EU tries to unblock internet impasse

The United States and Europe clashed on Thursday in one of their sharpest public disagreements in months, after European Union negotiators proposed stripping the Americans of their effective control of the internet.

According to a New York Times report (30 September) of a story in the International Herald Tribune, the European decision to back the rest of the world in demanding the creation of a new international body to govern the internet clearly caught the Americans off balance and left them largely isolated at talks designed to come up with a new way of regulating the digital traffic of the 21st century.

The Tribune's stopry said that a US Governmment opfficial said that the EU's proposal seemed to represent an historic shift in the regulatory approach to the internet from one that is based on private sector leadership to a government, top-down control of the internet.

The NYT says that the Tribune story said that delegates meeting in Geneva for the past two weeks had been hoping to reach consensus for a draft document by Friday after two years of debate. The talks on international digital issues, called the World Summit on the Information Society and organised by the United Nations, were scheduled to conclude in November at a meeting in Tunisia. Instead, the talks have deadlocked, with the United States fighting a solitary battle against countries that want to see a global body take over supervision of the internet.

According to the newsapaper, the United States lost its only ally late Wednesday when the EU made a surprise proposal to create an intergovernmental body that would set principles for running the internet. Currently, the US Commerce Department approves changes to the internet's "root zone files," which are administered by the Internet Corporation for Assigned Names and Numbers, or Icann, a nonprofit organisation based in California.

The report adds that political unease with the US approach, symbolised by opposition to the war in Iraq, has spilled over into these technical discussions, delegates said.

The EU and developing nations, they added, wanted to send a signal to America that it could not run things alone. Opposition to Washington's continued dominance of the internet was illustrated by a statement released last week by the Brazilian delegation to the talks. "On Internet governance, three words tend to come to mind: lack of legitimacy. In our digital world, only one nation decides for all of us."

The Tribune, as reported in the NYT., says that in its new proposal, the EU said the new body could set guidelines on who gets control of what internet address - the main mechanism for finding information across the global network - and could play a role in helping to set up a system for resolving disputes.

Star TV, Rupert Murdoch's Asian broadcaster, acquired a strategic stake in an Indonesian television network Thursday, securing a place in one of Asia's fastest-growing markets, the two companies said.

The New York Times reports (30 September) that a story in the International Herald Tribune says that Star TV, a satellite and cable operator based in Hong Kong, will buy 20 percent of the national network ANTV, giving it a firmer foothold in Indonesia, Asia's third most populous country. Star TV pay-television services are already available on cable and satellite in Indonesia.

According to the Tribune, the deal is a politically delicate marriage. Advisers to the Star-ANTV transaction were concerned that Mr. Murdoch's high profile could spur public opposition to the deal. Moreover, ANTV is owned by the family of Aburizal Bakrie, Indonesia's chief economy minister, drawing even more scrutiny.

The newspaper says that, in an effort to head off any opposition, ANTV has promised to improve the quality of news broadcasts and secure their independence. It has already hired away one of Indonesia's most respected news directors from a rival network. ANTV executives said that control over programming, particularly news content, would remain in Indonesian hands.

Mr. Bakrie declined to disclose what Star paid, but analysts said it was probably well below US$20 million. He also said the company had been profitable for the last three years, without elaborating.

The newspaper says that Star TV already broadcasts 50 television services in Asia in eight languages, with China and India among the markets. In Indonesia's crowded television market, ANTV is a low-ranked but promising partner. Its share of Indonesia's 180 million viewers has crept up to 5 percent from 2.5 percent in the last three years. The network generally rates as the country's eighth most popular service.

Microsoft plans to release a low-cost version of its Windows software for India in an attempt to check high piracy levels, the legal affairs head of the world's largest independent software maker said.

The company said it will launch more value products at affordable prices in India soon to reduce software piracy levels.

According to Reuters in The New York Times (1 October), the low-cost Windows starter version for India will be available in Hindi and English at 1,000 rupees, which would also help reduce entry-level personal computer prices to 10,000 rupees.

The report said Indian piracy level was around 73 percent, adding that Microsoft's practice echoes that of global publishers, many of whom print lower cost versions of books whose sale is restricted to India or South Asia.

The Associoated Press reports in The New York Times (1 October) that two new internet bans may offer insight into the Chinese government's biggest fears. One bars internet news services from inciting ''illegal'' assemblies, marches and demonstrations; the other prohibits activities on behalf of ''illegal'' civil groups.

According to AP in the NYT report, together, they evince the communist regime's concerns over growing civil unrest -- and particularly technology's role in fostering protests and strikes, says Julien Pain, who heads the Internet Freedom desk at Reporters Without Borders in Paris.

The AP reports that while the government has been successful at blocking specific web sites, Pain said, ''what is more difficult to censor are usually the forums and chat rooms.''

The report says that last week's update to internet regulations issued in 2000 is vague, but human rights activists and scholars on China say the new rules define online news services more broadly. The state-run China Daily even cites SMS text messages, a fast and efficient communications means available to anyone with a mobile phone, as falling under the new umbrella.

According to AP, although the Chinese government encourages internet use for education and business, it keeps a tight watch, blocking material it deems subversive or pornographic. Online dissidents who post items critical of the government, or those expressing opinions in chat rooms, are regularly arrested and charged under vaguely worded state security laws.

Opera is looking to mobilise its existing community of users in order to overtake Firefox as the number two browser on the desktop, according to a redport in The Register (30 September).

The Register says that last week, Opera decided to give away an ad-free version of its browser for the first time. Jon von Tetzchner, chief exec of Opera Software, said that by removing the inclusion of banner ads from the free version of its browser the company had removed the biggest reason users might have for avoiding its software.

According to The Register,the Norwegian software developer claims 2.4 million downloads of the ad-free version of the browser since 20 September, when Opera made the big move.

The Register says that von Tetzchner disputes figures from web analytics firms which put Opera's browser market share down at around 2-3 per cent or lower while Firefox has a market share of around 8.8 per cent. These figures can be misleading because users can change Opera to present itself as Internet Explorer to gain access to sites that fail to follow web standards, says The Register.

Opera's market share stands at around five per cent in many countries such as Norway, Germany, Russia and Japan, according to von Tetzchner, who said the goal of the firm is to reach double digits in as many places of the world as possible. Opera already has between 10-15 million active users, he added.

The Register says that beyond removing ads from its free browser, Opera has a two-part strategy for encouraging surfers to switch their preferred browser software. Firstly, it wants existing users to recommend the software as a faster more secure alternative to friends, something it is trying to encourage through a revamped version of its community sites (MyOpera.com). It also hopes the mobile side of its business will help its push Opera on the desktop.

Come 4 October, IBM will show off a new line of Unix servers centered around the Power5+ upgrade to the Power5 chip, according to various industry reports, says The Register in a 30 September report.

The Register says that, surprisingly, it seems the chip will arrive at speeds somewhere between 1.9GHz and 2.1GHz. That's going to disappoint many customers who had heard the chip would run somewhere between 2GHz and 3GHz - likely around 2.4GHz, claims the publication.

The publication says that a 1.9GHz clock would equal the top speed of Power5 chips that IBM currently includes with some pSeries Unix servers.

The Register reports that IBM's chip refresh follows Sun Microsystems' recent unveiling of the UltraSPARC IV+ at 1.5GHz. Intel will soon follow with its first dual-core version of Itanium code-named Montecito.

Some industry pundits have noted that it's lucky Itanic servers have been such slow sellers, otherwise the Earth could face its biggest global warming threat to date with the Montecito release, comments The Register.

September marked a quiet month on the malware front with virus levels at a yearly low and the long-running NetSky-P worm stuck at the top of virus nuisance charts.

The Register reports (30 September) that virus-laden email volumes dropped for the third consecutive month from 2.01 per cent in August, to 1.75 per cent in September to reach their lowest levels this year, according to email security firm BlackSpider Technologies. BlackSpider blocked over 2.8 million virus contaminated emails during September.

According to the publication, NetSky-P continues to top BlackSpider's virus chart, for the seventh successive month, accounting for 24 per cent of all viruses detected in September. The Register says it's a similar story over at security software firm Sophos where NetSky-P, the worm written by convicted German teenager Sven Jaschan, continues to head up the firm's top ten, 19 months after it was first detected.

The Register says that NetSky-P has risen in prevalence in Sophos's chart for the second consecutive month, up from 14.7 per cent in August to 18.6 per cent in September. There has also been an increase in reports of other old-timers Zafi-D and NetSky-D.

The report says that the average age of the top ten viruses in Sophos's chart is eight months. Variants of the MyTob worm, which was first identified in March 2005, continue to account for around half of all viruses reported in September.

Backers of the Blu-ray Disc (BD) have hit back against "erroneous" claims from Intel and Microsoft that HD DVD is the superior next-generation optical disc format for PCs.

The Register reports (30 September) that the joint Intel/Microsoft statement was said to be "not aligned" with the "vast majority" of computer industry participants, Blu-ray Disc Association (BDA) members Dell and HP said.

"Microsoft and Intel's announcement erroneously indicates that HD-DVD has an advantage in a number of areas," they claimed, pointing to the chip and software giants' statement that HD DVD offers a greater storage capacity than BD, reports The Register.

The report says that, as The Register noted at the time, Intel and MS' claim that HD DVD's 30GB capacity is better than BD's 25GB is nonsense: the two companies conveniently ignored the fact they were talking about dual-layer HD DVD discs and single-layer BDs.

The Register reports that Dell and HP also challenged MS and Intel on their claim that HD DVD is the only format to allow users to make controlled copies of the content stored on the disc: that's part of the AACS copy-protection system, the BDA said, and AACS is also part of the BD spec.

The New York Times reports (1 September) that the proposal, which is one of a range of proposals being submitted both by large communications firms and small start-ups, is in response to a TechConnect program proposed by the city's mayor, Gavin Newsom, this year. Mr. Newsom has positioned the program as a way to offer universal and affordable broadband internet access to the city's residents and businesses.

The newspaper says that in recent months, speculation about Google's plans as an internet service provider has reached a fevered pitch. However, the company said Friday that it did not yet have plans to roll out free nationwide internet services.

Instead, it called its proposal to San Francisco an opportunity to learn about offering a range of location-based services, including advertising.

Google said it expected to compete with a number of providers for the right to offer the new city service.

According to the NYT., the service will take Google into a new technology arena beyond its rapidly growing internet services. The Google proposal calls for deploying a wireless network based on the 802.11b and g standards and then upgrading to the coming 802.11n standard.

The company said its service would be an "open" one and added that it had proposed wholesaling wireless bandwidth to third parties that might be interested in selling premium services.

The New York Times reports (29 September) that the hot topic among mobile phone executives gathered last week in San Francisco for a cellphone trade show was the push to transform handsets into portable music players. By next year, phone makers expect to market several phones that will allow people to store and listen to songs and even download them wirelessly over cellular networks.

The newspaper reports that industry leaders said they were gearing up for a major marketing pitch in 2006 to sell consumers on the idea that music is a must-have phone feature, just like cameras and Web connections.

At the three-day trade show, which ended on Thursday, the potential success of the new iTunes-compatible phone, the Rokr E1, recently introduced by Motorola and Cingular Wireless, was the subject of much speculation, says the NYT.

According to the newspaper, Nokia, the Finnish phone manufacturer, announced this week that it would introduce a line of Xpress Music phones. And Sony Ericsson showed off the Walkman W800 phone, which it began selling in August.

The report said that carriers like Verizon Wireless and the phone makers said they hoped to offer handsets next year that could download songs over the air. (Phones like the Rokr can only download tracks from a personal computer.)

They have ample reason to push the music feature. Competition to acquire and retain mobile customers is brutal, and the carriers are looking for new streams of revenue, like taking a cut for selling songs, says the NYT.

One analyst for a market research firm, said the wireless carriers were hoping to follow the huge success of the Apple iPod music player. Evolving technology has made it less expensive to build music capability into a phone than in the past. Some analysts say the cost of adding music-organising software and more memory will be as little as US$30 a phone.

Equally important to the music phone's success, says the report, is having millions of consumers accustomed to downloading and listening to digital music. Indeed, some phone companies believe a music phone can become a strong competitor to a stand-alone music player like the iPod.

According to the newspaper,this is not the first time carriers have tried to introduce music player phones. Nokia first introduced a phone with music software in 2000, and then another such phone in 2003, said Ilkka Raiskinen, senior vice president of the company's entertainment products unit.

Samsung Electronics has said that it would spend US$33 billion to build nine new chip lines in South Korea by 2012, creating 14,000 jobs and going against a tide of cutbacks at its Japanese rivals, Sony and Sanyo.

The New York Times reports (30 September) that Samsung's latest investment plan followed a pattern that has made the company the No. 1 producer of computer memory chips: investing billions of dollars annually ahead of its rivals so it can develop and make advanced chips earlier and cheaper.

According to the newspaqper, analysts said Samsung's expansion plan reflected healthy growth prospects for the chip industry, but warned that cutthroat competition would get worse as rivals tried to match Samsung in investments, driving down chip prices.

The report says that by the time Samsung's investment is completed by 2012, the company said, its annual sales of semiconductors will have almost quadrupled to US$61 billion, from US$16 billion last year. That would place Samsung ahead of Intel as the leading chip producer in terms of revenue, some analysts said, noting that Samsung's chip sales have grown twice as fast as Intel's in recent years.

The newspaper says that with its dominant position in memory chips, which are used mainly in personal computers, analysts say Samsung will most likely focus on nonmemory semiconductors, like customized chips for cellphones, digital cameras and game devices.

The report adds that Samsung's aggressive expansion plan is in sharp contrast to the trajectory at Sony and Sanyo. Sony, the struggling maker of the Walkman portable music player and PlayStation game console, said last week that it would cut 10,000 jobs, about 6.5 percent of its work force, and close factories. Sony also said it expected to post a US$90 million loss in its current financial year, its first annual loss in more than a decade.

Sanyo said in July that it would shed 14,000 jobs, about 15 percent of its global work force, under a three-year reorganising plan. On Wednesday, it announced a loss estimate of US$1.24 billion for this year and said it would expedite the job cuts, exit the DVD player business and close some plants.

The newspaper says that, in contrast, Samsung reported an operating profit of 1.65 trillion won (US$1.59 billion) for the second quarter, about two-thirds of that coming from sales of memory chips. The company also makes cellphones and flat-panel displays.

E*Trade Financial said yesterday that it would acquire BrownCo, a division of J. P. Morgan Chase, for US$1.6 billion in cash, to gain access to the firm's affluent and active trading customers.

The New York Times reports (30 September) that the online brokerage business, a fertile field for new ventures during the 1990's stock market boom, has been rapidly shrinking and quickly maturing into the domain of a few large players. This most recent deal follows E*Trade's purchase of Harrisdirect and Ameritrade's merger with TD Waterhouse this year.

In BrownCo, E*Trade said, it would be buying a niche operator with 200,000 accounts whose owners place 28,000 trades a day and, more important, have average balances more than four times as large as E*Trade's customers.

The newspaper reports that BrownCo's average balance is US$146,247, compared with US$31,663 for E*Trade, which will have four million accounts after the Harrisdirect acquisition is completed in October, E*Trade said.

The European Union's Competition Commissioner Neelie Kroes will meet Microsoft's Chief Executive Steve Ballmer next Wednesday to discuss competition issues, a Commission spokesman said on Friday.

Reuters reports in The New York Times (30 September) that the EU and Microsoft have locked horns in court over the company's Windows software.

EU competition spokesman Jonathan Todd said Kroes and Ballmer would discuss ``general competition issues'' when they meet for breakfast on 5 October.

The Reuters report says that Ballmer is also due to attend the launch of a new periodical published by a European thinktank on his visit to Brussels.

The commission said earlier this month it had received informal fresh complaints about the US software giant, potentially paving the way for a new competition case against Microsoft. The company was ordered by Brussels last year to change the way it sells software in Europe and paid a fine. Microsoft has appealed against the decision.

Reuters says that earlier this month Microsoft filed a new lawsuit against the European Commission, a latest move in its long-running battle against the antitrust sanctions.