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Archive: September 2001 News Headlines
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Consumer Groups Rally Against XP

A coalition of US consumer groups yesterday called on US prosecutors to "get tough" with Microsoft and warned that Windows XP will drive up consumer costs, hamper innovation and restrict choice even more than the company has already been convicted of doing. In a 33-page report outlining their concerns, the Consumer Federation of America, Consumers Union, Media Access Project and the US Public Interest Research Group said that "we urge the attorneys-general.... to seek a swift and sure end to what we believe to be illegal leveraging of illegally obtained monopolies for the PC operating system and internet browser." Meanwhile, Korea's largest Internet portal Daum Communications, along with 17 Korean software companies, said today that they will take joint action against the planned release of Microsoft's Windows XP operating system in South Korea. The companies say that they are "deeply concerned" that Microsoft's bundling of a variety of application software with Windows XP - including instant messaging, Internet phone service and digital photo applications - would constitute an unfair business practice. The companies have lodged a complaint with Korea's Fair Trading Commission and are threatening to take out an injunction to prevent XP's scheduled release on October 25th. Microsoft said it would seek to meet the Korean companies to try to resolve the problem.

 

Tough New Cybercrime Laws In .AU, USA

Tough new cybercrime laws were enacted in Australia and proposed in the USA today. In Australia, the new Cybercrime Bill 2001 - initially introduced in July, but passed in parliament this afternoon - proposes seven new hi-tech offences: hacking, denial-of-service attacks, website vandalism, spreading viruses, and using computers in offences such as stalking, fraud and sabotage. The new offences carry penalties of up to 10 years in jail and give police wide-ranging new powers to compel suspects to assist investigations into crimes involving computer use. Several civil liberties groups - including Electronic Frontiers Australia - have expressed reservations about the matter. Meanwhile in the USA, the Justice Department is urging Congress to quickly approve its new Anti-Terrorism Act, a twenty-five page proposal that would expand the government's powers to conduct electronic surveillance, access business records and detain suspected terrorists. Amongst other things, the new Act would classify many computer crimes as acts of terrorism and would hand down penalties of life in jail without parole for proven offenses. "Federal terrorism offences" would include such things as hacking into a computer to obtain anything of value or causing damage, launching a virus, or making an extortionate threat to damage a computer.

 

Telstra Fined $75,000 For Email

In a landmark case, Australia's largest telco Telstra was fined $75,000 by the Federal Court today for sending a discriminatory email to its staff. In a case brought against the company by four unions, Telstra was found to have breached the Workplace Relations Act in July this year when former employee relations manager Robert Cartwright sent an email encouraging company executives to favour staff engaged on individual workplace agreements against unionised labour. The email was sent on the same day that Telstra announced 10,000 staff cuts. Community and Public Sector Union spokesperson Adrian O'Connell (one of the plaintiffs in the case) said that the fine was the largest ever imposed for a breach of the Act's "freedom of association" provisions and said it was a great outcome for Telstra workers. "It sends a clear message to other employers about the dangers of discriminating against union members and using [individual workplace contracts] to de-unionise a workforce." Footnote: Mr Cartwright now sits on the Australian Industrial Relations Commission.

 

Gartner Warns: IIS Too Unsafe To Use

The prestigious Gartner Group has issued a warning to its clients that the seemingly endemic security defects in Microsoft's Internet products have finally rendered them too unsafe and costly to use. In an analysis of the recent Code Red and Nimda worm attacks on Microsoft's IIS web servers, Microsoft Outlook and the company's other web software, Gartner said that the "almost weekly" patching effort required to protect the company's software from attack was no longer economically justifiable. Instead, it recommends that its clients - largely Fortune 500 companies - "immediately investigate alternatives" such as Apache and iPlanet for delivering their online services. Gartner said it remains concerned that viruses and worms will continue to attack IIS until Microsoft has released a completely rewritten and thoroughly tested new version of the product, but believes this is unlikely to happen (if it happens at all) until late 2002. Gartner also cast doubts on the security of Microsoft's proposed .NET web services, since they all require the use of IIS. In Australia, most banks and many Government departments currently use IIS to run their web sites.

 

dStore Resurrected; Free ISP Model Folds

Troubled Australian etailer dStore - which was sold for to retailer Harris Scarfe in December 2000 for $3 million after losing its initial AUD$23 million "dot.com" capital in little more than a year - has been onsold again. It was announced today that Brisbane developers HotShed have purchased the site from Harris Scarfe's administrators for $615,000. HotShed now plan to refloat dStore as pruned-down CD, video, toy, book, DVD and games retailer with a staff of between 4 and 10, and said they're confident of turning a profit in a matter of months - something dStore has so far failed to deliver any of its owners. Meanwhile, Australia's last remaining free ISP GoConnect announced over the weekend that it will be converting to a fee-based ISP model within 2 weeks after finding the being a free ISP in Australia was economically unsustainable. GoConnect's closure brings the country's flirtation with the free ISP model to an end after similar fold-ups by FreeNet in October 2000 and Globalfreeway in March 2001. GoConnect said that the April 2000 tech wreck, the global economic downturn and Australia's high bandwidth charges had all played a part in the decision.

 

Australian Government Web Sites Insecure

60% of Australian Federal Government web sites examined by acting Auditor-General Ian McPhee had "significant" security vulnerabilities affecting the confidentiality, availability and integrity of crucial government information systems and data - and 100% of them were at least partially vulnerable to some types of hacking attacks, it was announced today. In a scathing report into the current level of online security amongst Australian Federal Government agencies, Mr McPhee said that a recent random audit of 10 large Federal agencies - including the Tax Department, Bureau of Statistics and Treasury - had found that the general level of online security currently varied from average to abysmal. As a result of the audit, all agencies had been advised to fix their current problems and conduct a thorough risk assessment and review of security policy as a matter of urgency. "For the majority of agency web sites in the audit, the current level of internet security is insufficient given the threat environment and vulnerabilities identified within a number of agency sites," Mr McPhee said. The Australian National Audit Office will be publishing the full report - Internet Security within Commonwealth Government Agencies - on its web site in the near future.

 

Sharon Austen, DJ's Score Big Losses

Australian etailers Sharon Austen and David Jones announced major losses from their online operations yesterday - but both downplayed any negative sentiment about the matter. Online erotica retailer Austen announced an operating loss of AUD$3.4 million for the year to June - or more than 4 times the AUD$731,000 loss it had made the previous year - but said that much of it was attributable to merger and restructure costs (Sharon Austen merged with adult mail order and phone services company Divolution in May). A company spokesperson said that the firm hoped for a turnaround in the coming 12 months. Meanwhile, national retailer David Jones said that it was "pleased" with the loss of AUD$19 million it had made on its online operations since November 2000, since this was in line with expectations and the company really didn't expect the site to break even until the 2002-2003 fiscal year. David Jones disclosed that the loss was made up of several things including its purchase of The Spot (along with its transaction software, web site and warehouse) for $4 million last year; a further $7.5 million spent redesigning The Spot's software; and $7.2 million spent redesigning and running its own web site - an amount the company hoped would halve next year. David Jones said it had made $3 million in online sales during the period.

 

New Nimda Virus "Worse Than Code Red"

A new worm virus which propagates itself through emails, between servers and across Windows networks began to assault Australia today, less than a few hours after breaking out in Asia, the USA and Europe. As with the Code Red virus which caused global panic in July and August, the virulent new worm attacks Microsoft IIS web servers and Microsoft Outlook address books. But according to anti-virus software vendors, Nimda may be significantly worse han Code Red because it uses multiple methods to propagate itself (rather than the server-to-server method used by Code Red) and because it simultaneously attacks 16 known major security holes in Microsoft products, as opposed to Code Red's focus on a single defect. Today the South Australian Government was forced to close down its Internet mail gateway as a precaution against propagating the virus and many Australian State and Federal Government web servers were knocked off air as they became infected. Earlier this month Computer Economics estimated that viruses which take advantage of defects in Microsoft's products had caused at least US$10.7 billion in damages so far this year - and last week Netcraft announced that as many as 44% of IIS web servers were vulnerable to some form of worm attack.

 

TV Outstrips Net In Crisis

81% of Americans turned to TV to obtain the latest news on last week's World Trade Centre bombing in New York according to the latest research from the Pew Internet & American Life Project (PEW). PEW found that regardless of whether Americans had a Net connection or not, most relied on TV and the telephone for their primary communication needs in the first few days immediately following the terror attacks. Nonetheless - for many online Americans - the Internet played a very useful supplemental role as a communications tool through email, instant messaging, chat rooms and as a news resource. PEW found that 36% of US Internet users went online looking for news in the first two days after the attacks, which represented a leap of 33% on normal news-seeking behaviour. Surprisingly, PEW also found that US Net users were more likely than non-users to display some kinds of emotional and civic engagement with their country (for example, online Americans were among the most fervent to attend meetings and attempt to donate blood). 30% of Net users also said that the Internet helped them learn more about what was going on in the first days after the attacks, and 29% said that the Net helped them connect with people they needed to reach.

 

New Privacy Guidelines Released

The Australian Privacy Commissioner released guidelines for the country's new privacy laws today - less than 3 months from the date when most large organisations and heath practitioners are due to implement them. The new privacy laws (scheduled to come into effect on December 21 for all Australian health practitioners and organisations with a turnover of $3 million+) are intended to regulate the way that organisations collect, store, distribute and provide consumer access to personal data. However new research by Deloitte Touche Tohmatsu (DTT) - which questioned 90 medium and large-sized businesses on the subject - seems to indicate that many will either not be complying at all, or will simply be making token gestures on the matter. DTT found that 76% of the companies they surveyed collected and stored personal information on their customers but only 67% had begun preparing for the new legislation. They also found that 69% still didn't have a way of allowing customers to verify and update their own records; only 29% stored their customer data in encrypted form; 22% onsold customer data; and that 15% used cookies or web bugs to secretly track customer browsing on their sites without consent. Fortunately for all respondents - but unluckily, perhaps, for Australian consumers - the new laws provide no penalty whatsoever for any organisation that chooses to flout them.

 

Consumers Prefer Speed, Content

A new study by Jupiter Media Metrix (JMM) has found that US consumers prefer fast-loading pages over rich media by a margin of more than 2 to 1. JMM report that 40% of Internet users would visit a news or information site more often if its pages loaded quickly, while 36% would visit more often if the site could be customized to their preferences. Polling or chat capabilities would attract a further 31% of users. On the other hand, only 20% would visit a content site more often if it offered rich media and only 15% would do so if the site offered wireless feeds. JMM also found that similar concerns applied to retail sites with 59% of respondents citing “more product information”, 28% citing “product suggestions” and 26% citing faster-loading pages as the main reasons to increase visits to a site. JMM suggest that many retailers could dramatically slash to cost of mounting web sites and improve results by ignoring high-cost elements (such as elaborate graphics or Flash animations) in favour of better content and more light-weight design.

 

20% Of Microsoft Sites Still Vulnerable

While the Code Red panic has led many web sites running Microsoft's IIS web server to upgrade their security, almost 44% are still vulnerable to some form of attack and (on average) one in every five are still vulnerable to a range of attacks, according to Internet monitoring firm Netcraft. Releasing their latest monthly web server survey today, Netcraft noted that while the Code Red crisis in July and August and the issue of a cumulative patch by Microsoft had led to a remarkable improvement in the general level of security among sites running IIS, many ecommerce and government users were still displaying a "deep set complacency" about security issues, exposing both their customers and themselves to the risk of being hacked. Furthermore, Netcraft suggest that up to 12% of all IIS sites which have had security patches applied still have a live "back door" which could allow a hacker to gain access to sensitive data. In Australia, most banks and Government departments use Microsoft IIS web servers - and force users to waive their rights to legal redress if they should suffer any losses from using the online systems supplied to them.

 

Channel 7 Takes Big Dot.Com Loss

Australia's second-largest commercial TV network Channel 7 announced today that it had suffered another year of major losses in its new media investments and expects more in the future. Releasing the company's full-year figures for 2000-2001, Seven Network Ltd revealed it had lost a combined AU$84.9 million from investments in its i7 web site, C7 pay-TV business and B-digital mobile phone business and that net annual profits had dropped by 81% to AU$15.8 million as a result. The company also announced that it was taking a AU$17 write-down on its internet investments, and pledged to cap new media losses at AU$23 million over the coming year. The company's losses in the dot.com arena were almost double the AU$45.7 million hemorrhage the company had suffered in 1999-2000. Nonetheless, Channel 7 chairman Mr Kerry Stokes said that he was hopeful the new businesses would become self-sustaining with a year, and said he looked forward to an upturn in the current "soft" advertising market. Ironically, Channel 7's core broadcast TV business recorded a 4.7% rise in revenues and profitability over the period.

 

2001 Viruses Cost AU$20.5 Billion

Internet research firm Computer Economics (CE) estimate that viruses which take advantage of security defects in Microsoft's web servers and email software have run up a damages bill of US$10.7 billion (AUD$20.5 billion) around the world so far this year - and the total may rise as high as US$15 billion before the year is out. CE estimate that the world-wide cost of Code Red attacks on Microsoft IIS web servers in July and August alone has incurred US$2.6 billion in repair costs to date. $1.1 billion of this was required to clean infected systems and return to normal service; and a further $1.5 billion was run up in negative impacts on the productivity of system users, support and helpdesk staff and others responsible for assisting internal end users and customers. CE also estimate that the SirCam virus has cost the world $1.035 billion so far this year in a similar way. Nonetheless - unless another major viral outbreak occurs before December - CE report that this year's economic cost will be somewhat lower than the estimated US$17.1 billion that viruses cost the world in 2000, though still higher than the US$12.1 billion they cost in 1999. CE believe that 2000's Love Bug virus - which specifically targeted security holes in Microsoft's Internet Explorer - is still the most destructive virus unleashed to date, and has so far cost the world an estimated US$8.7 billion.

 

40% Of US Households Now Online

According to a new study by the US Census Bureau, around 54 million US households (roughly 51% of all US households) now have one or more computers, and 44 million of these (roughly 40% of all households) now have Net access. Furthermore, approximately 90% of all school-age children in the USA (ie 6 to 17 years old) had access to a computer in 2000 with 80% using a computer at school and 66% using one at home. However, the study also found that the problem of "digital divide" that's causing growing concern in Australia afflicts the USA in equal measure. The Bureau's research disclosed that 90% of households with annual incomes above US$75,000 now have a PC at home and 80% have Net access, while fewer than 30% of households with incomes below US$25,000 have a computer and 20% have Net access. The Bureau also found that there are pronounced geographic differences in PC and Net penetration in the USA, with West Coast households most likely to have PCs and Net access and households in the southern states least likely. The same applies to racial groups, with white anglo saxons the most likely (and Afro-Americans and Hispanics the least likely) to be enjoying the benefits of the Information Age at the present time.

 

We Take A Week's Holiday

Australian Cybermalls News will be taking a brief break through the remainder of this week until Monday, September 10th. Australian Cybermalls' Managing Director Dafyd Martindale has been invited to speak at the National Local Government Online Demonstration Conference being held at the Melbourne Convention Centre on September 6th and 7th, and will be taking the opportunity to enjoy a (very) brief break from his normal schedule. Mr Martindale has been invited to speak about the pioneering work that he and his companies have been undertaking on the South Burnett Online project in rural Queensland over the last 18 months with the support of Networking the Nation and a number of other public sector organisations. He'll also be speaking about new online service initiatives his companies have created for local government organisations throughout rural Australia and the results of recent live trials carried out in this area. AC News will return as normal next week.

 

Australian Net Declines 9%

After several months of growth, the number of live Australian web sites declined by approximately 9.1% during August according to our monthly Australian Internet Growth Index (which has been attempting to measure the number of live Australian web sites - as opposed to the number of registered domains - since January 1996). The decline can be attributed in part to seasonal cleanouts of dead sites by both search engines and ISPs; and in part to the ongoing dot.com fallout that has been steadily reducing the number of web sites world-wide over the last 18 months. The September 1st figures (with August 1st figures in brackets) are as follows:

  Australian Internet Growth Index August 2001
  (Figures Show Estimated Live Sites)
  • Brisbane - 8,716 (9,495)
  • Sydney - 42,099 (47,840)
  • Melbourne - 34,050 (37,459)
  • Adelaide - 6,275 (6,836)
  • Perth - 7,096 (7,789)
  • Hobart - 2,890 (2,983)
  • Canberra - 6,658 (7,390)
  • Darwin* - 7,971 (8,418)
NB: The Darwin figure includes rural Australian sites

During August 2001 Australian Cybermalls hosted 61,992 visitors, a fall on July's 67,566. Our visitors viewed 276,572 page displays from our servers, which in turn consumed 12.3 Gb of bandwidth.

 
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