In his Politechs column, Rory J. O'Connor writes that the Justice Department's plan to break into computers of suspected wrong-doers is a bad idea. People keeps pace with the high-tech shuffle. The Issue of the Week explains why broadband bill are languishing in Congress. And the State Roundup tells us about H1-B visa fever .

Privacy
HHS Grapples With Medical Privacy Matters
     Anticipating congressional gridlock, the Department of Health and Human Services has worked out its own plan to grapple with medical privacy, after Congress missed its deadline to pass reforms. As early as this fall, the department will announce a proposal to protect the privacy of medical records that closely mirrors recommendations HHS Secretary Donna E. Shalala made to Congress in 1997. Shalala's recommendations set guidelines on what medical information can be disclosed, how secure the information is, the amount of control consumers have over the information, and how privacy violations should be punished. But her testimony also called for exceptions to medical privacy in cases where public health, research or law enforcement purposes outweighed privacy interests. These exceptions have long concerned privacy advocates, who say the proposal gives too much power for law enforcement to obtain medical records. In addition, the plan left open the possibility for federal law preempting state law when state law is "less protective" than Federal law. The House Commerce Health and Environment Subcommittee will continue to work at a compromise in the hopes of passing a bill before the February deadline.

Domains
ICANN Meets, Debates, Gets Cash Infusion
     In its first open board meeting, the Internet Corporation for Assigned Names and Numbers approved a motion for establishing a uniform system of mandatory arbitration for settling disputes over Internet domain names. A more detailed process still needs to be drafted in 45 days, by a committee established by ICANN that is supposed to take into consideration the views of businesses, intellectual property interests, individuals and non-commercial groups. The committee was directed to use as a starting point a dispute resolution policy developed by the registrars and Network Solutions Inc., which up until this summer had a monopoly on registering top-level domain names. The registrars' policy included many of the recommendations drafted by the World Intellectual Property Organization (WIPO) in a report released April 30. The decision came one day after the body refused again to take up a petition to create a group that would represent individual domain name holders as part of the ICANN's Domain Name Supporting Organization (DNSO). Supporters of creating an individual domain name holder constituency argue that none of the other seven constituencies provide an appropriate outlet for the concerns of individuals. ICANN interim Chairwoman Esther Dyson and others noted that individual domain name holders will have a voice as members of ICANN's general assembly, which also will have seats on ICANN's board. The non-profit organization's interim board also approved a number of other resolutions Thursday — including a process for electing a new board with 18 members to replace the current nine-member board that was appointed when the federal government started ICANN last year. Nine of the elected members would be chosen — indirectly, in a controversial decision — by a vote of the at-large membership of ICANN, which Dyson hopes will reach some 5,000 by the time elections are held. That also hinges on the condition of the organization's creaky finances, which got a boost when 3Com Corp. agreed to loan ICANN $175,000. That adds to a loan pool from MCI WorldCom and Cisco Systems of $650,000 to help the financially strapped organization to continue to operate until November. ICANN had originally planned to help finance its operations through a $1 per year fee attached to the cost of registering each domain name. But the company was forced to abandon the plan for the time being when Congressional opponents and other critics blasted it as an unauthorized tax.

Encryption
Industry Says Help Could Be On The Way
     A preliminary Justice Department plan to covertly allow law enforcement officials to disable encryption could backfire and boost the fortunes of encryption supporters, some high-tech industry representatives and others said. The Cyberspace Electronic Security Act proposal would grant new authority to federal agents armed with search warrants to secretly implant devices that could unlock the passwords to encrypted information on suspects' computers. It met heavy criticism from some lawmakers, privacy advocates and high-tech industry representatives who say the plan poses a threat to civil liberties. Justice officials defended the plan, saying the increasing use of strong encryption to scramble information is making it much more difficult to catch criminals who use it to hide information about their illegal activities. Industry officials say with news of the proposed legislation coming a few weeks after reports of a Clinton administration plan to create a proposed government computer monitoring system in an effort to deter cyberterrorism, known as the Federal Intrusion Detection Network, bolster's their call for legislation (H.R. 850) that would ensure the free flow of strong. "In many ways its helpful for us, it takes them out of the closet," said Jason Mahler, vice president and general counsel for the Computer and Communications Industry Association. "It's much easier to explain why it's bad to allow the government to break into your house, than to give them a key," a reference to government efforts to promote the use of encryption products that would enable law enforcement officials to gain access to the "key" needed to unscramble encrypted data. Congressional reaction to the proposal? "Its chances of being anything other than dead on arrival at Capitol Hill are slim to none," said Rep. Bob Barr, R-GA, in a letter he sent last Friday to Attorney General Janet Reno requesting her to kill the proposal.

Trade
Making A List, Checking It Twice
     Despite encountering numerous delays, U.S. trade officials and high-tech industry representatives hope they can wrap up talks on expanding the list of products covered by the Information Technology Agreement before world trade ministers meet in Seattle in November. Officials have been working for more than a year to gain agreement among the participating countries to add more products to the list of items included in the 1996 ITA agreement. That pact called for the staged elimination of tariffs on information technology products like computers and semiconductors. The "ITA 2" talks on expanding the original agreement have focused on adding such items as printed circuit board manufacturing equipment, radar and navigational products and some consumer electronics. New talks have been delayed in part by concerns raised by India and Malaysia, which object to the inclusion of some items.

Fraud
Cracking The Credit Card Scam Circle
     An e-commerce industry alliance said it will not violate anyone's privacy with its plan to fight online credit card fraud by compiling data on electronic transactions. Five companies formed an association Monday dedicated to compiling data about credit-card purchases made on the Internet. The Internet Fraud Prevention Council, made up of HNC Software, EC Direct, CyberCash, Ebit.Net, ShopNow.Comand Signio, will use the data to analyze risks of online credit-card sales. Companies worry that if they don't have some standard for information about online credit fraud, someone might begin posting false information. Although some of the information contained in the data is personal, the group will collect data aggregately through an anonymous scoring system to provide risk analysis, insisting this method ensures users' privacy is not violated.

E-Commerce
Commissioners Say Consensus Could Be Tough To Build
     Members of the Advisory Commission on Electronic Commerce debated how to make their mission a success even if they can't reach consensus on what to recommend to Congress. "I think that there's wisdom in this commission not defining itself as having to achieve unanimity or even a two-thirds majority or otherwise it's defined a failure," said commission Chairman and Virginia Republican Gov. James Gilmore. Subcommittee Chairman and Charles Schwab CEO David Pottruck recommended a two-pronged report representing minority and majority viewpoints on the taxation issue. Commissioners on the 19-member panel range from no-tax advocates, like Gilmore, to Dallas Mayor Ron Kirk, who is worried that growing Internet sales could erode the local tax base. Business representatives are resigned to the fact that Internet sales and goods will likely face some taxation, but they would like to see simplified process. "I think our report has got to have some opportunity, the final written report, to also recognize the fact that there was not unanimity and that there were some other point of view which deserve to be represented in some fashion," Pottruck said.The full commission will meet via conference call on Sept. 7 to finalize the agenda for the group's Sept. 14-15 meeting in New York.

Y2K
ATM Networks Y2K Ready, Health Care Needs Work
     The country's major ATM networks are Y2K ready, but it's up to individual banks to ensure that cash is stocked and machines are functioning, industry leaders said. Close scrutiny by federal regulators has pushed the financial services industry to prepare for the 2000 date change, and that should reassure consumers that the system is safe. Plus the companies that run the ATM networks have done extensive end-to-end testing with major financial institutions, the executives said. Unstable utilities systems in foreign countries are what could cause ATMs outside the United States to crash; the major domestic ATM networks have already built redundancies into their systems to deal with any sort of periodic outages of electric power and telecommunications that occur. Some banks have been hesitant in public Y2K notices, however, because of liability fears, according to Ronald Congemi, president and CEO of Star System. Health care installations worldwide, though, are still ailing when it comes to Y2K readiness. In a survey of 72 countries by the International Y2K Cooperation Center, that industry trailed other sectors, with 11 countries of those surveyed having completed contingency plans, of which only two were tested. The U.S. reported its health care sector wouldn't be ready until around December. A Senate committee has urged the Health Care Financing Administration (HCFA) to conduct more comprehensive Y2K tests. Since the center posted results on the Web Thursday, more surveys have poured in by the hour and new results could be posted as early as next week.

Education
Gore, Riley Offer Teacher Tech Training Funds
     Vice President Al Gore announced Tuesday that the Education Department plans to provide $135 million in grants to train 400,000 new teachers to use technology in the classroom, particularly those instructors who serve low-income and rural areas. A study released early this year by the CEO Forum on Education and Technology found that only 20 percent of teachers felt prepared to "fully integrate" technology in the classroom. The teacher technology training initiative is part of a partnership involving universities, school districts, non-profit groups and high-tech companies. The private sector also has provided an additional $195 million for the grants, bringing the total available to $330 million. Many of the grants will be aimed at low-income and rural communities. The initiative will involve some historically black colleges and universities and institutions that serve Hispanics and American Indians. On a Silicon Valley visit to promote the initiative, Secretary of Education Richard Riley contrasted the 7 percent of federal government spending for primary and secondary education with the $500 million commitment for technology training — one-quarter of all funds being spent. The funds — which are in addition to the $2.25 billion in e-Rate funds.

Lobbying
Tech Lobby To Launch In Texas
     Silicon Valley's premiere high-tech lobbying group, Technology Network, is expected to expand its national reach with the launch of Texas-based version of the group scheduled for an early September launch. The Austin-based Texas TechNet is not considered a chapter of TechNet, but rather "a node on the network" and is "an equal part of the network," according to Michael Engelhardt, chief operating officer of TechNet. Sept. 7 is slated as the tentative commencement date for the group, which involves a contingent of new member companies including Dell Computer, Texas Instruments, Compaq and Powershift Group. There are also several existing members of Technet involved in the newly developed operation such as Intel and Applied Materials, which have operations in Texas, and Cisco Systems, based in California. The real mission is to engage the executives personally in politics in meeting national and political leaders — getting them personally involved in their time and money using those new relationships however they want," Engelhardt said.

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