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Bytes in Brief®

Issue 102

December 2005
BYTES IN BRIEF® by Editors: Sharon D. Nelson, Esq. and John W. Simek. Associate Editor: Brooke M. Weitz
Editor Emeritus: G.V. Nelson. 10000 + subscribers worldwide.® 2005 Sensei Enterprises, Inc. All rights reserved. This newsletter may not be reproduced or redistributed in any manner except with consent of the copyright owner. Distributed by this site under license.

U.S. PASSPORTS TO CONTAIN ELECTRONIC ID CHIPS

On October 25th, the State Deparment issued final rules for implanting electronic identification chips into all U.S. passports, despite continuing controversy over the security of the system and its impact on personal privacy. The regulations mean that as of October 2006, all new and renewed U.S. passports will contain radio frequency identification chips that will include a digital photo and all other information currently printed in passports. Over time, as older passports expire, everyone who holds a passport will get an electronic version. Government employee and diplomatic passports will receive the chips in a pilot program beginning early next year. Foreigners from countries who do not need visas to enter the United States also must have the chips by next October. Such countries will be responsible for providing their citizens with passports that comply with U.S. entry requirements. The department said that 98.5 percent of the 2,335 comments it received since it issued the proposed rules opposed the program. Further information may be found at http://travel.state.gov/passport/eppt/eppt_2498.html

COURTS REIN IN FBI ON CELLULAR SURVEILLANCE

Two federal judges have recently ruled that the FBI may not track the locations of cell phone users without showing evidence that a crime occurred or is in progress, saying that to do so would violate long-established privacy protections. Judges in Texas and New York denied FBI requests for court orders that would have forced wireless carriers to continuously reveal the location of a suspect's cell phone as part of an ongoing investigation. Other judges have allowed the practice in other jurisdictions, but the recent rulings could change that. Depending on a wireless phone's capabilities, carriers can determine either precise or rough locations of users when they make or receive calls, a feature primarily used for emergencies. In the New York and Texas cases, the courts approved FBI requests for other information from the wireless carriers, including logs of numbers a cell phone user called and received calls from. But the FBI also sought cell-site locations, which the courts said amounted to the ability to monitor someone's movements. Magistrate Judge James Orenstein from the U.S. District Court for the Eastern District of New York and Magistrate Judge Stephen William Smith from the U.S. District Court for the Southern District of Texas ruled that such information requires law enforcement to show probable cause that a crime has been or is being committed. Opinions in both cases may be found at http://www.eff.org/legal/cases/USA_v_PenRegister/

GROUPS CHALLENGE FCC RULES REQUIRING WIRETAP ASSISTANCE

A number of telecommunications firms, nonprofit organizations and educators are asking the U.S. Court of Appeals in Washington, D.C., to overturn controversial Federal Communications Commission (FCC) rules, which dramatically extend the sweep of an 11-year-old surveillance law designed to guarantee police the ability to eavesdrop on telephone calls. The regulations follow years of lobbying by the FBI, the Justice Department and the Drug Enforcement Administration, which have argued that "criminals, terrorists and spies" could cloak their Internet communications with impunity unless police received broad new surveillance powers. The final rules published by the Federal Communications Commission, apply to "any type of broadband Internet access service" and many Internet phone services. In many cases, the rules require Internet providers and universities to rewire their networks for FBI surveillance. The legal challenges basically say the rules are too expensive and invade privacy. The new rules are set to take effect in April 2007. The FCC has already been asked to stay the rules pending judicial review. A copy of the rules may be found at http://edocket.access.gpo.gov/2005/05-20606.htm. A copy of the request to stay the rules pending judicial review may be found at http://www.eff.org/Privacy/Surveillance/CALEA/calea_order_stay_request.pdf

SEX.COM DOMAIN HIJACKER ARRESTED

On October 27th, U.S. law enforcement officials took sex.com hijacker Stephen M. Cohen into custody after Cohen had spent four years on the run following a court ordering him in 2001 to pay $65 million in restitution for his theft. Previously, a federal court had ordered him to return control of the sex.com site to its original owner, Gary Kremen. Cohen had sent a fraudulent letter to Network Solutions, the domain registrar, stating that Kremen was no longer interested in the Sex.com domain and had authorized its transfer to him. Cohen subsequently started an Internet pornography site. Cohen had been hiding out in Tijuana and was detained by Mexican authorities when he tried to renew his work permit to operate another Internet pornography site. Mexican authorities turned him over to the U.S. Marshals Service and U.S. Border Patrol. Cohen was arrested for contempt of court, stemming from his failure to pay restitution. Further information may be found at http://www.courttv.com/news/2005/1115/sex.com_ctv.html

FINAL SPYWARE GUIDELINES ISSUED

On October 27th, the Anti-Spyware Coalition issued its final guidelines for detecting, rating and protecting against spyware. The group, composed of software companies and consumer advocates, also finalized its definition of spyware, with only minor changes from the version it proposed in July. The coalition defines spyware and other potentially unwanted technologies as programs deployed without sufficient user consent or that impair user control over any of the following: privacy, system security and user experience; use of their system resources; or collection, use and distribution of personal information. Further information may be found at http://www.antispywarecoalition.org/documents/definitions.htm

SUPREME COURT DECLINES TO HEAR MICROSOFT’S EOLAS APPEAL

On October 31st, the U.S. Supreme Court declined to hear Microsoft’s appeal in the company's ongoing Web browsing patent dispute with the University of California and Eolas Technologies. Microsoft had already been subject to a $520.6 million judgement in the case two years ago, but appealed it. The Supreme Court decided not to hear Microsoft's argument relating to how damages in the case should be calculated. Microsoft had asked the court to reject a previous ruling that damages should be awarded based on Microsoft's U.S. and foreign sales, saying that the Eolas patent should only apply to U.S. products. The new focus in the case will move to the U.S. District Court in Chicago, which is examining the validity of the Eolas patent. An appeals court remanded the case to the Chicago court last March, following a Microsoft appeal. The U.S. Patent and Trademark Office recently finished a re-examination of the Eolas patent and concluded that it is valid. The patent has been in litigation since 1999, when Eolas sued Microsoft, claiming that technology within Internet Explorer violated a 1998 University of California patent developed by Eolas founder Michael Doyle. Historical documents in the case may be found at http://www.microsoft.com/Presspass/legal_newsroomarchive.mspx?case=Eolas%20Techn ologies

SEC WARNS TRADERS ABOUT ONLINE THIEVES

On November 3rd, the Securities and Exchange Commsion alerted consumers who buy and sell stocks on the Internet to be wary of cyberthieves. The warning resulted from a flurry of complaints from online stock traders the SEC has received in recent months. The SEC warns that consumers must also be vigilant about how they open e-mail and browse popular websites, which can be infected with keystroke logging programs. The SEC also states they should guard their Social Security numbers and closely monitor banking accounts for discrepancies. Further information may be found at http://www.sec.gov/investor/pubs/onlinebrokerage.htm

BLOGGER BILL DEFEATED IN HOUSE OF REPRESENTATIVES

On November 2nd, a 225-182 vote was not enough to send the Online Freedom of Speech Act to the Senate. Under the rules that House leaders adopted to accelerate the process, a two-thirds supermajority was required. Liberal advocacy groups had circulated letters warning the measure was too broad and would invite corrupt activities online, and The New York Times wrote in an editorial that "the Internet would become a free-fire zone without any limits on spending." Rep. Lloyd Doggett, a Texas Democrat, said that if the bill were approved, the public would have "no idea whether Internet campaign ads are being financed by secret soft money." Soft money is a general term referring to funds not regulated by election laws. The House reform proposal, only one page long, simply says that the portion of federal election law that deals with publications aimed at the general public "shall not include communications over the Internet." It may eventually receive another vote under the normal, slower procedure that requires only a majority. The text of the bill may be found at http://thomas.loc.gov/cgi-bin/bdquery/z?d109:h.r.01606:

FTC SHUTS DOWN SPYWARE SITE

On November 10th, the Federal Trade Commission (FTC) succeeded in shutting down a website alleged to have sent spyware and adware along with the free music files, browser upgrades and ring tones it offered to consumers. The U.S. District Court for the Central District of California in Los Angeles, also froze the assets of an organization doing business as Enternet Media, Searchmiracle.com, C4tdownload.com, and Cash4toolbar.com, according to the FTC. In addition, the court halted downloads from an affiliate site, Iwebtunes.com, which allegedly spread spyware by offering free background music to Weblog operators. The FTC's November 1st complaint alleges that the Web sites of the defendants and their affiliates caused installation boxes to pop up on users' computer screens. In some cases, the installation boxes offered a variety of freeware, including music files, mobile phone ring tones, photographs and song lyrics. In another variation, the pop-up box warned users that their Internet browsers were defective and offered free upgrades or security patches, according to the FTC. Instead of receiving the free files or patches, users' computers were infected with spyware. The FTC complaint alleges that the defendants' software code could track PC owners' Internet use, change their home page settings, insert new toolbars into their browsers, insert a large frame displaying advertisements into browsers, and display pop-up ads. The software installed allegedly interfered with computer functions and could be difficult to remove.The FTC is seeking a permanent injunction against the downloads. The agency is also asking the court to order the defendants to give up their "ill-gotten gains." Defendants named in the FTC complaint are Enternet Media, Conspy & Co., Lida Rohbani, Nima Hakimi, and Baback Hakimi, doing business as Networld One, all based in California. The affiliate, also charged in the complaint, is Nicholas C. Albert, doing business as Iwebtunes, based in Ohio. Further information may be found at http://www.ftc.gov/opa/2005/11/enternet.htm

SUITS TARGET SONY BMG ANTI-PIRACY TECHNOLOGY

On November 1st, record company Sony BMG Music Entertainment was named in a class-action lawsuit in California by consumers claiming their computers have been harmed by anti-piracy software on some Sony BMG CDs. The claim states that Sony BMGs failed to disclose the true nature of the digital rights management system it uses on its CDs and thousands of computer users have unknowingly infected their computers with a rootkit, which allows remote attackers to have administrator level permissions. The suit was filed in Los Angeles Superior Court and asks the court to stop Sony BMG from selling additional CDs protected by the anti-piracy software and seeks monetary damages for California consumers who purchased them. The Electronic Freedom Foundation also filed a similar suit, in conjunction with two major class action firms. The attorney general for Texas also announced that a lawsuit would be filed. The complaint in the EFF’s case may be found at http://www.eff.org/IP/DRM/Sony-BMG/sony_complaint.pdf

FCC ABANDONS E911 DEADLINE

On November 7th, the Federal Communications Commission (FCC) announced that net phone companies will not be forced to cut off callers who cannot dial into the enhanced 911 network by November 28th. Instead, the latest FCC notice requires voice over Internet Protocol, or VoIP, providers to file a letter detailing how much of their subscriber base can receive E911 service, a next-generation network that automatically steers calls to a geographically appropriate emergency call center and identifies the caller's originating address. Accompanying that requirement is a new condition that proved perplexing to the Net phone industry: VoIP companies are expected to stop marketing their services and accepting new customers in areas that aren't outfitted with the technology to do the necessary E911 call routing, even if the subscribers would have access to "basic" 911 service. That means that even in the best-case scenario, about 98 million mostly rural Americans won't be able to become new subscribers to VoIP services when the FCC rules kick in, said Jim Kohlenberger, executive director of the VON Coalition, which represents VoIP interests. The FCC’s notice may be found at http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-05-2945A1.pdf

HOMELAND SECURITY RELEASES DRAFT CYBER SECURITY PLAN

On November 2nd, the Department of Home Security released a 175 page draft of the National Infrastructure Protection Plan (NIPP). The plan outlines a broad framework for protecting the nation's critical infrastructure and key assets. President Bush first commissioned the plan in December 2003, and the Department of Homeland Security released an early version in February 2005. According to a notice announcing the document's availability, the latest version aims to provide greater detail. Most of the plan is couched in generalities and vague plans. The plan asserts that cybersecurity responsibilities should ultimately lie with the Department of Homeland Security but also calls on state and local governments to come up with information security measures and to be aware of vulnerabilities in their systems. The report charges academia and research institutions with devising best practices for IT security and the private sector with ensuring that it is satisfying cyberprotection standards. The document suggests that work should be done through a "sector partnership model" - informal advisory bodies composed of private-sector and governmental representatives from the same subject area. The agency plans to accept comments on the proposal through Dec. 5th. The draft plan may be found at http://politechbot.com/docs/dhs.nipp.110205.pdf

KEYSTROKE SPYING GROWS DRAMATICALLY

The use of keystroke spying software is growing dramatically according to research conducted by iDefense. Findings released on November 15th indicated that the number of keylogger variants would rise 65 percent over last year, reaching nearly 6,200 in total. Each variant could lead to anything from a few to several thousand infections. iDefense said keyloggers are typically spread by organized cybercrime rings, which have used them in the past to conduct large-scale money transfers to fund criminal activities. The programs have grown exponentially since 2001, when the firm detected just 275 of them. Further information may be found at http://www.idefense.com/about/newscenter/recentreleases/2005_11_15.jsp

SUIT ALLEGES MATCH.COM SET UP FALSE DATES

Match.com, a unit of IAC/Interactive, is accused in a federal lawsuit filed in California of encouraging members into renewing their subscriptions through bogus romantic e-mails sent out by company employees. In some instances, the suit contends, people on the Match payroll even went on sham dates with subscribers as a marketing ploy. Match.com has about 15 million members worldwide and 250 employees, she said. In a separate suit, Yahoo's personals service is accused of posting profiles of fictitious potential dating partners on its Web site to make it look as though many more singles subscribe to the service than actually do. The suits, which both seek class-action status, come as growth in the online dating industry has slowed, though Web matchmaking still remains a big business. U.S. consumers spent $245.2 million on online personals and dating services in the first half of 2005, up 7.6 percent from a year earlier, according to the Online Publishers Association. The Match lawsuit was filed early in November in U.S. District Court in Los Angeles by plaintiff Matthew Evans, who contends he went out with a woman he met through the site who turned out to be nothing more than "date bait" working for the company. The lawsuit also claims the company violated the Racketeer Influenced and Corrupt Organization Act. The Yahoo suit was filed in October by Robert Anthony in U.S. District Court in San Jose, California and accuses the company of breach of contract, fraud and unfair trade practices. Further information may be found at http://www.sci-tech-today.com/news/Internet-Date-Bait-Scam-Draws-Lawsuits/story. xhtml?story_id=13200EQKCK6C

FTC SLAMS SPAMMERS

On November 17th, the Federal Trade Commission (FTC) reached a settlement barring the defendants from violating the Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act. The settlement also requires the adult-oriented businesses to monitor their affiliates to make sure they also comply with the law. The defendants sold access to sexually explicit Web sites through unsolicited e-mail, or spam, according to an FTC complaint filed in January. Four defendants controlled a network of businesses that operated adult Web sites, and the other defendant was an affiliate hired to market the content from the Web sites. The affiliate sent many of the e-mail messages that allegedly violated federal law, but under CAN-SPAM, all of the defendants are responsible for the e-mail, including the defendants who paid others to send e-mail on their behalf. The FTC charged that the e-mail violated CAN-SPAM and the FTC’s Adult Labeling Rule by failing to include the required label for sexually explicit content. The e-mail also displayed adult material, used misleading header information and subject lines, and failed to include the required opt-out notice, all violations of the law. Among other requirements, the court orders require the defendants to include working opt-out mechanisms in their commercial e-mail, label any sexually explicit e-mail and keep sexually oriented material out of the subject line and out of the initially viewable area of any e-mail. The settling defendants are Global Net Solutions Inc., Global Net Ventures Ltd., Open Space Enterprises Inc., Southlake Group Inc., Wedlake Ltd., and WTFRC Inc., doing business as Reflected Networks Inc. Individual defendants are Dustin Hamilton, Tobin Banks, Gregory Hamilton and Philip Doroff. Further information may be found at http://www.ftc.gov/opa/2005/11/globalnet.htm

HOUSE PASSES INTERNET CONTROL RESOLUTION

On November 16th, the House of Representatives, by a vote of 423-0, passed a resolution calling for the U.S. to plainly state its intention to permanently control the day to day operations of the Internet. The day before, representatives from more than 100 countries came up with a compromise to the long-running feud between the U.S. and other nations, including China, Brazil, Iran, and those of the European Union, that would leave the U.S. in control of the Domain Name System (DNS), but would create a special forum to address concerns. The forum, which is expected to meet for the first time in early 2006, would have no binding authority, U.S. officials have said, nor would it be allowed to interfere in DNS oversight. However, the House of Representatives saw the forum as a way to take control of the Internet. Resolution 268 demands that the U.S. "send clear signals to the marketplace that the current structure of oversight and management of the Internet's domain name and addressing service works" and that "the authoritative root zone server should remain physically located in the United States and the Secretary of Commerce should maintain oversight of ICANN." While the U.S. government doesn't directly oversee the DNS, it has authorized a California-based non-profit called the International Corporation for Assigned Names and Numbers (ICANN) to manage the DNS. ICANN operates under a memorandum of understanding with the U.S. Commerce Department. The text of House Concurrent Resolution 268 may be found at http://thomas.loc.gov/cgi-bin/query/z?c109:H.CON.RES.268:

YAHOO, AOL ET AL TAKE ON SPYWARE AND ADWARE

On November 16th, it was announced that a group of major Internet-related companies, including Yahoo!, America Online, Computer Associates, CNET Networks and Verizon, are backing a plan to certify software as adware and spyware free. Dubbed the Truste Download Program and administered by the Washington, D.C. based non-profit Truste, it essentially would be a white list of voluntarily-submitted software that meets a number of anti-adware, anti-spyware criteria. The companies sponsoring the plan would only distribute or advertise programs on the white list. Among the criteria software will have to meet, said Truste in its lengthy explanation of the program, are easy uninstallation, clear consumer consent before downloading, and disclosure of any affiliate relationships. A host of adware/spyware-like practices and traits are also banned, including taking control of a PC, tracking keystrokes, and modifying computer settings. Truste will also closely monitor certified software to make sure that adware or spyware isn't slipped into the mix after approval's been given. Further information may be found at http://www.truste.org/about/press_release/11_16_05.php

AMAZON WINS 1-CLICK PATENT CASE

On November 21st, Amazon.com won what could have been an expensive dispute over whether its 1-Click checkout system was patented by another company. The U.S. Court of Appeals for the Federal Circuit, which hears patent appeals, has upheld a lower court's grant of summary judgment to Amazon. Amazon gained notoriety years ago for attempting to enforce its own 1-Click patent system against Barnes & Noble's Web operations. IPXL, which could try to seek Supreme Court review, claimed in the lawsuit that Amazon's 1-Click system was covered by a patent on electronic transactions. The decision in the case may be found at http://www.fedcir.gov/opinions/05-1009.pdf

MUSIC INDUSTRY CRACKS DOWN ON INTERNET PIRATES

On November 15th, the International Federation for the Phonographic Industry (IFPI) announced that it was launching 2,100 legal cases against the sharing of files over the Internet and extending the action to five new countries in Europe, Asia and, for the first time, South America. It also said file-sharers in Sweden, Switzerland, Argentina, Hong Kong and Singapore faced prosecution for the first time. Further information may be found at http://www.ifpi.org/site-content/press/20051115.html

VERIZON WIRELESS TAKES ON SPAMMERS

On November 23rd, Verizon Wireless announced that it had filed a lawsuit in federal court in New Jersey, seeking an injunction against Passport Holidays for violating federal and state laws by sending tens of thousands of unsolicited text messages to Verizon customers. Verizon Wireless filed the suit after more than 98,000 unsolicited short text messages were sent in October to Verizon Wireless customers on behalf of Passport Holidays, informing customers they supposedly had won a cruise to the Bahamas and asking them to call to claim their prize. Passport Holidays and other currently unknown individuals who are alleged to have assisted in sending out the spam are named as defendants in the suit. The lawsuit alleges that Passport Holidays and others violated the Federal Telephone Consumer Protection Act by using auto-dialing equipment to send large bursts of text messages to sequential phone numbers within very short periods of time. Federal Communications Commission regulations prohibit the use of automated dialers to call or to send unsolicited text messages to cell phone numbers. Automated dialers are standard in the telemarketing industry; so most telemarketers are barred from calling consumers on their cell phones without their consent. Additionally, the lawsuit alleges that the defendants used deceptive means to hide the identity of the party sending the spam messages and to avoid filters that Verizon Wireless employs to prevent spam from reaching its customers. Further information may be found at http://news.vzw.com/news/2005/11/pr2005-11-23.html


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