27th > November > 2001 Archive

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Can Club Nokia thwart .NET?

Nokia is expected to announce ambitious plans for its Club Nokia portal at its Capital Markets Day in New York tomorrow.
Andrew Orlowski, 27 Nov 2001

Nerdy image keeps women out of networking

Women are shunning careers in IT networking because they think it is too nerdy. A lack of strong female role models and a perception that women are less able to undertake technical tasks than men also contribute to a massive under-representation of females in network engineering jobs. Even so, the number of female networking engineers in Western Europe is set to double by 2004, according to an IDC study commissioned by Cisco. At the end of last year, there were around 42,000 females (5.6 per cent) among the ranks of an estimated 750,000 networking engineers in Western Europe. France was the most egalitarian country with one in eight females among skilled net workers, three times higher than Austria. By 2004, almost 94,000 women in Western Europe will be working as Internet networking engineers, whose ranks by then will be an estimated 1.4 million strong. This is not nearly enough to offset the networking skills shortage, which is expected to exceed 500,000 in Western Europe by 2004. Report co-author Marianne Kolding said education can attract more women into networking but retention of women already in the profession was equally important. ®
John Leyden, 27 Nov 2001

Grey software is not black and white

UK resellers selling cheap Microsoft software are not necessarily flogging pirated goods. Microsoft is currently locked in legal proceedings with two UK businesses regarding the sale of what it says are counterfeit products, and which the resellers say are products acquired legitimately on the grey market. Matthew Rippon, a litigator specialising in intellectual property and IT at law firm Prettys, explains that a couple simple things that have to be established first: is the product genuine; and has it been marketed to the EEA (European Economic Area) with Microsoft's consent? Once these points have been verified, then Microsoft's trademark rights are exhausted, which means it has no further control over who brings it to market and at what price. Thus, it is completely possible for resellers to be selling legitimate grey market product. As Rippon says, the matter is about trademark law, not copyright law. (See Prettys' dissertation of the Tesco vs Levi Strauss ruling.) So if a local trader gets its hands on software from the EEA cheaper than other resellers, it is entitled to flog it on to consumers at a reduced price without falling foul of trademark law. And it is not pirated or counterfeit. Generally the trademark owner's rights are exhausted when its product is first marketed or put on sale. This is usually when it gets sold to its distributor. The distributor may then sell it off to anyone it chooses. Aside from possible contractual provisions and statutory regulations, the reseller can sell the product anyway it likes (and as profitably as it wants). This is known as the exhaustion of trademark rights. Julia Phillpot, Microsoft's anti-piracy manager, says that the vast majority of grey market product advertised at cut-price rates is counterfeit, although not all of it is. She says it will be difficult for anyone to get hold of software that is vastly cheaper than what's available on the legitimate channels and warns people to exercise caution when purchasing from non-authorised channels. Microsoft provides a free product identification service for resellers or consumers wanting to verify if the software they have purchased is legitimate. Drew Cullen writes We think the Tesco ruling will help Microsoft squeeze grey software from the UK channel. Although MS cannot stop UK resellers buying and selling OEM software sold within Europe, UK resellers are interested in selling English-language versions only. The greatest source is the US. In the US, Microsoft cannot legally enforce conditions of resale, and in the UK, it cannot legally enforce conditions of resale. But software originally intended for the US has not been marketed within the EEA. As trademark holder, Microsoft can, armed with the Tesco precedent, choke supply into the EU from this source. ® Related Links Prettys dissertation of the Tesco versus Levi Strauss ruling can be found here US example of trademark law: Quality King Distributors versus L'anza Research International Tesco versus Levi Strauss - FT Report Related Stories The Tesco ruling - what does it mean for grey MS software? German ruling loosens MS lock on reselling of Windows
James Watson, 27 Nov 2001

BT's Colossus's knees wobble

BT's broadband network wobbled again on Friday afternoon after its Colossus IP network was floored by a recurrent software problem. Friday's incident was much more minor than the outage which hit Colossus last Tuesday (when thousands of the UK's ADSL users were left without Net access). BT has put a temporary fix in place until a permanent solution can be found for the problem. The network fell over at around 2.50pm on Friday afternoon although it was partially restored within a couple of minutes. BT claims that Colossus was "fully stable" less than an hour later. A number of ISPs experience difficulties on Friday although the picture is by no means clear. A spokeswoman for Exeter-based Eclipse said that it did experience some problems, although not on the same scale as Tuesday's network failure. She said not all ADSL users were hit and that problems were sporadic. This latest "wobble" with BT's ADSL network has done little for confidence in broadband. Last week, Pierre Danon, the head of BT Retail, told a conference in Montpellier that BT's ADSL service levels were "mediocre", according to a report by VNUNet. ® Related Stories UK hit by major ADSL outage ADSL restored to UK
Tim Richardson, 27 Nov 2001

US assumes global cyber-police authority

Much has been written about the new anti-terrorism legislation passed by Congress and signed by President Bush, particularly as it respects the ability of the government to conduct surveillance on email, voice-mail, and other electronic communications. However, too little attention has been paid to other provisions of the legislation, particularly a significant change to the definition of the types of computers protected under federal law. An amendment to the definition of a "protected computer" for the first time explicitly enables U.S. law enforcement to prosecute computer hackers outside the United States in cases where neither the hackers nor their victims are in the U.S., provided only that packets related to that activity traveled through U.S. computers or routers. This remarkable amendment is to the Computer Fraud and Abuse Act, which Congress enacted in 1984 to prohibit conduct that damages a "Federal interest computer," defined at the time as "a computer owned or used by the United States Government or a financial institution," or, "one of two or more computers used in committing the offense, not all of which are located in the same State." Evolution of the 'Protected Computer' Under that initial definition, if a hacker in the U.S. broke into a computer in a foreign country (or vice versa), because the computers were not all located in the same state, a federal offense would have been committed. If, however, the victim computer and the hacker's computer were both located in the same state, this would be a purely "intrastate" offense, punishable by the state or local government. (A purely intrastate offense could also be prosecuted federally if the victim computer was used by the federal government or a federally insured institution, or if any computer involved in the offense was located in another state.) This limitation represented a conscious effort by the U.S. Congress to limit the scope of federal crimes to those with a truly interstate reach. In 1994, Congress replaced the term "Federal interest computer" with the phrase "computer used in interstate commerce or communication." In 1996, Congress amended the law once again, defining a new term, "protected computer," and concomitantly expanding the number of computers that the statute "protected." The 1996 amendments defined a protected computer as one that is "exclusively for the use of a financial institution or the United States Government, or, in the case of a computer not exclusively for such use, used by or for a financial institution or the United States Government and the conduct constituting the offense affects that use by or for the financial institution or the Government; or which is used in interstate or foreign commerce or communication." In the new anti-terrorism legislation, Congress once again expanded the scope of federal jurisdiction over computer crimes. Section 814 of the PATRIOT bill added to the definition of a protected computer an explicit provision stating that federal law precludes activities involving "a computer located outside the United States that is used in a manner that affects interstate or foreign commerce or communication of the United States." Congress did not require that the effect on interstate or foreign commerce or communication be substantial, or even, for that matter, measurable. Almost immediately after the legislation was signed, the Department of Justice issued a guidance paper to instruct thousands of federal prosecutors how to use the new statute. The guidance noted that: Because of the interdependency and availability of global computer networks, hackers from within the United States are increasingly targeting systems located entirely outside of this country. The [previous] statute did not explicitly allow for prosecution of such hackers. In addition, individuals in foreign countries frequently route communications through the United States, even as they hack from one foreign country to another. In such cases, their hope may be that the lack of any U.S. victim would either prevent or discourage U.S. law enforcement agencies from assisting in any foreign investigation or prosecution. ... Section 814 of the Act amends the definition of "protected computer" to make clear that this term includes computers outside of the United States so long as they affect "interstate or foreign commerce or communication of the United States." 18 U.S.C. § 1030(e)(2)(B). By clarifying the fact that a domestic offense exists, the United States can now use speedier domestic procedures to join in international hacker investigations. As these crimes often involve investigators and victims in more than one country, fostering international law enforcement cooperation is essential. In addition, the amendment creates the option, where appropriate, of prosecuting such criminals in the United States. Since the U.S. is urging other countries to ensure that they can vindicate the interests of U.S. victims for computer crimes that originate in their nations, this provision will allow the U.S. to provide reciprocal coverage. The Department of Justice therefore views the amendment as more than a mere clarification of existing law, but as an expansion of U.S. jurisdiction to permit, for the first time, the United States to prosecute cases where both the attacker and the victim are located outside the United States, and to apply U.S. substantive and procedural law to such international activity. International Law Computer crime in general, and computer hacking in particular, has always been recognized as a uniquely trans-national offense. Hackers from anywhere in the world can engage in activities that will affect computers outside of the country from which they originate. Moreover, computer viruses, worms and other malicious code do not respect international boundaries, and can damage information or computers located in countries far remote from those where the hacker is located. Interestingly, when a hacker in Singapore released the "I Love You" virus affecting computers all over the world, only the U.S. FBI traveled to Singapore to investigate. When the "Melissa" virus swept across the planet, no foreign law enforcement officials descended on New Jersey to prosecute David Smith, the author of the virus, nor were any such officials publicly invited to participate. Nevertheless, these cases demonstrate an important principle of international law -- the so-called "protective principle." Every nation has the right to extend the scope of its law beyond its borders to protect the rights and property of its own nationals. An attack on a U.S. citizen abroad may violate U.S. law. A gunshot from Canada that kills a person in the United States may properly be prosecuted in the United States. A hacker who attacks a computer in the United States from a foreign country violates U.S. law, and it is entirely appropriate that the United States should have the authority to protect itself from such attacks. Whether the U.S. will take the lead in such investigations or not will depend not so much on law, but on international politics. The recent Council of Europe Cybercrime Treaty encourages countries to make computer crime an offense within their own borders, and to cooperate on international investigations of computer crime. In its interpretation of the need for the unprecedented expansion of U.S. sovereignty, the Department of Justice asserts that U.S. law enforcement agencies would not investigate cases of computer crime where the victim and targets are located outside the United States, not because of the lack of any authority to do so, but because, of a lack of will. In fact, there is much truth to this assertion. Many law enforcement agencies see no reason to assist foreign governments' investigations where there is no likelihood that they will obtain a conviction within the country. However, the appropriate response to this reluctance is to encourage domestic law enforcement agencies to assist their foreign brethren voluntarily, not to expand the scope of domestic law to permit prosecution within the United States of what is essentially a foreign offense. When Reach Exceeds Grasp Congress' authority to criminalize conduct generally is derived from Article I of the Constitution, which, among other things allows the legislature to regulate interstate and foreign commerce. The statute is broad and allows the protection of the instrumentalities and channels of interstate or foreign commerce. In 1995 the Supreme Court noted that Congress' power was limited though to regulate those activities that "substantially affect" interstate commerce and not merely those where the affect is tangential. The distinction is crucial. Clearly if a U.S. computer or computer network is shut down, attacked, penetrated, or prevented from properly functioning as a result of foreign hacking activity, the protective principle of international law should properly permit a U.S. prosecution. Where the affect on U.S. computer networks is slight -- to the point of non-existence -- the U.S. should not impose its law on the activity. The new statute requires no threshold of damage or even effect on U.S. computers to trigger U.S. sovereignty. The vast majority of Internet traffic travels through the United States, with more than half of the traffic traveling through Northern Virginia alone. The mere fact that packets relating to the criminal activity travel through the United States should not be enough to trigger U.S. jurisdiction, even though such traffic would "affect" international commerce, albeit infinitesimally. The expanded statute, and the DOJ policy guidance, would permit the U.S. to impose its law on the Internet generally, without the need to show damage or trespass to a U.S. computer, merely on the basis of packets being inadvertently routed through U.S. computers. This represents and unwarranted and dangerous expansion of U.S. sovereignty, and will invariably result in more turf battles with foreign law enforcement agencies, rather than fewer. Under the Department of Justice's interpretation of this legislation, a computer hacker in Frankfurt Germany who hacks into a computer in Cologne Germany could be prosecuted in the Eastern District of Virginia in Alexandria if the packet of related to the attack traveled through America Online's computers. Moreover, the United States would reserve the right to demand that the extradition of the hacker even if the conduct would not have violated German law, or to, as it has in other kinds of cases, simply remove the offender forcibly for trial. What is perhaps the most troubling about this legislation, in addition to the lack of any debate or focus on it, is the fact that the Department of Justice manual simply says that this unprecedented power will be used in "appropriate cases." The Department of Justice provides no guidance to prosecutors or citizens of the world what kinds of cases it will deem to be "appropriate" for the expanded jurisdiction. The Department of Justice has no procedures in place to mandate high-level DOJ review before such power can be used. A prosecutor in Boise may therefore decide to go after a Norwegian hacker for hacking a computer in Oslo, if the packets "affected" interstate commerce, and the prosecutor thinks it "appropriate." Every country has the right to protect its own citizens, property and interests. No country has the right to impose its will, its values, its mores or laws on conduct that occurs outside its borders even if they may have a tangential effect on that country. The new legislation permits the U.S. government to do just that, and is unwise and unwarranted. © 2001 SecurityFocus.com, all rights reserved. Mark D. Rasch, J.D., is the Vice President for Cyberlaw at Predictive Systems, Inc. in Reston, Virginia, a computer security and network design consulting firm. Prior to joining Predictive Systems, Mr. Rasch was the head of the U.S. Department of Justice Computer Crime Unit and prosecuted a series of high profile computer crime cases from 1984 to 1991.
Mark Rasch, 27 Nov 2001

Infineon freed from future Rambus DDR lawsuits

Rambus may never pursue Infineon for further alleged infringement of its DDR SDRAM patents, a US court has ruled. Judge Robert Payne issued the permanent injunction against Rambus in response to a request from Infineon. Judge Payne presided over Rambus' legal assault on Infineon in the Virginia District Court earlier this year - and Infineon's counter-action, which alleged the memory maker committed fraud by failing to reveal its intellectual property rights to the JEDEC committee working on a industry-wide standard from single-data-rate SDRAM. The jury agreed with Infineon's accusation. Consequently, Payne ruled that Rambus could take no further action against Infineon for alleged violation of its single-data-rate SDRAM technology. However, the way was left open for future action centring on claimed infringement of double-data-rate SDRAM patents. Infineon appears to have complained that since much of Rambus' DDR patents were based on the single-data-rate patents it had fraudulently hidden from JEDEC, it should be protected from lawsuits arising from alleged DDR patent infringement too. Judge Payne's ruling follows a judgement from fellow District Court judge, Ronald Whyte, this time in Northern California, that Hynix's JEDEC-based single-data-rate SDRAM chips do not infringe Rambus' patents. He will not return to the case until Rambus' appeal against the Infineon judgement that its patents do not cover memory made to the JEDEC specification is heard. In the meantime, Rambus' third action, against memory maker Micron, is expected to begin next April. It's hard to see that case coming to a conclusion before the Appeal Court issues a judgment, and that isn't expected until late 2002 or early 2003. ® Related Rambus vs Infineon Stories Rambus must pay Infineon $7.12 million Infineon lets Rambus retain SDRAM patents Rambus damns fraud trial as a 'miscarriage of justice' Infineon damages slashed Guilty! Rambus committed fraud Rambus loses patent fight Related Rambus vs Micron Stories Judge postpones Hynix Rambus patent suit Rambus seeks 18-month Micron trial delay Rambus, Micron SDRAM patent trial delayed
Tony Smith, 27 Nov 2001

Palm to shut personal data portal

UpdatedUpdated Palm is to close its MyPalm Web-based personal information management service on 10 January 2002, the company has warned the portal's users. The move comes as no big surprise: Palm rid itself of a dozen workers at the MyPalm HQ in Cambridge, Massachusetts recently, according to sources close to the company. "All MyPalm Web portal services... will cease operation... All PIM data will be permanently deleted from the MyPalm portal and will no longer be accessible," a message on the site states. Between now and 10 January, users should transfer their online information to their PDA or a PC-based PIM, the company suggests. And users should forward their Palm.com-addressed email to another account, the message states. Palm.com email addresses will be deleted on 10 January. Only subscribers to Palm's Palm.net wireless Net access service will be allowed to maintain their Palm.com email addresses. MyPalm was launched a year ago, shortly after Palm acquired online PIM company AnyData.com in May 2000 for $80 million in cash. The plan was to provide a universal Web-based PIM allowing users to access their diaries, address books, to-do lists and so on from any machine with a Net connection, anywhere. MyPalm got into hot water early on after Palm found that the mypalm.com domain name was already owned, by British IT consultant Dominic Hulewicz. After accusing Hulewicz of being a cybersquatter - he said he only used the domain name for his own email - and threatening all kinds of legal action, the company leased the name from him for an undisclosed sum. Since mypalm.com reverted to Hulewicz last September and Palm apparently made no attempt to maintain the lease, it seems likely that the site's days were numbered even then. Essentially, MyPalm was a portal play, geared to making money by bringing in viewers who would pay for subscription services and encourage advertisers to play their wares on the site. Palm also hoped the provision of PIM services would encourage users to buy its PDAs to allow them to access their personal information when they weren't connected to the Web. The plan's flaw is that if you've got a PDA with you, you don't need to access your data via the Web. Keeping Web data synchronised with a PDA on the off-chance that you might leave the device at home, was presumably too much of an effort for most Palm users. And a PDA is perceived to be rather more secure than a Web site. ® Related Stories Palm calms down to work with MyPalm.com owner Palm leans on 'cybersquatter' who predicts future
Tony Smith, 27 Nov 2001

Refusenik attorneys want $14-$38bn from MS

Microsoft's cunning wheeze of dumping shedloads of free software (free to both involved parties, really) on IT-deprived US schools will be challenged today by a rival bunch of attorneys. The free deal was negotiated by Washington attorney Michael Hausfeld, and is allegedly worth $1 billion. But the refuseniks reckon Redmond should really have to cough up the considerably more bracing, and more than a little elastic, sum of $14.3-$38.6 billion. It's not entirely clear how either of those figures was arrived at, but Terry Gross of Gross & Belsky, one of the Californian ringleaders, has previously estimated that the class action covers around ten million users in California alone. The attorneys' estimate of the tab Microsoft should settle for California is from $3-$9 billion, hence you can calculate that at $300-$900 per Californian Windows user. Seems a bit steep? Well, a study carried out for the attorneys reckoned that Californian users were overcharged an average of $151, which is a figure large enough to be significant but small enough for people not to notice. A guilty verdict in the suit could lead to tripling of damages, getting us to $450, which is not of course $900, but neatly inside the $3-9 billion. The even bigger numbers take into account the other 16 States whose antitrust law prudently allows suits on behalf of people other than direct purchasers. In the remaining US States you can only sue the outfit you purchased the goods from for overcharging, and as very few people will have actually purchased directly from Microsoft, quite a few of the first suits that were filed were thrown out. The schools deal is therefore reasonable for some of the people suing Microsoft, because it's better than nothing, while the (international) telephone numbers the Californians and friends see make them disinclined to let Redmond off the hook so cheaply. The attorneys will be objecting to the proposed deal to a federal judge in Baltimore later today. ® Related stories: Red Hat trumps MS poor kids offer
John Lettice, 27 Nov 2001

BT finally sells £2.4 bn in property

BT has finally signed the deal which will see it sell £2.4 billion worth of property and then hire it back on a lease, providing the debt-laden telco with some much-needed financial relief. The plan to sell about 6,700 properties, including offices, telephone exchanges, vehicle depots, warehouses, call centres and computer centres was first touted in January this year as mounting debt forced BT to look at modern business practices. And yesterday, it signed over 5.5 million square metres to Telereal - a joint venture between Land Securities Trillium and The Pears Group. The deal was struck in April - just before new debt-warrior Sir Christopher Bland was installed as new chairman. Then, in July, the price was set for a scaled-back deal (down from 7,500 properties initially) and Telereal was left to raise the money on the bond market. Never one to miss an opportunity to tell worried investors that it is cutting debt, BT has announced the deal for the fourth time today. Although it will actually be completed on 14 December, so we may see another press release then. BT will pay Telereal £6 per square foot a year and £190 million (increasing at three per cent a year) for the freeholds. Bland said of the deal: "This transaction is another important step in our restructuring and debt reduction programme." ® Related Stories BT completes £2.3bn property sale BT builds for the future
Kieren McCarthy, 27 Nov 2001

Mobo wrestling and maxing 3DMark

HWRoundupHWRoundup Mobo wrestling Tom's Hardware Guide gets its hands on with thirteen motherboards, putting VIA's KT266A chipset head to head with nVidia's nForce 420D. Oh the whole, nVidia feels the force of a VIA smackdown, with a board from Soltek holding the champion's belt at the end of it all. Soyo made a close runner up in the race. The site is also shouting about its second video, entitled 'Cracking the AMD Athlon XP/MPs'. It has three minutes of 720x576 resolution movie packaged into a 9.9MB file through various tweaking efforts. Get yer mitts on it now. Talking of mobos, Amdmb.com has a review of an Abit KG7-RAID board here. Chill out, speed up Time to chill? It seems like everything inside PCs these days needs an ice-block clutched permanently to its forehead. The latest victim is memory modules, Cryoeniac somehow manages to fill five pages with details on everything you need to know about keeping them cooled. VR-Zone has an article on how to reach a 10,000+ score in 3DMark 2001. It has lots of pics and instructions on what to fiddle with and tweak, all of which gave it a score of 11,199. Prepare to get your work-bench messy. AnandTech has an update on the nVidia NV17M graphics chip launched at Comdex and discusses some confusion surrounding its choice of name, as well as picking up on a couple of little features that have been excluded. The site is also promoting its first book, 'The AnandTech guide to PC Gaming Hardware'. We discussed some issues with MSI's K7T266Pro2-RU mobo last week and provided some links for people looking for advice. Canadian reseller Hard Data is advising users to check their memory module configurations. It says it has experienced issues with modules specifically from supplier Crucial Technology when using two sticks of memory on these boards, although a single stick ran fine. Other readers have commented on a variety of other possibilities for getting the board to work as it should. A wide variety are posted on MSI's forum. Got something interesting on the hardware wires? Drop us a mail. Related Stories Sony cuts Japanese PS2 pricing VIA beats off Intel legal attack Linux app makes Xbox gaming a reality Intel preps transistor for 20GHz+ CPUs Next Linux kernel, v2.5, is born
James Watson, 27 Nov 2001

IR35 appeal date set

The Professional Contractors Group (PCG) will return to the High Court on 4-6 December to appeal against an April judgment that the government's controversial IR35 tax legislation is not illegal. The group - which represents 14,000 independent contractors, mostly in IT - argues that the measure is illegal under European law since it counts as illegal state aid and a barrier to free movement. High Court judge Mr Justice Burton ruled in April this year that IR35 was not against the law. He did, however, find in the PCG's favour on all findings of fact and criticised the Inland Revenue over the legislation. The PCG refused to say after the judgement whether it would appeal, but after gathering the support of its members for a fighting fund, announced in August that it would. Today, the date was set. The PCG's Chairman, Jane Akshar, said: "The High Court found in PCG's favour on so many factual issues that we felt it was only a small step to prove that not only is this law unfair and uncompetitive - it is also illegal." The PCG will be using the same lawyer as last time - Mr Gerald Barling QC, an expert on such matters. And the war cabinet will again congregate at the Cheshire Cheese pub, a short walk from the High Court. IR35 seeks to treat contractors on short-term contracts as employees of the company rather than independent workers. This has immediate tax implications and strongly affects the IT consultant market which is organised typically on a project-based basis. The PCG was set up to support the contractors' cause and argues that the law demonstrates the government's lack of understanding of the modern work market. ® Related Stories PCG appeals against IR35 ruling IR35 judicial review over IR35: the govt's viewpoint IR35 protesters enter High Court IR35 High Court date set CBI, FSB, PCG ask for rethink on IR35
Kieren McCarthy, 27 Nov 2001

Europe semicon sales fall

European semiconductor revenues will be $29 billion this year, a 33 per cent drop from 2000. Worldwide, revenues for the sector are set to fall 35 per cent, according to new numbers out from Gartner Dataquest. The research company says 2001 will mark the largest semiconductor revenue downturn ever recorded. On the plus side, it expects 2002 will be the start of the recovery, picking Europe up to $30 billion in revenue, as well as building up steam to achieve a 31 per cent growth rate by 2003. Gartner reckons three factors will allow this to happen: Intellectual property; China's entry into the WTO; and emerging technologies like digital video, wireless, digital modems, cars and smart card applications. It says intellectual property (IP) will enable semiconductors to reach the demands placed by Moore's law and OEMs. The burgeoning IP market grew 40 per cent in 2000 and is expected to show a compound growth rate of 38 per cent until 2005. Knocking down the wall to China will create a major new market to drive growth and various emerging technologies are creating additional vehicles to stimulate demand in the sector. ® Related Stories Intel preps transistor for 20GHz+ CPUs
James Watson, 27 Nov 2001

This is what Microsoft said about grey imports in 1998

This article was published on The Register in March 1998. Last year, Levi Strauss & Co refused to allow UK supermarket chain Tesco to stock its denims. The jeans manufacturer had spent years and millions of pounds persuading the Great British public to stump up £50 for a pair for the privilege of wearing the brand. And it saw no reason for letting the supermarket chain disrupt this happy state of affairs. Undeterred by this egregious example of selective distribution, Tesco collared 30,000 unauthorised pairs of Levis from a US distie, and promptly knocked them out to the British public at £30 a throw. This week, Tesco is in the news again, for grey importing Sony Playstations. A small victory for common sense and the consumer, you may think. But no: Tesco could well have broken the law, judging from Microsoft's interpretation of its rights. Under the copyright designs and patents act 1988 and Trade Marks Act 1994, it is illegal to import/ distribute into the UK without the copyright or trade mark owner's consent. So long as the product originates from outside the EU parallel importing between EU countries is sanctioned by the Treaty of Rome articles promoting fair competition. Which brings us back to Microsoft. Last year, the vendor acknowledged the rights of wholesalers to import and distribute 'legitimate' but unauthorised grey software. But the disties had to make clear to customers there would be no support from Microsoft for the product. It has now toughened its position. In a recent flyer prepared for the trade, Microsoft says "Grey software is illegal. There is no such thing as grey software whether it's bought or sold, it contravenes the following laws. "Copyright designs and patent act 1988; trade marks act 1994; European Union directive for the legal protection of computer programs of 1981; copyright (computer programs) regulations 1992. In practice this means, any Microsoft software imported from the US, and anything with academic edition stamped on it." Microsoft will defend its "rights" through raid and seize tactics. Last year, the company made more than 50 raids through Operation Major Strike. And this year it plans many more, Microsoft anti-piracy head David Gregory reveals. Anything between 40 and 90 per cent of grey software is counterfeit, according to whose estimates you believe. That means anything between 10 and 60 per cent is "legitimate". According to Gregory, most leads on so-called piracy come from the public. These leads are referred to Trading Standards bodies. So raids and seizures are actually subsidised by local councils. We have seen cases where thousands of shrink-wrapped copies are taken, arrests are made, and then... silence for months, while Microsoft determines whether software is counterfeit or not. If trading standards are wrong, then the public - and not Microsoft - pays for the error. Lucky Microsoft. Microsoft is entitled of course to safeguard its intellectual property rights - and use what ever blunt instrument it has at its disposal. But the tactics it is deploying in its campaign against parallel importing look very dubious indeed. Leaving aside possible breaches of international trading law - confirmation of which would require the attentions of the EU or the WTO - actions against 'legitimate' grey imports act against consumer interests. Grey markets exist where companies maintain differential pricing. And Microsoft operates a huge pricing spread for its products. If Microsoft worked off one global price list parallel imports would disappear overnight.. But global pricing is not in Microsoft's interests. By extracting top dollar from companies and individuals with limited negotiating power, Microsoft creams more profits. The grey market reflects Microsoft's own pricing strategy. No more, No less. The market needs a test case to challenge Microsoft's "right" to stop parallel imports. Any chance of getting Tesco involved? ® Fade to Grey Grey software is not black and white The Tesco ruling - what does it mean for grey software? Vendors beat up on grey market German ruling loosens MS lock on reselling of Windows
Drew Cullen, 27 Nov 2001

Revenue up at Kingston Communications

Shares in Kingston Communications rose five per cent in mid-morning trading despite reporting widening losses for the first half of the year. Turnover for H1 leapt 44 per cent to £148.7 million compared to the same period last year. Earnings before interest etc (EBITDA) also increased by 44 per cent to £9.4 million on last year, and by a whopping 129 per cent from quarter one to quarter two in 2001. But these improvements in EBITDA were offset by related charges concerning investment in its long distance network. As a result, group operating losses at the alternative carrier increased to £15.0 million from £8.0 million in the first half of last year. However, the company is confident that its tight rein on overheads will not damage its prospects for growth. Said chairman Michael Abrahams: "Kingston continues to deliver robust growth despite the tougher economic climate. "Based on current trends in its business performance, the board is confident that the company remains on track to deliver further growth in the second half of the year," he said. By mid morning shares were up 5.25p (4.46 per cent) at 123p. ®
Tim Richardson, 27 Nov 2001

Samsung damns DRAM price-fixing charge

Samsung did not attempt to drive DRAM prices down even further in a bid to push lesser players out of business, and it rejects any claims that it did, the company has said. The denial followed comments, reported in the Financial Times yesterday, from Infineon chief Ulrich Schumacher that the recent lift in DRAM prices had come about not because of increased demand but because a Korean rival's scheme to lower memory prices artificially had come to an abrupt end. "The guy who artificially pushed prices down realised it did not make sense now," he said, referring to Hynix's $7 billion rescue plan, recently agreed to by the ailing chip maker's creditors. "If [Hynix] are going to be around for another four to five months, they realised they would not have enough money to do that." Schumacher doesn't appear to have explicitly pinned the blame on Samsung, but as the only other major Korean memory player besides Hynix, most observers took his comments to refer to that company. But Samsung maintains its innocence and damned Schumacher's comments as "total nonsense". "Just one company could not decide the price," company spokesman James Chung told Reuters. Well if it cut prices enough to force its rivals to follow suit, it could, but there's no sign that Samsung did. DRAM have prices tumbled throughout the year to the point where almost all memory makers are selling product at below cost price. If Samsung did push a little harder, it would only have been hastening the decline, not initiating it. And memory vendor DRAMeXchange blames all the major producers for controlling shipments, rather than a single company pressuring the market into a change of pricing direction. That said, both Samsung and Hynix have already come under fire for allegedly pushing down prices. Micron has asked the US government to issue a complaint to the World Trade Organisation alleging that Hynix dumped DRAM onto the US market. And four Japanese memory makers - NEC, Toshiba, Matsushita and Hitachi - have asked their government to bring their own dumping allegations regarding Samsung and Hynix to the WTO's attention. In Europe, Infineon is believed to have made similar moves. ® Related Stories Infineon slams Samsung DRAM 'artificial pricing' DRAM bounces back (maybe) Samsung goes mad on memory chips Matsushita, Hitachi back NEC ,Toshiba DRAM dumping charge NEC, Toshiba moot anti-Hynix, anti-dumping complaints Hynix bail-out plan sets Micron a-grumbling
Tony Smith, 27 Nov 2001

Intel Xeon multi-processing chip to ship next month

Intel's multi-way Xeon MP server chip, codenamed Foster, will arrive next month - a month ahead of the part's official release - courtesy of IBM. Big Blue yesterday unveiled its x360 server, which will be based on four Xeon MP chips running at 1.5GHz or 1.6GHz. Both versions will begin shipping in December, the company said. The official debut of the Xeon MP will take place in January, according to Intel's internal roadmap. The 0.18 micron processor, which is based on the Pentium 4 core but features between 512KB and 1MB of on-die L3 cache, was originally to have been launched last October, but Intel delayed the part, claiming that it needed "further validation". Intel inevitably begins shipping new processors some way ahead of their official launch to ensure that vendors can ship systems on the same day. IBM appears to have decided that it's going to start offering Xeon MP-based servers just as soon as the chip turns up. This probably explains why it admitted that the x360 will only be initially available in limited quantities - it's not entirely sure how many chips Intel will truck over. We can't say how much IBM will want for one of its new servers, but we can reveal how much Intel is charging for the chips. Prices for the 1.4, 1.5 and 1.6GHz multi-way Xeon MPs will be $1177, $1980 and $3692, respectively. The 1.4GHz and 1.5GHz parts contain 512KB of on-die L3; the 1.6GHz chip has 1MB of cache. The 'MP' moniker has been on the cards for some months now and, as some AMD fan-boy sites have proclaimed, is indeed an attempt to compare the chips to AMD's own Athlon MP. But since AMD felt the need to nick someone else's name, XP, to promote its latest desktop processors, we don't feel it or its proponents have much of a right to complain about Intel using the same tactic. IBM's machines, meanwhile, are designed to bridge the gap between its 32-bit offerings and 64-bit products - an interesting point to stress, given that Intel's second-generation 64-bit Itanium chip, McKinley, is going into pilot production any day now. ® Related Story Intel delays MP Xeon
Tony Smith, 27 Nov 2001

Autodesk ‘not concerned’ by Microsoft motto mishap

Autodesk has decided not to charge Microsoft with trademark violation - despite the software giant's use of the CAD specialist's trademarked tagline 'Suddenly Everything Clicks'. Microsoft uses the phrase in its Windows XP advertising campaign, which has been the target of a series of pro-Linux defacements. Posters proclaiming that, thanks to XP, 'Suddenly Everything Clicks' have been spotted by Register readers from all over the UK and in parts of North America. However, Autodesk's Web site, which contains a list of trademarks taken by the company, showed that 'Suddenly Everything Clicks' had already been appropriated by the CAD company. Fortunately, Steve 'Monkeyman' Ballmer needn't lose any more sleep over the matter, as Autodesk has kindly decided it doesn't want the trademark any longer, essentially permitting Microsoft to take the slogan for its own. Says Autodesk's legal team: "This trademark had been associated with a product that Autodesk is no longer offering, and for all intents and purposes we have abandoned this mark. Generally a trademark is not considered abandoned by its owner until two years after its last known use. Because we are approaching that anniversary, we will remove it from our list, as we have had no plans to reactivate it." Indeed, so long ago was the 'Suddenly Everything Clicks' slogan coined that even Autodesk staffers can't recall quite what it had been used to promote. No wonder, then, that Microsoft come up with the same catchphrase entirely independently. Not that Autodesk would have much of a leg to stand on if Microsoft had been aware of the trademark since it failed to register its slogan with the US Patent and Trademark Office. "It would have been difficult, therefore, for Microsoft to have known that it was one of our claimed marks," says Autodesk. Ignorance is, of course, no defence, but we think Microsoft is safe on this one. Which is more than you can say for its billboards... ® Related Stories Autodesk trademark appears in WinXP ad Linux fans 'hack' Windows XP adverts
Tony Smith, 27 Nov 2001

Microsoft's eHome out of the closet

Microsoft came out of the closet yesterday on its eHome strategy with a talk from Mike Toutonghi, the man in charge. The title of the presentation, "Thinking outside the box: distributing the power of the PC throughout the home", tells you most of what you need to know. Your Windows-powered PC will deliver entertainment the way you want it, work as a unified communications centre and make it all available in a convenient, easy-to-manage way. Toutonghi says the unit is focusing on creating partnerships with various home appliance and PC makers, as well as working to create industry standards, manage digital rights and more. Presumably, it will also work on finding ways to tie together its other home-targeted products (Xbox, Microsoft TV, etc.). Although the eHome unit was assembled last February, Microsoft has not said much about it, bar a deal brokered in October with Samsung, where the two companies agreed to co-operate on some home/entertainment appliances. Samsung will make the hardware bits and Microsoft will contribute its Media Player and "eHome technologies". Microsoft anticipates future homes being wired together and sharing information in ways not yet seen outside of Gates' house. Everything will be networked, PCs will talk to stereos, appliances will be used for home control systems and Windows Media Player and WMA format will be popping up everywhere. As yet, no actual eHome products, or timelines for products, have been revealed. The Samsung-MS alliance expects to produce a product sometime in 2002. ® Related Story MS-Samsung sign Windows home network, digital music deal
James Watson, 27 Nov 2001

Hybrid viruses set to become bigger threat

Viruses which try to infect users through a variety of means, such as the infamous Nimda worm, and mass mailers are predicted to become even more of a problem for Internet users next year. That's the prediction of anti-virus firm Sophos which has gazed into the crystal ball and come up with some predictions for the threats we'll see next year. Here they are: Mass mailing Windows 32 viruses, such as Nimda and SirCam, to become even more common. Executables have been the most common type of virus reported to Sophos this year More macro and script viruses, which are easy to write with virus writing toolkits A increased incidence of Remote Access Trojans or Backdoor Trojan horses An increase in attacks on Unix systems More Code Red-style Internet worms directly targeting Web servers Combined (or cocktail) attacks, where viruses combine different spreading techniques and payloads, to become more common The risk that hype about viruses might blind users to possible problems ('virus fatigue') But little likelihood, according to Sophos, that there will be "an avalanche of new viruses affecting mobile devices" Apart from the risk from viruses on handhelds and smartphones, other antivirus vendors broadly agree with Sophos about coming risks. Symantec is placing particular emphasis on the risk of viruses which use hybrid modes of attack (e.g. attacking a firm both through infected email and its Web server) might pose in the future. A good example of this type of virus is Nimda. Virus writers still sex-obsessed nerds not terrorists Although viruses themselves are getting more sophisticated, virus writers are not. Sex continues to be a favourite method of tempting users into infection with the technique becoming, if anything, even more popular. Graham Cluley, senior technology consultant at Sophos, said virus writers are still predominantly males of between 14-24, who are looked down upon by hackers, even though the two groups are not as far apart as they used to be. There's little evidence that terrorists are interested in developing viruses, which in any case make poor weapons, according to Cluley. Up to date anti-virus software and safe computing practices (such as not opening suspicious attachments, blocking dangerous file types and applying security patches) stop viruses dead in their tracks. It's also difficult to target viruses, Cluley points out. ® Related Stories BadTrans virus bites Windows users hard SirCam blitz is damp squib Thousands of idiots still infected by SirCam SirCam virus hogs connections with spam Firms hit in Nimda mutant outbreak Nimda worm tails off Users haven't learned any lessons from the Love Bug Rise in viruses within emails outpacing growth of email There's a virus in my WinXP system, part two
John Leyden, 27 Nov 2001

Brown gives IT firms and small business more tax breaks

Pre-Budget reportPre-Budget report Chancellor Gordon Brown has delivered his pre-Budget report and silenced the endless commentary on how he will split up the government cash between public services and tax credits aimed at removing poverty and encouraging business. The answer is: he will give huge amounts of money to both. Well, what did you expect? Who knows how the figures will break down in reality, and no doubt there will be a lot of coverage tomorrow on his decisions regarding the NHS and pensions. However, with regard to The Register's area of interest, there was an overwhelming sense of déjà vu. Brown gave almost the exact same speech in March this year. There is some tinkering with tax credits and rates: a new tax credit for research and development to "boost innovation". To encourage entrepreneurship capital gains tax on business assets will be reduced to 20 per cent for those held over one year and 10 per cent for over two years. The share option scheme for small business will be extended - how or by how much we don't know at the moment, but Mr Brown reckons this is worth £30 million. Also for small business, the threshold for 10p corporation tax for increased and a new flat-rate VAT scheme will cut back on red tape and save a company, on average, £1,000 a year, he said. The chancellor went on for ages about how he had cut back national debt and how the reduction was worth £1 billion a year to the UK (we'll ignore the fact that he then went on to spend this £1 billion about ten times over). In 1997, debt was 54 per cent of our national income; now it's just 31 per cent (compared to 40 per cent for the US and Germany). He planned to pay back £34 billion this year but thanks to "tough fiscal rules" this has been increased to £37 billion. He was more candid this time about where this huge sum of money came from (we normally pay back about £9 billion a year). He admitted: "Instead of using the £22 billion from mobile phone licences on current spending we used it to pay off national debt and have achieved a permanent saving..." etc. etc. It's an indication of how little new was in the speech that the chancellor can give the same speech eight months later. Even the abolition of football pools tax was done last time with the abolition of gaming tax. Not that that is a bad thing. Oh, and Mr Brown said that he had waved the green flag on the review over whether the UK fits in with his famous five economic tests to join the euro. ® Related Story 3G phones fund the UK's future
Kieren McCarthy, 27 Nov 2001

Sign up here for a better Broadband Britain

A UK businessman is looking to collect one million signatures by Christmas as part of a campaign to highlight the failures of Broadband Britain. PR and marketing man Barrie Desmond says he is "fed up" with the current state of play of high speed DSL and leased line services in the UK, and has launched broadband4britain.co.uk to campaign for change. "Broadband Britain - more like broadbanned in Britain," he scoffs on his campaign Web site. In a no-nonsense approach Mr Desmond punches out his concerns claiming that the "wheels have come off the UK's Broadband-Wagon" and that the "cost for services are rising" and "economic development is being affected". He blames the failure of Broadband Britain on the cost of deployment and services, lack of awareness and "Bt's stranglehold" on DSL services. Speaking to The Register Mr Desmond's anger and frustration with current broadband services was clearly evident. He said that there is "such bad feeling" in the country at the moment and that he no longer wanted to be "one of the silent majority". "I'm looking to get a million signatures and then dump them on the Government's doorstep," he said. In a statement he added: "High speed broadband services should be like water - a fundamental given right. At this time, the UK's record is scandalous. "Analysts say Broadband in Britain is in decline and even Bill Gates has commented on the poor state of the UK in broadband terms, calling it the biggest threat to the Internet in the UK. "Blair can say what he wants about Broadband Britain - it's a joke. The wheels of the 'broadband-wagon' are falling off," he said. Mr Desmond, whose company represents a broadband wireless operator, said that the campaign received no backing from any of his clients and was wholly independent, representing his views and opinions as an independent marketing consultant and small business owner. Later this week the Government is due to respond to the report submitted by the Broadband Stakeholder Group in the autumn, which called for a series of initiatives, including tax breaks, to boost the take-up of hi-speed Internet services in the UK. However, a leaked draft report seen by The Register explained that even if all the initiatives contained in the report were carried out the UK would still fail to meet Government broadband targets. ® Related Stories UK will miss 2005 broadband goal UK leads Italy in broadband stakes DSL should be £20 a month, says report E-minister calls for lower broadband prices
Tim Richardson, 27 Nov 2001

Mobile phone biz will resist Dell-ification – Nokia CEO

Nokia CEO Jorma "Jurma" Ollila brushed aside comparisons between the mobile phone and PC industries today. In his introduction to eight hours of presentations by Nokia to financial analysts in New York, Ollila sought to dampen predictions that phone makers would become low margin box-shifters in the future. Nokia's flurry of recent announcements - touting its own software offerings with its OMA (Open Mobile Architecture) platform pitch, and services - have seen speculation that Nokia would move away from a business that's being increasingly commoditized and open. "It is not correct that we see a PC low-value hardware business model: we will ensure this will not happen" said Ollila. "The phone will not be a commodity. Technical advances are slowing down, we hear - but this is not the case. There is no slowdown in the technical advances in RF, hardware, software and integration." He explicitly went out of his way to de-emphasise the importance of software alone in the mix. That's a sideswipe at Microsoft, of course - but it also serves to highlight Nokia's own integration, hardware and product design skills. And these are skills that aren't really needed in today's low-end PC business, where integration skills mean not dropping the screwdriver. "You will get it all wrong if you talk about software and forget about the hardware," he said. "People say product differences are disappearing - this is not the case. We don't see competitors catching up. People say we'll have phones on one chip - this is not the case," he said. Which is odd, as the Nokia 9210 Communicator - which featured in almost every slide in the presentations - is a "one chip" phone, running NOS as the primary OS and the Symbian OS as a thread. And the Hilden communicator is believed to adopt a similar approach. Ollila clearly wanted to put the breaks on talk of Nokia moving away from its biggest money earner: handsets. 3G a Money Spinner Nokia said that it will see significant revenues from 3G WCDMA next year, bringing a dual mode 3G handset to market in the second half of next year. Hutchison yesterday confirmed that it will roll out dual mode 3G handsets from NEC in Q4 2002. Nokia said most of the ramp from terminals, rather than carrier deployments of 3G would take place in the first half of 2003. And Ollila said he wasn't worried by the slow take-up of wireless data: "they're adopting the same wait-and-see mode that did happen with GSM in 1991 to 1993. It's a similar learning curve." Nokia also announced that Matsushita was testing the Series 60 side of its OMA offering: that's the one that runs on Symbian smartphones (a parallel bundle offers similar software for cheaper text mode phones). Matsushita is a Symbian shareholder, and "evaluating" is some way short of being a licensee for OMA. But Nokia is determined to maintain the blizzard of publicity around the platform, and is expected to unveil real licensees next week. Analysts were keen to see what Nokia views as the key differentiators against .NET, and what it will do with Club Nokia. For the latter we'll have to wait until this afternoon, Eastern Time. But without mentioning The Beast by name all morning, Nokia said it had 20,000 R&D staff, half of whom worked in software. And it talked about "open, non-proprietary architectures" where the user has control of authentication and services. Then it reminded everyone how code size, energy consumption and reliability - not Microsoft's strongest mobile assets - were important. "It's a very important distinction to look at the competencies between companies," said Nokia President Pekka Ala-Pietilä. There was one tantalising detail which showed up how the different the world views of Nokia and Microsoft really are. In his session, Ala-Pietelä predicted a services market worth E810bn, of which transactions account for a mere two per cent. In the Hailstorm scheme of things, the Vig - which goes direct to Redmond - as we understand it, it's significantly higher. We'll update this as the day continues. ® Related Stories Can Club Nokia thwart .NET? NEC kick-starts Hutchison 3G UK campaign Motorola changes face of mobile industry Gates rails at 'proprietary Symbian', looks for the insanity defence
Andrew Orlowski, 27 Nov 2001

Dixons buys into Italy

Dixons Stores Group has bought a 24 per cent stake in UniEuro, said to be Italy's most profitable electronics retail chain, for E103m. It has an option to buy the rest of the business for E425m, and is funding the deal from existing resources. These have been topped up nicely with the sale of E245m worth of shares in Wanadoo, the French ISP, today. UniEuro has 61 mostly large stores in Northern Italy, and has 3 per cent of the Italian market, placing it second behind Metro, the German stores giant which has 5 per cent. As Dixons points out, the Italian electrical retailing market is very fragmented indeed. So plenty of opportunity for growth. ®
Drew Cullen, 27 Nov 2001

Lego remakes Monty Python and the Holy Grail

Lego - for some it's the ultimate kids' toy, for others the basis of an entire culture of cool. We thought 1999's Star Wars sets rocked, but we never imagined that these small plastic bricks from Denmark could get any better. But, thanks to some nifty work by anarcho-syndicalist animation team Spite Your Face, we now have the entire Camelot sequence from Monty Python and the Holy Grail done in Lego. What else can we say? Stop grovelling, click here and enjoy... ®
Tony Smith, 27 Nov 2001

AV vendors split over FBI Trojan snoops

Antivirus vendors are at loggerheads over whether they should include in their software packages detection for a Trojan horse program reportedly under development by the FBI. A keystroke logging Trojan, called Magic Lantern, will enable investigators to discover break PGP encoded messages sent by suspects under investigation, MSNBC reports. By logging what a suspect types, and transmitting this back to investigators, the FBI could use Magic Lantern to work out a suspect's passphrase. Getting a target's private PGP keyring is easy in comparison, and with the two any message can be broken. MSNBC quotes unnamed sources who says that Magic Lantern could be sent to a target by email or planted on a suspect's PC by exploiting common operating system vulnerabilities. Although unconfirmed, the reports are been taken seriously in the security community, and are consistent with the admitted use of key-logging software in the investigation of suspected mobster Nicodemo Scarfo. In that case, FBI agents obtained a warrant to enter Scarfo's office and install keystroke logging software on his machine. Magic Lantern, which would be an extension of the Carnivore Internet surveillance program, takes the idea one step further by enabling agents to place a Trojan on a target's computer without having to gain physical access. The suggested technique creates a clutch of legal, ethical and technical issues. Greater powers in the Patriot Act, which Congress is considering, may allow the tool to be used. But what if it was modified for use by hackers? And antivirus vendors are mulling over the rights and wrongs of putting Magic Lantern on their virus definition list. Eric Chien, chief researcher at Symantec's antivirus research lab, said that provided a hypothetical keystroke logging tool was used only by the FBI, then Symantec would avoid updating its antivirus tools to detect such a Trojan. Symantec is yet to hear back from the FBI on its enquiries about Magic Lantern. "If it was under the control of the FBI, with appropriate technical safeguards in place to prevent possible misuse, and nobody else used it - we wouldn't detect it," said Chien. "However we would detect modified versions that might be used by hackers." Graham Cluley, senior technology consultant at Sophos, disagrees. He says it it wrong to deliberately refrain from detecting the virus, because its customers outside the US would expect protection against the Trojan. Such a move also creates an awkward precedent. Cluley adds: "What if the French intelligence service, or even the Greeks, created a Trojan horse program for this purpose? Should we ignore those too?" ® Related Stories Mafia trial to test FBI spying tactics FBI chief Mueller lied to Senate about key-logging FBI let off cyber snooping hook Anti-terror bill may regulate Carnivore use Trojan lets cyber-cops plant bogus evidence Zimmermann defends strong crypto against govt assault Do-it-yourself Internet anonymity
John Leyden, 27 Nov 2001