Cyber Ramblings - Aug 28, 2001

28 August 2001
SMS Messages Targeted Under New Law

SMS text messaging could become much less practical as a marketing medium in the United Kingdom under recent proposals to reform U.K. company law, according to a report by

Currently, companies must include certain registration details in their business letters and notices.

Under new proposals from the Department of Trade and Industry (DTI), said, plans are in progress to extend the scope of this provision in U.K. company law to cover both e-mail and mobile phone text messages.

With the maximum length of text messages currently limited by screen displays to 160 characters, the registration details of companies would take up the vast majority of that space.

Text messaging is an extremely popular method of communication, a fact that advertising companies have picked up on. The monthly volume of text messages sent in the United Kingdom is expected to exceed one billion for the first time during August, according to a report released by the U.K.-based Mobile Data Association. This estimate only includes person-to-person messaging, not text messages sent by Web sites and SMS marketers.

Study Faults ICANN Resolution Procedure

The international arbitration system for resolving .com, .net and .org domain name disputes is flawed and can be easily manipulated to favor trademark holders, according to a study released yesterday by a Canadian law professor.

University of Ottawa Professor Michael Geist reported that trademark holders have won 81 percent of domain name disputes brought under the Uniform Domain Name Dispute Resolution Process (UDRP) since it was established by ICANN in 1999. Those raising an action have the choice of four forums for dispute resolution under the ICANN rules. However, the study claims that 90 percent of complainants chose the two forums most likely to award cases in favor of those who filed them.

The Arbitration Center of the Geneva-based World Intellectual Property Center (WIPO) and the U.S.-based National Arbitration Forum (NAF) rule in favor of trademark holders in 82.2 percent and 82.9 percent of cases respectively.

The two less popular forums, eResoution and the CPR Institute for Dispute Resolution, rule in favor of trademark holders in 63.4 percent and 59.1 percent of cases respectively.

New Software Opens More Doors for Hackers

AirSnort, a new software tool for recovering encryption keys across wireless local area networks, was released this week as a free download on the Internet, posing a serious threat to the security of the wireless networks increasingly being used by many businesses.

The tool passively monitors and analyzes data traveling across 802.11b (known as WiFi) wireless networks. Once enough information has been gathered (around 100M - 1GB), the tool can identify the encryption key in less than a second, effectively identifying the password for all data being transferred on the network.

The wireless networks affected are supposed to be protected by a security feature known as the Wired Equivalent Privacy system (WEP). But flaws have been found in WEP, the most serious of which lie in its encryption algorithm, which can be exploited by AirSnort users who have a computer with a wireless network card within range.

The authors of AirSnort said it is intended to heighten awareness of security flaws. They hope that wireless vendors will now be forced to significantly enhance the encryption of their products and that users will now realize they cannot rely on WEP encryption as their sole security mechanism.

Search Engines in Hot Water Over Ad Placement

Commercial Alert, a U.S.-based group that campaigns against commercial exploitation, has filed a deceptive advertising complaint with the Federal Trade Commission against eight search engines for allegedly including ads in search engine results without clear disclosure that the ads are paid placements.

The complaint states that such listings "look like information from an objective database selected by an objective algorithm. But really they are paid ads in disguise."

Companies named in the complaint include AltaVista, AOL Time Warner, Direct Hit Technologies, iWon, LookSmart, Microsoft and Terra Lycos.

"These search engines have chosen crass commercialism over editorial integrity," said Gary Ruskin, executive director of Commercial Alert. "We are asking the FTC to make sure that no one is tricked by the search engines' descent into commercial deception. If they are going to stuff ads into search results, they should be required to say that the ads are ads."

The complaint praises search engine Google for clearly stating "that its paid placements are 'Sponsored Links'" and for not putting "paid ads within its search results."

The FTC has yet to rule on the complaint, which was filed last month.

Korean Court Rules Against Web Site

A court ordered the operator of a defunct file-sharing Web site to pay 98 million won ($75,300) to two local record labels for violating copyrights.

World Music Entertainment and Most Best Music had sued Seoul-based Internet Empire in November for three times that amount for operating a Web site that allowed users to share songs and music videos.

The weekend ruling by a Seoul District Civil Court judge was the first against a free song-sharing Web service in South Korea, where nearly half the population of 46 million are Internet users.

Two weeks ago, prosecutors indicted creators of South Korea's largest free song-sharing service, Soribada, on charges of copyright violation.

Soribada has denied any wrongdoing, saying its service only provides private channels of communication and does not control or monitor users' activities.

Toshiba Cutting 17,000 Jobs

Toshiba Corp. is slashing 17,000 jobs, or about 9 percent of its global work force, in the next three years, joining a growing list of Japanese manufacturers forced to cut jobs amid a worldwide downturn in demand for electronics.

The Tokyo-based company said Monday that it now expects to post a loss for the year instead of the previously forecasted profit.

Toshiba said almost all of its job cuts will be in Japan, where it will reduce its work force by 12 percent from 144,000. But officials said about half of those domestic jobs cuts - approximately 10,000 - will be eliminated through attrition. The company employs 188,000 workers worldwide.

Toshiba's move is unusual because it involves such a large number of domestic jobs. It is generally difficult to get rid of unneeded workers in Japan because major companies are accustomed to providing lifetime employment.

Toshiba did not give details about where the job cuts will occur. The company is considering streamlining operations at six plants in Japan.

Samsung Experiments with Smart Appliances

Samsung Electronics has begun installing smart appliances using Echelon networking technology in a 100-apartment complex in South Korea. The goal is to network air conditioners, refrigerators, washing machines, microwave ovens and gateways to each other and to the Internet, the companies said.

The appliances being hooked into apartments in Suji, Kyonggi Province use Echelon's ANSI/EIA 709.2-compliant power line transceivers and the company's LNS network operating system. The Samsung appliances let residents use a wireless Web pad, PC or mobile phone to control and monitor each device via the Internet, set up schedules, get an online user's guide and perform remote diagnostics.

Governors Want Sales Tax Allocated to E-Commerce

More than 40 governors are calling for congressional approval of state sales taxes on Internet purchases.

In a letter sent to all House and Senate members on Aug. 17, the governors urged Congress not to renew a 1998 moratorium on Internet access taxes unless the states are allowed to design a system for the collection of Internet sales taxes.

"If you care about a level playing field for Main Street retail businesses and local control of states, local governments and schools, extend the moratorium on taxing Internet access ONLY with authorization for the states to streamline and simplify the existing sales tax system," said the letter signed by 42 governors. "To do otherwise perpetuates a fundamental inequity and ignores a growing problem.

"This ultimately is an issue about whether it would be in the best interest of the country to create a permanent special privilege for consumers and businesses who buy and sell goods over the Internet, or whether we should create a level playing field that treats all buyers and sellers the same."

Taliban Leaders Broaden Ban on Internet

Afghanistan's Taliban regime issued a decree Saturday that extended the country's ban on Internet usage to international organizations located in the war-torn country, as well as to government offices that have not secured permission from Taliban supreme leader Mullah Mohammad Omar, according to published reports.

The edict stated that the office of the supreme leader would maintain the only Internet connection permitted in Afghanistan. The wholesale ban appears to be an expansion of the one issued in July, which barred citizens and most government agencies from accessing the Internet. Last month news sources quoted Taliban foreign minister Maulvi Wakil Ahmad Muttawakil as saying that the Taliban "wants to establish a system in Afghanistan through which we can control all those things that are wrong, obscene, immoral and against Islam."