NewsScan Daily, 1 May 2003 ("Above The Fold")

NewsScan Daily, 1 May 2003 ("Above The Fold")
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"ABOVE THE FOLD"
        Napster Co-Founder Seeks to Can Spam
        Malicious Crackers Could Wreak Havoc in Physical World
        Mobile Phone Sales Boosted by New Features
        Internet Auction Fraud
        Latest Converts to Grid Computing
        Broadwing's Wings Clipped: Company Drops $4 Billion Plus Its Name

FEATURES
        Flash Card
        Honorary Subscriber: Richard Hakluyt
        Safe & Sound in the Cyber Age: The Multi-Billion Dollar Spam Threat

NAPSTER CO-FOUNDER SEEKS TO CAN SPAM
Napster co-founder Jordan Ritter teamed up with software engineer Vipul Ved 
Prakash about two years ago to form Cloudmark, and the company is now 
wrapping up the trial phase of testing on its SpamNet product. Cloudmark 
plans to officially launch the software this quarter. SpamNet, which claims 
to eliminate about 90% of junk e-mail, harnesses peer-to-peer technology to 
broaden its filtering mechanism. Users hit the "block" button whenever they 
receive spam, and after that the unwanted e-mail is rejected by any 
computer loaded with SpamNet software. "With Napster, the value of the 
network increased exponentially with the number of people who joined it," 
says Cloudmark CEO Karl Jacob. "It's the same with Cloudmark." About 
350,000 people have downloaded the software since it became available last 
summer and it's gotten rave reviews from some users. "I'm getting only one 
or two messages a day that aren't being caught, and it's pretty good in 
terms of not identifying legitimate mail as spam," says a consumer advocate 
who notes it's the only filter he uses. (Fortune 28 Apr 2003)
http://www.fortune.com/fortune/technology/articles/0,15114,443545,00.html

MALICIOUS CRACKERS COULD WREAK HAVOC IN PHYSICAL WORLD
Researchers participating in a recent ACM conference on privacy in an 
electronic society have described how automated order forms on the Web 
could be exploited to send tens of thousands of unwanted catalogs to a 
business or an individual. The resulting deluge not only would pose an 
inconvenience to the victim, but likely would swamp the local post office 
charged with delivery, said Avi Rubin, technical director of the 
Information Security Institute at Johns Hopkins University. "People have 
not considered how easily someone could leverage the scale and automation 
of the Internet to inflict damage on real-world processes." Using Google to 
locate online order forms and simple software to fill in fields such as 
"name" and "address," "it could be set up to send 30,000 different catalogs 
to one person or 30,000 copies of one catalog to 30,000 different 
recipients," said Rubin. The technique could also be used to exploit the 
increasingly common Web-based forms used to request repair service, 
deliveries or parcel pickups. Rubin and his fellow researchers suggested 
Web sites could take steps to prevent such attacks, including setting up 
online forms so that they cannot easily be picked up by a search engine, or 
using HTML coding to create an online form so it no longer contains easily 
recognized field names, such as "name." Another strategy could be to 
include a Reverse Turing Test -- a step in each form that requires human 
input. (Science Daily 1 May 2003)
http://www.sciencedaily.com/releases/2003/05/030501081411.htm

MOBILE PHONE SALES BOOSTED BY NEW FEATURES
Worldwide shipments of mobile handsets rose by 16% in the first quarter of 
2003, fueled by a new generation of smartphones. "The new functionalities 
-- the color displays and digital imaging -- are encouraging people to 
purchase new phones," says an International Data Corp. analyst. Nokia 
remained the top mobile phone vendor, with 35.5% of the global market 
share, followed by Motorola with 15.5%, Samsung with 12.3%, Siemens with 
7.4% and LG Electronics with 5.2%. (AP 30 Apr 2003)
http://apnews.excite.com/article/20030430/D7QO3NDG1.html

INTERNET AUCTION FRAUD
The Federal Trade Commission, together with 33 state and local law 
enforcement agencies, has announced the filing of 51 criminal and civil 
cases charging Internet auction fraud, most of them involving failure of 
the seller to deliver an item (usually items such as computers, plasma TVs, 
or diamond jewelry). Online auctions accounted for 46% of all complaints 
lodged with the Internet Fraud Complaint Center last year. (New York Times 
1 May 2003)
http://partners.nytimes.com/2003/05/01/technology/01ONLI.html

LATEST CONVERTS TO GRID COMPUTING
IBM says that Royal Dutch Shell and Kansai Electric Power will now be using 
IBM grid computing technology, which runs on IBM servers running Linux and 
which harvests the power of distributed computers. Royal Dutch Shell will 
use grid computing for seismic interpretation based on existing 
applications; Kansai, the second-largest electric utility in Japan, will 
use it for integrating information across divisions and departments. IBM 
has now introduced grid computing into the petroleum, electronics, higher 
education, and agricultural chemicals industries. (Internet Week 29 Apr 2003)
http://www.internetwk.com/breakingNews/showArticle.jhtml?articleID=9400097

BROADWING'S WINGS CLIPPED: COMPANY DROPS $4 BILLION PLUS ITS NAME
Broadwing Inc. is dropping its name and reverting to Cincinnati Bell, which 
adopted the Broadwing name in 1999 when it purchased iXC Communications for 
$4 billion in an attempt to become a player in the broadband industry. 
Blaming Broadwing's troubles on a slumping economy and the collapse of 
Internet stocks, the company's chief executive said: "Cincinnati Bell is, 
and will always be, an excellent company whose outstanding performance has 
been recently overshadowed by the troubles in our national operations." 
(AP/USA Today 1 May 2003)
http://www.usatoday.com/tech/news/2003-05-01-broadwing_x.htm

*****

FLASH CARD
      "You are not superior just because you see the world in an odious 
light." (Vicomte de Chateaubriand)

HONORARY SUBSCRIBER: RICHARD HAKLUYT
      Today's Honorary Subscriber is the English clergyman-scholar Richard 
Hakluyt, who was Oxford University's first professor of modern geography 
and an influential promoter of overseas exploration in the age of Elizabeth 
I. His best-known work, "The Principall Navigations, Voiages, and 
Discoveries of the English Nation" was the most comprehensive geography of 
its time and provides almost everything known about the early English 
voyages to North America. Something of a prose epic of the English nation, 
critics consider it more than a documentary history of exploration and 
adventure. Instead, it describes tales of daring mingled with historical, 
diplomatic, and economic position papers establishing Britain's right to 
sovereignty at sea and to a place in overseas settlement.
      Hakluyt belonged to a socially prominent family from the Welsh 
Marches. He was only five years old when his father died, leaving the 
family to the care of a cousin, another Richard Hakluyt, a lawyer who had 
many friends among prominent city merchants, geographers, and explorers of 
the day. Because of these connections, and his own expertise in overseas 
trade and economics, he was well placed to assist his young namesake in 
what would become his life work. With the help of various scholarships, 
Hakluyt was educated at Westminster School and Christ Church, Oxford, 
entering in 1570 and taking his M.A. degree in 1577. While in his early 
teens, his interest in geography and travel was first aroused on a visit to 
the Middle Temple, one of the four English legal societies. Hearing on that 
occasion about recent discoveries and examining a collection of maps, he 
there and then resolved to make geography the principle focus of his 
university studies.
      Some time before 1580 he took holy orders, and, though he never 
shirked his religious duties, he spent considerable time reading whatever 
accounts he could find about contemporary voyages and discoveries. He gave 
public lectures, displaying "Mappes, Globes, Spheares, and other 
instruments of this Art for demonstration in the common schooles." To learn 
more about the New World, he made it his business to become acquainted with 
the most important sea captains, merchants, and sailors, many being 
participants in voyages of discovery to find the northeast and northwest 
passages to the Orient. His writings supported Francis Drake's 
circumnavigation of the world and he propagandized for Sir Walter Raleigh's 
proposed Virginia settlement. The government sent him to Paris as chaplain 
to the English ambassador, where he also he also served as a kind of 
intelligence officer, collecting information on the fur trade of Canada and 
on other French and Spanish overseas enterprises. For this work Queen 
Elizabeth I rewarded him with an ecclesiastical post at Bristol cathedral 
and later at Westminster, where he could be on hand to advise on colonial 
affairs. He gave information to the newly formed East India Company and 
continued his interest in the North American colonizing project. When he 
died in 1616 he was buried in Westminster Abbey.

See http://www.amazon.com/exec/obidos/ASIN/0140430733/newsscancom/ref=nosim 
for 'Hackluyt's Voyages & Discoveries' -- or look for it in your favorite 
library. [We donate all revenues from our book recommendations to literacy 
programs.]

SAFE & SOUND IN THE CYBER AGE: THE MULTI-BILLION DOLLAR SPAM THREAT (PT 2)
      [This is Part 2 of a 2-part column by our computer security experts, 
Chey Cobb and Stephen Cobb.]
                          ***
      You know spam is a problem when you turn on the news and see a 
reporter talking to you from the Federal Trade Commission's Spam Forum in 
Washington, D.C. That is what we saw this week, along with a lot of 
hand-wringing about what a menace spam has become. The focus of most 
reporters was the pain that spam causes the consumers who find it in their 
inbox. A close second was the billions of dollars companies pay to prevent 
spam from flooding their networks.
      We heard very little about the costly problem that our last column 
highlighted: the tendency of fraudulent email to undermine brand value. 
Imagine you run a company that has a thriving online retail operation. One 
day several thousand customers get email that says:
      "As part of our continuing commitment to protect your account and to 
reduce the instance of fraud on our website, we are undertaking a periodic 
review of our member accounts."
      The message sports your corporate logo and the "From" address is at 
your company's domain, but your company did not send the message. Even 
worse, the message goes on to say:
      "You are requested to visit our site by following the link given 
below. Please fill in the required information. This is required for us to 
continue to offer you a safe and risk free online shopping environment."
      The link contains your site's domain name, so it looks legitimate, 
but the link leads to a different site, one that looks a lot like yours, 
but actually harvests your customers' account numbers, user names, 
passwords, and possibly even credit card numbers. This is not an imaginary 
scenario. The quotes above come from a fraudulent email that we, and 
millions of other email users, recently received.
      If consumers continue getting email like this, the effects are going 
to be very serious for some companies. Apart from the erosion of brand 
value that we talked about in our previous column, there is the possibility 
of legal action by consumers who have been duped, cheated, or had their 
identity stolen due to email like this. The perpetrators of these scams are 
hard to find and harder to prosecute. So lawyers for the plaintiffs are 
going to look to those they can find, the same companies whose names and 
logos are being misappropriated.
      Some lawyers are bound to be asking themselves these questions: Could 
Company X have done more to prevent dilution of its brand by bogus email? 
Could said company have done a better job of protecting consumers from 
those who are perpetrating email fraud in the company's name? Class action 
lawsuits along these lines, from shareholders and consumers, are not hard 
to imagine.
      Without a miraculous end to the flood of spam, the likelihood of such 
lawsuits will only increase over time, especially if companies fail to take 
stronger action in defense of their good names. How and when companies 
respond to this threat will determine the extent to which they are exposed 
to accusations of negligence with respect to both brand dilution and 
customer protection.
      But is there anything companies can do, apart from encourage the 
large Internet companies to get their act together to put an end to spam? 
The challenge is daunting. Companies look at the low cost of entry into 
mass emailing and the relative ease with which their digital assets can be 
ripped off. In some ways it is tempting to conclude there's nothing you can 
do to stop this, apart from launch the occasional token prosecution and put 
up a consumer help line. However, this view is not supported by the facts.
      The problem can be addressed by combining two proven strategies: 
positive discriminators and a preponderance of discouragement. A wide range 
of businesses have faced analogous challenges in recent years, such as 
counterfeit goods, fake credit cards, and pirated software. But because 
there is no way to stop people trying to make counterfeits, does not mean 
nothing can be done. The answer is to adopt positive discriminators, for 
example, inform consumers that all products which lack X are inferior 
rip-offs, where X is a hard-to-counterfeit mark, like a hologram, embedded 
logo, and such like. This is backed up by a preponderance of 
discouragement, a framework of technical and economic obstacles, legal 
penalties, and enforcement actions.
      Bogus email can be tackled in the same way. The positive 
discriminator can be something you place in all company email. Today, the 
technology exists to generate a unique, cryptographically protected, 
spoof-proof seal in each outbound email (the mere presence of this seal 
will satisfy most recipients that the email is official, but they can also 
verify the fact using a simple client-server interaction).
      You then put everyone on notice, via your Web site and all the other 
branding channels you use, that only those messages which contain the 
official seal are official messages and any message that purports to be 
from your company but lacks a seal is bogus, illegal, and should be reported.
      Having deployed the required positive discriminator in your email, 
you will find the preponderance of discouragement falls neatly into place. 
There are plenty of laws under which to prosecute bogus email (trademark 
and copyright infringement for a start, plus deceptive business practices, 
which the FTC is eager to enforce against spam). But even more importantly, 
you have, through the adoption of a positive discriminator, increased the 
economic obstacles to fraudsters seeking to profit from abuse of your good 
name.
      Today, the average consumer has no way to consistently and 
immediately distinguish between bogus email (fraudulently purporting to be 
from your company) and genuine email that really is from your company. Not 
only is this a major source of frustration and risk for consumers, it is 
the main reason why fraudsters continue to send bogus email in your 
company's name. If you give consumers a positive, non-spoofable means of 
identifying genuine email, then the fraudster's ratio of return-on-effort 
plummets. At the same time, you greatly increase your ability to claim due 
diligence in the areas of trademark defense and customer protection. Not to 
mention the fact that your consumers will likely thank you for making an 
effort to reassure them.
      [Chey Cobb, the author of Network Security for Dummies, is an 
independent consultant (www.cheycobb.com) and a former senior technical 
security advisor to the NRO. She can be reached at [email protected]. 
Stephen Cobb, the author of Privacy for Business: Web Sites and Email, is 
Senior VP of Research and Education for ePrivacy Group 
(www.eprivacygroup.com). He can be reached at [email protected].]

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