25 January 1999

Date: Mon, 25 Jan 1999 13:30:51 -0800 (PST)
From: Xena - Warrior Princess <xena@best.com>
To: cypherpunks@toad.com
Subject: P3


Intel to change Pentium III due to privacy concerns

WASHINGTON (AP) -- Intel Corp. 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

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

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

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

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

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