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Strong encryption exported

Network Associates, America's largest independent provider of security software, last week took steps to circumvent US legislation forbidding the export of strong encryption software by selling a clone of its 128- bit key encryption program, Pretty Good Privacy (PGP), through a Dutch subsidiary. Network Associates believes it has escaped the prohibition by asking a Swiss company, cnlab Software, to create a functionally equivalent version of PGP without technical help, the resulting software being marketed through a Dutch subsidiary in Amsterdam. "This is a risky, but not plainly illegal, strategy," Stewart Baker, an encryption lawyer, said. "It's risky because it makes a mockery of [US Commerce Department] controls. This takes real guts, if you make them mad enough, they can put your company under."

A Network Associates executive said the company briefed the Commerce Department about its plans six weeks ago. "They're fully aware [of our plans] and didn't raise any objections," Peter Watkins, general manager of the Net Tools Secure Division at Network Associates, said. "We're in compliance with the Commerce Department," Richard Hornstein, vice-president of legal affairs and corporate development for Network Associates, said.

"Whether [Network Associates] acted legally or not is a question for investigation," William A Reinsch, under-secretary of commerce for export administration, said. "If they exported [PGP] to this company illegally, then they have a problem. If we determine the product the company is going to ship out is an American product by virtue of its content, it is subject to American export controls."

Watkins said his company's move is not a political statement. "We just want to be able to sell products that people want,'" he said. "We are the first US company to address this issue of how do we sell a product that is functionally equivalent to a US product. It looks like, acts like and adheres to the same standards as PGP."

Microsoft investigation widens

The US Department of Justice (DOJ) last week expanded its anti-trust investigation of Microsoft to include issues related to Sun Microsystems' Java programming language. Sun spokeswoman Ann Little said the company had received civil subpoenas "from various states and the Justice Department over the past few months". In a lawsuit filed last October, Sun accused Microsoft of trying to sabotage Java, which some analysts say has the potential to threaten Microsoft's dominance in the PC operating system market. Sun's suit claims that Microsoft's implementation of Windows-only versions of Java breaks the fundamental premise of Java, that it will run on any platform.

Meanwhile, US government documents show that Microsoft increased its lobbying efforts in the past year as it became enmeshed in the legal battle with anti-trust regulators. Microsoft spent $1.2m on lobbying in the second half of 1997 - nearly double the $660,000 spent during the first six months. Microsoft's total spending on lobbying in Washington last year was $1.9 million, up 67 per cent from 1996. Microsoft's spending ranks it third in the computer industry behind IBM, which spent $5.2m in 1997, and Texas Instruments, which also spent nearly $2m. The Microsoft chairman, Bill Gates, and other executives acknowledged that the company has been slow to recognise the need for representation in Washington.

First underage hacker prosecuted

The first juvenile hacker to be prosecuted in the United States accepted a plea bargain with federal attorneys last week. The youth pleaded guilty to disabling a Worcester, Massachusetts, airport control tower and other airport facilities for six hours and disrupting telephone services in Rutland, Massachusetts, on 10 March 1997. He also hacked into a Worcester pharmacy computer and stole prescription details from a local chemist, according to the government, but the Justice Department is not charging him with that incident because the computer was not a government-protected system and the hacker did not cross state lines. Both attacks occurred when computer systems were made accessible through the Internet so that system administrators could work remotely.

According to the terms of the plea bargain, the youth is not allowed to use the Internet while on two years probation, he cannot be employed by a computer company and has been ordered to serve 250 hours community service. He also must pay $5,000 to Bell Atlantic and forfeit to the government the computer hardware and software used in the attack.

"Computer and telephone networks are at the heart of vital services provided by the government, private industry, and our critical infrastructure," Donald Stern, a US Attorney, said. "Hacking a computer or telephone network can create a tremendous risk to the public and we will prosecute juvenile hackers in appropriate cases, such as this one."

New media challenge

The question of how Britain can build a viable and sustainable new digital media economy over the next five years is the starting point for InterAction 2 - a workshop held physically at the Brighton Media Centre from Thursday to Saturday and virtually on the Web (http://www.interaction2.org.uk).

The Web site will build on the proposals arrived at by the workshop, which features invited representatives from industry (including the music, television, communication and software sectors), finance, public organisations, and universities. The project is being supported by the Department of Trade and Industry and the Foresight Programme in the Office of Science and Technology.

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