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Costly US policy on encryption control

Opponents of the US government's restrictions on exporting strong encryption programs had their arguments for relaxing restrictions boosted last week. A study that said government policy could cost the US economy at least $35bn over the next five years. The Economic Strategy Institute, urging the Clinton administration to abandon current policies, said that losses could be as high as $96bn.

"The encryption issue so far has been played as a software issue, but this report shows it is much broader," said Erik R Olbeter, director of the institute's Advanced Telecom and Information Technology Program and the report's main author. "This affects industries that have generated increased wealth in the past decade and things that are key to future growth. Encryption lies at the heart of the major growth markets within wireless communications, online banking, corporate intranets and extranets, financial smart cards and more."

The government did not welcome the report. "My biggest frustration is, they offer no constructive alternative," said William Reinsch, undersecretary of commerce and head of the Bureau of Export Administration, adding: "I'm sure it will add fuel to the fire the other side is trying to start."

Playboy goes to law to protect copyright

Playboy Enterprises was awarded $3.7m in a US federal court last week against Five Senses Productions, a subscription-based service that trawls Usenet newsgroups for sexually explicit images, which it then resells. Five Senses was found liable for illegally distributing 7,500 Playboy pictures through the service, which costs $5 per month. The founder of the operation based in Southern California has maintained that his service automatically grabs pictures posted to Usenet and that there is no way he could filter out Playboy images.

"This judgement is a significant victory in our efforts to combat copyright infringement on the Internet," Michelle Kaiser, intellectual property counsel for Playboy, said. In previous similar cases, the courts have ruled in favour of the company. Earlier, Playboy sued a former cover girl, Terri Welles, for $5m for infringing its trademarks on her Web site.

Pentium II goes mobile for laptops

Intel last week launched its much-hyped, low-voltage version of the Pentium II processor, running at speeds of 233 and 266MHz, designed for notebook computers. The new chip is expected to boost system performance by around 10 per cent.

The new chip is 75 per cent lighter, 83 per cent smaller and uses 50 per cent less power than a desktop Pentium II, but it consumes about 10 per cent more power than the MMX equivalent used in notebooks. Intel, however, does not believe this will reduce battery life. "Tests show the power management is so powerful that users won't really notice a difference," an Intel spokesman said.

Following the release, most notebook PC manufacturers exhibited the first mobile computers to incorporate the Pentium II processor. Compaq, Dell Computer, Toshiba, Gateway 2000, Digital Equipment, NEC Computer Systems and Hitachi all unveiled notebooks equipped with the latest Intel chips, priced from $3,000 to $5,000.

Andy Oldfield

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