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National | Lawyer challenges FBI computer bugging, executive predicts brighter days for the computer industry, and the vaunted V-chip makes little headway with parents

Issue: "Don't have a cow," Aug. 11, 2001

Cybertap
The case of an accused bookie may test the FBI's policies on computer surveillance. Lawyers say they want to know how agents bugged their client's computer, but a federal prosecutor claims the information is classified. Privacy experts are watching the case closely. Morris Gelman, lawyer for Nicodemo S. "Little Nicky" Scarfo Jr., argues that the FBI may have violated the Constitution's Fourth Amendment, which bars unreasonable search and seizure. If it did, any evidence stemming from the computer it bugged would be "fruit of the poisoned tree" and inadmissible at trial. Mr. Scarfo used the software PGP (Pretty Good Privacy) to encode his records. PGP is the most popular method for encrypting e-mail; it uses jumbles of characters as keys to lock and unlock messages. Prosecutors accuse him and another defendant, Frank Paolercio, of loansharking and running a gambling racket. FBI agents obtained a 30-day warrant to "install and leave behind software, firmware, and/or hardware equipment which will monitor the inputted data," according to court papers. The warrant allowed them to break into Mr. Scarfo's business and look for a key. They installed a monitoring system to record every keystroke on the suspect's computer, but the exact nature of the surveillance was undisclosed. Mr. Gelman wants to know how the key logger works to determine if it is a wiretap, which is harder for agents to obtain than a search warrant. (Agents must show more proof of a crime.) Assistant U.S. Attorney Ronald D. Wigler rejected the claim that agents may have violated the Fourth Amendment, saying, "There was not some wholesale rummaging that took place." Computer industry rebooting?
Look past the gloom: The computer industry could recover from the global slowdown in three to six months. At least that's what Intel CEO Craig Barrett said during a quick visit to Taiwan. Right now, however, things still don't look pretty. The executive said the future looks bright because the Internet will stimulate growth in computing, communications, and entertainment. Mobile phones and the rest of the communications industry could remain slow for another six months to a year. Just a few days before, Hewlett-Packard announced another round of job cuts, slashing an additional 6,000 jobs-more than 6 percent of its work force-claiming consumer spending worldwide on technology has worsened. Meanwhile, Compaq is laying off 8,500 people, and Dell is cutting 5,000 jobs. "Economies around the world continue to weaken and our consumer business is being hit particularly hard," HP CEO Carly Fiorina said during a conference call with analysts. She estimated that consumer sales will fall 24 percent and that a near-term recovery isn't coming. In July, Gartner Dataquest reported the first decline in worldwide PC sales. Sales are sagging and the U.S. market is glutted with computers. To stimulate demand and save market share, manufacturers are fighting a draconian price war. The price of a 1 GHz Pentium III system has dropped to around $700. For those who need a new PC, this may be a good time to go shopping. Chip shot
The much-ballyhooed V-Chip isn't very effective at helping parents choose TV shows for their kids. Just 7 percent of all parents have relied on the gizmo, according to a Kaiser Family Foundation survey. The V-Chip is supposed to block designated programs with sex or violence. The Telecommunications Act of 1996 requires one in every new TV set. The device was launched with generous media attention and promotion. Ads claimed, "They're only kids once; protect them for all it's worth." Today 40 percent of American families own a TV set with the device, but the survey found only 17 percent of them use it. Part of the problem is unfamiliar technology. To use the chip, parents must activate and program it. Also, more than half of parents (53 percent) who bought television sets after V-chips became standard equipment in January 2000 did not know they had one. Morality in Media president Robert W. Peters complained about the V-Chip's "block-one-block-all" configuration that blocks whatever programs have a certain rating. Parents may not want their kids to see certain shows rated TV-PG or TV-14 but may encourage others. The chip can't distinguish among programs and becomes impractical. Moreover, it also does not block ads or program promos-some of which contain material that's worse than the blocked programming. In addition, parents may not trust TV execs to rate programs since they approved offensive material in the first place.

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