The Hacker's Encyclopedia 1998

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####################################### # # # # # ======== =\ = ====== # # == = \ = = # # == = \ = ====== # # == = \ = = # # == = \= ====== # # # # # # <Tolmes News Service> # # ''''''''''''''''''''' # # # # # # > Written by Dr. Hugo P. Tolmes < # # # # # ####################################### Issue Number: 07 Release Date: November 19, 1987 Much of this issue deals with cellular phreaking and cellular technology. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ TITLE: Federal Sting Nets 26 for Cellular Phone Fraud in NYC FROM: DATE: April 15, 1987 NEW YORK- A free ride on the nation's airwaves ended abruptly here late last month when FBI and Secret Service Agents rounded up 26 people for using illegally re- programmed phones that billed other parties, some of them fictitious, for an estimated $40,000 a month worth of airtime. The arrests culminated a six-month undercover operation by the FBI and Secret Service in cooperation with NYNEX Mobile Communications Co., during which agents managed to infiltrate a network of fraudulent instlation shops, the FBI said. Those arrested, including a plumber, a hair stylist, a bus driver, a real estate businessman, and an electronics technician, were arraigned the week of the roundup in U.S. District court in Brooklyn, but no trial dates had been set by press time, according to NY FBI press officer Joe Valiquette. A maximum jail term of 10 years and a fine of up to $250,000 could be levied for the most serious offence with which the arrested were charged, law enforcement officials said here. The 26 were charged in the investigation allegedly were using mobile phones with counterfit electronic serial numbers and number assignment modules that enabled other parties to be billed for airtime use. The arrests "represent the first of a series of inatives undertaken jointly by the FBI and Secret Service to target fraud in emerging technologys" the FBI said. The bureau added that the investigation was conducted in accordance with federal fraud ststutes and made aggresive use of a statute drafted originaly to address credit card fraud. At a press conference here after the arrests, the FBI reportedly estimated the undercover operation put an end to fraud costing local operators about $40,000 a month. Officals added that carriers accross the country loose about 3 million annualy to fraud. Thomas Sheer, FBI assistant director and head of the office here, complemented NYNEX' participation in the sting operation, saying, "Recent technological advances in computerized telephone switching equipment and billing systems were instrumental in allowing law enforcement to ficus on this crime problem and will assist investigators in keeping this problem in check. The arrests prompted Audiovox Corp. of Hauppauge, NY to dash off a press release to the mobile industry highlighting aones to prevent fraud oof the kind charged in the FBI and Secret Service operation. An algorithm built into the software of Audiovox phones prevents the illegal alteration of memory chips, the firm said. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ NOTA: The next article also deals with cellular phone fraud busting. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ TITLE: 18 Are Seized in Illegal Use of Mobile Telephones FROM: The New York Times DATE: March 27, 1987 Yesterday's arrests, which started at 6 AM and took place at homes and places of employment, mostly in Brooklyn was carried out by 70 FBI and Secret Service agents. The 18 people who had the illegally altered chips installed "awoke this morning to find that their cellular telephones had been disconnected" electronically, Mr. Sheer said at a news conference at the bureau's office at 26 Federal Plaza in lower Manhattan. The officials said the arrests followed a six-month investigation that used the use of a confidential informer who installed the chips and Federal agents working under cover. The authorities acknowledged the cooperation of the Nynex Mobile Communications Company in the investigation. Mr. Sheer said that the fraud, which was not the product of an organized conspiracy, cost local mobile telephone companies about $40,000 a month and that nationwide, carriers of cellular services were losing about $3 million a year because of the frauds. The authorities gave not details about he alteration of the chips. Among the cellular telephone users who were arrested were a plumber, a hair stylist, a gasoline station owner, a physician, a student and a diamond merchant, as well as several business executives. Most lived or worked in Brooklyn, but they did not know each other, the authorities said. Andrew J. Maloney, the United States Attorney for the Eastern District, said in a statement that the cases against those arrested would be presented to a Federal grand jury in Brooklyn. The most serious charge that could be brought against each carries a maximum term of 10 years in prison and a possible fine of $250,000. According to the Federal authorities, each cellular mobile telephone has a memory chip containing a mobile identification number, or MIN, and another containing an electronic serial number or E.S.N. When a mobile telephone call is made, the two numbers are automatically transmitted. The mobile carriers make a computer check of the E.S.N. to see if it is valid. If it is, the call goes through and the cost is billed to the billing number provided by the M.I.N. chip. By using illegally reprogrammed chips, the Federal complaint said, other people were billed for calls made by those participating in the fraud. Those arrested were arraigned in United States District Court in Brooklyn and released in their own recognizance. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ NOTA: I have only article. Certain portions of this article have appeared in an issue of 2600 Magazine, but only a very small section. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ TITLE: Hello Anywhere FROM: Business Week DATE: September 21, 1987 For longer than he cares to remember, Peter Preuss has been the kind of customer that phone companies dream about. Anxious to keep abreast of his various interests, including a San Diego cancer research foundation, Preuss has always kept a phone within arm's reach. There are 24 of them in his three-bedroom house, two in the master bedroom alone. Then, in 1985, Preuss reached nirvana. General Electric Co. introduced a battery-powered cellular phone that he could use almost anywhere. Now there's a phone in each of Preuss's three cars- and, of course, in his attache case. One day last month, impatient with standing in a long airport ticket line, he used his briefcase phone to get his seat assigned through the airline's reservation system- and went directly to the gate. A couple of days later he used the same phone to wind up an interview as his plane taxied down the runway at Washington's Dulles International Airport. It may not be the Industrial Revolution, but cellular phones are transforming the way individuals communicate. In the 111 years since Alexander Graham Bell summoned Mr. Watson, cars have replaced the horse and buggy, planes have displaced passenger trains, and computers have made other business machines obsolete. But the telephone has stayed essential the same: a box connected by wire to a wall. Now, in one swift stroke, mobile phones are shrinking the world even more. EASY AS RADIO Anyone who can drive and talk can drive and phone. Nils Ingervar Lundin, chief press officer of Swedish telecommunications equipment maker L.M. Ericsson, even likes to ring up reporters in Stockholm. Cellular phones mean less wasted time, higher productivity, faster-arriving ambulances, and smarter cops-smarter crooks, too. Can't find a pay phone? Use your briefcase. Raves Barbara Schultis, a Freeport (N.Y.) real estate borker who makes about $150 worth of car phone calls a month arranging deals. "I'd die without it." One note of caution: Mobile phones also may mean no place to hide. There certainly won't be a phone in every car until prices fall from the current $1,200 per phone, a fixed month charge of $25 to $50, and 35 to 50 cents a minute in calling charges to the average customer- vs. the pennies per minue charge for regular residential phone calls. The magic figure for developing a mass market is less than $500 for the phone, says Geroge L. Lindemann, chairman and co-owner with Fort Worth investors Sid Bass and Richard Rainwater of New York-based Metro Mobil CTS Inc. But he expects to see such prices within five years. In the meantime, a lot of buyers aren't waiting. True, the so-called churn rate for carriers is high: One-third of the industry's customers drop out every year. Still, the Cellular Phone Industry Assn. predicts that more icans will have mobile phones by the end of this year, up 40% from a year earlier. The amount spent in the U.S. on cellular phone service jumped eightfold from 1984 to 1986, to $600 million. That figure is likely to nearly double this year, says market researcher Dataquest Inc. and by 1990 the seven Bell regional operating companies, GTE Corp., big independents such as McCaw Communications and Linn Broadcasting- plus dozens of smaller carriers - should rake in $2.6 billion a year from cellular service. Equipment sales are rising, too. Motorola, NovAtel, NEC and other top manufacturers will sell about $285 million worth of cellular phones this year, a 22% top over 1986. And Motorola, AT&T, and others will sell the phone companies $555 million worth of cellular network equipment in 1987-up 37% from 1986. Cellular phones are becoming riqueuer for anyone who spends a lot of time in the field, and not just for construction executives, architects, and traveling salespeople. when James Webb, a sweet-corn farmer near Albany, N.Y., put a mobile phone in his tractor last year, he eliminated a broker and doubled his 20 or so distributors to order directly, boosting revenues at his Gold-Harvest Farms & Nursery by 15%. That far offsets the $250 or so a month he spends on mobile calls during the harvest season. "The potential is almost unlimited," declares John T. Stupka, chief executive at Southwestern Bell Mobile systems. At least he hopes so. Southwestern Bell Corp. is awaiting court approval for its $28 billion acquisition of the cellular paging businesses of New Jersy financier John W. Kluges's Metromedia. That will make Southwestern the nation's second-largest cellular operator. Analysts say that because of the hoopla over the industry's projected growth, only sugar-plum fairies float farther that the market values of key independant cellular phone companies. For instance, shares of Seattle-based McCaw Communications Inc., the nation's largest cellular carrier, with holdings in 94 markets, were tentatively priced at $17 to $20 in early August when underwriter Burnham Lambert Inc. announced plans to sell 12% of the company- some 10.5 million shares. On Aug. 8 the stock opened at 21.75 and eventually settled at 24.75, putting McCaw's market value that day at $2.4 million. The McCaw offereing underscores the huge gamble some people are taking in cellular investments. McCaw, with a record much like most cellular carriers, lost $38.5 million in 1986, almost double its $12.9 million loss in 1985. Still, the market is valuing it at about $70 per initial customer, which the industry translates by taking the population of a sample market and multiplying it by the percentage ownership a company has in a real cellular franchise. That's three times what it cost into cellular companies just a year ago. Indeed, last-minute investors could not keep holding the bag. The more conservative ones are using one of the several regional Bell companies spun off in American Telephone & Telegraph Co.'s breakup as a cellular plalar operators in t he so-called top markets- big cities where commuters travel long distances - are likely to prosper. But independant operators in the hundreds of smaller markets around the country might not. Warns Robert B. Morris II, vice-president and telecommunications analyst at Prudential Bache Capital Funding, says "they're not all created equal. With the bigger markets, you're picking the low-hangin fruit." The primary reason for cellular's popularity is that is works. One relative, the citizens band radio, brocasts more static than information and is open to eavesdropping for miles around. An ancestor, the original car phone, relied on a central antenna and an operator to connect a call. Put a hill between you and the antenna, and communicatons stopped. By contrast, cellular technology keeps signals pure. A call from a car or portable phone travels via radio waves to "cell" stations that have been places strategically throughout a calling region. A central switching station does two things: It connects that radio signal to the regular public phone network. Also, as the car cum phone travels from one cell to the next, the switch seamlessly hands off the signal from one receiving tower to the next. The result: fire battalion chiefs in Colombus, Ohio, can instantly tap expert advice on how to handle even the most obscure chemical spill. At a disaster scene, they simply connect their portable computers to their cellular phones and log onto a national emergency materials data base. There's no denying that mobile phones carry a certain cachet. "Have you ever noticed," says Richard H. Conroy, a sales representative at Georgia-Pacific Corp. in Los Angeles, "that when people call you from a car phone they always make sure to point out they are calling you from a car phone?" Even gimmick makers have been quick to capitalize on this. W-D Industries Inc., of New York City, sells a "Sport-E Imitation Cellular Phone Antenna" that lets any caller give off the power vibes of a cellular phone owner- for only $4.95. Snob appeal aside, however, many people need mobile phones. Wheelchair-bound grandmother Jane Miller, in Oklahoma City, keeps a portable handy when she's away from her home phone. In Scandinavia, many fishing fleets now communicate via cellular radio instead of over the public airwaves via ship-to-ship radio. the idea is to map strategy without competitors listening in. Felix Grucci, president of the Long Island company that staged the fireworks at last year's Statue of Liberty centennial celebration, says Fireworks by Grucci Inc. often uses cellular phones to coordinate detonations- because they pick up less interference than walkie-talkies. When the phone system crashes at Nordstrom Inc.'s department store in Seattle, employees open a suitcase-size bag, pull out a five-phone portable system, and plug it into a wall socket- and the store is back in business. Cellular technology also promises to help hold down the cost of phone service in rural areas. Currently, some carriers charge cusregions a small fortu ne to run phone lines. Now some are looking to cellular phones to bring down these costs. U.S. West, one of the seven regional AT&T spinoffs, is test-offering "fixed" cellular phones. It's charging a $1,795 one-time fee for the cellular phone and installation, plus a $19.95-a-month per-line charge and a usage fee to run service to Evergreen, Colo., a mountatin town near Denver. The cellular phone's versatility also is winning big fans in local governments across the country. the Sheriff's Dept. in Boulder County, Colo., uses 13 cellular phones for more extended and private conversations than it can get from its regular police radios, according to Captain charles C. Pringle, head of staff services at the department. But criminals are going high-tech, too. For some time now, drug dealers in New York City's South Bronx have used radio-paging devices to reach customers. Now that they've gone cellular, these people can make calls that automatically are switched among the cellular system's 333 frequencies- and law-enforcement officials are finding it increasingly hard to eavesdrop on perpetrators. Most other mobile phone innovations are more mundane. Customers of L.A. Cel lular, and independent network, get a service called Star Jam that warns of traffic tie-ups on Los Angeles freeways. Farther south, Orange County, Calif., plans to set up a network of 1,000 cellular call boxes along the freeways to aid motorists. The move is expected to save the county about $44 million over what a regular land-line system would cost. Orange County's project raises another issue: how cellular will affect the $6 billion pay-phone business. $$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$$ NOTA: ...yeah...