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Special Event

Millennium 2000: Internet Future

Aired January 2, 2000 - 1:00 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JUANITA PHILLIPS, CNN ANCHOR: Around the world, a collective sigh of relief and a collective yawn as the feared Y2K computer glitch fails to bring any gloom and doom.

BRIAN NELSON, CNN ANCHOR: All the talk about Y2K showed us how dependent we are on computers. In the new millennium, what is next for the Internet and how will it change our lives?

PHILLIPS: And before the information superhighway -- in fact, before there were any highways at all -- there was Main Street. We'll take a stroll through small town America and look at its chances of surviving.

NELSON: Welcome to our special continuous coverage of this new millennium.

I'm Brian Nelson.

PHILLIPS: And I'm Juanita Phillips. Thanks very much for joining us.

Well, somewhere someone probably couldn't log on to a personal computer or couldn't get cash from an automated money machine. Those sort of glitches happen every day, and day one of the new millennium passed like any other. Nothing spectacular happened, and the Chicken Little predictions about a big computer meltdown failed to come true.

Well, CNN's Miles O'Brien joins us now from ground zero, the government's Y2K command center in Washington.

Well, Miles, I saw one newspaper headline which described it as all bug and no bite, and that just about sums it up, doesn't it?

MILES O'BRIEN, CNN CORRESPONDENT: It sure does, Juanita. This is one story where no news is a news story, given all the advance warning we had about the potential disaster which loomed with the Y2K bug.

What we've heard at this $50-million Y2K Center just a few blocks from the White House is a series of isolated, very manageable events that may be linked to the Y2K bug but have not caused any widespread problems. Here's what we know so far.

Seven nuclear plants have some problems with computer systems which you might call ancillary, systems which allow access to employees to track the weather and track some of the operations of the plant. Didn't cause any problems for customers whatsoever or any danger whatsoever.

Several utilities also had some problems with satellite- synchronized clocks which run some computers which help them manage the power grid. No service loss there.

As it relates to the FAA, a series of weather instruments had some problems. The FAA was able to either reboot or reset or repair or get the information to pilots through other means. They say there was never any unsafe situations involving air traffic as a result.

Amtrak had a few problems sort of keeping track of some of its trains. Some of the tote boards didn't light up properly. The went to a manual system. No problem there.

In short, all the problems were isolated, definitely not the doomsday scenario we had all been hearing about for so long. But are they ready to declare victory here just yet? Well, not quite. Here's the Y2K czar, John Koskinen.

(BEGIN VIDEO CLIP)

JOHN KOSKINEN, PRESIDENT'S COUNCIL ON Y2K: On Monday, obviously, the markets will open for the first time and the banks will be up and running, although a lot of banks are operating today without any noticeable problems. We do not expect in the United States any significant problems, but -- again, we cannot guarantee that, but we will not be -- we will be pleased if we get through the day without any problems, which is what our expectation is. But, again, I think we will probably find some small glitches, particularly in smaller organizations that may not have done any preparations at all.

(END VIDEO CLIP)

O'BRIEN: The plan here is to wind down the staff just a little bit for tomorrow, give them a little bit of rest, and then have everything up to snuff for Monday morning when work begins in the United States and some of those systems get booted up, and then we'll know for sure if we have dodged that Y2K bug bullet.

Miles O'Brien, CNN, reporting live from the Y2K center in Washington.

NELSON: Thanks, Miles.

New year's celebrations took a serious turn in New Orleans. Police say that five people were hit by falling bullets that partiers apparently fired into the air. None of the five is critically injured, though. People fired weapons into the air for about two hours on new year's despite repeated warnings not to do so.

From tighter gun control to a ban on traffic ticket quotas, the new year rings in a host of new laws across the United States.

In Illinois, gun owners must put locks on their weapons, and crimes committed with guns in hand will bring longer sentences.

Wisconsin banned traffic ticket quotas for its police, while Florida police can immediately take away a vehicle if a motorist whose license is already suspended for drunken driving is stopped for driving under the influence.

And in the strange but true category, New Yorkers who crash into and kill a moose can now legally take the carcass home.

PHILLIPS: Well, after celebrating the Year 2000 into the early hours of the morning, the president and Mrs. Clinton delivered a new year's message to the nation on Saturday. In a rare televised radio address, the Clintons called on Americans to set an example of unity and peace for the rest of the world.

(BEGIN VIDEO CLIP)

HILLARY CLINTON: If we can build one America and make our diversity our greatest strength, then perhaps other nations will see the advantage of working to overcome their own ethnic and religious tensions.

WILLIAM J. CLINTON, PRESIDENT OF THE UNITED STATES: We begin the 21st century well poised to be that guiding light. Seldom in our history and never in my lifetime has our nation enjoyed such a combination of widespread economic success, social solidarity, and national self-confidence without an internal crisis or an overarching external threat.

(END VIDEO CLIP)

PHILLIPS: Later in the morning, President Clinton took care of some important business, telephoning Russia's new acting president hoping to foster a good relationship.

CNN's Chris Black reports now from the White House.

(BEGIN VIDEOTAPE)

CHRIS BLACK, CNN CORRESPONDENT (voice-over): President Clinton began the new year by congratulating Vladimir Putin on his new position and saying privately what he said publicly a day earlier.

CLINTON: In that spirit, I look forward to working with acting President Putin as the Russian people begin the process of making the transition from one democratically elected president to another.

BLACK: White House officials say Mr. Putin reaffirmed his commitment to democracy, a reassuring pledge from a leader they concede they do not know very well. Mr. Clinton and Mr. Putin have met just twice, sparring over Chechnya during their last meeting in Oslo in November.

MICHAEL MCFAUL, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: He's said some of the rights. He's allied himself with the young, liberal reformers who we know well. I think that's a positive sign. But the real honest answer is we just don't know what kind of president he will be.

BLACK: Boris Yeltsin's handpicked successor acknowledged the two nations have differences, particularly on Russia's aggressive tactics in Chechnya. On his first full day as acting president, Mr. Putin traveled to the front and presented hunting knives to the soldiers who have been battling Chechnyan rebels.

But the two leaders told one another they agree more than they disagree. Mr. Putin has an affinity for what Western politicians call the third way, a pragmatic governing style.

THOMAS GRAHAM, FORMER STATE DEPARTMENT OFFICIAL: What we're going to see is discussion between Mr. Clinton and Mr. Putin that's based not on ideology, not on ideological differences but on a tough, I think, talk about the interest of the two countries, where those overlap, where those differ, and what we can do to work out those differences.

BLACK (on camera): The 10-minute telephone call did not cover much ground, but White House officials say it was a start to what they hope will be a strong personal relationship that will benefit both countries.

Chris Black, CNN, the White House.

(END VIDEOTAPE)

NELSON: There is no still no official word yet on the whereabouts of the five hijackers of an Indian Airlines plane. India's foreign minister says that Taliban sources told him the hijackers were heading for Pakistan. Pakistan says it is on high alert and has promised to arrest the hijackers if they cross the Pakistani border. Their whereabouts has been a mystery since the week-long hostage crisis ended Friday and they were ordered to leave Afghanistan.

PHILLIPS: More than 400 Haitians, Dominicans, and Chinese caught trying to slip into the United States are awaiting word of their fate. The Coast Guard intercepted the group today on the stranded freighter after it ran aground south of Key Biscayne, Florida. They were transferred to Coast Guard cutters. Immigration officials will decide their future. Under a Haiti-U.S. agreement, would-be immigrants are returned once they're intercepted.

NELSON: A New Orleans man flew a rented plane into Cuban airspace Saturday and dropped anti-Castro leaflets over Havana. U.S. Customs officials identified the pilot as 51-year-old Lee Tong (ph). He is a U.S. citizen who immigrated from Vietnam in 1984. Officials say, while Tong was flying over Havana, two Cuban MiGs tailed him, but they took no action. He was surrounded by Customs agents when he returned his plane to Florida. The Federal Aviation Administration is looking into whether he broke any laws.

Well, some people rang in the new millennium in party hats. Others wore swim caps. In one of the odder New Year's tradition, there are people who plunge into cold water to inaugurate the new year.

And our Don Knapp caught up with a group of them in San Francisco.

(BEGIN VIDEOTAPE)

DON KNAPP, CNN CORRESPONDENT (voice-over): Of all the ways to ring in the new millennium, this has to be one of the most challenging. With great bravado and a bit of raw courage, nearly 80 swimmers hit the cold waters along the Alcatraz Island shore for the 33rd Annual New Year's Day Swim to San Francisco.

DAVID HORNER, SWIMMER: Happy new year!

KNAPP: David Horner doesn't just swim it on New Year's Day. He's done it 74 times.

HORNER: The real trick here is you've got to make sure you have a swim cap on so you can keep your head warm, and then you get in, and you don't sit there and go, "What's the water temperature?" You go, "Swim."

It's biting cold. It's very biting.

UNIDENTIFIED SWIMMER: Go Yankees!

UNIDENTIFIED SWIMMER: Happy new year, Mom!

KNAPP (on camera): How tough is this swim? Well, swimmers talk about the 50-50-50. That is, at 50 degrees, which this water is now, 50 percent of the people would be unconscious in 50 minutes.

(voice-over): It's all about conditioning and a little extra body fat for insulation. Everyone on this swim first had to pass a test, survive an hour's swim in San Francisco Bay.

Becky Fenson was first ashore, 27 minutes, 21 seconds.

BECKY FENSON, SWIMMER: Oh, God, it was great. Nice. Warm. Pretty warm. Caught some jellyfish.

KNAPP: Scott Haskins (ph) came in second about a minute and a half later.

SCOTT HASKINS, SWIMMER: Nice.

KNAPP (on camera): Yeah?

HASKINS: Yeah. I'm looking forward to a doughnut and a shower.

KNAPP (voice-over): When you start the new year with a swim from Alcatraz, the rest of the year's got to feel like a nice, warm bath.

Don Knapp, CNN, San Francisco.

(END VIDEOTAPE) PHILLIPS: I'll wait until summer, I think.

Well, on the other U.S. coast, folks splashed around in the Atlantic Ocean. You are looking at members of the Polar Bear Club in the waters off Brooklyn. It was pretty cold there, too. Nevertheless, they call it the greatest way to start the new year.

NELSON: And now for another story. Microsoft founder and chairman Bill Gates was Larry King's first guess of the new millennium. Gates shared his thoughts on everything from wealth to health to the future of the Internet and entertainment.

(BEGIN VIDEO CLIP, "LARRY KING LIVE," JANUARY 1ST, 2000)

BILL GATES, MICROSOFT FOUNDER AND CHAIRMAN: In the next five years, entertainment will be redefined. The -- the way that we think about TV channels and we think about going out and having a collection of CDs where we have to open up the case and put it in there, that...

LARRY KING, HOST: Gone.

GATES: That will go away because you'll be able to take the songs that you like and organize them the way that you want, you know, pick the mood you're in, pick the thing that -- that you care about, and have a little device you carry around with you.

(END VIDEO CLIP)

NELSON: And a quick reminder: On Monday night, Monica Lewinsky will be Larry's guest.

And coming up, prying eyes in a place you may never have suspected: the Internet. Surfing the Web in your home does not guarantee complete privacy.

PHILLIPS: And joining us live from New York, we'll be talking to computer scientist, composer, and pioneer Jaron Lanier. He'll take us on a tour of the 21st century Internet.

And that's all coming up next on our special continuous coverage of the new millennium.

(COMMERCIAL BREAK)

PHILLIPS: As we move into the 21st century, it's expected that more and more of us will be spending more and more time on computers.

NELSON: Senior CNN Washington Correspondent Charles Bierbauer warns that as you learn more about the Internet, the Internet is going to learn a lot more about you.

(BEGIN VIDEOTAPE)

CHARLES BIERBAUER, CNN CORRESPONDENT (voice-over): First, we used the Internet to exchange information, swap e-mail, chat. Now we use can do so much more. There's politics, the stock market, and shopping, all from the privacy of our home or office. Well, perhaps not complete privacy.

PROF. ALAN WESTIN, COLUMBIA UNIVERSITY: In fact, they're leaving a trail, a click-stream trail that says that, on such-and-such a day, they looked at this book on sex practices in Greece, and then three days later, they looked at a book on sex in Ancient Rome, and after a while, there's a profile that's built up by the organizations that they go to.

BIERBAUER: Experts say privacy may be the thorniest legislative and legal issue that lies ahead on the Internet.

WESTIN: We have to have rules of the road, if this is not to be a very dangerous thing.

BIERBAUER: Internet sites collect vast amounts of personal data. A lot is given voluntarily: credit card numbers, addresses, income. Even privacy advocates share some information.

MARK RASCH, GLOBAL INTEGRITY: I give out my address to certain Internet places because I need something shipped to me. I don't have a choice.

BIERBAUER: But much of our personal data is collected without our knowledge. Have a cookie?

(on camera): Cookies are an enticing name for coded data strings hidden in your computer. You have to search for them. This cookie tells Philip Morris I've visited its Web site researching a story on tobacco. Philip Morris put the cookie there, and I let them. Well, my browser let them. It said I would accept all cookies, until I disabled it giving me some control.

(voice-over): Internet operators put a value on our personal information.

RASCH: They sell it, and they make money off of the personal information that I've given them, and so what we're recognizing now in the Internet is that personal information is a commodity.

BIERBAUER: One answer to regaining privacy lies in encryption, putting all that personal information and communication into a secure code. Encryption is where the government and privacy advocates collide, as the attorney general and FBI director told the House Intelligence Committee last summer.

JANET RENO, ATTORNEY GENERAL: We may wiretap a conversation in which the terrorists discuss the location of a bomb soon to go off, but we will be unable to prevent the terrorist act because we cannot understand the en -- conversation which is encrypted.

BIERBAUER: The framers of the Constitution could not foresee the Internet, but FBI Director Freeh argues they struck a balance in the Fourth Amendment: no unreasonable searches and seizures, no warrants except with probable cause.

LOUIS FREEH, FBI DIRECTOR: The framers sitting in Philadelphia looked at the egregious powers that the state would have to violate privacy and looked at also the needs to give the police the ability to protect citizens against crimes.

BIERBAUER: Courts are only beginning to deal with the dilemmas raised by the information revolution. The Supreme Court ruled two years ago that adults could exchange smutty material on the Internet, even though it may be offensive to some.

MARK ROTENBERG, ELECTRONIC PRIVACY INFORMATION CENTER: That's not surprising that some things will be viewed as offensive or unpleasant or disagreeable, but that is also one of the characteristics of an open society.

BIERBAUER: The court is now considering whether states may make money selling data from their driver's license files. Those are just the implications for U.S. law, but the Internet is global.

RASCH: If I were to be driving in France, I'd be subject to French traffic laws. If I'm driving in Australia, Australian traffic laws. If I'm driving the information superhighway, we don't know whose laws apply.

BIERBAUER: And what nation is willing to give up sovereignty over the commercial and technological juggernaut the Internet promises to be? Sovereignty, jurisdiction, commerce, intellectual property, encryption, privacy -- legal issues aplenty for years to come, thanks to the Internet.

Charles Bierbauer, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: It looks like some real areas of concern there, and now that we've taken a look at how others may explore our lives on the Internet, we'll do a little exploring of our own.

NELSON: Let's take a look at what the 21st century has in store for the Internet. And Jaron Lanier, a computer scientist, a composer, and an author, joins us now live from New York to help us do just that. Lanier had coined the term "virtual reality" years ago. He's active in scholarly programs at Columbia and Harvard Universities. He's also involved in something called telemersion (ph).

And so we'll get into that in a moment, but, first, Mr. Lanier, thanks for joining us.

JARON LANIER, VIRTUAL REALITY CREATOR, "INTERNET 2" SCIENTIST: Oh, thanks so much. I'm delighted to be here.

NELSON: I want to ask you our first question, and the first subject is privacy. How big a fear do you think that privacy is, the loss of privacy on the Internet, and is Big Brother in control of the Internet?

LANIER: I'm going to go out on a limb, and I'm going to say that I think the privacy problem is not going to be quite as bad as many fear, and the reason why is I think it goes both ways. On the one hand, yes, our privacy is going to be less protected. On the other hand, so is the privacy of the government, of corporations, foreign governments, of everybody, and I think the bargain is one that's not so bad. It's true that companies can learn more about me, but I know more about my world than ever before, and I think, in the balance, I've actually gained more than I've lost.

NELSON: Well, let me just interrupt you on that point. The government and corporations are able to put up firewalls that keep you out of their sensitive areas. Now in order to get around to the Internet, you're asked to divulge things like your name, your address, your date of birth, sometimes your Social Security number. Now they know a lot more about you than you will know about sensitive information of any government or corporation.

LANIER: Information has a way of filtering its way around firewalls. It's true that you can put up a firewall, but a firewall is really just a technical detail. Ultimately, the Internet will find some way around it, and what we've seen so far is both -- governments and corporations and other entities really have a hard time keeping secrets compared to the old days. The crazy thing we went through with the Lewinsky scandal last year is a great example.

So, you know, another thing I have to say is that invasion of privacy is going to be driven by commercial motive more than anything else, and we haven't really seen that all these databases they're collecting on us are all that valuable. I mean, right now, during the dot.com craze, a lot of companies are -- grasping for anything they can do to prove to investors they have some assets, but I haven't seen anybody really demonstrate the value of this information they're collecting on us yet, and I have a feeling it's going to turn out to be a lot less valuable than they expect, and that will result in less of it being kept.

PHILLIPS: Yeah. I'd just like to ask a question on behalf of the average computer user. I mean, what's the worst that can happen with loss of privacy, apart from, you know, getting inundated with junk mail from companies advertising their goods? I mean, is there something more sinister that we should be worried about?

LANIER: I think that there's potential for sinister things, but remember, you know, all -- all of -- there are balances that come into play. If an enormous number of people start being abused, you know, the people who are doing the abusing are also exposed. I mean, the transparency is -- goes in both directions. If you have a window, you can look at it from either side.

So those who abuse the new situation will themselves be exposed, and I -- once again, I think in the balance, we're going to be better off with this transparency than without it, not that there won't be discomfort. I mean, I think there will be, but on the whole I think it's actually better.

NELSON: Mr. Lanier, we're going to ask you to stay right there.

We're going to take a short break and be back in a moment. We'll have a look at a piece of technology that could represent a very serious threat to our privacy on the Internet, something that may know you better than you or your family do. We'll be right back.

(COMMERCIAL BREAK)

NELSON: Well, finding information on the Internet is getting a little more difficult considering the Net is packed with about 400 million Web sites, and that's growing.

PHILLIPS: But help is out there in the form of virtual robots. Now they're called bots. They're out there to serve you.

And as CNN's Science Correspondent Ann Kellan reports, in the future, these bots will be reporting directly to you.

(BEGIN VIDEOTAPE)

ANN KELLAN, CNN CORRESPONDENT (voice-over): Whether you know it or not, there are thousands of robots available at your fingertips, waiting to search the Web for you and more. They don't look like Robby (ph) the Robot in the movie, "Forbidden Planet." These robots are software programs designed to scour Web sites all over the world. Bots are found in search engines. Certain Web sites are bots. Just do a search on bots, and you'll see how many there are.

For example, chatter bots converse with humans, even translate text. Search bots collect specific information. Looking for a pet? A bot will help narrow your search. Shopping bots find Internet bargains. Today's bots perform specific functions but know very little about you or your tastes. That is changing. Researchers at MIT are designing bots that could someday know more about you than you know about yourself.

(on camera): Let's say I want to take a vacation. With today's bots, I fill in where I want to go, when, even how I want to get there, and the bot will give some choices, even prices. Now what if instead of me telling my bot where I want to go, in the future, my bot reminds me I need vacation and, based on my past behaviors, has already booked a reservation at my favorite beach?

(voice-over): Getting to know you is not as easy as it sounds. Once a bot gets the hang of your buying patterns and tastes, you change.

DAN ARIELY, MIT SLOAN SCHOOL OF MANAGEMENT: Especially if you talk about having a bot escort you through your lifetime. You don't want to listen to the same music that you listened to when you were 5 years old when you're 25. So that's something that we're -- we're currently facing, is trying to figure out how to learn over time and how to kind of keep track of the changing -- changing tastes.

KELLAN: According to researchers, intelligent bots may one day keep many of us glued to the Internet and away from the shopping malls.

ARIELY: I think it will take some away from the shopping malls because you could have a fun, interesting, shopping experience within the computer.

KELLAN: The computer will provide more information about products than stores provide, and bots will make the information easy to retrieve. Eventually, researchers predict, we'll grow up with bots that will know our behaviors, our likes and dislikes.

ARIELY: So a good bot -- a good, futuristic bot -- would be one that would basically be able to learn about you and learn over time and improve its performance.

KELLAN: And even though we can't see them, they'll be at our beck and call.

Ann Kellan, CNN, Boston, Massachusetts.

(END VIDEOTAPE)

NELSON: Now we want to welcome back Jaron Lanier who's in New York. He's a computer scientist, a composer, an author.

And we were discussing earlier about privacy, so let's continue that for just a comment. In this piece, bots, I think, to many people are going to sound very interesting. I mean, it's going to -- they will be able to do a lot of the hard work for us when it comes to shopping, but a lot of people are going to be disturbed by that phrase they may know more about you than you do. So is this the -- the camel's nose under the privacy tent?

LANIER: I personally think that the bot technology is -- is nonsense, I really have to say, and on this, I just have a disagreement with many of my colleagues.

NELSON: OK. In what way? In what way?

LANIER: Well, OK. Let me explain. Let me explain. Let's say that you manually go to the Internet and you search for something. You do a certain amount of work. Now the question is is it going to be actually less work for you to interact with one of these so-called bots for it to understand what you're looking for, and I think it's going to be more work. I don't think these things will save people work. I think that it's really this sort of weird fantasy that somehow the computers will become live and that that will save people work. I -- I have seen absolutely no evidence of that. I think this whole bot thing is a passing craze, and it's going to be remembered as just sort of a confusion more than anything else.

NELSON: Well, even -- even a couple of years ago under its more rudimentary form, I remember one of the Web sites that sold music. You were able to go out there and -- and offer -- try to buy certain selections of music. That Web site with its bot would record your selections, and then be able to come back at you with other music that was similar to what you had purchased but by recording artists you may not know, and then start to refine that technique until perhaps it may know your -- your tastes better than you do.

LANIER: Oh, look, come on. It doesn't know you at all. What has happened is you've put a lot of effort into trying to enter information into it, but you're doing it in this indirect way by trying to get it to watch what you do. It would be so much less work for you to just enter in what you're looking for, and I think, ultimately, that's what people are going to do.

I -- I just think this whole thing of computers being alive and understanding you is -- is, first of all, technically not correct, and, secondly, it doesn't save any time. It's just a phony claim. You know, with this whole Y2K bug, there was this fantasy that somehow the computers are out of control, and it turns out they are in control, and the same thing is true here.

The computers are not alive. They don't have more wisdom than us. They never will. They are tools we are actually responsible for, we're actually in control of, and this fantasy that they're -- that they're somehow gaining wisdom is just not founded. It's not true. There's no reason to be scared of that.

NELSON: Just very quickly. You don't think then we're going to see Hal take over as he did in "2001"?

LANIER: If Hal takes over, what it really means is that people gave up responsibility for their own lives, and you can say it's the computer that took over, but it -- what it really is -- as Y2K demonstrates, we are in control. If computers don't do the right thing, it's our fault. They are not responsible because they are not alive. We are. It's -- it's our job to make them run properly and do what we want, and any time that we fantasize that they have lives of their own, we're really just ignoring the responsibility we should be taking.

PHILLIPS: And the thing is also, I mean, do we really want computers to do all of these things for us? I mean, I personally like shopping, maybe a little bit too much, but there's this whole human interaction thing that -- maybe we don't want computers to take away that part of ourselves.

LANIER: You know, so far as I can tell, everything on the Internet that works, all of the e-commerce sites that actually make money do not try to automate things for people, but rather what they do is they allow people to do things that they enjoy. People are not -- people are not looking for computers to take over their lives.

People just want to be able to communicate better. They want to be more effective. If you think of the computer as a tool, it works for people. If you think of it as something that like replaces parts of life, I mean, who needs it? It's not what people want, so I -- so I agree with you completely, and I hope you continue to enjoy shopping. It's...

PHILLIPS: Oh, I will. Don't worry about that.

NELSON: Stay there with us for just a moment, please, Jaron Lanier.

Y2K -- we seem to have escaped any major problems this millennium weekend, but there is still a serious problem of cyberterrorism that faces corporations and nations around the world. We're going to discuss that when we come back in just a moment.

(COMMERCIAL BREAK)

(BEGIN GRAPHIC)

By the year 2002, 490 million people around the world will have Internet access, 79 people per every 1,000 worldwide. That is less than 1 percent of the world's population.

Source: Computer Industry Almanac

(END GRAPHIC)

NELSON: The end of the 20th century brought a whole new category of crime. It's called cyberterrorism.

PHILLIPS: CNN Justice Correspondent Pierre Thomas reports that cyberterrorism will become an increasing concern in the 21st century.

(BEGIN VIDEOTAPE)

PIERRE THOMAS, CNN CORRESPONDENT (voice-over): Nineteen ninety- seven, Worcester, Massachusetts: A teenager uses his computer to knock out communications at this air traffic control tower for six hours. March, 1999: A programmer unleashes the Melissa virus, disabling thousands of computers around the U.S. And the Pentagon is the target of 80 to 100 illegal hacking attempts each day.

As a new century begins, cybercrime, including electronic terrorism, no longer just a concept, now a reality and a potential threat to global security.

RICHARD CLARK, NATIONAL SECURITY COUNCIL: We've become dependent upon computer networks. They run our electric power grid, our telecommunications network. They run our railroads, our banking system. And all of them are vulnerable at some level to some degree of information warfare or cyberterrorism.

THOMAS: The Justice Department's Michael Vatis heads the U.S. government's efforts to protect its infrastructure.

MICHAEL VATIS, DIRECTOR, NATIONAL INFRASTRUCTURE PROTECTION CENTER, FBI: There's really a broad spectrum of people, groups, and countries that engage in cyberattacks as a general matter for different purposes.

THOMAS: Terrorists, hostile nations, criminals, malicious hackers -- a wide variety of threats creating new pressure for intelligence, defense, and law enforcement around the world. In fact, the FBI computer crime case load has doubled in each of the last two years. In October, the FBI reported 800 pending cases, and the future may bring even more ominous cyberthreats.

SEN. JON KYL (R-AZ), TECHNOLOGY, TERRORISM, AND GOVERNMENT INFORMATION SUBCOMMITTEE: According to the National Security Administration, there are over a hundred countries that are working on techniques to penetrate our information infrastructure. Many of them are aimed at the Defense Department and high-security areas in both the private sector and the government. So it's a very serious threat.

THOMAS: The Clinton administration's point man on counterterrorism confirms planning for electronic assaults is already underway.

CLARK: There are governments who are building units -- military units, intelligence units -- to engage in information warfare. They are developing capabilities, they're building the units and, in some cases, they appear to be doing reconnaissance on our computer networks.

THOMAS (on camera): A major advantage: Cybercrime allows criminals to use computer technology to inflict damage while simultaneously reducing the risk of retaliation.

VATIS: Our mission is to try to help protect the nation's critical infrastructure, and somebody sitting with a laptop computer and a modem connection on the other side of the world can attack those things if they don't have good security.

RICHARD POWER: Terrorists still prefer car bombs, you know. A car bomb still has a lot more impact than a cyberattack, but there is always the possibility that somebody could make some kind of dramatic statement by bringing down an aspect of the infrastructure.

THOMAS (voice-over): Nations are developing computer anti- hacking teams to block and investigate crimes in cyberspace, but officials says, as technology rapidly advances, preventing cybercrime and catching cybercriminals will only become tougher.

Pierre Thomas, CNN, Washington.

(END VIDEOTAPE)

NELSON: We're going to continue our theme of fears about the Internet with computer scientist Jaron Lanier who's in New York.

Thanks for being back again. Now what about threat of cyberterrorism? I mean, is this a major threat? And I was very concerned -- and I think many people would be -- at that line that there are entire governments in there -- I'm sorry -- entire governments around the world devoting huge amounts of money to break into the U.S. infrastructure.

LANIER: Yeah. Now, of course, this is something we have to take seriously, and in order to take it seriously, we have to, I think, think in a slightly different way than we have been. Most of the incidents of cyberhooliganism -- so far, nothing really bad has happened, but most of the sort of things where kids break in -- truly, the kids, in my opinion, have done us a service by pointing out that our computers just haven't been built the way they should be. One of our big problems is that so much of the software we use is in a sense designed practically to be broken into. For instance, the Microsoft product line tends to have all of these extra little gizmos, the so-called macros, really to an incredible excess, so this is like an open invitation to write viruses, and we just -- we do need to make adjustments.

The thing we were talking about of transparency is very, very important on this point. One of the things I want to tell you is that there are almost no incidences in which there's been any actual serious sabotage created by computers at all, and when there has been, the perpetrators usually get caught. I mean, we actually find the kids who write these viruses, in many cases. So the transparency is one of the -- the good things. I mean, this -- it's very hard to hide when you -- when you're a cyberterrorist. It's -- it's pretty easy to find the trail.

So I - I'm -- I think it's a very serious problem potentially, but it's also one that we will learn how to address. Cautiously optimistic.

NELSON: All right. I have another question for you. I just want to take -- take a moment here to just jump over into another issue. You're involved in something called telemersion. Now this is built on your earlier experience with virtual reality. Tell us what this is about. What does it mean to the average person in the coming years as the Internet develops and takes large -- a larger place in our life?

LANIER: Well, this is really great fun. There's a marvelous academic project going on in the United States where over a hundred universities are working together on something called Internet 2, which is the next version of the Internet, the next generation.

NELSON: The new superhighway, right?

LANIER: Yeah. The new superhighway. And we didn't have any applications for it that were demanding enough to really need it so we decided to make up a new one, and it's a fancy kind of virtual reality called telemersion, and the goal is to really make you feel that you're in the same place as another person on the other side of the country, and we have a way of scanning the places where both people are and making them feel as if they're in sort of a new place, a room that has aspects of both places, and they really are right there, and they can walk around each other and so forth, and it's a -- it's a marvelously, tricky, ambitious, crazy technology, and we've been working on it for a couple of years, and we're making progress, and it's -- it's great. It reminds me of the old -- the old early days of virtual reality all over again.

PHILLIPS: I guess the -- the closest that a lot of people have come to that sort of thing is watching movies, like, for example, "The Matrix" or even "Full Disclosure," and when you watch those movies, it's a fascinating and very exciting look into the future. But is that sort of thing really possible? LANIER: Well, the movies you mentioned are a little bit more like the old-style virtual reality where you're inside a synthetic place, although I guess "The Matrix" was trying to be realistic, but this is more like the Star Trek transporter booth where you suddenly feel that you've -- you've changed your location to something that's very far away. So it feels more like a transporter booth than virtual reality.

And are they -- you know, movies are movies. They're always -- they're always a little bit nutty, but they have a kernel of truth. I think that's a little bit like what we're going to come into. I hope it's not so dark. For some reason, movie producers like to show the dark side of virtual reality, and I -- I actually think it's going to be a lot of fun and not so dark.

NELSON: Well, we want to thank you very much for being with us, especially at this early hour. You're insights have been just great.

Jaron Lanier. He's a computer scientist, a compose, and an author, a man of all trades. He spoke to us this morning from New York.

And for those of you who'd like to hear more about him, Mr. Lanier will have a CNN chat event on cnn.com. That's at 4:00 p.m. Eastern Time Sunday. That's today here in the eastern part of North America. That is 2100 GMT. And the Web address for this chat with Mr. Jaron is cnn.com/chat.

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