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Date: Mon, Sep 20, 1999 8:25 AM -0400
From: Faulkner Information Services <flash@faulkner.com>
To: ???
Subject: Faulkner's Cyberscape Digest 09/17/99 (Part 1 of 1)

                                 CYBERSCAPE DIGEST

Welcome to CyberScape Digest, a roundup of top internet stories delivered
weekly to Faulkner Information Services subscribers.

This issue of CyberScape Digest covers events from Monday 09/13 through
Friday 09/17. Here's what you should know...

ACEC Navigates Taxes, Money Matters
The Advisory Commission on Electronic Commerce faces financial problems
before it can fulfill its Congress-mandated mission to study the issue of
Internet taxes. It still needs to get $2 million in funding from
Congress--funding that the White House said it won't provide unless the ACEC
reduces the proposed $150,000 salary of its executive director. Virginia
Gov. James Gilmore defended the high salary, saying that the executive
director is not acting as a federal employee and "you do what you got to do
to get the top person." At the commission's meeting in New York, the group
did agree to a 10-point agenda on the matter of taxing e-commerce--an agenda
that anyone making presentations before the commission will need to keep in
mind. Some of the points include no new taxes; preserving online privacy; no
out-of-state discrimination; reducing current telecom taxes; and no
unconstitutional recommendations. Some of the points still incite debate,
such as the meaning of "no new taxes." The commission's next meeting will be
held in San Francisco, with a goal of clarifying these issues.
[ http://www.ecommercecommission.org/ ]

AOL Active in Four Deals
America Online made a deal with Sandpiper to use its Footprint service for
nationwide streaming media events, including Webcasts. The ISP hopes to
improve the speed and reliability of its streaming media for its members.
Renewing an earlier deal, the ISP also made a four-year, $37 million
marketing agreement with 1-800-Flowers.com; the vendor will remain the
exclusive merchant for fresh-cut flowers in prominent parts of AOL's Web
site. In a move to help AOL subscribers maintain better contact with their
health care providers, the company allied with CareInsite to develop Web
sites that will allow AOL and CompuServe members to communicate with
doctors, insurers, HMOs, pharmacies, and labs. CareInsite will pay $30
million to AOL, and AOL will buy $10 million of CareInsite stock and gain an
option to buy another $10 million in the next 12 months. Finally, for
Canadian AOL fans, AOL Canada and Regional Cablesystems reached an agreement
that will bring high speed Internet access to small Canadian towns. The
service, called AOL Plus, will begin this fall, with a countrywide launch to
follow shortly thereafter.
[ http://www.aol.com/ ], [ http://www.sandpiper.com/ ], [
http://www.1800flowers.com/ ] 

Investments and Joint Ventures Make Internet Buzz
Sometimes it seems easier to report on which companies aren't making
investments and working on joint ventures than which companies are. This
week saw a respectable amount of activity in those areas. Cable television
channel CNBC acquired a 12.4 percent stake in Archipelago, an electronic
communications network (ECN) that anonymously matches stock orders. Sources
close to the deal say the stake cost CNBC between $25 and $30 million. With
CNBC focusing on financial news and Archipelago looking to become a
full-fledged stock market, the investment seems a sensible deal. For those
whose financial concerns don't always embrace the stock market, CheckFree
made a deal with Excite@Home and WingspanBank that will allow people to pay
their bills online through the latter two companies before the end of
December. The deal follows a similar one that CheckFree made with Yahoo!.
For those more concerned with music than money, online music directory
Listen.com partnered with Musicmaker.com and Liquid Audio to add information
about their tracks to Listen.com's directory, making nearly 100,000 pieces
of music easier for consumers to find. Of course, whether it's music or
money, it has to travel across infrastructure--and a joint venture involving
Global Crossing, Microsoft, and Softbank will greatly expand that
infrastructure. To be called the East Asia Crossing, the $1.3 billion
pan-Asian fiber-optic broadband network will link Japan, China, singapore,
Hong Kong, Taiwan, South Korea, Malaysia, and the Philippines. It will carry
voice and data and be connected to the worldwide network of Global Crossing,
which will own more than 90 percent of the venture. If it's e-commerce
traveling across a network infrastructure, it needs to be secured, and
Network Associates is working towards that end; the company not only plans
to market a new line of products aimed at making e-commerce safer by the end
of the year, but it is working with Sun and Frontier on related products.
The "E-ppliance" line will mix hardware and software and include antivirus,
firewall, and VPN features. In another deal related to e-commerce, online
consumer data collection companies Vignette and Edocs agreed to share the
consumer information they gather to build more useful information about
spending patterns for companies trying to effectively market various
products. If the thought of such companies pooling information about
consumer spending habits inspires feelings of illness, a quick click over to
Yahoo! should help. The portal giant made a deal with WebMD that will allow
users to access WebMD broadcast health news and feature broadcasts and
events through a co-branded area of Yahoo! Broadcast. Speaking of "healthy"
deals, WebMD and Healtheon (which are merging) planned a partnership
arrangement with HealthSouth that involves a total investment o f$50 million
from the companies over the next five years. They will produce a
sports-medicine Web site together, to be launched by the end of December,
and share equally in the revenue it generates. Finally--are they or aren't
they? According to the "Observer" newspaper, which cited sources close to
the talks, Rupert Murdoch's News Corp gazed longingly this week at
Ziff-Davis with acquisition in its heart and $1.5 billion in its purse.
Ziff-Davis did confirm that a "substantial" number of parties have
approached it expressing interest, but maintains that it isn't actively
negotiating to sell itself at present.  
[ http://www.cnbc.com/ ], [ http://www.tradearca.com//arcatime.htm ], [
http://www.checkfree.com/ ], [ http://www.excite.com/ ], [
http://www.wingspanbank.com/ ], [ http://www.listen.com/ ], [
http://www.musicmaker.com/ ], [ http://www.liquidaudio.com/ ], [
http://www.softbank.com/ ], [ http://www.microsoft.com/ ], [
http://www.globalcrossing.com/ ], [ http://www.nai.com/ ], [
http://www.sun.com/ ], [ http://www.vignette.com/ ], [ http://www.edocs.com/
], [ http://www.yahoo.com/ ], [ http://www.webmd.com/ ], [
http://www.healtheon.com/ ], [ http://www.healthsouth.com/ ], [
http://www.newscorp.com/ ], [ http://www.zdnet.com/ ]

eBay Imposes Bans While Competitors Circle Wagons
The oddball auctions never seem to end at eBay. The latest problem auction
involved some killer art work--literally. Serial killer Arthur Shawcross
sent his oil paintings and other art work to dealers who then auctioned it
off on eBay, and sent Shawcross clothes and shoes in return. eBay assisted
prison officials in investigating the matter, and got rid of most of the
auctions involved. Shawcross' actions amounted to running a business, which
is forbidden to prison inmates; the killer lost significant privileges as a
result, and may lose more privileges at a disciplinary hearing. With
Shawcross being just the latest in a weird string of auctions that included
body parts and unborn babies being put on the auction block (all of which
eBay promptly put a stop to), it's no wonder the online auction house is
concerned about the legality of some of its auctions. Following up on a
recent ban against selling firearms on its Web site, eBay announced that it
will prohibit the sale of alcohol and tobacco through its site as well,
starting October 13. The company explained that such sales may be illegal if
they involve sending the item in question across state lines. Exceptions
will be made for collectibles. Even with all its problems, eBay is still the
biggest online auction house in town--which has its competitors resorting to
teaming up. According to a story in the "Wall Street Journal," Microsoft,
Dell, Lycos, and Excite@Home are forming their own auction network that will
list items for sale across all their auction sites. Start-up company
FairMarket will act as the intermediary to keep the network running
smoothly, and receive a small percentage of the cut from every sale on the
network for its trouble.
[ http://www.ebay.com/ ], [ http://www.microsoft.com/ ], [
http://www.dell.com/ ], [ http://www.lycos.com/ ], [ http://www.excite.com/
], [ http://www.fairmarket.com/ ]

Microsoft Security Holes, Strategies, and Messengers
Reports of Microsoft-related security holes have come so fast and thick they
warrant checking just to make sure it isn't the same security hole being
reported on over and over again. One bug finder discovered that the Hotmail
service can be attacked with active Web applets because it lets Javascript
code embedded in Web pages run automatically. Another hole, found in
Internet Explorer 5, involves the feature called ImportExportFavorites. An
attacker can set up a malicious Web site with code that permits the abuse of
this feature--with the result that the attacker can gain control of any
computer that uses the IE5 browser to visit the Web site. Microsoft is
working on a patch for this browser bug. The Hotmail problem is the latest
in a string of security issues with the service, which is why the company
called in Truste to do a voluntary security audit of Hotmail. Microsoft
intends to keep the results secret, however, much to the annoyance of
Junkbusters, an online consumer advocacy group which wrote letters to the
FTC and Microsoft calling for the results of the audit to be made public. It
seems there are other matters Microsoft is more interested in making public
right now--its Web-based software strategy, for instance. (Good thing, too,
with Sun crowing over the quarter of a million people downloading their free
office suite). The new strategy, designated Windows DNA 2000, involved
increased use of the XML standard, and allows Web developers to download
technology components, called "megaservices," from the company's MSN Web
site. The megaservices include Passport, LinkExchange, Hotmail, and
Microsoft's MSN Messenger. Speaking of Microsoft's MSN Messenger, the
service will be integrated with the MSN Mobile Service, and versions will
also be available for Windows CE and WebTV. In short, the service is going
wireless. 
[ http://www.microsoft.com/ ], [ http://www.junkbusters.com/ ], [
http://www.truste.com/ ], [ http://www.ftc.gov/ ]

DSL, ISP Expansion Plans
US WEST unveiled its "MegaBit Select" service, which will be available to
Web surfers in 12 states. The service allows the use of "on-demand" DSL for
those who don't need a constant connection to the Internet; it offers speeds
up to ten times faster than 28.8 Kbps analog modem. The service will be
priced at just under $20 per month. AT&T, meanwhile, revealed plans to
expand its DSL services to 100 markets by the end of next year, and made
available a managed multiuser DSL service, which offers download speeds from
144 Kbps to 1.5 megabits per second. The company's single-user DSL service,
launched at the same time, costs from $59 to $79 per month. As to Internet
access using cable, the company plans to begin service trials next quarter.
Meanwhile, in the UK, wireless company Vodaphone launched a free Internet
service provider to deliver interactive services to its wireless phone
users. The service includes customized news, an online personal information
manager, and online shopping via cellphone.
[ http://www.uswest.com/ ], [ http://www.att.com/ ], [
http://www.vodaphone.com/ ]

The Internet and the US Government
At some points this week, the government and its agencies seemed to take the
attitude of "he governs best that governs least," but at other times seemed
to be making a vigorous effort to protect Netizens from themselves. Closely
following a presidential advisory committee's report that suggested getting
rid of export controls on encryption, the federal government looks set to do
just that. A final version of the proposed new regulations has not yet been
drafted, but it is expected that the government will do away with requiring
individual licenses from each buyer of so-called "strong" encryption, except
for buyers in seven "enemy" countries. Meanwhile, the Department of Justice
expressed concerns about "cyberstalking," stating in a report that federal
law needs to be changed to make it easier to catch online stalkers,
especially in view of the fact that over half the states have no laws
explicitly covering the issue. The report included horrifying examples of
online stalking, which seems to be a growing problem, and recommended that
states review their laws to cover this relatively new hazard.
[ http://www.whitehouse.gov/ ], [ http://www.usdoj.gov/ ]     

All Sorts of Hackers Busy
The systems violations inherent in hacking into a Web site awakened national
security concerns when intelligence sources quoted in "Newsweek" revealed
that Russian hackers thought to be working for the Russian Academy of
Sciences began attacking US computer systems in January. The hackers aimed
for systems used by the US departments of Defense and Energy, as well as
military contractor and some universities. US security agents quickly put
countermeasures in place, but it is believed the cyber-spies successfully
grabbed classified information on naval codes and missile systems. South
Africa also experienced the wrath of hackers when the home page of its
national statistics agency displayed vulgar words and an uncouth graphic.
Agency officials claimed the attack was really directed at state
telecommunications agency Telkom and concerned a labor dispute, but a Telkom
spokesperson vigorously denied this. Meanwhile, a new hacker group calling
themselves the "United Loan Gunman" ran rampant, vandalizing Matt Drudge's
Internet gossip site "The Drudge Report" and the NASDAQ/AMEX home page. At
the latter Web site, the "Gunman" put up a false story that NASDAQ's Web
servers quickly removed. But the folks at NASDAQ are taking the matter quite
seriously--the FBI is reportedly on the case.
[ http://www.nasdaq.com/ ], [ http://www.fbi.gov/ ], [
http://www.drudge.com/ ]

It's in the Details for ICANN, NSI, Test Changes
ICANN put out an open call for nominations of people to serve on ICANN's
Board of Directors, as a nominee of the ICANN Address Supporting
Organization (ASO). Any individual may be nominated, but officials of a
national government or a multinational entity established by treaty or other
agreement between national governments are not eligible. (Guess that rules
out Al Gore). Nominations must be submitted by October 1 and must be in
English; a form is available to ease to process. Meanwhile, Network
Solutions brought itself in line with all accredited domain name registrars,
officially changing its policy to require prepayment for .com, .org, and
.net domain name registrations. According to the new rules, NSI will take
credit card information from customers and bill the card before turning over
the domain name. It's a good change, designed to discourage cybersquatting,
but unfortunately NSI misstepped when it sent out a mass e-mailing
concerning the change. Along with informing recipients about the policy
change, the bulk e-mail included an offer for a free, Web-based e-mail
account hosted by NSI. Each offer included a name and a password that,
according to one recipient, was "incredibly easy to guess, because they all
follow the same pattern," which is an improper security practice. Some users
saw this as a security threat. In response, NSI began requiring those who
sign up for the offer to change their password at sign-up. Finally, the
Department of Commerce extended the test-bed period for domain name
registration competition for the fourth time, to September 30. The
department stated that disagreements over issues such as charging fees and
opening Network Solutions' data base to competing registrars caused the
delay. Andrew Pincus, general counsel for the DoC, expressed satisfaction
with the progress his department, NSI, and ICANN have made towards ironing
out these issues, and said that "the end of those discussions is in sight.
The additional extension should allow us to bring them to conclusion." 
[ http://www.icann.org/ ], [ http://www.nsi.com/ ], [ http://www.doc.gov/ ]

Internet IPOs Begin Bouncing Back
After a summer slowdown, Internet-related IPOs began re-entering the market.
Garden.com, with its three gardening-related Web sites, benefitted from
flourishing interest when its stock rose nearly 60 percent from its IPO of
$12 per share. Perhaps money does grow on trees, after all; the company
raised $49.2 million. Software firm NETsilicon performed even better by
percentage, doubling on its debut of $7 per share. The company raised $36.8
million with its IPO. The big performer was business-to-business Internet
company PurchasePro, which started their stock out at $12 per share this
week, and saw it shoot up to over $27 per share, more than doubling. 
[ http://www.garden.com/ ], [ http://www.netsilicon.com/ ], [
http://www.purchasepro.com/ ]

Look Who's Merging
Inktomi acquired privately held WebSpective for $106 million. WebSpective
produces software designed to help ISPs better manage content distribution.
The deal is expected to close next quarter. Meanwhile, Internet portal
StarMedia Network grabbed Webcast Solutions. Terms of the deal were not
disclosed. StarMedia expects the purchase to help strengthen its broadband
services.
[ http://www.inktomi.com/ ], [ http://www.webspective.com/ ], [
http://www.starmedia.com/ ], [ http://www.webcastsolutions.com/ ]

Lycos Increase Channels, Expands into Asia
Intent on increasing the size of its radio network, Internet media company
Lycos added 30 new channels of music, five of which will be programmed by
live disc jockeys. Lycos also added some features to its network to give
users more control, such as stop and play buttons and volume control. Lycos
is expanding in other ways, too; thanks to a $50 million joint venture with
Singapore Telecommunications, the portal giant will deliver localized
versions of Lycos.com and its Tripod community to at least ten Asian
markets. The venture will be called Lycos Asia, and each company will own 50
percent.
[ http://www.lycos.com/ ], [ http://www.singtel.com/prodserv/index.html ]

Outage Ticker: Floyd's Fury, Fiber Cut Flummox Systems
Much of the area around Washington, DC, reportedly experienced power outages
on Thursday and Friday due to Hurricane Floyd. Some ISPs were able to keep
running on generator power. MCI Worldcom experienced a major fiber cut in
New York in the wee hours on Friday that has been attributed to the storm,
reportedly affecting "anything going in or out of NY." No estimated time for
repairs was given.
[ http://www.wcom.com/ ]

Cyberscape Dee-Lite: Storm of the Century Covered Online
With clear skies overhead, it's interesting to consider how various Web
sites covered the recent "storm of the century." For those wondering if
Floyd really deserved that name, ABC New's Web site helpfully compared the
storm to Andrew, and of course provided regular news updates. Many Web
surfers headed to the usual suspects for information: Weather.com, Weather
Underground, AccuWeather.com, Intellicast.com, the National Hurricane
Center, and the Federal Emergency Management Agency. Some of these Web pages
experienced brown-outs, thanks to record traffic. Some truly dedicated folks
even set up Web cameras to watch the storm. One, located in Martin County,
Florida, and connected to a computer running Linux, was protected from water
and flooding by being wrapped in plastic and placed well above the ground.
Another one provided a view from the Isle of Palms in South Carolina. North
Carolina felt the brunt of the storm, though, and according to Gov. Jim
Hunt, it caused "the worst flooding in anybody's memory."  
[ http://www.abcnews.go.com/ ], [ http://www.weather.com/ ], [
http://www.accuweather.com/ ], [ http://www.intellicast.com/ ], [
http://z.treco.net/~greg/ ], [ http://www.jammercam.com/cam1.htm ]     

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