Electric Word
Clinton Sells Encryption Junk For years the Clinton administration's key escrow encryption proposals have been crippled by a lack of industry support. But now, rather than hold the line to protect your privacy, IBM has decided to cut a deal with Uncle Sam.
On October 1, the administration rolled out a new encryption proposal that raises the exportable key length from 40 to 56 bits. The catch? Export licenses would be granted "contingent upon industry commitments to build and market future products that support key recovery." (See "Feds versus Freedom," page 94.)
Cheering from the sidelines was the key recovery alliance, an IBM-led group dedicated to "developing modern, high-level cryptographic key recovery solutions." Other alliance members include Apple Computer, Digital Equipment Corporation, Groupe Bull, Hewlett-Packard, NCR, RSA, Sun Microsystems, Trusted Information Systems, and UPS.
Noticeably absent, however, was Netscape. "The White House is holding the industry hostage by attempting to drive the encryption standards process," says Peter Harter, Netscape's public policy lawyer. "If they honestly think that the new plan is the best thing for us, let them channel it through open forums like public hearings and Congressional legislation."
Todd Lappin
Twisted Telephony Bad news for AT&T and its competitors in the US$60 billion international phone market: US callers can reach out and touch someone in any part of the world for as little as 10 cents a minute – around 80 percent less than AT&T charges – using Net2Phone Direct from IDT, a phone company and ISP in Hackensack, New Jersey.
This is Internet telephony with a twist – the calling party needs only a standard touch-tone phone and a Net2Phone debit account. Users punch in an access code, and their connection is transferred from the standard telephone circuit-switch network to IDT's packet-switch network and back again at the other end. No computer, no buggy software, no techno-incompatibility hassles.
Although poor sound quality is a deterrent to some potential customers, the technology is improving quickly. "It's a growing market," says Hambrecht & Quist analyst Rakesh Sood. "As traffic increases, this will change the telecom landscape."
Jessie Scanlon
What Goes Around, Comes Around Good news! Spending on Web advertising nearly doubled from the first quarter of 1996 to the second, to US$43 million worldwide. According to Jupiter Communications in New York, spending on Web advertising will pass $300 million this year, and, if this growth continues, $5 billion by 2000.
Now here's the weird news: webvertising is remarkably circular. The top 10 publishers soak up two-thirds of those revenues. And six of the top 10 publishers – familiar names like Netscape and Yahoo! – rank in the top 10 among spenders on Web advertising. Given that these big publishers accounted for only one-third of spending on Web advertising, this is not a closed loop – but it's hardly a healthy openness, either. Diversify or die.
John Browning
The Top 10 Web PublishersThe Top 10 Web Advertisers
| Rank | Site Name | 2nd Quarter Revenue | Rank | Site Name | 2nd Quarter Spending
| 1 | Netscape | $7,755,990 | 1 | Microsoft | $2,009,301
| 2 | Infoseek | 3,793,464 | 2 | Infoseek | 1,448,080
| 3 | Yahoo! | 3,702,500 | 3 | Excite | 1,436,979
| 4 | Lycos | 2,551,860 | 4 | The McKinley Group | 1,384,065
| 5 | Excite | 2,397,500 | 5 | Netscape | 1,313,436
| 6 | CNET | 2,080.015 | 6 | Yahoo! | 1,279,998
| 7 | ZD net | 2,072,088 | 7 | Lycos | 1,279,848
| 8 | NewsPage | 1,407,663 | 8 | AT&T | 1,178,546
| 9
| ESPNet SportsZone | 1,343,322 | 9 | CNET | 1,036,158
| 10 | WebCrawler | 1,235,000 | 10 | Nynex | 1,001,903
Bernie S. Goes Free Sent to prison in January 1996 for possession of a modified RadioShack tone dialer and cellular phone programming equipment, Ed Cummings (aka Bernie S.) was unexpectedly released in September. His sentence ended after a transfer to a maximum security prison and an attack by an inmate.
When the word spread on the Net that Cummings had his jaw wired shut, his arm in a sling, and was still in prison for possession of equipment for which there was no evidence he had ever used fraudulently, prison officials were deluged with phone calls. That unpleasant publicity, says Cummings, triggered his release.
"Right now everything just feels very surreal," he admits when asked about his plans. "But I know that if I could get through the last 18 months, I can do just about anything."
Steve G. Steinberg
Addicted to Your Noise English writer, producer, and musician Scanner (n� Robin Rimbaud) trawls the airwaves for cell phone conversations to weave into chilling ambient music recordings. Repugnant aural voyeurism? Not to Scanner, who says that technology has made the concept of privacy moot. In Britain, he's scored a huge buzz, recording soundtracks for Derek Jarman and Neville Brody, speaking on panels with Brian Eno and Peter Gabriel, and playing with bands such as Elastica. Next, he hopes to invade US airwaves. "So much of American media is about voyeurism – talk shows, amateur porn, true-crime shows," he says. "It's increasingly difficult to conceive of truly private spaces."
Marc Spiegler
Les A-ROM-dissements de Paris Beneath Paris lies a vast network of sewers, catacombs, cellars, and ossuaries – a dark mirror image of the City of Light. Thanks to Le Deuxi�me Monde, you can reach the crypt of Notre Dame, the lake under the Op�ra, or the cemetery at P�re Lachaise, where the ghost of Jim Morrison, no less, will be your guide. If, that is, you're registered with the hybrid online CD-ROM service Obscura.
In Obscura's virtual Paris, subscribers create their own avatars and apartment dwellings. When you tire of wandering the sewers in search of companions, ticketing agencies and retail outlets offer real goods. Le Deuxi�me Monde plans to add Tokyo, Berlin, and New York soon.
Steve Shipside
Great Expectations No one accuses Malaysia Prime Minister Mahathir bin Mohamad of thinking small. First he transformed a sleepy backwater of rubber trees and palm oil estates into one of the world's hottest economies. Now he wants to make it one of the most wired as well, with a 250-square-mile cross between Silicon Valley and Multimedia Gulch carved into the rolling hills outside Kuala Lumpur.
Mahathir's Multimedia Super Corridor plan – or MSC, in brisk Mahathirese – calls for the construction of both an IT City for 100,000 inhabitants and Putrajaya, an "intelligent" seat of national government (goal: the world's first paperless bureaucracy by 2000). Built-in 5-Gbps fiber-optic cabling will keep everyone wired. Buffeting the MSC on both sides will be two other "megaprojects": the world's tallest buildings – the twin 1,480-foot Petronas Towers – and Asia's largest international airport.
Estimated cost: US$20 to $40 billion. Expected completion date: 2020. Grandiose plans, but Mahathir, a spry 71-year-old, usually gets what he wants.
Spencer Reiss
Brokering for the Masses For years, brokers have been able to get real-time quotes over Bloomberg and other proprietary computer networks, but this information is finally reaching a broader, less plugged-in segment of the population. Using some of the most advanced speech-recognition software around, Charles Schwab's system relates real-time stock quotes over the telephone. It recognizes more than 13,000 securities, said 2 million different ways.
The Schwab technology portends a larger Net-induced trend toward distributed information and decentralized finance. "If you're talking to your broker and Mr. Rich Guy calls, your broker will dump you in a second," says SRI Consulting principal Bob Morgen. "This system doesn't dump you. It's so user-friendly that someone who doesn't know better wouldn't even think of the network and computer behind it."
Jesse Freund
The Hipsters of House The generation that grew up building Revell model cars would have to sniff a lot of Testor's glue before today's software packaging starts to look good. But House Industries, a fontmaker in Wilmington, Delaware, ships boxes so sexy, you forget why you bought them."
Instead of putting our disks in envelopes, we spend money to make something special," explains Andy Cruz, House Industries' 24-year-old art director. He's not kidding. The company's Rat Fink Fonts collection will appeal to any fan of Ed "Big Daddy" Roth's scale plastic models from the '60s. Inside a box adorned with Roth's genuine Rat Fink drawing, you'll find a bitchin' T-shirt and floppies containing way-out fonts and monster icons. The company's Street Van Font Kit comes in a miniature cardboard van loaded with goodies.
"There's a small group that will recognize we do things right, like using a real painting instead of an Adobe Illustrator drawing," says Cruz. "We want to try to get across that we dig this old stuff and know where it's coming from."
Mark Frauenfelder
China's Net Bind There's an old Chinese saying, "The officials can start a fire, but the citizens can't even have a lamp." Last October, Chinese students used university bulletin boards to spread news of a protest against Japan's claim to the Diaoyus Islands. Alarmed by the largest student movement since Tiananmen Square, the government closed online sites and tried to filter out content from abroad.
But stopping traffic on the Net is like catching water with a sieve. "We're still communicating all the time with people in China about social issues," boasts Ignatious Ding, a director of Silicon Valley for Democracy in China.
As he explains it, there's one problem with China's efforts to curb online political organization – the country keeps making joint ventures with businesses and universities abroad. Stemming traffic would harm the deals. "It's too late in the game to stop Internet traffic," says Ding. "They can't afford to cut these deals off." Meanwhile, China's got to plug one leak at a time.
Bob Parks
Death of an Engineer Seymour Cray was a modest fellow, but a speed freak of an engineer. From the late 1950s to the late 1980s, he built the fastest computers on Earth.
He pushed his machines to the limit by packing the parts as closely together as possible. Information raced through Cray supercomputers so fast their chips had to be bathed in coolant to avoid meltdown.
The advent of parallel processing architectures in the 1990s left Cray in the dust, but not before he made supercomputers indispensable to scientific research, industrial design, and modern warfare. And he did it without government handouts – Cray didn't want anyone bossing him around.
Seymour Cray died October 5, after a highway accident. He was 71.
Russ Mitchell
