20th > July > 2006 Archive

Orange puts squeeze on customers

What is it with cellular operators these days? One minute they’re calling you up and offering you ADSL for free, the next they’re billing you for services which used to be free and chucking in charges where there used to be none. The operator in question, this time, is Orange, who are keenly promoting their fixed-broadband business (which used to be known as Wanadoo) by offering free ADSL to anyone who spends more than 30 quid a month on a mobile package. As one hand gives, so the other takes away and existing Orange customers were surprised to discover that itemised billing is now going to cost them £1.50 a month. Apparently customers didn't want it any more, which came as a surprise to the customers we spoke to. Readers with very long memories will know that itemized billing is what gave US consumers free local calls in the first place: they wouldn't accept non-itemised bills, and itemising local calls wasn't economical; in Europe we just trusted our monopoly providers and paid whatever they asked. SMS message delivery confirmation used to be free too, but that will set you back a penny a time and anyone claiming on their insurance with Orange might also be surprised to find a 15 quid “administration” charge being levied to handle their claim. This is waived for the first 6 months, and is mentioned in the insurance small print, but is still catching many customers out. Why the decision to start charging for things which used to be free? Could it in some way be related to the lack of income from 3G services, against enormous competitive pressure to reduce call and message charges? If they can't make money from calls and messages then they’re going to have to get money some other way; other examples of such innovative billing practices welcomed.®
Bill Ray, 20 Jul 2006
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French MoD questions OpenOffice security

The French Ministry of Defense has reportedly raised a red flag on OpenOffice, saying the open source desktop suite is less secure than Microsoft's product. A classified report by the ministry into OpenOffice has apparently concluded the suite is more susceptible to attack from macros than Microsoft Office. Details of the report are scarce, but one sticking point appears to be the fact OpenOffice - unlike Microsoft's Office - does not bombard the end-user with warnings before opening a macro. At least one vulnerability uncovered in OpenOffice - fixed in a patch released this month - saw some macros invoked even after the end-user had disabled the function. Publication of the report comes as OpenOffice sees growing use in government circles across Europe as an alternative to Microsoft's Office. Recent converts in France include the Direction Generale des Impots - rolling out OpenOffice to 80,000 clients ripping out Office 97 - and the French gendarmerie with 104,275 personnel. The report is unlikely to dampen enthusiasm for OpenOffice and will no-doubt be brushed aside by supporters of the suite as something the community can fix. Indeed, the MoD is expected to present its findings to OpenOffice.org. Supporters will also, rightly, point to the shameful security record of Microsoft Office. Malware writers have gone beyond just Outlook to crack open Word, Excel and PowerPoint as a means to gain control of users' PCs. That said, you can be sure the existence of the report will be seized upon by critics of OpenOffice and open source as proof "we told you so." Furthermore, you can expect a slow uptick in numbers of exploits. The Stardust poof of concept virus was recently written to exploit macros in Sun Microsystems's StarOffice, anchored on OpenOffice, but can be modified for OpenOffice 2.0.®
Gavin Clarke, 20 Jul 2006
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Apple and Juniper results overshadowed by SEC

The shadow of an SEC probe into irregular share allocations by public companies loomed over both Apple Computer and Juniper Networks Wednesday, as they reported their latest financial results. Juniper delayed reporting a second quarter profit and filing its 10-K after an internal investigation found discrepancies between share awards and their recorded allocation dates. The company expects to incur additional non-cash charges for the allocations, but is not yet able to determine what that amount will be. Additionally, Juniper said it was not in a position to say whether it would be forced to re-state earnings. The network infrastructure provider said it would not file its second-quarter report until after the completion of the full investigation. During its scheduled conference call with Wall St analysts, Juniper said it was not yet able to determine when irregular share options had been awarded. Over to Apple, who has found irregular stock option grants were made between 1997 and 2001. While Apple said the irregularities identified are unlikely to force an adjustment of its results, this could change pending the discovery of additional irregularities. An independent counsel has been hired by Apple's outside directors to investigate allocations. "If additional irregularities are identified by the independent investigation, a material adjustment to the financial information could be required," Apple warned. The statement came as Apple announced third-quarter net income jumped 48 per cent while revenue increased 24 per cent, and the company projected fourth quarter revenue to come in between $4.5bn and $4.6bn.®
Gavin Clarke, 20 Jul 2006

Geologists have ringside seats for an ocean's birth

A rift that opened in Africa after a massive earthquake last September could be the beginning of a new Ocean, scientists say. The crack in the ground appeared along a fault line in the Afar desert in Ethiopia. The crack is heading for the Red Sea. If it makes it that far, it would carve a new ocean that would separate Eritrea and part of Ethiopia (both of which lie on the Arabian plate) from the rest of the continent, creating a new island. Satellite data collected since the quake shows that the rift is widening at an unprecedented rate, according to reports. It is sixty kilometres long and by October it was already eight metres wide in some places. These observations are reported in Nature. The Rift Valley is a very geologically active region, thanks to the separation of the Arabian and Nubian tectonic plates. As the plates slide away from each other, the crust of the Earth is stretched and thinned to the point where cracks appear. In this case, as the crust fractured, approximately 2.5 cubic kilometres of magma from nearby volcanoes flooded into the rift, forming fresh continental crust. That is enough to cover the area inside the M25 to a depth of about a yard, the BBC reports. The research team, a collaboration between scientists in the UK and in Ethiopia, used both field measurements and satellite images from the European Space Agency's Envisat spacecraft to build a precise map of the changes. It is the first event of this kind to have occurred since the satellite technology became available. If the crack does represent the birth of a new ocean (and it may not - it could all just settle down again), it will be about a million years before it is wet enough. Which should give any local Noahs plenty of time to build their Arks. ®
Lucy Sherriff, 20 Jul 2006

Vodafone rewrites customers' calendars

When cellular network operators aren't trying to find new and interesting things to charge for they are making sure that they don't have to wait until the end of the month to get their money. On Friday a mailing list for people working in Public Relations was buzzing with stories of calls from Vodafone with demands that customers make an interim payment on their bill or risk disconnection. In one case payment was demanded within three hours. It seems that when people have exceeded their “monthly allowance” then an interim payment is demanded; except that people have never been informed of their “monthly allowance”, nor does it exist in any contract or clause. Such behaviour is not limited to cellular companies: Telewest left a voice mail with one poor customer and, when he didn't respond for a day or two, they suspended all international calls pending his paying the bill up to that point. Call us old-fashioned but we always thought that “pay monthly” meant paying every month, not just “pony up when the company feels like asking”. Perhaps someone working for Vodafone might like to ask for an interim wage payment half way through the month? All ended well for the PR people who complained to the mailing list; they got apologies from Vodafone (who obviously read the list) and offers of nice shiny phones and contracts. But we have to wonder if they would have been so well treated if they weren't in PR, so do let us know if you've received the call, or ever found out what your “monthly allowance” is.®
Bill Ray, 20 Jul 2006

Nvida working on switcheable GPU tech for laptops?

Nvidia is working on technology that would allow notebooks equipped with an integrated GPU and a dedicated graphics chip to flip between the two engines at will. Even though the system doesn't appear to allow the two GPUs to render co-operatively, it's claimed Nvidia will dub the technology 'SLI Power'.
Tony Smith, 20 Jul 2006
fingers pointing at man

eBay losing its 'magic' - CEO

Has the shine come off online auctions? eBay chief Meg Whitman has acknowledged that the site has lots some of its "magic", as the balance tilts away from home sellers to professional retailers. Not that eBay is grumbling too much. The company reported profits of $310m on turnover of $1.4bn for 2Q 2006 yesterday. eBay also has $4bn cash in the bank. $9bn worth of trading went on under its roof in the period. But revenue growth is faster than profit growth, which rose only one per cent sequentially, and this brought a frank admission from Whitman. "The marketplace has been overwhelmed with identical, often poorly-priced items that have diluted the magic of the eBay experience," she said. "This has resulted in fewer return visits, higher exit rates and fewer bids per listing. In turn, conversion rates and successful listings have declined and eBay's GMV growth has not been as strong as we would like." To remedy this, she said, eBay will raise the profile of the auctions and raise prices for stores. That won't be popular. eBay said that is has 78 million active users, 20 per cent more than a year ago, and there are 35 per cent more listings. But as a sign of its changing nature, fixed price listings - usually tagged "Buy It Now" - are up 35 per cent year on year. The company offered no clues on how to turn Skype, which cost eBay $1.6bn, from an expensive albatross into a money spinner.The "communications" revenues grossed only $44m revenues in the period. ®
Andrew Orlowski, 20 Jul 2006

Leadtek readies Nvidia 7600-based AGP boards

Leadtek will next month ship a pair of AGP graphics cards based on Nvidia's GeForce 7600 family of GPUs, pitching the parts at PC users who have yet to make the transition to PCI Express but still want high-speed graphics.
Tony Smith, 20 Jul 2006

NHS has another stab at records

A high-powered taskforce has been assigned to tackle problems with the overdue care records system, the core element of the troublesome £12.4bn National Programme for IT. The reputation of the national care records system was undermined in last month's House of Commons Public Accounts Committee on the NHS programme. It found development had been rushed without proper consultation with patients and clinicians. The Department of Health said in a statement yesterday that the task force would address "outstanding issues and concerns" and aid the introduction of the first phase of the care records system in 2007. It would "identify and look at the concerns of patients and the clinical profession about the creation of the summary care record," it continued. It would then draw up an implementation plan for a summary care record with Connecting for Health, the government agency in charge of the Programme. This would be reported in November. The DoH statement said that on the current timetable for the introduction of care records the pilot would start to run in "early 2007". A "wider roll out" would occur in 2008. The last official word on the timetable for care records was given at last month's PAC hearing. Then scheduled for late 2006, they were already running two years late. This had been blamed on suppliers having "difficulty in meeting the timetable" and clinicians wanting to see the system piloted. Professor Peter Hutton, who had been a clinical advisor to the Programme, told the PAC hearing that the problems with the care record had been overlooked by a National Audit Office investigation into the Programme. "The report fails to emphasise that key decisions were taken in the early period without proper clinical input," he said. Hutton added that the consequences of a lack of proper consultation with clinicians in the early stages were still having a "major impact" on the Programme. Richard Granger, director general of IT at Connecting for Health, told the hearing that the Programme had in the last 18 months developed a "more stable long term structure" for patient and clinical engagement. Lord Warner, health minister, stressed in yesterday's statement the importance of the clinical records system. "We owe it to patients to do it as soon as possible," he said. The taskforce is being chaired by Harry Clayton, national director for patients and the public at the DoH. It will consist of two British Medical Association chairs, an executive director of quality at Ealing PCT, and bosses of the Royal College of Nursing, Royal College of General Practitioners, the Terrence Higgins Trust, the college of emergency medicine, an ethics professor from Oxford and a patient advocate.®
Mark Ballard, 20 Jul 2006

Intel speeds quad-core CPU roll-out to Q4

Intel's quad-core processors 'Kentsfield' and 'Clovertown' may debut sooner than expected. Originally roadmapped for an H1 2007 introduction, the chips will now appear in Q4 2006, the chip giant's CEO, Paul Otellini, indicated yesterday.
Tony Smith, 20 Jul 2006

Palm 3G Euro Treo to ship 'September 2006'

The Vodafone-branded Euro-centric 3G Palm Treo will ship in September, Reg Hardware has learned. When the device was announced last week, Palm and Vodafone would only say the device will debut before the end of the year.
Tony Smith, 20 Jul 2006

Virtual – the new reality for developers

“The life of the developer has just become a lot harder,” said Sharad Singhal, Distinguished Technologist HP Labs, Palo Alto, “and the reason is that the assumptions they make about their environment are not necessarily true any more.”
Martin Banks, 20 Jul 2006

Moto makes billion buck profit

Motorola made $1.38bn profit in the quarter ending June on sales of $10.88bn - both record numbers for the company. Only another so-so performance from the networks division, which made a profit of $394m in the period, down from $494m a year ago, on sales of $2.9bn, could take the shine off the results. Motorola said it shipped 51.9m handsets, and 2.4m set top boxes in Q2 2006. So Motorola's phone success continues. Less than two years ago, Motorola was looking nervously over its shoulder as Samsung made its bid for second place. Motorola has now taken its market share from 14 per cent to 22 per cent, according to its own estimates. Nokia's decision to withdraw from the CDMA market won't harm Motorola at all. The company estimates 2006 revenue will be between $10.9bn and $11.1bn. The networks division boasted a WiMAX win in Pakistan, and is an investor in Craig McCaw's Clearwire venture to build a nationwide WiMAX network in the US.®
Andrew Orlowski, 20 Jul 2006

Vietnam to offer 'healthy sex' website

The Vietnamese government has decided to combat the country's rising divorce and abortion rates and "rampant prostitution" by offering citizens the chance to download educational "healthy sexual intercourse" movies from the internet, Reuters reports. Vietnam normally takes a dim view of web smut, and recently ordered net cafes to install porn-blocking software on their computers. At the same time, the country boasts an annual abortion rate of 1.4 million among the population of 83 million - largely due to a lack of sex education and teenagers' ignorance of contraception. Accordingly, Khuat Thu Hong, Deputy Director of the Institute for Social Development, announced the launch of an "orthodox sex website" aimed at setting couples back on the straight and narrow. He did, however, tell the Vietnam News that any material offered on the site would be "only educational", which presumably means guides on how to put a condom on a banana and little else. ®
Lester Haines, 20 Jul 2006

Daewoo dips into UMPC pool

South Korea's Daewoo - probably better known over here for its cars than its computers - is to follow Samsung into the ultra-mobile PC (UMPC) arena: the firm's Lucoms subsidiary has announced the Solo M1.
Tony Smith, 20 Jul 2006

Voice of the Daleks dies at 82

The man who originally gave voice to the Daleks has died at the age of 82, The Stage reports. Peter Hawkins' impressive list of TV credits also included Bill and Ben (for which he created the "flobadob" lingo), Super Ted, Captain Pugwash, Zippy in Rainbow* and the Martian robots in the 1970s Cadbury's Smash ads. Hawkins featured in the Daleks' debut back in 1963. The Stage notes: "Something that Hawkins’s work on those early episodes of Doctor Who shows that the best voice artists, whatever the gig, should approach the work as a bona fide acting job. The early Daleks were menacing, raucous, scheming, frightened emotional creatures, not the staccato, monotonous bores they became in later years." ® Bootnote *Hawkins did the original voice for Zippy, "only to be succeeded by Roy Skelton, who eventually became the most prolific Dalek voice artist in later episodes", The Stage explains.
Lester Haines, 20 Jul 2006

Excel scientific and engineering cookbook

Book reviewBook review Most people have a schizophrenic attitude to Excel, seeing it as “trivial” because they can use it with almost no training, but too difficult to use on more meaty problems. By way of response, David Bourg delivers a set of recipes that cook up some increasingly non trivial problems.
Dominic Connor, 20 Jul 2006

Macs get Windows Mobile 5.0 gadget sync support

Synchronisation software specialist Mark/Space has brought Windows Mobile 5.0 support to its Mac OS X-based utility The Missing Sync for Windows Mobile. The tool runs natively on both PowerPC- and Intel-based Macs.
Tony Smith, 20 Jul 2006

Microsoft steps on recruitment consultant

A Microsoft plan that involves undercutting the recruitment consultants that feed skills into its sales channel has caused particular alarm for a recruiter that is already operating under the name the software giant had wanted for its own service. DymanicsCareers.com was alarmed to read on The Register last week about Microsoft's plan to launch its own service called DynamicsCareers. The Microsoft scheme would involve using its own corporate consultant, Norman Broadbent, to recruit sales consultants free of charge for Microsoft Business Partners. Brett Iredale, managing director of the independent DynamicsCareers.com, said in an email: "We are disappointed that they would do this without at least contacting us to discuss options. It's not as though they don't know who we are - we currently have seven Microsoft offices around the world using the site for their own recruitment." Dynamics is the brand name for the business software sold through the Microsoft Business Solutions channel. Dynamics is not trade marked. Paul White, UK business group lead of Microsoft Business Solutions, said Microsoft had thought it might call its free recruitment service DynamicsCareers, but has now decided to drop an 's', settling for DynamicCareers.co.uk. White said he is planning to launch the Microsoft scheme in August, said he intended to meet with DynamicsCareers and might find a way to work with them. But he warned, the incumbent was a "classic recruitment consultant" that made its money from fees associated with filling its client's vacancies. "There's an extent to which we are undermining their business model because they charge and we don't. We will pass partners CVs free of charge," he said. "There's clearly a challenge there. If it's successful we will do it on an ongoing basis...We are at liberty to drive our business as we see fit," said White. Iredale said he had a customer base of 500 Microsoft Business Partners to which he distributed over 100 CVs a day. "It would be ridiculous if we were forced into a competitive situation with the very people we have been helping for the last four years," he said. Whatever the outcome, it appears both sides will have got some publicity from their spat.®
Mark Ballard, 20 Jul 2006

Child abuse website takedown delays can take years

Only one in 500 (0.2 per cent) of child abuse images on the net are hosted in the UK, down from 18 per cent in 1997. That's according to a half-yearly study from the Internet Watch Foundation (IWF) which found that paedophile sites hosted overseas remain accessible for up to five years despite being reported to the relevant authorities. For example, a website first reported in 1999, that's become the subject of a further 20 IWF complaints, still remains available. The IWF is calling for greater international efforts so that sites hosting child abuse content can be rapidly taken down and so that those who publish illegal material can be traced and investigated. Online photo album services began to be used for posting images of child abuse online in the first six months of 2006. Non-commercial hosting of images of child abuse on Japanese message boards continued to be a problem. While the abuse of US free hosting systems gathered pace. The distribution of child abuse videos online also grew in prevalence. The IWF operates a hotline that allows members of the public or IT pros to anonymously report on child abuse content online as well as criminally obscene or racist content hosted in the UK. Any potentially illegal websites hosted in UK can be removed within 48 hours. During the first six months of 2006, the IWF's hotline processed 14,000 reports, up 24 per on figures from 1H05. Many (5,000) of these reports were over paedophile websites, a 49 per cent increase on first six month of 05. Half (50 per cent) of child abuse content was traced back to the US, with Russia (15 per cent), Japan (12 per cent) and Spain (9 per cent) also acting as significant hosting locations for depraved images online. The IWF suggests the rise in calls to its hotline takes might be down to public intolerance of child abuse content online combined with increased awareness of its role in combating it. Greater expertise in tackling new ways of distributing abuse images online by its workers might also be a factor, the IWF suggests. Vernon Coaker MP, under-secretary for policing, security and community safety at the Home Office, said: "UK Ministers continue to press for greater action at an international level, but this report underlines the importance of the work the IWF and ISPs are doing to block all UK residents from accessing websites, wherever they are hosted, identified as potentially illegal by the IWF by the end of 2007. "It is crucial to raise awareness among UK internet users about the IWF as the vehicle to report their inadvertent exposure to this type of content," he added. ®
John Leyden, 20 Jul 2006

Amnesty calls for action on China

Amnesty International is calling on internet users to join its campaign to reclaim the web as a place of freedom. The lobby group names Cisco, Google, Microsoft, Nortel Networks, Sun and Yahoo! as companies who have co-operated to censor the internet or to help track down individuals. Amnesty wants users of these services to complain directly - by email or on support forums - about these companies support of repression in China and elsewhere. The group also wants the companies to "come clean" on their policies - they want the companies named to make public all agreements with the Chinese government and publish a list of words excluded from web and blog searches. Amnesty also wants the companies to publicly call for the release of "cyber-dissidents" currently imprisoned. Amnesty accuses the firms of hypocrisy. Kate Allen, Amnesty's UK director, said: "There is a huge gulf between the companies stated values and their actions. Yahoo!, Microsoft and Google need to stop denying their culpability, acknowledge where their responsibilities lie, and begin to focus on solutions in China." Yahoo! handed over confidential information which led to the imprisonment of two journalists - Shi Tao and Li Zhi - who have both been adopted as Amnesty Prisoners of Conscience. Microsoft shut down a blog run by a New York Times researcher Zhao Jing following a request from the Chinese government. Google is offering a censored version of its search engine for China. Microsoft gave Israeli authorities the Hotmail account of Mordechai Vanunu - the man who blew the whistle on Israel's nuclear weapon programme. He is out of prison but banned from contacting the foreign media. The online pledge has already been signed by almost 25,000 people. Go here to sign up or go here to learn more about the irrepressible campaign.®
John Oates, 20 Jul 2006

Boffins use hypnosis to induce déjà vu

A post graduate student at Leeds University claims to have replicated the phenomenon of déjà vu in the laboratory. The basic mechanism behind the phenomenon is thought to work as follows: When it is presented with a scene, the brain runs through two processes. First it checks to see if it has seen or experienced any of the things before. If it has, a second process is triggered in a separate part of the brain which alerts the brain's owner that the scene is familiar. This sense of familiarity can be triggered in error, leading to a feeling of déjà vu - something that 97 per cent of people report having experienced at some point in their lives. The Leeds researcher, Akira O'Connor, wanted to use hypnosis to separate the two processes, and see if he could provoke a sense of déjà vu when presenting people with a novel situation, according to New Scientist. He showed a group of volunteers a set of 24 words. Then the volunteers were hypnotised. While they were in their trance, they were told that when they saw a word in a red box, it would feel familiar but that they wouldn't be sure when they had seen it before. Words in green boxes, meanwhile, would be identified as belonging to the original list of the 24. Once they were out of their trance, the volunteers were shown another set of 24 words, some from the original list, but others that were new. The words were all framed in various colours, including some in red and some in green. Of the 18 volunteers, ten reported feeling odd when they saw words that were new and framed in red. Half of those said the sensation was like déjà vu. This, the researchers say, demonstrates that the two processes can be separated. which could have implications for our understanding of how human memory works. As yet, the work is not peer reviewed, but O'Connor says that he now plans to write up the study for publication in a journal. ®
Lucy Sherriff, 20 Jul 2006
hands waving dollar bills in the air

Hard drive shipments soar in Q1

The global hard drive market is in rude health, according to figures from analysts iSuppli. Shipments in Q1 2006 were up 16.5 per cent on the same period in 2005. The Seagate-Maxtor twosome accounted for a whopping 41 percent of the total 101.7m units shipped. Western Digital swallowed 18.5 per cent, with Hitachi taking bronze at 14.4 per cent. Evangelists of flash memory face a long wait to see the back of the magnetic platter, it seems.®
Christopher Williams, 20 Jul 2006

Wi-Fi Skype phones to connect this month

Taiwan's Edge-Core will ship its first Wi-Fi phone with on-board Skype software at the end of the month, the company said today. The gadget uses Wi-Fi's Wireless Multimedia (WMM) add-on technology to enhance call quality.
Register Hardware, 20 Jul 2006
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ABN Amro introduces voice recognition

ABN Amro is to introduce voice recoginition for its customers, the Dutch bank announced today. Customers in the Netherlands can soon be identified over the phone without the need for passwords and PIN codes. The system distinguishes more than 100 biometric characteristics in a person's voice, including pitch, frequency, soft and even jaw structure. The technology - Voicevault - was developed by Biometric Security, headquartered in Chertsey in the UK, in close collaboration with government and the military. The company says the solution is "the result of over 160 man years of research and development in to science, mathematics and technology." ABN says it already tested the system with 1,450 volunteers, including twins, and over 25,000 test calls. These calls were made using both fixed-line and mobile phones. Even people who were suffering from colds volunteered. Voice verification will initially be applied to customers making balance enquiries, transfers and investment orders via the telephone. This is done by saying the account number. A continued roll-out is planned for 2007. The option of voice verified access will only be offered to customers on a voluntary basis, the bank says.®
Jan Libbenga, 20 Jul 2006

MXI Outbacker MXP 40GB biometric hard drive

ReviewReview It used to be sufficient just to punch in a password to prove you have a right to read to the information your trying to access, but faster processors and smarter crackers means such methods are falling from favour, especially among those with very hush-hush information to guard. Instead, they're turning to biometrics - factors unique to an individual - to verify users' identities, and products like the Outbacker mobile hard drive are being equipped with fingerprint scanners accordingly...
Tony Smith, 20 Jul 2006

PlusNet hit by storm in a forum

PlusNet's marketing director seems to have lost patience with posters slagging off his company in the forums at ADSLguide. In a lengthy post made yesterday Marco Potesta accepts that "PlusNet is not going through a great time right now" but says the forum "has degenerated into a personal conflict zone pandering to self righteous egotism". PlusNet recently misplaced 700GB of customer emails - more details here. The post ends: "Wasting time responding to some of you self-absorbed phonies? Not any more." Potesta asks all PlusNet staff to stop posting in the forums and recomends PlusNet customers use the ISP's own forums to discuss problems. The post has so far attracted about 200 comments. Marco Potesta told the Reg: "ADSLguide used to be a good place to see customer feedback but it has degenerated." He added that he has made a formal complaint to the company. Brian Trevaskiss, marketing manager at PlusNet, said: "Customers are happy with the communication we've done and that will continue." Read the whole post here.®
John Oates, 20 Jul 2006

Carbon trading for all will save the planet!

AnalysisAnalysis David Miliband is widely viewed as quite the cleverest of the younger generation of New Labour Ministers, a fast riser headed for greater things, not excluding the top job. But puzzling over the text of his speech extolling the virtues of personal carbon allowance swipe-cards, one begins to suspect that maybe he's not so smart after all. Doesn't this man know any economists? Hasn't he had a word with anybody involved in keeping the credit card networks airborne? And secure? Possibly not. "Imagine a country where carbon becomes a new currency," he tells us. "We carry bank cards that store both pounds and carbon points. When we buy electricity, gas and fuel, we use our carbon points, as well as pounds... It is easy to dismiss the idea as too complex administratively, too utopian or too much of a burden for citizens." And indeed it is, but we know from experience that that won't necessarily stop it. Miliband's bit of carbon card kite-fyling has been heavily influenced by a 2005 Tyndall Centre report into the subject. Miliband's blog, which sums up Government nicely by being both terminally dull and perplexingly expensive to produce, tells us that he intended to "sketch out a thought experiment of what it would be like to 'spend' carbon, save it and trade it in the same way we do with money," but in the speech itself he already seems seriously smitten. Which is a worry. The Tyndall Report effectively envisages personal carbon allowances (PCAs) as taking the form of a whole new, parallel, currency with all of the verification, security, payment and transactional baggage this implies. So think bank, opening a bank account, getting statements, securing and using the plastic, moving your 'money' (Shall we call it beanz? Or barrelz?), exchanging the stuff, trading the stuff, not financing terrorist networks with the stuff (they appear not to have thought of that yet, but we have)... All of this to be deployed at the behest of the Government, possibly run and owned by the Government but (in our view) more likely to be farmed out to the people who've already done all of this stuff with real money, for very large fees. The report notes (what a surprise) that the ID card system and National ID Register might be just the ticket to hang this off, but also notes widespread doubts about its viability and the Government's poor record on IT projects. So it takes on board the possibility of this route not being available, and considers other routes (effectively, the verification and security mechanisms currently used by banks) in order to get the system set up. But to what end? If you're not wearing the weird specs when you read Miliband's speech, it becomes less clear as you go along. "As the Treasury set out in 1997, 'Just as work should be encouraged through the tax system, environmental pollution should be discouraged.'" So, um, you could discourage high carbon emissions through the tax system using, um, real money? Perhaps. "As set out in the Energy Review, DCLG, Defra, DTI and HM Treasury... will examine what new policy options, such as tradeable personal carbon allowances, could contribute. A variety of models of tradeable personal carbon allowances have been proposed. But the basic elements are easy to describe. It is a compelling thought experiment – limit the carbon emissions by end users based on the science, and then use financial incentives to drive efficiency and innovation." Financial incentives? So that's real money, right? Uh, no. "Imagine a country where carbon becomes a new currency. We carry bank cards that store both pounds and carbon points. When we buy electricity, gas and fuel, we use our carbon points, as well as pounds. To help reduce carbon emissions, the Government would set limits on the amount of carbon that could be used." So carbon is real money. As well. Note in passing that, as they're both on the same card and surely therefore both being handled by the same machines and infrastructure, we are paying the banks a large wedge to sort it for us. Also note "the Government would set limits..." This is not, from our reading of the proposals, strictly the case. The government would set allowance levels, but you would be perfectly free to spend on carbon in excess of these levels by paying for more credits. So it's kind of like wartime rationing, except the blackmarket is legal and above board, and the spivs are A Good Thing, environmental crusaders dressed as stockbrokers. The system would work in pretty much the same way that the European emissions trading system for businesses works, although currently this appears not to, entirely, several Governments having apparently cocked up setting the allowance levels. As indeed you would expect them to, by accident or design. Back, though to the Minister for bat-hugging. "Imagine your neighbourhood. The family next door has an SUV and realise they are going to have to buy more carbon points. So instead they decide to trade in the SUV for a hybrid car. They save 2.2 tonnes of carbon each year. They then sell their carbon points back to the bank and share the dividends of environmental growth." Which you might reckon sounds a bit like the pre-barrelz version, with real money - they realise their SUV's petrol bills are costing them a fortune, so they sell it and buy a hybrid, spend less money on petrol, and thus 'share the dividends of environmental growth.' Why does that not happen now, but does happen when barrelz exist? And where in the equation is the 'environmental growth'? It could happen if barrelz spent on an SUV were sufficiently expensive for the cost of an SUV over the cost of a hybrid to become prohibitively expensive for the family. That is, if barrelz operated as a kind of tax, and the tax level were set appropriately by Government. Might that work with tax on petrol too if you applied the principle with real money? There's a thought. Meanwhile on the other side: "The granny next door doesn’t drive and doesn’t do much air travel. So she has spare carbon points that she can sell. But she doesn’t want to be handling two currencies so she cashes in all her carbon permits as soon as she receives them. When she pays her electricity bill, her energy company builds in the price of carbon to her total bill. She simply pays carbon as she uses it. At the end of the year she finds herself better off." So she effectively just skips barrelz and continues happily through life with real money. Miliband does not mention what happens to her at the end of the following Q1, where we might speculate she gets a huge winter fuel bill, discovers she needs to buy more barrelz and further discovers that increased winter fuel use has resulted in barrelz costing far more than she got when she sold them. Barrelz can go up as well as down, gran - have you considered a hedge fund for next year? The SUV family meanwhile used its higher income to buy up her cheap barrelz last summer, and has been toastie-warm all winter. From the perspective of most people, the system surely will operate as a tax, levied by Government according to its carbon (or more likely, Government being Government, its spending) requirements. It does however have the advantage of being presentable as money to the people, rather than taxes from. But it does, as far as we can see, appear to walk like the proverbial duck. The notion of a widespread 'people's market' in carbon allowances meanwhile will certainly have traction in some areas, but we could perhaps think of it as analogous to the 'shareholders democracy' of the Thatcher years. So we might see a burst of enthusiasm possibly followed by flurries of Internet-enabled day-trading, and then the bust to follow the bubble, and participation back down to more normal levels. And we know from experience we can do the booms and busts with real money, so why do we need an extra set? Higher emissions go with higher incomes, Miliband tells us, so people with higher incomes will need to spend more on carbon allowances. But given that what is proposed is effectively a carbon tax, you could say precisely the same thing about a carbon tax, using real money, if that were imposed instead. And you could do that without all of the extra expenditure on PCAs - if. that is, you had the will to impose it. And there's one more problem we think we can see. As PCAs would be effectively real money, the Exchequer would really have to treat them as such. So do we call that carbon trading helping control emissions by having a direct influence on economic policy, or economic policy dictating environmental policy? Best hail a passing economist for an answer, but it does look like Gordon's going to be calling this one. Recklessly however (given our lack of credentials) we propose to pursue this just a little bit further. "Developments like the EU Emissions Trading Scheme show that it is not fanciful to think of all major emitters in the global economy being covered by a scheme of tradeable allowances", says Miliband. To which you may well respond, 'huh, in your dreams, squirrel-hugger.' But lets at least pretend the EU scheme is in fact only going through teething problems and is not morphing into a hugely expensive cunning wheeze for national Governments to subsidise local industries via over-stuffed allowances. So, we imagine, tradable carbon allowances take off across Europe, and follow the British lead into personal trading allowances, in a common currency valid across the continent. The currency would have to be managed centrally, of course, so nobody cheated, flooded the market and caused inflation. So we could call the people in charge the Central Bank, and we could call the common currency, ah, the Euro? ®
John Lettice, 20 Jul 2006

Channel Five to air cryonic freezing

Channel Five is to broadcast a documentary on the cryonic freezing of a terminally-ill cancer victim, The Guardian reports. The one-hour doco shows the American woman's "emotional journey" - illustrated by interviews with her and her husband - to eventual cryonic preservation. It will show for the first time the "shocking and compelling invasive procedure used to freeze her", which has been performed only on around 150 people, The Guardian explains. It should come as no surprise that the moderately-titled Death in the Deep Freeze was shot by indie production outfit Zig Zag which will in August point its cameras at the UK's first "Masturbate-a-thon". Executive producer Jes Wilkins enthused: "We're really very proud of what we have achieved with this programme - the human and emotional journey we captured with one contributor in particular, filming prior to her death and the subsequent process of her preservation, in conjunction with the amazing scientific and ethical questions raised by this subject, makes for one of our most challenging and fascinating productions to date." Death in the Deep Freeze will hit UK screens at the end of the month as part of Channel Five's "Stranger than Fiction" strand. Industry rumours that Zig Zag is currently filming a "thought-provoking" documentary on the organ harvesting of condemned Chinese prisoners - showing the "emotional journey" of one net user, caught with his trousers down perusing the Masturbate-a-thon website, from courtroom to autopsy slab - are unconfirmed. ®
Lester Haines, 20 Jul 2006
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Conservative council snubs private sector

Walsall Metropolitan Borough Council has opted to keep its struggling benefits services in-house after assessing the outsourcing ventures of other councils and coming to the conclusion that the the private sector was not up to the job. The council has been wondering what to do with its worst performing departments since January when it ducked out of a £500m "strategic partnership" with Fujitsu at the nth hour. The move was vindicated by a report presented to Walsall's Conservative Cabinet last week, which said that after a benchmarking study of other councils that had outsourced their benefits departments, Walsall concluded that there were "serious drawbacks" to handing the whole department over to the private sector. Walsall's benchmarking study found "very few success stories in other local authorities" that outsourced their benefits service. The benchmark considered 38 other authorities that had outsourced benefits. Eleven of them had ended up bringing the department back in-house. The study also found that outsourcing would take too long, and the risk that services would degrade or fail during procurement was too high. In December 2003, when Walsall was given a "weak" rating by the Audit Commission, the council's benefits department had been one of only two to earn three out of four stars. But by 2005, when the Audit Commission commended Walsall for "improving well" its benefits service had deteriorated so much that it was one of only two departments with two stars. The council had claimed that benefits and other under-performing departments would see improvements once they were farmed out to the private sector, the Audit Commission reported in January. But within the month, Fujitsu had been given the boot and Conservative Counsel leader Tom Ansell had declared the council did not need help from the private sector. January's Audit Commission report explained why Walsall's benefits service had declined while most of its other services had improved since 2003. One of the main reasons was the introduction of a new benefits computer system last year. The council had outsourced its benefits IT systems to Northgate in 2004, but the system was delivered late. A report by the Benefits fraud inspectorate noted yesterday that the new computer system had "created inevitable delays in claims processing", and inundated its walk-in centres with claimants wanting to query their computer-generated allocations. The council's benefits service was "already strained", reported the BFI. "This situation was made worse when the council restructured its Revenues and Benefits service at the same time," it said. The computer system should, however, help pull the department out of its mire, reported the BFI. If only it could train its staff to use it properly. Walsall still felt the need for some scheme to replace its aborted strategic partnership with Fujitsu. After seeing the benchmarking study that rubbished the private sector, the council's Cabinet considered three other options: do nothing; develop shared services with other councils; or go for a "mixed economy" model in which core services were kept in-house and non-essential support services where outsourced. It ruled out a joint services agreement with another local authority because of the difficulty in finding a good fit in good time. Doing nothing was never really an option. The cabinet voted for the "mixed economy" method, which would require an investment of £400,000. It did, however, note that it would not be an easy ride. "Can the council manage the potentially complex mix of internal core service activities and the externalised non-core activities?" a report to cabinet asked. In light of the problems caused by handing responsibility for its benefits IT systems over to Northgate, this was clearly a pertinent question.®
Mark Ballard, 20 Jul 2006

US drunks face abuse from talking urinal

Drunks in Nassau County, New York, are advised that the traditional dash to the john, normally accompanied only by sighs of relief and cries of "jeez, that feels better" may in future be interrupted by public messages broadcast from talking urinals. Safety officials in said county have bought 100 examples of Dr Richard Deutsch's "Wizmark Urinal Communicator" - a "waterproof, disposable drain cover embedded with electronics that senses a visitor and then relays an audio message". The device boasts a proximity sensor which detects someone approaching "within about 30 to 60 centimetres". After a suitable pause to allow the customer to position himself, the Communicator gives forth with a "pre-recorded audio announcement". It also comes complete with "nine-centimetre diameter display area containing a lenticular screen that features multiple images or text that, and as the person moves toward the urinal, they appear to change from one graphic to the other". Oh yes, and it acts as a deodoriser, too. As for the message, well, that will be something "promoting responsible drinking", which shows how the Communicator will simultaneously take the piss literally and figuratively. For the record, no taxpayers were harmed during the acquisition of the Wizmark Urinal Communicator, since the purchase was funded "by fines from those caught driving while intoxicated". ®
Lester Haines, 20 Jul 2006

Cassini finds land on Titan

New radar images sent back from the Cassini spacecraft have revealed an Australia-sized land mass on Saturn's moon, Titan. The continent is in a region known as Xanadu, but readers are asked to kindly refrain from any Olivia Newton-John references. The Xanadu region had been observed before the Cassini mission. It was snapped in 1994 by the Hubble Space Telescope's infrared camera, but astronomers could only make it out as an unusually bright spot on the moon's surface. Now it transpires that the region is riddled with geological features very reminiscent of Earth. The surface has been shaped by weather - winds, rain and a flowing liquid, most likely liquid ethane or methane. The researchers have identified dark sand dunes, river networks, hills and valleys. The land mass has a prominent crater, which may have been caused by the impact of an asteroid, or possibly by water vulcanism. The region also boasts a range mountains reaching over 5,000 feet. "We could only speculate about the nature of this mysterious bright country, too far from us for details to be revealed by Earth-based and space-based telescopes. Now, under Cassini's powerful radar eyes, facts are replacing speculation," said Dr Jonathan Lunine, Cassini interdisciplinary scientist at the University of Arizona, Tucson. Most notable, though, is the absence of the organic dirt that covers most of the rest of the moon's surface. "Xanadu has been washed clean," says Steve Wall, the Cassini radar team's deputy leader. "What is left underneath looks like very porous water ice, maybe filled with caverns." Cassini's will next fly by Titan on Saturday 22 July. ®
Lucy Sherriff, 20 Jul 2006
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PC growth dives during World Cup

Zidane, Rooney and the rest put the boot into PC vendors in the second quarter with unit shipments knocked off course as punters tuned into the World Cup. Analysts IDC said that while the market overall grew at a “healthy” 12 per cent to 52 million units, there were unexpected twists at regional level. The most significant came in Europe, where a combination of inventory overhang from Q2 and “distractions from the World Cup” meant shipments grew by just 7 per cent in the quarter, compared to the forecast 12 per cent. Who’d have thought Europeans would balk at lashing out on a new PC, after they’d just shelled out for inflated match tickets or stocked up with cold beer and hot new flat screen TVs. Luckily US shipments were better than expected, growing 6.7 per cent to 15.9 million. Latin America and Asia/Pac both showed better than expected growth, while Japan was slower than expected. Apparently the Japanese preferred to spend their money on flat screen TVs as well. IDC said it was seeing aggressive competition “as the market transitions to a new phase”. This seems to be a polite way of saying there will be some turmoil as vendors and consumers adjust to Windows Vista and new processor platforms. Dell took first place for worldwide shipments, growing 10.9 per cent to 10 million units, and taking 19.2 per cent of the market overall. HP was second, with 15.9 per cent share, but its growth was higher, at 13 per cent. Lenovo was hard on its heels, growing shipments 12.8 per cent and taking 7.7 per cent of the market overall.®
Joe Fay, 20 Jul 2006
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Trojan poses as Google Toolbar

In briefIn brief Virus writers have developed a Trojan downloader attack that poses as an offer for the latest edition of Google's Toolbar, the popular search tool. Spam messages that began circulating on Wednesday attempt to trick users into visiting a maliciously constructed website, disguised to resemble the genuine Google Toolbar site, reports UK-based net security firm SurfControl. Users who accept a offer to download "Google Toolbar" software from the bogus site will find themselves installing a Trojan which turns their machines into zombie clients, controlled by hackers. ®
John Leyden, 20 Jul 2006

US 419 victim shoots preacher husband

A row over money which provoked a US woman to shoot dead her husband may have been exacerbated by the couple's fleecing by 419 scammers, AP reports. Mary Winkler, of Selmer, Tennessee, allegedly shot her preacher husband in the back with a 12-gauge shotgun as he lay in bed on 22 March. The body of Matthew Winkler, described as "the popular minister at the Fourth Street Church of Christ", was discovered later that evening by members of his church. His wife had fled the scene with her three young daughters but was arrested the following day in Orange Beach, Alabama. Investigators said last month that Winkler "confessed to shooting her husband after a night of arguing about money", although she has pleaded not guilty to a murder charge. In a statement made to police and later read at her bail hearing, Winkler said: "I had gotten a call from the bank and we were having trouble, mostly my fault, bad bookkeeping. He was upset with me about that. "He had really been on me lately, criticizing me for things - the way I walk, what I eat, everything. It was just building up to a point. I was tired of it. I guess I got to a point and snapped." The Winklers' money troubles appear to have stemmed from a 419 "sweepstake" scam in which victims are are told they've won a pot of cash, receive cheques for the partial amount against which they draw "processing fees" for immediate return to the scammers, and too late realise that the cheques are bogus and they've been had. The amount lost by the Winklers is unknown, although the authorities confirmed that Mary Winkler "deposited several checks from Canada and Nigeria for a total of $17,500". Defense attorney Steve Farese said: "All I know is they entered sweepstakes. They got these checks in the mail, and they made calls to activate them. "They were always kind of living on the edge of their budget, so I'm sure this would have just wrecked their budget." Mary Winkler was unable to raise bail set at $750,000, and is currently in jail awaiting a 30 October trial. ® Bootnote Thanks to Geoff Hamer for the tip-off.
Lester Haines, 20 Jul 2006
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Multivalue datatypes

Editors blogEditors blog Mark Whitehorn's recent article on multivalue data types in Access (here) sure attracted some comments.
David Norfolk, 20 Jul 2006

PowerColor to ship HDMI, HDCP X1600 board next week

Tul has become the latest graphics card maker to launch a board supporting HDMI. The company's PowerColor-branded board is based on an ATI Radeon X1600-class GPU and incorporates an HDCP anti-piracy crypto chip for full HD readiness.
Register Hardware, 20 Jul 2006

Medion preps personalised portable PC

Centrino notebook for a mere 400 quid, anyone? That's the deal Germany's Medion is offering British buyers next month when Woolworths begins selling its latest machine. Buy direct and you get the chance to have your favourite picture or logo fitted on the lid.
Tony Smith, 20 Jul 2006
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Microsoft so very, very proud of its ties to open source Xen

AnalysisAnalysis Few people outside of the server virtualization debate have encountered the mutual dislike that Microsoft and VMware have for each other. However, the spat between the two software makers has started edging closer to the general tech public due to events transpiring this week. And this is the kind of squabble that you want to start watching because both companies have abandoned subtle jibes in favor of blunt smacks to the face.
Ashlee Vance, 20 Jul 2006
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Capita finds new contracts 'pleasing'

Capita notched up record contract wins for the seven months of 2006, the firm's chairman Rod Aldridge OBE noted today in the last set of results he will report to city before he steps down. Aldridge announced his resignation in March following allegations that his donations to the Labour party had been rewarded with contracts for business with the government. He said at the time that the allegations were "spurious". In his last chairman's statement today, Aldridge noted new contract wins with Birmingham, Rossendale and Westminster councils, the Northern Ireland Civil Service, the DTI and the BBC. Private sector wins included DSG Plc and Fujitsu. Contract wins totalled £806m, of which £624m came from new contract wins, while the rest came from contract renewals. Aldridge noted that despite the capital outlay required to get all this new business off the ground, Capita had still managed to post a 12.2 per cent increase in operating margins during the six months to 30 June 2006. Operating profit was up 27 per cent to £103.2m. "This is a pleasing performance given the higher than usual level of implementation costs associated with the start up of a record number of new contracts," he said. "The improving margin reflects the continued increase in economies of scale in the business," he added. Turnover was up 23 per cent to £845m. Six per cent of this growth was attributable to acquisitions, of which Capita made seven in the six month period. Pre-tax profits were up 24 per cent to £92.4m. It plans further acquisitions in the second half. The firm also had a bid pipeline of £2.8bn in accounts where it had been shortlisted with four or fewer competitors.®
Mark Ballard, 20 Jul 2006

CIO wanted - must be good at fixing broken ID card schemes

The ID scheme is the most obvious of the Home Office's IT headaches, but it's by no means the only one. The Immigration and Nationality Directorate's recent discovery of up to 450,000 records associated with asylum seekers speaks volumes about the state (or indeed the very existence) of the asylum and immigration database, while serial failures in passing simple pieces of data between departments and agencies indicates systemic IT failure. Even if you conceded the ID scheme was dead now, you would not be able to fix the Home Office without fixing all the rest of the IT. There are signs in the Home Office's Reform Action Plan, which was unveiled yesterday, that the Home Office grasps this, but there are also less positive signs that suggest that having understood it, it has decided to fake it anyway, for the sake of brevity. In terms of broad structure the Home Office centre is intended to shrink while its various arms gain greater autonomy and accountability, and savings from staff cuts at the centre are to be balanced by increased resources for and improvements in front line services, as per the standard Brown/Gershon pitch for 'efficiency savings' (which received a poor review from the Public Accounts committee today). IND itself will evolve into an executive agency of the Home Office, while the new National Policing Improvement Agency will open its doors in April 2007. The Identity and Passport Service already is an executive agency, which leaves one other major operational service, the National Offender Management Service (NOMS). Home Office structures and IT systems will also need to take numerous other areas, including police, prisons and criminal justice, into account. According to the plan, the Home Office "will completely overhaul how we collect, analyse, share and use management information in developing policy, delivering front-line services and in communications." There will also be "a programme to improve our management information", while published statistics will be streamlined (which may or may not be a euphemism), and research and analytical resources will focus on "producing timely and accurate information for our policy teams and operations." So there's clearly plenty of IT management meat there, along with what one might presume as a heavy budget requirement. That, however, may not be entirely straightforward, because in common with other departments the Home Office is under a tight financial leash, and Home Secretary Reid has already had to horse-trade with the Treasury to finance the new prisons he finds himself in need of. However, "We will build reliable and efficient processes in all our operating areas, through implementing a Department-wide programme, and will strengthen our systems through an IT strategy led by our new Chief Information Officer." The CIO, intended to "lead the work to join up information and IT systems across the Home Office", is clearly key. A Home Office spokesman however told The Register that no appointment had yet been made, that the recruitment process had yet to begin, and that there was as yet no timescale for the appointment. The Plan however calls for the CIO to have developed a "Home Office-wide IT strategy" by December 2006 - which will be a good trick if they, whoever they turn out to be, can pull it off. Also by the end of 2006 each of the operating businesses is intended to have "a high-quality IT director." The spokesman was unable to say how many of these, if any, were already in place, but it seems likely that there's a whole IT upper management superstructure to be put into place in order to drive the IT programme forward. The Home Office is however engaged in "a rapid stock take of our most important programmes, including those with significant IT components, which will be completed by the end of September 2006." Some form of IT rescue programme also seems to be already engaged at the Identity and Passport Service (whose new chief executive is to be announced in September): "We will also build on the approach developed by criminal justice IT to assess and improve IT programmes - the Identity and Passport Service will complete a pilot by September 2006, and we will extend this across the Department by the end of the year." The Register has asked the Home Office for some elaboration, and they may well get back to us with it at some point. It does however look like IT strategy is beginning to go into place before the IT management actually arrives, which risks the imposition of a top-down strategy implemented without adequate consideration of what's going on on the ground. The reference to criminal justice is however significant, because the current Government CIO, John Suffolk, moved there from criminal justice IT; we could therefore speculate that he's involved in digging the ID scheme out of the mire. With what success we may discover in September - the wise job applicant might choose to wait until then to sign. ® Tough on language... In framing the challenge, the Home Office tells us that John Reid expects performance to improve in five areas, the first of these being "poor performance." It is tempting to pretend they're saying performance isn't poor enough yet, that "weak services" aren't weak enough, or that they haven't got anything like enough "inadequate systems and processes." But yes, it's not clever, it's not funny and we know what they mean really. Nevertheless, the notion of the Home Office striving to improve its performance performance does conjure pictures of hamsters and wheels...
John Lettice, 20 Jul 2006
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SEC outs itself in case against ex-Brocade CEO

The US Securities and Exchange Commission (SEC) appears to have revealed its intentions to go after former Brocade CEO Greg Reyes. The commission earlier today announced a press conference in San Francisco via a covertly named Word file dubbed "brocademedia.doc". "You can't draw any conclusion from that," SEC spokesman John Heine told Reuters. Ah, but you can. Brocade's ex-chief has long been at the center of speculation that the SEC would dish out civil charges against him over the alleged improper booking of stock options expenses. Numerous companies have been fingered in a wide-ranging stock options probe. The government suspects that companies reworked the dates of options grants to give employees more lucrative packages. The SEC will hold a press conference at 2 p.m. today in San Francisco and is expected to announce the first set of criminal and civil charges in the stock option probe against Reyes, making an example of the former executive. Brocade, which has suffered from long-running accounting issues, has been investigating the options issue. The storage switch maker has a contentious relationship with Reyes. It granted him a cushy exit package only to try and weasel out of the deal and any association with Reyes later on, claiming the executive wasn't doing his consultancy work as promised. We'll have more this afternoon, following the SEC announcement. ®
Ashlee Vance, 20 Jul 2006
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SEC hits former Brocade CEO first in operation 'Options Fiasco'

You can slap an apron on Greg Reyes and hand him a rolling pin. The US Securities and Exchange Commission (SEC) has just turned the former Brocade CEO into the Martha Stewart of the options expensing scandal. The SEC today hit Reyes with criminal and civil charges, alleging that the CEO backdated stock options to make compensation packages more lucrative for new workers. According to the SEC, Reyes then failed to expense the option awards properly. Reyes has become the first major executive to be charged by the SEC as part of a far-reaching probe into how companies handled stock option expenses. The SEC has also accused Brocade's former CFO Antonio Canova and human resources VP Stephanie Jensen of helping Reyes conduct the options operation. Richard Marmaro, a lawyer for Reyes, hit back against the SEC, saying his client "is innocent" and willing to "prove his innocence in a court of law." "It is surprising that in an area where the government is investigating at least 60 companies on allegations of stock options accounting irregularities, the government would choose to charge Mr. Reyes. Mr. Reyes is not even alleged to have granted himself any of the options at issue in the case, nor is there even an allegation that he made any money through the alleged option irregularities," Marmaro said. "All he did was what his Board authorized him to do. During a time where competition was extremely high in Silicon Valley for employees, he awarded options to new and current employees of the company - from the receptionist to engineers - to attract and retain talent." The options question is part of the dot-com hangover still haunting Silicon Valley. Technology companies reworked the dates of options grants in the hopes of creating more competitive pay packages during a fierce hiring boom here. Storage switch maker Brocade hired a new CEO in January of 2005 after an internal audit turned up accounting irregularities around the way options were handled. The company maintained an amicable relationship with Reyes at first, handing him a lucrative consultancy package. Later, however, Brocade moved to sever ties with Reyes and argued that he had not been performing the consultant duties as expected. Later in 2005, the SEC announced a formal probe into Brocade's bookkeeping. Brocade has been forced to restate past financial results on numerous occasions. ®
Ashlee Vance, 20 Jul 2006

MySpace faces royalty challenge

MySpace should set aside some of its revenues into a pool to compensate musicians, says an industry group. "We think they should pay," a spokesman for British Music Rights, a group representing songwriters, publishers and performers, told us today. At a MusicAlly music industry seminar this week, MySpace's European VP rejected the idea that MySpace owed anyone performance royalties. Responding to a question from Jim Griffin, who pointed out that owners of public spaces such as pubs, hotels and stores contribute to a pool of money in exchange for a blanket license, Jamie Kantrowitz said that MySpace already gave musicians enough - in the form of web space, for example. As for revenues, she suggested artists look elsewhere: "People love to go to your show and buy your T-shirt," she said. "MySpace users are interacting with music in the same way as they would in everyday life - in a store or on the radio." It isn't surprising that songwriters and composers think there should be a cut. A digital pool for the public performance of sound recordings has existed for many years, and applies to stores and - in most parts of the world - radio too. (The USA is an exception, although a new organization now collects royalties on sound recordings played on webcasts.) There's another precedent, too. P2P radio station Mercora pays royalties, and its usage model is very similar to MySpace. Many of MySpace's users spend most of their internet time on the site. The BMR recently joined with indie labels and the Musician's Union to call for legitimizing P2P by monetizing the exchanges via a license. It's worth noting that MySpace attracts quite a different demographic on each side of the pond. In Britain, it's a cult social network for artists. In the US, it's a teen phenomenon that recently usurped Yahoo! Mail as the most popular web destination for Americans. BMR declined to elaborate on what kind of license mechanism should apply to MySpace, saying that it was a technical issue, and for the collection agencies. ®
Andrew Orlowski, 20 Jul 2006

Nokia bounds along in Q2

Mobile phone market leader Nokia showed a strong Q2 recording a profit of €1.14bn ($1.44bn) on revenues of €9.83bn ($12.42bn). That's up 22 per cent and 43 per cent from a year ago. Under intense pricing pressure from rivals, and with most growth coming from markets which want cheaper phones, Nokia also managed to increase its margins from 12.5 per cent to 15.3 per cent. For mobile phones, it was slightly higher, at 16.7 per cent, but still fractionally up from a year ago. Nokia said the average selling price of a phone fell by a Euro, to €102. The strong performance of its handsets and multimedia businesses offset weak results for Nokia's networks and enterprise units. The company pointed to 3m sales of N series phones - several key models have been delayed, and are only just appearing - and 30 per cent growth in its 3G business. Nokia said it shipped 78.4m handsets in the period.Yesterday the No.2 phone manufacturer Motorola reported bullish results, and said it had shifted 51.9m phones in Q2. ®
Andrew Orlowski, 20 Jul 2006
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AMD delivers on promise of Q2 disappointment

AMD did everything it promised during the second quarter. The company underwhelmed investors, while posting healthier results than rival Intel. AMD reported revenue of $1.22bn and a profit of $89m for the second quarter. Those figures compare to revenue of $797m and a profit of $11m in the same period last year, excluding the memory business that AMD has spun-off as Spansion. On the one hand, the results reflect AMD's tremendous year-on-year growth. The company, however disappointed investors by not beating out the results from its first quarter. AMD warned earlier this month that the second quarter numbers would likely come in 9 per cent below the first quarter revenue of $1.33bn. True to forecast, AMD's Q2 revenue rolled in 8.7 per cent below the Q1 mark. Still, AMD's year-over-year growth proved more impressive than Intel's 60 per cent profit slide reported yesterday. Both companies are locked in a fierce price-war on the desktop and server processor fronts. AMD hopes to keep the momentum around its processors, while Intel is betting that a new line of processors will blunt AMD's prospects. "While we achieved 53 per cent year-over-year sales growth and recorded our twelfth consecutive quarter of greater than 20 per cent year-over-year microprocessor sales growth, we are dissatisfied by not reaching our second quarter sales target," said AMD's CFO Robert Rivet. Sales of the Opteron chip rose 26 per cent when compared to the first quarter, but AMD was hurt by slower than expected desktop processor sales. Overall, AMD's processor shipments dipped 4 per cent from the first quarter. Investors hammered AMD shares in the after-hours markets. AMD dropped more than 6 per cent to $20.30 per share at the time of this report. The company once enjoyed a 52-week high of $42.70. ®
Ashlee Vance, 20 Jul 2006
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Investors' hopes rise as Microsoft's Q4 profit falls

Microsoft today erased investor worries over a 24 per cent drop in fourth quarter profits by announcing a massive stock buyback program and bullish results for its fiscal year. Redmond's fourth quarter revenue came in at $11.80bn - a 16 per cent year-over-year increase. The revenue gains, however, were offset by the large profit dip. Microsoft's profit slipped to $2.83bn or 28 cents per share from the $3.7bn or 34 cents per share reported last year. Microsoft's operating expenses rose more than 10 per cent, as the company shelled out cash to catch up to Google in the search game and correct product delays. As usual, Microsoft's bottom line was also hurt by legal settlements. This time around Microsoft chalked up $351m in legal charges as a result of a European Commission fine. Last year, Microsoft had to pay $756m in legal charges. But, when you're posting a $3bn profit, who cares? Riding Buyback Microsoft looks to please investors by putting its cash horde to good use. The company plans to buy back up to $40bn of stock via a $20bn tender offer and a $20bn five-year share repurchase plan. Investors were tickled again when Microsoft's CFO Chris Liddell promised "strong, double-digit revenue growth" in this fiscal year. With Vista and a revamped Office on its side, the company expects full-year 2007 revenue to come in between $49.7bn and $50.7bn. In the nearer term, Microsoft forecasted a first quarter revenue total between $10.6bn and $10.8bn. Some close software watchers wanted Microsoft to dish out specific revenue goals for Vista and Office. Liddell declined to provide such detail. Instead, he simply reiterated a November release of Vista to businesses, a January release to consumers and an Office release in the "beginning of next year." Bleeding MSN Looking back to the fourth quarter, we find Microsoft's client business humming along as usual. Client software revenue rose from $3bn in last year's fourth quarter to $3.4bn. This business also provided Microsoft with $2.5bn in income up from $2.2bn. The server and tools unit performed even better with revenue rising to $3.2bn from $2.7bn. This unit posted income of $1.2bn - up from $814m. Information worker revenue rose to $3.1bn from $2.9bn and offered up net income of $2.2bn - up from $2bn. Microsoft's home and entertainment business enjoyed a large rise in revenue, reaching $1.1bn in this year's fourth quarter as compared to $587m last year. The unit's loss, however, swelled to $414m from $201m. The MSN unit also posted a loss of $190m on revenue of $580m. That compares to a profit of $101m on revenue of $598m last year. For the fiscal year ended June, 30, Microsoft reported an 11 per cent rise in revenue to $44.28bn. Shares of Microsoft rose more than 5 per cent in after-hours trading, following the release of the financial report. ®
Ashlee Vance, 20 Jul 2006