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Computer underground Digest Sun Dec 8, 1996 Volume 8 : Issue 86
ISSN 1004-042X
Editor: Jim Thomas (cudigest@sun.soci.niu.edu)
News Editor: Gordon Meyer (gmeyer@sun.soci.niu.edu)
Archivist: Brendan Kehoe
Shadow Master: Stanton McCandlish
Field Agent Extraordinaire: David Smith
Shadow-Archivists: Dan Carosone / Paul Southworth
Ralph Sims / Jyrki Kuoppala
Ian Dickinson
Cu Digest Homepage: http://www.soci.niu.edu/~cudigest
CONTENTS, #8.86 (Sun, Dec 8, 1996)
File 1--Fort Bragg hacker/spy case shrouded in secrecy
File 2--Utah High School Hackers Club
File 3--Debate on "Fastfoto" as "a scam"?
File 4--Censorship on cypherpunks? -- from The Netly News
File 5--CDT Policy Post 2.38 - Pres Takes First Steps Towards Clipper
File 6--"NEWS ALERT -- Findings Reveal Security Problems in Fortune 1,000
File 7--US Touts Duty-Free Internet (fwd)
File 8--Cu Digest Header Info (unchanged since 8 Dec, 1996)
CuD ADMINISTRATIVE, EDITORIAL, AND SUBSCRIPTION INFORMATION ApPEARS IN
THE CONCLUDING FILE AT THE END OF EACH ISSUE.
---------------------------------------------------------------------
Date: Sun, 1 Dec 1996 16:12:56 -0600 (CST)
From: Crypt Newsletter <crypt@sun.soci.niu.edu>
Subject: File 1--Fort Bragg hacker/spy case shrouded in secrecy
In late October, the Fayetteville Observer-Times started
reporting on the trial of Eric Jenott, a Fort Bragg, NC,
paratrooper accused of spying.
In testimony at a pre-trial hearing on October 23rd, Chief Warrant
Officer Lorenzo Clemmons said Jenott had told him he could
break into an Army communications system three months before
the paratrooper was arrested on spying charges.
Clemmons said Jenott told him in March 1996 that the Army's
Mobile Subscriber Equipment, carried by hummvee and the Army's
equivalent of cellular telephones, computer and fax communications,
"might not be as secure as we think . . . "
Jenott demonstrated the system's weakness to a supervisor who
passed it along to a Major Jerry R. Moore. Moore met with
Jenott to discuss the weaknesses. On October 23rd, Jenott's
defense attempted to show that statements the paratrooper made
to investigators not be allowed as evidence since Moore did
not advise Jenott of his rights.
In news already published, Jenott's family said that he gave
an unclassified Internet access code to a friend from China.
The Army maintains Jenott gave secret computer passwords to
a Chinese accomplice, named "Mr. Liu." At the hearing,
Jenott's lawyer, Tim Dunn, said "Mr. Liu" had left the country
and could not be located.
According the Observer, the Jenott hearings were shrouded in
secrecy. "During the hearing only a few minutes of testimony
were open. The hearing was closed to reporters twice when
court wasn't even in session," reads a boxed-out quote from
the 24th October edition of the newspaper.
Security officers for the Army claim some testimony and audiotapes
presented at the hearing contain classified information.
During a period in which Jenott's lawyer questioned Moore over
what he would do if he discovered a soldier had "hacked" into
Army systems, Army prosecution objected maintaining Dunn was
getting into classified information. More testimony was taken
behind closed doors.
Jenott's court-martial is scheduled to begin on December 9,
according to reports in the Observer.
Crypt Newsletter
http://www.soci.niu.edu/~crypt
------------------------------
Date: Mon, 2 Dec 96 18:54:40 -0800
From: Gordon Meyer <grmeyer@ricochet.net>
Subject: File 2--Utah High School Hackers Club
Officials at Bonneville High School in Ogden, Utah are
considering what do with an unofficial "hacking club." A group
of students calling themselves the "Bonneville Hacking Society"
recently distributed information to other students about how to
break into the schools DOS and AutoCAD computer systems.
A recent editorial in the local paper, The Ogden
Standard-Examiner, points out that disseminating information is
perfectly legal and called for a reasonable response from the
administration: "While we don't in any way condone the activites
of the Bonneville Hacker Society, we do caution school
administrators to view the kids' actions in the proper context.
[...] What they did was, in most respects, stupid and
irresponsible; ...But we should be careful not to overreact in
these kinds of situations."
------------------------------
Date: Tue, 12 Nov 1996 14:23:13 -0500 (EST)
From: "I G (Slim) Simpson" <ssimpson@cnwl.igs.net>
Subject: File 3--Debate on "Fastfoto" as "a scam"?
In Cu Digest #8.79 you included the following response to my
post. I have taken the libery of a few resposes of my own
(starting debate?).
>Dear Sirs,
>In Cu Digest #8.73, you included a note from Slim Simpson,
warning of a potential scam of >some sort by a company by a
Fastfoto of Pomano Beach, Florida. In the header the author
>suggested that he was unsure of whether it was appropriate for
the CU-Digest or not, and >personally I think it was not.
>Obviously Mr. or Ms. Simpson, was frustrated at the inability to lash out at
the person who had >spammed their mailbox.
It's Mr. Why *obviously frustrated*? Why *lash out*? I don't like spam but I
reply "Please take me off your list." Most do. When people asking me to send
money have a false e-mail address, no phone number, and no fax number I smell
scam. I forwarded same to Cu Digest.
> Lately, with more an more newcomers to the net, I have noticed that one thing
they seem to >find out quickly is their supposed right to be spamless, and
their little private electronic >domain, called their mailbox.
I am not a newcomer to the net.
>Many of these same people invite advertising material like flyers, magazines,
coupons, to their >household door or mailbox on a daily basis, but never
confront these advertisers. Advertising >material created by the decimation
of forests, pollution of the environment by the processing >of such, and
ending up as filler for our garbage dumps.
Mine ends up in my woodstove.
> Amazingly only 4% of the recipients will ever be interested in the message
that these >advertising materials contain.
>Yet this person will strike out from their armchair, in their little form of
civil protest against an >action they do not agree with, in relative
obscurity. Mean while they sit passively while shots >are fired outside their
home, children are being abused, homeless people starve, and guard >the
sanctity of their mailbox.
Shots *are * fired outside my home. I live on the water and it's duck season.
But in Summerstown, Ont, Canada, there's no child abuse and no homeless people
that I know of.
If I hear of any it will be reported.
>The bottom line is they could have just deleted the note, went on their merry
way and ignored >the invasion of privacy. Instead they chose to track this
down, and highlight it in some sort of >shroud of scam and sent it in to
CU-Digest, after their inability to express their displeasure to >the
offending party.
I should ignore *possible* spam; never warn others about it?
>Personally I would accept my mailbox having a few useless nuisance messages,
from >recyclable electrons if it meant stopping the destructive process of our
current advertising >means. Maybe it was not a spam. Maybe they just left
their email address off to protect >themselves from individuals who want to
stop this method of advertising Maybe they thought >they might end up
scanning material of a questionable nature, considering the way certain
>individuals are communicating with other individuals today. Maybe they
should have added >the word Adult, then their obscurity would make more sense
And maybe they just wanted me to send money.
>There were people who did not like the introduction of the printing press at
one time either, >and of course they are no longer living. I just think that
this message was NOT appropriate for >the CU-Digest, but hopefully will spark
debate.
You've made your point. And you think that I was so *frustrated* that I had to
*lash out*. The fact that there was no way to communicate with the company to
me was suspicious. I don't consider sending Cu Digest a short, ironic, message
about it is lashing out. And since when is the environment a fit subject for Cu
Digest? (But, I, for one, am content to let the moderator decide).
Slim Simpson
>The thousands of people who regularly send a message to someone who has
spammed >them, just has to lighten up, and learn how to use some filtering
software. Then maybe >everyone can communicate without destroying our
environment.
>This is just my opinion, on recyclable material I might add, :)).
>Jeffrey Hinchey
------------------------------
--=====================_847837132==_
Content-Type: TEXT/PLAIN; CHARSET=us-ascii
Content-ID: <Pine.GSO.3.93.961112223412.19991F@sun>
Content-Description:
Beowulf How ceaselessly Grendel harassed......
--=====================_847837132==_--
------------------------------
Date: Tue, 12 Nov 1996 09:34:15 -0800 (PST)
From: Declan McCullagh <declan@well.com>
Subject: File 4--Censorship on cypherpunks? -- from The Netly News
From -- fight-censorship@vorlon.mit.edu
The Netly News
http://www.netlynews.com/
November 11, 1996
Cypher-Censored
By Declan McCullagh (declan@well.com)
The cypherpunks mailing list, so legend goes, coalesced around two
principles: the dissemination of strong encryption and an absolute
commitment to free speech. It was a kind of crypto-anarchist utopia:
Here was a place where anonymity was encouraged and PGP-signed
postings were the norm -- and nobody seemed to be in control.
That is, until recently, when Dimitri Vulis was given the boot.
After he refused to stop posting flames, rants and uninspired personal
attacks, Vulis was summarily removed from the mailing list.
Now, normally, when someone gets evicted from a mailing list, it
excites little attention. But here was an ironic -- some would say
momentous -- event: The list is run, after all, by John Gilmore, the
EFF cofounder, a cypherpunk god who is famous for having once said
that the Internet interprets censorship as damage and routes around
it. And it was none other than Gilmore who gave Vulis the boot. The
shunning of Vulis was "an act of leadership," Gilmore said.
Thus began a debate over what the concept of censorship means in a
forum devoted to opposing it. Did Gilmore have the right to show Vulis
the virtual door? Or should he have let the ad hominem attacks
continue, encouraging people to set their filters accordingly? The
incident raises deeper questions about how a virtual community can
prevent one person from ruining the forum for all and whether only
government controls on expression can be called "censorship."
Vulis, a 31-year old Russian emigre who completed a PhD in
mathematics last year at the City University of New York, is described
as sociable, even friendly, by people who have met him. Online,
though, he's almost notorious. His .sig file, for instance, proudly
points out that he's a former Kook of the Month; Vulis was also a
Net-legend and even has the alt.fan.dimitri-vulis newsgroup named
after him.
Vulis portrays himself as a victim, but as I posted to the list
last week, I disagree. Anyone who's spent any time on the
100-plus-messages-a-day list can read for themselves the kind of nasty
daily messages that came from Vulis's keyboard. The list is on
Gilmore's machine and he can do what he wants with it; he can moderate
the postings, he can censor material, he can shut the whole thing
down. By kicking off an offending user, a list owner merely exercises
his property right. There's no government involvement, so the First
Amendment doesn't apply. And the deleted, disgruntled user is free to
start his own mailing list with different rules.
But then the question is whether Gilmore should have exercised
that right, especially in such an open forum. Again, I think Gilmore's
actions were justified. Consider inviting someone into your home or
private club. If your guest is a boor, you might ask him to leave. If
your guest is an slobbish drunk of a boor, you have a responsibility
to require him to leave before he ruins the evening of others.
Eugene Volokh, a law professor at UCLA, runs a number of mailing
lists and has kicked people off to maintain better editorial control.
Volokh says that the most valuable publications are those that
exercise the highest degree of editorial control.
But what if your private club's express purpose is to cherish free
speech? That's where the terrain gets mucky. One 'punk wrote: "For
someone who espouses freedom of speech to arbitrarily censor someone
is indeed hypocritical." Another called it a "big cypherpunkish move"
that couldn't be condoned "even bearing in mind the inane and
wearisome behaviour of Dr. Vulis." Still others said that this
demonstrated that "libertarianism can't work without some measure of
authoritarianism." (Libertarianism being the primordial flame war
topic, the debate nearly consumed itself at this point.)
Vulis told me yesterday: "I'm particularly disappointed by John
Gilmore's actions. I've known him and communicated with him before.
His treatment of me was rude and unprofessional and inappropriate." In
posts to the mailing list, Vulis levels the additional criticism that
it was "arbitrary and capricious" and that he was not notified that he
would be forcibly unsubscribed.
This week Vulis busied himself by saying that now Gilmore can be
sued for what happens on cypherpunks, arguing that the list owner is
exercising greater control and so is subject to greater liability. Of
course, in this country anyone can sue for anything. But it's highly
unlikely the suit would go anywhere. Solveig Bernstein, a lawyer with
the Cato Institute, says: "Chances are in a defamation lawsuit he'd be
treated like a publisher or bookstore owner.. They exercise some
control over content and enjoy pretty broad immunity from lawsuits."
For his part, Gilmore calls removing the Russian mathematician "an
act of leadership." He says: "It said we've all been putting up with
this guy and it's time to stop. You're not welcome here... It seemed
to me that a lot of the posts on cypherpunks were missing the mark.
They seemed to have an idea that their ability to speak through my
machine was guaranteed by the Constitution."
What does Vulis's ouster mean to the community that sprang up
around this mailing list, of which he had been a member for nearly
three years? Many of his peers think he did it for attention or
notoriety; one longtime list-denizen declined to be interviewed for
fear of encouraging him. (If that's his goal, he's already succeeded.
Will Rodger from Inter@ctive Week and Lewis Koch from Upside Magazine
are writing about this.)
Other cypherpunks wonder why Vulis is abrasive online, yet
mild-mannered in person; Gilmore likened him to "a Jekyll-and-Hyde
personality."
The flap comes at a time when other prominent cypherpunks are
leaving, citing too many flames and too little content. Perry Metzger,
another longtime member, announced last month he would start his own,
moderated mailing list. The hard-core programmers have moved on. Yet
the list membership has never been higher, at 1,949 direct
subscribers. And the cyber-rights issues the group discusses have
never been more important.
Ironically, tools like anonymous remailers that the cypherpunks
labored to create now make it impossible to get rid of Vulis
completely. Blocking posts from remailers is unthinkable to the
cypherpunks. So the embattled Russian =E9migr=E9 continues to read the
list under a pseudonym and appears to be posting as frequently as
ever. But perhaps Gilmore succeeded in part. If not more polite,
Vulis's messages now are at least on-topic.
------------------------------
Date: Mon, 18 Nov 1996 18:56:33 -0500
From: Bob Palacios <editor@cdt.org>
Subject: File 5--CDT Policy Post 2.38 - Pres Takes First Steps Towards Clipper
Source - fight-censorship@vorlon.mit.edu
The Center for Democracy and Technology /____/ Volume 2, Number 38
----------------------------------------------------------------------
A briefing on public policy issues affecting civil liberties online
----------------------------------------------------------------------
CDT POLICY POST Volume 2, Number 38 November 18, 1996
CONTENTS: (1) President Takes First Steps Towards Clipper 3.1.1
(2) Details of the Executive Order
(3) How to Subscribe/Unsubscribe
(4) About CDT, contacting us
** This document may be redistributed freely with this banner intact **
Excerpts may be re-posted with permission of <editor@cdt.org>
** This document looks best when viewed in COURIER font **
-----------------------------------------------------------------------
(1) PRESIDENT TAKES FIRST STEPS TOWARDS CLIPPER 3.1.1
In a move that leaves major unanswered questions about the privacy of global
communications on the Internet, President Clinton has taken the first
concrete steps towards implementing the government's controversial key
recovery encryption proposal. On Friday November 15, the President appointed
an ambassador-level "Special Envoy for Cryptography" and signed an Executive
Order that gives the Commerce Department jurisdiction over encryption exports
but includes the Justice Department in all such export decisions. These
developments do little to change the underlying regulations on encryption
that have prevented the development of a strong worldwide encryption standard
needed to protect privacy and security on the Internet.
The full text of the executive order and other relevant background materials
are available on CDT's Encryption Policy Page:
http://www.cdt.org/crypto/
Friday's White House announcements demonstrate the Administration's
commitment to its dangerous key recovery approach to worldwide encryption.
This approach fails to meet the fundamental privacy needs of computer users
and industry because:
* International communications are still vulnerable since products sold
by the dominant U.S. hardware and software manufacturers must conform
to U.S. export controls.
* Key recovery won't protect privacy internationally and institutionalizes
a global government surveillance mechanism without privacy safeguards.
* U.S. exports are still controlled and uncompetitive making it harder for
the market to develop a secure global encryption standard.
The Administration policy, initially announced on October 1st and dubbed
"Clipper 3.1.1," leaves Internet users without the technical means to secure
their communications or the international legal standards needed to protect
their privacy.
In other developments this week, Hewlett-Packard and other companies announced
preliminary approval to export new "dormant encryption" products, which
contain strong encryption that can only be activated with a special license.
While this new architecture is expected to make it easier for industry to
market encryption products, this technology does not change the underlying
privacy problems created by the Administration's export control policy.
Granting of licenses to use strong encryption will still be subject to the
current export controls limiting key length and requiring key recovery for
strong encryption.
CONTINUING A DANGEROUS KEY RECOVERY POLICY
The Administration's announcements mark the first real steps towards
implementing an approach to encryption policy based on the dangerous and
untested idea of global key recovery. This approach would institutionalize
worldwide governmental access to encrypted communications without providing
any privacy standards for electronic communications or stored data.
The Administration's approach leaves computer users at risk operating on a
global network without the technical security provided by strong encryption
or the legal privacy rights afforded here in the United States by the Fourth
Amendment and federal law. For example, the Administration policy would not
solve the following privacy problems:
* International communications are still vulnerable. For example, an
American individual doing business with someone in France would still
be forced to use weaker forms of encryption, or use key recovery systems
that make their communications accessible to law enforcement officials of
both countries.
* Key recovery won't protect privacy internationally. A Chinese dissident
communicating with supporters in the U.S. and fearful of weaker encryption
would be to forced to use key recovery. The Administration indicates that
such key recovery mechanisms would be based on bilateral key-access
arrangements between governments. Even if the dissident's keys were
recoverable only in the U.S., such a global key access policy would
almost certainly make those keys accessible to the Chinese government. If
the United States expects China to assist U.S. law enforcement with key
recovery for issues of national interest, such as anti-piracy efforts in
China, we can also expect China to require U.S. disclosure of keys to its
law enforcement community.
* Exports are still controlled and uncompetitive. A Japanese company using
exportable U.S. encryption products would be forced to use lower strength
encryption -- or use an key recovery agent approved by the U.S. law
enforcement community. This is unlikely to help the global market develop
a worldwide standard for secure communications.
As a result of this policy, computer users all over the world will be left
with a lowest common denominator infrastructure that does not provide for
either technical security or legal privacy for sensitive communications and
data. CDT believes that any workable U.S. encryption policy must be designed
to protect the privacy and security of Internet users.
----------------------------------------------------------------
(2) DETAILS OF THE EXECUTIVE ORDER
The Executive Order signed by the President on Friday does not change the
type of encryption products that will be exportable. Rather, it lays the
groundwork for the eventual transfer of encryption export control
jurisdiction from the State Department to the Commerce Department pending
Final Regulations by both departments.
Encryption exports have traditionally been regulated as "munitions"
controlled by the State Department. While the Commerce Department is widely
viewed as more sensitive to the needs of business and individual encryption
users, Commerce is still constrained by Administration encryption policy.
Additional provisions of the Executive Order indicate that the Commerce
Department's encryption controls will continue to be dominated by law
enforcement and national security interests:
* New Justice Department role in export review committee -- In an unusual
step, the Order adds the Justice Department to the interagency group
reviewing Commerce encryption export decisions.
* Source code treated as a "product" -- The Order specifically singles out
encryption source code to be given the stricter review scrutiny of a
"product" rather than a "technology."
* Broad definition of export -- The export of encryption source code or
object code is extended to explicitly include posting to FTP sites or
electronic bulletin boards unless "adequate" precautions are taken to
prevent transfer abroad. As reflected by a recent Federal Court finding
in the CDA indecency case that Internet users rarely have control over
the parties accessing materials via FTP, Usenet, or the Web, this
provision could have the chilling effect of preventing most
dissemination or discussion of new cryptographic tools on the Internet.
The Administration's announcements will have little effect on the existing
encryption privacy problem unless the underlying policies governing the
export and use of encryption are changed. These announcements do little to
address the unanswered questions about how privacy will be protected in the
key recovery system envisioned by the Administration.
APPOINTMENT OF THE "SPECIAL ENVOY FOR CRYPTOGRAPHY"
On Friday the President also designated Ambassador David L. Aaron as the
new "Special Envoy for Cryptography." According to the White House, this
Special Envoy will have "responsibility to promote the growth of electronic
commerce and robust, secure global communications in a manner that protects
the public safety and national security. . . . Ambassador Aaron will promote
international cooperation, coordinate U.S. contacts with foreign governments
on encryption matters and provide a focal point for identifying and resolving
bilateral and multilateral encryption issues." Ambassador Aaron is currently
the U.S. Ambassador to the OECD.
CDT hopes that the new Special Envoy, as a representative of the United
States, will work to represent the needs of Americans to communicate
privately in the currently insecure global environment. Until now, U.S.
encryption representation abroad has been dominated by law enforcement and
national security interests. CDT hopes that the new Special Envoy will also
consult with the computer user community, consumers, privacy advocates, and
industry to promote their need for secure networks worldwide.
NEXT STEPS
In the coming months, both the Department of Commerce and the State
Department must issue rules to implement the Administration's new encryption
policy.
* The State Department will issue a rule transferring its jurisdiction of
encryption licensing to the Commerce Department.
* The Commerce Department will issue rules spelling out exactly how it will
approve products for export, and what the requirements for approved key
recovery centers and key recovery plans will look like.
CDT hopes and expects that the Administration will provide an opportunity
for public comment in the rulemaking process to allow input from those
concerned about privacy and security in the formulation of U.S. encryption
policy.
-----------------------------------------------------------------
(3) SUBSCRIPTION INFORMATION
Be sure you are up to date on the latest public policy issues affecting
civil liberties online and how they will affect you! Subscribe to the CDT
Policy Post news distribution list. CDT Policy Posts, the regular news
publication of the Center For Democracy and Technology, are received by
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activists, and have become the leading source for information about
critical free speech and privacy issues affecting the Internet and other
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To subscribe to CDT's Policy Post list, send mail to
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with a subject:
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If you ever wish to remove yourself from the list, send mail to the
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----------------------------------------------------------------
(4) ABOUT THE CENTER FOR DEMOCRACY AND TECHNOLOGY/CONTACTING US
The Center for Democracy and Technology is a non-profit public interest
organization based in Washington, DC. The Center's mission is to develop
and advocate public policies that advance democratic values and
constitutional civil liberties in new computer and communications
technologies.
Contacting us:
General information: info@cdt.org
World Wide Web: URL:http://www.cdt.org/
FTP URL:ftp://ftp.cdt.org/pub/cdt/
Snail Mail: The Center for Democracy and Technology
1634 Eye Street NW * Suite 1100 * Washington, DC 20006
(v) +1.202.637.9800 * (f) +1.202.637.0968
------------------------------
Date: Mon, 25 Nov 1996 07:47:13 -0500 (EST)
From: Noah <noah@enabled.com
Subject: File 6--"NEWS ALERT--Findings Reveal Security Prblmss in Fortune 1,000
From -Noah
---------- Forwarded message ----------
Date--Wed, 20 Nov 1996 10:02:14 -0500
From--Betty G. O'Hearn <betty@infowar.com
To--news_from_wschwartau@infowar.com
Subject--"NEWS ALERT -- Findings Reveal Security Problems in Fortune 1,000"
We thank our sponsors:
Internet Security Solutions
New Dimensions International - Security Training
Secure Computing Corporation
HOMECOM Communications
National Computer Security Association
OPEN SOURCE SOLUTIONS, Inc.
_______________________________________________________
Please note that Infowar.Com assisted in sponsoring this survey and the d=
ata will be posted on our web site after the news conference.=20
FOR IMMEDIATE RELEASE
1996 INFORMATION SYSTEMS SECURITY SURVEY
Findings Reveal Security Problems in Fortune 1,000 Corporations
Baltimore, Maryland (November 19, 1996) ---- A new information security
survey of Fortune 1,000 firms has produced striking evidence of serious pro=
blems in many commercial organizations. Nearly half of the 205 firms that =
responded
admitted that their computer networks had been successfully attacked and pe=
netrated by "outsiders" in the past year -- with losses and associated cost=
s considerably higher than previously estimated.
The results of the =9196 Information Systems Security Survey, which was
sponsored by WarRoom Research, LLC, will be presented during a Morning News=
maker press conference at the National Press Club in Washington, DC, 9 am T=
hursday, November 21, 1996.
The survey also had another intriguing credential. The survey questionnair=
e
was accompanied by a letter from Senator Sam Nunn=92s Chief Counsel with th=
e U.S. Senate=92s Permanent Subcommittee on Investigations, expressing thei=
r interest in the results and promising to respect the survey=92s guarantee=
of anonymity to all
respondents.
Mr. Gembicki expressed his gratitude to the respondents and to the groups
that distributed the survey: IBM, Interpact/Infowar.com, National Computer=
Security Association, Security Dynamics, Symantec, and the WheelGroup.
CONTACT:
Mark Gembicki
Executive Vice President
WarRoom Research, LLC.
410.437.1106 or 410.437.1110
Winn Schwartau, President, InfoWar.com & Inter-Pact, Inc.=20
e-mail: winn@infowar.com
813-393-6600
Kevin J. Stevens, IAR Communications
e-mail: kevin.stevens@internetmci.com
410-795-3436
# # #
WarRoom Research, LLC, of Baltimore, Maryland, was founded in 1995 to
research and develop alternative technologies and techniques to assist orga=
nizations in gaining a competitive edge in today=92s global business enviro=
nment. =20
It offers a line of WarRoom(TM) products and consulting services which blen=
d the distinct, yet interrelated areas of collaborative decision making, co=
mpetitive intelligence, information security, and operations security. Tra=
ining services include the new seminar series entitled Raising the Competit=
ive IQ(TM), which provides instruction on how to develop and maintain a suc=
cessful level of 'competitiveness' as well as the Quarterback Technique(TM)=
for collecting competitive intelligence at conferences and in cyberspace.
=20
__________________________________________________________________
****************************************************************
DIRECT REQUESTS to: list@infowar.com with one-line in the BODY, NOT
in the subject line.
Subscribe news_from_wschwartau TO JOIN GROUP
Unsubscribe news_from_wschwartau TO LEAVE GROUP
****************************************************************
http://www.Infowar.Com
Managed by Winn Schwartau
winn@infowar.com
Interpact, Inc.
11511 Pine St.
Seminole, FL 33772
813-393-6600 Voice
813-393-6361 FAX
Comments, Content, Sponsor Opportunties
Betty O'Hearn
Assistant to Mr.Winn Schwartau
betty@infowar.com
813-367-7277 Voice
813-363-7277 FAX
------------------------------
Date: Mon, 25 Nov 1996 07:05:23 -0500 (EST)
From: Noah <noah@enabled.com>
Subject: File 7--US Touts Duty-Free Internet (fwd)
((MODERATORS' NOTE: Thanks to Noah for the steady flow of
information he has provided over the year. He has his own
small and private newsgroup that covers computer information
and humor -- jt)
Source -Noah
---------- Forwarded message ----------
Date--Mon, 25 Nov 1996 10:12:05 +0200
From--shaw <ROBERT.SHAW@itu.ch>
To--ietf <ietf@ietf.org>
Subject--US Touts Duty-Free Internet
Thought this would be of significantly high interest
to the list to warrant posting it. The article should
appear in the press within the next few days...
Bob
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Forwarded with permission - Copyright 1996 Communications
Week International.
U.S. touts duty-free Internet
BY KENNETH HART
In a bid to abolish trade barriers and boost exports, the United States is
proposing to declare the Internet a global duty-free zone for all
electronic goods and services.
But the plan, which proponents said would expand the market for electronic
'content,' has been criticized by governments wary of 'info-imperialism'
and politicking.
The new policy, designed to pre-empt any attempts to impose customs duties
or other new Net taxes, will apply to all electronic items and services
purchased across the Internet in the United States and abroad, said senior
White House officials.
The proposal, to be discussed with senior European Commission
representatives at a meeting in Brussels next week and with world trade
representatives shortly afterwards, is part of a broad administration
public policy initiative by President Bill Clinton's administration to spur
electronic commerce across the Internet.
Under the proposal, only goods and services bought and delivered
electronically would be exempt from tariffs and taxes. Material items, such
as a modem purchased electronically from a Web site, will not be included.
The proposal--which may ultimately require the backing of a Republican
congress as well as international approval--will almost certainly face
stiff resistance from local state governments and other countries that fear
electronic commerce over the Internet will erode their current revenue
base.
It has received qualified support from leading figures in the Internet
community, who caution against overly-ambitious political intervention.
But free trade enthusiasts and U.S. software companies called the move a
giant leap towards the creation of a stable, predictable market for global
electronic commerce.
"This is marvellous," said Tony Rutkowski, vice president for Internet
business development at software maker General Magic Inc., of Sunnyvale,
California.
Industry observers say the U.S. initiative, to be lead by Ira Magaziner,
senior White House policy adviser to President Bill Clinton, throws the
spotlight on the difficulty that sovereign governments have in tracking,
let alone taxing, exchanges of data across the global network of networks.
This borderless, lawless nature has been a key element in the Internet's
phenomenal global growth. But there is now a widespread belief that, if the
Internet is to be accepted as the medium for electronic commerce around the
world, it needs a coherent set of legal guidelines and principles.
The White House's sweeping Internet initiative represents a new,
"minimalist" role that the U.S. government intends to play, senior
officials said. Instead of firmly regulating the Internet according to the
traditional telecommunications model, White House officials said government
emphasis will be on ensuring users can conduct business within a proper
commercial environment.
Exact details on the Internet electronic initiative remain to be worked
out. For example, a few officials said the duty-free proposal may only be
applicable to goods and services valued under $50.
The aim is to ensure that Net commerce is unencumbered by customs duties or
any forms of taxation such as a bit tax, where charges would be levied in
proportion to the amount of data flowing across communications networks,
which is currently under consideration in Europe.
The Clinton initiative is not specifically aimed at abolishing value added
tax for electronic goods--European opposition to such a move is likely to
be fierce. But Washington officials acknowledge that the U.S.'s tacit
admission that taxes are difficult to levy over the Net may undermine
countries currently in favor of imposing VAT.
Nevertheless, U.S. officials argue that a free-trade zone will boost
overall transactions, increasing state revenues through conventional income
taxes. If adopted, the duty-free zone will increase sales of software and
other items of intellectual propriety over the Internet, said Peter Harter,
public policy counsel at Netscape Communications Corp., of Mountain View,
California.
In addition to the duty-free proposal, a white paper outlining initiatives,
to be published in its final form by next spring, will also contain policy
guidelines in areas such as data privacy, electronic payment, intellectual
property rights and technical standards.
Already the Clinton administration has submitted drafts containing some of
the key ideas to the World Trade Organization, the World Intellectual
Propriety Organization, the Organization of Economic Cooperation and
Development (OECD), and other organizations, as the basis for multinational
negotiations, said senior officials.
It hopes its white paper will dovetail with a variety of Internet-related
issues already being tackled by the OECD, including taxation and
encryption, said officials at the Paris-based organization.
A high-level European Community workgroup is preparing a report on the
technical and economic feasibility of taxing flows of digital information,
said Luc Soete, professor of international economics at the University of
Maastricht and director of an economic research group that works on
Internet taxation issues. Privately, however, several top EC officials said
they oppose the idea.
One senior EC official said the Clinton administration's Internet trade
proposal smacks of "U.S. info-imperialism" specifically designed to
aggressively boost exports.
Not so, said General Magic's Rutkowski. He said a duty-free zone may
ultimately help companies, especially those from developing nations, to
compete more effectively around the world to the disadvantage of U.S.
firms.
Other governments are expected to react apprehensively to the new proposal
when it is fully discussed at the World Trade Organization meeting in
Singapore early next month. Another observer called the proposal a
political gesture--the unofficial launch of U.S. vice president Al Gore's
presidential campaign for the year 2000.
Leading Internet figures, meanwhile, welcomed the government's
proposal--albeit with some skepticism. The duty-free proposal is "a step in
the right direction," said Scott Bradner, director of Harvard University's
network device test lab in Cambridge, Massachusetts, and a leading member
of the Internet Engineering Task Force (IETF).
But he and other IETF members warned against any "top-down approach" by
policy makers who are often unfamiliar with the Internet's technology and
operations.
While policy makers and diplomats try to hammer out global Internet
agreements, many in the Internet community suggest a more pragmatic
approach.
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Date: Thu, 21 Mar 1996 22:51:01 CST
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