- cypherpunks-legacy - lists.cpunks.org

The Fortezza random number generator is not trustworthy
by John Gilmore 17 Dec '03

17 Dec '03

> Yes Fortezza cards can be instructed to produce a random number through one > of its library calls (someday they'll have a real API). One of the > diagnostic tools I had tested this function. What algorithm do they use? > Haven't a clue. Sources say that the RNG implementation may vary from vendor > to vendor (i.e., GTC, Spyrus, Mykotronix, etc.). A caution. I believe that CAPSTONE chips inside the Fortezza card are highly likely to have back doors in them, above and beyond the Clipper key escrow feature. In particular, the random number generator is probably compromised. Many of the top-secret NSA documents I have received under FOIA about Clipper say things like: "2. I briefed the Board on the CLIPPER and CAPSTONE chips and their capabilities and summarized the recommendations of the 19 November session: [TWO INCHES OF SOLID BLACKOUT] "3. The Policy Board reached consensus on the following points: [TWO LINES BLACKED OUT] a. NSA will provide for the availability from a vendor of a single chip which can be programed for law enforcement access exclusively through a key escrow "law enforcement exploitation field." The chip will have no trap doors or other methods of access. This chip is called CLIPPER. [THREE INCHES OF SOLID BLACKOUT] Note that they explicitly say "The chip will have no trap doors or other methods of access" when talking about Clipper, but all information about Capstone is blacked out. There's no such guarantee about Capstone. The Digital Signature Algorithm embedded in Capstone is the best "host algorithm" ever seen for subliminal channels. A subliminal channel is a means of communication which imparts information but cannot even be detected by third parties. By choosing numbers for DSA signatures that are not completely random, several subliminal channels are available, which can leak information as part of normal digital signatures. This subliminal information can only be read by someone who knows a secret about how the non-random numbers were generated. Gus Simmons, who did seminal work on subliminal channels while at Sandia Labs, wrote a Eurocrypt paper on this a year or two ago. The Capstone chip knows private things like your DSA private key, the last session key you loaded for Skipjack, etc. So it has info that is worth leaking to NSA wiretappers. Now the plot thickens. I submitted a FOIA request for all information the NSA had on subliminal channels. They responded that they had no information! We appealed and got the same answer. However, subliminal channels are clearly part of the crypto literature and knowledge base. They were a major concern when Gus designed nuclear test-ban verification crypto equipment in the '70s. The ONLY way NSA can legally claim to have no information on subliminal channels is if the MERE FACT OF THE EXISTENCE AT NSA of information on subliminal channels is classified. In other words, if their information ABOUT subliminal channels is classified, they can't say they have no documents; they have to say, e.g. "We have ten documents and they're all classified." If they have any documents, they can only legally claim to have no documents if just confirming the existence of the documents would itself reveal classified info. This is called "Glomarizing" and it's named for the Glomar Explorer, a ship which was secretly used for dredging up code books from sunken Soviet submarines. Merely confirming that records existed on the Glomar would have revealed classified information (i.e. that the government was involved; the cover story was that a private company was using it for deep-sea mining experiments). Apparently, merely confirming that NSA knows anything about subliminal channels would reveal classified information. If the mere existence of documents on subliminal channels is classified, it's probably because they are very actively and very secretly using them. And this tends to reinforce my perception that they are using them in Capstone, the heart of the Fortezza card. You're free to dismiss all this as paranoid rambling. However, if you use a Fortezza card to generate your random numbers, you have no way to determine how these numbers are being generated. Are they really random? How could you tell? Would you rather get "random" numbers from a classified NSA-designed chip that's part of a family designed to subvert your privacy? Or would you rather get them from a third-party product whose design you can actually verify? I'd prefer a random number generator where I can pull one "at random" from stock, take it apart, and verify that it really does what its designers say it does. John Gilmore

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Re: SAIC bought InterNic, but who is SAIC? A spook contractor!
by Rich Salz 17 Dec '03

17 Dec '03

One of the most interesting things SAIC does is run places that monitor seismic events. S.E.'s, by the way, are things that might be earthquakes but could be A-bomb tests. SAIC ran the Center for Seismic Studies in Arlington, VA. Rick Adams, co-founder of UUnet, made one of their machines, seismo, the UUCP hub of the world for a couple of years. /r$

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Type I capabilities added to mix@zifi.genetics.utah.edu
by zinc 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- howdy folks, the purpose of this message is to announce the addition of Type I capabilities to the remailer at mix(a)zifi.genetics.utah.edu. mix(a)zifi.genetics.utah.edu now supports the standard cpunk commands. here's the section of the help file that pertains to the Type I remailer, the whole help file available by sending a message to mix(a)zifi.genetics.utah.edu with Subject: remailer-help. the Type I remailer is Matt Ghio's code. all commands are supported EXCEPT usenet posting which would probably just get me in trouble. the pgp key for the remailer is included in the message below. in addition, you can obtain the key by fingering remailer(a)zifi.genetics.utah.edu. the whole help file is also available by fingering mixmaster(a)zifi.genetics.utah.edu. thanks, - -patrick finerty Part II - Type I remailer features I have an automated mail handling program installed here which will take any message with the proper headers and automatically re-send it anonymously. You can use this by sending a message to mix(a)zifi.genetics.utah.edu, with the header Anon-To: containing the address that you want to send anonymously to. (Only one recipient address is permitted.) If you can't add headers to your mail, you can place two colons on the first line of your message, followed by the Anon-To line. Follow that with a blank line, and then begin your message. For Example: > From: joe(a)site.com > To: mix(a)zifi.genetics.utah.edu > Subject: Anonymous Mail > > :: > Anon-To: beth(a)univ.edu > > This is some anonymous mail. The above would be delivered to beth(a)univ.edu anonymously. All headers in the original message are removed, with the exception of the Subject (and Content-Type, if present). She would not know that it came from Joe, nor would she be able to reply to the message. However, if Beth suspected that Joe had sent the message, she could compare the time that the message was received with the times that Joe was logged in. However, this problem can be avoided by instructing the remailer to delay the message, by using the Latent-Time header: > From: joe(a)site.com > To: mix(a)zifi.genetics.utah.edu > Subject: Anonymous Mail > > :: > Anon-To: beth(a)univ.edu > Latent-Time: +1:00 > > This is some anonymous mail. The above message would be delayed one hour from when it is sent. It is also possible to create a random delay by adding an r to the time (ie +1:00r), which would have the message be delivered at a random time, but not more than an hour. Another problem is that some mailers automatically insert a signature file. Of course, this usually contains the senders email address, and so would reveal their identity. The remailer software can be instructed to remove a signature file with the header "Cutmarks". Any line beginning with the same text at in the cutmarks header, and any lines following it will be removed. > From: sender(a)origin.com > To: mix(a)zifi.genetics.utah.edu > Subject: Anonymous Mail > > :: > Anon-To: recipient(a)destination.com > Cutmarks: -- > > This line of text will be in the anonymous message. > -- > This line of text will not be in the anonymous message. You can add additional headers to the output message by preceeding them with ## > From: chris(a)nifty.org > To: mix(a)zifi.genetics.utah.edu > Subject: Nifty Anon Msg > > :: > Anon-To: andrew(a)hell.edu > > ## > Reply-To: acs-314159(a)chop.ucsd.edu > > A Message with a reply address. By seperating messages with cutmarks, you can send more than one message at once: > From: me@mysite > To: mix(a)zifi.genetics.utah.edu > Subject: message 1 > > :: > Anon-To: recipient1(a)site1.org > Cutmarks: -- > > Message one. > -- > :: > Anon-To: recipient2(a)site2.org > > ## > Subject: message 2 > > Message two. The two messages will be delivered seperately. For added security, you can encrypt your messages to the remailer with PGP. The remailer software will decrypt the message and send it on. Here is the remailer's public key: - -----BEGIN PGP PUBLIC KEY BLOCK----- Version: 2.6.2 mQCNAzEY6mQAAAEEAMqdj6BCAb95C7KDM7UWTieGdCWVNmI8sKcDdX5JIyBWGo7Y hKnxF3OgO+sTxjeeabCG8xWHNe9w8CzXPbOBE3soEedvY+FqaRBYdO8a3Eex4nSp WomnKtcKcBet7G93PErGf4srEwR1OqMRsi+1CbDayNSu6IDU2P69KCmvu47hAAUR tCpsZWFkIHJlbWFpbGVyIDxtaXhAemlmaS5nZW5ldGljcy51dGFoLmVkdT6JAJUD BRAxGOraTdCj+UbQAfkBAVu9A/4kPaTN84+giuDkeiqbwTRMGAUQZ3N65hSR6snt cQp3cvpY30d4i8r3PiBR+5LUAsO/vrrGGyW106X/PHKQpb2lJ5SbcoJ+fMhMcBFc /UPxkwJGbcc7ftBkrIUNVetPik8PoRTlzgbBSypv97HiApYdZc6fKr2NuLv8OhmG fdWcEYkAlQMFEDEY6oX+vSgpr7uO4QEBoUMD+wfpS5YhYHfVp37iklOSYhQdzpcl pefg/RxgroWMWMzLYCeMvcoqlCIEznfYA8fSEPsmVDH22lQvZaLSbXM5WQ1gpZsE 6qR5SicFI9oX5ciVa2M+KgH3sxwS9TDFqcWBSgSnWPHzDT1oUBI/PLI2k/FGN5Hq rbYH2gPobLez9N9z =ms21 - -----END PGP PUBLIC KEY BLOCK----- To utilize this feature, create a message with two colons on the first line, then the Anon-To line, then any other headers, such as cutmarks or latency, then a blank line, and then the message. Encrypt this with the remailer's public key. Then send it to the remailer, adding the header "Encrypted: PGP". If you forget this, the remailer won't know that it needs to be decrypted. Also be sure to use the -t option with PGP, or the linefeeds might not be handled properly. > To: mix(a)zifi.genetics.utah.edu > From: me(a)mysite.org > > :: > Encrypted: PGP > > -----BEGIN PGP MESSAGE----- > Version: 2.3a > > hIkCuMeAjnwmCTUBA+dfWcFk/fLRpm4ZM7A23iONxkOGDL6D0FyRi/r0P8+pH2gf > Hai4+1BHUhXDCW2LfLfay5JwHBNMtcdbgXiQVXIm0cHM0zgf9hBroIM9W+B2Z07i > 6UN3BDhiTSJBCTZUGQ7DrkltbgoyRhNTgrzQRR8FSQQXSo/cf4po0vCezKYAAABP > smG6rgPhdtWlynKSZR6Gd2W3S/5pa+Qd+OD2nN1TWepINgjXVHrCt0kLOY6nVFNQ > U7lPLDihXw/+PPJclxwvUeCSygmP+peB1lPrhSiAVA== > =da+F > -----END PGP MESSAGE----- Any unencrypted text after the PGP message is also remailed. This is to allow sending to someone who is anonymous. If you create a PGP-encrypted message to yourself via my remailer, and then you give it to someone, they can send you a message by sending the encrypted message to the remailer. The remailer will then decrypt it and send it to you. The message gets anonymized in the process, so the sender will need to include a return address if he wants a reply. Messages sent this way can be encrypted using the Encrypt-Key: feature. Any text following a line beginning with ** will be encrypted with this key. For example, if you put in your PGP message: > :: > Anon-To: you(a)yourhost.org > Encrypt-Key: your_password > > ** The appended message after the ** will be encrypted with the key "your_password", using PGP's conventional encryption option. Part III - Common Features Can mix(a)zifi.genetics.utah.edu post to News? No. News posting is not supported at this time. Abuse Policy: I consider the following to be inappropriate use of this anonymous remailer, and will take steps to prevent anyone from doing any of the following: - - Sending messages intended primarilly to be harassing or annoying. - - Use of the remailer for any illegal purpose. If you don't want to receive anonymous mail, send me a message, and I will add your email address to the block list. "Those that give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -- Benjamin Franklin (1773) finger for PGP key zifi runs LINUX 1.3.57 -=-=-=WEB=-=-=-> http://zifi.genetics.utah.edu -----BEGIN PGP SIGNATURE----- Version: 2.6.2 Comment: Processed by mkpgp1.6, a Pine/PGP interface. iQCVAwUBMRkfF03Qo/lG0AH5AQFJ9gQAly+8Jko2cikOh254fcl/j2/ts7S/hgeR IpLNGHbJlT4BQtFZT6JT/e6cuijVt5x2u6pBVphRpAp/om033mwgIcMwYnIvDMEo ijnxb6dskrdQf6zV9lRV7HJ4izIX85btI41e9VNDrIT/VVgsJ/MVPYYfB6xNdM9h UbzGt/x9I58= =AG+5 -----END PGP SIGNATURE-----

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digital cash &c.
by Carlos Perez 17 Dec '03

17 Dec '03

Has anyone heard any developments on the forthcoming Visa "Cash" cards? Release date or other info? (for those who haven't heard of it _is_ anonymous, can be refilled at ATMs. Supposedly in a test release in Atlanta.) Has any attempt been made to remove the "munitions" classification from cryptographic materials. It seems a lot of our legal difficulties start there...

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Re: Children and the Net
by gtoal＠an-teallach.com 17 Dec '03

17 Dec '03

From: "James A. Donald" <jamesd(a)netcom.com> Yep. They thought that was really great. > Will you be upset > if they try this at home? At the age of three Jim figured out that death was permanent and extremely serious. It was just a real shame you had to kill your kid's dog with a sharp spike up one nostril to make the point though ;-) G

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Re: Lawsuits Against PKP
by smb＠research.att.com 17 Dec '03

17 Dec '03

Two lawsuits were recently filed in federal court, northern district of Calif, which may cripple Public Key Partners. Cylink v. RSA Data Security, C-94-02332-CW, June 30, 1994, San Fran. It alleges that the RSA patent is invalid. RSA Data had denied Cylink a patent license. This one is really fascinating -- Cylink is one of the owners of PKP, along with RSADSI...

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Re: Project: a standard cell random number generator
by Pierre Uszynski 17 Dec '03

17 Dec '03

At 9:50 PM 9/20/95, John Gilmore wrote: >You probably can't build a hardware random number generator out of >existing "gate array" gates or "standard cell" cells, because all the >existing gates and cells are designed to behave completely >predictably! It will take designing a new circuit structure. Actually, even without going into the more analog characteristics of these same standard cells (as Tim suggests: threshold measurement, DRAM discharge time, and so on) you can do that using the really basic behavior of really basic standard cells: I did that some 8 years ago around a free-running ring oscillator (a bunch of basic logic gates in a ring). The problem I would look into first is that any such random number generator (even the ones based on measurements of analog quantities) would likely synchronize to some extend to the local noise (like CMOS switching noise in sync with the chip clock). My impression is that if you try and make the thing more impervious to noise, it will be less random too, and the most prominent noise in such chips is not random at all. So, you could try to make it run fast, and place it in a slow chip (like an older style UART), or you could try to kick it out of sync now and then based on some external conditions (maybe) (bus signal arrival time, serial line input, etc). It's not guaranteed it would end up generating anything useful (maybe not even to seed a software PRNG). I still like the idea of using macroscopic events, many orders of magnitude different from system operating frequencies: mouse location and timing sounds good. If you want to get large amounts of random numbers, use a specially designed separate box, well shielded, and running on batteries (like a walkman :-) And a cryptographically secure software hash is always necessary. Pierre. pierre(a)shell.portal.com

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SecureDrive/Secure Device News
by edgar＠highnrg.sbay.org 17 Dec '03

17 Dec '03

-----BEGIN PGP SIGNED MESSAGE----- My thanks to Mark Grant who suggested re the Iomega zip Drive & Secure Device: On Sat, 16 Sep 1995, Edgar Swank wrote: >problem is that the DOS file must be present when the CONFIG.SYS >DEVICE= statement for the SECDEV.SYS is processed. But the zip drive >driver is a TSR that doesn't get loaded until after all DEVICE >statements have been processed. There are programs around that will load DOS device drivers from the DOS command line after booting, there's one I've used at work called 'DEVLOD', but I don't know if it's commercial or freeware. If it's free it may be possible to find it on the Net somewhere. I found several shareware/freeware programs which claim to have this ability. The first one I tried, DMC35.ZIP 74710 11-29-93 Allows loading/unloading of dev. drivers /TSR's did the job, loading SECDEV.SYS -after- the zip drive TSR was loaded. Other possibilities, which are present in the SIMTEL archive in the msdos/sysutil subdirectory would be, comp.zip 5086 08-29-88 Load and unload device drivers after bootup devic104.zip 7250 05-30-92 Load and unload device drivers after bootup devlod.zip 18240 12-30-91 Dynamic load of device drivers after boot-up drvins11.zip 12298 12-06-90 Load and unload device drivers after bootup idrv01.zip 16369 04-10-92 Install/uninstall device drivers after bootup although I haven't tried any of these. - From a SecureDrive user comes the following warning: Norton Utilities' wipeinfo appears to CORRUPT a SecureDrive (1.3d) partition, and well as an SFS (1.17) one. That was with the F-PROT (2.19) anti-virus TSR in memory (virstop.exe). I did not encounter problems with it off. I think the main fault would be with virstop. The user didn't say, but if virstop is loaded before sectsr, that could lead to bypassing sectsr, accessing encrypted data directly, which is likely to corrupt the whole partition. A user has also informed me that RAWDSK11 (or RAWDRV11) is no longer found at ftp.uni-duisburg.de: /pub/pc/misc/rawdsk11.zip This is a utility useful with SecureDrive for tape backups. Since it's a short program, I'll include a UUENCODED image of the file here. This program does not do cryptography by itself, so ITAR does not apply. Edgar Swank SecureDrive Co-author section 1 of uuencode 5.25 of file rawdrv11.zip by R.E.M. begin 644 rawdrv11.zip M4$L#!!0``@`(`$`)/1LU[E/**P$``-4!```+````2$E35$]262Y46%1-D<]. 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by rooster＠ix.netcom.com 17 Dec '03

17 Dec '03

ROSTER(a)IX.NETCOM.COM THANK YOU!!

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by nobody＠REPLAY.COM 17 Dec '03

17 Dec '03

NYT Magazine, Sept 24, 1995 How the Propeller Heads Stole the Electronic Future The silver-haired media monopolists follow their 500- channel dream. They haven't reckoned with the 500 million channels of Netscape and the Internet. By Steven Levy. If you want an arbitrary date for the burial of the 500-channel dream, Aug. 9, 1995, will do just fine. On that morning, the public had its first crack at buying stock in the year-old Netscape Commumcations Corporation, which makes software that helps people navigate the Internet and set up "sites" that Net surfers can visit. What happened next is already the stuff of high-tech legend. The offering price of $28 per share shot up within minutes to a vertiginous $75 until finally settling at $58, a price that valued the as-yet-profitless company at well over $2 billion. A month later, it was trading at about $53. The initial news reports focused on the instant millionaires at Netscape, including a 24-year-old computer programmer, Marc Andreessen, who emerged from the stock offering with that all-important first $58 million. But the real significance of the event was not that another bunch of propeller heads had joined the ranks of the super-rich. Aug. 9 marked the moment when Wall Street finally realized what had been becoming increasingly apparent to computer users: a set of highly technical but reliably standardized communications protocols known as the Internet had established itself as the real key to the electronic future. That future would be made not by silver-haired telephone- and cable-company executives in Denver, New York and Washington, building an empire around a golden goose called pay-per-view television, but by companies like Netscape and their customers. In short, the end of the 500-channel dream. This was a myth constructed by the masters of the media, people like John Malone of Tele-Communications Inc. (T.C.I.), Ray Smith of Bell Atlantic and Sumner Redstone of Viacom. They believed that the television set would extend its domain from the center of the entertainment universe to the worlds of commerce and information. Despite their promises that the new era of digital media would be marked by increased competition, they assumed that their companies would keep their hands on the valves of a limited information pipeline. But for consumers, the dream offered only two differences, really, between what the public has now and what will be available in the future. *The same programming but more of it*. Instead of getting 50 or 60 alternatives when you plopped down in front of the tube, you'd get a lot more. Five hundred was the number that stuck in people's minds. *So-called interactive programming*. The interactivity comes in makng choices: pressing buttons to choose programs and, above all, to buy things. The living-room television would be a cash register of sorts, enabling Dad, Mom, Junior, Sis and probably even the faithful dog Astro to buy more programming -- and buy more everything, from pizzas to Dustbusters. The operators of those systems, like T.C.I. and Time Warner, would act as gatekeepers, deciding which entertainment channels, pay-per-view events, banks, retailers, publications and data bases would reach consumers. There were tremendous opportunities to make money, not only from monthly fees and pay-per-view charges but also from percentages of every transaction. And then there was the wealth of information about consumer buying habits generated by the aggregation of buying choices made by pressing those buttons. This, too, would be sold and bartered. For the past few months the silver-haired guys have been arranging expensive technology tests in places like Orlando, Fla. They have been wooing Congress for favorable regulations. They have been frantically merging and making alliances. But meanwhile, a different vision of the media future has begun to form -- totally under their radar. It moved from the academic and scientific communities, then to the business world, then to politics. As it grew and grew, it suddenly became clear that this new vision had the potential to pull the plug on the 500-channel dream. This is the Internet and its most interesting subset, the World Wide Web. It is based on unlimited channels of communication, community building, electronic commerce and a full-blown version of interactivity that blurs the line between provider and consumer. You don't need an Arthur Andersen report or even a cyberpunk science fiction novel to envision how this new model of the future will work. Millions are already participating in it. Its nascent form -- albeit with often sluggish performance and frequent system crashes -- has spread like digital wildfire. In short, the information superhighway, font of a thousand bad metaphors, is already here. But it's not about sitting on a couch and pressing a button to order "Dumb and Dumber." It's about Web surfing, open systems and freedom. Why did the stock market go bonkers for Netscape, a year-old company that not only operated deep in the red but also warned in its prospectus that it did not intend to make any profits "in the foreseeable future?" Only one reason: the Internet If the 500 channel dream on the TV screen is the old future, the new one is the Internet on the computer screen. Think of it as a combination book, radio, magazine, mailbox, conversation parlor, bulletin board, billboard and, one day, television set. Install what is known as a browser program -- the most popular is Netscape's Navigator -- and you're cruising the World Wide Web. Your screen is a selection of signed baseballs up for auction, a tour of the Louvre, a zine (a self-published magazine) on the life of a teen-age girl in Canada, a multimedia repository of General Electric's public relations documents, the complete text of the Congressional Record. Millions of possibilities await you, and getting to them is easy. Anything can be wired to anything else on this World Wide Web (thus the name) by moving the cursor to a highlighted word or image with an embedded link to another location. Web travelers do not just travel by links, of course -- they can go directly to any Web site. The interesting thing about the sites is their equality. Like phone numbers, or addresses on letters, these addresses have no favored positions; in terms of gaining access to homes, ABC, Disney and Sears have no inherent advantage over Joe's Video or the corner pizza parlor. (For help in knowing what's available, people are already adopting the first of a new breed of electronic guide services, like the popular Yahoo Web site, a sort of Baedeker's of the Net.) At first, Web traveling seems like a fascinating but perhaps frivolous diversion. But then you consider the next step -- commerce. Secure creditcard transactions are already possible, the ability to charge for time spent on a link is currently being implemented and companies like Visa, Mastercard and newer entities with names like Cybercash and Digicash (and, yes, Microsoft) are concocting Net-based technologies that work just like cash. And then you begin to realize why some farsighted people in the media industries are terrified of the World Wide Web. Every home is potentially a video conferencing center, every independent film maker is potentially a widespread broadcaster, every business is potentially a global marketer. A single twisted idea and a rudimentary sense of layout can transform a voiceless outcast into a cult publisher. Now that's interactivity. The 500-cable-channel tests are just the beginning of a long process. The Net, meanwhile, has millions of people on it, now. It will take a decade or so to upgrade the Net to carry high-quality video services, but most everything else is feasible now and better suited to the desktop than to the TV room. You can't easily read a newsletter or a bank balance on a television set that's 20 feet away. So by the time the cable and telephone companies get their systems in order, millions of Americans will be riding the I-way from their dens and offices, not their living rooms. Sure, eventually the electronics of computers and televisions will be indistinguishable, but by then the road to information nilvana will have been laid -- and the ethos will be that of the Internet. In that ethos, the people who provide you the pipes to move information have no say in what content moves through those pipes. They collect no information on their consumers' buying habits, and they certainly do not get a piece of the transactions that occur over their wires. The guys in the middle -- those with the 500-channel dream -- will thus be cut out of the best part of the action. The masters of the media have taken notice, and lately they've been hedging their bets. Still, they have yet to grasp that the Internet can never be merely another profit center in their dreams of empire. Their power is based on monopoly, on controlling distribution. But the Net is built to smash monopolies. Instead of a gatekeeper, users get an open invitation to the electronic world and can choose whatever they want. "If there is a market for 500 channels," says James Barksdale, Netscape's president, "imagine the market for 5 million, 50 million, 500 million!" Now, this new vision doesn't portend poverty for the media masters. There's still a place for movie studios, television producers and music publishers -- the Disneys of the world -- in this new, content-driven universe. The phone companies will provide Internet access to the masses. And the couch-potato style of television will probably always be with us. But it won't be business as usual for the media masters. It's entirely possible that beginning novelists, musicians and even film makers will choose to distribute through the Web. And it's almost inevitable that one day soon, a John Grisham, an R.E.M. or a Roseanne will grasp the advantages of ditching the media company and selling directly to the consumer. A year ago, people were buzzing about the proposed (and eventually aborted) marriage of Bell Atlantic and T.C.I. Now people are talking about Disney and Cap Cities, CBS and Westinghouse, and Ted Turner and some other television network. But if the World Wide Web shatters the current paradigm of distribution, the channel capabilities of cable systems and even networks will be severely devalued. Anyone will be able to set up a new channel or storefront on the virtual highway, for free, asking permission of no one and accepting income directly over the wire. This is why John Perry Barlow, co-founder of the Electronic Frontier Foundation, calls the current vave of media realliances "the rearrangement of deck chairs on the Titanic." The iceberg, of course, is the Internet. ---------- Steven Levy is a columnist for Newsweek. His last article for the New York Times Magazine was "The Unabomber and David Gelernter."

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