INTEL: BIG BROTHERS ASSISTANT?

Maybe they should spell it: IN-TELL !!!


1/26/99

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Is the logo "Intel Inside" really the "Mark of the Best?"

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Intel Agrees To Change Its Chips
By TED BRIDIS Associated Press Writer

(See Yahoo News Story)


WASHINGTON (AP) - Intel Corp. (Nasdaq:INTC - news) bowed today to 
concerns by privacy groups upset over new technology that allows 
consumers to be identified as they move across the Internet.

The company promised it will offer free software to allow customers 
to easily turn off the feature permanently on its upcoming line of 
Pentium III computer chips, to be sold within months.

Intel also said it will turn off the feature by default for Pentium 
III chips that haven't already been produced and distributed to the 
world's computer makers.

Consumers could then choose to activate the technology, which for 
security reasons would require restarting their computers, Intel 
spokesman Chuck Mulloy said.

Intel, the world's largest chip-maker with $26.2 billion in sales 
last year, announced last week that its new chip will by default 
transmit its unique serial number internally and across the Internet 
to help verify the identity of users.

Among other things, the feature offers a boon for electronic 
commerce, allowing companies and shoppers to feel more secure in 
the transmission of sensitive data.

With existing Pentium III chips already in production, consumers 
can turn the feature off, but it turned itself back on each time 
the computer was restarted.

Privacy groups that had launched a boycott of Intel products just 
four hours before the company's announcement today said they were 
``delighted that Intel has taken one small step toward respecting 
people's privacy.''

But they said Intel's software concession still was inadequate.

``You still have the problem of an ID number, and Web sites can 
force people to disclose that ID number as a condition to get 
into the sites,'' complained David Banisar of the Washington-based 
Electronic Privacy Information Center. ``Just having a software 
patch does not resolve the underlying concerns.''

The privacy information center organized the boycott with 
Junkbusters Corp. of Green Brook, N.J., which lobbies on a range 
of high-tech issues.

In addition to making about 85 percent of the world's computer 
processors, Intel also manufactures memory chips plus hardware 
for computer networks, communications and graphics.

Jason Catlett, president of Junkbusters, called the Pentium III 
chips that already have been produced ``toxic hardware.''

``They should destroy them,'' said Catlett, who spoke last year 
at a summit on Internet privacy in Washington organized by the 
Commerce Department.

As part of their boycott, organizers unveiled a parody of the 
company's ubiquitous ``Intel Inside'' logo. Theirs features the 
same familiar swirl but with the words, ``Big Brother Inside.''

Rep. Edward J. Markey, D-Mass., urged Intel on Friday to 
reconsider its plans, ``to better balance both commercial and 
privacy objectives.'' Markey is the senior Democrat on the House 
Commerce consumer protection subcommittee and active in Internet 
privacy issues.

Intel's plans came at an awkward time for the Clinton administration.

David Aaron, undersecretary of state for commerce, was to begin
negotiations today in Europe - the same day as the boycott 
announcement - over a tough new privacy law enacted by the 
15-nation European Union last October.

Aaron must assure Europeans that the United States has adequate 
privacy protections or risk a prohibition against businesses in 
those 15 countries from disclosing personal information about 
citizens there to U.S. companies.

``It couldn't have come at a worse time,'' Catlett said. ``This 
new feature from Intel is really throwing kerosene on the fire 
of the trans-Atlantic privacy negotiations.''

Aaron said last week that such a ban would carry ``a very adverse 
impact on the operation of the economies on both sides of the 
Atlantic and could be a very serious blow.''

The Electronic Privacy Information Center said it will meet later 
this week with the Federal Trade Commission to discuss Intel's 
plans.

The FTC has criticized the online industry for its failure to 
protect privacy rights. Last year, the agency successfully pressed 
for a new law that prohibits Web sites from collecting personal 
information from children without parental permission.

Coincidentally, the FTC also is suing Intel for alleged antitrust
violations. The trial is set to begin March 9.

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