# A Milpitas, California, couple were convicted in a Tennessee federal
court for the transmission of "obscene" pictures over a bulletin board
system, operated in the San Francisco area. A "hacker" broke into the
couple's system and later complained to the Memphis
authorities. The determination of whether the pictures are obscene was
made by Memphis standards, as it was the locale where the material was
"received." The couple face up to 5 years in prison and fines of
$250,000 on each of 11 criminal counts of transmitting
obscenity over interstate phone lines. (San Jose Mercury News, July 29,
1994, 1A; New York Times, July 26, 1994, B.16.)
# Lawrence Livermore Laboratory, one of the nation's 3 nuclear weapons
labs, confirmed that hackers obtained access to one of its computers and
were using it to store and distribute hard-core pornography. The lab
believes at least one of its employees was involved.
(San Jose Mercury News, July 12, 1994, 1A.)
# The Defense Information Systems Agency reported that hackers have
gained unauthorized access to hundreds of sensitive, but not classified,
Government and military networks connected to the Internet. Some
intruders have been able to take control of several
military computer systems, allowing them to steal, alter or erase files,
or shut the systems down. The Defense Department reports that the
hackers have adversely affected Defense Department military readiness.
(New York Times, July 21, 1994, A1.)
# The Internal Revenue Service (IRS) investigated 1,300 IRS employees
for using IRS computers to snoop on taxpayers, including review of the
financial status of friends, neighbors, enemies, potential in-laws,
stockbrokers, celebrities and former spouses. A few cases
involved tampering with data and kickbacks to employees. In one third of
the cases, employees were punished. (New York Times, July 19, 1994, C1;
San Jose Mercury News, July 19, 1994, 1E.)
# The Clinton Administration said it was willing to explore alternatives
to the Clipper encryption system for anything beyond basic telephone
calls. The Administration is not, however, willing to compromise on the
key-escrow feature of Clipper, which allows law
enforcement agencies access to the content of a message encrypted by the
Clipper system. (New York Times, July 21, 1994, C1.)
# Kevin Mitnick, a convicted hacker, is suspected of stealing software
and data from leading cellular phone manufacturers. Mitnick is currently
being hunted for violating a Federal probation requirement of not
entering computers illegally or associating with other persons
convicted of similar crimes. (New York Times, July 4, 1994, p.1.)
# Microsoft Corp. entered into a consent decree with the Justice
Department in which Microsoft agreed to abandon a number of practices
the Government said had smothered competition. Among other things,
Microsoft agreed to abandon immediately its practice of
licensing MS-DOS and Windows on a "per processor" basis, under which
computer manufacturers were provided steep discounts for agreeing to pay
a royalty based on every computer shipped. Microsoft also agreed to
abandon long-term contracts that obliged
manufacturers to commit themselves to particular volumes of software for
several years and also to abandon its policy of demanding extremely
strict nondisclosure agreements from independent developers of
applications programs, banning the developers from working
on software for competing operating systems for up to 3 years. (New York
Times, July 17, 1994, p.1, and July 18, 1994, C1; San Jose Mercury News,
July 17, 1994, 1A.)
# The Commerce Department released a draft proposal for changes to
copyright law to protect copyright owners from challenges posed by
development of the nation's information infrastructure and the Internet,
in particular. (New York Times, July 7, 1994, C1.)
# The Justice Department approved AT&T's takeover of McCaw Cellular
Communications, which will allow the nation's biggest long-distance
carrier to also become the largest operator of wireless communications.
AT&T agreed to give cellular customers access to the
long-distance carrier of their choice and also to insulate its cellular
operations from its equipment subsidiary, which makes cellular switches
and transmission systems. AT&T still needs to obtain Federal
Communications Committee approval and a waiver of the antitrust
decree that broke up the old Bell system. (New York Times, July 16,
1994, p.13.)
# Two industry groups, the Recreational Software Advisory Council
(backed by computer game publishers) and the Interactive Digital
Software Association (formed by video game companies), unveiled separate
proposed rating systems to appear on computer and video
games. (San Jose Mercury News, July 29, 1994, 1A.)
# The Federal Communications Commission approved Bell Atlantic's
application to offer interactive television service to 38,000 homes in
New Jersey. This is the first time a telephone company has received
approval to offer commercial cable television. (San Jose
Mercury News, July 7, 1994, 1D; New York Times, July 7, 1994, C1.)
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