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Atari Online News, Etc. Volume 04 Issue 17
Volume 4, Issue 17 Atari Online News, Etc. April 26, 2002
Published and Copyright (c) 1999 - 2002
All Rights Reserved
Atari Online News, Etc.
A-ONE Online Magazine
Dana P. Jacobson, Publisher/Managing Editor
Joseph Mirando, Managing Editor
Rob Mahlert, Associate Editor
Atari Online News, Etc. Staff
Dana P. Jacobson -- Editor
Joe Mirando -- "People Are Talking"
Michael Burkley -- "Unabashed Atariophile"
Albert Dayes -- "CC: Classic Chips"
Rob Mahlert -- Web site
Thomas J. Andrews -- "Keeper of the Flame"
With Contributions by:
Dan Iacovelli
James Krych
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=~=~=~=
A-ONE #0417 04/26/02
~ Bill Gates Testifies! ~ People Are Talking! ~ McAfee Deal Killed!
~ Online Storage Risky! ~ EU Unveils Hacker Plan ~ JagFest 2K2 News!
~ HP's Fiorina Gets Testy ~ Spam Scam Shut Down! ~ GameCube Price Cut?
~ Xbox Co-creator Resigns ~ Kazaa Out In the Open! ~ 'Pong' Marathon!
-* States Dispute Gates' Claims *-
-* Hewlett Lawyers Claim Deal Deception *-
-* Gates: Remedies Would Have Barred Behavior *-
=~=~=~=
->From the Editor's Keyboard "Saying it like it is!"
""""""""""""""""""""""""""
I have to admit - this has been a terrible weather week for a vacation!
However, I didn't let it stop me from getting some things done nor enjoying
a week off. Since my plans are up in the air at the moment for the end of
the week, I thought I had better get a jump on this week's editorial which
usually waits until late.
I did manage to get in some relaxation - hanging around the house on those
cold and damp days in the beginning of the week. A little Diablo II was a
good outlet for pent-up stress! I did get some gardening done, but mostly
just getting them ready for planting once the warm(er) weather decides to
stick around. Got in some golfing as I had hoped, down on Cape Cod. That
was fun and relaxing. No, I didn't keep score, but Tiger Woods has nothing
to worry about as far as I'm concerned! Now I'm just holding off plans to
go to Maine to see my father until I hear what the weather outlook will be.
I heard rumors of snow and freezing rain headed north, so I may have to
postpone that road trip. We'll see in a few hours if things have changed.
If I head north Friday, this week's issue may likely be late getting out.
It looks like things may be winding down - finally - with regard to the
Microsoft antitrust case, as well as the HP-Compaq merger debate. Boy,
things are getting nasty in those two cases! Both defendants in these cases
didn't appear to help themselves out, but perhaps not as negatively as the
press portrayed - especially in the HP case. I still don't know how the
Microsoft case will end up, but my gut feeling is that the HP-Compaq merger
will go forward as planned regardless of the case Walter Hewlett's lawyers
put forth. I don't think there's enough evidence to kill that deal. Time
will, inevitably, tell.
Until next time...
=~=~=~=
PEOPLE ARE TALKING
compiled by Joe Mirando
joe@atarinews.org
Hidi ho friends and neighbors. Yep, it's that time again. This past
week just seemed to fly by. Maybe it's just part of getting older, or
maybe there's some really weird temporal effect going on that no one
has been able to put down on paper yet, but time really seems to be
going faster these days. That "getting older" thing was really just red
herring. <grin>
I'd like to take a minute to congratulate the 50 other members of the
TEAM ATARI SETI@home search group. As of this week, we have contributed
more than EIGHTY years of CPU time to the search for a radio signal
from an extraterrestrial intelligence. Sure, it's not a huge amount of
time when compared to the total of the whole project (over three
million users strong), but heck, there are only 51 of us. If you'd like
to make it 52, then go to:
http://iosef.ssl.berkeley.edu/cgi-bin/cgi?cmd=team_lookup&name=Team+Atari
and check it out. C'mon and help us hunt for ET's phone number!
Well, let's get to the stuff from the UseNet
============================================
Gil Parrish asks for help in finding HSMODEM:
"I need the HSMODEM software which (I gather) replaces the serial port
driver to provide faster speeds.
This software is mentioned in the Quick FAQ as an important component,
along with CAB1.5, STinG, and certain other software, to get an ST on
the internet. The FAQ has a link for it, but the link is bad. I
haven't found it elsewhere.
If you don't know where it can be found, the exact name of the package
would give me something better to search with."
Martin Tarenskeen tells Gil:
"Try looking for HSMODA07.LZH ( or was it HSMODA07.ZIP )"
Derryck Croker adds:
"The Chapelie ftp server is the best place to look for such.
You might also be interested in the English docs for HSModem, which are
available for download from my web site."
Michael Depke comes up with a URL:
"http://www.flinny.demon.co.uk/download.html"
Derryck Croker tells us that...
"Something basic is obviously escaping me, but I can't get QED to
reformat a paragraph - the menu entry is greyed out!"
Diedrich Dirks tells Derryck:
"Format Paragraph?
Look at: Options -> Local ... and select Line formatting.
(QED 4.53)"
Martin Tarenskeen asks:
"I can use my Falcon with the CT2b switched off or in Turbo mode with
TOS 7.x. But I when I select TOS 4.x from the CT2b bootmenu, my Falcon
crashes almost immediately. Is this mode completely useless, or am I
doing something wrong?"
Derryck Croker tells Martin:
"Yes, but to be honest I've never had to use it (I did have a problem
with copying files to floppy with TOS 7, but that's been sorted since).
It should boot up with the familiar Fuji logo along with the memory
test and boot delay if so configured.
Have you used the Centek NVRAM resetting tool and reset all the
parameters? Could be that it's become corrupted over time."
Martin tells Derryck:
"I'm having problems with the floppy sometimes. What did you do to solve
your problems ?
Yes, the Fuji logo appears just fine. But after some (HDDRIVER ?)
messages my system hangs with a long row of bombs. Maybe I have to
change some settings with HDDRIVER, or try a different HDDRIVER
version. (I now use HDDRIVER 7.71. I also have 7.8 ( an official disk
with a Serien-Nr herr Seimet :-) ) but 7.71 worked better with my CT2b.
I also tried an 8.0 demo, which also seems to work. Maybe I'll order an
update, and try the fully working version."
Janka Gerhard adds:
"I think I tried that mode too when I got the CT2b but since IIRC it
is the same as 7.x but without fastram access it seemed to make no
sense to use it afterwards."
Mickael Pointier asks about the STEs analog joystick ports:
"My question is simple: Since the STE has two additional joystick ports
with analog input, I wonder if it's possible to do any kind of
signal sampling on it?
Is it possible to sample audio data, and if yes, at which
frequency/range?"
Adam Klobukowski tells Mickael:
"This STE additional joystick ports look like 15-pin pc analog joystick
ports, but they are not. Signals at this ports are standard joystick
signal (like joystick you can hook up in STFM, AMIGA or 8bit machines).
There are some additional signals for paddles, etc.
Concluding: sampling is impossible (well, nothing is impossible), but
using an adapter you can hook there two additional joysticks, paddles or
jagpads."
Wef Dinaina asks about finding some pictures in that amazing (for its
time) format... Spectrum512:
"I'm looking for a site or ftp-archive I can download Spectrum 512 files
from. I know it's old hat, but the nostalgia but grabbed me recently.
Googling (SPU, SPC, Spectrum 512) doesn't do much regarding images, for
some reason, so I tried that first of course, and this just seems the
right group to ask."
'Brume' tells Wef:
"Spectrum 512 (and many other gfx-prg) in on the brilliant DHS website:
http://www.dhs.nu"
Nick Harlow adds:
"Or if you want an original, try:
http://www.1632-sales.zenwebhosting.com/acatalog/16_32_Catalogue_Graphics___
Image_Manipulation_Software_11.html"
Well folks, that's it for this time around. Tune in again next week,
same time, same station, and be ready to listen to that they are saying
when...
PEOPLE ARE TALKING
=~=~=~=
->In This Week's Gaming Section - Xbox Co-creator Resigns!
""""""""""""""""""""""""""""" GameCube Price Cut?!
NBA Titles! 'Mr. Mosquito'!
And much more!
=~=~=~=
->A-ONE's Game Console Industry News - The Latest Gaming News!
""""""""""""""""""""""""""""""""""
Xbox Co-Creator Resigns to Start New Venture
The co-creator of Microsoft Corp.'s Xbox video game console has resigned
days after the software giant conceded the unit was struggling
internationally and would miss its initial sales targets, Microsoft said on
Monday.
Seamus Blackley, a physicist by training who also worked in Hollywood
before joining Microsoft, plans to start some sort of new venture, the
details of which he will begin discussing in the next few weeks, according
to his spokeswoman, Susan Lusty.
Lusty declined to discuss Blackley's plans, and, without elaborating, a
Microsoft spokesman only said the former Xbox executive was leaving to
"pursue other opportunities."
News of Blackley's departure comes just days after Microsoft said it would
miss its fiscal year-end sales target for the Xbox by as much as 40 percent,
a shortfall it blamed on weak international sales. Those weak sales led to
price cuts in Europe and Australia last week.
"I think that the guy is responsible for the positioning of the product,
and I think Microsoft positioned the product wrong when they launched,"
said Michael Pachter, an analyst at Wedbush Morgan Securities. "It's an
over-engineered product."
The console has also struggled in Japan, selling just over 190,000 units
in its first six weeks there, according to Japanese game magazine
publisher Enterbrain Inc. By comparison, the console sold nearly 1.5
million units in its first six weeks in the U.S. last year.
Blackley worked at the video game arm of Hollywood movie studio DreamWorks
before joining Microsoft as head of the company's Advanced Technology
Group. Before his stint at DreamWorks, he was also a noted designer of
flight simulation games.
He has been one of the Xbox's public faces from the start, even going so
far as to propose to his fiance during the Xbox's launch on Nov. 15 in
Times Square in New York.
A book being launched tomorrow about the history of the Xbox project,
"Opening the Xbox," by journalist Dean Takahashi, features a forward
written by Blackley and centers in large part on the genesis of the
project through him.
The book, and Blackley's resignation, come as the video game industry is
in the midst of gearing up for the Electronic Entertainment Expo, or E3,
which begins on May 21 in Los Angeles.
Industry executives, analysts and observers generally believe Microsoft is
likely to cut the Xbox's price from $299 to $249 or even $199 at some
point this year, though they are divided as to whether such a cut will
come at E3 or later in the year, perhaps around September, a more
traditional time for price cuts.
Nintendo Cuts Planned GameCube Price for Europe
Nintendo Co. Ltd. on Monday upped the ante in the hotly contested video
games market by cutting the price of its GameCube consoles by up to
24 percent in Europe, two weeks before launch.
GameCube machines will go on sale in Europe on May 3 for 199 euros (US$177),
down 20 percent from the earlier announced price of 250 euros, and for
129 pounds ($186.7) in Britain, a 24 percent discount.
Nintendo's move follows Microsoft's decision last week to cut the price of
its Xbox consoles in Europe, putting it in line with best-selling rival,
Sony's PlayStation 2, at 299 euros and 199 pounds in Britain.
The GameCube will now retail at 100 euros cheaper than Xbox and
PlayStation 2 in Europe, although the latter two come with a built-in DVD
drive.
GameCube will launch amid the most competitive video games console market
in memory. Nintendo, Microsoft and Sony are battling for dominance in a
$20 billion-plus market that now rivals the film and music industry as the
favorite past-time of teens and twenty-somethings.
Nintendo plans to rollout its GameCube video game consoles in Europe in
two weeks, initially shipping 500,000 units with a marketing budget of 100
million euros. The company plans to ship another 500,000 units within the
following eight weeks.
Nintendo, which has already shipped four million GameCube consoles
worldwide, said it had made the cut as it felt if could pass on production
economies of scale to consumers.
Console makers traditionally institute a price cut within the first 12
months of launch to reignite demand but there was industry surprise at the
rapidity of the GameCube cut.
"To change the price structure two weeks from launch is incredible," said
Stuart Dinsey, managing editor of Games Trade Weekly MCV.
He added that Nintendo may have imposed the cut to put further pressure on
Microsoft's Xbox, which has registered disappointing sales in Germany and
France.
David Gocen, managing director of Nintendo Europe, told Reuters the
decision was not influenced by last week's Xbox cut.
"We wanted to tell consumers that if they buy GameCube on May 3 they will
be buying it at the best possible price," Gocen told Reuters.
Others suggested the move was indeed executed to put further heat on
Microsoft and give GameCube ample sales momentum in the run-up to the
crucial pre-Christmas period.
"Historically, there's only been room for two consoles, not three," Dinsey
said. "Obviously, this is an attempt by Nintendo to put the pressure on
Microsoft and try to squeeze them out."
Gocen said Nintendo has taken 30,000 pre-orders for GameCube in the UK,
and expects that number to reach 50,000 by launch. He added that the
European market has become increasingly important to Nintendo, representing
over 20 percent of global sales.
Microsoft's sooner-than-expected price cut, intended to shore up sagging
sales of Xbox, fueled speculation of a global price war in Europe, Japan
and the United States.
But Hiroshi Imanishi, head of Nintendo's public relations, explained the
price cut had been under consideration for some time.
"We had originally planned to offer GameCube below 200 euros but needed to
figure out specific production costs before actually announcing the
price," he said.
Imanishi said the company planned to manufacture GameCube machines in
Japan and China for global shipment, with the intention of boosting China
production in the future to pare back manufacturing costs.
In Japan, Nintendo shipped 1.29 million GameCubes between its September 14
debut and March 31, while Xbox sold 190,092 units from a February 22
launch to March 31, according to Japanese game magazine publisher
Enterbrain Inc.
Three NBA Titles Put You on the Court
For NBA fans, this is the time of the year that really matters - the
playoffs.
For NBA videogame fans, this is also an excellent time. There are a number
of good basketball titles on shelves right now, no matter which system you
pledge your allegiance to.
Let's take a look at one for each of the current systems, and see if we
can pick a winner.
Now appearing on the PlayStation 2 is Konami's version of NBA play. "NBA
2Night 2002" is a decent overall package that won't disappoint.
I found the offense to be the easiest to handle, although it can match up
against the other titles, spin move for spin move. There are the key
options you have to have for a complete basketball experience, including
Franchise mode and create-a-player.
Graphics are good, with nicely detailed players and a great crowd. Passing
is a treat; hold down the L1 button and button symbols appear over the
heads of your teammates. Simply hit the button representing the player you
want to get the ball and it's done.
Game play is fast and there aren't a lot of fluke steals or turnovers to
tempt you to throw your controller at the wall.
Give it a B. It's a solid alternative to Sega's all-conquering "NBA 2K2."
Xbox owners should take a look at "NBA Inside Drive 2002." High Voltage
Software has done a decent job of putting a solid, comprehensive package
together for Microsoft's mighty machine.
"Inside Drive" offers a wide variety of options to let you make the game
yours.
The arenas are good, the uniforms are excellent and only the players
themselves seem a bit like they were whipped up in some science lab. The
expressions are cold, like a space alien posing as human. A 6-foot-8-inch
human.
Commentary by Kevin Calabro and former star Marques Johnson is adequate,
although it suffers from the repetition problem. There are only so many
funny things you can say about basketball before you start tripping on
your tongue. Not a problem unique to this game, of course.
I found the shooting to be inconsistent. A shot I bagged on one trip down
the floor clanked like a hammer on an anvil the next. Steals are common,
traveling is a plague and that 10-point run will soon be wiped out by the
console's 12-point string.
The game is also missing some of the more common sports features. No
franchise mode. No make-your-own-player. On the plus side, there's a whole
page in the manual given over to "dekes," those tricky moves that get a
player free for a shot or a drive.
The game's biggest problem, however, is that Sega isn't hogging "NBA 2K2"
for its own system anymore. The premier basketball title is available for
Xbox, and if you want the best, that's it.
Not awful, not great. Give it a C+.
I tried "NBA 2K2" on Nintendo's Gamecube. Visual Concept's spectacular
creation is even better than the last version, with improved ball handling,
solid fundamentals and the best look yet for NBA hoops.
I love the perspective. When you take the ball out under the opponent's
basket, you can see the entire court, not just the half you're on. This
opens up great opportunities for passing and dunks aplenty. You're
rewarded for solid team play, but you can also shake-and-bake one-on-one,
if that's your game.
Every option you can think of is included. Adjust the speed of the game,
obey or ignore NBA rules, post-ups, picks, create-a-player, franchise -
it's all here and it all works.
Graphics are excellent, including the players and the arenas. There can be
only one NBA champion, and there can be only one top title. "NBA 2K2" gets
an A. It's simply the best.
All three titles are rated E, for ages 6 and up.
'Mister Mosquito' Excels in Weirdness, Lacks Bite
Here's the buzz on "Mister Mosquito," the PlayStation 2 game from Eidos
($50) where your job is to fly throughout the home of Kenichi and Kaneyo
Yamada, and their teen-age daughter. Your ultimate goal: suck their blood.
Yes, they're good people and you'll make them itchy and miserable. Yes,
they'll try to snuff out your miserable little existence as soon as they
realize you are there. But you don't care. As the narrator informs you
during a droning opening monologue: You're now a mosquito. It's what you
do. Get over it.
I'll be the first to admit that I like bizarre things. For example, I
enjoyed the 1997 Windows game "Banzai Bug," where you assume the role of
an insect trapped inside the house of a high-tech exterminator. But "Bug"
performed its mission with a lot more style and humor. "Mosquito" seems
bland by comparison, and some elements of "Mosquito" were too weird, even
for me.
One was the realization that Mr. Mosquito is a freak of nature. It's not
just his immense belly, which makes you wonder if he's been sucking too
much blood in the first place, or the huge mammal-like eyes, or the snout
that looks like a toilet plunger. It's the simple fact that Mr. Mosquito is
a mister.
In real life, only female mosquitoes can suck blood. So, in truth, he is
a she. Who would have thought that cross-dressing would extend to the
insect world?
At the beginning of each level -- at least the ones I got through -- your
assignment is to approach the human and find the perfect spot for landing.
The game doesn't let you attack any exposed area. Instead, you have to zero
in on a glowing red marker. Once locked in, a press of a button allows you
to zoom to the spot and land. Pressing the right thumbstick lets Mr.
Mosquito plunge his (or should I be saying her?) proboscis into the skin.
Moving the thumbstick in a circular motion at the proper rate brings in the
blood.
If you collect enough blood by filling your belly and the vials that are
hidden throughout the rooms -- avoiding the pink clouds of insecticide
in the process -- you can go on to the next level.
As in real life, it's a game that can end VERY quickly. If you are detected
while drinking, one swipe of the hand is all it takes to send you back to
the start of the level.
But in other cases, where they see or hear you, the humans come after you.
The Yamadas become lumbering giants with Godzilla-like stomps, as they try
to track you down and swipe your buzzin' little butt into oblivion.
To your advantage, the controls let you flit around, making it easy to
dodge the swipes of the slow-moving human hand. You can also escape to
areas of the room that are inaccessible to the Yamadas, although that only
buys you some time.
If you want the human to stop the attack, you have to make Mr. Mosquito
fly straight into a certain part of the human anatomy. If you hit the
wrong spot, you're stunned by the impact and vulnerable to being swatted.
If you're successful, your victim stops and, in some cases, decides to lie
down.
This is weird, but it gets weirder.
The vulnerable point for the teen-age daughter, Rena, turns out to be
just above her groin. And when you hit the spot, she says, "Oooooo, bliss!"
and heads for the bed to rest. I can't begin to imagine what the developers
of this game would see in a Rorschach inkblot test.
The game does have some charms. It's fun to eavesdrop on the Yamadas. In
addition, you can perform all kinds of mischief, such as whacking the
remote control button and turning off the television so Mr. Yamada, who
sports a hideous comb-over, has to keep getting up to fix it.
I kept turning the lights off on Rena (after all, she kept complaining
that she was tired), but she insisted on putting them back on. I was
disappointed when, after the third time, she didn't run screaming from
the room, convinced it was haunted. Perhaps Japanese mosquitoes do those
kinds of things.
In other ways, "Mister Mosquito" is simply tiresome, especially when the
characters keep saying the same things over and over. It is one game that
left me scratching my head.
Video Game Channel Launches with 'Pong' Marathon
Imagine watching a white ball bouncing back and forth across a black TV
screen, 24 hours a day, for a full week.
G4, a new cable channel devoted exclusively to video games that went live
on Wednesday, plans to broadcast a live game of "Pong" -- widely
considered the first consumer video game -- for seven days straight.
G4, backed by a $150 million investment from cable giant Comcast Corp. ,
flipped the switch at 3 a.m. EDT with a total of 3 million subscribers on
digital cable platforms from Comcast and Midwestern operator Insight.
The channel plans to offer 13 original weekly series, focusing on topics
like sports games, gaming reviews, and hints and tricks for winning at
popular video games. It is expected to have 350 to 400 hours of original
content per year.
"Our mission is to capture all those elements of the video game business,"
G4 founder and Chief Executive Charles Hirschhorn told Reuters earlier
this year.
The launch comes at a time when the video game industry is at the
beginning of a multi-year growth cycle, with some analysts estimating the
industry will see more than 20 percent growth for at least the next two
years.
Gov. Ventura Plans Video Game Pitch
Gov. Jesse Ventura may soon become more animated than ever.
Ventura's campaign committee, credited in 1998 with its effective use of
the Internet as a campaign tool, is again exploring how to break new ground
this time through interactive campaign-themed video games.
Forget the standard glossy leaflets most candidates send out. The games, on
CDs or DVDs or posted on Ventura's Web site, would feature the former
professional wrestler, presumably touting his political accomplishments and
putting the heat on his opponents.
"There's no shortage of material for a number of games," said Phil Madsen,
treasurer of the Jesse Ventura Volunteer Committee.
The Ventura game or collection of games would be entertaining, 100
percent political and distributed free to voters as campaign literature, he
said. While the games are just in the talking stage, Madsen described what
might emerge as "an ongoing political cartoon."
First, though, there's a potential legal hurdle: Would the games be
considered campaign literature or gifts? Minnesota law prohibits a campaign
from giving most gifts to voters.
Madsen has asked the state's Campaign Finance and Public Disclosure Board
for an opinion, but board members said this week that the gift clause
doesn't appear to fall under their jurisdiction. It's unclear, exactly,
what group might have jurisdiction.
In the meantime, the video game idea is still in its talking stages, and
Ventura hasn't yet been approached with the suggestion.
The governor has said he won't decide whether he'll run until the July
candidate filing period, but Madsen said he wants to be ready just in case.
"I'd much rather be prepared for a campaign that doesn't happen than to be
unprepared for one that does," he said.
Joseph Turow, professor of communications at the Annenberg School for
Communications at the University of Pennsylvania, said the use of video
games is a logical next step in the integration of politics and
entertainment.
"In a crowded media environment, breaking through is what you need to do,"
he said. "If you can break through, particularly if they're younger
voters or unaffiliated voters, it's terrific."
=~=~=~=
->A-ONE Gaming Online - Online Users Growl & Purr!
"""""""""""""""""""
Jagfest 2002
Sixth annual Atari Jaguar Festival to be held Downtown St. Louis
For immediate Release:
April 17, 2002
Greg George webmaster of The Atari Times, James Garvin of OMC Games and
Daniel Iacovelli Chairperson of The Atari Video Club/Jaguar Community
United has agreed to host the Sixth Annual Atari Jaguar Festival (dubbed
Jagfest 2k2) in downtown St. Louis, Missouri at The Mayfair Wyndham
Historic Hotel. (806 St. Charles Street St. Louis, Missouri 63101.
(Phone: 314-421-2500.) For the first time this event will be held on two
days instead of one, Friday, July 12th and Saturday, July 13th 2002.
The scheduled time for the event is 10am to 6pm on the first day and 10am
to 4pm on the second day (a full schedule of events will be announced in
the days to come).
Admission cost for this event is $25.00 for those who wish to pre-pay and
$30.00 for those who wish pay at the door; this cost covers for both days.
At this time table prices are estimated to be: Visitor tables: $40.00
Dealer Tables: $50.00 (extra tables are $5.00 each) (Table Fees are
subject to change)
For more information On Jag fest 2k2 e-mail Greg George at
greg@ataritimes.com, James Garvin at omc@omcgames.com or Daniel
Iacovelli at atarivideoclub@yahoo.com or visit the Jagfest 2002 site at
http://omcgames.com/jagfest/jf2k2.html (be sure to visit the Jag fest
message board and post your ideas for this event.)
CCAG 2002
The Classic Computer And Gaming (CCAG) Show 2002 is on!
"We, the CCAG organizers, regret that it took so long to officially
announce the CCAG 2002 Show. However, we are also very glad that the CCAG
2001 Show did NOT take place after September 11th, 2001. Had CCAG 2001
taken place after 9-11, we would have had to cancel. Because we had used a
National Guard Armory for the previous two CCAG's, we were not able to rent
the Armory again after the events of 9-11. We have been able to locate and
secure a facility for CCAG 2002! We again apologize for the delay, as we
were only able to know with certainty, in the past several days. See you
all at the CCAG 2002!!!"
CCAG 2002 Staff
The Classic Computer And Gaming Show 2002 will be held on May 25th, 2002
from 8AM till 2 PM. Vendor setup is on the 24th from 5:30PM till 9PM, and
from 6:30AM till 8AM on the 25th. Show location is at the St. John Lutheran
Church, 11333 Granger Road, Garfield Hts. Ohio, 44125.
Here is our own site for more information and current status of vendors and
attendees.
www.ccagshow.com
Table rental is $5 this year, and admission is only $2. The admission fee
will also allow you to be eligible for a drawing at 1PM, the 25th, for an
Arcade machine! (You will need a way to take the machine home with you!)
The web site, www.ccagshow.com, has site info, table layouts, map info,
etc.
We hope to see you there at the CCAG 2002!
CCAG will have a limited number of a CCAG-exclusive release for
collectors!!!
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A-ONE's Headline News
The Latest in Computer Technology News
Compiled by: Dana P. Jacobson
Gates Testifies in Microsoft Case
For the first time in Microsoft's four-year antitrust battle, Bill Gates
took the witness stand Monday and personally chastised states for seeking
penalties he said would cripple the American software giant.
With a mix of computer slide shows and short, calm answers, Gates sought
to rebut the arguments of nine states that have asked a court to further
punish Microsoft for operating an illegal monopoly that hurt competitors
and consumers.
Gates offered no apologies for his company's business practices. Instead,
he portrayed Microsoft's flagship Windows software as the epicenter of
innovation in America's computer revolution - a revolution that would be
stifled by the states' proposed penalties, hurting consumers and the wider
industry.
"The (remedies) would turn back the clock on Windows development and
effectively freeze it there," Gates testified at one point, delivering in
person the warnings that Microsoft has made for months in court documents.
He said the health of the personal computer "ecosystem depends in
substantial part upon the continued health of and improvements to
Windows."
At one point, he suggested Microsoft might need to lay off half of its
15,000 workers or pull Windows from the marketplace as fallout from the
proposed penalties.
"The practical effect ... would be to cripple Microsoft as a technology
company," Gates wrote in 150 pages of written testimony that was submitted
along with his appearance.
Gates' performance Monday contrasted sharply from his 1998 videotaped
testimony that became a key piece of evidence in the first phase of the
antitrust trial. Gates was criticized for appearing fidgety, evasive and
combative in that tape.
On Monday, he spurned his customary casual attire for a traditional blue
suit and purple tie and brought his wife to the courtroom.
Under intense questioning by states' lawyer Steven Kuney, the Microsoft
chairman occasionally chuckled before taking issue with definitions or
assumptions. He was to return Tuesday for more questioning.
Gates began his testimony with a computer-generated slideshow. He
demonstrated how, if the states successfully persuaded a court to force
Microsoft to remove the Internet Explorer Web browser, essential
components of Windows would stop working.
"This shows that if you remove this block of code, other functions are
degraded in the most extreme way. They no longer work," Gates said,
referring to the removal of the Explorer software.
In his written testimony, Gates exhaustively countered every argument the
states had made in favor of penalties. During cross examination, the
states' lawyers sought to turn his words to their advantage.
At one point, Kuney challenged Gates' assertion that Microsoft does all it
can to disclose technical information so software developers can write
programs that work well with Microsoft products.
The lawyer cited an internal memo in which Gates instructed his employees
to stop trying to make sure Microsoft Office documents would work with
rival Web browsers.
"We have to stop putting any effort into this," he said in the December
1998 e-mail. "Anything else is suicide for our platform. This is a case
where Office has to avoid doing something to (destroy) Windows."
Confronted with the memo, Gates said he believed it was inefficient for
engineers to spend their time on an effort that was "not making any
progress."
Gates appearance came a little over two years after a court concluded his
company operated as an illegal monpoly that thwarted competitors and hurt
consumers.
The Justice Department and nine other states settled the case last fall and
their deal with Microsoft is awaiting court approval. The nine states
remaining in the case want U.S. District Judge Colleen Kollar-Kotelly to
impose tougher penalties than those in the settlement.
Those penalties include requiring Microsoft to share with competitors
technical information and blueprints about how some of its most popular
software works and creating a modular version of Windows that could
incorporate other software makers' products.
In his written testimony, Gates argued such penalties would cause "a
massive transfer of Microsoft's intellectual property rights" to
competitors, leaving no motivation for Microsoft to continue being
innovative.
And he said the consumer would ultimately pay the price.
Gates also argued the penalties would allow competitors to create Windows
clones. He named five companies that have assisted the states' lawsuit
that he said could create the clones: AOL Time Warner, Sun, Gateway,
Novell and Oracle.
States that rejected the government's settlement with Microsoft and are
continuing to pursue the antitrust case are Iowa, Utah, Massachusetts,
Connecticut, California, Kansas, Florida, Minnesota and West Virginia,
along with the District of Columbia.
Gates: Remedies Would Bar Behavior
Although he's highly critical of the remedies proposed by nine states and
the District of Columbia in his company's antitrust trial, Microsoft
Chairman Bill Gates acknowledged Tuesday that some of the restrictions
would have prevented the company from engaging in behavior that an earlier
court deemed illegal.
In cross-examination during his second day on the witness stand, Gates
reluctantly said the proposed remedies would not have prevented Microsoft
from threatening to cease development of Mac Office if Apple Computer had
not installed Internet Explorer on new computers.
Similarly, Gates said, Microsoft would not have been able to bully Intel
into stopping development of software that could have competed against
Windows. Both actions were found to be illegal during the trial phase of
the four-year antitrust case.
Gates, though, added that the settlement Microsoft reached with the
Department of Justice also would have restrained the company in a similar
manner.
Gates further testified that Netscape's Internet browser and Sun
Microsystems' Java software represented a competitive threat against
Windows. In his written testimony, submitted Monday, Gates wrote that the
two technologies "supposedly" posed a competitive threat.
In 2000, a federal court found that Microsoft violated antitrust laws by
using its heft in operating systems to capture the market for Web browsers.
Following the conclusions and a series of appeals, the Redmond, Wash.-based
software giant and the Department of Justice hammered out a settlement
agreement in November 2001.
Rather than sign on to the settlement, nine states and the District of
Columbia decided to pursue the case and proposed their own remedies. Among
other restrictions, this group is seeking a proposal that would prevent
Microsoft from retaliating against companies that adopt competing
technologies and would require Microsoft to support a wider variety of
Windows.
Like previous witnesses, Gates first submitted written testimony and then
took the stand to be cross-examined orally. Also like some other witnesses,
Gates made statements that have seemingly dented his credibility.
When he first took the stand Monday, Gates was the picture of professorial
cool, holding in his temper, which had hurt him earlier in videotaped
depositions.
Gates remained highly critical of the states' settlement proposal,
however, calling it ambiguous and "impossible" for Microsoft to follow.
The company would be forced into a game of "endless second-guessing" every
time it changed a product to determine whether it was violating the law,
Gates said. Design efforts in the early stages of a product might later
inadvertently hurt third parties and be deemed violations of the law under
the proposal, he said.
"We're allowed to make mistakes," the billionaire said.
Microsoft's attorney, Dan Webb, strongly objected to some of the
questioning directed at Gates. "We are using the word 'supposedly'...to
re-litigate the entire Netscape and Java case," he said at one point. But
his objection was overruled.
Steven Kuney, the attorney for the states, also asked Gates whether older
versions of Windows should be made available to consumers at a lower price.
"That's not a choice you want consumers to make, is it, Mr. Gates?" Kuney
asked.
States Dispute Gates' Windows Claim
Microsoft Chairman Bill Gates said Wednesday the company has not tried to
figure out how to remove elements of its Windows operating system, because
the task would be impossible.
But Steven Kuney, a lawyer for nine states seeking tougher penalties
against the software giant, pointed to a product Microsoft already offers,
which lets companies choose which components they want to put into Windows
and automatically adds other, required portions.
The product, mentioned periodically during the case, is Windows XP
Embedded. XP Embedded is made for devices like television set-top boxes and
automatic teller machines, although it is possible to configure it as a
full-featured desktop operating system.
The product contains the "same binary files as Windows XP Professional.
Therefore, it supports all the same features," the program says in its
user guide.
Microsoft uses its licensing terms to bar consumers from running XP
Embedded on personal computers.
In the configuration program, a user can choose to add or remove the
Internet Explorer Web browser, Windows Media Player music and movie
software, or a long list of other features. In consumer versions of
Windows XP, removing Internet Explorer is not possible.
"There's no suggestion at least at this point this is a modified or
truncated version of Internet Explorer, is there Mr. Gates?," Kuney asked.
"No, there is not," Gates replied.
Under questioning, Gates admitted that Microsoft's popular Office business
software could be configured to work on XP Embedded.
Andrew Appel, a Princeton University computer scientist, testified for the
nine states suing for antitrust violations. Appel suggested several ways
Microsoft could comply with their demand for a "modular" version of
Windows.
The issue stems from how different portions of Windows are reliant on each
other. If one piece is removed, such as the part of the Internet Explorer
Web browser that makes Web pages appear, other features like the Windows
Help system would break.
But XP Embedded recognizes those dependencies and adds the vital
functions.
The states want to let computer manufacturers remove Internet Explorer and
other features of Windows and substitute competing software. That, the
states say, would reduce Microsoft's advantage, give consumers more choice
and let software developers make many different kinds of programs.
The Justice Department and nine other states settled the case last fall and
their deal with Microsoft is awaiting court approval. The states remaining
in the case, along with the District of Columbia, want U.S. District Judge
Colleen Kollar-Kotelly to impose tougher penalties than those in the
settlement.
The penalties sought would include requiring Microsoft to share with
competitors technical information and blueprints about how some of its
most popular software works and sell the rights to translate its Office
business software to other operating systems.
Hewlett Attorneys Claim Deal Deception
Lawyers for dissident Hewlett-Packard Co. shareholder Walter Hewlett cited
internal company memos and personal documents in court Tuesday as evidence
that executives deceived investors about the financial prospects of HP's
proposed $19 billion purchase of rival Compaq Computer Corp.
In opening statements in Hewlett's attempt to overturn a shareholder vote
approving the deal, Hewlett lawyer Stephen Neal claimed HP executives knew
as late as a few days before shareholders were set to vote on the deal
last month that internal projections showed the financial benefits would
fall well short of what HP publicly touted.
A personal journal entry Compaq CEO Michael Capellas made in late February
or early March was headed "sobering thought" and said "at our course and
speed we will fail."
At the same time, a select group of HP and Compaq executives held regular
meetings on the merger's progression and consulted a chart that showed the
widening gap between current projected financial benefits of the merger
and what was promised when the merger was initially proposed to
shareholders in an SEC filing. The series of charts was presented to the
judge Tuesday, but was kept from view of the courtroom to protect company
secrets.
Neal also presented an e-mail from a member of HP chief financial officer
Bob Wayman's staff who had conducted one internal study on the financials.
The message to Wayman said "The attached is a frightening reality check.
... I see little realistic upside and I am not alone. I sincerely hope we
all start acknowledging the realities soon."
Neal said HP's internal projections showed the deal would likely reduce
the combined company's earnings per share by as much as 25 percent rather
than boost them, at least in the near term. He also suggested that HP
suddenly found a way to make the numbers work once the judge ruled to let
Hewlett's suit go to trial.
HP chairwoman and chief executive Carly Fiorina took the stand first, and
insisted that the company's original projections were based on the best
estimates at the time and that it was known that they were subject to
change.
Speaking in a voice so soft, she was asked to speak up several times,
Fiorina testified that she did not disclose the updated projections to
shareholders because "it would be irresponsible to do so." She explained
that the reports are not a full picture of the company's targets.
Fiorina testified for more than 4 1/2 hours and was to resume Wednesday
morning.
The official certification of HP's shareholder vote on the deal, first
announced seven months ago, is expected within days, but Hewlett is asking
a Delaware Chancery Court judge to invalidate those results.
Hewlett first fought the deal in a public relations battle with HP on the
grounds that buying Compaq was too risky and would bog HP down in the weak
personal-computer market at the expense of its profitable printing
division.
In his lawsuit, he contends HP won its slim majority in the March 19
shareholder vote by threatening to take business away from at least one
big investor, Deutsche Bank, in addition to hiding unflattering information
about HP and Compaq's ability to carry out the merger.
Neal claimed Deutsche Bank was doing work for HP to help the company with
"market intelligence" and was promised $1 million bonus if deal was
approved. That payment was approved by HP chief financial officer Bob
Wayman without HP chairwoman and chief executive Carly Fiorina's knowledge,
Neal told the court.
Fiorina testified that she was aware there was some kind of business
arrangement, but didn't know anything about a related payment to Deutsche
Bank.
Fiorina personally thanked head of Deutsche Bank for "going to bat for us"
with the bank's proxy committee, Neal said, citing a voice-mail, which
Fiorina ended by saying, "I look forward to doing business with you" in
the future.
Hewlett-Packard has denied wrongdoing, and Deutsche Asset Management has
said it merely voted the shares it controlled in the best interests of its
investment clients.
HP attorney Steven Schatz said the signoff was typical for any conversation
with an investment bank and said there are other memos showing the merger
plan was ahead of schedule.
"The shareholders vote should be honored," Schatz said. "Management
integrity has been impugned on the flimsiest of bases."
In a scene normally reserved for popular sporting events and concerts,
about 100 people - mostly attorneys, investors and journalists - lined up
outside the courthouse. Some had paid others to stand in line overnight to
ensure they would get inside the courtroom.
"This is a such high profile case, everybody's afraid they're not going to
get a seat for the trial," said Rob Campbell, 27, an employee at a local
courier service who was paid $20 an hour by a law firm to line up outside
the courthouse at 3 a.m.
The trial, being heard by one of the court's expert business judges and
not a jury, is expected to last three days. The Delaware Chancery Court in
Wilmington, which has jurisdiction over the governance of companies that
are incorporated in the state, including HP.
A preliminary tally released last week by an independent proxy certifying
firm found that 51.4 percent of HP shares were voted for the Compaq deal,
and 48.6 percent came out against. With more than 1.6 billion shares
voted, HP beat Hewlett by 45 million shares - a margin of less than 3
percent.
Hewlett hopes Chancellor William Chandler III negates the vote either by
voiding certain investors' shares or by determining that HP corrupted the
entire process by buying votes.
Hewlett believes Deutsche Asset Management originally voted 25 million HP
shares against the deal but switched 17 million just before the shareholder
meeting, which came days after Deutsche Bank helped arrange a $4 billion
credit facility for HP.
Barring court intervention, Fiorina said HP is prepared to close the deal
May 7, and that job cuts resulting from the merger likely will be around
13,000 instead of the 15,000 HP previously anticipated. Hewlett had said
24,000 might be necessary.
HP's Fiorina Testifies as Trial Wraps Up
Hewlett-Packard Co. Chief Executive Carly Fiorina conceded in court on
Thursday she told Deutsche Bank asset managers their vote in favor of her
company's hotly contested plan to buy Compaq Computer Corp. was of "great
importance to our ongoing relationship."
The comments came on the last day of the three-day trial here in which
Walter Hewlett, a son of an HP founder and dissident board member, seeks
to throw out a March 19 shareholder vote in favor of the $18 billion deal
to buy Compaq.
The trial was a shorter version of the extended battle that Fiorina and
Walter Hewlett have fought since late last year in the press and in
documents to shareholders after Hewlett began soliciting votes against the
merger.
He says the deal would create a company too large to grow quickly while
Fiorina says the combined companies can compete more effectively.
The trial comes as HP is trying to close that acquisition of Houston-based
Compaq. Last week, HP said that it had won the vote by a sufficient margin
and during testimony here, executives said they planned to launch to the
combined company on May 7.
Chancellor William Chandler, who requested post-trial briefs instead of
closing arguments as part of his effort to limit the trial to three days,
said he expected to deliver a response "very quickly."
Thursday morning, Walter Hewlett's lawyer Stephen Neal presented Fiorina
with a transcript of a conference call she and other HP executives held
the morning of the vote to convince Deutsche Bank's asset management team
to change their stance and back the deal.
Neal has argued that Deutsche Bank asset managers, who did switch their
vote and back the merger that day, did so under pressure of losing future
investment banking business.
"This is obviously of great importance to us as a company and it's of
great importance to our ongoing relationship," the transcript said. "We
very much would like to have your support here. We think this is a
crucially important decision for the company."
Fiorina, in a testy exchange with Neal, read from the transcript. She
later said she was trying to convey that she appreciated Deutsche Bank's
time and hoped to work with them again, pointing out the bank is a large
customer of HP.
HP played down the transcript, which caused investor confidence in the
deal to falter early Thursday when it was first revealed. And after the
trial ended, HP said that it believed Walter Hewlett had failed to prove
his allegations that the Palo Alto, California computer and printer maker
had coerced Deutsche Bank or misled investors.
"We clearly believe the plaintiffs failed to prove their claims. HP's
management and Board members demonstrated over and over again that they
acted properly and consistently in the interest of shareowners. We look
forward to the Chancellor's ruling and will continue to prepare for the
launch of the new HP," HP said in a statement.
Walter Hewlett, who testified for about an hour and a half on Wednesday,
declined to comment after the trial.
One lawyer for a Delaware-based firm who attended the trial said that he
believed that HP had probably come out ahead because Walter Hewlett's side
had failed to prove that HP management should have disclosed internal
business group estimates to its shareholders ahead of the March 19 vote.
Walter Hewlett said those estimates, which showed group estimates for 2003
revenue and operating profit below HP management's numbers, should have
been disclosed.
"I think the Delaware courts are probably going to be reluctant to set a
precedent that unreliable, internal information in any contested merger is
required to be disclosed," Mark Saltzburg of Morris, James, Hitchens &
Williams LLP said.
"The real question is whether this rises above the material threshold," he
added.
In addition, he said there didn't appear to be enough to prove coercion
regarding Deutsche Bank.
Deutsche Bank has said its asset managers had not considered Deutsche's
banking business when deciding how to vote its shares.
Deutsche Bank on Tuesday said it had been hired in January as a "secondary"
merger adviser to Hewlett-Packard.
Asset managers and investment bankers working at a single firm are supposed
to work separately, although the so-called "Chinese walls" have come under
heightened scrutiny lately.
The latest courtroom development added concern about the chances for the
deal's success into the market.
The deal's spread -- the difference between where the deal values Compaq
shares and where the market currently values them -- widened to 7 percent
from 5 percent on Thursday morning after Fiorina's testimony. The spread
then narrowed again during later trading Thursday to close at about
5 percent.
The deal spread, which is a reflection of investor thinking about the odds
the deal will go through, had been as wide as 26 percent in the weeks
leading up to the vote.
Judge Considers Hewlett's Complaints
Walter Hewlett's lawyers dropped a few big bombshells during the three-day
trial over the HP heir's lawsuit against Hewlett-Packard Co. But were they
enough to bring down the biggest high-tech merger in history?
A Delaware judge began considering that question Thursday, and promises to
rule soon on Hewlett's request that he overturn the March 19 shareholder
vote that apparently gave HP approval to buy Compaq.
HP executives and lawyers left expressing confidence they had knocked down
Hewlett's allegations that HP misled investors about the chances the
Compaq merger would generate its promised financial benefits.
They also predicted Hewlett would fail to convince the judge that the
company got Deutsche Bank's investment division to vote for the deal by
threatening to withhold future business.
"The evidence produced in that courtroom showed Hewlett-Packard acted
totally properly, and this case was without merit," HP attorney Steven
Schatz said outside court Thursday.
Wall Street seemed to agree, dramatically reducing the "spread" - the
difference between Compaq's stock price and the price implied by the terms
of the acquisition.
Still, some observers cautioned against predicting victory for HP.
"In business trials there are very few smoking guns. They really don't
exist," said Charles Elson, director of the Center for Corporate
Governance at the University of Delaware. "It's more like a series of
facts and what kind of picture (the judge) can put together with them. You
can assemble them in a lot of different ways."
Regardless of how the judge rules, Elson said, "I don't think anyone comes
out of this thing overwhelmingly happy with the picture that got painted
here."
Indeed, there were some disturbing allegations.
In addition to the voice mail that surfaced before the trial in which HP
chief Carly Fiorina suggested doing something extraordinary for Deutsche
Bank, she was recorded in another conversation telling Deutsche money
managers their vote was "of great importance to our ongoing relationship."
She said "extraordinary" referred to the last-minute presentation HP made
to sell the deal, and called the "ongoing relationship" remark a normal
signoff for a conversation with an investment bank, especially one that
buys a lot of equipment from HP.
The deep ties between the bank and the company also became apparent when
chief financial officer Bob Wayman acknowledged Deutsche Bank provided
"market intelligence" during the proxy fight for $1 million, with a $1
million bonus if the shareholders approved the deal.
Hewlett lawyer Stephen Neal pointed out that an HP proxy solicitor wrote
on a chart that HP had a "carrot" to use in lobbying Deutsche Bank.
Exactly what that referred to was not made clear. Fiorina denied ever
seeing the "carrot" notation.
Neal also revealed that in an internal call that was recorded, Deutsche's
chief investment officer told the proxy team that controlled Deutsche's
vote on the deal: "You may or may not be aware we have an enormous banking
relationship with Hewlett-Packard."
A preliminary tally released last week found that 51.4 percent of HP
shares were voted for acquiring Compaq, with 48.6 percent against. That
amounts to a lead of 45 million shares - which means Chancery Court Judge
William B. Chandler would have to do more than erase Deutsche Bank's 17
million votes to overturn the deal.
To that end, Hewlett's team also tried to show that HP corrupted the
entire proxy fight by refusing to release updated internal projections
showing the merged companies falling far short of their publicly disclosed
financial targets.
Hewlett's side introduced internal memos from Compaq chief financial
officer Jeff Clarke calling the projections "ugly" and "a disaster" and
saying the integration team had "a mile to go."
And a personal diary entry by Compaq CEO Michael Capellas said he found it
sobering that HP and Compaq were about to embark on a historic deal for
the industry, and noted: "At our course and speed we will fail."
But Fiorina and Wayman testified that the documents showing the shortfalls
were taken out of context, and drawn up by HP and Compaq managers who
intentionally set low targets they knew they could beat.
Clarke testified Thursday that his nasty-sounding comments were merely
motivational messages, and said he is as confident as ever the merger can
be a financial success. For example, $3.5 billion in cost savings are
possible by 2004, well ahead of the publicly touted figure of $2.5
billion, Clarke said.
Walter Hewlett contended that HP not only failed to disclose the weak
internal projections to shareholders, but to its board. That notion was
dismissed by the trial's final witness, Boeing Co. chairman and CEO Phil
Condit.
"I have never participated in a board," said Condit, who has been an HP
director for four years, "that was more fully informed."
Network Associates Accounting Woes Kill McAfee Deal
Network Associates shares tumbled Wednesday, dropping more than 20 percent
to US$19, as the security company withdrew its $224 million offer to
purchase the 25 percent of McAfee.com it does not already own.
NA canceled the offer, which it made in early April, after a check of its
books during a tax filing found accounting errors that might compel the
company to restate its 1999 and 2000 financial results. The company noted
that it believes only those two years' earnings will be affected.
Under terms of the proposed purchase, McAfee shareholders would have
received 0.78 of a share of Network Associates common stock for each Class
A share of McAfee.
The company said it called off the offer, which was set to expire
Thursday, because it believes McAfee shareholders deserve full disclosure.
In a conference call, McAfee CEO Srivats Sampath told analysts that
Network Associates' withdrawal "in a nutshell-means-nothing," and that
day-to-day operations will not be affected.
But the "no-go" already has had some effect. McAfee's shares dropped
precipitously when news of the deal's demise became public, falling by 26
percent to $13.67.
Network Associates ended the first quarter of 2002 on March 31st on an
upbeat note, with consolidated net revenue of $220.7 million and net
earnings of $15.8 million, or 10 cents per share.
At the time, NA chairman and CEO George Samenuk said, "Our focus is paying
off, and customers are voting with their dollars. We've made a lot of
progress and are aggressively moving forward toward the billion-dollar
threshold and beyond."
But questions regarding its accounting practices continue to hound the
company.
Network Associates' books are already under scrutiny by the U.S. Securities
and Exchange Commission, and the company has been downgraded by some
analysts as a result.
The ongoing SEC investigation centers on the company's year 2000 practice
of booking revenue when products were shipped to distributors, rather than
when customers actually bought the products.
The company has launched its own internal investigation of the latest
accounting errors.
EU Unveils Plan to Fight Hackers, Cybercrime
The European Commission unveiled new proposals on Tuesday which could send
Internet hackers and spreaders of computer viruses to jail for years.
Industry and security experts welcomed the proposals, but said more needed
to be done to get companies, cautious of bad publicity, to report Internet
attacks and to boost law enforcement resources in the fight against
cybercrime.
Presenting the proposals, European Justice and Home Affairs Commissioner
Antonio Vitorino said there was a clear link between organized crime and
Internet attacks.
"There is clearly a mafia approach. There have also been sophisticated
organized attempts to steal substantial sums from banking services," he
said.
The draft law seeks to harmonize existing national legislation in the
15-nation European Union (news - web sites) and would require backing from
EU governments before coming into force.
It defines hacking as gaining unauthorized access to an information system
with the intent to cause damage or for economic gain.
It also targets anyone who sends computer viruses such as the infamous "I
love you" virus -- which caused major
information system breakdowns across
the world in 2000 -- as well as other types of destructive software such
as "logic bombs," "worms" and "Trojan horses."
If approved, the law will lead to prison sentences of at least one year
for acts of cybercrime and at least four years in attacks that caused
physical harm, large economic losses or gains, or that involve an organized
crime network.
The proposal also requires member states to set up a round-the-clock
information exchange system for cybercrime attacks.
Neil Barrett, a Internet security expert, said an effective fight against
cybercrime relied on additional factors.
"Victims need to report the attacks, the police need to be prepared to
investigate these attacks," said Barrett, who is technical director of
Information Risk Management, a London-based security consultant firm.
Many incidents of hacking are believed to go unreported by companies and
government bodies due to the difficulty in tracking the culprits and the
embarrassment of admitting vulnerability.
One industry victimized by organized hack attacks is the online gambling
industry, where hackers have managed to crack servers, corrupt games and
rack up winnings worth millions of dollars, according to industry and
security experts.
The European Information Society Group, EURIM, an industry lobby group
said that while the proposals would help in the fight against cybercrime,
more cooperation between law enforcement and the industry was needed.
"Clarification of the law is most welcome," said Philip Virgo, secretary
general of EURIM. "But (it) will not achieve results without greatly
improved cooperation between industry, which is under regular attack, and
law enforcement."
FTC Shuts Down 'Spam' Scam That Promised Prizes
The U.S. government said on Wednesday it had shut down an e-mail scam that
promised free video-game consoles but instead delivered a connection to a
pornographic Web site that charged $3.99 per minute.
The case is one of the most egregious examples yet of the deceptive junk
e-mail known as "spam," the Federal Trade Commission said.
According to the FTC, Internet users received an e-mail message saying
they had won a Sony PlayStation 2 in a sweepstakes contest sponsored by Web
portal Yahoo Inc . Those who responded to the message were directed to a
bogus Yahoo page that instructed them to download a program that would
allow them to claim the prize.
The program then connected them to a pornographic Web page that secretly
charged them $3.99 per minute through a 1-900 telephone line, the FTC
said.
"This case involves 'bait and switch' of the worst kind," said Howard
Beales, head of the FTC's consumer-protection division. "The spammers
promised a product that's particularly attractive to kids. They delivered
a product that's offensive to many adults, and totally inappropriate for
kids."
A Nevada court has temporarily shut down the operation and frozen its
assets pending a preliminary hearing next Monday, the FTC said.
The consumer-protection agency will seek to recover the $11 million that
the operation took in between May and December of last year, Beales said.
Some of that money has already been refunded by ATT National
Communications Team Inc.; LO/AD Communications Corp.; and Nicholas Loader.
An attorney for the defendants has not yet stepped forward, the FTC said.
Online Storage: Risky Move For Your Files
Until late last year, Debbie Lander was a big fan of online storage.
Lander paid $19.95 a year to keep photos of her custom embroidery at
PhotoPoint.com. But shortly before Christmas, the North Prairie, Wis.,
resident ran into what she thought was a server snag: She was repeatedly
unable to access the PhotoPoint site.
Only after searching Internet message boards did Lander discover that
PhotoPoint had shut down without notifying its 1.5 million customers.
"I basically had to start over from scratch," said Lander, who used the
site for years to help sell her embroidery online. She became doubly mad
when PhotoPoint later said it would release files--if the owner paid $25.
"To me, that's really deceitful," Lander said.
The dot-com demise has left a trail of wreckage; once-hot companies are
shutting their doors and auctioning off foosball tables, and former
product managers are assembling triple macchiatos at Starbucks. Among the
fallen are numerous online storage companies that have gone belly-up or
shut down consumer services, adding more victims to the pile: people whose
files have evaporated like so much dot-com paper wealth.
But in the largely unregulated world of the Web, consumers have little or
no remedy when it comes to getting their files back.
"There isn't a great deal you can do about it," said Ira Rothken, a lawyer
who has successfully argued on behalf of consumers against credit card
companies that accepted online gambling charges, among others. "Usually
when a company shuts down, it doesn't have any money. In most instances, a
person is out of luck."
Nearly seven years after Netscape Communications went public and the
masses began discovering the Internet, policies intended to make the Web
safe for businesses are looking increasingly dated. Millions of people
head online as part of their daily routines and entrust bits of their
lives to cyberspace. Yet some are beginning to wonder whether rules aimed
at fostering e-commerce have created a double standard for consumer
protection, with regulators turning a blind eye to online practices that
no one would stand for in the real world.
High-profile failures have many people calling for federal regulation, but
such recourse may be long in coming. For now, legal experts say, most
companies are protected by sweeping terms-of-use contracts that consumers
agree to before uploading files or saving messages.
In addition, defunct companies frequently have no assets that customers
can lay claim to, particularly when they are looking to replace something
that holds personal but relatively low monetary value.
Last summer, several online warehouses reached the end of the road after
burning through their cash, forcing customers to scramble to retrieve
their files. Others abandoned free services and started to charge
customers for storage. But in most cases, it was too late.
Some companies that cut off free consumer storage, including Myspace.com
and i-Drive, gave customers a few days to download their files. Other
sites, like PhotoPoint, sent no warning at all.
The rapid death spiral of consumer storage caught many customers off
guard. People who didn't check e-mail during the critical download period
or didn't back up their records lost them.
When high-speed Net access provider Excite@Home closed its doors earlier
this year, its cable partners became the exclusive providers of broadband
service to its 4.1 million customers. The transfer caused massive
disruptions in Internet and e-mail service, and some people were unable to
access archived or forwarded e-mail for several weeks. Complaints about
customer service ensued when the cable partners directed questions about
old mail to Excite@Home, which declined to say whether people would
eventually gain access to archived mail.
Rothken said he's received a lot of e-mail from people who've lost files
and messages after a dot-com company went under. He said that concerns
escalated when Excite@Home shut down, leaving people worried they would
lose e-mail access and anything stored in their mail folders.
Regardless of how the Excite@Home shutdown shakes out, legal sources said
that in general, companies include contract language in their customer
relationships that makes it relatively easy for them to walk away
scot-free.
"Usually, these organizations have click-through agreements that absolve
them of a lot of liability," said Neil Smith, a lawyer with San Francisco
law firm Howard Rice.
Most of the agreements warn customers that the storage company isn't
responsible for preserving files should it go out of business--a prospect
that may have seemed unthinkable during the dot-com heyday, as the online
storage phenomenon was sweeping the Web and attracting millions of
customers.
For example, in July of last year, just as PhotoPoint's then-President
Dale Gass was telling customers that "recent changes at PhotoPoint.com
ensure a long and stable future for the site and your photos," the
company's terms-of-use agreement declared that "materials in and
operations of this Website are provided as-is and there is no warranty
made that they will be free from errors, interruptions, or loss of data."
These days, Gass says that notifying customers was impossible because the
company was in a severe financial crunch.
"Announcing to the members we would be shutting down was not a viable
option, as it would have created such a crush of traffic it would have
crippled our bandwidth and servers, as well as run up significant
additional networking chargesthat we knew would never be paid," Gass told
CNET News.com.
Legal issues surrounding the storage of online files or photos differ from
those dealing with the warehousing of physical items, such as those
sitting in a paid storage shed along the highway. For example, storage
landlords cannot avoid liability if damage or loss results from their own
negligence, even if they specifically spell that out in a contract.
What's more, a warranty on a parking-garage ticket saying that the company
isn't liable for loss under any situation probably wouldn't hold true if a
parking attendant were to give his friend the keys to your car so he could
steal your stereo.
"There are things you just can't contract your way out of," said David
Maher, a lawyer with Miami-based law firm Harke & Clasby.
But online, the gray areas are wider. For one, digital copies are much
easier to duplicate--and therefore back up and replace--than, say, your
great grandma's antique dresser. Furthermore, many people have little
sympathy for people who didn't back up their files.
Because online storage is so new, there's little legal precedent for
consumers to pin potential lawsuits on. In addition, pursuing legal action
is expensive and time consuming.
Those who do decide to head down a legal path have a few choices. They can
sue under their state's unfair business practices act. However, even if
they can identify a defendant--a challenge once a company has gone
bust--and even if they win, they still face the problem of extracting
monetary damages from a defunct company. In most cases, they'll have to
get in line behind all the other creditors pursuing the company through
bankruptcy action.
Class-action lawsuits are also an option, but plaintiffs' attorneys would
need to find numerous other victims of similar circumstances--and even
then, how do you put a price on a lost photo of your family's summer trip
to Thailand?
For many consumers, it's not the money they're after--it's their files.
As storing files on third-party Web sites becomes more popular, consumer
advocates say, companies that want to survive are going to have to
reassure consumers that their files are safe.
Jamie Love, director of Ralph Nader's Consumer Project on Technology, said
this is one area where he'd like to see some regulation. "The idea would be
for a very minimal approach to make it clear for people so they could make
better decisions," he said.
Love said his group has received several complaints about the issue, but
it has yet to take up the cause. He thinks the problem could be alleviated
if companies were to give more information to consumers.
"I like starting out with a light touch," Love said. "An industry code of
conduct would be helpful."
For example, sites could be required to spell out the site's liability
through an easy-to-understand agreement; have a set way of notifying
consumers when their files are at risk; and give people a standard amount
of time to retrieve their files.
PhotoPoint's Gass said he doesn't think official regulations are needed,
but that a consumer education campaign and industry-backed guidelines
could solve many of the problems. Gass said he had no idea that so many
people kept the only copy of their photos on the PhotoPoint site.
"The digital imaging industry, including PhotoPoint, has not done a good
job educating people about backup and security of digital content," Gass
said. "Just like people would not leave their previous film negatives at a
store, but instead would keep them safe in a closet at home, similarly,
people should always keep copies of any valuable digital data safe at home
as well."
Meanwhile, online storage companies continue to receive mixed reviews from
consumers.
Mark Wyatt called his divorce from free online storage company Myspace.com
"amiable," saying he used the site for backup and was able to retrieve his
files.
"Don't expect something that's free to last forever," he wrote in an
e-mail to CNET News.com. Representatives of Myspace and i-Drive did not
return requests for comment.
Other consumers were less sanguine, especially those who paid to store
their files.
After PhotoPoint's demise, Nanette Gallas spent hours reprogramming her
gift and collectible-selling site so it would point to another server
containing photos of her goods.
Although Gallas kept digital and physical copies of many of the photos she
stored on PhotoPoint for an annual fee of about $10, she's angry about
lost time and lost business. Gallas said pictures of her gifts were
unavailable to potential online buyers for a couple of weeks when she
didn't know whether PhotoPoint was gone for good.
"They screwed us over, that's what they did," she said.
Gallas, who lives in Cheney, Wash., also lost a photo album she had
compiled containing photos of her deceased brother and her parent's 50th
wedding anniversary.
Like many victims of online storage failures, Gallas is frustrated about
her lack of recourse.
"The same business laws that apply to any business you can walk into
should apply to businesses on the Web," she said. "The fact that they're
selling you this service and then turning around and telling you 'We're
not responsible for anything' is just abhorrent."
eBay To Cancel Customer Service E-mail
eBay is quietly canceling a much-used e-mail address, which has some
members worried.
Next month, the online auction giant will close its direct e-mail link to
SafeHarbor, its department that responds to questions about suspicious
activity on the site or specific fraud complaints. Instead, eBay will
direct members to an online form, which categorizes their problems and
links to related help pages.
The company has not posted a notice about the change on its announcements
board; instead it is notifying customers who send e-mail to the
safeharbor@ebay.com address.
"On May 15, 2002, this e-mail address will no longer be available," the
company said in an automated reply to a member who e-mailed the SafeHarbor
address. "Instead, all SafeHarbor queries should be sent using our online
Contact Rules & Safety Web form."
But here's the rub. Some members fear that because of the way the form is
set up, eBay is limiting members' ability to report fraud or rules
violations.
"It's incredibly disgraceful that they're doing this. They keep shutting
down your means of getting in contact with them," said Rosalinda Baldwin,
editor of the Auction Guild, a newsletter that covers the online auction
industry.
eBay does not list its phone number on its site and recently moved to
curtail some of the discussions on its message boards.
eBay representatives did not return calls seeking comment, but a customer
service representative, contacted through the company's online chat
service, said the new form was meant to help organize customer inquiries.
"We have found that it is very hard to take the e-mails sent in to this
address and answer them in a timely fashion. By using the Web form, the
e-mails automatically go to the same area, and the Web form also allows us
to make sure the e-mails get sent to the appropriate department right away
instead of having to rely on a representative to get them there," she
said.
eBay is the latest company to try to streamline its customer service
operations. Many companies try to categorize the complaints and questions
they receive from customers in order to track them and deal with them most
efficiently. And, as they have been pressed to post profits, many Web
companies such as Amazon.com have cut back on customer service departments
or removed toll-free service numbers from their Web pages.
Like Amazon, eBay does not list a customer service number on its Web site,
and members have complained about the difficulty of reaching the company.
For some members, those concerns have become more pressing in recent
months. eBay has acknowledged that a growing number of member accounts
have been hijacked and used to set up fraudulent auctions. Affected
customers often want answers immediately and don't want to wait for an
e-mail response.
One of the problems with the new form is that for most purposes, customers
using it will have to be members of the site and log in to eBay. That
could mean that members who have been suspended by eBay or who have had
their accounts hijacked may not be able to use the form to report problems.
Baldwin notes that a person who had some property stolen from him and
placed for auction on eBay would have no way to contact the company about
the problem through its form, except by registering on eBay.
"But what if you don't want to become a member? There has to be a way to
contact them without you being a registered member," she said.
Around the time the SafeHarbor e-mail address is cancelled, eBay will have
a "workaround" in place that will allow non-members as well as members who
have problems accessing their account to contact eBay, the company's
customer service representative said. She did not know exactly when the
workaround would be in place.
But members point out other problems with using the form. Alan, a Los
Angeles resident, said he often reports suspicious activity to eBay. Alan,
who asked that his last name not be used, noted that the form has a
limited number of categories that members can choose from and doesn't
allow members to select more than one violation at a time.
"It's wonderfully simple if you're reporting a single violation," he said.
"But most of the time you're trying to report multiple infractions at
once."
Additionally, by e-mailing SafeHarbor directly, he's able to keep a copy
of his messages and therefore has documentation of past fraud cases. The
new form won't allow him to have that same documentation, because it
doesn't send a copy of a filed complaint back to the sender, he said.
Alan sees the move to cancel the SafeHarbor addresses as being related to
eBay's recent move to restrict posts on its discussion boards. One of
eBay's new posting rules forbids members from discussing specific fraud
incidents or suspicious auctions.
"To me, it is clear that what is happening is a two-pronged attack:
Discussion of fraud is being stifled on the boards, while reporting of
fraud is being made more difficult," Alan said. "The inevitable result
will be greater ignorance among the membership and the public at large
about the amount of fraud on eBay, while the fraud will be allowed to
spread unchecked."
But member Laurie Jefferson said eBay's move to use the Web form instead
of directing all complaints to the SafeHarbor e-mail address could improve
customer service. Jefferson, who lives outside of Boston and has been an
eBay member for about a year, said she has often received replies from
SafeHarbor that have nothing to do with the inquiries she has sent.
"I've found that I rarely get the answers I'm looking for, no matter what
I'm reporting or questioning or what the case might be," Jefferson said.
Kazaa Steps Out Of the Shadows
A new candidate to become center of the file-swapping universe has been
unveiled: Vanuatu, a small group of Islands in the South Pacific.
That's where Sharman Networks, the parent company of the hugely popular
Kazaa software, is registered to do business, according to Chief Executive
Nikki Hemming. After months of speculation about the mysterious
file-trading company, Hemming went public with this and other details of
her business in a conference call late Tuesday.
Hemming and Sharman control software that has been downloaded more than 60
million times, with more than 1.5 million people using the software on any
given day, the company says. Now, with ambitious commercial plans and a
lobbying presence in Washington, D.C., Hemming is poised to make a bigger
mark on the business of file swapping and digital entertainment than any
figure since Napster's Shawn Fanning.
But to get there, the company will have to wend its way through legal
threats from movie studios and record labels, as well as concerns of
consumers angry about Kazaa's policy of bundling software that will use
individuals' computers for other companies' purposes. On Tuesday, Hemming
defended company policies that have drawn criticism from both sides.
"Our primary goal is to deliver quality software to users," she said. "I'm
very comfortable that we've kept our word to users so far."
The 35-year-old Hemming, a former Virgin Interactive executive who lives
in Sydney, Australia, is something of an anomaly in the nearly all-male
file-swapping software world. She brings a decade of experience and
contacts in the traditional entertainment world to her new company, as
well as familiarity with running a fragmented international business.
Hemming was introduced to Kazaa and the world of file swapping by a former
business associate, Brilliant Digital Entertainment CEO Kevin Bermeister.
Brilliant had been working closely with the group of Netherlands-based
programmers that had originally written Kazaa and its underlying
peer-to-peer technology and was trying to sell the software.
When a Dutch court ruled in late 2001 that the programmers had to take
Kazaa offline, most bidders disappeared. Hemming stayed put, said Niklas
Zennstrom, one of Kazaa's original creators.
"We had some other offers and discussions during the year," Zennstrom
wrote in an e-mail interview. "(After the court ruling) the other
potential buyers had withdrawn, but Sharman was still interested, so we
sold it to them."
As the new owners of a piece of software that had been downloaded over 30
million times by the beginning of March, Sharman was instantly a name to
be reckoned with online. But Hemming declined to give interviews.
Reporters and copyright authorities couldn't even find a record of the
company registered in Australia, Hemming's home.
Hemming finally answered some-- if not all--of those questions on Tuesday.
Sharman itself is registered for tax reasons in Vanuatu, an island nation
that advertises itself on its Web site as "The South Pacific's premiere
tax haven." Day-to-day operations are conducted in Sydney by an affiliated
management company, she said.
According to the company's terms of service, it can be sued in Australia,
which has copyright laws similar to those in the United States.
Sharman is funded by a group of private individual investors who wish to
remain anonymous, Hemming said.
Rumors have floated for months, spurred by a note in the company's terms
of service, that Kazaa would soon start charging for its service. Hemming
said that she intended to keep the basic Kazaa service free, but would
later introduce a premium service with new features. The company already
has a deal with DoubleClick to serve ads through the Kazaa software, she
noted.
Sharman is the largest peer-to-peer company that hasn't been sued by
recording companies or movie studios. Kazaa BV, the Dutch company that
sold Sharman its software, is still being sued. StreamCast Networks and
Grokster, two companies that initially shared the Dutch file-swapping
technology, also are being sued.
A Dutch appeals court ruled last month that the owners of the Kazaa
software weren't liable for the actions of people using the software to
trade copyrighted works illegally. That ruling doesn't hold immediate
value as precedent in United States courts, however.
Australian copyright authorities have previously said they were
investigating Sharman, but were not able to find records of the company's
existence. Now they're mum on their plans, but say they're still looking.
"They are still a matter of interest to the anti-piracy unit," said
Michael Speck, head of the Australian Record Industry Association's (ARIA)
anti-piracy division, in an e-mail to News.com. "The unit down here
has...zero tolerance (toward) piracy, and any piracy identified in this
territory is dealt with according to the available resources."
The Recording Industry Association of America (RIAA) declined to comment
directly on Sharman for this article.
Even while scrutiny from copyright holders has tightened, Hemming has
tapped into some deep consumer fears about privacy and loss of control of
their own computers. For the last two weeks, Sharman has been trying to
assuage consumers' concerns about Brilliant Digital Entertainment's
Altnet, which will use consumers' PCs in a new commercial peer-to-peer
network. Altnet is installed with every copy of Kazaa.
Hemming said that Kazaa has changed its policies to ensure that no
personally identifiable information is collected by any of the company's
partners, and that all companies--including Brilliant and
Altnet--communicate directly with consumers about what will happen to
individuals' computers.
"Look, I've got the most powerful brand in the market right now," Hemming
said. "I'm not about to put this brand into any risk whatsoever by making
a hasty discussion on partnerships."
Some online file swappers are taking matters into their own hands. A
hacked version of Kazaa stripped of Brilliant and other companies'
advertising software has begun circulating online. Sharman has persuaded
Download.com, a popular software aggregation site operated by News.com
publisher CNET Networks, to remove that software program from its
database, but it is still readily available elsewhere. She said the
companies' attorneys are in the process of issuing cease-and-desist orders
to the distributors and creators of that software.
Kazaa itself was removed from Download.com's directory after Altnet's
software was revealed, but it had reappeared by Monday.
Hemming is moving ahead quickly despite the skirmishes on both flanks,
however. Sharman's lobbyist in the United States has been speaking to
musicians' groups and hardware companies about a new plan for paying
content owners. The company also is hoping to win Internet service
providers and telecommunications companies as allies, arguing that file
swapping will help persuade people to sign up for broadband service.
"It's pretty clear that we have a way to play the part of being the driver
in this market," Hemming told reporters Tuesday. "Why not be the
visionary. Why not be the driver?"
=~=~=~=
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