10, 9, 8, 7, 6, 5 . . .

Europe makes a silly attempt to control the international flow of data-plus other reports from the digital frontier.

Even if all the fingers in Europe tried to fill all the holes in the dike created by the internet, it wouldn't be possible to monitor and stop the flow of electronic information.

SEE NO EVIL, HEAR NO EVIL, TRANSMIT NO EVIL

When Context was invited to the Trans-Atlantic Business Dialog trade conference in Rome in November, we were astonished to find out about a European Union directive. The EU Directive on the Protection of Personal Data decreed that people in member states shouldn't be allowed to exchange data with people in countries that didn't meet EU standards on privacy. The directive was silly. First, it wouldn't work. It's not possible to monitor and stop the flow of electronic information, even if all the fingers in Europe tried to fill all the holes in the dike created by the Internet and other networks. Second, the directive would keep U.S. and European parent companies from communicating electronically with subsidiaries on the other side of the Atlantic. Commerce would slow because it wouldn't be possible to check electronically on the creditworthiness of a potential customer across the ocean.

By the end of the high-profile conference-which gathered more than 100 U.S. and European chief executives-the EU was backing off. But the directive is still on the books, to take effect in October.

While we're on the subject of the conference, we'll brag a bit: The Digital Strategies Survey that was done for the first issue of Context was the starting point for the discussion on electronic commerce, the hottest issue at the conference. In the end, the CEOs agreed to recommend that the U.S. and European governments be very cautious about imposing regulation on electronic commerce and that any rules be consistent globally. Senior representatives from the various governments assured the group that its position would influence trade talks that started in December.

Q: What do you call someone who spends too much time on his computer?

A: A mouse potato.

THIS PREDICTION BUSINESS IS ROUGH

A senior AT&T executive guessed at the beginning of last year that the $100 billion local phone market would finally be opened to competition from long-distance companies in 1997 as part of "the giant quid pro quo that's at the heart of the Telecom Act." For its part, AT&T pledged to offer local service in every state by year end.

Here's where we actually stand: AT&T delivers only limited local service and just in a handful of states. Fewer than 1% of U.S. telephone customers can choose their local service provider, according to one recent study, even though it has been 2 1/2 years since telecom deregulation began.

Oh, and the AT&T executive who made the predictions? That was John Walter, who was pushed out in July, just nine months after being brought to AT&T with the promise that he'd soon be chief executive.

IBM once fought the BUNCH-Burroughs, Univac, NCR, Control Data, and Honeywell. Now, Microsoft faces NOISE-Novell, Oracle, IBM, Sun, and Everybody else.

IN CONTEXT

To provide a little perspective on how business is developing on the Internet, here are some recent figures from Computerworld's e-commerce Web page (www.computerworld.com/emmerce):

Total purchases on the Web in 1997: $10 billion.
Expected total in 2001: $220 billion.
Percent of e-commerce in 2001 that will be business-to-business: 80%.
Percent of Web sites that were profitable in 1997: 30%.
Percent of time spent on shopping: 2.7%.
Percent of time on Web spent on adult content: 6.7%.
Percent of retailers offering on-line shopping in 1997: 20%.
Percent of retailers offering on-line shopping in 1996: 11%.

NEWS NOTE

Devices for "burning in" your own compact disks sell for less than $200 at wholesale.

MOORE'S LAW OR MORON'S LAW?

Lots of people in the computer industry are fed up with how slowly telecommunications prices are coming down. The computer types worry because their latest whiz-bang devices focus largely on helping people communicate better-and high telecommunications prices could dampen interest.

There's logic behind the griping. After all, pretty much the same laws of physics govern telecommunications as computers, and computer prices have fallen a steady 50% every 18 months for more than three decades, as laid out in Moore's Law.

Telecom types can explain away some of the difference between the two industries' pricing by pointing to telecom regulation and to some structural differences in the industries. But Roger McNamee, a Silicon Valley investor, was having none of that the other day. He said that, while the computer world was governed by Moore's Law, the telecom world seems to be run according to "Moron's Law."

OUT OF CONTEXT

Here's our favorite recent quote. (We like it even though we're the only ones who think it has anything to do with our magazine.)

Andy Gems, an executive at Yahoo!, the search-engine people, said the Internet has "no shortage of content, just a shortage of context."