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Date: Friday, July 28, 2000, 2:15 PM -0400
From: Faulkner Information Services <mailserver@faulknerinfo.com>
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Subject: Faulkner's Cyberscape Digest 07/28/00


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CyberScape Digest

CyberScape Digest is a weekly roundup of top internet stories. This issue
covers events from Monday 07/24/00 through Friday 07/28/00. 

Privacy Issues Concern Government Agencies...
Questions of online privacy and security received examination from many
different angles this week. The FBI found itself in the uncomfortable
position of answering rather than asking questions when the Constitution
subcommittee of the House Judiciary Committee wanted information about
Carnivore, an e-mail monitoring device that brought an uproar of protest
from privacy groups. Subcommittee chairman Charles Canady (R-FL) pointed
out that Carnivore raises Fourth Amendment issues, balancing the needs of
law enforcement against the constitutionally guaranteed protection against
unreasonable searches and seizures. The FBI responded that it only uses
Carnivore with proper legal authorization, often with the approval of both
a judge and a senior official from the Justice Department--and never
without probable cause. The bureau also revealed that Carnivore has been
used 25 times, which includes 16 times since the beginning of January. Of
course, this raises another question: can the FBI be trusted to limit
itself? One wonders, especially in light of its new interpretation of the
Communications Assistance for Law Enforcement Act of 1994. Clearly intended
to apply only to voice communications, the bureau nevertheless wants to
open paging systems, mobile satellite systems, and specialized mobile
radios to electronic eavesdropping. Paging systems transmit data, not
voice, which should mean they are not affected by the legislation. Even if
the FBI does expand the systems it can monitor, three questions must be
addressed: how much capacity a company must give the FBI for wiretapping,
how companies will be reimbursed for their compliance, and what type of
information the bureau will be allowed to access. Meanwhile, another spy
agency tried to deal with somewhat different privacy and security problems.
John Young, Webmaster of a site that displays government intelligence
documents, posted a classified CIA examination of the US intelligence
community prepared for Japanese intelligence officials in 1998. Young
claims he obtained the file from an anonymous source, from which he also
received and posted a file containing the names, birth dates, and titles of
numerous employees of the Public Security Investigation Agency, Japan's
version of the FBI. Young refused a request from Japan to take the
documents off his Web site, and says he was told to expect contact directly
from the Japanese government. Even the Securities and Exchange Commission
heard protests when it revealed plans to create an online data base that
would allow consumers to check certain records and business practices of
the 8100 US registered investment advisor firms. The data base will include
advisors' educational background, experience, disciplinary problems (if
any), and also cover each firm's fees for labor, policy on conflict of
interest disclosures, and other practices. The Investment Counsel
Association of America pointed out that the move represents the largest
change in the industry since 1940, and expressed concern with how the
information in the data base will be used.

..And Industry and Governing Bodies, Too
Responding to increasing concerns about the collection of personal
information online, 36 companies joined together to form Privacy
Partnership 2000, a coalition that will fund print, radio, and online
advertisements to educate consumers about privacy issues and provide advice
on how to protect personal information on the Internet. The group includes
America Online, IBM, Intel, Microsoft, RealNetworks, Verizon, and many
others. Twenty-six daily newspapers will carry the ads, and the companies
agreed to donate more than $300,000 worth of advertising space to the
cause. Many of the ads will point consumers to privacy advocate TRUSTe's
Web site for more information. The US Congress is taking this matter
seriously, too. Former presidential candidate Senator John McCain (R-AZ)
introduced a bill that would force Web sites to disclose to users exactly
what they do with the personal information they collect. Web sites would
still be permitted to collect such information for marketing purposes, but
must state what steps Web surfers must take if they wish to limit that use.
To give the bill some teeth, if passed, it would empower consumers to sue
Web sites in violation of the legislation for up to $22,000. Joining
Senator McCain in sponsoring the bill were Senators Spencer Abraham (R-MI),
John Kerry (D-MA), and Barbara Boxer (D-CA). The Commerce Department and
the Federal Trade Commission also promoted privacy. Along with Network
Advertising Initiative, representing the vast majority of online
advertising firms, they crafted a set of industry standards that gives Web
surfers a say in how these firms use their personal data. It also prevents
such firms from using surfers' medical or financial information, Social
Security numbers, and online sexual behavior to choose which advertisements
to display. Meanwhile, in the UK, the British government passed the
Regulation and Investigatory Powers Bill, which allows police and security
services to tap private e-mails. The legislation went through a months-long
battle and received a string of amendments. The home secretary will have to
approve interception warrants personally, and companies asked to install
monitoring equipment will be offered money. Still, some members of the UK
government think the law needs some tweaking, even now, and civil rights
groups raised an outcry about the bill encouraging infringement of personal
privacy. Industry leaders in particular expressed concern about the proviso
obligating a person to turn over an encryption key when asked or face up to
two years in prison. Encryption keys could give access to huge amounts of
confidential information not relevant to a police investigation. 

Birds of a Feather: Four Companies Looking to Get Hitched
Proving that even Internet companies want to marry doctors, two online
medical firms expressed interest in purchasing financially troubled
Drkoop.com. Medical information company Undertherapy.com put in an
unsolicited bid for an undisclosed sum. The approach came after an offer
from MillenniumHealth Communications to merge with Drkoop, also for an
undisclosed sum. Drkoop said that any talk of a deal at this time is
premature, but it is apparently considering MillenniumHealth's proposal. In
a deal that should have virus writers shaking in their boots (well, we can
hope), security software maker Symantec agreed to purchase rival Axent
Technologies for stock valued at $975 million. Axent shareholders will
receive one share of Symantec stock for every two shares of Axent stock
they own. But the biggest news in the world of mergers features InfoSpace
putting up stock valued at $4 billion to purchase Go2Net. The move gives
InfoSpace, a content syndicator, the ability to process online payments and
deliver interactive games, in addition to its regular line-up of national
Yellow and White pages directories, maps, classified ads, live music event
and TV listings, news, and stock quotes. The combined companies aim to
deliver news and information via the Internet to both wired and wireless
devices, including cable- and DSL-connected machines. 

Fraud, Lies, and Copyright Infringement
The Office of the Comptroller of the Currency issued a warning that some
hackers had begun setting up fake bank Web sites that closely resembled the
Web sites of real financial institutions in order to gain finance-related
information from bank customers duped by the site. Banks can and have taken
action against some of the fakers. For instance, Bank of America convinced
the owner of a Web site with a similar name and set-up to take it down
after several unsuspecting customers were taken in. So far, the OCC has not
heard of thefts of personal account information or access codes through
spoofed sites, but it may be only a matter of time. Speaking of nasty Web
site games, shortly after presidential candidate George W. Bush fingered
Dick Cheney as his running mate, the Democratic National Committee began
detailing Cheney's conservative voting record--on a Web site it had grabbed
that contained both candidates' last names in its domain name. It also
features quotes casting Cheney as more conservative than Newt Gingrich.
Bush campaign spokesman Ray Sullivan complained that the Democrats were
trying to make the site appear as if it had been created by Bush-Cheney
supporters. The site is labeled as belonging to the DNC--in small print at
the bottom of the page. Of course, the real news of online nastiness
(either committed or stopped, depending on one's point of view) came
Wednesday when US District Judge Marilyn Hall Patel issued a preliminary
injunction against song-swapping site Napster that effectively closes it
down. The Recording Industry Association of America hailed the injunction
as a victory in its battle against music piracy. The order to Napster to
stop trade in music covered by RIAA-member copyrights by midnight Friday
inspired a frenzy of activity among Napster users trying to download all
their favorite songs before the deadline. On Thursday, Napster appealed
Patel's decision. The next step in the process is a full trial. Perhaps
Napster should have taken a page from MP3Board.com's book. The company
initiated a LinkBlaster service, which allows music copyright owners to
sign up for an account, review links to music files and Web pages in the
MP3Board data base, and get rid of links to items that infringe on their
copyrights. 

AOL Gets Heard, Listens, Turns Deaf Ear
The Federal Communications Commission held a public hearing to cover the
issues surrounding the proposed merger between America Online and Time
Warner. The intense debate in the packed hearing room centered on whether
such a merger truly served the public interest. AOL's Steve Case and Time
Warner's Gerald Levin argued that the merger would promote innovation and
competition, and pointed to AOLTV, set to debut in eight cities by the end
of the summer, as one example of this. Opponents of the merger, which
included Disney, NBC, and the Consumer Federation of America, complained
that the merger would create a media  monopoly, and that simple assurances
that the merged company will open up its cable pipes to competing ISPs
would not guarantee good behavior. Not everyone distrusts AOL, however. The
National Federation of the Blind withdrew its lawsuit against the company
to give it time to make its service usable by the blind. AOL said it will
try to ensure that the next version of its software, AOL 6.0, due out later
this year, will work with screen readers. Of course, AOL doesn't listen to
everyone's complaints, either. Several rivals in the instant messaging
arena, including Microsoft, AT&T, Excite@Home, and Tribal Voice, among
others, have banded together in an attempt to create a common open standard
for instant message. The alliance, called IMUnified, hopes to have common
specifications by the end of next month, and that AOL will be forced to go
along with their combined standards and join their network. It would seem
these rivals want a piece of AOL, or at least of its traffic. Others who
want a piece of the company--or one of its divisions--will get their chance
at the end of the month, when the ISP is expected to float America Online
Latin America with an IPO of 25 million shares of stock that could bring in
up to $425 million. 

Internet Infrastructure Goes Through Changes, Convergence
The Internet's wired and wireless aspects look set to undergo some rapid
changes over the next year, including convergence with other applications.
For instance, IBM revealed plans to invest $1 billion in the mobile
Internet in Europe. A fair piece of that money will be devoted to providing
seed capital to small companies operating in that field. Net2Phone and
Rhythms NetConnections are working together to develop a version of
Internet telephony that works with DSL. Speaking of DSL, Prodigy went live
with a Web site geared to users of its broadband service. If offers nine
channels of content and plans to add more before the end of December. Those
who take their broadband via cable might be interested to learn that SBC
and Verizon are both looking for buyers for their cable TV properties.
Meanwhile, in Canada, Shaw Communications formed Big Pipe--an appropriate
name for a company that will build a national fiber backbone for broadband
Internet services. The firm plans to provide broadband access to 500,000
users by the end of December. Finally, Tellme Networks took its Web phone
service national. The company lets users call a toll-free number and give
voice commands to get audio information covering news, sports, local
restaurants, and other information retrievable from the Web. 

Microsoft Appeals, Whistles, Gets a Glitch
To no one's surprise, Microsoft requested that the Supreme Court send the
software giant's appeal of its antitrust violations back to the Court of
Appeals. The company pointed out that its appeal deals with factual and
legal issues best left to the lower court. Sounding as if it were trying to
save the nine solemn judges some trouble, Microsoft said that the appeal
involves "a morass of procedural and substantive issues that can be
resolved only through a painstaking review of a lengthy and technologically
complex trial record." The accused monopolist left unsaid the point that
the Court of Appeals had decided in its favor in the past, and that the
company is hoping for another favorable judgment. Out of the courtroom, the
company was all business. It set October as the month it will release the
beta version of Windows software, code-named Whistler, that is supposed to
be the next step in creating a single code base across the Windows product
line and ditching DOS once and for all. One hopes that Whistler will also
solve the compatibility problem discovered between Windows 2000 and
Adaptec's Easy CD Creator. The intermittent glitch causes the operating
system to destabilize and reboot. The problem stems from Windows Media
Player 7, which can overwrite important parts of Easy CD Creator, damaging
the software until the user deletes one of the programs.

Online Exchanges and B2B Markets Make News
Thirteen airlines teamed up to build Aeroexchange, an online B2B exchange
for the aviation industry. Users of Aeroexchange, set to go live later this
year, will be able to buy and sell everything from engine components and
maintenance services to more general items. Founding members include
Singapore Airlines, Air Canada, All Nippon Airways, FedEx Express,
Lufthansa, Northwest Airlines, and KLM Royal Dutch Airlines. In a somewhat
more closed arrangement, Seagate opened an online exchange to help its
channel partners buy Seagate products more efficiently. Putting their money
on the line, five major European financial institutions revealed plans to
go live with an e-marketplace for Treasury and Capital Markets by the
spring of next year. The founding partners include Banco Santander Central
Hispano, Commerzbank Group, Royal Bank of Scotland, SANPAOLO IMI, and SG,
belonging to Societe Generale Group. The marketplace will operate
independently of the five partners, which will each own an equal stake in
the venture. Once established, it will branch out to offer products and
services to other financial markets. E*Trade Australia agreed to take a
stake in the Australian Wine Exchange, a market that will trade in premium
wine similar to the way a stock exchange trades in stock. Finally, Oracle
teamed with Collab.Net to set up an online marketplace for something even
more valuable than wine: software developers. The Web site is intended as a
place for developers and businesses with job openings to meet and
collaborate on projects by sharing code online. But will they release no
code before its time? 

  Doing the Deals That Keep the 'Net Going
AOL subsidiary CompuServe made an agreement with GoTo.com in which the
search engine will provide the ISP with integrated search results across
CompuServe's Web properties. Excite@Home expanded its services by teaming
up with the Home Shopping Network to develop a co-branded broadband
shopping service. Viewers will be able to watch live video of HSN TV and
interact on Excite's portal. Speaking of portals,  LookSmart made a deal
with AltaVista giving the directory provider an exclusive place on the
search service's Web site. LookSmart had to pay for the privilege of
exclusivity--a painful state of affairs for a company that used to receive
money from companies to use its Web directory. Thanks to competition from
the volunteer-compiled Open Directory Project, LookSmart had little choice.
Mail Boxes Etc. teamed up with Juniper Financial to allow Juniper customers
to deposit their checks free of charge at Mail Boxes locations. Customers
will get a receipt and tracking number so that they can track their deposit
on Juniper's Web site. The deal helps online banking move forward, taking
some of the difficulty out of making a deposit. Does this seem all Greek to
you? Perhaps Yahoo's latest deal makes more sense. The portal made a deal
with OTE Telecom to provide its platform in Greek on OTE's ISP Otenet.
Clients of OTE's mobile phone subsidiary Cosmote will also receive Yahoo!
content in Greek. 

Online Payments, Online Taxes, Online Fines
Several companies provide services that allow consumers to effectively
e-mail money to another person in the service. Unfortunately, many if not
most of these services work in only one country. GlobalCollect, a
subsidiary of TNT Post Group, went live with a payment system usable in
more than 40 countries. Dubbed WebCollect, the system can accept credit
cards, bank transfers, checks, and other payment methods, and allows users
to pay or be paid in their own currency. Visa also seems interested in the
international online payment arena; the credit card issuer created e-Visa
International, an Internet-focused unit with marching orders to examine
payment technologies and form alliances aimed at building Web-based
standards and improving online security.  In a somewhat different version
of an "online payment," ICANN ruled at its meeting in Japan that anyone can
propose top-level domains to expand beyond .com, .net, and .org--but they
will have to pay a nonrefundable application fee of $50,000 for the
privilege, which provides no guarantees as to adoption of the proposed
domain. On a more positive note, the Clinton administration hopes to expand
online payments to the US government beyond income taxes. When launched.
Pay.gov will accept electronic payments for government fees, fines, certain
taxes, loans, leases, and donations; additionally, users will be able to
receive some types of forms and documents. As of this writing, the system
is not yet live, and no information was available as to its launch date. On
the topic of online taxes, China reportedly plans to tax e-commerce
transactions. The State Administration of Taxation chief Jin Renqing was
quoted as stating that all trade should be taxed, regardless of how it is
conducted; not taxing e-commerce may promote the industry, but it also
prevents the tapping of a possible source of revenue. Finally, those who
ordered gifts online over the holiday season, only to be disappointed when
they didn't show up as promised, can take some consolation from the
settlement earned by the Federal Trade Commission. Seven e-tailers agreed
to pay a total of $1.5 million to settle charges from the FTC that they
violated the Mail and Telephone Order Rule when they failed to give enough
notice of shipping delays or, in some cases, continued to promise delivery
by a particular date despite the impossibility of timely fulfillment of
orders. The retailers included CDNow, KBkids.com, Macys.com,
Minidiscnow.com (which is no longer in operation), The Original Honey Baked
Ham Company of Georgia, Patriot Computer, and Toysrus.com. The businesses
have agreed to change their procedures so that such problems do not crop up
in the future. 

  FTC Endorses Industry Self-Regulation of Online Privacy
The Federal Trade Commission voted 4-1 to endorse recommendations put
forward by the Network Advertising Initiative for industry self-regulation
of online preference marketing. The NAI, a consortium of online advertising
companies, worked with the federal government for a year to create the
guidelines. Under the agreement, NAI companies will follow a strict set of
rules, which includes not using personal information such as medical and
financial data, Social Security numbers, or online sexual behavior to
determine the ads that appear on a user's screen. The rules also give Web
surfers some control over their personal information, mandating that they
"opt-in" before personally identifiable information can be merged with
previously collected information that is not personally identifiable.
Members of NAI include DoubleClick, AdKnowledge, Engage, and MatchLogic. 

  Stephen King Scares Traditional Publishers
Best selling horror writer Stephen King is following up the online success
of novella Riding the Bullet with a download calculated to curl the hair of
traditional publishers. He is offering the first installment of a novel he
started in the 1980s, The Plant, directly to readers for downloading from
his Web site. If 75 percent or more of the people who download the
installment send him $1 each, the story will continue; while the second
installment is already written, King gave no guarantee that there will be a
third installment. "If you pay, the story rolls. If you don't, the story
folds," according to the Web site. Users can pay through Amazon's online
payment system. If successful, King's approach could allow other well-known
authors to sell books directly to their fans without going through a
traditional publisher. Plant downloads so far are said to be well behind
those for Riding the Bullet. 

Amazon President and COO Resigns
Online bookseller Amazon said good-by to Joseph Galli Jr., its president
and chief operating officer, after he spent just over a year on the job.
Galli is leaving for the top post at VerticalNet, a company catering to B2B
e-commerce businesses. Jeff Bezos will take over as president of Amazon. No
information was available concerning how much of a discount on book
purchases a prospective COO would receive. 

  Outage Ticker: Sprint
Sprint reported an outage in Seattle that occurred at 10:30 AM July 23 and
affected the area's sl-gw6 router. Sprint also reported an outage in Fort
Worth that occurred at 1:00 PM July 24 and affected slot 11 on sl-gw10-fw.
Those connected to the relevant routers experienced a loss of connectivity
or a degradation of service.  
  
Cyberscape Delight: Spinal Tap Returns From the Dead
Oh, for the glory days of heavy metal band Spinal Tap, back in the 60's
when they still had their original drummer...who can forget "(Listen to
the) Flower People"? What's that? Never heard of Spinal Tap? Well, don't
feel deprived; the group was featured in Rob Reiner's 1984 rockumentary
(some would say "mockumentary") "This Is Spinal Tap," a parody film about a
band that bravely continues on despite dwindling popularity and a string of
sudden drummer deaths. At long last, Tap fans ("and God knows there aren't
many of them," to quote lead singer David St. Hubbins) can rejoice: the
band's latest hit, "Back from the Dead," is available for download at
Tapster.com. But wait, there's more: the movie itself will be re-released
in theaters and on DVD and videotape in September. The DVD features more
than one hour of additional scenes "taken from 30 hours of original camera
negatives unearthed by STUDIOCANAL in 1996 from a salt mine in Kansas,"
according to a release detailing the band's revival. Listen.com is running
a promotion to find someone who has what it takes to be the next Spinal Tap
drummer; the winner will go to the band's exclusive concert at the House of
Blues and receive a drum set. He or she won't actually play with the band,
due to insurance and liability issues (drummers with Spinal Tap seem to
suffer shortened life spans).


*** 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
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