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---------- Forwarded Message ----------
Date: Friday, May 12, 2000, 3:46 PM -0400
From: Cyberscape Digest <cyberscape@faulknerinfo.com>
To: @unspecified-domain
Subject: Faulkner's Cyberscape Digest 05/12/00




CyberScape Digest 

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 05/08/00 through Friday 05/12/00. 

Microsoft Responds to Justice Department's Breakup Proposal
Software giant Microsoft reacted like a person in denial, claiming that it
broke no laws, and even if it did, the Justice Department's proposal to
break the company in two went far beyond what was called for under the
circumstances. Microsoft requested a summary judgment throwing out the
DoJ's plan to split the company. If Judge Thomas Penfield Jackson refused
to grant the judgment, the company wants further hearings to be held,
starting in December, so it would have more time to gather evidence and
witnesses. Microsoft's proposals for its own punishment include: granting
computer makers more permission to change the appearance of the Windows OS,
including hiding the Internet Explorer icon; not canceling Windows license
agreements with computer makers who ship products with competing
non-Microsoft software; and not making agreements that result in limiting
distribution of software for use on non-Microsoft platforms. The Justice
Department and lawyers for the states involved in the suit expressed the
opinion that Microsoft's insufficient proposals would not have prevented
the company's antitrust violations, and that the proposals and the request
for more hearings in December are merely delaying tactics.  


US House Extends Internet Tax Ban, Examines Other Tech-Related Issues
On Wednesday, the US House of Representatives voted to continue the
prohibition against new Internet taxes for another five years, to 2006. The
extension passed by 352 to 75 after about six hours of debate.
Representatives hope the ban will encourage the growth of e-commerce. If
the Senate passes a similar bill and sends it to the president, Clinton
might use his veto power, because the extension is three years longer than
he supports. The House Judiciary Committee put together a bill that should
meet with approval from the high-tech industry. The legislation completely
removes limits on the number of H-1B visas issued for the next three years.
H-1B visas are issued to non-US citizens with college degrees to allow them
to work in the US for six years; high-tech companies covet such workers for
their technical skills, and rail at visa limits because lately such limits
have been reached within the first few months of the year. The Senate
Judiciary Committee has already sent a similar bill to the full Senate for
review. Speaking of the Senate, Senator Mike DeWine (R-OH) and Herb Kohl
(D-WI), both on the Senate's antitrust subcommittee, sent a letter to
federal regulators expressing concern about the cable industry. According
to the senators, cable TV companies can speed connections to Web sites
affiliated to them or their business partners while slowing connections to
other Web sites. The senators want the Federal Communications Commission
and the Federal Trade Commission to examine the merger between America
Online and Time Warner in light of this information. The House, meanwhile,
wants to figure out what effect music-swapping technologies such as those
offered by Napster and MP3.com have on small record labels and other
businesses. The House Committee on Small Business scheduled a hearing on
the matter for May 24. At issue is the question of whether small music
businesses can survive in an environment where music is practically given
away. 


Hunt for Love Bug Creator Continues; More Viruses, Security Glitches Crop up
The FBI and law enforcement authorities in the Philippines worked together
to try to locate the creator of the Love Bug worm, which caused an
estimated $5 billion in damage to businesses and government agencies. The
authorities removed floppy disks and computer magazines from an apartment
where the virus is believed to have originated. After holding the first
suspect for one night, a 27-year-old bank employee named Reonel Ramones,
the authorities released him for lack of evidence. Some reports indicated
that the creator of the virus might be a 23-year-old female computer
student at AMA Computer College. More digging led to the discovery that
both Onel A. de Guzman, brother of Ramones' live-in girlfriend and also a
resident of the raided apartment, had written a thesis featuring a
password-stealing program eerily similar to the Love Bug. Michael Buen,
also a student at the college and a close friend of Guzman's, wrote a
thesis that acknowledged a debt to Guzman. Buen graduated, but Guzman did
not, because school officials did not wish to encourage malicious behavior
such as password-stealing; however, they believe the two theses could have
been combined to produce the Love Bug. Interestingly, the worm hit
worldwide the day before graduation ceremonies were held at the college. As
a major plot thickener, Onel de Guzman appeared for a press conference in
dark glasses, and admitted he may have accidentally released the bug.
Further, he claimed not to remember where he was on May 4, when the virus
exploded worldwide. Meanwhile, more security problems keep popping up. At
last count, about 25 Love Bug copycat worms were running rampant. At least
one new virus behaves similar to the Love Bug, but is not a variant. Dubbed
the "Friend Virus," it shows up as an e-mail with "Friend Message" in its
subject line. The payload is in an attachment labeled
"Friend_Message.txt.vbs." Click on it, and it inserts commands into the
machine's AUTOEXEC.BAT files to delete all files in the Windows directory,
the Windows System directory, and the Windows Temp directory. After the
machine is rebooted, Windows will not run and must be reinstalled. Like the
Love Bug, it e-mails itself to everyone in the user's Outlook Address book.
A new SouthPark worm, from Germany, shows up with the subject "Servus
Alter!" ("Hey Dude1" in English) and reads "Hier ist das Spiel, das du
unbedingt wolltest!" ("Here is the game you desperately wanted"). The
attachment reads "SouthPark.exe." While it doesn't rewrite anything on the
computer itself, it does mail itself to every address in a user's Outlook
address book; thus, it can overload systems in much the same way that
Melissa did last year. Finally, Hotmail users felt exposed this week when
bug hunter Bennett Haselton discovered a flaw in Hotmail's system which
could let a malicious hacker break into an e-mail account by sending the
user an e-mail with an HTML message attached. When the Hotmail user reads
the attachment, which contains a JavaScript Trojan horse, their Hotmail
cookie is intercepted--allowing the hacker to digitally steal the person's
identity and read his or her Hotmail e-mail. Microsoft put up a patch for
the hole on Wednesday 

. 

MP3.com and Napster: a Tale of Two Pirates?
If MP3.com and Napster were people instead of music companies, one could
easily picture them at a bar performing a blues duet. Both companies are
being sued by major forces in the music industry, accusing them of massive
copyright infringements. And both companies are now trying to make nice.
Shortly after MP3.com was found by a federal judge to be violating
copyrights, it made a licensing agreement with Broadcast Music to collect
royalty payments. BMI represents 140,000 US songwriters and composers and
60,000 US publishers. Also, bowing to pressure from the Recording Industry
Association of America, MP3.com removed the music of major performers from
its service. Meanwhile, a judge rejected Napster's argument that, like an
ISP, it is not directly responsible for copyright infringement on its
network and therefore should not have to stand trial for such charges. The
judge ruled in part that, since the nature of the connection is different
from the connection an ISP forms, Napster is not a "mere conduit" for
information. The RIAA claimed a victory from the ruling. Responding to
legal action from the heavy metal rock band Metallica, Napster removed from
its service more than 300,000 users which Metallica identified as trading
copyrighted songs through Napster. The company said it would be willing to
reinstate those who appealed and insisted that they have been blocked in
error, but warned that such an appeal opened the individual to a lawsuit
from Metallica 

. 

Internet Companies Doing the Deals This Week
America Online went to the top of the dealmakers' list this week. First, it
snagged a major marketing agreement with Network Solutions in which NSI
will offer its domain name registration and other services through
co-branded Web sites across AOL's online properties. The deal includes some
VeriSign services, which should come as no surprise, since NSI agreed to be
acquired by VeriSign two months ago. Second, AOL snagged a five-year joint
marketing alliance with Office Depot worth more than $44 million. The
agreement will promote AOL in all 836 Office Depot brick-and-mortar stores,
and create a co-branded business site aimed at small business customers. Of
course, lots of big companies are targeting small businesses these days.
Take GE and NBCi, for instance; the Small Business unit of the former and
the AllBusiness.com unit of the latter partnered to market and share
content, products, and services on each other's Web sites. Some companies
just like exclusivity. Oxygen Media tapped Amazon.com to become the
exclusive online bookseller on its network of 19 Web sites. The two-year
deal also features Amazon advertising on Oxygen's TV network. Web-caching
company Akamai teamed up with marketing services provider Engage to develop
two services, personalized Web page assembly and insertion of streaming
ads, by the end of the year. The personalized Web page assembly service
will utilize Engage's data base of 52 million online users to allow
Internet companies to tailor their mass content to the individual user.
Pages will be dynamically assembled to users'  tastes on Akamai-controlled
servers--without the need for the user to fill out an online form. In a
deal that combines a traditional company with a new technology
up-and-comer, Random House formed an alliance with Audible to create Random
House Audible, a division charged with producing spoken word content for
digital downloading. Finally, Lycos and Terra Networks are rumored to be
accelerating their talks to merge at least part of their businesses.  


Significant Interest Still Evident in B2B, Portals Worldwide
The pace may have slowed, but the B2B market sector is still active,
especially outside the US. For instance, New Zealand-based Professional
Supply Brokers, Asia-based Qixel Capital Group, and Advantage Group teamed
up to create an online B2B procurement service. The joint venture, dubbed
SupplyNet, will  target the public sector. Portals are also picking up
outside the US. Following in the footsteps of several US airlines, British
Airways and 10 other European airlines joined forces to launch an online
travel agency; the move forces BA to cooperate with some of its fiercest
rivals. Of course, US companies still want a piece of the action.
PeopleSoft created PeopleSoft MarketPlace, an online trading exchange aimed
at linking up suppliers, customers, and employees for doing business over
the Internet. Trading partners already signed up include Sabre,
SkillsVillage, and Office Depot.  


Sun's Week: Warm, but Partly Cloudy
Graduate students this fall can look forward to more than their studies. At
that time, Sun plans to unveil e-business incubator programs at major
universities throughout the world, specifically geared to graduate
students. The Sun Campus program is designed to put Sun's computer
equipment in the hands of start-up businesses. Backed by venture
capitalists AsiaTech and Diamondhead, Sun will select promising business
plans from prestigious schools from the US, England, Singapore, India, and
China. Meanwhile, Sun lost a round against old nemesis Microsoft. Federal
Judge Ronald Whyte dismissed the company's accusations that Microsoft broke
copyright laws by designing a version of Sun's Java technology that only
works with Windows. He declared that Sun's dispute with Microsoft is
contractual rather than copyright-based. Sun is still pursuing a
breach-of-contract claim against Microsoft. 


Sprint Invests, EarthLink Tests
EarthLink reported that Sprint agreed to buy 26 million shares of EarthLink
stock for $431 million, bringing its investment in the ISP to $1.1 billion,
or 26.7 percent. This meets with the terms of the EarthLink-Sprint alliance
agreement, which permits Sprint to retain its original ownership position
of 28.7 percent. The EarthLink-MindSpring merger had significantly reduced
Sprint's share in the company. That money should come in handy for
technology development and promotion, such as EarthLink's arrangement with
Research in Motion. The two companies began test marketing EarthLink
Airmanager, a wireless e-mail service. The service lets users send and
receive e-mail at their EarthLink address via RIM's BlackBerry product. The
initial test will be limited to 500 subscribers. 


Intel Involved in Internet Action
Chip maker Intel wants the world to know that it isn't just a chip maker
anymore. The company is investing $200 million over two years into the
creation of Intel Internet Media Services, a streaming media company with
the goal of enabling its customers to send everything from movies to
conferences to online training over the Internet. The money will go in part
into building a network of broadcast operations centers. The move puts
Intel in direct competition with Akamai and  Broadcast.com; nevertheless,
Intel intends to become the market leader. Of course, being a market leader
doesn't guarantee perfection. Intel admitted that a flaw in "less than a
million" motherboards can cause computers to freeze up or crash, and
possibly lose data. Intel said it would replace any defective parts, and
offered software over the Internet that lets users test to see if their
computers possess the flaw. Intel should have better luck with its Itanium
processor. The company took the bold move of posting the chip's blueprints
online so that open source programmers will have an easier time building
applications for the Itanium. The chip will run initially at 800MHz and
contain three levels of cache. Emphasizing its commitment to the Internet,
Intel also unveiled the 7210 XML Accelerator and the 7280 XML Director,
products that will decipher, route, and manage network traffic written in
XML. 


Disney Wants Conditions on AOL-Time Warner Merger
Still smarting from Time Warner's recent temporary removal of ABC from its
cable network, Walt Disney filed a request with the Federal Communications
Commission to impose conditions on the merger of America Online with Time
Warner. Specifically, Disney wants to obligate the merged company to offer
access to its cable network to other ISPs. In its filing, Disney said that
it wasn't opposed to the merger, but it wants acceptable and unacceptable
practices spelled out, rather than allowing the companies to simply make
"vague promises of open access." A Disney spokesperson also pointed out
that, in locations where there is only one cable provider (not at all
uncommon), the present voluntary arrangement can discourage competition. 


DoJ, FBI Create Place to Report Internet Fraud
The Justice Department and the FBI teamed up to create a Web site where
users can go to report suspected Internet frauds. The Internet Fraud
Complaint Center will provide a one-stop approach and handle fraud matters
at the federal, state, and local levels. Complaints will be sent to the
appropriate authorities; they will also be examined for purposes of
statistics and developing strategies to catch those who commit online
fraud. 


Two Lawsuits With Interesting Implications
Every lawsuit related to the Internet risks setting a precedent, and the
latest two are no exception. Several angry uBid customers filed a suit
against the company in Cook County Illinois Circuit Court, accusing uBid of
committing fraud by deleting their low bids on expensive computers.
According to the bidders, uBid offered up 959 Pentium III 733MHz computers
at starting bids of $3 each. When the auction ended in late April, 306
bidders won with bids ranging from $53 to $353. After sending a confirming
e-mail to the winners and charging each bidder's credit card for the
winning amount, ubid sent another e-mail canceling the orders, consoling
the winners with a $50 coupon for other uBid merchandise instead. The
company also reversed the credit card charges. For its part, uBid says that
the fault lies in part with the third party who put the computers up for
auction, and in part to mistyped information. Sharp readers no doubt
already figured out that the intended auction was for three Pentium III
733MHz computers at starting bids of $959 each, not the other way around.
Observers say the resolution of the suit will depend in part on uBid's
written policies--the company doesn't let bidders retract their bids, for
instance. The second lawsuit, filed by a "John Doe" who goes by the online
handle Aquacool_2000, is against Yahoo! and supported by the ACLU and the
Electronic Privacy Information Center. The suit, filed in California,
charges Yahoo with invasion of privacy, breach of contract, negligent
misrepresentation, unfair competition, and false advertising. According to
the plaintiff, after he posted a message in a chatroom devoted to
AnswerThink Consulting which criticized the company's management,
AnswerThink subpoenaed Yahoo! to tell them the identity of the user. Yahoo
complied. As it turned out, Aquacool_2000 was an AnswerThink employee--and
was not only promptly fired, but sued by AnswerThink for defamation.
Aquacool_2000 maintains that Yahoo! broke its own privacy policy and broke
government privacy laws by giving out his identity information without
consulting him first. He is also suing AnswerThink for compensation of lost
wages 


Job Cuts, Job Leavers Prominent in Dot-Com Market
Nearly anyone watching the stock market could have predicted that dot-com
companies would begin laying off employees, and that the exodus of
executives from Internet firms would continue. For instance, online
Hispanic community Quepasa.com said it would cut its work force by 33
percent over the next two months. In the case of CMGI's AltaVista, the
postponement of an IPO last month may have been a warning; 60 out of 800
positions at the search engine company were cut. Excite@Home lost chairman
Thomas Jermoluk to venture capital company KPMG. Microsoft was not immune,
of course; in addition to Nathan Myrhold stating that he's not coming back
from his sabbatical, Jim Kinsella, CEO and president of MSNBC.com,
resigned. He accepted a position with Netherlands-based World Online as
chairman elect. 

Outage Ticker: Practically Everyone
It only seemed like the entire world suffered outages over the past week.
Users of Pacific Bell's Internet service lost access to their e-mail all
day May 6; the company fixed the problem by the following morning. It's
reportedly the third time Pac Bell users experienced problems with their
e-mail service in as many months. While the company gave no details about
the problem, it was all too clear what caused many of the other outages
this week. With the return of spring comes the return of construction...and
backhoes...and fiber cuts. There's quite a bumper crop for so early in the
season. Tuesday, UUNET's Palo Alto POP seemed to be experiencing problems,
allegedly due to a fiber cut on a different but shared network. Other
reports seemed to indicate frame relay problems with UUNET's network on the
West Coast. Intermedia appeared to be suffering from a major fiber cut in
Texas Wednesday morning. GTE experienced a DSL outage in California and
Washington; ALS experienced a fiber cut in Santa Clara that affected
multiple providers; and Media One suffered a fiber cut in Atlanta. To add
spice to the mix, even utility companies fell prey to outages: in Chicago,
ConEd suffered a power outage that affected 268,000 customers, while
Portugal experienced an outage affecting the southern half of the country,
include Lisbon. Finally, AOL users felt the pain between 9 PM and midnight
Wednesday when a software glitch prevented many of them from logging into
AOL or receiving the ISP's full services. The problem seemed to affect West
Coast users the most. 


Cyberscape Delight: Something in Addition to Flowers for Mother's Day
It's become a commonplace observation that many new businesses are started
by women these days, but women still have problems getting loans for their
start-ups. Enter Count-Me-In. A microcredit program being launched by Nell
Merlino. Count-Me-In is accepting donations as small as $5 with the goal of
raising a multi-million-dollar from which to loan $500 to $10,000 to women
starting or expanding their own small business. Interest rates will range
from two to four percent above the prime rate. Applicants will be judged on
business potential rather than earnings or hard assets. The site has the
support of a number of women's Web sites, including iVillage.com,
Oxygen.com, Whoopi.com, and Women.com, and will begin making loans in June. 

  


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

  

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


Please contact me with any problems or questions 
  
Thank You
flash@faulkner.com

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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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