iPhone 5 hits China, as Apple market share slips

SHANGHAI (Reuters) - The China release of its iPhone 5 on Friday should win Apple Inc some respite from a recent slide in its share of what is likely already the world's biggest smartphone market, but its longer-term hopes may depend on new technology being tested by China's top telecoms carrier.

Cupertino, California-based Apple has been in talks about a tie-up with China Mobile for four years. A deal with China's biggest carrier is seen as crucial to improve Apple's distribution in a market of 290 million users - which is forecast to double this year.

China is Apple's second-largest and fastest-growing market - it brings in around 15 percent of total revenue - but the company's failure to strike a deal with China Mobile means it is missing out on a large number of phone users. As the China pie grows, Apple's sales increase, but without China Mobile, it's losing ground at a faster rate compared to other brands.

"In absolute terms, this (iPhone 5) launch will certainly result in strong sales for Apple in China. However, in relative terms, I don't believe it will move the needle enough in market share," said Shiv Putcha, a Mumbai-based analyst at Ovum, a global technology consultant.

On Friday, just one person was waiting outside the Apple store in Shanghai's financial district when its doors opened at 9 a.m., a contrast to the launch of the iPhone 4 earlier this year when rowdy crowds pelted a Beijing store with eggs.

China Mobile and Apple initially said they were separated only by a technical issue - as the Chinese carrier runs a different 3G network from most of the world - but that has evolved into a broader and more complex issue of revenue-sharing.

"China Mobile and Apple still have to solve many issues, such as the business model, articles of cooperation and revenue division, but I believe we will reach an agreement eventually," China Mobile CEO Li Yue was reported by Chinese media as saying in Guangzhou last week.

Apple China declined to comment. China Mobile said it had no update to the Apple discussions.

STRONG PRE-ORDERS

Apple's ranking in China's smartphone market slipped to sixth in July-September, according to research firm IDC, but investors, primed to look to China product launches for an uptick in Apple's quarterly sales, have good headline numbers to digest - more than 300,000 iPhones pre-ordered on one carrier alone. But it's the lack of a deal with the No.1 carrier that prevents those numbers being stronger.

The iPhone is currently sold through Apple's seven stores, resellers and through China Unicom and China Telecom - which together have fewer than half the mobile subscribers of bigger rival China Mobile.

"Apple's market share declined because of the transition between the iPhone 4S and 5. Their market share will recover (with the iPhone 5), but if you don't have China Mobile, the significant market share gains will be very difficult," said Huang Leping, an analyst at Nomura in Hong Kong.

TD-LTE: STILL DISTANT

Cutting a deal with a Chinese state-owned carrier may be less optimal than the deals Apple is used to in other markets, and analysts note that China Mobile wouldn't necessarily open the flood gates for Apple.

Ovum's Putcha believes Apple and China Mobile will eventually strike a deal - though this would be for an iPhone running on China Mobile's next-generation network rather than its current 3G network.

Of China Mobile's 704 million subscribers, only 79 million are on its 3G network, and Apple has been reluctant to sign up to China Mobile's under-utilized, homegrown TD-SCDMA technology. "Apple likely doesn't see the return-on-investment in extending themselves for TD-SCDMA," Putcha said.

China Mobile is currently trialing its next-generation network, TD-LTE, which could be of more interest to Apple, but full-scale commercial use - and an iPhone tie-up - could still be years away.

ANDROID THREAT

Meanwhile, rivals are circling, eating away at Apple's smartphone market share. Samsung Electronics, Lenovo Group and little-known Chinese brand Coolpad held the top three slots in the third quarter, according to IDC.

All three have relationships with China Mobile and offer smartphone models at different price points. Apple competes exclusively at the high-end, and even there, rivals are rolling out models with China Mobile. Last week, Nokia said it planned to release its latest Lumia smartphone with China's top carrier, which is also expected to launch Research in Motion's new Blackberry 10, analysts predict.

"The threat will still come more from the Android camp where they have many vendors already working with China Mobile and offering high-end phones," said TZ Wong, a Singapore-based IDC analyst.

While these smartphones don't generate the buzz of a new iPhone, Chinese buyers are not known for their brand loyalty, and this could siphon away users considering an Apple upgrade.

"I've used a Blackberry, Android and iOS and, personally, I want to try the Windows 8," said Andy Huang, a 37-year-old fund manager, who owns most iPad models, an iPhone 4 and a 4S. "I think the Windows 8 is very innovative."

With a China Mobile deal looking some way off, Apple could always boost market share by offering cheaper models - the basic iPhone 5 will cost 5,288 yuan ($850) without a contract - though this appears an unlikely route for a high-end brand.

"If they want to expand market share, probably the only way to do it here dramatically would be to put out a lower cost phone," said Michael Clendenin, managing director at RedTech Advisors. "It's really uncertain if they'd decide to go that route ... Apple's a mystery in that regard."

(Additional reporting by the Shanghai Newsroom, Jane Lee and Anita Li; Editing by Kazunori Takada and Ian Geoghegan)

Read More..

Bengals beat Eagles 34-13

PHILADELPHIA (AP) — So long, Eagles.

Up ahead for the Cincinnati Bengals, the only Pennsylvania team that truly matters.

Andy Dalton threw a touchdown pass and ran for another score, an opportunistic defense forced five turnovers and Cincinnati beat the Philadelphia Eagles 34-13 on Thursday night.

The Bengals (8-6) took a half-game lead over the Steelers for the last playoff spot in the AFC. But their game at Pittsburgh next week is far more important in the standings than this one.

The Bengals would clinch their second straight playoff berth with a win over the Steelers if Pittsburgh loses at Dallas this Sunday. A loss to the Steelers, though, likely would ruin Cincinnati's chances because it would lose the tiebreaker.

"We control what we can control," coach Marvin Lewis said. "We want to win in December, so we have a chance to win in January."

Can they beat the Steelers? Probably not if they play like they did for most of their 60 minutes at Lincoln Financial Field. They committed 10 of their 11 penalties through the first three quarters. Dalton was sacked six times by one of the worst lines in the league.

Dalton was an unimpressive 13 of 27 for 127 yards and a touchdown. No receiver had more than 63 yards.

Funny how a playoff push can make those stats meaningless as long as the Bengals win.

"We're playing for something now," Dalton said. "That's great and that's what makes it fun this time of year."

The Eagles' season was lost a long time ago. They fell to 4-10, losing double-digit games for the first time since 2005, the year after losing the Super Bowl to New England.

There were plenty of empty seats at the Linc, where fans are hoping this is Andy Reid's final season as coach. Reid led the Eagles to nine playoff appearances, six division titles and five NFC championship games in his first 13 years. But the Eagles will miss the playoffs for the second straight year and owner Jeffrey Lurie already said 8-8 would be "unacceptable."

"I thought the effort was there and guys played hard," Reid said, "but you just can't have those turnovers. That's a problem."

An interception by Leon Hall set up Dalton's go-ahead 11-yard TD run in the third quarter. Then Wallace Gilberry picked up Bryce Brown's fumble and ran it back 25 yards for another score and an 11-point lead.

BenJarvus Green-Ellis ran for 106 yards, including a 1-yard TD run in the first quarter for Cincinnati. Dalton tossed a 5-yard scoring pass to A.J. Green in the fourth to cap a 24-point outburst in a span of 3:23.

"Our goal is to win games. Period. We did that. Doesn't matter how we got there," cornerback Adam Jones said. "We can be better. We can be higher. And that's what we take from this game. Listen, we all know we need to play better as a defense next week. Because we have ourselves a big one next week."

The Eagles committed three turnovers on three straight possessions at one point and then fumbled a kickoff when defensive lineman Cedric Thornton let the ball fall through his hands on a short kick.

After beating Tampa Bay on a last-second TD last week to snap an eight-game losing streak, the Eagles tried to make it two in a row. Turnovers got in their way again. They've committed an NFL-high 34 and forced just 12 all season.

The Eagles snapped a drought of 22 quarters without a turnover by recovering two fumbles in the second. Both led to field goals by Alex Henery, helping Philadelphia to a 13-10 halftime lead.

Rookie Nick Foles made his fifth straight start for Michael Vick, who just returned to practice this week after sustaining a concussion on Nov. 11. Foles threw for 182 yards, one TD and one interception. Reid said Foles is still the starter.

Down 13-10, the Bengals started their rally with a turnover.

Hall intercepted Foles' deep pass and returned it 44 yards to the Eagles 40. Foles underthrew Jeremy Maclin, who was a few steps behind Hall.

"I feel really good anytime I have one of our receivers vertical on a guy," Foles said. "I just have to get the ball out there and make a better throw."

Green made an acrobatic catch for an 11-yard gain on third-and-9 a few plays before Dalton ran for the score to put the Bengals up 17-13.

Foles, who threw for 381 yards to lead that comeback against the Bucs, hit Riley Cooper on an 11-yard TD pass to cut it to 10-7. Foles connected with Maclin on a 46-yard pass during the drive.

The Eagles then forced their first turnover since Nov. 5 against New Orleans. Brandon Graham sacked Dalton, the ball popped loose and Trent Cole recovered at the Bengals 29.

Just two plays in, Maclin fumbled after a 6-yard catch. Carlos Dunlap recovered and the Bengals started at the Eagles 44. Green-Ellis ran 29 yards on first down and scored a few plays later for a 7-0 lead.

It got uglier for Philadelphia on the next possession. Mat McBriar punted into his own blocker, Daniel Herron picked it up and ran 3 yards to the Eagles 11. But Graham sacked Dalton and Cincinnati settled for Brown's 24-yard field goal that made it 10-0.

The Bengals would get their act together and put a playoff berth in sight.

"We're in control right now of where we end up," Dalton said. "And that's how you want it to be. We have two tough games ahead of us. But I know we will be ready to go."

NOTES: Green-Ellis surpassed 1,000 yards rushing for second time in his career. He did it with New England in 2010. ... The Eagles had a season-high six sacks. They have eight in two games since defensive line coach Jim Washburn was fired, and had 20 in first 12 games. ... Bowles confirmed he interviewed for the coaching vacancy at Temple, his alma mater. ... Eagles RB LeSean McCoy and TE Brent Celek also sat out. Both players also are recovering from concussions. McCoy missed his fourth straight game, but returned to practice this week with Vick.

___

Follow Dan Gelston on Twitter: https://twitter.com/APGelston

___

Online: http://pro32.ap.org/poll and http://twitter.com/AP_NFL

Read More..

Fewer health care options for illegal immigrants

ALAMO, Texas (AP) — For years, Sonia Limas would drag her daughters to the emergency room whenever they fell sick. As an illegal immigrant, she had no health insurance, and the only place she knew to seek treatment was the hospital — the most expensive setting for those covering the cost.

The family's options improved somewhat a decade ago with the expansion of community health clinics, which offered free or low-cost care with help from the federal government. But President Barack Obama's health care overhaul threatens to roll back some of those services if clinics and hospitals are overwhelmed with newly insured patients and can't afford to care for as many poor families.

To be clear, Obama's law was never intended to help Limas and an estimated 11 million illegal immigrants like her. Instead, it envisions that 32 million uninsured Americans will get access to coverage by 2019. Because that should mean fewer uninsured patients showing up at hospitals, the Obama program slashed the federal reimbursement for uncompensated care.

But in states with large illegal immigrant populations, the math may not work, especially if lawmakers don't expand Medicaid, the joint state-federal health program for the poor and disabled.

When the reform has been fully implemented, illegal immigrants will make up the nation's second-largest population of uninsured, or about 25 percent. The only larger group will be people who qualify for insurance but fail to enroll, according to a 2012 study by the Washington-based Urban Institute.

And since about two-thirds of illegal immigrants live in just eight states, those areas will have a disproportionate share of the uninsured to care for.

In communities "where the number of undocumented immigrants is greatest, the strain has reached the breaking point," Rich Umbdenstock, president of the American Hospital Association, wrote last year in a letter to Obama, asking him to keep in mind the uncompensated care hospitals gave to that group. "In response, many hospitals have had to curtail services, delay implementing services, or close beds."

The federal government has offered to expand Medicaid, but states must decide whether to take the deal. And in some of those eight states — including Texas, Florida and New Jersey — hospitals are scrambling to determine whether they will still have enough money to treat the remaining uninsured.

Without a Medicaid expansion, the influx of new patients and the looming cuts in federal funding could inflict "a double whammy" in Texas, said David Lopez, CEO of the Harris Health System in Houston, which spends 10 to 15 percent of its $1.2 billion annual budget to care for illegal immigrants.

Realistically, taxpayers are already paying for some of the treatment provided to illegal immigrants because hospitals are required by law to stabilize and treat any patients that arrive in an emergency room, regardless of their ability to pay. The money to cover the costs typically comes from federal, state and local taxes.

A solid accounting of money spent treating illegal immigrants is elusive because most hospitals do not ask for immigration status. But some states have tried.

California, which is home to the nation's largest population of illegal immigrants, spent an estimated $1.2 billion last year through Medicaid to care for 822,500 illegal immigrants.

The New Jersey Hospital Association in 2010 estimated that it cost between $600 million and $650 million annually to treat 550,000 illegal immigrants.

And in Texas, a 2010 analysis by the Health and Human Services Commission found that the agency had provided $96 million in benefits to illegal immigrants, up from $81 million two years earlier. The state's public hospital districts spent an additional $717 million in uncompensated care to treat that population.

If large states such as Florida and Texas make good on their intention to forgo federal money to expand Medicaid, the decision "basically eviscerates" the effects of the health care overhaul in those areas because of "who lives there and what they're eligible for," said Lisa Clemans-Cope, a senior researcher at the Urban Institute.

Seeking to curb expenses, hospitals might change what qualifies as an emergency or cap the number of uninsured patients they treat. And although it's believed states with the most illegal immigrants will face a smaller cut, they will still lose money.

The potential impacts of reform are a hot topic at MD Anderson Cancer Center in Houston. In addition to offering its own charity care, some MD Anderson oncologists volunteer at a county-funded clinic at Lyndon B. Johnson General Hospital that largely treats the uninsured.

"In a sense we've been in the worst-case scenario in Texas for a long time," said Lewis Foxhall, MD Anderson's vice president of health policy in Houston. "The large number of uninsured and the large low-income population creates a very difficult problem for us."

Community clinics are a key part of the reform plan and were supposed to take up some of the slack for hospitals. Clinics received $11 billion in new funding over five years so they could expand to help care for a swell of newly insured who might otherwise overwhelm doctors' offices. But in the first year, $600 million was cut from the centers' usual allocation, leaving many to use the money to fill gaps rather than expand.

There is concern that clinics could themselves be inundated with newly insured patients, forcing many illegal immigrants back to emergency rooms.

Limas, 44, moved to the border town of Alamo 13 years ago with her husband and three daughters. Now single, she supports the family by teaching a citizenship class in Spanish at the local community center and selling cookies and cakes she whips up in her trailer. Soon, she hopes to seek a work permit of her own.

For now, the clinic helps with basic health care needs. If necessary, Limas will return to the emergency room, where the attendants help her fill out paperwork to ensure the government covers the bills she cannot afford.

"They always attended to me," she said, "even though it's slow."

___

Sherman can be followed on Twitter at https://twitter.com/chrisshermanAP .

Plushnick-Masti can be followed on Twitter at https://twitter.com/RamitMastiAP .

Read More..

From 'Sherlock' to 'Star Trek' for Cumberbatch

LONDON (AP) — Benedict Cumberbatch has had a busy 24 hours.

The British actor was nominated for a Golden Globe for "Sherlock" and unveiled the first nine minutes of the new "Star Trek" movie at a special presentation Friday in London.

Cumberbatch's character John Harrison was introduced in the much-anticipated sci-fi sequel, "Star Trek Into Darkness."

Cumberbatch was not allowed to reveal much about the plot, but the 36-year-old did admit that he auditioned for the role of Harrison — who he describes as "a phenomenal one-man weapon of mass destruction" — on an iPhone in his friend's kitchen.

Fans wanting to see the footage can catch it in front of selected IMAX 3D screenings worldwide of "The Hobbit," beginning Friday.

"Star Trek Into Darkness," directed by J.J. Abrams, opens next May.

Read More..

Push for minimum wage hike intensifies

NEW YORK — Before the recession, Amie Crawford was an interior designer, earning $50,000 a year patterning baths and cabinets for architectural firms.

Now, she's a "team member" at the Protein Bar in Chicago, where she makes $8.50 an hour, slightly more than minimum wage. It was the only job she could find after months of looking. Crawford, now 56, says she needed to take the job to stop the hemorrhaging of her retirement accounts.

In her spare time, Crawford works with a Chicago group called Action Now, which is staging protests to raise the minimum wage in a state where it hasn't been raised since 2006.

"Thousands of workers in Chicago, let alone in the rest of the country, deserve to have a livable wage, and I truly believe that when someone is given a livable wage, that is going to bolster growth in communities," she said.

If it seems that workers such as Crawford are more prevalent these days, protesting outside stores including Wal-Mart, McDonald's and Wendy's to call for higher wages, it may be because there are more workers in these jobs than there were a few years ago.

Quiz: How much do you know about the 'fiscal cliff'?

Of the 1.9 million jobs created during the recovery, 43% of them have been in the low-wage industries of retail, food services and employment services, whose workforces include temporary employees who often work part time and without benefits or health insurance, according to a study by Annette Bernhardt, policy co-director of the National Employment Law Project in New York.

At the same time, many workers such as Crawford who have been displaced from their jobs are experiencing significant earnings losses after getting a new job. About one-third of the 3 million workers displaced from their jobs from 2009 to 2011 and then reemployed said their earnings had dropped 20% or more, according to the Bureau of Labor Statistics.

"What these protests are signaling are that working families are at breaking point after three decades of rising inequality and stagnant wages," Bernhardt said.

The rise of low-paying jobs in the recovery, experts said, has cut the spending power of workers who once worked in middle-class occupations. Construction workers who made $30 an hour, for example, during the housing boom may now find themselves working on a temporary basis.

"You see workers trading down their living standards," said Joseph Brusuelas, a senior economist for Bloomberg who studies the U.S. economy.

Now, Brusuelas said, there's an oversupply of workers and they're willing to take any job in a sluggish economy, even if they're overqualified. That includes temporary jobs without benefits, and minimum wage positions such as the one Crawford took.

Although the 2012 election might have brought the idea of income inequality to the forefront of voters' minds, efforts to increase wages for these workers are sputtering in an era of austerity when businesses say they are barely hiring, much less paying workers more.

The New Jersey state legislature handed Gov. Chris Christie a bill to raise the state's minimum wage to $8.50 an hour from the federal minimum of $7.25 this month, but he hasn't signed it and has signaled he might not. An earlier effort in New Jersey to tie the minimum wage to the consumer price index was vetoed by the governor.

Democratic lawmakers in Illinois are also trying to push a bill that would increase the minimum wage — an earlier effort this year failed. The Legislature last voted to raise its minimum wage in 2006, before the recession, and the governor agreed.

"A higher minimum wage means a person has to pay more for each worker," said Ted Dabrowski, vice president of policy at the Illinois Policy Institute, which opposes raising the minimum wage. "Companies have a few choices — increase prices, reduce the number of people they hire, cut employee hours or reduce benefits. When employees become too expensive, they have no choice but to reduce the number of workers."

The Center for Economic and Policy Research in Washington, D.C., however, says there is little indication from economic research that increases in the minimum wage lead to lower employment, and, because higher wages mean workers have more money to spend, employment can actually increase.

A bill to raise the federal minimum wage was introduced to the U.S. Senate by Tom Harkin (D-Iowa) in July and referred to committee, where it has sat ever since.

"Business lobbyists are aware of the campaign and are aggressively working to stop it," said Madeline Talbott, the former lead organizer of Chicago's Action Now. "We've had a hard time getting our legislature to approve it."

But Talbott and other advocates say that the protests that have spread throughout Illinois and the country in recent weeks might force the issue to its head.

"You saw it happening 18 months ago when Occupy started — workers are now realizing that they have rights too in the workplace," said Camille Rivera, executive director of United NY, one of the groups working to raise the minimum wage in New York. "It's a good time for us to be fighting these issues, when companies are making millions of dollars in profits."

The protests are bringing out people who might not usually participate, including Marcus Rose, 33. Rose, who has worked the grill at a Wendy's for 21/2 months, was marching outside that Wendy's in Brooklyn recently on a day of protests, responding as organizers shouted lines such as "Wendy's, Wendy's, can't you see, $7.25 is not for me."

"If you don't stand up for nothing, you can't fall for anything," he said.

Talbott, the Action Now organizer, says that people such as Rose may make a difference in whether lawmakers at the state and national level will listen to the protests. The Obama victory energized the working class to believe that they could fight against big-money interests and win, she said.

"It comes down to the traditional situation — whether the power is in the hands of organized money or of organized people," she said. "The organized money side tends to win, but it doesn't have to win. The more people you are, the more chance you have against money."

alana.semuels@latimes.com

ricardo.lopez2@latimes.com

Semuels reported from New York and Lopez from Los Angeles

Read More..

Man dies after falling from Mag Mile hotel while taking photos

Firefighters grab equipment from inside a Collapse Rescue truck outside the Intercontinental Hotel early Dec. 13, 2012. (Peter Nickeas / Chicago Tribune) (Peter Nickeas / Chicago Tribune / December 13, 2012)

By Peter Nickeas




Tribune reporter

7:47 a.m. CST, December 13, 2012

A man trying to take a photo from the top of the Intercontinental Hotel on Michigan Avenue died after falling 22 feet down a smokestack, authorities said.

It took rescue crews four hours to remove the 23-year-old man from Minnesota, at one point cutting through a wall and wedging boards in the chute to keep him from falling farther down.

Covered in a white sheet, he was wheeled into an ambulance inside the hotel's basement garage around 5:05 a.m. and taken to Northwestern Memorial Hospital, where he was pronounced dead, according to the Fire Department and the Cook County medical examiner's office.

Rescue crews responded to the hotel at 505 N. Michigan Ave. around 1:10 a.m. after someone called and reported that a person threatening to jump from the roof. Firefighters later learned the man fell down the smokestack, according to Fire Department spokeswoman Meg Ahlheim.

A "confined space rescue" was called, bringing 30 companies and about 125 firefighters and paramedics to the scene.

They discovered that the man had fallen 22 feet down a 6-foot wide smokestack and was wedged where the chute angled before dropping 42 floors, Ahlheim said. Crews cut into the wall and used wood boards to block the man from falling any farther, she said.

"We had to send members from the top down on ropes to assess his condition. The whole time we’re monitoring the situation for toxic gases," said Special Operations Chief Michael Fox. "We found the best way to get out him was to go about two floors below, and we had to cut the duct work for the chimney, which was made out of steel. And eventually we ended up sliding the victim down into the hole and removing him from the building."

The man was able to communicate with his girlfriend, either with phone calls or text messages, Ahlheim said, but firefighters lost contact with him around 3:15 a.m.

A representative of the hotel was not available for comment.

pnickeas@tribune.com
Twitter: @peternickeas

Read More..

Selling flak jackets in the cyberwars

SAN FRANCISCO (Reuters) - When the Israeli army and Hamas trade virtual blows in cyberspace, or when hacker groups like Anonymous rise from the digital ether, or when WikiLeaks dumps a trove of classified documents, some see a lawless Internet.

But Matthew Prince, chief executive at CloudFlare, a little-known Internet start-up that serves some of the Web's most controversial characters, sees a business opportunity.

Founded in 2010, CloudFlare markets itself as an Internet intermediary that shields websites from distributed denial-of-service, or DDoS, attacks, the crude but effective weapon that hackers use to bludgeon websites until they go dark. The 40-person company claims to route up to 5 percent of all Internet traffic through its global network.

Prince calls his company the "Switzerland" of cyberspace - assiduously neutral and open to all comers. But just as companies like Twitter, YouTube and Facebook have faced profound questions about the balance between free speech and openness on the Internet and national security and law enforcement concerns, CloudFlare's business has posed another thorny question: what kinds of services, if any, should an American company be allowed to offer designated terrorists and cyber criminals?

CloudFlare's unusual position at the heart of this debate came to the fore last month, when the Israel Defense Forces sought help from CloudFlare after its website was struck by attackers based in Gaza. The IDF was turning to the same company that provides those services to Hamas and the al-Quds Brigades, according to publicly searchable domain information. Both Hamas and al-Quds, the military wing of the Palestinian Islamic Jihad, are designated by the United States as terrorist groups.

Under the USA Patriot Act, U.S. firms are forbidden from providing "material support" to groups deemed foreign terrorist organizations. But what constitutes material support - like many other facets of the law itself - has been subject to intense debate.

CloudFlare's dealings have attracted heated criticism in the blogosphere from both Israelis and Palestinians, but Prince defended his company as a champion of free speech.

"Both sides have an absolute right to tell their story," said Prince, a 38-year old former lawyer. "We're not providing material support for anybody. We're not sending money, or helping people arm themselves."

Prince noted that his company only provides defensive capabilities that enable websites to stay online.

"We can't be sitting in a role where we decide what is good or what is bad based on our own personal biases," he said. "That's a huge slippery slope."

Many U.S. agencies are customers, but so is WikiLeaks, the whistle-blowing organization. CloudFlare has consulted for many Wall Street institutions, yet also protects Anonymous, the "hacktivist" group associated with the Occupy movement.

Prince's stance could be tested at a time when some lawmakers in the United States and Europe, armed with evidence that militant groups rely on the Web for critical operations and recruitment purposes, have pressured Internet companies to censor content or cut off customers.

Last month, conservative political lobbies, as well as seven lawmakers led by Ted Poe, a Republican from Texas, urged the FBI to shut down the Hamas Twitter account. The account remains active; Twitter declined to comment.

MATERIAL SUPPORT

Although it has never prosecuted an Internet company under the Patriot Act, the government's use of the material support argument has steadily risen since 2006. Since September 11, 2001, more than 260 cases have been charged under the provision, according to Fordham Law School's Terrorism Trends database.

Catherine Lotrionte, the director of Georgetown University's Institute for Law, Science and Global Security and a former Central Intelligence Agency lawyer, argued that Internet companies should be more closely regulated.

"Material support includes web services," Lotrionte said. "Denying them services makes it more costly for the terrorists. You're cornering them."

But others have warned that an aggressive government approach would have a chilling effect on free speech.

"We're resurrecting the kind of broad-brush approaches we used in the McCarthy era," said David Cole, who represented the Humanitarian Law Project, a non-profit organization that was charged by the Justice Department for teaching law to the Kurdistan Workers' Party, which is designated by the United States as a terrorist group. The group took its case to the Supreme Court but lost in 2010.

The material support law is vague and ill-crafted, to the point where basic telecom providers, for instance, could be found guilty by association if a terrorist logs onto the Web to plot an attack, Cole said.

In that case, he asked, "Do we really think that AT&T or Google should be held accountable?"

CloudFlare said it has not been contacted about its services by the U.S. government. Spokespeople for Hamas and the Palestinian Islamic Jihad, told Reuters they contracted a cyber-security company in Gaza that out-sources work to foreign companies, but declined to comment further. The IDF confirmed it had hired CloudFlare, but declined to discuss "internal security" matters.

CloudFlare offers many of its services for free, but the company says websites seeking advanced protection and features can see their bill rise to more than $3,000 a month. Prince declined to discuss the business arrangements with specific customers.

While not yet profitable, CloudFlare has more than doubled its revenue in the past four months, according to Prince, and is picking up 3,000 new customers a month. The company has raked in more than $22 million from venture capital firms including New Enterprise Associates, Venrock and Pelion Venture Partners.

Prince, a Midwestern native with mussed brown hair who holds a law degree from the University of Chicago, said he has a track record of working on the right side of the law.

A decade ago, Prince provided free legal aid to Spamhaus, an international group that tracked email spammers and identity thieves. He went on to create Project Honey Pot, an open source spam-tracking endeavor that turned over findings to police.

Prince's latest company, CloudFlare, has been hailed by groups such as the Committee to Protect Journalists for protecting speech. Another client, the World Economic Forum, named CloudFlare among its 2012 "technology pioneers" for its work. But it also owes its profile to its most controversial customers.

CloudFlare has hosted 4Chan, the online messaging community that spawned Anonymous. LulzSec, the hacker group best known for targeting Sony Corp, is another customer. And since last May, the company has propped up WikiLeaks after a vigilante hacker group crashed the document repository.

Last year, members of the hacker collective UgNazi, whose exploits include pilfering user account information from eBay and crashing the CIA.gov website, broke into Prince's cell phone and email accounts.

"It was a personal affront," Prince said. "But we never kicked them off either."

Prince said CloudFlare would comply with a valid court order to remove a customer, but that the Federal Bureau of Investigation has never requested a takedown. The company has agreed to turn over information to authorities on "exceedingly rare" occasions, he acknowledged, declining to elaborate.

"Any company that doesn't do that won't be in business long," Prince said. But in an email, he added: "We have a deep and abiding respect for our users' privacy, disclose to our users whenever possible if we are ordered to turn over information and would fight an order that we believed was not proper."

Juliannne Sohn, an FBI spokeswoman, declined to comment.

Michael Sussmann, a former Justice Department lawyer who prosecuted computer crimes, said U.S. law enforcement agencies may in fact prefer that the Web's most wanted are parked behind CloudFlare rather than a foreign service over which they have no jurisdiction.

Federal investigators "want to gather information from as many sources as they can, and they're happy to get it," Sussmann said.

In an era of rampant cyber warfare, Prince acknowledged he is something of a war profiteer, but with a wrinkle.

"We're not selling bullets," he said. "We're selling flak jackets."

(Reporting By Gerry Shih in San Francisco and Nidal al-Mughrabi in Gaza; editing by Jonathan Weber and Claudia Parsons)

Read More..

Watson returns as Ryder Cup captain

NEW YORK (AP) — The Americans are bringing back Tom Watson as their Ryder Cup captain with hopes of ending two decades of losing in Europe.

The PGA of America announced Watson's selection Thursday morning on the "Today." Watson, an eight-time major champion and one of the most respected figures in golf, will be 65 when the 2014 Ryder Cup is played at Gleneagles in Scotland. That will make him the oldest captain in Ryder Cup history.

He also is the first repeat captain for the U.S. team since Jack Nicklaus in 1987. Watson also was captain in 1993 at The Belfry, the last time the Americans won the Ryder Cup away from home.

Watson is beloved in Scotland, where he won four of his five British Open titles, the most of any American.

Read More..

Late BBC star Savile suspected of 199 crimes: UK police

LONDON (Reuters) – British television star Jimmy Savile is suspected of carrying out an unprecedented number of sex offences including 31 rapes, police said on Wednesday in their most comprehensive review of the scandal.

Revelations about Savile, who died last year, provoked outrage across Britain where he had been a household name since the 1960s.

News of Savile’s crimes threw his main employer the BBC into turmoil, led to resignation of the BBC’s director general just 54 days into his job and provoked awkward questions for his predecessor Mark Thompson, who recently took over as chief executive of the New York Times.

Detectives launched their inquiry 10 weeks ago following reports in a TV documentary that Savile had abused young girls on BBC premises and at hospitals where he did charity work.

Since then, 450 people had come forward with allegations about Savile, mostly dealing with sexual abuse, said police.

Savile was now a suspect in 199 crimes, the vast majority of them involving children or young people, the force added.

“These levels of reporting of sexual abuse against a single individual are unprecedented in the UK,” the police said in a statement.

Detectives have been examining three categories of alleged offences: those involving only Savile, which make up the majority of cases; those involving Savile and others; and those which had no direct link to Savile.

So far six men have been arrested and another questioned by London police.

Those quizzed include Max Clifford, Britain’s most high-profile celebrity publicist, former BBC radio DJ Dave Lee Travis and former glam-rock singer Gary Glitter.

They have all denied any wrongdoing.

“Our officers will continue to investigate allegations made against those who potentially can be brought to justice,” the police statement said. “More arrests nationally will be forthcoming.”

A one-time professional wrestler with a penchant for garish outfits, Savile became famous as a pioneering DJ in the 1960s before hosting prime-time TV shows until the 1990s.

He ran about 200 marathons for charity, raising tens of millions of pounds for hospitals, leading some to give him keys to rooms where victims now allege they were abused.

TV News Headlines – Yahoo! News

Read More..

Dozens sue pharmacy, but compensation uncertain

NASHVILLE, Tenn. (AP) — Dennis O'Brien rubs his head as he details ailments triggered by the fungal meningitis he developed after a series of steroid shots in his neck: nausea, vomiting, dizziness, drowsiness, blurred vision, exhaustion and trouble with his speech and attention.

He estimates the disease has cost him and his wife thousands of dollars in out-of-pocket expenses and her lost wages, including time spent on 6-hour round trip weekly visits to the hospital. They've filed a lawsuit seeking $4 million in damages from the Massachusetts pharmacy that supplied the steroid injections, but it could take years for them to get any money back and they may never get enough to cover their expenses. The same is true for dozens of others who have sued the New England Compounding Center.

"I don't have a life anymore. My life is a meningitis life," the 59-year-old former school teacher said, adding that he's grateful he survived.

His is one of at least 50 federal lawsuits in nine states that have been filed against NECC, and more are being filed in state courts every day. More than 500 people have gotten sick after receiving injections prepared by the pharmacy.

The lawsuits allege that NECC negligently produced a defective and dangerous product and seek millions to repay families for the death of spouses, physically painful recoveries, lost wages and mental and emotional suffering. Thirty-seven people have died in the outbreak.

"The truth is the chance of recovering damages from NECC is extremely low," said John Day, a Nashville attorney who represents several patients who have been sickened by fungal meningitis.

To streamline the process, attorneys on both sides are asking to have a single judge preside over the pretrial and discovery phases for all of the federal lawsuits.

This approach, called multidistrict litigation, would prevent inconsistent pretrial rulings and conserve resources of all parties. But unlike a class-action case, those lawsuits would eventually be returned to judges in their original district for trial, according to Brian Fitzpatrick, a law professor at Vanderbilt University Law School in Nashville.

Even with this approach, Fitzpatrick noted that federal litigation is very slow, and gathering all the evidence, records and depositions during the discovery phase could take months or years.

"Most of the time what happens is once they are consolidated for pretrial proceedings, there is a settlement, a global settlement between all the lawyers and the defendants before anything is shipped back for trial," he said.

A lawyer representing NECC, Frederick H. Fern, described the consolidation process as an important step.

"A Boston venue is probably the best scenario," Fern said in an email. "That's where the parties, witnesses and documents are located, and where the acts subject to these complaints occurred."

Complicating efforts to recover damages, attorneys for the patients said, NECC is a small private company that has now recalled all its products and laid off its workers. The company's pharmacy licenses have been surrendered, and it's unclear whether NECC had adequate liability insurance.

Fern said NECC has insurance, but they were still determining what the policy covers.

But Day says, "It's clear to me that at the end of the day, NECC is not going to have sufficient assets to compensate any of these people, not even 1 percent."

As a result, many attorneys are seeking compensation from other parties. Among the additional defendants named in lawsuits are NECC pharmacist and co-founder Barry Cadden; co-founder Greg Conigliaro; sister company Ameridose and its marketing and support arm, Medical Sales Management.

Founded in 2006 by Cadden and Conigliaro, Ameridose would eventually report annual revenue of $100 million. An NECC spokesman didn't respond to a request for the pharmacy's revenue.

While Federal Drug Administration regulators have also found contamination issues at Westborough, Mass.-based Ameridose, the FDA has said it has not connected Ameridose drugs to infection or illness.

Under tort law, a lawsuit has to prove a defendant has a potential liability, which in this case could be anyone involved in the medical procedure. However, any such suit could take years and ultimately may not be successful.

"I would not be surprised if doctors, hospitals, people that actually injected the drugs, the people that bought the drugs from the compounding company, many of those people will also be sued," said Fitzpatrick.

Plaintiffs' attorneys said they're considering that option but want more information on the relationships between the compounding pharmacy and the hundreds of hospitals and clinics that received its products.

Day, the attorney in Tennessee, said the clinics and doctors that purchase their drugs from compounding pharmacies or manufacturers could be held liable for negligence because they are in a better position to determine the safety of the medicine than the patients.

"Did they use due care in determining from whom to buy these drugs?" Day said.

Terry Dawes, a Michigan attorney who has filed at least 10 federal lawsuits in the case, said in traditional product liability cases, a pharmaceutical distributor could be liable.

"We are looking at any conceivable sources of recovery for our clients including pharmaceutical supply places that may have dealt with this company in the past," he said.

Ten years ago, seven fungal meningitis illnesses and deaths were linked to injectable steroid from a South Carolina compounding pharmacy. That resulted in fewer than a dozen lawsuits, a scale much smaller than the litigations mounting up against NECC.

Two companies that insured the South Carolina pharmacy and its operators tried unsuccessfully to deny payouts. An appellate court ruled against their argument that the pharmacy willfully violated state regulations by making multiple vials of the drug without specific prescriptions, but the opinion was unpublished and doesn't set a precedent for the current litigation.

The lawsuits represent a way for patients and their families recover expenses, but also to hold the pharmacy and others accountable for the incalculable emotional and physical toll of the disease.

A binder of snapshots shows what life is like in the O'Briens' rural Fentress County, Tenn., home: Dennis hooked up to an IV, Dennis in an antibiotics stupor, bruises on his body from injections and blood tests. He's had three spinal taps. His 11-day stay in the hospital cost over $100,000, which was covered by health insurance.

His wife said she sometimes quietly checks at night to see whether her husband of 35 years is still breathing.

"In my mind, I thought we were going to fight this and get over it. But we are not ever going to get over it," said Kaye O'Brien.

Marjorie Norwood, a 59-year-old grandmother of three who lives in Ethridge, Tenn., has spent just shy of two months total in the hospital in Nashville battling fungal meningitis after receiving a steroid injection in her back. She was allowed to come home for almost a week around Thanksgiving, but was readmitted after her symptoms worsened.

Family members are still dealing with much uncertainty about her recovery, but they have not filed a lawsuit, said their attorney Mark Chalos. He said Norwood will likely be sent to a rehabilitation facility after her second stay in the hospital rather than return home again.

Marjorie Norwood's husband, an autoworker, has taken time off work to care for her and they depend on his income and insurance.

"It doesn't just change her life, it changes everyone else's life around her because we care about her and want her to be happy and well and have everything that she needs," said her daughter, Melanie Norwood.

Read More..