textfiles/magazines/CUD/cud0634.txt

Computer underground Digest    Sun  Apr 17, 1994   Volume 6 : Issue 34
                           ISSN  1004-042X

       Editors: Jim Thomas and Gordon Meyer (TK0JUT2@NIU.BITNET)
       Archivist: Brendan Kehoe
       Archivist Le Grande: Stanton McCandlish
       Shadow-Archivists: Dan Carosone / Paul Southworth
                          Ralph Sims / Jyrki Kuoppala
                          Ian Dickinson
        Suspercollater:       Shrdlu Nooseman

CONTENTS, #6.34 (Apr 17, 1994)

File 1--Bruce Sterling's Remarks at CFP '94
File 2--"When Copying Isn't Theft" (Internet World/M. Godwin Rprnt)
File 3--NII & Service to the Poor (fwd)

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----------------------------------------------------------------------

Date: Mon, 4 Apr 1994 16:07:11 -0700
From: Bruce Sterling <bruces@WELL.SF.CA.US>
Subject: File 1--Bruce Sterling's Remarks at CFP '94

Bruce Sterling
bruces@well.sf.ca.us

LITERARY FREEWARE:  NOT FOR COMMERCIAL USE

Remarks at Computers, Freedom and Privacy Conference IV
Chicago, Mar 26, 1994

I've been asked to explain why I don't worry much about the topics of
privacy threat raised by this panel.  And I don't.  One reason is that
these scenarios seem to assume that there will be large, monolithic
bureaucracies (of whatever character, political or economic)  that are
capable of harnessing computers for one-way surveillance of an
unsuspecting populace.  I've come to feel that computation just
doesn't work that way.  Being afraid of monolithic organizations
especially when they have computers, is like being afraid of really
big gorillas especially when they are on fire.

The threat simply doesn't concur with my historical experience.  None
of the large organizations of my youth that compelled my fear and
uneasy respect have prospered.  Let me just roll off a few acronyms
here.  CCCP.  KGB.  IBM.  GM.  AEC.  SAC.

It was recently revealed that the CIA has been of actual negative
worth -- literally worse than useless -- to American national
security.  They were in the pockets of the KGB during our death
struggle with the Soviet Union -- and yet we still won.  Japanese
zaibatsus -- Japan Inc. -- the corporate monoliths of Japan -- how
much hype have we heard about that lately?   I admit that AT&T has
prospered, sort of -- if you don't count the fact that they've
hollowed themselves out by firing a huge percentage of their
personnel.

Suppose that, say, Equifax, turned into an outright fascist
organization and stated abusing privacy in every way they could.  How
could they keep that a secret?  Realistically, given current
employment practices in the Western economies, what kind of loyalty
could they command among their own personnel?  The low level temps
have no health insurance and no job security; the high level people
are ready to grab their golden parachutes and bail at any time.  Where
is the fanatically loyal army of gray flannel organization men who
will swear lifelong allegiance to this organization, or *any*
organization in this country with the possible exception of the Mafia?

I feel that the real threat to our society isn't because people are
being surveilled but because people are being deliberately ignored.
People drop through the safety nets.  People stumble through the
streets of every city in this country absolutely wrapped in the grip
of demons, groping at passersby for a moment's attention and pity and
not getting it.  In parts of the Third World people are routinely
disappeared, not because of high-tech computer surveillance but for
the most trivial and insane reasons -- because they wear glasses,
because they were seen reading a book -- and if they survive, it's
because of the thin thread of surveillance carried out by Amnesty
International.

There may be securicams running 24 hours a day all around us, but
mechanical surveillance is not the same as people actually getting
attention or care.  Sure, rich people, like most of us here, are gonna
get plenty of attention, probably too much, a poisonous amount, but in
the meantime life has become so cheap in this society that we let
people stagger around right in front of us exhaling tuberculosis
without treatment.  It's not so much information haves and have-nots
and watch and watch-nots.

I wish I could speak at greater length more directly to the topic of
this panel.  But since I'm the last guy to officially speak at CFP IV,
I want the seize the chance to grandstand and do a kind of pontifical
summation of the event.  And get some irrepressible feelings off my
chest.

What am I going to remember from CFP IV?  I'm going to remember the
Chief Counsel of NSA and his impassioned insistence that key escrow
cryptography represents normality and the status quo, and that
unlicensed hard cryptography is a rash and radical leap into unplumbed
depths of lawlessness.  He made a literary reference to BRAVE NEW
WORLD.  What he said in so many words was, "We're not the Brave New
World, Clipper's opponents are the Brave New World."

And I believe he meant that.  As a professional science fiction writer
I remember being immediately struck by the deep conviction that there
was plenty of Brave New World to go around.

I've been to all four CFPs, and in my opinion this is the darkest one
by far.  I hear ancestral voices prophesying war.  All previous CFPs
had a weird kind of camaraderie about them.  People from the most
disparate groups found something useful to tell each other.  But now
that America's premiere spookocracy has arrived on stage and spoken
up, I think the CFP community has finally found a group of outsiders
that it cannot metabolize.  The trenchworks are going up and I see
nothing but confrontation ahead.

Senator Leahy at least had the elementary good sense to backpedal and
temporize, as any politician would when he saw the white-hot volcano
of technological advance in the direct path of a Cold War glacier that
has previously crushed everything in its way.

But that unlucky flak-catcher the White House sent down here -- that
guy was mousetrapped, basically.  That was a debacle!  Who was
briefing that guy?  Are they utterly unaware?  How on earth could they
miss the fact that Clipper and Digital Telephony are violently
detested by every element in this community -- with the possible
exception of one brave little math professor this high?  Don't they
get it that everybody from Rush Limbaugh to Timothy Leary despises
this initiative?  Don't they read newspapers?   The Wall Street
Journal, The New York Times?  I won't even ask if they read their
email.

That was bad politics.  But that was nothing compared to the
presentation by the gentleman from the NSA.  If I can do it without
losing my temper, I want to talk to you a little bit about how
radically unsatisfactory that was.

I've been waiting a long time for somebody from Fort Meade to come to
the aid of Dorothy Denning in Professor Denning's heroic and
heartbreaking solo struggle against twelve million other people with
email addresses.  And I listened very carefully and I took notes and I
swear to God I even applauded at the end.

He had seven points to make, four of which were disingenuous, two were
half-truths, and the other was the actual core of the problem.

Let me blow away some of the smoke and mirrors first, more for my own
satisfaction than because it's going to enlighten you people any.
With your indulgence.

First, the kidporn thing.  I am sick and tired of hearing this
specious blackwash.  Are American citizens really so neurotically
uptight about deviant sexual behavior that we will allow our entire
information infrastructure to be dictated by the existence of
pedophiles?  Are pedophiles that precious and important to us?  Do the
NSA and the FBI really believe that they can hide the structure of a
telephone switch under a layer of camouflage called child pornography?
Are we supposed to flinch so violently at the specter of child abuse
that we somehow miss the fact that you've installed a Sony Walkman
jack in our phones?

Look, there were pedophiles before NII and there will be pedophiles
long after NII is just another dead acronym.  Pedophiles don't jump
out of BBSes like jacks in the box.  You want to impress me with your
deep concern for children?  This is Chicago!  Go down to the Projects
and rescue some children from being terrorized and recruited by crack
gangs who wouldn't know a modem if it bit them on the ass!  Stop
pornkidding us around!  Just knock it off with that crap, you're
embarrassing yourselves.

But back to the speech by Mr. Baker of the NSA.  Was it just me,
ladies and gentlemen, or did anyone else catch that tone of truly
intolerable arrogance?  Did they guy have to make the remark about our
missing Woodstock because we were busy with our trigonometry?  Do
spook mathematicians permanently cooped up inside Fort Meade consider
that a funny remark?  I'd like to make an even more amusing
observation -- that I've seen scarier secret police agencies than his
completely destroyed by a Czech hippie playwright with a manual
typewriter.

Is the NSA unaware that the current President of the United States
once had a big bushel-basket-full of hair?  What does he expect from
the computer community?  Normality?  Sorry pal, we're fresh out!   Who
is it, exactly, that the NSA considers a level-headed sober sort,
someone to sit down with and talk to seriously?  Jobs?  Wozniak?
Gates?  Sculley?  Perot -- I hope to God it's not Perot.  Bob Allen --
okay, maybe Bob Allen, that brownshoe guy from AT&T.  Bob Allen seems
to think that Clipper is a swell idea, at least he's somehow willing
to merchandise it.  But Christ, Bob Allen just gave eight zillion
dollars to a guy whose idea of a good time is Microsoft Windows for
Spaceships!

When is the NSA going to realize that Kapor and his people and
Rotenberg and his people and the rest of the people here are as good
as people get in this milieu?  Yes they are weird people, and yes they
have weird friends (and I'm one of them), but there isn't any
normality left for anybody in this society, and when it comes to
computers, when the going got weird the weird turned pro!  The status
quo is *over!*  Wake up to it!  Get used to it!

Where in hell does a crowd of spooks from Fort Meade get off playing
"responsible adults" in this situation?  This is a laugh and a half!
Bobby Ray Inman, the legendary NSA leader, made a stab at computer
entrepreneurism and rapidly went down for the third time.  Then he got
out of the shadows of espionage and into the bright lights of actual
public service and immediately started gabbling like a
daylight-stricken vampire.  Is this the kind of responsive public
official we're expected to blindly trust with the insides of our
phones and computers?  Who made him God?

You know, it's a difficult confession for a practiced cynic like me to
make, but I actually trust EFF people.  I do; I trust them; there,
I've said it.   But I wouldn't trust Bobby Ray Inman to go down to the
corner store for a pack of cigarettes.

You know, I like FBI people.  I even kind of trust them, sort of, kind
of, a little bit.  I'm sorry that they didn't catch Kevin Mitnick
here.  I'm even sorry that they didn't manage to apprehend Robert
Steele, who is about one hundred times as smart as Mitnick and ten
thousand times as dangerous.   But FBI people, I think your idea of
Digital Telephony is a scarcely mitigated disaster, and I'll tell you
why.

Because you're going to be filling out your paperwork in quintuplicate
to get a tap, just like you always do, because you don't have your own
pet court like the NSA does.  And for you, it probably is going to
seem pretty much like the status quo used to be.  But in the meantime,
you will have armed the enemies of the United States around the world
with a terrible weapon.  Not your court-ordered, civilized Digital
Telephony -- their raw and tyrannical Digital Telephony.

You're gonna be using it to round up wiseguys in streetgangs, and
people like Saddam Hussein are gonna be using it to round up
democratic activists and national minorities.  You're going to
strengthen the hand of despotism around the world, and then you're
going to have to deal with the hordes of state-supported truckbombers
these rogue governments are sending our way after annihilating their
own internal opposition by using your tools.  You want us to put an
axe in your hand and you're promising to hit us with only the flat
side of it, but the Chinese don't see it that way; they're already
licensing fax machines and they're gonna need a lot of new hardware to
gear up for Tiananmen II.

I've talked a long time, but I want to finish by saying something
about the NSA guy's one real and actual argument.  The terrors of the
Brave New World of free individual encryption.  When he called
encryption enthusiasts "romantic" he was dead-on, and when he said the
results of spreading encryption were unpredictable and dangerous he
was also dead-on, because people, encryption is not our friend.
Encryption is a mathematical technique, and it has about as much
concern for our human well-being as the fact that seventeen times
seventeen equals two hundred and eighty-nine.  It does, but that
doesn't make us sleep any safer in our beds.

Encrypted networks worry the hell out of me and they have since the
mid 1980s.  The effects are very scary and very unpredictable and
could be very destabilizing.  But even the Four Horsemen of Kidporn,
Dope Dealers, Mafia and Terrorists don't worry me as much as
totalitarian governments.  It's been a long century, and we've had
enough of them.

Our battle this century against totalitarianism has left terrible
scars all over our body politic and the threat these people pose to us
is entirely and utterly predictable.   You can say that the devil we
know is better than the devil we don't, but the devils we knew were
ready to commit genocide, litter the earth with dead, and blow up the
world.  How much worse can that get?  Let's not build chips and wiring
for our police and spies when only their police and spies can reap the
full benefit of them.

But I don't expect my arguments to persuade anyone in the NSA.  If
you're NSA and I do somehow convince you, by some fluke, then I urge
you to look at your conscience -- I know you have one -- and take the
word to your superiors and if they don't agree with you --*resign.*
Leave the Agency.  Resign now, and if I'm right about what's coming
down the line, you'll be glad you didn't wait till later.

But even though I have a good line of gab, I don't expect to actually
argue people out of their livelihood.  That's notoriously difficult.

So CFP people, you have a fight on your hands.  I'm sorry that a
community this young should have to face a fight this savage, for such
terribly high stakes, so soon.   But what the heck;  you're always
bragging about how clever you are; here's your chance to prove to your
fellow citizens that you're more than a crowd of net-nattering MENSA
dilettantes.  In cyberspace one year is like seven dog years, and on
the Internet nobody knows you're a dog, so I figure that makes you CFP
people twenty-eight years old.   And people, for the sake of our
society and our children you had better learn to act your age.

Good luck.  Good luck to you.  For what it's worth, I think you're
some of the best and brightest our society has to offer.  Things look
dark but I feel hopeful.  See you next year in San Francisco.

------------------------------

Date: Sun, 17 Apr 1994 22:51:01 CDT
From: CuD Moderators <cudigest@mindvox.phantom.com>
Subject: File 2--"When Copying Isn't Theft" (Internet World/M. Godwin Rprnt)

From:  Internet World, Jan./Feb. 1994

 When Copying Isn't Theft:
 How the Government Stumbled in a "Hacker" Case
 By Mike Godwin

 As more and more private individuals and private companies connect to the
 Internet, more and more of them will generate or use their intellectual
 property there. And since not everyone is familiar with the legal
 distinctions between so-called "intellectual property" and everyday
 tangible property, there will be more and more discussion of how
 infringement of intellectual property amounts to "online theft."


 But the law of intellectual property is not so simple as Usenet
 discussions may lead you to believe. Assuming that your information is
 "property" (when in fact it may not be property at all) may lead you to a
 false sense of security about how much the law protects your interest in
 that information. This article discusses one computer-crime case, United
 States v. Riggs, that illustrates how even well-trained federal
 prosecutors can grow confused about how to apply intellectual-property
 law--especially the law of trade secrets. In particular, it shows what can
 happen when prosecutors uncritically apply *intellectual* property notions
 in prosecuting a defendant under laws passed to protect *tangible*
 property.


 Big Phrack Attack


 In the recent case of U.S. v. Riggs, the Chicago U.S. Attorney's office
 prosecuted two young men, Robert Riggs and Craig Neidorf, on counts of
 wire fraud (18 U.S.C. 1343), interstate transportation of stolen property
 (18 U.S.C.  2314) and computer fraud (18 U.S.C. 1030).  Of these statutes,
 only the last was passed specifically to address the problems of
 unauthorized computer intrusion; the other two are "general purpose"
 federal criminal statutes that are used by the government in a wide range
 of criminal prosecutions.  One element of the wire-fraud statute is the
 taking (by fraudulent means) of "money or property," while the
 interstate-transportation-of-stolen-property (ITSP) statute requires,
 naturally enough, the element of "goods, wares, merchandise, securities or
 money, of the value of $5,000 or more."


 (I don't discuss here the extent to which the notions of "property" differ
 between these two federal statutes.  It is certain that they do differ to
 some extent, and the interests protected by the wire-fraud statute were
 expanded in the 1980s by Congress to include Rthe intangible right to
 honest services.S 18 U.S.C. 1346..  Even so, the prosectuion in the Riggs
 case relies not on 1346, but on intellectual-property notions, which are
 the focus of this article.)


 The computer-intrusion counts against Neidorf were dropped in the
 governmentUs June 1990 superseding indictment, the indictment actually
 used at NeidorfUs trial in July 1990. Probably this was due to the
 government's realization that it would be hard to prove beyond a
 reasonable doubt that Neidorf had any direct involvement with any actual
 computer breakin.


 The Riggs case is based on the following facts: Robert Riggs, a computer
 "hacker" in his early '20s, discovered that he could easily gain access to
 an account on a computer belonging to Bell South, one of the Regional Bell
 Operating Companies (RBOCs).  The account was highly insecure--access to
 it did not require a password (a standard, if not always effective,
 security precaution).  While exploring this account, Riggs discovered a
 word-processing document detailing procedures and definitions of terms
 relating the Emergency 911 system ("E911 system").  Like many hackers,
 Riggs had a deep curiosity about the workings of this country's telephone
 system. (This curiosity among young hackers is a social phenomenon that
 has been documented for more than 20 years. See, e.g., Rosenbaum, "Secrets
 of the Little Blue Box," Esquire, October 1971; and Barlow, "Crime and
 Puzzlement: In Advance of the Law on the Electronic Frontier," Whole Earth
 Review, September 1990.)


 Riggs knew that his discovery would be of interest to Craig Neidorf, a
 Missouri college student who, while not a hacker himself, was an amateur
 journalist whose electronically distributed publication, Phrack, was
 devoted to articles of interest to computer hackers.  Riggs sent a copy of
 the E911 document to Neidorf over the telephone, using computer and modem,
 and Neidorf edited the copy to conceal its origin.  Among other things,
 Neidorf removed the statements that the information contained in the
 document was proprietary and not for distribution.  Neidorf then sent the
 edited copy back to Riggs for the latter's review; following RiggsUs
 approval of the edited copy, Neidorf published the E911 document in the
 February 24, 1989, issue of Phrack.  Some months following publication of
 the document in Phrack, both Riggs and Neidorf were contacted and
 questioned by the Secret Service, and all systems that might contain the
 E911 document were seized pursuant to evidentiary search warrants.


 Riggs and Neidorf were indicted under the statutes discussed above; Riggs,
 whose unauthorized access to the BellSouth computer was difficult to
 dispute, later pled guilty to wire fraud for that conduct.  In contrast,
 Neidorf pled innocent on all counts, arguing, among other things, that his
 conduct was protected by the First Amendment, and that he had not deprived
 Bell South of property as that notion is defined for the purposes of the
 wire fraud and ITSP statutes.


 The two defenses are closely related.  Under the First Amendment, the
 presumption is that information is free, and that it can readily be
 published and republished.  For this reason, information "becomes
 property" only if it passes certain legal tests.  This means that law
 enforcement cannot simply assume that whenever information has been copied
 from a private computer system a theft has taken place.


 But in Neidorf's case, as it turns out, this is essentially what the
 Secret Service and the U.S. Attorney's office did assume. And this
 assumption came back to haunt the government when it was revealed during
 trial that the information contained within the E911 document did not meet
 any of the relevant legal tests to be established as a property interest.


 How information becomes stealable property.


 In order for information to be stolen property, it must first be property.
 There are only a few ways that information can qualify as a property
 interest, and two of these--patent law and copyright law--are entirely
 creations of federal statute, pursuant to an express Constitutional grant
 of legislative authority. (U.S. Constitution, Article I, Sec. 8, clause
 8.)  Patent protections were clearly inapplicable in the Neidorf case; the
 E911 document, a list of definitions and procedures, did not constitute an
 invention or otherwise patentable process or method.  Copyright law might
 have looked more promising to Neidorf's prosecutors, since it is well
 established that copyrights qualify as property interests in some contexts
 (for example, your uncle's copyright interest in his novel can be
 bequeathed to you as "personal property" through a will).


 Unfortunately for the government, the Supreme Court has explicitly stated
 that copyrighted material is not property for the purposes of the ITSP
 statute.  In Dowling v. United States, 473 U.S. 207 (1985), the Court held
 that interests in copyright are outside the scope of the ITSP statute.
 (Dowling involved a prosecution for interstate shipments of pirated Elvis
 Presley recordings.)  In reaching its decision, the Court held, among
 other things, that 18 U.S.C. ' 2314 contemplates "a physical identity
 between the items unlawfully obtained and those eventually transported,
 and hence some prior physical taking of the subject goods."   Unauthorized
 copies of copyrighted material do not meet this "physical identity"
 requirement.


 The Court also reasoned that intellectual property is different in
 character from property protected by generic theft statutes: "The
 copyright owner, however, holds no ordinary chattel.  A copyright, like
 other intellectual property, comprises a series of carefully defined and
 carefully delimited interests to which the law affords correspondingly
 exact protections."  The Court went on to note that a special term of art,
 "infringement," is used in reference to violations of copyright
 interests--thus undercutting any easy equation between unauthorized
 copying and "stealing" or "theft."


 It is clear, then, that in order for the government to prosecute the
 unauthorized copying of computerized information as a theft, it must rely
 on other theories of information-as-property.  Trade-secret law is one
 well-established legal theory of this sort.  Another is the
 breach-of-confidence theory articulated recently by the Supreme Court in
 Carpenter v. United States, 108 S.Ct. 316 (1987). I will discuss each
 theory in turn below.

 Trade Secrets


 Unlike copyrights and patents, trade secrets are generally created by
 state law, and most jurisdictions have laws that criminalize the
 violations of a trade-secret holder's rights in the secret. There is no
 general federal definition of what a trade secret is, but there have been
 federal cases in which trade-secret information has been used to establish
 the property element of a federal property crime. In the 1966 case of
 United States v. Bottone (365 F.2d 389, cert denied, 385 U.S. 974 (1966)),
 for example, the Second Circuit Court of Appeals affirmed ITSP convictions
 in a case involving a conspiracy to steal drug-manufacturing bacterial
 cultures and related documents from a pharmaceutical company and sell them
 in foreign markets.


 But the problem in using a trade secret to establish the property element
 of a theft crime is that, unlike traditional property, information has to
 leap several hurdles in order to be established as a trade secret.


 Trade secret definitions vary somewhat from state to state, but the
 varying definitions typically have most elements in common.  One good
 definition of "trade secret" is outlined by the Supreme Court in Kewanee
 Oil Co. v. Bicron Corp., 416 U.S. 470 (1974): "a trade secret may consist
 of any forumula, pattern, device or compilation of information which is
 used in one's business, and which gives one an opportunity to obtain an
 advantage over competitors who do not know or use it.  It may be a formula
 for a chemical compound, a process of manufacturing, treating or
 preserving materials, a pattern for a machine or other device, or a list
 of customers."  The Court went further and listed the particular
 attributes of a trade secret:


 * The information must, in fact, be secret--"not of public knowledge or of
 general knowledge in the trade or business."
 * A trade secret remains a secret if it is revealed in confidence to
 someone who is under a contractual or fiduciary obligation, express or
 implied, not to reveal it.
 * A trade secret is protected against those who acquire via unauthorized
 disclosure, violation of contractual duty of confidentiality, or through
 "improper means." ("Improper means" includes such things as theft,
 bribery, burglary, or trespass. The Restatement of Torts at 757 defines
 such means as follows: "In general they are means which fall below the
 generally accepted standards of commercial morality and reasonable
 conduct.")
 * A court will allow a trade secret to be used by someone who discovered
 or developed the trade secret independently (that is, without taking it in
 some way from the holder), or if the holder does not take adequate
 precautions to protect the secret.
 * An employee or contractor who, while working for a company, develops or
 discovers a trade secret, generally creates trade secret rights in the
 company.


 The holder of a trade secret may take a number of steps to meet its
 obligation to keep the trade secret a secret.  These may include:
 a) Labelling documents containing the trade secret "proprietary" or
 "confidential" or "trade secret" or "not for distribution to the public;"
 b) Requiring employees and contractors to sign agreements not to disclose
 whatever trade secrets they come in contact with;
 c) destroying or rendering illegible discarded documents containing parts
 or all of the secret, and;
 d) restricting access to areas in the company where a nonemployee, or an
 employee without a clear obligation to keep the information secret, might
 encounter the secret. (See Dan Greenwood's Information Protection Advisor,
 April 1992, page 5.)


 Breach-of-confidence


 Even if information is not protected under the federal patent and
 copyright schemes, or under state-law trade-secret provisions, it is
 possible, according to the Supreme Court in Carpenter v. United States,
 for such information to give rise to a property interest when its
 unauthorized disclosure occurs via the breach of confidential or fiduciary
 relationship.  In this case, R. Foster Winans, a Wall Street Journal
 reporter who contributed to the Journal's "Heard on the Street" column,
 conspired with Carpenter and others to reveal the contents of the column
 before it was printed in the Journal, thus allowing the conspirators to
 buy and sell stock with the foreknowledge that stock prices would be
 affected by publication of the column.  Winans and others were convicted
 of wire fraud; they appealed the wire-fraud convictions on the grounds
 that had not deprived the Journal of any money or property.


 It should be noted that this is not an "insider trading" case, since
 Winans was no corporate insider, nor was it alleged that he had received
 illegal insider tips.  The "Heard on the Street" column published
 information about companies and stocks that would be available to anyone
 who did the requisite research into publicly available materials.  Since
 the information reported in the columns did not itself belong to the
 Journal, and since the Journal planned to publish the information for a
 general readership, traditional trade secret notions did not apply.  Where
 was the property interest necessary for a wire-fraud conviction?


 The Supreme Court reasoned that although the facts being reported in the
 column were not exclusive to the Journal, the Journal's right--presumably
 based in contract--to Winan's keeping the information confidential gave
 rise to a property interest adequate to support a wire-fraud conviction.
 Once the Court reached this conclusion, upholding the convictions of the
 other defendants followed: even if one does not have a direct fiduciary
 duty to protect a trade secret or confidential information, one can become
 civilly or criminally liable if one conspires with, solicits, or aids and
 abets a fiduciary to disclose such information in violation of that
 person's duty.  The Court's decision in Carpenter has received significant
 criticism in the academic community for its expansion of the contours of
 "intangible property," but it remains good law today.


 How the theories didn't fit


 With these two legal approaches--trade secrets and breach of
 confidence--in mind, we can turn back to the facts of the Riggs case and
 see how well, or how poorly, the theories applied in the case of Craig
 Neidorf.


 With regard to any trade-secret theory, it is worth noting first of all
 that the alleged victim, BellSouth, is a Regional Bell Operating
 Company--a monopoly telephone-service provider for a geographic region in
 the United States.  Remember the comment in the Kewanee Oil case that a
 trade secret "gives one an opportunity to obtain an advantage over
 competitors who do not know or use it"?  There are strong arguments
 that--at least so far as the provision of Emergency 911 service
 goes--BellSouth has no "competitors" within any normal meaning of the
 term.  And even if BellSouth did have competitors, it is likely that they
 would both know and use the E911 information, since the specifications of
 this particular phone service are standardized among the regional Bells.


 Moreover, as became clear in the course of the Neidorf trial, the
 information contained in the E911 document was available to the general
 public as well, for a nominal fee. (One of the dramatic developments at
 trial occurred during the cross-examination of a BellSouth witness who had
 testified that the E911 document was worth nearly $80,000.  Neidorf's
 counsel showed her a publication containing substantially the same
 information that was available from a regional Bell or from Bellcore, the
 Bells' research arm, for $13.to any member of the public that ordered it
 over an 800 number.) Under the circumstances, if the Bells wanted to
 maintain the E911 information as a trade secret, they hadn't taken the
 kind of steps one might normally think a keeper of a secret would take.


 BellSouth had, however, taken the step of labelling the E911 document as
 "NOT TO BE DISCLOSED OUTSIDE OF BELLSOUTH OR ITS SUBSIDIARIES" (it was
 this kind of labelling that Neidorf attempted to remove as he edited the
 document for publication in Phrack).  This fact may have been responsible
 for the federal prosecutors' oversight in not determining prior to trial
 whethe E911 document actually met the tests of trade-secret law.  It is
 possible that prosecutors, unfamiliar with the nuances of trade-secret
 law, read the "proprietary" warnings and, reasonining backwards, concluded
 that the information thus labelled must be trade-secret information.  If
 so, this was a fatal error on the government's part.  In the face of
 strong evidence that the E911 document was neither secret nor
 competitively or financially very valuable, any hope the government had of
 proving the document to be a trade secret evaporated.


 (It's also possible that the government reasoned that the E911 information
 could be used by malicious hackers to damage the telephone system in some
 way. The trial transcript shows instances in which the government
 attempted to elicit information of this sort. It should be noted, however,
 that even if the information did lend itself to abuse and vandalism, this
 fact alone does not bring it within the scope of trade-secret law.)


 Nor did the facts lend themselves to a Carpenter-like theory based on
 breach of confidence; Neidorf had no duties to BellSouth not to disclose
 its information.  Neither did Riggs, from whom Neidorf acquired a copy of
 the document.  The Riggs case lacks the linchpin necessary for a
 conviction based on Carpenter--in order for nonfiduciaries to be
 convicted, there must be a breaching fiduciary involved in the scheme in
 some way.  There can be no breach of a duty of confidence when there is no
 duty to be breached.


 Thus, when its trade-secret theory of the E911 document was demolished in
 mid-trial, the government had no fall-back theory to rely on with regard
 to its property-crime counts, and the prosecution quickly sought a
 settlement on terms favorable to Neidorf, dropping prosecution of the case
 in return for Neidorf's agreement to a pre-trial diversion on one minor
 count.


 The lesson to be learned from Riggs is that it is no easy task to
 establish the elements of a theft crime when the "property" in question is
 information.  There are good reasons, in a free society, that this should
 be so--the proper functioning of free speech and a free press require that
 information be presumptively free, and that the publication of information
 be presumptively protected from regulation by the government or by private
 entities invoking the civil- or criminal-law property protections.  The
 government in Riggs failed in its duty to recognize this presumption by
 failing to make the necessary effort to understand the intellectual
 property issues of the case.  Had it done so, Neidorf might have been
 spared an expensive and painful trial, and the government might have been
 spared a black eye.*


 *See, e.g., "Score One for the Hackers of America," NEWSWEEK, Aug. 6 1990,
 page 48, and "Dial 1-800 ... for BellSouth 'Secrets'," COMPUTERWORLD, Aug.
 6, 1990, page 8.

 ===================================================================

 Mike Godwin, a 1990 guaduate of the University fo Texas School of Law, is
 legal services counsel for the Electronic Frontier Foundation. EFF filed
 an amicus curiae brief in the Neidorf case, arguing that Neidorf's
 attempted publication of the E911 document was protected speech under the
 First Amendment. Godwin received a B.A. in liberal arts from the
 University of Texas at Austin in 1980. Prior to law school, Godwin worked
 as a journalist and as a computer consultant.

------------------------------

Date: Sun, 27 Mar 1994 23:21:55 -0800 (PST)
From: "Arthur R. McGee" <amcgee@NETCOM.COM>
Subject: File 3--NII & Service to the Poor (fwd)

Original Sender--"Karen G. Schneider" <kgs@panix.com>
Date--Sun, 27 Mar 1994 20:06:59 -0500
Subject--NII & Service to the Poor

The Poor Will Always Be With Us...

I am a librarian in a "poor but proud" city--Newark, New Jersey.

Every day we see poor people in this library.  Some people are
*obviously* poor--their personal appearance speaks for their
situations.  But many, many more people are impoverished in ways at
once only subtly apparent yet highly pernicious: they are poorly
educated, poorly skilled and poorly prepared for the massive changes
in informtion-sharing behavior our world is now experiencing.

These poor are the children growing up without exposure to
computers--not at school, not at home, not even, for the most part, in
our libraries.  These poor are the adults with such weak educations
and limited information-seeking skills that they passively accept the
quality, quality and media of information we provide them, regardless
of how limited or antiquated our services. These poor are the people
who have never heard of the "information superhighway," who will not
purchase computers with modems, who have never touched keyboards, who
do not know what the Internet is. Those of you who believe that
"everyone" is aware of the upcoming information revolution do not work
with the reality of poor inner-city lives.

One of the quandaries of the information revolution is that those who
are information-poor are unaware of it, so they are unable to
participate in it.  So far, the information revolution has been
largely waged by highly educated and informed advocates, people who
often have tremendous resources at their disposal.  These advocates
have spoken quite well on behalf of their own needs; some have
attempted to speak to the needs of the information-poor (as, in
essence, I am doing here).  But the information-rich, however
well-meaning, have largely determined and prioritized the issues of
the information revolution according to their own visions and
realities.

So across our nation and the world, we hear of multimedia cable
extended to private homes, but not to housing projects; we read about
public kiosks in wealthy communities, but city schools lack computers;
in academic communities, nearly everyone seems to have an Internet
account, but in the middle of a poor city, there is not so much as a
public-use computer available in the main library. Information access
as a basic public service is broached only tentatively at the national
level.  There is much discussion of commercializing resources but
little discussion about ensuring access for everyone, even with
respect to basic community information.  Communities with freenets can
be lauded for their efforts in public computing, but the
implementation of these projects invariably assumes a information-rich
public proactively seeking and demanding such services.

Who, then, will speak for the poor?  The problem is (at minimum)
two-fold.  The information have-nots need advocates, guides, leaders
and visionaries to help them understand what it is they are missing
out on, and why it is important.  We who wish to provide such
advocacy, on the other hand, need information from our disenfranchised
communities so we can better understand what *we* are missing out on,
and why it is important--in other words, to understand what goods and
services we need to provide; to tailor and temper our advocacy with a
real-world understanding of what people need for survival and growth
in tomorrow's culture.

Here in Newark, we have several groups attempting to do just that: to
reach out to the disenfranchised, draw them in, and empower them to
shape tomorrow's information revolution.  There are grass-roots
community organizers speaking to small groups around the city, and
Newark Public Library is beginning to reach out to both city leaders
and community organizers to develop a coalition of information
advocates for Newark.  We dream of a network that will ensure that
every Newark resident will have access to information--and by access
we mean not only physical availability but *awareness of resources*
and *resource relevance*--two stipulations which make our paradigm of
access unusual and, in some ways, extremely progressive.  We can only
hope that other communities join us in repaving the information
highway to meet the needs of not just its present but also its
potential travellers.

Our efforts demonstrate that unless things change, the information
revolution will only aggravate the inequities underlying current
policies for providing basic services in our country.  Out of
necessity, many of us now assume that the funds essential to
maintaining this network will come from local (city and county)
resources.  (We are hopeful that we are eligible for a special
infusion of funds to help us initiate this project, but experience
teaches city workers that we cannot rely on federal resources for
program maintenance.)  This is not new for libraries; in our country,
the vast majority of funds for public libraries are provided at the
city or county level.  If it is the de facto funding standard for the
new information resources, however, it bodes poorly for our country's
future with respect to equity in information access.  Jonathon Kozol,
in _Savage Inequalities_, spoke to the inherent unfairness of using
local funds to pay for education; just as we will perpetuate
information poverty if we do not provide people relevant information
in ways they can access it, so too will we perpetuate poverty in all
its forms if we persist in funding national policies with local taxes.
We must not codify inequality for the next generation.

The poor will always be with us--and, as working with the poor has
taught me, they *are* us.  The most elaborate networking scheme, the
fastest computers, the most dazzling graphics are all for naught if
they are really a private service for a specially-privileged
population.  It is incumbent on those in public service, particularly
the public information services, and especially librarians, that we
become aggressive participants in the information
revolution--lobbying, writing, organizing, or whatever else it takes
to become equal participants in the desing of the information
superhighway and all it represents--or we, and those we represent,
will be left behind as forgotten casualties of a silent battle.

Karen G. Schneider   kgs@panix.com                     *   *   *

------------------------------

End of Computer Underground Digest #6.34
************************************