Yes, it is.  I just checked the news source, and it's a fictitious news rag.  
(Although it scared the crap outa me until I finally saw the disclaimer.)

----------
From:   Jim Hatridge[SMTP:[EMAIL PROTECTED]]
Sent:   Wednesday, September 23, 1998 8:48 AM
To:     [EMAIL PROTECTED]; [EMAIL PROTECTED]
Subject:        Is this a JOKE? or what? 


FBI Asks for Legislation to Monitor Entire Internet. Microsoft Agrees to 
Modify Operating Systems to Comply, In Exchange for an End to All Litigation.
  
NEW YORK /DenounceNewswire/ -- 18 July 1998 -- The Federal Bureau of 
Investigation (FBI) has asked a Senate committee to add language to a Justice
Department appropriations bill to require a number of high-tech companies,
including Microsoft Corporation, to provide law enforcement personnel with
real-time access to the data that flows into and out of personal computers
connected to the Internet. Microsoft announced that it would fully support the
bill, including the FBI provisions, in exchange for a permanent end to the
government's antitrust litigation against the company as well as the ability
for Microsoft to also have access to the Internet data. The government agreed.
"It's a good deal for America," says Attorney General Janet Reno, "and we have
Microsoft's promise that they will use the data only to improve their products,
which will benefit every consumer." 

The bill, which would go into effect next Friday, would enable law enforcement
(and Microsoft) to essentially "tap at will" any Internet connection in the
United States, if not the world. Bureau experts claim the tapping would slow
down the average user's Internet connection "by only 20 per cent," which they
believe will be "more than acceptable considering the increase in criminal
prosecution which will result from the tapping." 

Microsoft explained that it would modify every copy of Windows 95, NT, and
Windows 98, automatically without customer intervention, such that every byte
of data sent or received by the computer would be copied and sent to the FBI's
central clearinghouse for inspection followed by approval or prosecution.

"We've been anticipating this move for years, so the mechanisms in our 
operating systems have been in place since 1994 for this eventuality," said
Bill Gates of Microsoft. 

Internet content-blocking companies, including the makers of NetNanny,
CyberSitter, and SurfWatch, expressed outrage at the bill. "If the government
does the censorship then consumers won't need our software, and that puts us
out of business," said a NetNanny spokester. 

Indu Strypundit, an industry pundit occasionally asked to provide a pithy quip
of commentary at generally this point in a Denounce story, was unavailable for
comment, as he was packing and moving to, sources say, an undisclosed island
in the Pacific. 

Asked if this bill would, in effect, "kill" what's left of the beleaguered
Bill of Rights, FBI Director Louis Freeh said, "What's that?" upon which it
was explained to him what the Bill of Rights was, to which he replied, "Oh,
well, that explains it, that document is over 200 years old, now tell me, how
is that relevant in today's society?" upon which it was explained to him why
the document was still relevant but he wasn't convinced, said he was busy, and
took no further questions. 



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