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(NEWS)(GOVT)(NYC)(00001) ****NY Hackers Plead Not Guilty 07/17/92 NEW YORK, NEW YORK, U.S.A., 1992 JUL 17 (NB) -- At an arraignment in New York Federal Court on Thursday, July 16th, the five New York "hackers" recently indicted on charges relating to alleged computer intrusion, all entered pleas of not guilty and were released after each signed a personal recognizance (PRB) bond of $15,000 to guarantee continued appearances in court. The accused, Mark Abene also known as "Phiber Optik"; Julio Fernandez a/k/a "Outlaw"; Elias Ladopoulos a/k/a "Acid Phreak"; John Lee a/k/a "Corrupt"; and Paul Stira a/k/a "Scorpion," were indicted on July 8th on 11 counts alleging various computer and communications related crimes. Although all five were indicted together, each is not named in all eleven counts and the maximum penalties possible under the charges vary from five years imprisonment and a $250,000 fine (Stira) to 40 years imprisonment and a $2 million fine (Lee). As part of the arraignment process, United States District Judge Richard Owen was assigned as the case's presiding judge and a pre-trial meeting between the judge and the parties involved. Charles Ross, attorney for John Lee, told Newsbytes, "John Lee entered a not guilty plea and we intend to energetically and aggressively defend against the charges made against him." Ross also explained the procedures that will be in effect in the case, saying, "We will meet with the judge and he will set a schedule for discovery and the filing of motions. The defense will have to review the evidence that the government has amassed before it can file intelligent motions and the first meeting is simply a scheduling one." Marjorie Peerce, attorney for Stira, told Newsbytes, "Mr. Stira has pleaded not guilty and will continue to plead not guilty. I am sorry to see the government indict a 22-year-old college student for acts that he allegedly committed as a 19-year-old." The terms of the PRB signed by the accused require them to remain within the continental United States. In requesting the bond arrangement, Assistant United States Attorney Stephen Fishbein referred to the allegations as serious and requested the $15,000 bond with the stipulation that the accused have their bonds co-signed by parents. Abene, Fernandez and Lee, through their attorneys, agreed to the bond as stipulated while the attorneys for Ladopoulos and Stira requested no bail or bond for their clients, citing the fact that their clients have been available, when requested by authorities, for over a year. After consideration by the judge, the same $15,000 bond was set for Ladopoulos and Stira but no co-signature was required. (Barbara E. McMullen & John F. McMullen//19920717) (NEWS)(GENERAL)(SYD)(00002) Melbourne PC User Group In Trouble 07/17/92 MELBOURNE, AUSTRALIA 1992 JUL 17 (NB) -- Australia's largest PC user group is once again attracting unwanted attention. The 6000-strong Melbourne PC User Group is asking members if the group's buying service should be discontinued. The group has become known for two things - good member services and ups-and-downs in its leadership. Following factional splits, name-calling and power grabbing in the first part of this year, the 15-member committee was replaced with an interim committee of five members. It's this committee which has revealed that an audit is being undertaken into the group's financial undertakings, especially the member's buying service (MBS) which procured computer systems and software for members at special prices. The committee says it's especially worried about the MBS as it was run by the replaced president Spen Ingamells. He in turn had placed orders for around US$200,000 with a company called Allied Business Supplies (ABS). In fact this company had been de-registered in 1989, and Ingamells was at that time a director. The company has since been re-registered, and although Ingamells was no longer a director, he was a director of the company which largely owned ABS. The group's current president, Lloyd Borrett, said almost all checks made out to ABS had been signed over to Ingamells. However, he also said that no one who had ordered goods had so far complained about what they received. He said his main concern was the obvious one of conflict of interest. Another area which the new committee was worried about was the MBS practice of selling unbundled copies of MS-DOS, DR-DOS and MS-Windows, in breach of OEM agreements. Microsoft has recently been "heavy" with a number of vendors, revoking their right to sell DOS and Windows after they allegedly sold them separately. (Paul Zucker/19920717) (NEWS)(TRENDS)(SYD)(00003) Australia: Lessons By Satellite 07/17/92 SYDNEY, AUSTRALIA 1992 JUL 17 (NB) -- The difficulties faced by maritime students continuing their studies at sea are to be addressed in a world-first pilot scheme conducted by the Australian Maritime College. The distance trial for the next six months will enable Diploma of Applied Science (Nautical Science) students aboard 10 selected vessels to submit their assignments to the college in the state of Tasmania from anywhere in the Pacific and Indian oceans. Students aboard vessels of Australian National Line, Broken Hill PL, Associated Steamships and Howard Smith Industries will be able to continue their studies using Inmarsat-C satellite based mobile communications services provided by Australia's OTC Maritime. Inmarsat is a 65-member country cooperative that provides 2-way direct dial mobile phone, fax, telex and data services to ships, land transportables and aircraft worldwide. Inmarsat-C enables two-way comms between any two parts of the world - fixed and mobile. Principal of the Maritime College Rod Short said that the experiment fitted well with the students' study requirements and work experience, and should make up for the otherwise limited interaction with tutors. The pilot scheme will take advantage of OTC's FleetNET which is an enhancement of standard Satcom-C, allowing PCs on all ten vessels to simultaneously be networked to the college computer system. (Paul Zucker/19920717/Contact: Tim Jensen, OTC Maritime tel. +61-2-9012000 Fax +61-2-90-66338) (NEWS)(TELECOM)(SYD)(00004) Solomon Islands Joins PACT 07/17/92 HONIARA, SOLOMON ISLANDS 1992 JUL 17 (NB) -- The Solomon Islands (third largest Pacific Island nation after PNG and Fiji) has joined the Pacific Area Cooperative Telecommunications (PACT) network. Under an agreement signed this week by OTC Australia and Solomon Telekom, the existing earth station in capital Honiara will be upgraded to become the 18th satellite earth station in the PACT network. Countries already in PACT are Australia, Cook Islands, Kiribati, Marshall islands, Nauru, New Zealand, Niue and Tuvalu. Through access to a shared pool of satellite capacity PACT provides member countries with efficient, cost-effective communications between their own dispersed communities, their neighboring countries and the rest of the world. PACT operates alongside the member country's existing telecoms network, relieving congestion on heavy routes and providing a subsidized satellite rate for lower volume routes to remote communities. Users only pay for actual satellite time, allowing smaller members to keep costs to a minimum. (Paul Zucker/19920717/Contact: Paul Rea, OTC Tel. +61-2- 2875602 Fax +61-2-2874324) (NEWS)(BUSINESS)(SYD)(00005) Australia: Dataflow Wins Custody Of Carmen Sandiego 07/17/92 SYDNEY, AUSTRALIA, 1992 JUL 17 (NB) -- Australia's largest education software distributor Dataflow has won its case over parallel importing of the Carmen Sandiego software series. It had claimed copyright infringement by Computermate Products which was parallel-importing the software. The Australian federal Court awarded AUS$17,000 damages to Dataflow from Computermate, having found that Dataflow had an exclusive license to distribute Broderbund software in Australia. Computermate Products had been buying from US distributors. Computermate managing director, Ray Firth, maintained that parallel importing wouldn't be financially possible if the official distributor priced the products realistically. Dataflow countered by saying it offered top-quality service, technical support and back-up, which it couldn't afford to do if it had to compete with importers who didn't offer anything more than the product. Dataflow also admitted it had little chance of getting the money as Computermate Products was in receivership. Another of Ray Firth's companies, Conmputermate Australia is still in business and distributes GeoWorks. Dataflow has just been named by Apple as its distributor of the year, based on an independent survey of Australian Apple resellers. (Paul Zucker/19920717/Contact: Dataflow, tel +61-2-3102020 fax +61-2-3192676) (NEWS)(GENERAL)(SYD)(00006) TV Network Accused Of People Meter Rigging 07/17/92 SYDNEY, AUSTRALIA 1992 JUL 17 (NB) -- There's a war of words going on between Australian TV networks, and it's all about alleged rigging of the people meters that report who is watching what. The Nine network is accused of trying to boost its early evening ratings by artificially influencing only those viewers who really count - those with people meters installed. Until recently in most countries, TV viewing was assessed by having a sample group of viewers keep diaries of what they watched. These were subject to inaccuracies such as: people forgot to fill them in; they didn't correctly record the number of viewers; they didn't track channel swapping (where the dominant family member flicks between channels with the remote control); people often wrote what they thought they should have watched rather than what they did. The people meters not only instantly report each channel change back to headquarters, but they are able to count the number of viewers in the room. The Nine network ran a story on people who have people meters on local current affairs programs in the three largest capital cities. It promoted the segments, and not surprisingly, ratings for the programs doubled as people meter people tuned in to see a story about their own kind. A rival channel was so upset, it felt forced to cover the story on three consecutive nights. (Paul Zucker/19920717) (NEWS)(BUSINESS)(MOW)(00007) Moscow: Chips & Tech Venture, Summit Systems Changes Mgt 07/17/92 MOSCOW, RUSSIA, 1992 JUL 17 (NB) -- Summit Systems, one of the few Russian PC manufacturers, has announced management changes. An American-born marketing manager is being replaced by a Russian one, and a new general manager has been appointed. Kurt Kailhacker has been appointed general manager and Sergey Sidorov will be responsible for marketing. "New management comes not to save Summit, but to develop the success we have already reached," former general manager Douglas Stuart McCullam said in his farewell speech. Summit Systems is a joint venture between Chips & Technologies, and Dialogue company. It is manufacturing PC-compatible computers on the factory in Minsk, Byelorussia. Kurt Kailhacker, MBA from Chicago University, has been working with the Swiss-based Tranlink. His other positions include being the Byelorussian government consultant on money reform. Sergey Sidorov graduated from Novosibirsk University in 1980 and has been working at various management posts at the Dialogue Novosibirsk affiliate. Igor Viazanichev, an editor of ComputerPress magazine, who carefully monitors all three local PC manufacturers (ASI in Moscow, Compan in St Petersburg, Summit Systems in Minsk) said that the management changes reflects the trend to promote successful Russian entrepreneurs within the company and do not constitute a crisis of any kind. He also noted that Summit Systems, incorporated in Byelorussia, is hard hit by the country's taxation structure and is reportedly considering relocating its production facilities into Russia. (Kirill Tchashchin/19920717/Press Contact: Summit Systems, Sergey Barabanov, phone +7 095 299-6239; Public contact: phone +7 095 299- 6239; fax +7 095 299-1162) (EDITORIAL)(GOVT)(NYC)(00008) Editorial: NY Computer Crime Indictments 07/17/92 NEW YORK, NEW YORK, U.S.A., 1992 JUL 17 (NB) -- By John F. McMullen. On July 9th, I sat at a press briefing in NY's Federal Court Building as law enforcement officials presented details of their indictment of five young computer "hackers." US Assistant Attorney Stephen Fishbein wove a tale of a conspiracy in which members of an evil-sounding group called the "Masters of Destruction" (MOD) attempted to wreck havoc with the telecommunications system of the country. Immediate reaction to the indictments were predictably knee-jerk. Those who support so-called "hacker"-activities mocked the government and the charges, forgetting that these charges are serious -- one of the accused could face up to 40 years in prison and $2 million in fines. In view of that possibility, it seems to me a wasteful diversion of effort to get all excited that the government insists on misusing the word "hacker" (the indictment defines computer hacker as "someone who uses a computer or a telephone to obtain unauthorized access to other computers") or that the government used wiretapping evidence to obtain the indictment. Meanwhile, those who take the government and corporate line were grateful that this threat to our communications life had been removed -- they do not in my judgement properly consider that some of these charges may have been ill-conceived and a result of political considerations. Both groups oversimplify complex issues. They range from a simple black-and-white case of fraudulently obtaining free telephone time to the much broader question of the appropriate interaction of technology and law enforcement. The clear-cut cases allege that Julio Fernandez a/k/a "Outlaw" and John Lee a/k/a "Corrupt" fraudulently used the computers of New York University to avoid paying long distance charges for calls to computer systems in El Paso Texas and Seattle, Washington. A more troubling count is that the indicted were all part of a conspiracy to "gain access to and control of computer systems in order to enhance their image and prestige among other computer hackers; to harass and intimidate rival hackers and people they did not like; to obtain telephone, credit, information, and other services without paying for them; and to obtain passwords, account numbers and other things of value which they could sell to others." To support this allegation, the indictment lists 26, lettered A through Z, "Overt Acts." One mentions the name Paul Stira a/k/a "Scorpion" only twice with both allegations dated "on or about" January 24, 1990, a full 16 months before the next chronological incident. Stira is also never mentioned as joining in any of the wiretapped conversation -- in fact, he is never mentioned again! I find it hard to believe that he could be considered, from these charges, to have engaged in a criminal conspiracy. Another troubling point is the allegation that Fernandez, Lee, Abene and "others whom they aided and abetted" performed various computer activities "that caused losses to Southwestern Bell of approximately $370,000." The $370,000, according to Assistant US Attorney Fishbein, was developed by Southwestern Bell and is based on expenses to replace computer programs, determine the source of unauthorized intrusions, and for new computers and security devices to prevent continued break-ins. While there is precedent in assigning damages for such things as those enumerated above (the Riggs, Darden & Grant case in Atlanta found that the defendants were liable for such expenses), many feel that such action is totally wrong. If a person is found uninvited in someone's house, they are appropriately charged with unlawful entry, trespassing, burglary -- whatever the statute is for the transgression. That's it. Finally, there's the indictment as tool in the on-going political debate over the FBI Digital Telephony proposal. Otto G. Obermaier, US Attorney, said that this investigation was "the first investigative use of court-authorized wiretaps to obtain conversations and data transmissions of computer hackers." He added that the interception of data was possible only because the material was in analog form. He said a pending statute in Congress seeks the support of telecommunications companies to allow the federal government, under court authorization, to intercept digital transmission. "Many of you may have read the newspaper about the laser transmission which goes through fiber optics as a method of the coming telecommunications method. The federal government needs the help of Congress and, indeed, the telecommunications companies to able to intercept digital communications." The proposal has been strongly attacked by the American Civil Liberties Union (ACLU), the Electronic Frontier Foundation (EFF) and Computer Professionals for Social Responsibility (CPSR) as an attempt to make criminal investigations the responsibility of the communications companies, a responsibility that they feel belongs to law-enforcement. It seems that the indictments would not have been made and would not have been done with such fanfare if it were not for an effort to drum up support for the legislation. The press conference was the biggest thing of this type since the May 1990 "Operation Sun Devil" in which authorities declared that "hackers" were endangering lives by disrupting hospital procedures and being engaged in a nationwide, 13 state conspiracy. The conference was held with great fanfare, attended by high level Justice Department, FBI and Secret Service personnel and veteran New York City crime reporters who told me that the alleged damages in this case would normally not call for such a production. NY Daily News's Alex Michelini told Obermaier "What you've outlined, basically, except for the sales of credit information, this sounds like a big prank, most of it." One hopes that it is only the fanfare surrounding the indictments that is tied in with the FBI initiative and not the indictments themselves. We should insist on appropriate punishment for lawbreakers but also that companies that collect data about us properly protect it. The FBI proposal before Congress requires separate analysis and has nothing to do with the guilt or innocence of these young men or the appropriate punishment should any guilt be established. (John F. McMullen/19920714) (NEWS)(TELECOM)(ATL)(00009) ****FCC Lets Bells Transmit Video By Phone 07/17/92 WASHINGTON, D.C., U.S.A., 1992 JUL 17 (NB) -- As expected, the Federal Communications Commission adopted new rules allowing the nation's phone companies to transmit video programming. Technically, it allows for creation of a "video dial tone," similar to the audio dial tone heard as people start making calls. The rules accepted by the commissioners also allow such companies to own up to five percent of the programming companies. Currently, many cable operators have major stakes in cable programmers like Turner Broadcasting System. However, it could be years before FCC Chairman Alfred Sikes gets his wish, in the form of direct competition between cable companies and phone companies in the area of program delivery. The new rules are designed to encourage the phone companies to replace their current copper cables with fiber, while the phone companies themselves are looking at technologies which will give them limited video-delivery capability on their current cables. The replacement of the nation's basic phone infrastructure with fiber cable could cost billions of dollars, and take decades. The phone companies still don't have all they want, namely the right to take major stakes in cable programmers. The FCC said that will require changes in the 1984 Cable Act. Changes in that act, ironically, have been proposed by Democratic vice presidential nominee Sen. Albert Gore, but the White House has threatened to veto the bill, which would also re-regulate prices. Even the modest move to allow a five percent stake in programming drew dissents from two commissioners, Democrats Ervin S. Duggan and James H. Quello, who claimed it would cause phone companies to do what Gore has accused the cable operators of doing in that area. Sikes urged that Congress reject the Gore bill based on his agency's actions. The phone companies called the FCC's action a "half-step," and are awaiting congressional follow-up. "We want the whole thing," said a Bell Atlantic spokesman. "Ameritech is eager to give consumers a choice," said its vice chairman, Ormand Wade. (Dana Blankenhorn/19920717/Press Contact: Ameritech, Mike Brand, 312/750-5219; FCC Press Office, 202-632-5050) (NEWS)(TELECOM)(ATL)(00010) FCC Opens Proceeding On PCN 07/17/92 WASHINGTON, D.C., U.S.A., 1992 JUL 17 (NB) -- The Federal Communications Commission opened for public comment a plan to re-allocate parts of the microwave spectrum for portable cellular phones. Chairman Alfred Sikes hopes to license such companies to begin service in early 1994. But the commission remains sharply divided on what the rules will be. Sikes is said to be opposed to telephone company entrance into the new market, while the phone companies themselves, which also dominate regular cellular service, are demanding it. Other companies which have been active in the debate include Cox Enterprises and Time Warner, both of which are major cable television operators and hope to use their systems to transmit parts of the calls. The vague rule-making proceeding proposes that three competing services be licensed in each market, but commission staffers indicated support for nationwide licenses, and Democratic Commissioner Ervin Duggan suggested that thousands of small companies be licensed. Uncertainty also exists on who will own the new systems. Chairman Sikes doesn't want the existing cellular operators to be allowed to vie for the new frequencies, while the utilities which already control the channels don't want anyone in. Chief Engineer Ed Stanley indicated that existing licensees could share frequencies with PCN systems, as Millicom has claimed and Motorola has decried, while the whole question of offering "pioneer preferences" on licenses to the 100 or so companies now experimenting with the technology was put off. Also unclear is how the licenses will be granted, either by lottery, or through an auction. The only certainty seemed to be that more lobbying, and more rhetoric, will result before anything concrete happens. But this is a political year. (Dana Blankenhorn/19920717/Press Contact: FCC Press Office, 202- 632-5050) (NEWS)(TELECOM)(ATL)(00011) Phone Earnings Tied To Economy, Cost Cutting 07/17/92 NEW YORK, NEW YORK, U.S.A., 1992 JUL 17 (NB) -- Phone company earnings for the second quarter of 1992 are beginning to come in, and they remain tied closely to local economies and cost cutting. AT&T turned in a fine performance, with net income of $961 million, compared to $841 million in earnings from last year, not counting an $87 million gain from its sale of stock in Sun Microsystems. Revenues rose to $15.845 billion. All this despite what Chairman Robert E. Allen called a "still-sluggish economy." The company's Universal Card also made a profit, for the first time, which AT&T said was ahead of schedule. The company's NCR computer unit also posted profits, with operating income of $98 million. NYNEX, which serves New York and New England, credited its $331 million in earnings, 14 percent up from a year ago, on its aggressive cost cutting, with thousands of employees let go. Revenues were actually down slightly, based on a slow economy in its service area. Pacific Telesis, which has been holding its stock high due to a study which could break it up into regulated and non-regulated companies, showed lower earnings, with net income of $282 million falling well short of the $316 million gain recorded a year earlier, on slightly lower revenues. Chairman Sam Ginn blamed the recession, which is especially hard in California. Pacific Bell cut its workforce by 3,995 employees last year. Ameritech credited an improved economy in the Midwest for its 13 percent rise in quarterly earnings, to $343 million. That company too has cut its staff, but it posted gains in both wired and wireless customers. Centel, which is in the process of being acquired by Sprint, said it earned $54.8 million, but that included a gain of $45.6 million from selling its Ohio phone properties. The results are not expected to end calls by arbitrageurs to rescind the sale of the company to Sprint. Finally Rochester Telephone, which serves upstate New York, said it earned $15.8 million for the quarter, way down from $31.3 million a year earlier. However, when costs of its purchases of some Minnesota phone systems from Centel are taken out, net income was actually up 11 percent, the company said. Operating income also rose, the company said. (Dana Blankenhorn/19920717/Press Contact: Frederick R. Pestorius, Rochester Telephone, 716-777-7330; William K. White, Centel, 312- 399-2735; Jim Byrnes, AT&T, 908-221-4011) (NEWS)(TELECOM)(ATL)(00012) International Phone Update 07/17/92 ATLANTA, GEORGIA, U.S.A., 1992 JUL 17 (NB) -- The pending privatization of a successful Latin phone company highlights the international telecommunication news. Uruguay's Antel has a good reputation for service, and more citizens there have phones than in most other Latin countries, but the government said GTE, Southwestern Bell, and Bell Atlantic of the US, as well as Bell Canada, Detecon of Germany, France Telecom, STET of Italy, Cable & Wireless of Britain, and Spain's Telefonica de Espana have all expressed interest in it. Telefonica already owns a share in half of Argentina's old Entel unit, while GTE owns a major stake in Venezuela's CANTV. All moves to privatize still await an October 1 referendum. If over one-quarter of voters support that vote, a formal plebiscite to end the privatization move could be held in November. Also in Latin America, Telesp of Sao Paulo, the state phone company, will hold its cellular tender in August. The company wants to buy and install equipment to create a 300,000 unit cellular system in 18 months. Sao Paulo and its suburbs contain about 15 million people. Telesp is a unit of Telebras, the national phone monopoly which has been subject of privatization rumors. A second cellular tender in Sao Paulo will go to a private company. STET, meanwhile, said it signed to lay an undersea fiber cable between Palermo in Sicily and Novosibirsk in Russia's Siberia region, via Istanbul, Turkey and Odessa. The new line would then go overland to Moscow. Finally, Northern Telecom won an initial order from Mercury Communications of the United Kingdom, a unit of Cable and Wireless, to start putting together a fiber network. Northern Telecom's equipment will quadruple the capacity of the existing fiber network, providing capacity for 30,720 voice channels. (Dana Blankenhorn/19920717) (NEWS)(GOVT)(SFO)(00013) ****Cypress Pres Talks Tough Over TI Patent Win 07/17/92 SAN FRANCISCO, CALIFORNIA, U.S.A., 1992 JUL 17 (NB) -- T.J. Rodgers, president of Cypress Semiconductor, in an exclusive interview with Newsbytes, spoke about this week's court ruling in favor of his company in its ongoing patent suits brought against it by Texas Instruments. Two suits were initiated by TI against Cypress in 1990. In the case won by Cypress, a federal district court jury ruled that a Texas Instruments patent covering a method for testing programmable logic devices is not valid. The trial was part of an ongoing patent dispute between the giant computer chip manufacturer and five other companies: Cypress Semiconductor, Analog Devices, VLSI Technology, LSI Logic, and Integrated Device Technology. At issue was Cypress' use of a TI invention that makes it possible for a programmable logic device, a type of semiconductor, to be tested. Rodgers gave his interpretation of the ruling to Newsbytes. "Here's what happened: one, the jury found no infringement on our part; two, they found the TI-987 patent invalid due to prior invention; three, they found the 987 patent invalid due to.... (aspects)....having not been disclosed to the patent office; four, they found the 987 patent invalid due to the 'indefiniteness' of the claims." He added that "indefiniteness" was a legal term. Rodgers was in no doubt as to the outcome of the case, "So the patent was not just shoved over, it was blown away," he said. He also had hard words as to what he views as recent TI tactics. "What that means is, in general terms, I don't believe TI can rely on suing people in Texas, and under the treat of law suit, taking money away from them for very narrow patents of dubious quality - which is what has been their strategy." He continued: "They have in the past made a bunch of money, by taking some more important patents, like their DRAM portfolio, and going after companies that were making huge revenue and profit on the DRAM portfolio. Now they are trying to extend that to take every patent -- scrape the bottom of the barrel -- and assert it against everyone where they might make enough money to pay the lawyers fees and come up with a, quote, profit." He also gave an opinion on the consequences of the result for TI, saying: "I think their newest tac, one which hurts our industry with unnecessary litigation, is going to show up for them not making very much profit, and going to cause them to defend their intellectual property where it really matters, and it's not just a profit making endeavor." Asked by Newsbytes how this decision affects the other outstanding patent suit against Cypress and the other companies, he said: "In a substantive way it does not, because there is another patent called 027 which...(we are contesting.) But one thing now that we know, is that the 027 patent, which is a 1963 transistor patent -- (which TI is) trying to assert against 1992 microprocessors -- we now know that we do not have to be intimidated by the 'home court' advantage. We can go in there with good lawyers and a good case against a weak patent and a weak case and win." In conclusion he said: "So nothing happened to change the fact that there will be another trial later this year, except for the fact that we are going to be a whole lot tougher and a whole lot more resolved when we go into that case together." (Ian Stokell/19920717) (NEWS)(TELECOM)(LON)(00014) EC Delays Forced European Telecoms Deregulation 07/17/92 BRUSSELS, BELGIUM, 1992 JUL 17 (NB) -- European Community (EC) ministers have delayed until September their planned legislation to force EC member state telecoms companies to cut their phone call charges on international calls. The two-month delay will allow the various affected telecoms companies to act on their own in bring rates down, according to industry analysts. Publicly, EC officials say they are just too busy to pass the legislation just now. According to a number of EC investigations, several European telecoms companies have been accused of pushing international call charges -- notably within Europe -- far higher than would normally be expected when compared with long distance charges. EC reports show, for example, that an international call within Europe can cost up to three times as much as an in-country long distance call covering the same mileage. Other areas where EC legislation is expected to reduce international charges include reverse country calling. Examples cited by the EC are where a Spanish phone user pays twice as much to call the UK than for a call in the reverse direction. The move to delay legislation until September has been queried by telecoms analysts, most of whom feel that the EC telecoms companies have had more than long enough to get their act together. (Steve Gold/19920717) (NEWS)(TELECOM)(LON)(00015) Ericsson Secures Japanese Mobile Phone Contract 07/17/92 STOCKHOLM, SWEDEN, 1992 JUL 17 (NB) -- Ericsson has secured a major contract to supply digital cellular phone equipment to Kansai Digital, the Japanese phone network operator. Terms of the $112 million contract call for the Swedish telecoms company to supply and install a digital mobile phone network -- based on the pan-European groupe speciale mobile (GSM) technology -- in the Kansai region of Japan. The Kansai region includes the cities of Kobe, Kyoto and Osaka. Despite the value of the two-year contract, Newsbytes understands that the Kansai deal is very much a beta test, with a total network capacity of around 75,000 subscribers. If the scheme is a success, it will be extended to cover other areas of Japan. Cellular phones have been a runaway success in Japan. As in the UK, take-up of mobile phone technology by the masses has outstripped all expectations, with the result that the analogue networks are fairly congested at peak times. The GSM mobile phone technology should solve this congestion problem, since the calls are processed digitally, with all voice transmissions reduced to digital, error-checked data -- calls are crystal clear and with minimum interference. Ericsson expects great things for its GSM contract with Kansai. According to the company, subscribers to the existing analogue networks in Japan jumped by more than 60 percent, resulting in the Japanese cellular marketplace moving into second position in the world in terms of market size with 1.25 million phones in active use -- this figure is expected to increase ten times over by the end of the century, according to official estimates. (Steve Gold/19920717) (NEWS)(GENERAL)(LON)(00016) UK: Groupware Newsletter 07/17/92 OXTED, SURREY, ENGLAND, 1992 JUL 17 (NB) -- Office Futures has begun producing a new publication on the subjected of groupware, aiming to cover all aspects of workflow management, group filing, scheduling, joint authoring and conferencing systems. The newsletter -- Groupware News -- carries no advertising or paid material. As a result, the ten times a year newsletter is fairly expensive at UKP 250 a year subscription, though editor/publisher, Roger Whitehead, claims that it is unique in the marketplace. According to Whitehead, Groupware News aims to report the latest industry trends in groupware, detailing news of current research in the area, as well as case histories. Plans call for the newsletter to cover conferences, events and publications in the marketplace. GPN, as the newsletter is known as, is edited by Whitehead, who is also a director if Office Futures, an independent consultancy that specializes in office systems. Contributors to the newsletter come from a wide variety of business, academic and user backgrounds. (Steve Gold/19920717/Press & Public Contact: Office Futures - Tel: 0883-713974; Fax: 0883-716793) (NEWS)(BUSINESS)(LON)(00017) New Data Communications Company Debuts In UK 07/17/92 LONDON, ENGLAND, 1992 JUL 17 (NB) -- What do you do when you've moved on from two communications/modem companies, having made more than a little money in the process? For Bob Jones, a comms industry veteran, the answer is simple -- set up another communications company. Sonix is Jones' latest venture. Backed by UKP 2.1 million start-up capital from the US and UK, the company is headed by Jones, who plans to supply data communications networking product to the UK business community. The company's first products, due to be launched this November, aim to provide a link between main network facilities and remote users, using the telephone network, according to Jones. Sonix specializes in conventional analogue components -- modems -- and their digital counterparts -- for integrated service digital network (ISDN) technology. Jones claims that this approach differs from the competition, which either focuses heavily on analogue modems or digital ISDN technology, but rarely both. Sonix will specialize in both areas, Jones said. Plans call for Sonix to launch three products in November: one will be an Ethernet bridge with ISDN backup, the second a 14,400 bits-per-second modem with V.42Bis error correction and data compression, while the third will be an ISDN connection device. Jones is confident that the new products will establish Sonix quickly in the data communications marketplace. "It's a straightforward approach which contrasts very much with that taken by organizations until now," he explained. According to Jones, traditional suppliers are very modem- oriented, with the more innovative companies focussing exclusively on ISDN technology, so failing to acknowledge the large installed base of modems in the market. "Nobody else is combining the two properly, or takes the view that you need to offer people a migration path," he said. (Steve Gold/19920717/Press & Public Contact: Sonix - Tel: 0285- 641651; Fax: 0285-642098) (NEWS)(IBM)(DEN)(00018) AutoTester Lets Developers Test Software Performance 07/17/92 DALLAS, TEXAS, U.S.A., 1992 JUL 17 (NB) -- AutoTester says that software developers spend more than half their development resources testing software performance, but less than 20 percent of the features will be checked. The Dallas-based company markets AutoTester Plus, an automated testing tool for software developers. Platform independent, the fully automated test environment provides unit, integration, acceptance and regression testing in a completely unattended mode, according to the company. AutoTester spokesperson Jodi Abrams told Newsbytes that an application can be tested around the clock, exercising the hundreds of thousands of test cases needed to achieve what she called "reasonable coverage" without making errors and with detailed documentation. Abrams cited the software-dependent insurance industry as an example of a business where the software has to work the first time. With hundreds, or perhaps thousands of possible rates and combinations of insured parties criteria, it would be virtually impossible to manually test every iteration. Abrams says the Prudential insurance company updates their programs quarterly. Using AutoTester, MIS Manager Joe Fleck says Prudential designs test cases which force every question and every answer to appear, and assures that all 27 plans are available in all 50 states. The test is run overnight in about eight hours, according to Fleck. According to Linda Hayes, AutoTester president, 25 percent of all software is rewritten every year. She says "expert erosion" may hinder testing efforts by new personnel with limited application knowledge. Using AutoTester's script writing feature, once the test script is written, personnel losses don't affect the testing. Abrams said a single unit license costs $5,000, with a Pilot Project license, which includes software, training and consulting support can cost up to $50,000 but averages about $21,500. The company originally released AutoTester, a manually operated system, but has now released AutoTester Plus, a fully automated version of the program. The program provides a direct link between the user interface of the application and the test script library. Application modifications are made at the specification level and the related test scripts are regenerated. A cross-reference capability alerts testers to the cases which may be affected, and a search and replace facility is available for pervasive changes. The company also distributes an AutoTester product for Windows, which bridges the gap between graphics and text running in distributed environments. AutoTester for Windows version 1.3 supports the Attachmate emulator for Windows as well as the Rumba emulator from Walldata. Multiple DOS sessions are also supported, with access to cursor location, finding and retrieving test, and maintaining synchronization. AutoTester says foreign language keyboards supported by Windows are automatically supported, mapping and reformatting related system variables such as date and time settings. The company says you can even develop a test script in one language and translate to a second language, even in the middle of a test. The Windows version of AutoTester carries a single unit license price of $15,000, with volume, site and corporate licenses available. (Jim Mallory/19920717/Press contact: Jodi Abrams, Autotester, Inc., 708-291-1616; Reader contact: 800-328-1196, fax 214-750-9668) (NEWS)(BUSINESS)(DEN)(00019) Cray Computer Loses Nearly $12M In 2Q 07/17/92 COLORADO SPRINGS, COLORADO, U.S.A., 1992 JUL 17 (NB) -- Cray Computer Corporation today reported net loss of nearly $26 million, or $1.07 per share, for the six months ending June 30. For the same period last year, the company reported a $24.7 million loss, or $1.34 per share. For the second quarter, ending June 30 the company lost almost $12 million, or $0.49 per share, compared with $0.69 per share for the same period last year. Cray Computer was spun off from Minnesota-based Cray Research in late 1989 to develop the Cray-3 supercomputer. The Cray-3 was originally intended to include 16 separate processors and a unique technology using gallium arsenide. After having quality control problems with the gallium arsenide chip supplier, Cray Computer built an $11 million foundry to provide its own chips. Cray Computer had sold one Cray-3, to the Department of Energy's Lawrence Livermore Laboratories, before problems began to develop. In May 1991 founder Seymour Cray told stockholders attending the company's annual meeting that the Cray-3 was right on schedule, and would ship by the end of 1991. However in December of '91, the company said testing was proceeding slower than anticipated, and missed its December 9 milestone. Livermore Labs said at that time that it was concerned with the delay, and on December 24 exercised a contract option, switching to a Cray Research C-90 supercomputer. Early this year the company's problems multiplied, with a stockholder filing a class action suit claiming company officials knew they would miss deadlines, but failed to tell the stockholders. The delay adversely affected the price of Cray Computer stock. In mid-February, Cray Computer announced that it was halting work on a 16-processor version of the Cray-3, and would work on development of 4 and 8-processor versions. It also said it was looking for a partner to help finance, market, and manufacture the smaller machines. In April of this year, the company announced a $13.9 million loss for the first quarter, and president and CEO Neil Davenport resigned, saying it was "the best time to look for other opportunities." Davenport's statement said his departure at that time would cause the least amount of disruption in the company. Seymour Cray assumed the presidency and took over day-to-day operations of the company. Contacted by Newsbytes today, spokesperson Greg Barnum told Newsbytes that at the present rate of spending, about $4 million per month, the company had sufficient funding to go through May 1993. Asked about the probability of developing the smaller units, Barnum said "Mr. Cray is still positive." (Jim Mallory/19920717/Press contact: Greg Barnum, Cray Computer, 719-579-6464; Reader contact: 719-579-6464) (NEWS)(BUSINESS)(WAS)(00020) DEC and H-P Both Lose Heads 07/17/92 WASHINGTON, DC, U.S.A., 1992 JUL 17 (NB) -- On Thursday the founder of pioneering computer company Digital Equipment, 66 year-old Kenneth H. Olsen, announced that he would step down as president and chief executive of his company effective October 1, 1992. Palo Alto, California-based Hewlett-Packard, announced that after a 14-year stint at the head of that company, John A. Young is retiring. Digital is expected to announce dismal quarterly earnings next week, but the announcement of Mr. Olsen's imminent retirement was not expected by industry observers. Olsen, who was a student at MIT when he began the company, worked closely with the computer department at MIT and the famous Model Railroad Club at the school, supplying them with his early PDP computers and getting important software development input in return. A DEC manufacturing vice president, Robert B. Palmer, was named to succeed Olsen as both president and chief executive, pending approval of the board of directors. Lewis Platt, presently executive VP at HP will replace Hewlett- Packard's retiring head John Young effective November 1, 1992. Following IBM, DEC and HP are the country's second and third largest computer companies. Digital Equipment stock opened Friday trading up 3.25 points from Thursday's closing price following yesterday's announcement of Mr. Olsen's retirement. TI moved up slightly in early Friday trading following the announcement of Mr. Young's retirement and a second quarter profit of 72 cents per share for the second quarter verses a loss of $1.99 per share for the same quarter last year. (John McCormick/19920717/) (NEWS)(IBM)(WAS)(00021) ****IBM Earnings UP, But Below Expectations 07/17/92 ARMONK, NEW YORK, U.S.A., 1992 JUL 17 (NB) -- IBM secondary market trading dropped Friday when IBM reported second quarter 1992 earnings of only $1.25 per share compared to 22 cents per share for the same quarter last year. The drop was attributed to the fact that analysts had been predicting a slightly higher earnings of $1.33 per share. Reuters is reporting that actual estimates ranged all the way from slightly under $1 per share to $1.60. IBM's second quarter revenues for services were up a whopping 45.5 percent to nearly $2 billion while software related revenue jumped by just over 12 percent to $2.7 billion. Hardware was the laggard section in IBM's earnings growth, but still accounted for more than software and service sales combined at a total of $8.64 billion, up only 4.6 percent over the same period last year. IBM's total revenues were $16.2 billion for the second quarter of 92, with net profits topping $700 million. The net profit for the first six months of fiscal year 1992 were $1.3 billion on sales of $30.36 billion. (John McCormick/19920717) (NEWS)(GOVT)(WAS)(00022) AUDRE Image Compression CALS Compatible 07/17/92 WASHINGTON, DC, U.S.A., 1992 JUL 17 (NB) -- The NIST (National Institute of Standards and Technology) has determined that Audre Recognition Systems' image file compression and decompression technology is fully compatible with MIL-STD-1840A and MIL-R- 28002A, the Pentagon's CALS or Computer-Aided Acquisition and Logistic Support system. CALS is designed to reduce the amount of paperwork involved in contracting with the military as well as making repair, maintenance, and parts data available directly from computer files. The CALS system is intended to reduce costs involved with the government's purchase and maintenance of major weapons systems such as aircraft. AUDRE software has been used at Lawrence Livermore Laboratories to support the CALS Test Network since mid-1990. CALS allows easy storage, retrieval, and transmission of technical documents and illustrations, and the image compression software greatly reduces the size of scanned images. (John McCormick/19920717/Press Contact: Thomas F. Casey, AUDRE Recognition Systems Inc., 619-451-2260) (NEWS)(GOVT)(WAS)(00023) Silicon Graphics Wins Sandia Labs Contract 07/17/92 WASHINGTON, DC, U.S.A., 1992 JUL 17 (NB) -- Mountain View, California-based Silicon Graphics has announced that the company has received orders from Department of Energy contractors to supply IRIS 4D graphics workstations designed to run Parametric Technology's computer aided design software. The move is part of an overall effort to make DoE technology available to commercial users as DoE nuclear weapons research is being reduced by changes in the world situation and domestic budget considerations. The DoE contract sites involved are Sandia National Laboratories, Albuquerque, New Mexico; and Livermore, California, locations; and Allied-Signal's Aerospace division based in Kansas City, Kansas. Sandia Labs provide research and development facilities to the Department of Energy's nuclear weapons research division, while the Allied-Signal location in Kansas is a manufacturing facility. The new computer systems will allow a much closer link between the three facilities. Silicon Graphics expects the five-year contract to be worth approximately $10 million total. The overall project is a part of the move to reduce defense and military-related spending and boost the transfer of military technology to civilian-based manufacturing. (John McCormick/19920717/Press Contact: Renee Wildmanm, Silicon Graphics, 415-390-1026) (NEWS)(GENERAL)(WAS)(00024) ROUNDUP: Stories Carried By Other Media This Week 07/17/92 WASHINGTON, DC, U.S.A., 1992 JUL 17 (NB) -- Roundup is a brief look at some computer stories carried in other publications received here this past week. InformationWeek for the week of July 13 looks at "ethics" and has a look at Windows NT. July's Networking Management puts the "GUI Stampede" on the cover. The Office for July looks at color copiers and plain paper fax. July 13's Network World carries a buyer's guide on LAN backup software. The July issue of Canadian Datasystems carries a special report on Canada's "Crisis in High-Tech Education," co-authored by Newsbytes' own Grant Buckler. CommunicationsWeek dated July 13 says that the Democratic National Committee used 189 miles of cable to support 6,000 voice and data lines and made 250 Windows-based PCs available in a massive high-tech support effort for this week's Democratic Convention in New York City. This week's Computerworld says users report Novell's Netware Management System is a "resource hog" and has a strong NetWare bias. Computer Reseller News for the week of the 13th says that ComputerLand franchisees will finally get a cost-plus purchase option - bringing CL into line with the rest of the distribution channel. (John McCormick/19920717) (NEWS)(TRENDS)(LAX)(00025) ****New Book Offers How-To For Virus Creators 07/17/92 LOS ANGELES, CALIFORNIA, U.S.A., 1992 JUL 17 (NB) -- Contests, development kits, support bulletin boards, newsletters -- these and more are being offered to developers of computer viruses. Some computer virus experts are saying it's time to put at stop to it with an inexpensive hardware fix called the Programmable Physical Write-Protect (PPWP). Newsbytes has obtained a copy of "The Little Black Book of Computer Viruses," available by mail order for $14.95 from American Eagle Publications in Tucson, Arizona and the first in a series of three volumes of books designed to "...teach you to design viruses, deploy them, and make them better." The author, Mark Ludwig, goes on to say, "I am convinced that computer viruses are not evil and that programmers have a right to create them, possess them and experiment with them." Lugwig goes on to defend his position and the book by saying, "That kind of stand is going to offend a lot of people, no matter how it is presented. Even a purely technical treatment of viruses which simply discussed how to write them and provided some examples would be offensive. The mere thought of a million well armed hackers out there is enough to drive some bureaucrats mad. These books (Ludwig's Computer Virus Handbooks) go beyond a technical treatment, though, to defend the idea that viruses can be useful, interesting, and just plain fun." Ludwig's book goes on to provide instructions and source code for six viruses, including the mutating Stealth virus. If the reader doesn't feel like going to the trouble to type in the code, he doesn't have to. An order form offers a disk with the code on it along with compiled executable live viruses for another $14.95. The publisher does require the user to sign a statement that says, "I understand that the disk is sold for information purposes only. I certify that I am at least 18 years of age, and I agree to take full responsibility for any damage caused, either to my own computer or anyone else's, as a result of my use of this software." Newsbytes contacted American Eagle Publications and talked with Lugwig, who said he has a Ph.D. in Physics from University of Phoenix, a Masters from Cal Tech, and did undergraduate work at MIT. Ludwig said his interest in computer viruses is from a purely scientific point of view and finds the similarity to human organisms fascinating. When asked about his feelings about people who might use the information provided to cause harm, Ludwig said he has copyrighted the programs and would certainly consider prosecuting anyone who misused them. He said our country was founded on twin principles, freedom and responsibility, and pointed to the repeated warnings in the book about behaving responsibly with the information. Ludwig says he doesn't consider himself a hacker in the negative sense of the word, like the Dark Avenger, who says he loves to destroy people's data. About 2500 copies of the book and 250 disks have been distributed, Ludwig said. Ludwig's book isn't the only printed information. There is at least one other book, as well as newsletters both in print and distributed on electronic bulletin boards. Newsbytes has even seen a video done by virus authors on how to get access or "hack" into US government systems. Newsbytes obtained an entry form from one group, who calls itself PHALCON/SKISM, for a contest that had a July 4, 1992 deadline for the best, original virus. The entry form had to accompany the submission and only original code and no "hacks," or mutations of currently available viruses, were allowed. Virginia Beach, Virginia computer consultant Roger Grimes tracks viruses and says he has over 800. Grimes told Newsbytes most viruses are written by 15 to 21-year-olds and the problem has gotten way out of hand. Newsbytes understands that it is not illegal to write or distribute information on how to write viruses, it is only illegal to actually damage or otherwise purposefully harm someone's data. According to Grimes, the problem accelerated when McAfee and Associates, a developer of antivirus software, started offering cash rewards to those providing new virus strains to the company. Rich Levin, author of the Computer Virus Handbook (Osborne, McGraw-Hill, 1990) told Newsbytes as long as antivirus experts profit from the spread of computer viruses, a software end to the problem won't happen. "First of all, someone has to get hit before the antivirus people even know about a new virus. So the antivirus software has to be continually updated. Every time there's a virus scare the stores get cleaned out of antivirus software, but the only way to stop this is for hardware manufacturers to put a physical barrier in computers to stop viruses," Levin said. (Linda Rohrbough/19920717/Press Contact: Rich Levin, Levin and Associates, tel 215-333-8274; Roger Grimes, tel 804-431-5662; Mark Ludwig, American Eagle Publications, tel 602-888-4957; Padgett Peterson, Dick Lefton, International Computer Virus & Security Conference, 212-641-6159; Hali Deneberg, Multix, tel 214-239-4989, fax 214-239-6826) (NEWS)(TRENDS)(LAX)(00026) ****Hardware Device Seen As Cure-All For Viruses 07/17/92 VAN NUYS, CALIFORNIA, U.S.A., 1992 JUL 17 (NB) -- Some computer virus experts are saying it's time to put at stop to the continuing proliferation of computer viruses with an inexpensive hardware fix called the Programmable Physical Write-Protect (PPWP). According to Rich Levin, author of Computer Virus Handbook (Osborne-McGraw-Hill), software (a virus) can evade software (an antivirus program). "Software-based write-protection schemes are logical (virtual) barriers to viral activity. These 'soft' barriers are subject to tampering, reprogramming, and other deficiencies which result in security loopholes -- flaws virus authors exploit," Levin said. Levin has provided Newsbytes with the specifications for a hardware write protection scheme for personal computers. Levin says physical write protection is what is needed, much like the write-protect mechanism engineered into 5.25-inch and 3.5-inch floppy disk drives. "No virus, regardless of its algorithmic sophistication, can infect write-protected floppy disks; a physical hardware barrier prevents access," Levin maintains. Levin's idea is an implementation of a hardware write protect he calls the Programmable Physical Write-Protection (PPWP), which he claims would put antivirus authors, including himself, out of business. Desktop PCs with the PPWP would have a switch on the face of the system unit, and portables could have the switch on the back or above the keyboard. The switch could be locked into place with detents or removable keys and would have three settings (1) PROGRAM EEPROMS, (2) PROTECT BOOT, and (3) PROTECT ALL. With the switch in the first position, the hard disk drive could be initialized, the physical sector 0 and logical sector 1 (the boot sector and partition table) could be written to. In the second position, the switch must provide an electrical connection before the computer's read-only memory (ROM) would allow access to the basic input/output system (BIOS) electrically erasable programmable read-only memory (EEPROM) so computer viruses would be prevented from altering or entering BIOS EEPROMs. Levin said the BIOS EEPROMs code could be preset to write protect all .COM and .EXE files so when the switch was in the third position, a physical write protection of all the critical disk areas is provided, Levin said. Levin said, with the exception of disk initialization, which is often done at the factory or by a dealer, normal computer operation NEVER requires write-access to the partition table or boot sector areas. "Such access is of exclusive use to computer viruses and other rogue programs," Levin said. Write-protection of executable programs, which should never be altered once they are copied onto the disk, would also be provided. Levin told Newsbytes the PPWP would cost manufacturers less than $10 a computer to implement. Levin is not selling the idea, however, but has placed the concept in the public domain. Newsbytes showed the PPWP to Padgett Peterson, who is on the board of directors of the Washington, D.C.-based International Computer Virus and Security Conference. Peterson said alteration of the BIOS would be necessary as currently the BIOS doesn't receive file extensions (such as .EXE or .COM) but just sector addresses. Peterson also said network device drivers and things that write directly to the disk may be able to "tunnel" under the PPWP. Virginia computer consultant, Roger Grimes, contacted by Newsbytes, agreed, saying he could think of a couple of ways around it. However, Grimes said if the concept was implemented by computer manufacturers it would eliminate 99.9 percent of the viruses currently out there. However, $10 a computer may be low, as Peterson said at least one patent has been issued for an "EEPROM anti-virus device." Peterson also mentioned that a card might work on current machines to stop many viruses. A Dallas, Texas based company, Multix, has introduced the Virustop Card, a $69 card that offers physical write protection. Newsbytes understands the card has prevented infection by the new Taiwanese Fish virus, a virus the antiviral products missed when it was released recently. While the PPWP device might not stop all viruses, it would eliminate an entire class of viruses available now, and frustrate the growing underground virus movement. Levin said his hope is the release of the PPWP will help stimulate public pressure on computer manufacturers to put antiviral hardware on the market. (Linda Rohrbough/19920717/Press Contact: Rich Levin, Levin and Associates, tel 215-333-8274; Roger Grimes, tel 804-431-5662; Mark Ludwig, American Eagle Publications, tel 602-888-4957; Padgett Peterson, Dick Lefton, International Computer Virus & Security Conference, 212-641-6159; Hali Deneberg, Multix, tel 214-239-4989, fax 214-239-6826) (NEWS)(BUSINESS)(DEN)(00027) TI Reports $72M 2Q Net Earnings 07/17/92 DALLAS, TEXAS, U.S.A., 1992 JUL 17 (NB) -- Texas Instruments reported today that its net earnings for the second quarter, which ended June 30, were $72 million. Second quarter results were significantly better this year than for the same period last year, when TI reported a net loss of $157 million. Earnings per common and common equivalent shares was $0.73, compared to a $1.99 loss per share for the same period last year. TI said the significant improvement was the result of cost reductions and operating improvements. TI said its financial performance continues to strengthen in spite of the slow pace of US economic recovery and weakness in the Japanese economy. The company said net revenues for the three months ended June 30, 1992, were $186.7 million, up 11 percent from the same period of 1991. Profit from operations was $128 million. This represents a $65 million increase from this year's first quarter. Last year's second-quarter results included a special charge of $130 million, or $1.59 per common share after tax, for cost-reduction actions. In a letter to stockholders, TI's chairman, president and chief executive officer, Jerry R. Junkins, said operating improved over the second quarter of last year in every major TI business. Junkins also reported that semiconductor performance improved substantially over the first quarter of this year, particularly in memory, and TI's semiconductor business operated near breakeven in the second quarter of 1992. "Results for the quarter include royalty revenues of $124 million, compared with $74 million in the second quarter of 1991 and $95 million in the first quarter of 1992. Second-quarter 1992 royalty revenues include one-time amounts totaling $45 million, reflecting previously announced patent license agreements with Mitsubishi Electric Corporation; New Japan Radio Co., Ltd.; Nippon Precision Circuit, Ltd.; Seiko Epson Corporation; and Toko, Inc. Junkins said TI's semiconductor orders reached an all-time high in the second quarter, reflecting record orders for application-specific products and improvement over this year's first quarter in orders for memory, standard logic and linear products. Semiconductor orders increased over the first quarter of this year in all major market regions of the world. Semiconductor revenues were also at record levels in the second quarter. TI spokesperson Terri West told Newsbytes that the big story is the improvement in semiconductor operations. West said that while that business is still operating at a loss, it is near the break-even point. West said that is a substantial improvement over the last quarter, and over a year ago. TI does not comment on expectations for the future, West said. (Jim Mallory/19920717/Press contact: Terri West,Texas Instruments, 214-995-3481) (NEWS)(BUSINESS)(DEN)(00028) Zenith 2Q Loss of $15.2 M 07/17/92 GLENVIEW, ILLINOIS,U.S.A., 1992 JUL 17 (NB) -- Zenith Electronics Corporation has reported a second-quarter loss of $15.2 million but said that's an improvement compared with the $26.9 million loss recorded in the second quarter of last year. Second-quarter 1992 sales were $280 million, down slightly compared with $275 million in the 1991 quarter. The company, explaining the shrinkage in revenues, said shipments of color television and VCR products increased but that prices were lower. In addition, it said shipments of other electronics products were down during the quarter. Zenith Chairman Jerry K. Pearlman said significant royalty income was recorded in the second quarter. A number of major color TV and VCR manufacturers licensed Zenith patents for tuner technology. Zenith holds key patents used in tuning systems in essentially all cable-compatible TVs and VCRs on the US market. Collected and accrued tuning system royalties in the second quarter, including past royalties and after deducting legal expenses, were about $13 million, Zenith said. The company said it expects royalty earnings of about $8 million on its U.S. tuning system patents in the second half of 1992 and more than $15 million annually. For the first six months of 1992, Zenith reported a net loss of $43.8 million compared with a loss of $50.6 million in the first half of last year. First-half sales dipped to $545 million compared with $579 million in the year-ago period. Pearlman said operating results in the second quarter were adversely affected by delays in shipments of the new 15- and 17-inch versions of the company's patented flat tension mask high-resolution computer monitors. He said customer-requested product upgrades and start-up conditions delayed shipments of the monitors. Testing of the Digital Spectrum Compatible high-definition television (HDTV) was also completed during the quarter, and a special 32-inch prototype monitor was installed in a VIP area at the Democratic convention this week to view the proceedings. Zenith Electronics officials were unavailable for comment about financial results at press time. (Jim Mallory/19920717/Press contact: John Taylor, Zenith Electronics, 708-391-8181) (NEWS)(BUSINESS)(SFO)(00029) AmCoEx Index of Used Computer Prices 07/17/92 SAN FRANCISCO, CALIFORNIA, U.S.A., 1992 JUL 17 (NB) -- The next generation of microprocessor chip from Intel may not be named the 586, as everyone has expected. Because the courts have allowed its competitors to use the 386 moniker, and may allow the use of 486, Intel is searching for a new name that it could copyright. However, the new name must convey its compatibility with the 386 and 486. Because Intel was the victor in a recent lawsuit against AMD, it has postponed some competition for the 486 chip market for approximately six months. This should allow Intel some delay in price cuts for the 486 market. However, demand for the high end systems is still weak when compared to the venerable 386 market. This is most likely due to a lack of software which demands the 486 system. Virtually any program which runs on the 486, can also run more slowly on a 386. It was actually software demands which put the 386 into its dominant position, not just its speed advantage over the 286. Windows 3.0 and numerous applications made excellent use of 386 features which the 286 could not match. The 486 chip possesses none of these feature advantages over the 386. Its principle benefit is speed. While a small percentage of users will pay any price for speed enhancement, the majority will not. Hence, the 386 market will continue to be vibrant until the 486 prices fall further. Since AMD is the largest producer of 386 chips today, the loss of the lawsuit may not be as damaging as many first suspected. Given its penchant for innovation, the delayed 486 AMD unveils next year may be the improved version needed to move the market. In the interim, prices of used 386's are not expected to fall as rapidly as previously expected. While IBM will introduce a record number of notebook computers this year, most of them will not be IBM originals. The first one due this month is manufactured by Zenith. The color notebook due this fall will be true IBM, but the pen-based notebook due by then will be another Zenith. The most inexpensive IBM notebook, also due in the fall, will be made by AST. Following portables, laptops, notebooks, subnotebooks, and palmtops, the smallest computers of all may not be computers but tiny, removable hard drives. Once the removable hard drive interface is standardized, the need for transporting the computer is lessened. A business person can use a home system with greater continuity by bring the hard drive home. In addition, inexpensive computers without hard drives will be made available by airlines and hotels for the traveler. Software savings is significant due to the single copy on a single drive. The following prices are for July 15, 1992. Avg. Avg. Buyer's Seller's Machine Bid Ask Close Change IBM AT 339 350 675 475 ** IBM PS/2 Model 50Z 30M 700 950 775 +25 IBM PS/2 Model 70 60M 1100 1700 1450 +50 IBM PS/2 Model 80 60M 1300 2200 1900 +25 Clone AT 20 Mg 350 675 475 ** Clone Notebook 386SX, 40 MB 1150 1500 1275 +50 Clone 386/SX40M, VGA 600 1050 800 -50 Clone 386/25 40M, VGA 800 1300 900 ** Clone 386/33 40M, VGA 900 1550 1100 -25 Clone 486/25 80M, VGA 1500 2150 1450 +50 Compaq SLT/286 20M 700 1200 875 +75 Compaq LTE 286 40M 650 1200 975 ** Compaq Portable II 20M 400 700 475 -25 Compaq Portable III 40M 500 950 775 ** Compaq Deskpro 286 40M 400 700 475 -25 Compaq Deskpro 386/20e 100M 1300 1900 1625 -100 Macintosh Plus 300 650 500 ** Macintosh SE 20M 500 900 875 +75 Macintosh SE/30 40M 1300 1900 1625 -50 Macintosh Classic 40M 600 800 750 ** Macintosh II 40M 1400 2150 1975 ** Macintosh IIcx 80M 2200 3100 2700 -50 Macintosh IIci 80M 2700 3600 3350 +50 LaserWriter Plus 900 1500 1050 ** LaserWriter IINT 1500 1950 1550 -50 Toshiba 1200HB 500 950 700 ** Toshiba 1200XE 20M 700 1350 875 -25 Toshiba 1600 550 1000 900 ** Toshiba T-3100SX 1200 1800 1300 -50 Toshiba 5200 1300 1950 1600 -100 HP LaserJet II 800 1150 1000 .. John Hastings is the president of the American Computer Exchange Corporation. The American Computer Exchange matches buyers and sellers of used microcomputer equipment. For more information contact the American Computer Exchange Corporation at (800) 786-0717. (John Hastings/19920717) (NEWS)(APPLE)(SFO)(00030) Apple Posts Profits Despite Tough Competition 07/17/92 CUPERTINO, CALIFORNIA, U.S.A., 1992 JUL 17 (NB) -- Despite increasing competition and tough price cutting tactics by PC manufacturers, Apple Computer has posted revenues for the third quarter ended June 26, 1992, of $1.740 billion, a 13.8 percent increase from the $1.529 billion reported in the third quarter of the prior year. According to the company, net income for the third quarter of fiscal 1992 was $132 million, as compared to a net loss of $53 million in the third quarter of fiscal 1991, although the prior year third quarter net loss included a one time charge of $224 million, or $138.9 million after tax, for restructuring, cost reduction, and "other activities." John Sculley, chairman and chief executive officer, said that: "Despite a tough business environment, Apple has been consistent in achieving the milestones that we set out. Our sales momentum this past quarter has been strong, led by successful products. At the same time, we are building for our future through partnerships and new technology foundations." The company reported that earnings in the third quarter of fiscal 1992 were $1.07 per share, an increase over the loss of $0.44 per share in the third quarter of fiscal 1991. The prior year net loss included $1.16 per share for restructuring and other expenses. Gross margin was reported as 44.3 percent of sales in the third quarter compared to 45.8 percent of sales in the prior year period. Apple continues to fair well overseas, reporting that international sales were 44 percent of net sales, which the company claims is unchanged from the third quarter of the prior year. Speaking of the international aspects of the company's sales, Sculley said that: "Apple's business is now one characterized by broad product line strengths in CPU (central processor unit), software and peripheral products, sold into multiple global and end-user markets." More than one analyst has noted that the company's PowerBook notebook products have contributed greatly to Apple's recent success. The company was a long time supplying a competitive notebook computer into the market. The PowerBook's predecessor, the Mac Portable, was both cumbersome and extremely heavy, and enjoyed little sales success. "Our powerbook computers have become one of the most successful product lines in our history. With over 300,000 sold in the last three fiscal quarters, we expect to achieve our $1.0 billion target for these products in their first year of introduction." Apple's push into the education market and its new strategy towards high street distribution channels also garnered comment from Sculley. "During the last quarter, we have seen a strong start to our education sales season, where Apple has significant mind and market share strength, said Sculley. "Our best selling product, the Macintosh LCII, sold more than 200,000 units in the quarter alone. At the same time, our mid-range has shown continued strength, and we are growing our imaging products business. We continue to open new channels to reach new customers, especially in consumer markets. We anticipate establishing up to 1,800 new retail locations in the US later this year." Understandably, Sculley also managed to promote the company's new Newton product in the prepared statement. "With a core business that is growing positively, we are also building for the future based on our strengths as a technology company," he said. At the consumer electronics show in June, we showcased Newton, Apple's first in a family of personal digital assistants. Due to come to market in 1993, the Newton technology aims at new product categories arising out of the convergence of digital and information technologies. We see this as one of the biggest industry opportunities for Apple since the Macintosh was launched in 1984." (Ian Stokell/19920717/Press Contact: Mary Ann Cusenza, Investor Relations, 408-974-4178; Cindy McCaffrey, Public Relations, 408-974-1578, Apple Computer Inc.)