April 2010

Cybersecurity specialists say China, with the world's biggest Internet population with about 400m users, probably boasts the planet's largest group of hackers. China last month became the biggest source of targeted hacking attacks, according to a report by MessageLabs, a research arm of Symantec. The security company says just over a quarter of malicious e-mails sent to gain access to sensitive data came from China. "There are probably no more than 1,000 people in China who are capable of producing genuinely new tools," says Eagle Wan, a veteran Chinese hacker who now works for IBM. "But those with basic training who can tweak and use tools are in their hundreds of thousands." According to the China Internet Network Information Center, the state-owned domain name registrar, just over half of China's "netizens" encountered Internet security incidents last year. Most cases involved viruses and Trojan horses - disguised malicious software that facilitates unauthorized access to the recipient's computer - while surfing the web. It said one fifth of users suffered financially.

"People aren't going to want Macs anymore," says Marc Benioff, CEO of Salesforce.com. Now that the iPad is here, they "won't want laptops anymore" either. Seeing as Apple Inc.'s computers remain one of the company's biggest revenue generators, the bean counters in Cupertino might be hoping Benioff's prediction is at least a tad premature. Here's how Ben Bajarin, a longtime Apple analyst, thinks it will play out: "The iPad can replace some functions, but not all. I don't see it being a laptop killer." Same goes for Mac desktops, and the other supposed dead-product-walking, the iPod Touch. "It's much more portable than the iPad," he noted. It's not in jeopardy anytime soon." Rather, Bajarin, director of consumer technology at Creative Strategies in Campbell, believes Apple is "expanding its total addressable market for computing" - in other words an Apple product for every type of consumer, from content producer to content consumer, from the desktop-bound to the increasingly mobile.

Soon after the Federal Communications Commission released its national broadband plan a few weeks ago, the nation's biggest telecom companies began a battle against specific measures and questioned the agency's ability to regulate broadband services.

Verizon Wireless and AT&T sent petitions last week to the agency, protesting a condition to a satellite broadband merger that would exclude them from partnering up with the new company. The condition isn't part of the national broadband plan, but some communications policy experts say the requirement was a signal of similar policies to come. The move could signal, for example, spectrum caps or other rules attached to spectrum auctions and the formation of a public safety network that would exclude the biggest players in favor of smaller competitors.

Rebecca Arbogast, an analyst at Stifel Nicolaus, said those comments were meant to counter any move by the agency to classify broadband as a common carrier service, under which the FCC has clear authority. Comcast, the nation's biggest cable and broadband services company, hasn't weighed in on reclassification or specific elements of the national broadband plan. The company, whose lawsuit against the FCC began the debate over the agency's jurisdiction, is seeking FCC approval for its merger with NBC Universal. "The biggest caveats and concerns for the Bells would be if the FCC, in response to court review, moves to reclassify broadband as a more heavily regulated Title II telecom services, and/or crafts strict net neutrality rules," Arbogast wrote in a research note. "The significance of these fundamental issues were reflected in Verizon's strategic decision to call on Congress to revise the central foundation of the Communications Act." The comments also signal a change in tone, observers said. Aside from protests of a net neutrality policy proposal last fall, analysts and telecom attorneys said the top telecom and cable companies had been reluctant to criticize FCC Chairman Julius Genachowski.

Does the Federal Communications Commission have the legal authority to regulate Internet access? It's a question that could throw a monkey wrench into the FCC's national broadband plan. A case brought by Comcast against the FCC is pending before the 4th Circuit Court of Appeals, and the big telecoms are pressing Congress to step in. Sascha Meinrath, who directs the Open Technology Initiative at the non-partisan New America Foundation, says, "We could end up with a moment where all rules and regulations go out the window. It would have profoundly detrimental impacts on our privacy, detrimental impacts on what we pay every month. It would have detrimental impacts on just creating and maintaining a healthy marketplace."