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Date: Monday, April 10, 2000, 8:41 AM -0400
From: Faulkner Mail Server <mailserver@faulknerinfo.com>
To: @unspecified-domain
Subject: CyberScape Digest April 7, 2000


  

CyberScape Digest 

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 04/03/00 through Friday 04/07/00. 

__________________________________________________

Antitrust Ruling Dominates Microsoft's Busy Week 

Settlement talks broke down last weekend between the Justice Department and
Microsoft, with each side claiming the other was being unreasonable. Judge
Posner, the Court-appointed mediator, blamed neither side, but indicated
that they were still too far apart to negotiate a settlement. The breakdown
paved the way for Judge Thomas Penfield Jackson to deliver his conclusions
in law on the antitrust case. To no one's great surprise, Judge Jackson
ruled that Microsoft was a monopoly that had illegally misused its power,
harming consumers. Specifically, Judge Jackson ruled that Microsoft
violated two sections of the Sherman Antitrust Act. Microsoft's bundling
its browser with its operating system and refusing to sell a browserless
version of Windows 98 was an illegal attempt by the company to protect its
monopoly, according to the judge; furthermore, Microsoft seriously harmed
other companies with its anticompetitive behavior. The judge did not come
down on Microsoft's marketing arrangements with its partners, however,
giving the software giant some cold comfort as it prepares to appeal. The
next step involves Judge Jackson ruling on penalties for the company; he
set May 24 as the date for that hearing. The judge also said that he was
considering putting Microsoft's appeal of his decision on a fast track,
sending it directly to the Supreme Court rather than an appellate court,
raising the possibility of a complete resolution of the case before the end
of the year. Microsoft opposes this plan, and would rather fight the issue
out with a full appellate review. After the ruling, the company also chose
to fight in the court of public opinion, taking full page ads in prominent
newspapers noting its disagreement with the decision, and sending Chairman
Bill Gates to Capitol Hill to cultivate good will with both Congress and
President Clinton. The actions may yet bear fruit; several Republican
representatives suggested an investigation of the government's prosecution
of the case. Once the Justice Department finishes, though, Microsoft will
still need to contend with a slew of private antitrust cases--and Sun may
add itself to the long list of plaintiffs. Mike Morris, Sun's general
counsel, said that the company is studying Judge Jackson's decision and
considering whether to file a private antitrust suit over Microsoft's
attempts to subvert Java to its own ends. 

__________________________________________________

America Online Makes Nonstop Deals 

Microsoft wasn't the only company with a full schedule this week. As one
would expect from a company that just made the Fortune 500 (albeit at
number 337), America Online signed diverse deals and introduced some new
services. The ISP expanded its agreement with MCI WorldCom for UUNET to
provide AOL with dial-up access. Hoping to add even more fizz to its bottom
line, AOL and Coca-Cola plan to form a marketing alliance worth $100
million in advertising and promotions. The agreement follows closely on the
heels of a similar deal between PepsiCo and Yahoo!. Moving forward with its
"AOL Anywhere" initiative, the company joined Gateway to unveil three
Internet appliances at the Spring Internet World in Los Angeles. The
appliances, which were jointly developed by AOL and Gateway, will feature
the Linux operating system and the Netscape 6 Internet browser, also
released at the show. For those who like using bigger pipes, AOL began
marketing AOL Plus, a service that provides AOL subscribers with streaming
video and audio if they log in via a high-speed Internet connection. The
service, available to AOL 5.0 users, offers news, weather, and
entertainment programming, with shopping, games, autos, and real estate
content in the works. Apparently, AOL's activity makes its stock fit for a
Prince; Prince Alwaleed bin Talal raised his investment in the ISP by
another $400 million over the past six months, bringing his total
investment in the company to $1.05 billion. 

__________________________________________________

IBM Expands into European E-Business Market 

Working to gain a foothold in the European e-business market, IBM and
KMPQwest formed a 10-year alliance to create 18 "CyberCentres" that will
deliver network-based services. The first six, planned for Frankfurt,
Paris, Munich, Stockholm, Milan, and London, will go live by year's end and
target ISPs as customers, among others. The two companies will split
revenues 50-50. IBM also introduced a product likely to have more of an
impact in Europe than the US, given that more people in Europe than the US
access the Internet via wireless devices. The product, dubbed the WebSphere
Transcoding Publisher, translates Web information into a format that can be
read by a variety of Internet devices. The Publisher matches the
translation of the content to the capability of the receiving device. The
product is available in 10 languages. 

__________________________________________________

Purchases and Divestitures 

NBC Internet proved that one needn't spend a billion dollars to get a good
deal on a company. For just $100 million in stock, it picked up
privately-held Flyswat in an acquisition expected to close next month.
Flyswat makes a technology that creates links to relevant online content
and commerce services on any Web site or document. Of course, for those who
insist on billion-dollar deals, Peregrine Software agreed to purchase
Harbinger for stock valued at $2.1 billion. Peregrine makes business
software, while Harbinger makes e-business software and owns an electronic
marketplace Internet portal. The deal calls for Harbinger stockholders to
receive 0.75 shares of Peregrine for every share of Harbinger stock they
own. The companies expect to close the transaction in about three months.
Finally, here's an opportunity for bargain-hunters to open their wallets:
Mattel is reportedly planning to sell its Learning Company unit. The
software unit bled $300 million worth of red ink since Mattel acquired it
for $3.5 billion last May; a sale might bring the toy maker less than a
third of that purchase price. 

__________________________________________________

  Taking Stakes in the Future of Technology 

Seeing a future of dial tones traveling over the Internet, an AT&T-led
consortium took a 37 percent stake in Net2Phone. Other members of the
consortium included Yahoo!, British Telecom, and Liberty Media. The stake,
worth nearly $1.6 billion, carries 39 percent of Net2Phone's voting rights.
AT&T put up $725 million. The book publishing industry made another
cautious attempt to embrace the Internet when the venture capital arm of
Random House took a significant minority stake in online publishing
services provider Xlibris.com. Xlibris plans to use the money to expand its
services to authors. 

__________________________________________________

Government Matters and the Internet 

The American Civil Liberties Union saw shades of Big Brother in a plan by
the Securities and Exchange Commission to automate its monitoring of public
Web sites for stock fraud. According to a letter sent by the ACLU to the
SEC, while the commission "certainly has legitimate concerns about online
fraud, the answer to the problem cannot be a system that monitors lawful
online speech." The SEC, for its part, maintains that it is only automating
what it already uses human staff to do. President Clinton, meanwhile, was
far more concerned about the Digital Divide than Big Brother. The president
unveiled a public-private initiative which he hopes will close that divide,
and has requested $2 billion in tax incentives over ten years and $380
million in grants in his 2001 budget to encourage businesses to donate
computers, train workers, and engage in other activities dedicated to
spreading computer and Internet literacy throughout their communities. Of
course, Clinton isn't the only one looking for funding. The Federal Bureau
of Investigation wants more than $75 million to expand its information
technology capabilities, including a system called "Digital Storm," which
will improve its ability to electronically sift through traffic on
telephones and cell phones. The bureau cites increasing threats from cyber
attacks as the reason it needs to expand its technology. Meanwhile, the
National Security Agency suffered a setback in its attempts to limit the
spread of encryption. A three-judge panel in Cleveland ruled that computer
programming languages deserve First Amendment protection. The ruling allows
Cleveland law professor Peter Junger to place course materials concerning
encryption online so that his non-US students can access them. The NSA had
argued that posting such material online would threaten national security.
The ruling might affect other cases involving the posting of programs
online. 

__________________________________________________

Relative Quiet on the Business-to-Business Front 

In comparison with the frantic B2B marketplace activity of the past couple
of months, this week seemed calm. The B2B retailing exchange set up by
Sears and Carrefour gained some competition as nearly a dozen retailing
giants in the US and Europe joined forces to create their own
Internet-based B2B marketplace. Called the WorldWide Retail Exchange, it's
open to all retailers. Partners include Target, Kmart, Albertson's,
Safeway, CVS, Royal Ahold, Auchan, Casino Guichard Perrachon, Kingfisher,
Marks &Spencer, and Tesco. The exchange is expected to go live by the
middle of this year. Interestingly, retailing powerhouse Wal-Mart elected
to remain aloof from both exchanges. Creating a more specialized
marketplace, LeatherXchange.com formed a B2B exchange for the leather
trade. The portal will make its money from membership fees; trading
services will be available only to members. The service is expected to link
slaughterhouses, tanneries, leather goods manufacturers, and chemical and
machinery suppliers worldwide. 

__________________________________________________

Organizations Team up to Improve the Internet 

Nortel headed up a group of more than 30 communications companies that
created the Broadband Content Delivery Forum. The forum's goal is to create
standards for sending information over the Internet. Members already signed
up include Hewlett-Packard, AT&T, Sun, and AltaVista. The group will hold
its first meeting next month. Meanwhile 26 Internet advertising companies
formed the Personalization Consortium, an organization dedicated to
addressing the issue of online privacy. The group plans to adopt strict
privacy guidelines dictating how its members collect consumer data, but it
faces a small credibility problem: one of its members is DoubleClick,
notorious for data collection practices that inspired state and federal
investigations. Finally, six highly-respected institutions teamed up to
create a global online public library. Columbia University, the London
School of Economics and Political Science, Cambridge University Press, the
British Library, Smithsonian's Museum of Natural History, and the New York
Public Library formed Fathom, a Web site designed to present the public
content and courses of universities, libraries, and museums. The partners
will invest $116 million in the project, which will offer free content and
also allow users to pay for difficult-to-find information. A future IPO is
possible. 

__________________________________________________

PSINet, Exodus Stop Talking to Each Other 

Exodus and PSINet disconnected the DS3 lines joining their networks.
According to a confidential e-mail sent by Exodus to its subscribers, the
decision to end the peering agreement between the two companies was made
unilaterally by PSINet, and against the wishes of Exodus. According to
PSINet, Exodus chose to end the agreement after months of communication
between the two companies. Exodus rerouted its traffic through Sprint after
the lines were disconnected. This is not the first time Exodus has been
involved in a peering dispute; in 1998, Exodus and BBN Planet (now known as
GTE Internetworking) argued over peering agreements at public exchanges.
This issue may be similar; one grievance Exodus raised is that PSINet
refused to exchange traffic at public access points, which is unusual.  

__________________________________________________

Companies Expand Their Services, Extend Their Reach, Change Focus 

Online currency firm beenz.com took another step towards becoming an
international firm by opening a Web site in Sweden. The new site joins
others the company set up in the US, France, the UK, Canada, Australia,
Hong Kong, Italy, and Singapore. Looking at online currency in a different
way, Internet brokerage firm E-Trade launched E-Trade Bank. The move,
coming within three months of the company's merger with Telebank, lets it
offer federally insured products such as certificates of deposit and
interest-bearing checking and savings accounts. E-Trade will also allow its
customers to pay bills online. Of course, online bill paying brings us to
the US Post Office. Why? Because the agency teamed up with CheckFree to
offer eBillPay, a service that lets users receive and pay their bills
through the Post Office's Web site. For creditors not yet accepting
electronic payments, the service sends a paper check. The service will be
free to new customers for the first six months, after which users will be
charged a nominal fee depending on which plan they choose and how many
bills they pay. The post office isn't the only organization turning its
eyes towards the Internet. Dell, long known for making custom-built
computers, revealed plans to change its direction. At Dell's semiannual
meeting, CEO Michael Dell said that the company will increase its efforts
to provide support services, expand its wireless products, and invest in
start-up businesses. Sega, long known for electronic games, also climbed
aboard the Internet bandwagon. The company created Sega.com, a new firm
which will include an Internet service provider, SegaNet. The ISP will
launch in the fall; in addition to high-speed Internet access, it will
offer subscribers a wide range of gaming content. 

__________________________________________________

Two Security Matters to Worry About 

According to a posting by the National Infrastructure Protection Center,
the FBI discovered a virus capable of erasing hard drives and dialing 911.
The virus at present seems limited to Houston, Texas. Four ISPs are
affected: AOL, MCI WorldCom, AT&T, and NetZero. Meanwhile, at a De Beer's
Web site providing information about diamonds, 35,000 customers had their
e-mail and home addresses exposed. The problem was reportedly fixed before
more than a couple of people accessed the page. 

__________________________________________________

Legal Matters and the Internet 

In a suit with wide-ranging jurisdiction implications, the American Civil
Liberties Union said it will appeal a Boston judge's ruling that the
authors of the "cphack" program must stop distributing it, turn it over to
Mattel, and promise not to reverse engineer the Cyber Patrol Internet
filtering software. The cphack program allowed its users to bypass Cyber
Patrol and to see which Web sites the software blocks. In this case, the
ACLU is standing up for three Web site operators who mirrored the cphack
program; the judge stated in his ruling that those acting "in active
concert" with the program's creators faces the possibility of jail time for
contempt of court unless they take down their Web sites. The ACLU argued
that a Boston court does not possess jurisdiction over the entire Internet.
Meanwhile, the Federal Trade Commission extracted settlements from three
online health companies as part of Operation Cure All, a Web sweep aimed at
Web sites with questionable health claims. The three companies are National
Heritage Enterprises, CMO Distribution Centers of America, and EHP
Products. The firms claimed that their products could cure cancer,
arthritis, diabetes, and AIDS, but did not adequately support their claims;
they also designed their Web pages to deliberately deceive consumers. The
companies have been prohibited from making unsubstantiated claims and will
provide purchasers of their products with refunds. Finally, two hackers
received sentences this week. "Mixter," the alleged creator of the "Tribe
Flood Network" program that crashed Yahoo! and other well-known Web sites
in February, was sentenced by a German court to six months in a youth
prison. The sentence was commuted to two years of parole. In Hong Kong,
19-year-old Po Yiu-ming received a sentence of six months in prison for
hacking into the accounts of Internet users. The case itself was the first
one brought in Hong Kong under computer crime laws enacted in 1994.    

__________________________________________________

IPO Interest Subdued, But Still Buzzing 

Despite this week's roller coaster ride on Wall Street, those intrigued by
initial public offerings of stock found quite a bit to focus on.
Excite@Home raised some excitement when rumors circulated that it was
considering an IPO for Excite Europe to raise as much as two billion pounds
(US$3.2 billion). Those who prefer something more solid than rumors could
take heart from HandSpring. Created by the founders of Palm, HandSpring
hopes to raise $300 million with its IPO later this year. Somewhat more
modestly, free Internet service provider Freei.net filed for its IPO,
planning to raise more than $172 million. Those who like free computers
with their Internet access may remember PeoplePC, the company that set up
Ford and Delta employees with PCs and Internet access at a minimal cost to
the workers. The company hopes to raise up to $100 million with an IPO.
Finally, wireless equipment showed its potential--at least on the stock
market, where Vyyo, a maker of high-speed wireless equipment, saw its stock
gain 50 percent on its first day of trading. 

__________________________________________________

Outage Ticker: Sprint, Ameritech, Excite@Home, London Stock Exchange


Monday morning, Sprint performed emergency maintenance on its sl-gw2 router
in New York City. Sprint performed the maintenance to upgrade its network;
it lasted for an hour. Customers connected to the router experienced a
short outage. Also on Monday, at 4 PM, Sprint performed emergency
maintenance on its sl-gw15-fw router, causing an outage for Fort Worth
customers connected to the router. Early Friday morning, that same router
had a hardware failure, causing another temporary loss of connectivity. On
Sunday, Ameritech's facilities in Milwaukee, Wisconsin, reportedly lost
power around 7:40 PM Central Daylight Time due to scheduled repairs to the
company's building. Power was restored about a half hour later. Premiering
its new high-speed Internet service, Excite@Home riled many of its
subscribers on Monday when they could not access the new @Home 2000 portal
due to technical difficulties related to both hardware and software.
Finally, the London Stock Exchange crashed--in the technical sense. The
system was down before trading started on Wednesday, and stayed down until
3:45 PM London time. The fiasco forced traders to work until 8 PM to
process 70 percent of the day's trades, and put Andersen Consulting, the
LSE's IT systems manager, in a rather uncomfortable spotlight. Brokers said
they lost millions of pounds in trades, and the Financial Services
Authority, the UK's financial regulator, launched an immediate inquiry. 

__________________________________________________

  Cyberscape Delight: For Those Really Concerned About Privacy... 

At the "Computers, Freedom, and Privacy" conference in Ontario, Canada,
several privacy groups got together to hand out the second annual "Big
Brother" awards to those government agencies and private companies that did
the most to harm individuals' privacy online. Dressed as Dr. Evil from the
Austin Powers movies, the director of Privacy International acted the role
of MC. The corporate award went to DoubleClick. Commerce Secretary William
Daley won for worst government official. The lifetime achievement award
went to Transunion, a credit reporting firm--which surprised some, because
it beat out the National Security Agency. The award statuettes are
Orwellian sculptures of a head being stepped on by a boot. Meanwhile,
cryptology enthusiasts are working to get the word out on the Internet
about a recent April Fool's Day theft. Somebody stole the Abwehr Enigma
machine from a glass display case at Bletchley Park Trust in London. The
machine was used during World War II to protect German secret messages. The
machine is one of only two of its kind known to exist. While its encryption
technology is way out of date (the machine itself looks rather like an
old-fashioned typewriter), the item itself is of great historic value.   

__________________________________________________

*** Terri Wells, Faulkner Information Services *** 

  

__________________________________________________

CyberScape Digest, Copyright 2000, Faulkner Information Services. All
rights reserved. 

---------- End Forwarded Message ----------



Missy Harvey
Computer Science Librarian
Engineering & Science Library
Carnegie Mellon University
Pittsburgh, PA  15213

http://www.library.cmu.edu/usr/missy/

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