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Date: Friday, July 14, 2000, 2:48 PM -0400
From: Faulkner Information Services <mailserver@faulknerinfo.com>
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Subject: Faulkner Cyberscape Digest July 14, 2000


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CyberScape Digest

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 07/10/00 through Friday 07/14/00. 


  

Many Merger Stories Making News
Almost anyone not hiding under a rock this week knows the biggest merger
news is about the merger that didn't happen. Due to complaints from
regulators, MCI WorldCom and Sprint canceled their $120 billion wedding.
Both the US Justice Department and the European Union feared that the
merger would adversely affect competition in the Internet and long-distance
telephone arenas. What next? Some speculate that the two companies will now
become takeover targets for non-US telecoms trying to get a toehold in the
US market. In any case, the setback forced WorldCom to put its wireless
Internet dreams on hold. Psion, on the other hand, is forging ahead with
its Internet plans. The venerable handheld maker agreed to acquire
Teklogix, a maker of data collection technology, and Fonedata, a WAP
portal; furthermore, it is working with United News and Media to form a
company, dubbed Trivanti, to provide mobile Internet services across all
device platforms. Meanwhile, as "King Content" loses its online throne,
Internet magazines Feed and Suck, and online culture encyclopedia
Alt.Culture are merging to create Automatic Media. Lycos, owner of Suck,
will hold a 25 percent stake in the venture, which will focus on building
Web sites and services. Several investors put up a total of $4 million to
get the company off to a good start. In a deal worth $478 million, digital
advertising distributor DG Systems issued stock to merge with StarGuide
Digital Networks, a streaming audio and video provider. The merged company
will center itself around StarGuide's Internet audio and video unit, dubbed
CoolCast. Another all-stock deal provided a smaller jackpot: $19.3 million
to lottery site webMillion.com, for agreeing to let itself be purchased by
Internet advertising firm L90. Finally, two transactions fall into the
"perfect complements" category: WebGain's purchase of Zat and Cisco's $210
million all-stock purchase of Netiverse. WebGain makes Visual Cafe, which
lets users build pre-written Java components, and Zat makes Spin, which
lets users put bits of pre-written Java code together to create e-commerce
software. Do I smell the coffee of an integrated product? Cisco, of course,
makes networking gear, and Netiverse makes hardware and software for
speeding up Web content delivery.
  

Microsoft Has Busy Week...
Between Toronto's Comdex Canada, Atlanta's Fusion 2000, and the Microsoft
Professional Developers Conference 2000 in Orlando, the software giant
seemed to be everywhere. In Canada, CEO Steve Ballmer denied in his keynote
speech that the company's recently unveiled ".NET" Internet strategy is a
hidden agenda for the software giant's takeover of the Internet; it is
aimed solely at creating and selling tools for the Web. Judging from the
number of glitches in the software demo, the company's aim needs
improvement. In Atlanta, Microsoft revealed its pricing for ASPs for Office
and BackOffice servers. ASPs will pay two monthly subscription fees,
per-server and per-user, to host Microsoft applications. In both Orlando
and Canada, Microsoft said that Visual J++, its Java-based tool, will not
be shipping with its Visual Studio.NET tool suite. The suite will support
Java with a third-party tool from Rational Software. The company made these
changes because of Sun's litigation pertaining to Microsoft's use (or
misuse) of Java. In Orlando, Bill Gates unveiled the Internet Explorer 5.5
Web browser. Enhancements include speedier page loading and increased
support for industry standards. Also in Orlando, group VP Paul Maritz
detailed the company's .NET vision: Microsoft will use XML, SOAP, and other
standard languages and interfaces to put individual Web sites together into
combined services. Users will access these services on a variety of
devices. The company distributed pre-release code for the .NET Framework to
developers, so they could write applications based on the framework.
Finally, the company's Microsoft Network forged a deal with Epinions.com to
integrate the latter's reviews into MSN's eShop later this year.

  

..And So Do the FTC and the FBI
How much government watchdog behavior is too much? This open question
gained increasing relevance this week as two government agencies engaged in
Internet crackdowns. First, the Federal Trade Commission settled charges
against several online pharmacies that agreed to cease making deceptive
claims. Focusmedical.com, Worldwidemedicine.com, and several other Web
sites sold prescription drugs Viagra, Propecia, and others while falsely
stating that they were full-service medical clinics. The sites agreed not
to misrepresent their businesses; not to give out personal customer
information without permission from the customer; and not to charge
customers' credit cards without their permission. The FTC also sued
bankrupt online toy retailer ToySmart in an attempt to prevent it from
selling its customer data base. ToySmart maintained a privacy policy that
forbids the company from selling personal information collected from
customers--but it placed an ad in the Wall Street Journal, shortly after
going bankrupt, looking for a buyer for its customer lists and data bases.
Disney, ToySmart's majority owner, came forward with an offer to buy the
information from ToySmart and retire it, in an attempt to settle the
matter. Of course, concerns about online privacy leads one straight to the
FBI...but not quite in the way one might think. Seems the bureau developed
a new surveillance tool, known as Carnivore. The souped-up PC can rapidly
and covertly search millions of e-mails a second for messages from those
suspected of criminal activity. To use the system, the FBI links it
directly into an ISP's computer networks; in theory, this allows the bureau
to snoop on any and all digital communications through those lines. The
ACLU and other civil liberties groups are up in arms over Carnivore, and
sent a letter to the chairman of the Constitution Subcommittee of the House
Judiciary Committee, urging the consideration of an update to the country's
electronic privacy laws. Some ISPs, such as EarthLink and RMI.Net, said
they would fight any court order to install Carnivore on its network.
EarthLink reported actual experience with Carnivore on its network, saying
that technical problems with the surveillance device knocked out access for
many of its customers--a sharp contrast to the FBI's insistence that the
device does not interfere with the normal functioning of an ISP's network.
Attorney General Janet Reno said that she would review the Carnivore
system, and that the Justice Department will examine its constitutional
implications.

  

This Week's Internet Deals
Increasing visibility for both companies, QUALCOMM and 3Com agreed to
bundle the former's Eudora e-mail program on CDs with the latter's US
Robotics modems worldwide. Additionally, Eudora's user interface will
include the US Robotics logo. WellPoint Health Networks made a five-year
deal for Drugstore.com to offer its products and services to WellPoint's
pharmacy management unit online. The deal is a coup for both sides, since
WellPoint's 22 million members can now fill prescriptions online using
Drugstore.com; members will also receive electronic alerts about Food and
Drug Administration or drug manufacturer warnings and recalls. Oracle and
Cisco agreed to link components of Oracle 11i with Cisco's voice over IP
and customer call center software. The resulting system, which includes CRM
and will be jointly marketed by both companies, will let a business see
each customer's interaction history with the business as an integrated
whole despite contacts that may include phone, e-mail, Web chat, and
interactive voice response. Juno and Hughes Network agreed to collaborate
on high-speed Internet access by satellite. Available later this year to
Juno members in the US, the service, dubbed Juno Express Powered by
DirecPC, will provide access speeds up to 400 kbps.

  

Internet Standards in Flux
It isn't often that several different standards become newsworthy at the
same time. This week, three standards made headlines. Starting with the on
ramp to the information superhighway, Lucent, Conexant, PCtel, and Cisco
all said they would support the recently ratified V.92 standard for modems.
Modems adhering to this standard can be put "on hold" while the user
answers a phone call, without dropping the Internet connection. Other
chipmakers are expected to support the standard. Meanwhile, the form of
what Web surfers see once they get onto that superhighway came under
consideration by the World Wide Web Consortium (W3C). For the first time in
seven years, the group will work on a large overhaul of HTML--specifically,
the mechanisms for HTML forms. The W3C's XForms working group posted a
first draft of the Data Model, one of three specifications concerning HTML
forms, and hopes to have a full-fledged standard for the Data Model ready
for recommendation by the end of the year. But the update everyone is
waiting for with bated breath may come out of ICANN's meeting in Japan.
There, board members will go over the many suggestions received for new
top-level domains. The overcrowding of the .com domain illustrates the need
for more TLDs, yet each new TLD approved raises the question of
administration for the new domain. Recommendations include .gnu (for open
source software projects), .tel, .faq, .list, .prices, .gallery, and .kid
(for child-friendly Web sites). Fortunately for ICANN, the General
Accounting Office confirmed its authority to perform this function (as
delegated to it by the Department of Commerce) shortly before the meeting,
which should lend strength to whatever it decides.

  

Big News in Broadband
Everybody in telecommunications wants to provide fat pipes, or so it seemed
this week. AT&T invested $200 million in its network in preparation for the
launch of "Ecosystem for Media," a rich media service that will provide
live Webcasts, video-on-demand, and similar items to businesses. Available
by sometime in March 2001, it will deliver Internet content to a larger
number of users simultaneously at higher speeds, according to the company.
Microsoft, RealNetworks, and Inktomi will provide software to help make the
system work. Taking a different approach, wireless companies Sprint, MCI
WorldCom, and Nucentrix are working with the Federal Communications
Commission to develop two-way use of the 2.1 GHz and 2.5 to 2.7 GHz bands.
The carriers want to use this part of the spectrum for broadband services.
The band had not been previously used for two-way connections because such
use would have caused interference levels greater than those set by the
FCC. Satellite communications company ICO-Teledesic Global received $315
million from Microsoft chairman Bill Gates and other investors. Rescued
from bankruptcy last year by Craig McCaw, ICO will use the money to move
ahead with its plans to start up a broadband Internet communications
service. SBC hopes to attract DSL customers by offering a free PC to
everyone who signs a two-year contract for the $60 a month service (which
drops to $40 a month without the free PC). The PC, a 566MHz Compaq Presario
with an Intel Celeron processor, CD-ROM drive, and 10GB hard drive normally
retails for $1000. New Edge Networks' broadband strategy simply involves
going where the customers are--in this case, Nebraska and Iowa. It began
offering DSL access in Des Moines and Omaha, and plans to reach 22 Nebraska
locations and at least 12 Iowa towns.

  

Taxes and Hackers and Suits, Oh My!
EU Commissioner Frits Bolkestein spoke before the European Parliament in
Brussels in favor of an Internet-based value-added tax. Bolkestein argued
that e-commerce should be taxed in the same way as traditional sales, which
would require a VAT on all services consumed with the EU, even if they
originate in the US. Speaking of the US, the House Judiciary Subcommittee
on Commercial and Administrative Law discussed three bills that would allow
states to collect sales and use taxes on catalog and Internet transactions
even if the seller has no physical presence in the buyer's state.
Meanwhile, in the criminal trenches of the Internet, a 15-year-old and a
20-year-old were arrested on charges of hacking into NASA's computers.
Investigators found 76,000 unauthorized passwords on the 20-year-old's
computer. If convicted of unauthorized password possession, he faces up to
10 years in prison and a fine of $250,000. Finally, cybersquatters and
others faced lawsuits this week. A federal judge ruled that Gridiron.com
violated the NFL Players Association licensing rights--not by using the
name Gridiron, but by using names and images of league players. Gridiron
was forbidden from using certain images on its Web site and from making
private agreements with players bound by NFLPA contracts. A UK citizen
accused of hacking into Etisalat, a telecom run by the United Arab
Emirates, is suing the telecom. According to the Briton's lawyer, Etisalat
is refusing to hand over any evidence that the hacking took place. Finally,
the International Olympic Committee, US Olympic Committee, and organizers
of the Salt Lake City Winter Games in 2002 filed a lawsuit against 1800 Web
sites illegally using the Olympic name. The case is the largest so far to
be brought under the 1999 Anticybersquatting Consumer Protection Act. Sites
sued included 1689 falsely claiming a connection with the Olympics, 69
claiming to sell tickets, 43 offering gambling, and 15 offering pornography.

  

America Online Expands...
America Online ventured just south of the border with the launch of its
second service in Latin America, America Online Mexico. The Spanish
language service represents a real challenge for the company; Latin America
is the world's fastest growing Internet market, but less than two percent
of Mexico's population has Internet accounts--not surprising in a country
where phone lines are hard to come by. AOL also made two deals this week,
with Metromedia Fiber Networks and RealNetworks. Metromedia agreed to allow
AOL members and content providers to use its global optical Internet
network, which should encourage the development of streaming video and
other high-bandwidth applications. AOL's deal with RealNetworks will take
advantage of all that bandwidth; the media giant said it will use
RealNetworks software throughout its network. As part of the deal,
RealPlayer will be bundled with Netscape's Web browser.

  

..And eBay Both Contracts and Increases by Half
Online auction giant eBay revealed plans to cut back on its live online
auction business to focus more effort on selling high-end art and antiques.
To this end, the company will lay off five percent of the staff it acquired
from its purchase of Butterfields and convert its Chicago auction galleries
into an Internet auction facility. eBay also found itself forced to go to
court to bar a Chicago man for life from using its Web site. Braxton
Anderson, who was the subject of many complaints from other eBay users for
his objectionable language, managed to get around the ban by registering
under different electronic aliases--at least 40 to 45 in the past three
months, according to eBay. Meanwhile, eBay completed its bid to buy
Half.com, an online secondhand marketplace, for stock valued at just over
$224 million. 

  

New Companies, New Technologies, New Services Blossom
Every week, someone finds a new use for the Internet, or a new twist on an
earlier use. This week was no different. Compaq and CMGI joined forces for
a joint venture in the business-to-employee space. Freeup.com will provide
products and services aimed at helping IT employees increase their
productivity. Freeup will eventually target other types of employees. Asia
Online worked with Interliant to create WorldHost, a Web hosting service
capable of fully automating customer fulfillment. Cisco and StarHub joined
together to bring high-speed Internet access and e-commerce applications to
businesses in Singapore. The companies anticipate an October launch.
Certicom and 724 Solutions teamed up to create a wireless Public Key
Infrastructure (PKI) for use by financial service providers. The technology
would allow users to digitally sign legally binding financial services
documents, such as mortgages, loans, and insurance policies. Search service
AltaVista launched an India-specific Web site, marking its first entry into
the Asian continent. Excite@Home tried to persuade small businesses to set
up online stores by offering Freetailer, a service that allows users to
launch online stores on Excite's Web site for free. The move acknowledges
that many small businesses cannot afford the $75 to $150 per month (plus
commission) that the company charged for hosting the stores. Certain
restrictions apply; the service will be more limited than Excite's
fee-based hosting, which will still be available.

  

Latest Legal Woes for Napster
Lars Ulrich, Metallica drummer and Napster critic, addressed the Senate
Judiciary Committee on his band's legal battle with the online music
company. Along with the Recording Industry Association of America and
others, Metallica is suing Napster for copyright infringement because its
software allows easy distribution of copyrighted songs over the Internet.
The committee also heard testimony from Napster interim CEO Hank Barry
covering Napster's business model, including its plans for raising revenue.
MP3.com CEO Michael Robertson also appeared before the committee. While
several senators expressed skepticism that Napster is completely innocent
of copyright violations, the committee in general showed reluctance to
enact legislation covering the matter and urged both parties to work
towards a settlement. Meanwhile, Artists Against Piracy, an anti-Napster
coalition, took out full-page ads in USA Today, The New York Times, the Los
Angeles Times, The Wall Street Journal, and The Washington Post. Included
in the ads were endorsements from 70 recording artists of various musical
genres. The group objects to Napster in part because they believe Napster
deprives them of determining how their music is presented, distributed, and
marketed online. Meanwhile, Listen.com joined the long list of plaintiffs
charging Napster with copyright infringement. In this case, Napster is not
stealing Listen's music. Listen maintains that Napster's redesigned "New
Artist Program," featuring a genre tree of music categories, looks too
similar to pages on its own Web site. Interestingly, several of the
companies funding Listen.com are also involved in litigation against
Napster. With all of its legal woes, it's no wonder Napster hired Keith
Bernstein, formerly an executive at Universal Music Group's digital music
division. Bernstein has extensive experience managing artists' copyrights.
Finally, Napster faces even more direct competition than in the courtroom.
EMI Group began offering downloadable music this week by Frank Sinatra,
Pink Floyd, and others, in secure formats. Fifty online retailers will
carry the recordings, at prices equal to those of CDs.

  

Virus Set for Smash Hit on July 14
Russian antivirus firm Kaspersky Labs warned that the Win95 Smash virus,
first appearing in April, will trigger on July 14 and could cause real
problems for PC users. The virus cannot propagate under Windows NT. It can
infect any Windows PE file by writing to the end of the file. Its payload
routine overwrites the C:\IO.SYS file with a Trojan code. The user sees
this message: "Virus Warning! Your computer has been infected by virus.
Virus name is `SMASH,.' project D version 0x0A. Created and compiled by
Domitor. Seems like your bad dream comes true..." At this point, the virus
reboots the computer, displays the words, "Formatting hard disk..." and
erases the PC's first hard drive. The virus itself is difficult to get rid
of because the virus hides its virus code and installs itself into Windows
memory. 

  

It Had to Happen: Lloyd's Sells Hacker Insurance
Eclectic insurance company Lloyd's of London, know for its willingness to
insure nearly anything, began offering hacker insurance. The company will
insure customers of Counterpane Security for up to $100 million in damages
against hacker-related losses. The service is aimed at such large online
businesses as Yahoo and CDUniverse, and directly addresses the growing tide
of hacker break-ins and virus problems. 

  

Outage Ticker: MCI WorldCom, Sprint, Yahoo, eBay
An MCI WorldCom spokesperson clarified rumors surrounding a major outage of
the company's MAE West peering point. The company performed scheduled
maintenance to its FDDI technology Thursday morning between midnight and
4:00 AM Pacific time. WorldCom gave advance warning of the outage to its
customers, less than one-third of whom would have been affected. The outage
watchers on the NANOG mailing list, however, tell a different story.
Peering problems with MAE West were reported early Monday morning (July
10); MCI WorldCom followed up at 3:00 PM, informing customers that it found
a problem with the gigaswitch, which it would try to repair overnight. On
July 11, MCI WorldCom informed customers that the previous night's work did
not fix the problem; a suspected bad SCP card would be replaced that night.
On July 12 (Wednesday) MCI WorldCom customers were told that the repair did
not take place, and that the company would try again that night. The
problem appeared to be fixed by 2:00 AM PDT Friday. A number of ISPs
stopped peering across MAE-West until the repairs were completed, causing
very minor traffic delays. At 6:15 AM on Thursday, Sprint experienced an
outage in its sl-bb13 router in Fort Worth, which affected the connectivity
of all customers connected to the router. ETR was unknown. Sprint also gave
advance warning of scheduled maintenance. On July 17, the company will
upgrade hardware on its sl-gw12 router in New York City and its sl-gw24
router in Chicago. The maintenance will take place between 12:01 AM and
7:00 AM EDT. Customers directly connected to the routers may experience a
temporary loss of connectivity or degradation of service during the
maintenance. Some users of Yahoo's free e-mail service experienced an
interruption in that service lasting up to two days. After Yahoo restored
the service on Wednesday, it vehemently denied an internal cause for the
outage, claiming that user/ISP connectivity problems caused the
interruption. Finally, online auction fans were disappointed on Monday
between 5:57 PM and 6:47 PM Pacific time when one of eBay's ISPs lost
power, preventing users from bidding on, listing, or viewing auctions. 

  

Cyberscape Delight: Of Bach, Burning Man, and Bicycles
Classical music lovers, rejoice: the manuscripts and works of Johann
Sebastian Bach will be stored in a digital library that can be accessed
from the Internet. Herbert Herz of IBM, the head of the massive "Bach
Digital" project, said he hopes to have the complete works online within a
few years. A number of libraries across Germany are involved in the
project, including the Berlin State Library, which holds 80 percent of
Bach's manuscripts. Bach fans, be patient: the site contains the message
that it is under construction, and to come back July 27. Looking even
further into the future, those celebrating the annual week-long Burning Man
event in the Nevada Black Rock desert will be able to plug into a wireless,
high-speed network built by three volunteers from PlayaNET. Since many
Burning Man attendees leave their electronic devices at home for the
festival,  the volunteers will set up three public kiosks with
network-enabled terminals and open ports (for those who decided to bring
the laptop after all). They will also build three transmitter towers to
avoid radio interference. Finally, for those interested in another great
outdoor event, the Tour de France bicycle race, a number of Web sites let
fans follow the action. The Societe du Tour de France offers text reports
updating the race, as well as route details and race statistics. VeloNews
provides coverage of the race by both journalists and three American
professional riders in the race. For US fans looking to cheer on a home
team, Lance Armstrong's United States Postal Service cycling team Web site
provides two race reports each day, with occasional interesting sidelights.



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

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

Should you have any questions, concerns or problems with your flash, please
contact us at: mailto:flash@faulkner.com 

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