., which makes storage-management software, and Sybase Inc., which makes database software."
• The Wall Street Journal: Technology Spending Has A Hiccup (Subscription required)

Another article by the paper's online staff said: "Shares of software companies tumbled for a second day in a row Wednesday after a number of new profit warnings, including one from PeopleSoft. Still, technology shares closed slightly higher overall as investors looked for bargains following the previous session's losses."
• The Wall Street Journal: Tech Shares End Higher, But Software Firms Drop (Subscription required)
• Mercury News Wire Services via the San Jose Mercury News: Nasdaq Edges Higher, Despite Internet Sector Downgrade (Registration required)

Speaking of PeopleSoft...

PeopleSoft is blaming its earnings worries on rival Oracle. "PeopleSoft says its second-quarter earnings and revenue will fall short of expectations because of Oracle's hostile $7.7 billion takeover bid and publicity from the federal government's trial to block it," USA Today reported. "PeopleSoft expects earnings of 13 cents to 15 cents a share. The average estimate among analysts had been 21 cents a share. The software-maker expects revenue of $655 million to $665 million. Analysts expected nearly $700 million. PeopleSoft gives its second-quarter results July 27. Although the trial may have compelled some customers to delay buying software, PeopleSoft's troubles and weakness at other companies – including Oracle's software applications business in its recently completed quarter – portend bumpy times for the software market."
• USA Today: PeopleSoft Blames Oracle For Its Slump

"Although we have been able to meet or exceed our financial projections since Oracle launched their hostile tender offer more than a year ago, the extensive publicity of the antitrust trial during the last month of our quarter was impossible to completely overcome," PeopleSoft chief executive Craig Conway said in a statement. "We believe the adverse impact to our business has been substantial, with even greater impact this past month," Conway said.

Some analysts don't buy it. "They are trying to cite just Oracle, and I don't think it's accurate," Patrick Mason, a Pacific Growth Equities analyst told the San Jose Mercury News. "I think it's a combination of products from J.D. Edwards not selling as well as they thought. And it's also a little bit of Oracle and a little bit of the IT spending environment."

Oracle was mum on PeopleSoft's announcement, the Financial Times and USA Today reported. "Even before Wednesday's news, PeopleSoft's shares had sagged on fading hopes for a strong rebound in the applications software business this year. However, by the close on Wednesday the shares climbed 1.84 per cent to $17.13 in New York, not far above the initial $16 bid made by Oracle a year ago," the Financial Times said.
• San Jose Mercury News: Why PeopleSoft's Profit Is Coming Up Short (Registration required)
• Financial Times: PeopleSoft Earnings Hit By Oracle

Hooked on Your Data

The company that makes the Hooked on Phonics teaching program was hooked on more than just its product. Program maker Gateway Learning Corp. of Santa Ana, Calif. yesterday paid $4,600 to settle a Federal Trade Commission complaint that the company hawked customer data and violated its privacy policy. The FTC said Gateway Learning "provided marketers with information that included names, addresses, phone numbers and the ages and sexes of children of families who bought the program, which is used to help children learn to read. At the same time, the company's privacy policy on its Web site promised not to 'sell, rent or loan any personally identifiable information regarding our consumers with any third party unless we receive a customer's explicit consent,' according to the complaint," The Washington Post reported.
• The Washington Post: Company Pays Fine For Renting Out Its Customer Data (Registration required)

The fine equaled the amount of money the company made selling the data, the FTC said. "The company also agreed not to share consumer data without consent and not to retroactively change its privacy policy without alerting customers. If it does, it faces an $11,000 fine per violation, the FTC said. Gateway Learning, which admitted no wrongdoing, couldn't be reached Wednesday," the Los Angeles Times reported.
• Los Angeles Times: Gateway Learning Is Ordered To Pay In FTC Privacy Case (Registration required)

The iPod Chronicles

Apple's mini-version of its popular iPod digital music player may become easier for consumers to get their hands on. The player will ship worldwide on July 24, Reuters reported, for a suggested price of $249. Worldwide shipments were put on hold in the spring after demand outstripped supply. "Apple had originally planned to start worldwide shipping in April. Earlier this year, the company said it had 100,000 preorders for the iPod mini, a smaller version of the popular iPod player that is about the length and width of a business card and holds about 1,000 songs," Reuters reported.
• Reuters: Apple To Ship iPod Minis Worldwide July 24

Meanwhile, Apple and Sony continue to duke it out in the digital music space. "Apple Computer Inc., aiming to protect the lead of its iPod digital music player, said Sony Corp (NYSE:SNE - news) (news - web sites). is exaggerating the attributes of its new Network Walkman music player," The Wall Street Journal reported. "The verbal sparring comes a week after Sony unveiled its Network Walkman, a hard-drive-based music player that is designed to be an iPod killer. At the time, Sony made much of the physically smaller size of the new 20-gigabyte Walkman in comparison to Apple's iPod. Sony also said the Network Walkman holds 13,000 songs, compared with 5,000 songs for the 20-gigabyte iPod and 10,000 songs for the 40-gigabyte iPod. Yesterday, Apple struck back and said Sony isn't fairly comparing the products' capacity. Apple said Sony based its calculations for the capacity of its Network Walkman on compressing files at low encoding 'bit rates,' a technique that creates more-compact digital files but reduces the fidelity of recordings."
• The Wall Street Journal: Apple Challenges Sony's Claims Over New Digital Music Player (Subscription required)

Filter is designed for hard-core techies, news junkies and technology professionals alike. Have suggestions, cool links or interesting tales to share? Send your tips and feedback to cindyDOTwebbATwashingtonpost.com. (Yes, those spammers have been having a lot of fun with my e-mail address lately.)

July 8, 2004 at 10:55 PM in Portals | Permalink | TrackBack (14) | Top of page | Blog Home

Household Internet Use Survey

The Daily, Thursday, July 8, 2004. Household Internet Use Survey

2003
The number of Canadian households surfing the Internet continued to grow in 2003 according to the Household Internet Use Survey. However, growth rates remained relatively stable largely because the majority of households were already plugged in.

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An estimated 7.9 million (64%) of the 12.3 million Canadian households had at least one member who used the Internet regularly in 2003, either from home, work, school, a public library or another location. This was a 5% increase from 2002, but well below the annual gains of 19% and 24% observed in 2000 and 2001.

Households with high income, members active in the labour force, those with children still living at home and people with higher levels of education have been in the forefront of Internet adoption.

Internet use was highest at home. About 6.7 million households had at least one member who regularly used the Internet from home, a gain of 7% since 2002. These households accounted for nearly 55% of the total, up from 51% in 2002.

Lower income households are making strides in logging on. Nearly 45% (1.3 million) of the households with income between $24,001 and $43,999, had someone who used the Internet from home in 2003, which is up 13% from 2002. This group of households had the highest growth in connections from home and work, as well as the combination of various locations. In contrast, the proportion of households regularly using the Internet from home remained relatively unchanged for the lowest income quartile.

Canadians continue their quest for speed
Of the nearly 6.7 million households with a regular user from home in 2003, an estimated 4.4 million (65%) had a high-speed link to the Internet through either a cable or telephone connection. This was up from 56% a year earlier.

At the same time, the proportion of households that had a low-speed connection fell from 44% in 2002 to 35% last year. Internet service providers have increased their expenditures on high-speed infrastructure in a competitive battle to provide subscribers with a wider range of online services.

Note to readers
The Household Internet Use Survey (HIUS) was conducted as a subsample of the Labour Force Survey. The HIUS collected information on the household as a whole. In total, 34,674 households were eligible for the HIUS and 23,113 (66.7%) responded. Data gathered in January 2004 covered household Internet use for the 2003 calendar year.

The respondent provided a proxy response to questions for all members of the household. Of households indicating that they regularly used the Internet, about 89% of the individuals who answered the survey for their household were one of the members that regularly used the Internet from various locations.

Regular-use households are those that responded "yes" to the question "In a typical month, does anyone in the household use the Internet?"

Of the estimated 4.4 million households with high-speed connection, the majority (61%) had a link through cable. The remaining 39% had a high-speed telephone connection, also known as a digital subscriber line, or DSL.

However, the number of DSL connections increased nearly 30% in 2003, compared with a gain of only 21% for cable. This may be an indication of price competitiveness of DSL over cable connections, or increased accessibility of households to high-speed telephone infrastructure within their neighbourhood.

Fewer households report downloading music
More and more households were using the Internet to search for medical or health-related information or to use online banking services. However, fewer reported downloading music.

Just under 38% of regular users from home reported downloading music in 2003, down from a high of 48% in 2001. This may be the result of a highly-publicized campaign by the music industry against downloading music for free.

Almost two-thirds (65%) of households had at least one member who used the Internet to search for medical or health-related information, compared with 61% in 2001. This was the third most popular use after e-mail and general browsing.

About 57% of households using the Internet at home had someone who accessed online banking services, well above the proportion of 44% in 2001, the biggest proportional gain of any use. This growth may indicate consumers are becoming more confident in the Internet's security aspects.

Four in five high-income households had Internet at home
The survey divided households into four equal groups based on income, each representing 25% of the income spectrum from highest to lowest.

In 2003, 82% of households in the highest income group had a member who used the Internet from home. This was more than double the proportion of 33% among these households five years earlier. However the strongest growth (+13%) was observed in the second income quartile, households with income between $24,001 and $43,999.

Rates of Internet use still varied substantially across family types, with children still a key factor. Single-family households with unmarried children under the age of 18 had the highest rate of Internet use from home last year, about 73%.

However, growth rates in Internet use from home were strongest among single-family households without children and one-person households. The number of households in each group increased just over 11%.

Also, the higher the level of education in the household, the more likely it is to have an Internet connection from home. Nearly 77% of households with someone with a university degree were connected from home.

In contrast, only about 12% of households in which the highest level of attainment was less than high school were connected from home. However, households with high school attainment grew fastest.

Internet use highest in British Columbia, Ontario and Alberta
Internet use from home increased in most provinces in 2003. The highest rates of use were in British Columbia, Ontario and Alberta where roughly 6 out of every 10 households were connected to the Internet at home.

All the other provinces had rates of Internet use from home that were below the national average of 55%.

Some of the biggest proportional increases occurred in the Atlantic provinces. In Nova Scotia, for example, the proportion of households connected to the Internet from home increased from 46% in 2002 to nearly 53% last year. The gain in New Brunswick was from 37% to nearly 43%.

Of the 7.9 million households in census metropolitan areas, about 58% or 4.6 million were connected to the Internet from home in 2003, just above the national average. This was an increase from 55% in 2002.

Slight reduction in non-connected households
In 2003, 809,000 households indicated that a member of the household either used the Internet infrequently, or had pulled the plug entirely. The size of this group had remained constant for three years, but was slightly reduced this year.

In 2003, about 3.6 million Canadian households had never used the Internet. Most of the households in this group (87%) were either families without children or one-person households.

As well, many of these non-users earned below-average household income with 49% of non-users in the lowest group.

Available on CANSIM: tables 358-0002 to 358-0006 and 358-0017.

Definitions, data sources and methods: survey number 4432.

Additional data tables related to the information presented in this release are available online. From the Canadian statistics page, choose Culture, leisure and travel, then Internet.

For more information, or to enquire about the concepts, methods or data quality of this release, contact Jonathan Ellison (613-951-5882; jonathan.ellison@statcan.ca), Science, Innovation and Electronic Information Division.

July 8, 2004 at 05:20 PM in Web lifestyle | Permalink | TrackBack (13) | Top of page | Blog Home

Cards to replace notes in our affections

Guardian Unlimited Money | News_ | Cards to replace notes in our affections

Rupert Jones
Thursday July 8, 2004
The Guardian

Credit and debit cards are expected to overtake cash this year as Britain's most popular method of payment, according to a new industry report yesterday.

It will be the first time that card payments have outstripped cash outlay for goods and services. There are 246 plastic card transactions made every second.

Total plastic card use is expected to exceed £269bn in 2004, just a whisker ahead of the predicted £268bn for cash payments, said banking industry body the Association for Payment Clearing Services.

The group, which represents the major banks, said credit cards had become "demonised" as one of the main causes of ballooning debts, but added: "Without plastic, our society would virtually grind to a halt."

Last year, the number of plastic cards in use in Britain grew by 13m, or 9%, to 160m - the equivalent of 3.5 cards per adult. Two-thirds of card transactions are now made using debit cards.

Plastic accounted for £244bn of spending in 2003. "This year, total plastic card use, if business card usage is included, is expected to top £269bn. In 2005 it is expected that personal plastic card usage alone will overtake cash payments," said Apacs.

In terms of numbers of transactions, cash will remain much bigger than plastic for some time to come, it added. "Cash will always remain there for low-value payments."

Meanwhile, 2003 was the year that e-commerce "came of age" in the UK following the false dawn that was the dotcom boom. More than 18 million people bought goods or services online, up 50% on 2002. Credit cards accounted for 69% of the 200m transactions, with debit cards mopping up most of the remainder.

Last year was a landmark year for another reason - the first reduction in card fraud for eight years. Fraud losses on plastic cards fell by 5% to £402m as measures to combat crooks started to take effect.

A new generation of cards containing computer chips is being introduced, and by the end of this year most people making face-to-face purchases will have to type their four-digit Pin number into keypads at tills and will no longer have to sign receipts.

Apacs used the report, entitled The Way We Pay, to hit out at the largely "overwhelmingly negative" media coverage of the sector. The credit card industry in particular has been accused of irresponsible lending, a lack of transparency and being a driving force behind a consumer credit boom that threatened imminent disaster for the economy.

But the report claimed many of these criticisms were unjustified, pointing out that the vast majority of people used credit cards responsibly. It said the industry had made "significant strides" to address areas of concern, with "summary boxes" introduced on card marketing literature.

July 8, 2004 at 08:23 AM in eCommerce | Permalink | TrackBack (14) | Top of page | Blog Home

Yahoo has reason to cheer as net profit more than doubles

TheStar.com - Yahoo has reason to cheer as net profit more than doubles

Quarterly sales soar to $832 million U.S. as online ads gain Investors punish shares on lack of

more bullish outlook

SAN FRANCISCO—Yahoo Inc.'s second-quarter profit more than doubled as the Internet giant continued to ride online advertising's rising wave.

The company, based in Sunnyvale, Calif., earned $112.5 million (U.S.), or 8 cents a share, for the quarter, up from $50.8 million, or 4 cents, at the same time last year.

Revenue for the three months ended June 30 totalled $832.3 million, compared with $321.4 million a year earlier, Yahoo added yesterday.

The earnings matched the mean estimate among analysts surveyed by Thomson First Call.

Despite the solid second-quarter performance, Yahoo didn't raise its expectations for the rest of the year.

The cautious approach apparently disappointed investors who had been betting the company would be more bullish about its financial outlook, in line with revisions in previous quarters.

Yahoo shares declined 62 cents to close at $32.60 on the Nasdaq Stock Market, and then tumbled $4.25, or 13 per cent, in extended trading.

Yahoo released its results after the stock market closed.

Buoyed by the company's swelling profits, Yahoo's stock has nearly quadrupled since the end of 2002.

The company's comeback from the dot-com doldrums has been powered by steady advertising growth as businesses sought to capitalize on the popularity of Yahoo's Web site, the most popular destination on the Internet.

The trend continued in the latest quarter. The company's marketing revenue totalled $691 million, more than tripling from $219 million last year. The gains largely reflected Yahoo's $1.8 billion acquisition of Overture Services Inc., which makes money distributing advertising links based on requests entered into online search engines.

Yahoo also continued to attract more subscribers who pay the company for Internet access, expanded e-mail and online match-making services. Yahoo ended June with 6.4 million subscribers, up from 5.8 million at the end of March.

Despite the company's recent success, industry analysts have become increasingly worried that Yahoo's stock has become too pricey, especially as formidable rivals develop more competitive products.

ASSOCIATED PRESS

July 8, 2004 at 08:10 AM in Portals | Permalink | TrackBack (20) | Top of page | Blog Home

Over a million UK shoppers hit by online fraud

finextra news: Over a million UK shoppers hit by online fraud

08 July 2004 - Over a million UK consumers have been victims of security breaches while shopping via the Internet, according to a survey by online research company Tickbox.net for LogicaCMG.

More than one in 20 consumers experienced attempted or actual theft of financial or personal details whilst shopping on the Internet.

The research shows that almost a quarter (24%) of those affected defected to an alternative online brand while 23% decided not to buy anything from that company again.

Nearly three quarters of consumers (73%) say security is more important than price, quality or convenience when shopping online and 70% would boycott a Web site even if they only had word of mouth evidence that the brand had been involved in a security scare.

When asked if they would continue to use a Web site if their financial data was stolen, 79% claimed they would stop shopping online, while two thirds (65%) said they would stop shopping with the company altogether - both online and at high street stores. One in five would need to be more convinced by retailers that financial details are secure in order to carry on using the service.

Dave Martin, principal security consultant, LogicaCMG, says the figures demonstrate that consumers will vote with their feet if they lose trust in brands: "With online sales from British consumers predicted to be £17 billion this year and 20 million UK consumers shopping online, these findings will make businesses aware of how costly a security failure can be to its brand."

Citing statistics from IT securiy organisation The Honeynet Project, Martin says there are many recorded instances where a new Web site has been successfully attacked within 15 minutes of it being launched.

However, almost half of those surveyed (47%) claimed they would feel more concerned about using wireless channels to make purchases than using the Internet.

July 8, 2004 at 08:06 AM in Online crime | Permalink | TrackBack (52) | Top of page | Blog Home

Wachovia rolls out RSA Security's digital certificate management software

finextra news: Wachovia rolls out RSA Security's digital certificate management software

17 May 2004 - US bank Wachovia has implemented RSA Security's Keon digital certificate management software to secure access to its customers' personal and financial information.

Wachovia uses digital certificates as a form of electronic identification to ensure the identity of customers and employees who need to access financial data. The bank has installed RSA's Keon software to automate and centralise the administration of its digital certificate management policies and procedures.

The system enables Wachovia to distribute certificates inhouse to create digital signatures, which are applied to electronic versions of customers' contracts and orders. The software also enables the bank to quickly update and alter certificates as needed and issue new certificate authorities immediately.

Keon also includes a OneStep feature which is designed to automatically approve and issue certificates to authenticated users. RSA's professional services team will embed certificates with the RSA Keon OneStep software feature to meet Wachovia's authentication requirements.

"We needed to ensure our customers that information stored within our applications and on our servers was being accessed securely and exclusively by Wachovia employees," says Tony Suarez, vice president of Wachovia Encryption Technologies. "RSA Keon software allows us to effectively manage and control secure access to business-critical information within Wachovia."

July 8, 2004 at 08:05 AM in Security | Permalink | TrackBack (24) | Top of page | Blog Home

Kerry Relies on E-Mail for Edwards Announcement

Yahoo! News - Kerry Relies on E-Mail for Edwards Announcement

By Andy Sullivan
WASHINGTON (Reuters) - The hottest political news of the summer arrived on a tide of spam Tuesday morning as Democratic presidential candidate John Kerry (news - web sites) sent an e-mail announcing Sen. John Edwards (news - web sites) would be his running mate.

Half an hour after Kerry called Edwards to offer him the vice-presidential slot, one million Kerry supporters received an e-mail explaining that the North Carolina senator "understands and defends the values of America."

"You are the heart and soul of this campaign," Kerry's message said. "Because of your incredible grassroots energy and commitment, I wanted to make the first official announcement of my decision to you."

Minutes later, the Republican National Committee (news - web sites) fired off a response: "Who is John Edwards? A disingenuous, unaccomplished liberal and friend to personal injury trial lawyers."

By the time Kerry announced the news in person at a Pittsburgh rally 45 minutes later, Democratic and Republican Web sites were ready with dueling videos, fact sheets and statements.

But they were all 12 hours behind the air-travel Web site USAviation.com, where on Monday night a visitor wrote that John Edwards decals were being fitted to Kerry's campaign plane in a Pittsburgh hangar.

The Internet has sped up the pace of political campaigns and allowed them to stay in close touch with their most energetic supporters, experts said.

By telling those on his e-mail list first about Edwards' selection, Kerry is trying to build a sense of loyalty among people most likely to knock on doors for him, said Michael Cornfield, an adjunct professor at George Washington University's school of political management.

"They're the opinion leaders," Cornfield said. "They're the focus of this online activity, and they tend to be the ones gobbling up this insider information."

Unlike television and other media, Internet use spikes during the day, when most people are at work. Faithful supporters expect to see a response to any big news before the end of the day, not in the next day's newspapers.

Thus President Bush (news - web sites)'s campaign responded quickly with a video spot charging Kerry had been spurned by his top choice, Republican Sen. John McCain.

Meanwhile, the Democratic National Committee (news - web sites) posted a video spot showing McCain criticizing Bush.

"It's gone from being a 24-hour news cycle to a nanosecond news cycle," said Lee Rainie, director of the Pew Internet and American Life Project, a nonprofit organization that studies U.S. Internet use.

July 8, 2004 at 12:28 AM in Politics | Permalink | TrackBack (7) | Top of page | Blog Home

July 07, 2004

PC: Hey, your mobile's being stolen!

PC: Hey, your mobile's being stolen!

By Matt Loney, ZDNet UK
Researchers at Leeds University are developing technology that will allow Bluetooth devices to keep tabs on - and potentially protect - each other

Bluetooth, the short-range personal area networking technology, may have found a new application as a guard dog for notebooks and smartphones.

Researchers at the University of Leeds say they have figured out a way of measuring the distance between Bluetooth-enabled devices such as notebook computers, PDAs and mobile phones. They say the development could be used to track movement of devices; for instance, if a computer is moved, an alert could sound and a record of its unauthorised movement could be used in court.

Dr David Walsh, of Leeds University's department of electronic and electrical engineering, said: "The main application is for crime detection and prevention. By locating equipment to half a metre radius or less it will be a deterrent to crime. If something is stolen it will be possible to pinpoint the exact location it was stolen from."

Sadly, the technology on its own is unlikely to be able to pinpoint where the stolen equipment has been taken to. As a crime prevention measure the technology is also limited in that it can only help protect against physical loss. Leaving Bluetooth switched on can place devices at risk of Bluesnarfing -- a technique in which an attacker reads, modifies and copies a phone's address book and calendar without leaving any trace of the intrusion. But, although the tracking only works over a short range -- typically a few tens of metres -- it could still find a large range of applications, said Dr Walsh. "If it works well enough it could be used for locating firefighters in a burning building or to keep track of equipment on large industrial sites, instead of blueprints which have to be constantly revised."

The joint two-year £240,000 project with Imperial College is being carried out with the Home Office Police Scientific Development Branch and the Forensic Science Services.

July 7, 2004 at 08:22 PM in Telecommunications | Permalink | TrackBack (15) | Top of page | Blog Home

36 percent of software used worldwide is pirated: survey

36 percent of software used worldwide is pirated: survey

WASHINGTON (AFP) - Some 36 percent of the software installed on computers worldwide in 2003 was pirated, representing a loss of about 29 billion dollars to companies, a survey showed.

The survey, conducted by research firm International Data Corp. for the Business Software Alliance (BSA), included a broader range of software than previous reports.

Last year, the BSA said the piracy rate was 39 percent, down from 40 percent in 2002.

But this year's global piracy study incorporated operating systems and consumer software, and not just business software applications, as in prior years, giving a more accurate picture of the global software piracy problem, according to BSA.

The study found that while 80 billion dollars' worth of software was installed on computers worldwide last year, only 51 billion dollars' worth was legally purchased.

"Software piracy continues to be a major challenge for economies worldwide," said Robert Holleyman, president and chief executive of BSA.

"From Algeria to New Zealand, Canada to China, piracy deprives local governments of tax revenue, costs jobs throughout the technology supply chain and cripples the local, in-country software industry."

IDC conducted more than 5,600 interviews in 15 countries and used its in-country analysts around the globe to evaluate local market conditions.

It found the piracy rate in the Asia/Pacific region was 53 percent, with dollar losses totaling more than 7.5 billion dollars. In Eastern Europe, the rate was 71 percent, with losses at more than 2.1 billion dollars.

Western Europe's percentage of illegally copied software was 36 percent, leading to losses of 9.6 billion dollars. In North America, losses were pegged at 7.2 billion dollars and the piracy rate was 23 percent, the survey found.

The average piracy rate across Latin American countries was 63 percent, with losses totaling 1.3 billion dollars, and 56 percent on average in Middle Eastern and African countries, leading to losses of one billion dollars.

Among individual countries, China and Vietnam had the highest piracy rates (92 percent), followed by Ukraine (91 percent), Indonesia (88 percent), Russia (87 percent) and Zimbabwe (87 percent).

The lowest rates were in the United States (22 percent), New Zealand (23 percent), Demmark (26 percent), Austria (27 percent) and Sweden (27 percent).

But in dollar vale, the losses were greatest in the United States (6.5 billion dollars), followed by China (3.8 billion), France (2.3 billion), Germany (1.9 billion), Japan (1.6 billion) and Britain (1.6 billion).

"A number of factors contribute to the regional differences in piracy, including local-market size, the availability of pirated software, the strength of copyright laws, and cultural differences regarding intellectual property rights," said John Gantz, chief research officer at IDC.

"Unfortunately, we found that high market growth regions also tend to be high piracy regions, such as China, India and Russia. If the piracy rate in emerging markets -- where people are rapidly integrating computers into their lives and businesses -- does not drop, the worldwide piracy rate will continue to increase."

July 7, 2004 at 08:18 PM in Business Models | Permalink | TrackBack (21) | Top of page | Blog Home

SK Group to invest billions of dollars in telecom by 2007

SK Group to invest billions of dollars in telecom by 2007

SEOUL (AFP) - South Korea's SK Group said it plans to invest more than eight billion dollars in information and telecommunications business over the next three years.

The conglomerate which controls South Korea's largest mobile carrier SK Telecom said the major investment plan was aimed at maintaining its leadership in the sector and promoting growth.

"We will spend more than 10 trillion won (8.6 billion dollars) in the information and telecommunications area by 2007," South Korea's third largest conglomerate SK Group said in a statement.

The initiative would focus on "platform business" whereby it seeks all the relevant business areas encompassing service, equipment and content, it said.

With a budget of two trillion won set aside, much of its resources would go to the new satellite digital broadcasting business where customers can watch TV programs on their mobile handsets, the group said.

It added it would expand its own research on service and equipment sectors, while fostering collaborative work with partners on developing programs.

SK Telecom has 18 million subscribers, 54 percent of South Korea's total mobile communications market.

July 7, 2004 at 08:17 PM in Telecommunications | Permalink | TrackBack (6) | Top of page | Blog Home

Regulators from 60 countries start to tackle growing tide of spam

Regulators from 60 countries start to tackle growing tide of spam

GENEVA (AFP) - Regulators from about 60 countries began a meeting at the UN's top telecommunications agency to try to stop the growing tide of unsolicited e-mails or "spam" that threaten to drive users and businesses off the Internet.

"It's a disease which has spread around the world. We have an epidemic on our hands which we need to control," said Robert Horton, the acting head of the Australian Communications Authority who is chairing the three-day meeting in Geneva.

Some studies indicate that spam now accounts for up to 75 or 85 percent of inbound electronic mail, according to the UN's International Telecommunciations Union (ITU).

"Clearly it's more irritable than it was even 12 months ago where it could have been 35 percent, and people might have tolerated it to a certain level," Horton told journalists.

"People are less tolerant today and are prepared to walk away from the Internet and stop using it in their business and in their private lives," he added.

Horton said he hoped that the meeting, the first of its kind, would trigger greater international cooperation needed to bring spam under control within two years.

As a first step, regulators are likely to set up a register of contacts in individual countries, where the problem is often dealt with by different government telecommunications, broadcasting or trade agencies.

They are also aiming to swap notes over different types of legislation which are being implemented in countries including the United States, South Korea and Britain.

July 7, 2004 at 08:16 PM in Spam | Permalink | TrackBack (31) | Top of page | Blog Home

Parties to Allow Bloggers to Cover Conventions for First Time

Yahoo! News - Parties to Allow Bloggers to Cover Conventions for First Time

Tue Jul 6, 9:40 AM
By Brian Faler, Special to The Washington Post More than 15,000 people will converge on Boston later this month to cover the Democratic National Convention -- including, for the first time, bloggers.

The Democratic Party plans to give media credentials to a select group of bloggers who want to cover the event, where Sen. John F. Kerry (Mass.) is expected to accept his party's presidential nomination. The group has not announced which bloggers might get the passes, but that information will come in the "next few weeks," an event spokeswoman said. The convention begins July 26.

But officials said whoever gets credentials will have the same opportunities to cover the four-day event that journalists enjoy. "We want to treat them just the same as other reporters," said Mike Liddell, the convention's director of online communications. "We're even planning to do a breakfast for them the first day of the convention."

The Republican Party recently decided that it will also give bloggers credentials for its convention later this summer. A spokesman for the event said it is still working out details.

The Web sites, which are essentially online journals, have become a prominent campaign tool this election season -- ever since former Democratic presidential candidate Howard Dean (news - web sites)'s official blog caught on. Since then, scores of other candidates have developed similar sites. Some candidates have begun advertising on other independent blogs -- especially sites that feature commentaries, usually partisan, on the political news of the day.

But neither party has ever allowed bloggers to cover one of its presidential conventions firsthand -- and the decision seems to promise a clash of two very different cultures. The conventions have become carefully staged productions intended, primarily, to reintroduce the parties' nominees to the general public. Independent blogs -- especially those focusing on politics -- are far more freewheeling, their authors mixing fact with opinion and under no obligation to be either fair or accurate.

Joe Trippi, former campaign manager for Dean's campaign, said he supports the decision but that it presents some risk to the Democrats. He said many bloggers are more liberal than Kerry -- and may feel free to vent their frustration with the candidate if, for example, he presents himself at the convention as a centrist.

"They're much tougher, I think, from an ideological bent than mainstream press," Trippi said. "You're not going to take any flak from the mainstream press for tacking to the center on a given issue."

But he and other Democrats said the plan also gives the party a chance to reach a larger audience. Although television networks have cut back on their coverage of the conventions -- saying they yield little news -- some bloggers have attracted sizable audiences. Lina Garcia, a spokeswoman for the convention, said she hopes the bloggers will help the party reach young people. "A lot of young people blog now, and they're important to us," she said.

Markos Moulitsas Zuniga, a Berkeley, Calif.-based lawyer who runs one of the most popular liberal blogs -- Dailykos.com -- predicted that many bloggers will beam a reliably pro-Democratic message back to their readers. "We're all partisan. We don't pretend to be otherwise and would not be constrained by bounds of having to balance out what we write with the other side," he said. "So it's a much more direct way to get out the party's message to its constituents and potential constituents."

It is not clear how the Democratic Party will decide among the more than 60 bloggers who have applied for credentials. Convention officials said they are considering three criteria: the size of the blogger's audience, the "professionalism" of the site and the amount of original material it includes. It is subjective and a little vague. But then again, Liddell said, no one has tried this before. "We don't have a guide to go by," he said.

July 7, 2004 at 08:15 PM in Blogging & feeds | Permalink | TrackBack (9) | Top of page | Blog Home

National Australia Bank to use SMS to beat phishers

finextra news: National Australia Bank to use SMS to beat phishers

06 July 2004 - National Australia Bank is to use SMS messaging to provide PIN-protected access to Internet banking services for online customers.

Under the scheme, NAB customers will be invited to register their mobile phone numbers with the bank. Each time a registered user tries to log on to their accounts, the bank will send a unique PIN-entry code by SMS to their mobile.

The bank plans a pilot of the programme in September and full roll-out to its one million online banking customers next year.

This two-factor authentication system is intended to crack down on phishing fraud, which has plagued banks down under.

NAB is not alone in evaluating new schemes to beat the fraudsters. Bendigo Bank has also announced plans to offer its 70,000 Internet banking customers keyring-sized authentication tokens which generate a new password every time a customer logs on to the Net.

The bank says it has yet to decide who will foot the bill for the devices, which are expected to cost up to A$15 each.

July 7, 2004 at 02:41 PM in Security | Permalink | TrackBack (25) | Top of page | Blog Home

Wachovia moves online banking to Corillian platform

finextra news: Wachovia moves online banking to Corillian platform

07 July 2004 - US bank Wachovia is migrating its online banking services to Corillian Corporation's Voyager platform in order to manage its increasing customer base and rise in transaction volumes.

The Corillian platform will support Wachovia's 4.3 million online banking customers.

Lawrence Baxter, EVP, chief e-commerce officer, Wachovia says: "We concluded that we needed to find the right partner to take our online banking services to the next level. After an in-depth analysis, we concluded that Corillian emerged as the best partner for us due to their extensive track record of working with financial institutions of our size and complexity."

Corillian shares moved up 11.11% on the news to $5.30 from an overnight close of $4.77.

July 7, 2004 at 02:06 PM in Financial Services | Permalink | TrackBack (19) | Top of page | Blog Home

ATM fraud driving move to chip cards in Taiwan

ATM fraud driving move to chip cards in Taiwan | ATM Marketplace News

14 October 2003
TAIWAN — Taiwan's Ministry of Finance pledged to safeguard the interests of bank account holders after a recent ATM scam drained the savings accounts of at least 36 Bank of Taiwan (BOT) clients.

Finance Minister Lin Chuan said, "The interests of depositors will be fully protected. Local banks should take full responsibility and guard against the risk of similar fraud."

According to a Taiwan News report, the ATM scam is expected to cost the bank at least NT$3.78 million ($11,176 U.S.) Seven banks, including ChinaTrust Commercial Bank and the Land Bank of Taiwan, disclosed similar recent cases of account fraud.

To restore consumer confidence, Lin refused to reveal the latest information about how many banks had suffered similar ATM scams and how much money has been withdrawn using duplicated ATM cards, claiming the information would hamper the police investigation.

"We hope (the confidence of) local depositors will not be negatively affected by the incident," Lin said, but he added that he could not rule out the possibility of similar ATM fraud in the future.

Most of the BOT victims had accounts at the bank's Tainan branch, but their money was withdrawn through ATMs in central and northern Taiwan, said Lee Shang-yann, president of the bank.

The BOT has approximately 6 million customers with 2.66 million ATM cards in circulation, although only 1.7 million ATM cards are active, according to Lee.

The investigators found illegally installed cameras at the BOT Tainan brach, allowing the thieves to steal card holders' PINs and later use the information to make duplicate cards, said Chou Yew-wei, brigade captain of the National Criminal Investigation Bureau's seventh Investigation Corps.

The police on Oct. 13 revealed two videotapes showing two criminals getting cash from a BOT ATM and a Fuhwa Commercial Bank ATM in Taipei county. The criminals withdrew a total of NT$110,000 ($3,235 U.S.) from the two ATMs, according to the police.

"As local consumers find it increasingly difficult to avoid ATM and credit card scams that drain their accounts, chip-embedded ATM cards will gradually replace traditional ATM cards," said Pan Wei-jong, sales director of Financial Information Service Co., Ltd. (FISC) "I believe recent ATM scams will speed up the launch of IC chip ATM cards."

FISC monitors and processes cash transactions at 18,000 ATMs throughout the nation. Only 300 ATMs islandwide have completed upgrades to provide services to chip-embedded ATM card holders, according to the Taiwan News.

While only 13 banks currently have chip-embedded ATM cards in circulation, Pan expects the number to increase to 70 by March. He expects chip-embedded ATM cards to replace all 50 million traditional cards within the next five to six years.

July 7, 2004 at 10:10 AM in Smart Cards | Permalink | TrackBack (11) | Top of page | Blog Home

Some Taiwan banks may not meet accelerated ATM card conversion deadline

Some Taiwan banks may not meet accelerated ATM card conversion deadline | ATM Marketplace News

24 November 2003
TAIWAN — Some Taiwan banks are complaining about a ruling that speeds up by six months the Ministry of Finance's requirements to replace magnetic stripe ATM cards with integrated circuit (IC) cards.

"We'll do our best to meet the deadline," said a local bank official, who did not wish to be identified beyond the surname Tsai. "But we're also worried that some technologies to enhance the IC cards' capabilities haven't matured yet."

According to a report in the Taipei Times, the finance ministry last month ruled that ATMs would have to be upgraded by June and all magnetic cards would have to be replaced by IC cards by the end of 2004.

(See related stories Taiwan to begin converting ATM cards to chip in September, ATM fraud driving move to chip cards in Taiwan, Taiwan police arrest two suspects in ATM fraud, seeking several more and Taiwan to require digital photos of account holders)

Originally, changing the nation's 60 million cards over to the new system was scheduled to take five years.

Tsai said that it may be difficult to upgrade ATMs in line with the ministry's schedule because of a limited number of engineers qualified to install IC readers on the nation's 17,000 machines.

"We have the readers, but small banks like ours may have to wait in a long line for engineers to install them," Tsai said.

Tsai said that banks are expect the new IC cards to be used for multiple purposes, functioning as smart cards, or "electronic purses," to spur consumption that will offset costs associated with the changeover.

Facilitating a smart-card environment, however, will take time, money, and manpower, Tsai said.

Large banks such as Chang Hwa Bank and the Cathay United Bank believe that IC cards must generate substantial new business to justify their expense.

An executive vice president at Chang Hwa, Hsien Chao-nan, said that it would be a waste of banks' money if the new IC cards are only used to make cash withdrawals. IC cards cost NT$35 ($1.03 U.S.), while magnetic cards cost about NT$3 to NT$6.

According to Hsieh, Chang Hwa will replace more than 2 million ATM cards at a total cost of more than NT$70 million ($2 million U.S.), a cost that the bank sees as impossible to pass on to customers in today's highly competitive financial market.

Although the Bankers' Association allows banks to decide on their own whether they will charge clients for new IC cards, its secretary-general, Kuo Yu-chyi, said that it is unlikely that banks will charge clients.

"It's a matter of survival," Kuo said. "If banks charge their customers for IC cards, the customers will choose other banks."

Hsieh said in addition that new IC cards may cause problems for users who travel abroad.

Travelers may find it inconvenient to use IC cards in countries where ATMs have not been upgraded to read them, he said.

July 7, 2004 at 10:09 AM in Smart Cards | Permalink | TrackBack (8) | Top of page | Blog Home

Taiwan to spend $430M to convert ATM cards to chip

Taiwan to spend $430M to convert ATM cards to chip | ATM Marketplace News

TAIWAN — If local banks adopt integrated circuit (IC) cards, which combine cash withdrawal, credit, cash advances and smart debit features on one card, it will be easier for Taiwanese consumers to connect to future international standards, according to a report in the Taipei Times.

Stony Yen, president of GemFor Tech Co., a veteran in the financial application system industry, said banks would need to spend up to NT$15 billion (U.S. $430 million) on converting the current ATM card system, including cards, ATMs and host computer systems, from magnetic strip to chip.

In a bid to resolve the increasingly severe problems of card fraud in Taiwan, the Ministry of Finance (MOF) ruled in October that the more than 600 million magnetic cards currently in circulation must be converted into more secure chip-based cards by next June.

(See related stories Some Taiwan banks may not meet accelerated ATM card conversion deadline, ATM fraud driving move to chip cards in Taiwan and Taiwan to begin converting ATM cards to chip in September)

International credit card issuers like Visa and MasterCard are also promoting the conversion of current magnetic credit cards into IC ones by 2006.

"Taiwan's banks would save the cost and customers' troubles by adopting a combo-card system by taking this opportunity," Yen said.

GemFor Tech last week launched its chip data preparation system (CDPS) as a platform for combination IC cards for local banks.

The MOF-funded Financial Information Service Co. said that IC cards would retain their magnetic strips for cardholders' convenience when abroad.

"The retained magnetic strip on the IC card's back will facilitate Taiwan's cardholders using IC cards for money withdrawals or transfers at overseas ATMs with Cirrus or Plus functions," said Pan Wei-chung, the company's associate manager.

However, the preservation of the magnetic strip has sparked a debate about whether the problem of data theft to produce fake cards will remain, according to the Taipei Times.

The Financial Information Service, which was set up to oversee the automation of banking services, has urged local banks to install anti-record facilities at local ATMs in a bid to prevent the recorded information in the magnetic strip of new IC cards getting into the hands of criminals, Pan said.

"One of the practical measures to avoid such a problem is that banks do not write the information into the strips until cardholders ask for it before traveling overseas and delete the information right after they come back from abroad," GemFor's Yen said.

July 7, 2004 at 10:08 AM in Smart Cards | Permalink | TrackBack (3) | Top of page | Blog Home

Taiwan begins switch to chip cards

Taiwan begins switch to chip cards | ATM Marketplace News

30 June 2004
TAIWAN — Beginning next month, holders of ATM cards will have to upgrade to integrated-circuit or smart cards in a bid to counter the increasingly severe problem of card fraud.

According to a report in Taipei Times, the Bankers' Association of the Republic of China has said that inter-bank transactions via magnetic cards will end in 2005, which will gradually eliminate the more than 64.5 million magnetic cards currently in circulation.

Though some banks will issue IC-embedded cards used for cash withdrawals only, others are expected to launch cards which combine cash withdrawal, credit, cash advance, stored value and debit functions on a single card.

Combination cards will give banks an opportunity to expand their credit card market share when their savings account customers upgrade their magnetic cards, according to the Taipei Times.

Chinatrust Commercial Bank, which has more than three million bank cards in circulation, is expected to convert two million cards by the end of 2004, according to the bank's public relations department.

Chinatrust will not issue combination cards, but only chip-embedded cards.

Hua Nan Commercial Bank will offer gifts to customers who apply for combination cards starting next month.

According to figures provided by the government-funded Financial Information Service Co., 14,550 ATMs, or 73 percent of all cash machines in the country, had been modified to read chip-embedded cards by June 25.

July 7, 2004 at 10:08 AM in Smart Cards | Permalink | TrackBack (8) | Top of page | Blog Home

JohnKerry.com May Have to Do Without 'Edwards'

washingtonpost.com: JohnKerry.com May Have to Do Without 'Edwards'

By David McGuire
Special to the Washington Post
Wednesday, July 7, 2004; Page E01
Indianapolis native Kerry Edwards is feeling pretty good about his decision to immortalize his name on the Web six years ago.

Yesterday, shortly after presidential candidate John F. Kerry (D-Mass.) announced that Sen. John Edwards (D-N.C.) will be his running mate, the 34-year-old bail bondsman and owner of Kerryedwards.com said he took down the picture of his child that graced the Web site and put up a for-sale sign.

It didn't take long for the phone to ring.

"Our campaign did inquire about KerryEdwards.com, but because of the money they were asking for, we took a pass," said Kerry spokesman Michael Meehan. He said Edwards wanted a five-figure payment.

Edwards said he did not discuss an exact figure with the campaign, and he would not name a price in an interview. But he did say the price would have to be right for him to part with the now-hot address. "I'm not going to give away my name for $1,000," he said.

He added that one person offered him $15,000 for the domain and that another offered to split advertising revenue generated from the page. He wouldn't identify either bidder.

Meehan said the Kerry organization, at least for now, will stick with its Web address, www.johnkerry.com. "It's a site we've branded, and we have over a million subscribers and we're looking to decide what we're doing going forward."

Edwards's potential windfall highlights a 21st-century quandary for the newly christened Kerry-Edwards campaign, which may hit a snag if it tries to break ground on a new online home.

Web addresses ending in .com and .org can cost $8 to $35. Ever since the Internet became popular, many people have speculated that the Internet domains they buy today could be worth thousands, or maybe millions, of dollars tomorrow.

Other obvious choices for a campaign Web site -- including KerryEdwards04.com, KerryEdwards2004.com, and KerryEdwards-2004.com -- have already been registered, according to publicly available Internet records. The listed owners of those sites could not be reached yesterday.

Internet records identified the owner of the addresses Kerry-Edwards.com, Kerry-Edwards2004.com and Kerry-Edwards2008.com as Kevin Draftz of Chicago. A man who answered the phone at the Web sites' contact number identified himself as Draftz. He described himself as a 42-year-old "lifelong Democrat" and said he wants the Kerry campaign to pay him "thousands of dollars" for the addresses Kerry-Edwards.com, Kerry-Edwards2004.com and Kerry-Edwards2008.com. He bought the addresses on Jan. 19, the day of the Iowa caucuses.

"I'm now just waiting to hear from Mr. Kerry," he said, adding that the campaign had not called as of late yesterday afternoon. He said that his first choice of buyers is the Kerry campaign but that he would not rule out the possibility of selling to the competition. One proud owner of a handful of Kerry-Edwards domains says he will not turn them loose for any price. Mark Alexander is the editor of the Chattanooga, Tenn., Federalist Patriot, a conservative e-mail journal with 500,000 subscribers. Alexander said he bought Kerry-Edwards04.net, Kerry-Edwards04.org and Kerry-Edwards04.info in 2003.

"We predicted early on in this thing that this would be a Kerry win and that he would almost have to pick Edwards as his running mate," Alexander said. All of Alexander's Kerry-Edwards addresses link to a Web site designed to look like Kerry's official site but are loaded with criticism of the candidate. The site's banner reads "John Kerry President?"

Democrats have also registered Web sites that attack the other side's candidates. Zach Exley, a Kerry-Edwards staffer and the former online chief of MoveOn.org, owns the anti-George Bush Web site www.gwbush.com.

Alexander said he ran the site by his lawyers, who concluded that because he was not trying to extort money from the Kerry campaign, he was not "cybersquatting."

A 1999 law made it illegal to register an Internet domain name with the intention of forcing a trademark owner or a namesake to pay to reclaim it. The Internet addressing system's main oversight body also disapproves of the practice and offers a dispute resolution process for people who feel their names or trademarks have been improperly registered as Internet addresses in a bid to extort money.

But "use for political commentary is clearly okay," said Wendy Seltzer, a staff attorney for the San Francisco's Electronic Frontier Foundation and an expert in intellectual property law. Seltzer said Edwards probably is not breaking the law because he registered the address in good faith several years before Kerry made his announcement.

But speculators who bought the domains to sell them to the Kerry campaign at higher prices might get in trouble if the campaign sues to recover them, Seltzer said. Draftz said he is aware of the law but does not think he is violating it.

David McGuire is a reporter for washingtonpost.com.

© 2004 The Washington Post Company

July 7, 2004 at 08:33 AM in Web lifestyle | Permalink | TrackBack (14) | Top of page | Blog Home

InterActiveCorp Looks for Ways to Cross-Promote

The New York Times > Business > E-Commerce Report: InterActiveCorp Looks for Ways to Cross-Promote

By BOB TEDESCHI

Published: July 5, 2004

ITH every acquisition Barry Diller makes for his Internet conglomerate, InterActiveCorp, the company's potential grows. But so does the number of people asking this question: Can his company connect its dot-coms?

The company is starting to show signs that it can, but perhaps not quickly enough to satisfy some of its critics.

InterActiveCorp's travel companies, Hotels.com, Hotwire.com and Expedia, have been advertising each other's Web sites, and essentially shuttling customers to other InterActiveCorp companies for complementary services - or replacement services if customers can't find, say, a suitable hotel room on Hotwire. At a recent investor conference, InterActiveCorp's chief financial officer, Dara Khosrowshahi, said that the integration of its travel-related companies, including Expedia, Hotels.com and Hotwire, had resulted in $58 million in additional travel bookings in the first quarter of 2004.

"They'd been saying that they'd seen no synergies to date, but for the first time they've given us a number," said Mark Mahaney, an analyst with American Technology Research, an investment firm based in Greenwich, Conn. "They didn't provide much color on it, but in theory, they should be able to hook in someone who'd bought something on Hotwire, and have them book a room at Hotels."

Andrea Riggs, a spokeswoman, said the businesses would also save a combined $75 million by buying travel inventory in bulk from suppliers over the next three years, and they are improving their operations by sharing tips on marketing, credit fraud protection and technology.

For some analysts, even this is not enough. "I'm not saying they're not creating some incremental revenue," said Scott Benesch, an analyst with US Trust. "I just have a hard time getting to something more than that."

Mr. Mahaney was slightly more forgiving. "Fifty-eight million sounds like a nice big number," he said, referring to the additional travel revenue generated from its cross-promotional efforts. "But they've had a while to do it, and we haven't seen much. So I think the revenue synergies will come; it's just going to take a while."

An example of an intracompany partnership is one between Hotels.com and Entertainment Publications, which sells coupon books for restaurants, stores and event venues in more than 160 markets. Entertainment Publications, which was bought by InterActiveCorp in March 2003, will today announce a program in which Hotels.com customers receive free coupons when they book rooms.

For instance, customers who booked a hotel room last week at the Fairfield Inn Buckhead in Atlanta for $129.50 on Hotels.com also received three Entertainment Publications coupons. Any customer who used the $15 car rental coupon, the $10 dinner coupon and another for a free weekend of golf saved $51.

Such savings could be critical, especially in businesses where customers routinely click to several sites to save even a few dollars, Jack E. Richards, the company's senior vice president for product marketing, said. "This is helping to drive bookings," Mr. Richards said. "It's things like this that will differentiate us."

Mr. Richards would not say how many more bookings Hotels.com had generated since it began offering coupons, but he did say that about 34 percent of those who now book hotel rooms were printing coupons for redemption.

Executives at Entertainment Publications say the partnership is helping their cause, too. "It's definitely very early in the process, but it's been very helpful to business," said Dion Camp-Sanders, the company's vice president for corporate strategy and business development.

The increased exposure has helped Entertainment Publications build on the eight million customers who already pay $25 to $40 for the company's coupon books and to gain access to special offers on the company's Web site, Entertainment.com. Mr. Camp-Sanders declined to say how many more customers the Hotels.com relationship has yielded. But in the meantime, he said, his business was generating money from Hotels.com customers in another way.

This year's Entertainment Publications books include 32 pages of Hotels.com-related discounts and descriptions. When a customer books a room, Entertainment Publications receives an undisclosed bounty. "We've already become one of Hotels.com's larger affiliates, in terms of driving bookings," Mr. Camp-Sanders said. "It's our most successful integration."

Mr. Camp-Sanders also said that his company had been offering coupons to Expedia customers. As travelers book vacations, Expedia offers discounted tickets, meals and other attractions from Entertainment Publications' clients.

InterActiveCorp declined to comment on the overall pace or success of its integration efforts, instead leaving it to division leaders like Mr. Camp-Sanders to comment on their own initiatives. But other examples of intracompany programs abound. Hotels.com customers who want to book airfare, for instance, can do so on the Web site, using a booking engine developed by Expedia.

Match.com dating customers, meanwhile, can find links to restaurants from Citysearch.com, or event tickets from Ticketmaster - all InterActiveCorp companies.

But the travel category in particular seems the most logical target for integration, analysts said. Seventy percent of the company's revenue comes from travel-related sales, and according to Mr. Mahaney of American Technology Research, its share of the online travel industry's sales is growing.

According to new research released last week by the Pew Internet and American Life Project, the average Internet user's appetite for online travel purchases is growing quickly. The research, which was completed on June 17, indicated that the number of people who bought travel services online had more than doubled, from 34 million four years ago to more than 70 million now. High-speed Internet users in particular are drawn to travel sites, the data suggest. More than 12 percent of those with high-speed connections at home look online for travel-related information - more than twice the rate of dial-up Internet users.

While InterActiveCorp would not disclose specifics of its travel integration efforts, data from the Internet research firm Nielsen//NetRatings shed some light onto the company's cross-promotion efforts. NetRatings last week looked at the Internet visitors to Hotwire and Expedia in May 2003 and May 2004, six months before and after InterActiveCorp acquired Hotwire.

Since InterActiveCorp bought Hotwire and began advertising the site on Expedia - and vice versa - about 900,000 more Hotwire customers have visited Expedia on a monthly basis, NetRatings estimated. Meanwhile, roughly 600,000 more Expedia customers have visited Hotwire, bringing the total of prospective new InterActiveCorp customers to 1.5 million.

Despite these numbers, Mr. Benesch of US Trust said he would like more proof that customers are buying more services from the company en masse, rather than simply buying from one business or another.

"Synergies come from having something that someone else doesn't have, and charging for it," Mr. Benesch said. "Or, putting two things together and creating excess value. There's no excess value here for customers."

July 7, 2004 at 08:32 AM in eCommerce | Permalink | TrackBack (16) | Top of page | Blog Home

You've Got Mail (and Court Says Others Can Read It)

The New York Times > Technology > You've Got Mail (and Court Says Others Can Read It)

By SAUL HANSELL

hen everything is working right, an e-mail message appears to zip instantaneously from the sender to the recipient's inbox. But in reality, most messages make several momentary stops as they are processed by various computers en route to their destination.

Those short stops may make no difference to the users, but they make an enormous difference to the privacy that e-mail is accorded under federal law.

Last week a federal appeals court in Boston ruled that federal wiretap laws do not apply to e-mail messages if they are stored, even for a millisecond, on the computers of the Internet providers that process them - meaning that it can be legal for the government or others to read such messages without a court order.

The ruling was a surprise to many people, because in 1986 Congress specifically amended the wiretap laws to incorporate new technologies like e-mail. Some argue that the ruling's implications could affect emerging applications like Internet-based phone calls and Gmail, Google's new e-mail service, which shows advertising based on the content of a subscriber's e-mail messages.

"The court has eviscerated the protections that Congress established back in the 1980's," said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a civil liberties group.

But other experts argue that the Boston case will have little practical effect. The outcry, said Stuart Baker, a privacy lawyer with Steptoe & Johnson in Washington, is "much ado about nothing."

Mr. Baker pointed out that even under the broadest interpretation of the law, Congress made it easier for prosecutors and lawyers in civil cases to read other people's e-mail messages than to listen to their phone calls. The wiretap law - which requires prosecutors to prove their need for a wiretap and forbids civil litigants from ever using them - applies to e-mail messages only when they are in transit.

But in a 1986 law, Congress created a second category, called stored communication, for messages that had been delivered to recipients' inboxes but not yet read. That law, the Stored Communications Act, grants significant protection to e-mail messages, but does not go as far as the wiretap law: it lets prosecutors have access to stored messages with a search warrant, while imposing stricter requirements on parties in civil suits.

Interestingly, messages that have been read but remain on the Internet provider's computer system have very little protection. Prosecutors can typically gain access to an opened e-mail message with a simple subpoena rather than a search warrant. Similarly, lawyers in civil cases, including divorces, can subpoena opened e-mail messages.

The case in Boston involved an online bookseller, now called Alibris. In 1998, the company offered e-mail accounts to book dealers and, hoping to gain market advantage, secretly copied messages they received from Amazon.com. In 1999, Alibris and one employee pleaded guilty to criminal wiretapping charges.

But a supervisor, Bradford C. Councilman, fought the charges, saying he did not know about the scheme. He also moved to have the case dismissed on the ground that the wiretapping law did not apply. He argued that because the messages had been on the hard drive of Alibris's computer while they were being processed for delivery, they counted as stored communication. The wiretap law bans a company from monitoring the communications of its customers, except in a few cases. But it does not ban a company from reading customers' stored communications.

"Congress recognized that any time you store communication, there is an inherent loss of privacy," said Mr. Councilman's lawyer, Andrew Good of Good & Cormier in Boston.

In 2003, a federal district court in Boston agreed with Mr. Councilman's interpretation of the wiretap law and dismissed the case. Last week, the First Circuit Court of Appeals, in a 2-to-1 decision, affirmed that decision.

Because most major Internet providers have explicit policies against reading their customers' e-mail messages, the ruling would seem to have little effect on most people.

But this year Google is testing a service called Gmail, which electronically scans the content of the e-mail messages its customers receive and then displays related ads. Privacy groups have argued that the service is intrusive, and some have claimed it violates wiretap laws. The Councilman decision, if it stands, could undercut that argument.

Federal prosecutors, who often argue that wiretap restrictions do not apply in government investigations, were in the somewhat surprising position of arguing that those same laws should apply to Mr. Councilman's conduct. A spokesman for the United States attorney's office in Boston said the department had not decided whether to appeal.

Mr. Baker said that another federal appeals court ruling, in San Francisco, is already making it hard for prosecutors to retrieve e-mail that has been read and remains on an Internet provider's system.

In that case, Theofel v. Farey-Jones, a small Internet provider responded to a subpoena by giving a lawyer copies of 339 e-mail messages received by two of its customers.

The customers claimed the subpoena was so broad it violated the wiretap and stored communication laws. A district court agreed the subpoenas were too broad, but ruled they were within the law. The plaintiffs appealed, and the Justice Department filed a friend of the court brief arguing that the Stored Communications Act should not apply.

In February, the appeals court ruled that e-mail stored on the computer server of an Internet provider is indeed covered by the Stored Communications Act, even after it has been read. The court noted that the act refers both to messages before they are delivered and to backup copies kept by the Internet provider. "An obvious purpose for storing a message on an I.S.P.'s server after delivery," the court wrote, " is to provide a second copy of the message in the event that the user needs to download it again - if, for example, the message is accidentally erased from the user's own computer."

Calling e-mail "stored communication" does not necessarily reduce privacy protections for most e-mail users. While the Councilman ruling would limit the applicability of wiretap laws to e-mail, it appears to apply to a very small number of potential cases. The Theofel decision, by contrast, by defining more e-mail as "stored communications," is restricting access to e-mail in a wide range of cases in the Ninth Circuit, and could have a far greater effect on privacy if courts in the rest of the country follow that ruling.

July 7, 2004 at 08:29 AM in email | Permalink | TrackBack (18) | Top of page | Blog Home

Tackling the threat from portable storage devices

Tackling the threat from portable storage devices - ZDNet UK Insight
Ruggero Contu
Gartner
July 05, 2004, 17:10 BST
USB flash drives, MP3 players and the like are everywhere nowadays. Giving your staff free rein to use them at work could lead to breaches of security and loss of data

Analysis
Businesses are increasingly putting themselves at risk by allowing the unauthorised and uncontrolled use of portable storage devices. We show which strategies and technologies organisations should adopt to manage them securely.

What are the security concerns?
The use of unauthorised portable storage devices poses many dangers, not least for the malicious code that they can introduce. High data capacity and transfer rates, and broad platform support mean that a Universal Serial Bus (USB) or FireWire (IEEE 1394) device has the capacity to quickly download much valuable corporate information, which can be easily leaked to the outside world.

This underlying vulnerability has existed since the release of Microsoft Windows 2000, the first widely deployed operating system able to mount a USB storage device automatically.

Portable devices include any kind of pocket-sized portable FireWire hard drive, like those from LaCie or Toshiba, or USB hard drive or keychain drive, such as M-Systems' DiskOnKey. They also include disk-based MP3 players, such as Apple's iPod, and digital cameras with smart media cards, memory sticks, compact flash and other memory media.

The devices pose two kinds of threat.

Intentionally or unintentionally, users can bypass perimeter defences like firewalls and antivirus at mailserver, and introduce malware such as Trojan horses or viruses that, if not discovered, can cause serious damage.
Companies are at risk of losing intellectual property and other critical corporate data. Portable storage devices are ideal for anyone intending to steal sensitive and valuable data. Employees may also be responsible for losing data if they inadvertently mislay these devices.

USB flash drives, MP3 players and the like are everywhere nowadays. Giving your staff free rein to use them at work could lead to breaches of security and loss of data.

The impact of the latter goes beyond the commercial value of the data for two reasons.

There are different privacy laws in different countries. This means there is more risk of legal action if personal information — belonging to corporate clients or employees — ends up in the hands of an unauthorised third party.
Companies' reputations may be damaged as a consequence of information leaks. This is particularly the case for those operating in areas where client privacy must be preserved, such as the financial market.

What are company requirements and strategies for deploying these devices in the workplace?

Companies should forbid the use of uncontrolled, privately owned devices with corporate PCs. The prohibition should extend to employees, and external contractors with direct access to corporate networks.
Portable storage devices can undoubtedly provide very good practical benefits to a company and its workforce. And, in many cases, it would be unpractical and counterproductive to ban their use outright.
A controlled approach would be a safer option. This would involve adopting certain security measures in terms of overall organisation (policy) and specific tools (technology).

What are the best practices in managing these devices?

These general security recommendations can apply to a whole range of portable storage devices.
Adopt a suitable security policy on using portable storage devices
Create a specific policy to help outline company guidelines on using portable storage devices by specifying if, and when, they can be used.

Managers should advise on the main procedures to be followed for the eventual use of such devices; for instance, to confirm the need for password and security protection (encryption) of stored corporate data. This will also help mitigate risks from loss or theft.

Make provision for training to increase awareness of the need for security in this area. A security-conscious workforce will be less likely to unwittingly leak sensitive information, by misplacing a storage device, for instance.
Use tools to help manage port access of USBs and FireWire.

USB flash drives, MP3 players and the like are everywhere nowadays. Giving your staff free rein to use them at work could lead to breaches of security and loss of data

Adopt personal firewalls to limit what can be done on USB ports. Leading products to consider are from vendors like Sygate Technologies, Zone Labs and Symantec. For a more detailed marketplace and product evaluation, see "Magic Quadrant for Personal Firewalls, 1H03".
Look at other products that can control ports selectively. SecureWave offers a host-based security solution, where administrators can create rules on the use of PCs to control applications and devices. This allows only authorised devices to be used and bars access to unauthorised ones.
Use more traditional, host-based intrusion prevention products to assure compliance. This is a less straightforward process, but the system can be set to generate alerts when portable devices connect to a system. In this way, user activity is monitored so that individual access rights can be adhered to.
Consider employing mobile data protection products to encrypt corporate or sensitive data. The Encrypting File System is a widely available product within Microsoft Windows operating system. Vendors like Pointsec Mobile Technologies, Information Security Corporation and PC Guardian Technologies offer alternative specialist solutions. For a more detailed insight into the mobile data encryption marketplace, see "Magic Quadrant for Mobile Data Protection, 1H04" and "Mobile Data Protection Magic Quadrant Criteria, 1H04".
Consider using digital rights management technology as part of a wider protection strategy for proprietary information

On a broader level, and especially for those industries where intellectual property is of critical importance, the use of digital rights management software ensures the persistent protection of digital assets by maintaining constant control over their use and distribution. Vendors like Microsoft, Authentica, Liquid Machines and SealedMedia offer products that protect documents and files sent via email, or are generally shared across the wide company network.

As a general security best practice, managers should implement a desktop lockdown policy. They should also consider disabling universal plug and play, after pre-installing any desired drivers to permit the use of only authorised devices.

Businesses must ensure that the right procedures and technologies are adopted to securely manage the use of portable storage devices like USB "keychain" drives. This will help to limit damage from malicious code, loss of proprietary information or intellectual property, and consequent lawsuits and loss of reputation.

Key issues
How can enterprises comply with international and local regulations for security and personal data privacy, and how can IT security policies be tailored for specific regulatory entities?

July 7, 2004 at 08:20 AM in Security | Permalink | TrackBack (19) | Top of page | Blog Home

T-Systems Aims to Make WiFi as Easy as Phone Call

Yahoo! News - T-Systems Aims to Make WiFi as Easy as Phone Call

Tue Jul 6, 7:30 AM ETAdd Technology - Reuters to My Yahoo!

AMSTERDAM (Reuters) - T-Systems, a unit Deutsche Telekom, is linking together 10,000 locations for wireless computer access and aims to connect half of the world's public hotspots to a seamless network, it said on Tuesday.

The company in February began to connect wireless LAN (WLAN) hotspots -- found in coffee bars, airports and hotels -- from different providers across all continents.

Its roaming service has been set up for business travelers who want fast wireless access to the Internet on their laptop computers, but who do not want to sign up and pay separately every time they log on.

Hotels and conference centers in Europe typically ask between five and 10 euros for one hour of WLAN access, also known as Wi-Fi. Hotspots connected by T-Systems allow subscribers of one service to log onto any of the other 120 participating services and pay one bill at the end of the month, similar to the international roaming agreements between cellular operators.

"We have 10,000 hotspots signed or under negotiation. Our strategy is to become the leader in WiFi roaming. We would be content when we come to the point where we have half of the hotspots that exist," said product manager Christian Wollner.

The number of public hotspots worldwide is expected to grow to 135,000 by late 2006 from some 35,000 at end-2003, according to estimates by Datamonitor.

T-Systems, through its International Carrier Sales & Solutions unit, does not operate hotspots itself. It focuses on tying together hotspots from different providers, including those owned by sister companies within Deutsche Telekom.

"We do not have the intention to acquire any hotspots ourselves," Wollner told Reuters in a telephone interview.

This position allows T-Systems to work with many different telecom operators which have come to realize they cannot cover the world with their own hotspots.

A linked system, however, will allow business travelers to use the WLAN hotspot in an airport, for example, then continue to work on the plane over the Connexion WLAN network from aircraft maker Boeing, and finish work in a hotel room.

As well as manually selecting the WLAN providers from the host company page, the connection could be made automatically with software on the laptop or a SIM card, similar to mobile phones. This has been tested in trials, but is not yet commercial.

Wollner believes prices for WLAN will drop in Europe, to come more in line with lower levels in the United States.

"I don't think it will be free of charge, but the very high prices in Europe will have to come down," he said.

July 7, 2004 at 08:15 AM in Telecommunications | Permalink | TrackBack (13) | Top of page | Blog Home

July 06, 2004

Japan's E-Airport Plan Includes Biometrics

International Government Navigator

JAL to pilot e-check-in
Early next year Japan Airlines will pilot test an "e-check-in" system at Tokyo's Narita Airport using biometric technology, including facial recognition, according to an article in Aviationnow.com. JAL will be joined in the test by the New Tokyo International Airport Authority, NTT Docomo and Matsushita Electrical Industries.

July 6, 2004 at 10:14 PM in Security | Permalink | TrackBack (18) | Top of page | Blog Home

UK cardholders flout PIN security guidelines

finextra news: UK cardholders flout PIN security guidelines

05 July 2004 - Two per cent of cardholders in the UK - approximately 700,000 consumers - carry PIN numbers together with their payments cards, according to research by NOP World Financial on behalf of Halifax Card Services.

Furthermore, Halifax says a couple of those interviewed admitted to writing their PIN number on their actual card.

Commenting on the research, Ian Corfield, head of Halifax Card Services, says: "It's important that once you have your PIN number you either store it in a secure place or destroy it completely. If you're having trouble remembering your PIN you can easily change it to a number you can remember."

The survey also showed that 41% of respondents carried enough information in their wallets to allow their identity to be stolen. According to the research two out of five consumers carry some form of identification in the same place as their payment cards - usually in the form of a drivers licence.

Corfield adds: "Our research showed that a worrying number of us carried more than enough information in our wallets to allow would-be thieves to steal our identity. Fraudsters only need a few pieces of information and carrying it all in one place can therefore be very risky."

The bank recommends that consumers keep forms of identification - such as drivers licences - in a separate place to their payments cards and to take receipts home, check them against statements and then destroy them.

July 6, 2004 at 07:48 AM in Security | Permalink | TrackBack (7) | Top of page | Blog Home

Pop up malware labelled 'huge threat' to financial industry

finextra news: Pop up malware labelled 'huge threat' to financial industry

01 July 2004 - A malicious item of code that exploits unpatched security flaws in Internet Explorer to intercept online banking passwords has been found on Web pop-up ads.

The malware, which has been identified by the Sans Institute, is programmed to pass on data from secure sessions between user PCs and the urls of up to 50 banking Websites worldwide. The trojan grabs any oubound data from within IE before it is encrypted by SSL and feeds it back to a Web server in Estonia.

The file is automatically dowloaded to user PCs under the guise of a compressed image from pop up ads delivered by third party Web servers that appear to have been hacked.

Sans analyst Tom Liston comments: "I believe that this particular type of malware represents a huge threat to the online financial industry. As the proliferation of ad/spyware shows, installing executable software on user’s machines is far too easy."

The latest warning comes less than a week after it was discovered that certain Web sites running Microsoft Internet Information Server 5.0 had been hacked and programmed to install similar keylogging spyware on passing browsers.

Both scams exploit an as yet unpatched flaw in Microsoft's Internet Explorer Web browser. Web surfers are being advised to switch to alternative browsers such as Mozilla and Opera until Microsoft releases a new set of patches.

July 6, 2004 at 07:47 AM in Security | Permalink | TrackBack (16) | Top of page | Blog Home

July 05, 2004

Bloggers come of age in US presidential race

Bloggers come of age in US presidential race

WASHINGTON (AFP) - It started as a way to have a cyber-rant or just share a personal thought, but the blogger has become cutting edge media with a role to play even in the US presidential election race.

Sifting through the tens of thousands of blogs, short for web logs, or weblogs, has become a challenge for media and intelligence analysts. But amid the diatribes, commentaries and gossip, bloggers are gaining influence and breaking stories.

Blogging has taken off since the internet boom of the late 1990s. It has gained ground over the past two years as the technology becomes cheaper and easier to handle.

Howard Dean, a former candidate for the Democratic party's presidential nomination, was the first politician to discover the political power of the blog.

He stunned America last year by raising more than seven million dollars over the internet through his blogforamerica.com website. Dean followers spread his word through website blogs and election insiders had to take notice.

"Political campaigns tend to be very active around the margins," said conservative blogger, Bruce Rheinstein, who runs the www.ombudsgod.com website.

"You can affect the elections by getting people on the internet involved, you can have an impact on public opinion and people who might be torn between voting Democratic or Republican or possibly a third party," he said.

For the first time, bloggers will be accredited media at the major party conventions when John Kerry and President George W. Bush will be officially named the Democratic and Republican candidates.

The Democratic Party has decided some of the 15,000 press passes will be assigned to bloggers at its July 26-28 convention. The Democratic National Committee has hired Eric Schnure, a former speechwriter for ex-vice president Al Gore, to handle its own blog.

The Republican National Committee, has not yet chosen an official convention blogger for its conference starting August 30. But spokeswoman Alyssa McClenning said, "We're working on getting them credentials, We'd like to see them here."

"I think they're a great tool because they get people talking about politics and public policy," said Michael Turk, an electronic campaign director for the Bush campaign.

The blog puts a very personal spin on politics.

Bush's own campaign blog included a recent entry that boasts of a Fox News poll where the president is seven points ahead of Democratic rival Kerry. Most show the two neck-and-neck and some put Kerry ahead.

The Bush blog also cites a recent Washington Post editorial that criticizes Kerry for "gloomermongering."

Likewise, Kerry's campaign blog presents its partisan version of the facts.

One headline reads "Supreme Court Lets Cheney Hide Documents," and a written statement beneath said,"The Nixon legacy of secrecy is alive and well in the Bush White House. Americans shouldn't have to rely on court orders to learn what special interest lobbyists are writing White House policies."

Some bloggers are scornful of these campaign blogs saying they are unauthentic.

"They have no personality, they never talk about anything remotely interesting," said blogger Markos Moulitsas Zuniga, whose website www.dailykos.com, receives an estimated 104,910 visits a day, according to weblog traffic ratings.

"They are so risk-aversed that they would rather say nothing than say something that might be interesting," Zuniga said of both campaigns blogs.

The liberal blogger has also raised 76,709 dollars for Kerry and hundreds of thousands more for other Democratic congressional candidates. Zuniga points out that unlike most, the Bush campaign blog has no place for public comment.

Most bloggers feel they are the watchdogs of the media and political stories often brew on bloggers websites before they make it into newspapers.

"Stories often bounce around and you get an echo chamber where the top bloggers talk about things," said Peter Daou, a longtime blogger, who now helps write blog entries for John Kerry's campaign website.

"By studying the blog carefully, you can sometimes get a sense of what's coming. They'll telegraph things that are going to come in the future."

Many attribute some of the biggest political news stories to the persistence of bloggers. Bloggers attacked Republican senator Trent Lott's remarks during the 100th birthday party for late senator Strom Thurmond.

Lott praised Thurmond's segregationalist platform when he was a presidential candidate in 1948. Newspapers did not immediately notice the remarks but bloggers kept up the campaign and the outcry eventually forced Lott to resign as Senate majority leader in 2002.

But media critics caution against treating bloggers as real journalists, especially highlighting instances such as reports of an alleged affair between Kerry and an intern Alexandra Polier. Many bloggers were eager to spread the reports.

"It's just the latest manifestation of the vanity press," said Steve Lovelady, managing editor of Columbia Journalism Review's Campaign Desk, that analyzes bloggers as part of its media coverage.

"Most of them don't consider themselves journalists and I'll be the first to tell you that," Lovelady commented.

July 5, 2004 at 05:26 PM in Blogging & feeds | Permalink | TrackBack (18) | Top of page | Blog Home

Report: BBC Site Should Emphasize News

Yahoo! News - Report: BBC Site Should Emphasize News

By ROBERT