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Computer underground Digest Sun Jan 30 1994 Volume 6 : Issue 11
ISSN 1004-042X

Editors: Jim Thomas and Gordon Meyer ([email protected]IU.BITNET)
Archivist: Brendan Kehoe (Improving each day)
Acting Archivist: Stanton McCandlish
Shadow-Archivists: Dan Carosone / Paul Southworth
Ralph Sims / Jyrki Kuoppala
Ian Dickinson
Coppice Editor: P. Bunyan

CONTENTS, #6.11 (Jan 30 1994)
File 1--Brendan Update and his "thanks"
File 2--Changes in SUBBING/UNSUBBING to CuD
File 3--CuD -- The "SECRET LIST" and other listserv information
File 4--Policy on Distributing CuDs
File 5--cDc GD Update #14
File 6--CPSR--not so bad after all
File 7--Soliciting Articles for New Journal
File 8--Leading Cryptologists Oppose Clipper
File 9--1994-01-26 Irving Testimony on Telecommunications Legislation

Cu-Digest is a weekly electronic journal/newsletter. Subscriptions are
available at no cost electronically.
To subscribe, send a one-line message: SUB CUDIGEST your name
Send it to [email protected] or [email protected]
The editors may be contacted by voice (815-753-0303), fax (815-753-6302)
or U.S. mail at: Jim Thomas, Department of Sociology, NIU, DeKalb, IL
60115.

Issues of CuD can also be found in the Usenet comp.society.cu-digest
news group; on CompuServe in DL0 and DL4 of the IBMBBS SIG, DL1 of
LAWSIG, and DL1 of TELECOM; on GEnie in the PF*NPC RT
libraries and in the VIRUS/SECURITY library; from America Online in
the PC Telecom forum under "computing newsletters;"
On Delphi in the General Discussion database of the Internet SIG;
on the PC-EXEC BBS at (414) 789-4210; and on: RIPCO BBS (312)
528-5020 (and via internet). CuD is also available via Fidonet File
Request from 1:11/70; unlisted nodes and points welcome.
EUROPE: from the ComNet in LUXEMBOURG BBS (++352) 466893;
In ITALY: Bits against the Empire BBS: +39-461-980493

ANONYMOUS FTP SITES:
AUSTRALIA: ftp.ee.mu.oz.au (128.250.77.2) in /pub/text/CuD.
EUROPE: ftp.funet.fi in pub/doc/cud. (Finland)
UNITED STATES:
aql.gatech.edu (128.61.10.53) in /pub/eff/cud
etext.archive.umich.edu (141.211.164.18) in /pub/CuD/cud
ftp.eff.org (192.88.144.4) in /pub/Publications/CuD
halcyon.com( 202.135.191.2) in mirror2/cud
ftp.warwick.ac.uk in pub/cud (United Kingdom)
KOREA: ftp: cair.kaist.ac.kr in /doc/eff/cud

COMPUTER UNDERGROUND DIGEST is an open forum dedicated to sharing
information among computerists and to the presentation and debate of
diverse views. CuD material may be reprinted for non-profit as long
as the source is cited. Authors hold a presumptive copyright, and
they should be contacted for reprint permission. It is assumed that
non-personal mail to the moderators may be reprinted unless otherwise
specified. Readers are encouraged to submit reasoned articles
relating to computer culture and communication. Articles are
preferred to short responses. Please avoid quoting previous posts
unless absolutely necessary.

DISCLAIMER: The views represented herein do not necessarily represent
the views of the moderators. Digest contributors assume all
responsibility for ensuring that articles submitted do not
violate copyright protections.

----------------------------------------------------------------------

Date: Sat, 29 Jan 94 21:09:22 PST
From: [email protected](Sun Ming Lieu)
Subject: File 1--Brendan Update and his "thanks"

((MODERATORS' NOTE: The following update on Brendan Kehoe, author of
ZEN AND THE ART OF THE INTERNET, CuD ftp archmeister, and
cyberdenizen, is great news. We've also received two posts from him,
and he sends along "THANKS" for all the posts. We mailed off the
collection of e-wishes this week, and thanks to all those who
contributed)).

Brendan continues to make phenomenal progress in the last few days.
His neurologist says that she has not seen a case like this in 12
years of practice.

The hospital is letting Brendan out on extended passes, and so he has
been visiting the hotel where his mother and brother are staying,
eating out, and other outings. He will be moving to the Spaulding
Center at Mass General in Boston on Tuesday (Feb 1). The injury to
his ear was not as serious as originally expected - he can hear from
it and it is okay for him to fly.

I talked with Brendan for about 10 minutes by phone today. He and
Jeff sprung it on me when Jeff called and was I surprised! Brendan
just came on the line saying "This friend of mine who is working in
California thinks you would like to talk to me" and started to talk up
a storm. He's been reading his mail and kept talking about how much
g++ traffic there has been and how eager he is to go back to work. He
sounded happy and excited. We talked about the weather in
Philadelphia, flying first class, living closer to the office so he
wouldn't have to commute from Santa Cruz, the earthquake in Southern
California, and so on...

Brendan wants to be done with the 2-3 weeks in Spaulding and be back
in California as soon as possible - he says end of February, although
everyone is telling him to hold his horses and not count on it quite
so soon. Does he know something we don't?

Sun Ming

------------------------------

Date: Fri, 28 Jan 1994 18:19:22 CST
From: CuD Moderators
Subject: File 2--Changes in SUBBING/UNSUBBING to CuD

Less than three percent of the total CuD readership comes from the
listserv mailing list (excluding feeds), but the list continues to grow
rapidly. Because of the dramatically increased size of the mailing
list we are making an important change in how readers subscribe or to
CuD. The mailing list has roughly doubled each year, and the time of
maintaining the list semi-manually is no longer possible. Therefore,
we're moving to full automation of the mailing list.

TO SUBSCRIBE, readers should type the following in the Subject header
and first line of the message:

SUB CUDIGEST your name

TO UNSUBSCRIBE, use the following:

UNSUB CUDIGEST your name

Send the message to [email protected]

This change will have NO EFFECT on those read CuD from
comp.society.cu-digest, public access systems, or other sources.

------------------------------

Date: Fri, 28 Jan 1994 18:19:22 CST
From: CuD Moderators
Subject: File 3--CuD -- The "SECRET LIST" and other listserv information

1. CUD--THE SECRET LIST (heh):

We've begun receiving inquiries asking why CuD is "secret" and why we
don't want the list known outside of a small group of people. The
reason for the inquiry comes from the automatic message that the
listserv site sends to new subscribers:

> IMPORTANT: This list is confidential. You should not
>publicly mention its existence, or forward copies of
>information you have obtained from it to third parties.

First, CuD obviously isn't "secret," at least not with over 100,000
readers on BBSes, Usenet, the mailing list, public access systems, and
elsewhere. The "confidential" note is automatically sent by the
listserv to all mailing lists that have settings that limit
distribution. So, the notice may be safely ignored. CuD can be
mentioned, discussed, and forwarded to others.

2. USING LISTSERV COMMANDS:

Users can set parameters for their own addresses (such as suspending
mail while on vacation, concealing their address, or leaving the list)
with conventional listserv commands:

> More information on LISTSERV commands can be found in the
>LISTSERV reference card, which you can retrieve by
>sending an "INFO REFCARD" command to
>[email protected] (or [email protected]).

3. LEAVING THE LIST:

Readers on the mailing list can leave at any time with the command:

UNSUB CUDIGEST your name

and sending it to [email protected]

We're appreciative for the help and space that Mark, Eric, and
Charlie have provided at the UIUC site. True saints, all of 'em.

------------------------------

Date: Fri, 28 Jan 1994 18:51:45 CST
From: CuD Moderators
Subject: File 4--Policy on Distributing CuDs

We're continually asked about our policy on distributing or
disseminating CuDs. The policy is fairly simple:

CuDs may be freely distributed in their entirety as long as they are
unaltered. This means that they may be uploaded to bulletin boards or
placed on public access systems, or zeroxed and sent, at no cost, to
others.

In general, individual articles may be extracted in their entirety as
long as the the text, author identity and source are included.
However, some authors do retain copyright, and the authors should be
contacted. Some articles are printed on condition by the author that
they may not be extracted and distributed. A notice will appear at the
start or conclusion of the article. In these cases, the authors *MUST*
give their consent.

There are some important qualifications:

CuDs may not be sold or other distributed for commercial gain. It's
fully acceptable to place CuDs on commercial BBSes, of course, but it
is unacceptable, for example, to make CDs or hardcopies and sell them.
Because authors hold the presumptive copyright to their own works,
individual articles may be reproduced commercially IF AND ONLY IF the
authors give explicit permission.

CuDs and their contents may be cited, extracted, quoted, or other used
within fair-use guidelines, but students (and some media folk) should
bear in mind that plagiarism is considered unethical.

Our general philosophy is that CuDs should be free. Authors contribute
their works at no cost, we assemble and distribute them at no cost,
and we would take a rather dim view of anyone attempting to profit
from the altruistic voluntary labors of others. We hope that the
rumors that CuD is being sold commercially on CD are untrue.

------------------------------

Date: Sat, 29 Jan 94 12:23:26 EST
From: [email protected](Swamp Ratte)
Subject: File 5--cDc GD Update #14
_ _
((___))
[ x x ] cDc communications
\ / Global Domination Update #14
(' ') December 30th, 1993
(U)
Est. 1986

New gNu NEW gnU new GnU nEW gNu neW gnu nEw GNU releases for December, 1993:

+________________________________/Text Files\_________________________________

241: "Cell-Hell" by Video Vindicator. In-depth article on modifying the
Mitsubishi 800 cellular phone by Mr. Fraud himself. Rad.

242: "The Darkroom" by Mark Vaxlov. Very dark story about a high school rape
in the photography lab at school. Disturbing.

243: "Fortune Smiles" by Obscure Images. Story set in the future with
organized crime and identity-swapping.

244: "Radiocarbon Dating Service" by Markian Gooley. Who would go out with
Gooley? YOUR MOM!

245: "The U.S. Mercenary Army" by Phil Agee. Forwarded by The Deth Vegetable,
this file contains a speech by former CIA agent Agee on the Gulf War.
Interesting stuff.

246: "The Monolith" by Daniel S. Reinker. This is one of the most disgusting
files we've put out since the infamous "Bunny Lust." I don't wanna describe
this, just read it.

247: "Post-Election '92 Cult Coverage" by Omega. Afterthoughts on Tequila
Willy's bid for the U.S. Presidency.

248: "The Lunatic Crown" by Matthew Legare. Wear the crown. Buy a Slurpee.
Seek the adept. Do not pass 'Go.'

249: "Yet Another Suicide" by The Mad Hatter. Guy gets depressed over a girl
and kills himself.

250: "State of Seige" by Curtis Yarvin. The soldiers hunt the dogs hunt the
soldiers. Like, war, ya know. Hell!

+_________________________________/cDc Gnuz\__________________________________

"cDc: We're Into Barbie!"

cDc mailing list: Get on the ever-dope and slamagnifiterrific cDc mailing list!
Send mail to [email protected] and include some wonderlessly elite message along
he lines of "ADD ME 2 DA MAILIN [email protected]&!"

NEW Official cDc Global Domination Factory Direct Outlets:
The Land of Rape and Honey 502/491-6562
Desperadoes +61-7-3683567
Underworld 203/649-6103
Airstrip-One 512/371-7971
Ministry of Death 516/878-1774
Future Shock +61-7-3660740
Murder, Inc 404/416-6638
The Prodigal Sun 312/238-3585
Red Dawn-2 Enterprises 410/263-2258
Cyber Neurotic Reality Test 613/723-4743
Terminal Sabotage 314/878-7909
The Wall 707/874-1316,2970

We're always taking t-file submissions, so if you've got a file and want to
really get it out there, there's no better way than with cDc. Upload text to
The Polka AE, to [email protected], or send disks or hardcopy to the cDc post
office box in Lubbock, TX.

cDc has been named SASSY magazine's "Sassiest Underground Computer Group."
Hell yeah!

Thanks to Drunkfux for setting up another fun HoHoCon this year, in Austin. It
was cool as usual to hang out with everyone who showed up.

Music credits for stuff listened to while editing this batch of files: Zapp,
Carpenters, Deicide, and Swingset Disaster.

Only text editor worth a damn: ProTERM, on the Apple II.

So here's the new cDc release. It's been a while since the last one. It's out
because I fucking felt like it, and have to prove to myself that I can do this
crap without losing my mind and having to go stand in a cotton field and look
at some dirt at 3 in the morning. cDc=cDc+1, yeah yeah. Do you know what this
is about? Any idea? This is SICK and shouldn't be harped on or celebrated.
This whole cyberdweeb/telecom/'puter underground scene makes me wanna puke,
it's all sick and dysfunctional. Eat my shit, G33/death. Go blind staring at the screen waiting for more wares/inph0 to come
trickling down the wire. The more of that shit comes in, the more life goes
out. Ooh, and you hate it so much, don't you. You hate it.

Hacking's mostly a big waste of time. Fuck you.
Stupid Telephone Tricks will never be on David Letterman. Fuck you.
Cryptography? Who'd wanna read YOUR boring email? Fuck you.
Interactive television is a couch potato trap. Fuck you.
"Surf the net," sucker. "Ride the edge," you maladjusted sack of shit.

S. Ratte'
cDc/Editor and P|-|Ear13zz |[email protected]
"We're into t-files for the groupies and money."
Fuck you, fuck you... and most of all, fuck YOU.

Write to: cDc communications, P.O. Box 53011, Lubbock, TX 79453.
Internet: [email protected]
+____________________________________________________________________________

cDc Global Domination Update #14-by Swamp Ratte'-"Hyperbole is our business"


ALL NEW cDc RELEASES FTP'ABLE FROM FTP.EFF.ORG -pub/Publications/CuD/CDC

------------------------------

Date: Fri, 28 Jan 1994 10:20:19 -0600
From: [email protected](Marsha W)
Subject: File 6--CPSR--not so bad after all

Dear Bryce, and other people curious about CPSR,

I read the criticism of CPSR, that it had a socialist/welfare-state
agenda, and I thought, "probably some members do." I think you'll
find extremes in any organization, and CPSR is no exception. CPSR
members range from socialists to libertarians and everything in
between.

The offical stance of the organization certainly isn't socialist in
any commonly used sense of the word.

I can only speak from personal experience. I've been a member and now
a Board member, and I've met the most active people and attended a
national conference. I felt that these people have concerns about
where computer technology is taking us, with grave worries about
projects like Star Wars. CPSR wants to have some constructive input
into the National Information Infrastructure (NII). If we don't keep
our eyes wide open, the interests of the everyday user will be put
aside for those trying to make a profit out of, or control, the
technology.

I've chosen to join forces with the CPSR group because they are very
intelligent and knowledgeable and hard-working. You may have the
impression that CPSR is a socialist enclave, but from my experience,
it just ain't so. It's more like Physicians for Social
Responsibility.

Yours, Marsha Woodbury, Director at Large, CPSR

------------------------------

Date: Fri, 28 Jan 1994 18:45:02 -0500
From: [email protected](Gene Spafford)
Subject: File 7--Soliciting Articles for New Journal

I'm on the editorial board of a new journal. One of the areas I'll be
coordinating is computer viruses and autonomous agents in computing
systems.

I'd like to encourage any of you with interesting research ideas or
results to write them up for submission.

Enclosed is a call for papers for the journal with more details.
+--------------------

CALL FOR PAPERS

ARTIFICIAL LIFE

Premiering in March with double Fall/Winter 1993 issue

Edited by Christopher G. Langton
Los Alamos National Laboratory and Santa Fe Institute

Artificial Life, a new quarterly from The MIT Press, is the first
unifying forum for the dissemination of scientific and engineering
research in the field of artificial life. It reports on synthetic
biological work being carried out in any media, from the familiar
"wetware" of organic chemistry, through the inorganic "hardware" of
mobile robots, all the way to the virtual "software" residing inside
computers. Covering topics from the origin of life, through self-
reproduction, evolution, growth and development, and animal
behavior, to the dynamics of whole ecosystems, its articles present
novel approaches to the theory and application of biological
phenomena.


Artificial Life will be an essential resource for scientists, academics,
and students researching artificial life, biology, evolution, robotics,
artificial intelligence, neural networks, genetic algorithms, ecosystem
dynamics, and the origin of life.


Selected Articles from Volume 1, Numbers 1 & 2

Kristian Lindgren and Mats Nordahl
Cooperation and Community Structure in Artificial Ecosystems
Luc Steels
The Artificial Life Roots of Artificial Intelligence
Pattie Maes
Autonomous Agents and AL
Tom Ray
An Evolutionary Approach to Synthetic Biology
Eugene Spafford
Computer Viruses as Artificial Life
Stephanie Forrest and Melanie Mitchell
Genetic Algorithms and Artificial Life

Quarterly, Volume 1 forthcoming, fall/winter/spring/summer
96 pages per issue 7 x10, illustrated, ISSN 1064-5462

Yearly Rates: $45 Individual; $125 Institution, $25 Student

For Submission Information To order Subscriptions
please contact: please contact:

Christopher G. Langton Circulation Department
Santa Fe Institute MIT Press Journals
1660 Old Pecos Trail 55 Hayward Street
Santa Fe, NM 87501 U.S.A. Cambridge, MA 02142 U.S.A.
TEL: 505-984-8800 TEL: 617-253-2889
FAX: 505-982-0565 FAX: 617-258-6779
[email protected] edu [email protected]

------------------------------

Date: Mon, 24 Jan 1994 13:49:38 -0800
From: Al Whaley
Subject: File 8--Leading Cryptologists Oppose Clipper

More than three dozen of the nation's leading cryptographers,
computer security specialists and privacy experts today urged
President Clinton to abandon the controversial Clipper encryption
proposal. The letter was coordinated by Computer Professionals
for Social Responsibility (CPSR), which has long sought to open
the issue of cryptography policy to public debate

The group cited the secrecy surrounding the proposal,
widespread public opposition to the plan and privacy concerns as
reasons why the initiative should not go forward.

The letter comes at a crucial point in the debate on
cryptography policy. An internal Administration review of the
issue is nearing completion and the National Security Agency (NSA)
is moving forward with efforts to deploy Clipper technology in
civilian agencies, including the Internal Revenue Service.

CPSR has sponsored several public conferences on
cryptography and privacy and has litigated Freedom of Informa-
tion Act cases seeking the disclosure of relevant government
documents. In one pending FOIA case, CPSR is challenging the
secrecy of the Skipjack algorithm which underlies the Clipper
proposal.

For additional information, contact Dave Banisar, CPSR
Washington, DC, (202) 544-9240, .

=============================================================


January 24, 1994

The President
The White House
Washington, DC 20500

Dear Mr. President,

We are writing to you regarding the "Clipper" escrowed
encryption proposal now under consideration by the White House.
We wish to express our concern about this plan and similar
technical standards that may be proposed for the nation's
communications infrastructure.

The current proposal was developed in secret by federal
agencies primarily concerned about electronic surveillance, not
privacy protection. Critical aspects of the plan remain
classified and thus beyond public review.

The private sector and the public have expressed nearly
unanimous opposition to Clipper. In the formal request for
comments conducted by the Department of Commerce last year, less
than a handful of respondents supported the plan. Several hundred
opposed it.

If the plan goes forward, commercial firms that hope to
develop new products will face extensive government obstacles.
Cryptographers who wish to develop new privacy enhancing
technologies will be discouraged. Citizens who anticipate that
the progress of technology will enhance personal privacy will
find their expectations unfulfilled.

Some have proposed that Clipper be adopted on a voluntary
basis and suggest that other technical approaches will remain
viable. The government, however, exerts enormous influence in the
marketplace, and the likelihood that competing standards would
survive is small. Few in the user community believe that the
proposal would be truly voluntary.

The Clipper proposal should not be adopted. We believe that
if this proposal and the associated standards go forward, even on
a voluntary basis, privacy protection will be diminished,
innovation will be slowed, government accountability will be
lessened, and the openness necessary to ensure the successful
development of the nation's communications infrastructure will be
threatened.

We respectfully ask the White House to withdraw the Clipper
proposal.

Sincerely,

Public Interest and Civil Liberties Organizations

Marc Rotenberg, CPSR
Conrad Martin, Fund for Constitutional Government
William Caming, privacy consultant
Simon Davies, Privacy International
Evan Hendricks, US Privacy Council
Simona Nass, Society for Electronic Access
Robert Ellis Smith, Privacy Journal
Jerry Berman, Electronic Frontier Foundation

Cryptographers and Security Experts

Bob Bales, National Computer Security Association
Jim Bidzos, RSA Data Security Inc.
G. Robert Blakley, Texas A&M University
Stephen Bryen, Secured Communications Technologies, Inc.
David Chaum, Digicash
George Davida, University of Wisconsin
Whitfield Diffie, Sun Microsystems
Martin Hellman, Stanford University
Ingemar Ingemarsson, Universitetet i Linkvping
Ralph C. Merkle, Xerox PARC
William Hugh Murray, security consultant
Peter G. Neumann, SRI International
Bart Preneel, Katolieke Universiteit
Ronald Rivest, MIT
Bruce Schneier, Applied Cryptography (1993)
Richard Schroeppel, University of Arizona
Stephen Walker, Trusted Information Systems
Philip Zimmermann, Boulder Software Engineering

Industry and Academia

Andrew Scott Beals, Telebit International
Mikki Barry, InterCon Systems Corporation
David Bellin, North Carolina A&T University
Margaret Chon, Syracuse University College of Law
Laura Fillmore, Online BookStore
Scott Fritchie, Twin-Cities Free Net
Gary Marx, University of Colorado
Ronald B. Natalie, Jr, Sensor Systems Inc.
Harold Joseph Highland, Computers & Security
Doug Humphrey, Digital Express Group, Inc
Carl Pomerance, University of Georgia
Eric Roberts, Stanford University
Jonathan Rosenoer, CyberLaw & CyberLex
Alexis Rosen, Public Access Networks Corp.
Steven Zorn, Pace University Law School

(affiliations are for identification purposes only)

------------------------------

Date: Fri, 28 Jan 1994 12:12-0500
From: The White House <[email protected]>
Subject: File 9--1994-01-26 Irving Testimony on Telecommunications Legislation


TESTIMONY OF LARRY IRVING
ASSISTANT SECRETARY FOR COMMUNICATIONS AND INFORMATION
U.S. DEPARTMENT OF COMMERCE

ON
TELECOMMUNICATIONS REFORM LEGISLATION



BEFORE THE SUBCOMMITTEE ON ECONOMIC AND COMMERCIAL LAW
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES

JANUARY 26, 1994

Mr. Chairman and Members of the Subcommittee:

INTRODUCTION

Good morning. Thank you for this opportunity to testify
before you today on issues related to the development of a
national telecommunications and information infrastructure --
and, specifically, on Administration legislative proposals to
promote the advancement of this infrastructure in a
procompetitive manner that benefits all Americans. I am pleased
to join Assistant Attorney General Bingaman, who will focus on
the Administration's reform proposals bearing on the AT&T Consent
Decree. I will discuss more generally the changes in the
competitive landscape that make the passage of telecommunications
legislation this year a top Administration priority, and, in the
context of that discussion, highlight elements of the
Administration's proposals not covered by Assistant Attorney
General Bingaman.

Vice President Gore and Secretary Brown unveiled the
Administration's National Information Infrastructure (NII)
initiative in September of last year, setting forth an agenda for
a public-private partnership to help bring about this revolution.

This includes support for innovative applications that will use
the NII, improving access to government information, protecting
individual privacy and intellectual property rights, and the
passage of telecommunications legislation -- the subject of
today's hearing.

Before proceeding further, let me underscore, Mr. Chairman,
the profound debt of gratitude the Administration owes you and
Chairman Dingell for seizing the initiative in developing H.R.
3626. Our proposals for reform of the AT&T Consent Decree
substantially build upon your efforts. The Administration also
wishes to salute the creative bipartisan legislative initiatives
undertaken by Representatives Markey and Fields, and by Senators
Hollings, Inouye, and Danforth, among others. We have closely
studied their proposals. Aspects of our set of legislative
proposals, which I will touch on today, also build in large part
upon the foundation they have established. The Administration
looks forward to working closely with Congress to arrive at a
final telecommunications legislative product that will stand the
test of time.

THE NEED FOR LEGISLATION

There is a national consensus that an advanced information
infrastructure will transform life for every person in the United
States in the near future. We have all heard of countless
examples of how broadband, interactive communications will
connect and empower all people in this country. Vice President
Al Gore recently said that the word "revolution" by no means
overstates the changes ahead.

The newspapers bring us daily examples of the ways in which
the development of the NII will revolutionize American life. The
January 19 Washington Post reported how interactive dial-up
computer network services allowed individuals to communicate with
friends and relatives in the Los Angeles area immediately after
last week's disastrous earthquake, and to spread vital news to
other interested subscribers within a matter of minutes. On
January 19 Secretary of Health and Human Resources Shalala
announced a contract that will provide by the end of this decade
for the electronic payment of nearly all of the $1 billion annual
Medicare bills. The Mountain Doctor Television Project (MDTV) in
West Virginia brings high quality care to rural residents by
allowing rural physicians to link to medical specialists at the
University of West Virginia. Likewise, the Texas Telemedicine
Project offers interactive video consultation to primary care
physicians in rural hospitals as a way of alleviating the
shortage of specialists in rural areas. Also, the Texas
Education Network serves over 25,000 educators and is making the
resources of the Internet available to classrooms, so that
students in small school districts can access NASA and leave
messages for the astronauts, browse around in libraries larger
than they will ever be able to visit, and discuss world ecology
with students in countries around the world, among other things.

These and countless other examples attest to the rapid rate at
which the American public is entering the information age.

It would be a mistake, however, simply to "let nature take
its course" and allow change to proceed under the existing legal
regime, whose underlying structure was established 60 years ago.

This is true for three essential reasons.

First, in an increasingly competitive world trade
environment -- which will become even more open with the
implementation of NAFTA and the GATT Uruguay Round -- we simply
must ensure that our telecommunications capabilities remain the
best in the world. Because information transmission increasingly
is the life's blood of all our industries, archaic rules that
inappropriately retard innovation by telecommunications firms
have a negative impact on the international competitiveness of
the private sector in general by inhibiting industrial
productivity and job creation. Legislation that lifts these
outdated structures will enhance competitiveness and spur the
creation of good new jobs.

Second, the existing regulatory structure has been altered
on an ad hoc basis over six decades to meet perceived problems of
the moment. This has created an uneven playing field that
artificially favors some competitors over others, and that in
some instances unnecessarily discourages investment and risk-
taking. These effects, in turn, inappropriately skew the growth
of industry sectors and retard the development of the NII itself.

Accordingly, legislation is needed to eliminate these unwarranted
regulatory disparities.

Third, we need to be sure that our telecommunications
policies are fully responsive to the needs of the American people
as a whole, and, in particular, poorer and disadvantaged
Americans. As Secretary Brown stated in a January 5 address, we
cannot "become a nation in which the new information age acts as
a barrier, rather than a pathway, between Americans" -- a nation
divided between the information rich and the information poor.

Yet, while the universal provision of "plain old telephone
service" has long been a national goal, the existing regulatory
structure may not be sufficient to ensure that all Americans
benefit from the broader range of information services that will
become available under the NII. Accordingly, legislative reform
is urgently needed to address this shortcoming. As Secretary
Brown stated on January 5, "the Administration will propose a
renewal and re-invention of the concept of universal service." I
will have more to say about the Administration's views on
universal service below.

THE ADMINISTRATION'S PROPOSAL

The Administration, as promised last fall, has developed a
comprehensive set of legislative proposals setting forth the
principles under which we believe the advanced infrastructure
should operate. As I have already indicated, the
Administration's proposals further the visions set forth in House
and Senate legislative initiatives. We build upon innovative
regulatory reforms and other dramatic steps taken by various
states, and we will work closely with the states in promoting an
advanced telecommunications and information infrastructure.

Together we can encourage competition, infrastructure
modernization, and advanced NII applications in health care,
education, and government services.

Underlying the Administration's proposals are five
fundamental principles that Vice President Gore and Secretary
Brown have outlined. These principles are:

* Encouraging private investment in the NII;

* Promoting and protecting competition;

* Providing open access to the NII by consumers and service
providers;

* Preserving and advancing universal service to avoid creating
a society of information "haves" and "have nots";

* Ensuring flexibility so that the newly-adopted regulatory
framework can keep pace with the rapid technological and
market changes that pervade the telecommunications and
information industries.

ENCOURAGING PRIVATE INVESTMENT AND PROMOTING COMPETITION
The Administration believes it is time to act decisively to
lift the artificial regulatory boundaries that separate
telecommunications and information industries and markets.

Those clear, stable boundaries served us well in the past.

They enabled regulators to establish separate regulatory regimes
for firms in different industries. They also prompted regulators
to address the threat of anticompetitive conduct on the part of
some telecommunications firms by barring them from certain
industries and markets.

Technological and market changes are now blurring these
boundaries beyond recognition, if not erasing them entirely. As
Vice President Gore emphasized on January 11, we are moving away
from a world where technologically valid regulatory distinctions
may be made among local telephone, long distance telephone,
cable, and other purveyors of information transmission. Digital
technology enables virtually all types of information, including
voice, video, and data, to be represented and transmitted as
"bits" -- the ones and zeros of computer code. Thus, rules which
artificially distinguish among different types of "bit
transmitters" based on old historical understandings will no
longer serve a socially useful purpose. Accordingly, regulatory
change is necessary to fully realize the benefits of private
investment and greater competition in the information
infrastructure. Regulatory policies predicated on the old
boundaries can harm consumers by impeding competition and
discouraging private investment in networks and services. The
Administration is therefore committed to removing unnecessary and
artificial barriers to participation by private firms in all
communications markets, while making sure that consumers remain
protected and interconnected. These reforms are necessary in
order for people in the United States to "win" the information
revolution as soon as possible.

To this end, the Administration supports the initiation by
the Federal Communications Commission (FCC) of a review of
current broadcast policies. Broadcasters remain the principal
source of free, universally available electronic information in
the United States, and it is important to ensure full
participation by that industry in the NII.

LOCAL TELECOMMUNICATIONS SERVICES
The Administration supports removal of those barriers
preventing competition in the provision of local
telecommunications services. Competition already has generated
substantial benefits for consumers in a host of communications
and information service markets. For example, the varieties of
customer premises equipment have expanded dramatically since
deregulation. In addition, the price of interstate long distance
telephone services for the average residential user has declined
more than fifty percent in real dollars since 1984, due to
competition and regulatory reform. At the same time, the
infrastructure used to provide long distance service has been
substantially upgraded. There are now four digital, fiber-based
national networks serving this market, and many more
interconnected regional networks. Consumers will realize similar
benefits in service innovation, declining prices, and
infrastructure enhancement from the expansion of competition in
the local telephone market. Such competition will reduce the
ability of any telephone company to harm competition and
consumers through monopoly control and will encourage investment
and innovation in the "on and off ramps" of the NII.

Current policies regarding interconnection and service
bundling, as well as specific barriers erected by individual
states, inhibit competition -- and the low prices, service
choices, and other benefits such competition brings to consumers.

The Administration proposes to ensure that competing providers
have the opportunity to interconnect their networks to local
telephone company facilities on reasonable, nondiscriminatory
terms. Local telephone companies will also be required to
unbundle their service offerings so that alternative providers
can offer similar services using a combination of, for example,
telephone company-provided switching and their own transmission
facilities. Finally, in order to ensure a consistent,
procompetitive environment for telecommunications services, the
Administration proposes to preempt state entry barriers and rate
regulation of new entrants and other providers found by the FCC
to lack market power.

Competition in local telecommunications markets should
generally lower prices and increase innovation in the services
offered users. Nevertheless, we are aware of concerns that
repricing of some local services may result in rate increases in
some cases in an increasingly competitive environment.

Accordingly, in order to guard against any possible "rate shock"
for users, the FCC and state regulators will be directed, in
implementing network interconnection and unbundling, to prevent
undue rate increases for any class or group of ratepayers.

MODIFIED FINAL JUDGMENT (MFJ) RESTRICTIONS

The Modified Final Judgment (MFJ) in the AT&T Consent Decree
helped unleash an era of competition and innovation that brought
low prices and new service choices for consumers. In short, it
has been a tremendous success. The Administration acknowledges
the great public service the judiciary has performed in
overseeing the breakup of that monopoly. But twelve years have
passed since the basic framework of the MFJ was established, and
it has been ten years since the breakup took place. Technologies
and markets are changing rapidly. A judicial decree may at some
point become a barrier to a more comprehensive, far-reaching
approach to an advanced information infrastructure.

Reform of the MFJ goes hand-in-glove with opening up local
competition, which I described above. The development of full-
fledged competition in the local provision of telecommunications
services will alleviate the competitive concerns that prompted
the strictures placed by the MFJ on the activities of the
Regional Bell Operating Companies (RBOCs). Thus, comprehensive
legislative procedures for loosening the MFJ restrictions as
competition develops are appropriate. Implementation of these
procedures in the wake of enhanced local competition will allow
the RBOCs to compete in markets for goods and services now closed
to them. This will further enhance innovation in the American
economy and benefit consumers.

Assistant Attorney General Bingaman will address the MFJ
reform provisions. I wish to note, however, that while Assistant
Attorney General Bingaman will describe the Administration's MFJ
position, the Departments of Commerce and Justice have worked
together closely in developing our position in this area. This
position represents not only the joint efforts of our two
Departments, but also the work of others in the Administration
who have joined in this policy initiative.

CABLE TELEVISION-TELEPHONE COMPANY CROSS-OWNERSHIP

The Administration supports repeal of the current cable
television-telephone company cross-ownership restriction in the
1984 Cable Act. We believe that telephone companies should be
allowed to provide video services in their local exchange areas,
subject to effective safeguards to protect consumers and
competition.

OPEN ACCESS AND PROGRAMMING DIVERSITY

The public benefits of the information revolution would be
severely diminished without a wide range of diverse programming.

An advanced information infrastructure, to be truly useful, must
offer a potpourri of educational material, health information,
home and business services, entertainment, and other programming
matter, both passive and interactive. Barriers to open access
and widespread availability of programming serve only to harm
users. The Administration's legislative proposals are designed
to further the goals of promoting a diversity of programming and
open access to distribution of this programming.

ENSURING REGULATORY FLEXIBILITY AND FAIRNESS

As barriers to an advanced information infrastructure fall,
the regulatory regime must adapt to the changing environment. In
the rapidly changing telecommunications and information
industries, the only certainty is uncertainty. A new regulatory
framework is required that will stand the test of time, without
the need for continual upheaval in the nation's overall approach
to telecommunications and information policy. At the same time,
in the interest of fairness, similarly situated services should
be subject to the same regulatory requirements. The
Administration proposes to address these concerns by granting the
FCC flexibility to reduce regulation for telecommunications
carriers that lack market power.

The Administration also proposes a new Title VII to the
Communications Act, that will encourage firms to provide
broadband, interactive, switched, digital transmission services.

The Administration's Title VII proposal will provide the FCC with
broad regulatory flexibility while maintaining key public policy
goals, including open access, interconnection, and
interoperability requirements, and obligations to support
universal service.

UNIVERSAL SERVICE

The Administration is committed to developing a new concept
of universal service that will serve the information needs of the
American people in the 21st century. Indeed, the full potential
of the NII will not be realized unless all Americans who desire
it have easy, affordable access to advanced communications and
information services, regardless of income, disability, or
location. In his January 5 speech, Secretary Brown challenged
the private sector "to expand universal service to the National
Information Infrastructure." He pointed out that promotion of
universal service advances American competitiveness, stating:

"Just as progressive businesses have increasingly recognized that
their fate is tied to education and good schools, so the
businesses that will take advantage of the new information
marketplace must realize that our national fortune is dependent
on our national competitiveness -- on ensuring that no talent
goes to waste."

CONCLUSION

In conclusion, enactment of telecommunications reform
legislation will promote the development of the NII in a
flexible, procompetitive fashion that creates incentives for
desirable investment, economic growth, and the widescale
availability to all Americans of new, highly valued information
services. The Administration looks forward to close
collaboration with Congress to enact a set of legislative
proposals that achieves these desired ends. This concludes my
testimony. I would be pleased to respond to any questions you
may have.

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End of Computer Underground Digest #6.11
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