Tag Archives: U.S.
BEIJING (Reuters) – Chinese telecoms equipment group ZTE Corp hit back on Thursday against concerns from U.S. lawmakers that it is a vehicle for Chinese espionage, saying it was a trusted partner of its U.S. customers, state news agency Xinhua reported.
China is trying to gain access to sensitive U.S. technologies and intellectual properties through telecommunications companies, academia and joint business ventures, U.S. senators and spy chiefs warned on Tuesday.
Republican Senator Richard Burr, chairman of the Senate Intelligence Committee, said he was concerned about the ties to the Chinese government of Chinese telecoms companies like Huawei Technologies Co Ltd and ZTE.
“ZTE is proud of the innovation and security of our products in the U.S. market,” Xinhua cited a ZTE spokesman as saying.
The company takes cybersecurity and privacy seriously, has always adhered to laws and remains a trusted partner of U.S. suppliers and customers, the company added.
“As a publicly traded company, we are committed to adhering to all applicable laws and regulations of the United States, work with carriers to pass strict testing protocols, and adhere to the highest business standards,” it said.
Last week, Republican Senator Tom Cotton and Republican Senator Marco Rubio introduced legislation that would block the U.S. government from buying or leasing telecoms equipment from Huawei or ZTE, citing concern the companies would use their access to spy on U.S. officials.
In 2012, Huawei and ZTE were the subject of a U.S. investigation into whether their equipment provided an opportunity for foreign espionage and threatened critical U.S. infrastructure – something they have consistently denied.
Allegations of hacking and internet spying have long strained relations between China and the United States. In 2014 then FBI Director James Comey said Chinese hacking likely cost the U.S. economy billions of dollars every year.
China has strongly denied all U.S. accusations of hacking attacks.
Reporting by Ben Blanchard; Editing by Stephen Coates
WASHINGTON (Reuters) – Elon Musk’s SpaceX, fresh off the successful launch this month of the world’s most powerful rocket, won an endorsement on Wednesday from the top U.S. communications regulator to build a broadband network using satellites.
Federal Communications Commission Chairman Ajit Pai proposed the approval of an application by SpaceX to provide broadband services using satellites in the United States and worldwide.
“Satellite technology can help reach Americans who live in rural or hard-to-serve places where fiber optic cables and cell towers do not reach,” Pai said in a statement.
SpaceX told the FCC in a Feb. 1 letter that it plans to launch a pair of experimental satellites on one of its Falcon 9 rockets. That launch, which has been approved by the FCC, is set for Saturday in California.
The rocket will carry the PAZ satellite for Hisdesat of Madrid, Spain and multiple smaller secondary payloads.
SpaceX was not immediately available for comment.
On Feb. 6, the company launched the world’s most powerful rocket, SpaceX’s Falcon Heavy, from Florida. The 23-story-tall jumbo rocket carried a Tesla Inc Roadster from the assembly line of Musk’s electric car company as a mock payload
Pai said after a staff review he was urging approval for SpaceX, saying: ”it would be the first approval given to an American-based company to provide broadband services using a new generation of low-Earth orbit satellite technologies.”
Over the past year, the FCC has approved requests by OneWeb, Space Norway, and Telesat to access the U.S. market to provide broadband services using satellite technology. The FCC said the technology “holds promise to expand Internet access in remote and rural areas across the country.”
The recent approvals are the first of their kind, the FCC said, for “a new generation of large, non-geostationary satellite orbit, fixed-satellite service systems.”
The FCC “continues to process other, similar requests,” it added.
The Wall Street Journal reported in 2017 that SpaceX hopes it can use revenue from a satellite-internet business to finance manned missions to Mars.
The U.S. government is working to try to bring high-speed internet access to rural areas that lack service. An FCC report released this month said the number of Americans without access to both fixed and mobile broadband fell by more than half from 72.1 million in 2012 to 34.5 million in 2014.
Approximately 14 million rural Americans and 1.2 million Americans on tribal lands lack mobile broadband even at relatively slow speeds.
Reporting by David Shepardson in Washington and Munsif Vengattil in Bengaluru; Editing by David Gregorio
SHANGHAI/BEIJING (Reuters) – Chinese internet search firm Baidu Inc posted a forecast-beating quarterly revenue increase and unveiled a U.S. listing plan for its Netflix-like video platform iQiyi as it looks to rev up new drivers for growth.
Baidu posted on Tuesday fourth quarter revenue of 23.6 billion yuan ($ 3.72 billion), up 29 percent against the same period a year ago and topping analysts’ forecasts of 23.05 billion yuan and the company’s own guidance.
The strong results are a major fillip for Baidu as it looks to ramp up spending on riskier gambles in autonomous driving and fend off cashed-up rivals such as Tencent Holdings Ltd and Alibaba Group Holding Ltd in online video content.
A U.S. listing would bring extra financial muscle for its popular iQiyi platform as it ramps up spending. Baidu said the size of any IPO was not yet set, but that it would likely remain iQiyi’s controlling shareholder. iQiyi could be worth $ 8 billion or more, according to Reuters Breakingviews.
“An IPO will bolster iQiyi’s position in the market and give it more cash to buy content or make content on their own,” said Ni Shuang, Beijing-based Pacific Securities analyst, adding it would help Baidu keep pace with rivals in the space.
The strong quarterly showing – driven by the core search and news feed businesses – is also key to generating cash flow “to fund our new AI businesses”, Baidu chief executive Robin Li told a post-earnings conference call.
The company’s shares rose nearly 5 percent in extended trading after the results, overturning a nearly 4 percent fall since the start of the year.
Herman Yu, the firm’s chief financial officer, said content costs rose 70 percent last year to 13.4 bln yuan as iQiyi acquired content. These costs would rise at a similar pace this year.
The firm will also raise R&D spending in areas like its Apollo open-source software platform for autonomous driving, which executives said would eventually become a “very material and significant revenue source for the company”.
“Having said that, a key caveat is that this market will take time to build,” chief operating officer Qi Lu told the conference call.
Strong results in its more traditional businesses were central to Baidu’s success, with revenue from its core online marketing – including its search platform and news feed – jumping 26.3 percent to 20.4 billion yuan.
The results will help soothe Baidu investors as the company looks to turn around its fortunes after a series of missteps sparked steep losses in 2016 and hit its advertising revenue from internet searches.
Baidu, part of China’s trinity of tech giants along with Alibaba and Tencent, posted net income of 4.16 billion yuan in the quarter ended Dec. 31, up from 4.13 billion yuan a year earlier.
Excluding one-time items, the company earned 14.9 yuan per ADS, above forecasts.
Baidu pegged its guidance for first-quarter revenue growth, between 19.86 billion yuan and 20.97 billion yuan, a 25-32 percent increase against the same period of 2017. That compared with analysts’ average estimate of 21.18 billion yuan.
Reporting by Adam Jourdan in SHANGHAI, Pei Li in BEIJING and Arjun Panchadar in BENGALURU; Editing by Eric Meijer and Muralikumar Anantharaman
OTTAWA (Reuters) – Canadian Prime Minister Justin Trudeau will meet Amazon.com (AMZN.O) Chief Executive Jeff Bezos on Thursday during a tour of three major U.S. cities this week to bolster support for the North American Free Trade Agreement, which is being renegotiated.
Amazon is in the process of identifying a location to build a massive new second headquarters and has shortlisted 20 cities, including Toronto, the only non-U.S. city to make the list.
Trudeau will meet Bezos in San Francisco, the government said on Wednesday.
During his trip, Trudeau will also meet with other technology executives, including eBay Inc (EBAY.O) chief executive officer Devin Wenig.
“The point of those meetings is to portray Canada as a good place to invest … and to explore opportunities related to job growth with those prominent business leaders who may be interested in expanding their operations in Canada,” said spokesman Cameron Ahmad.
Ahmad declined to comment specifically on the meeting with Bezos.
Amazon’s decision on where to locate its second headquarters is expected this year. The tech giant has promised to invest $ 5 billion and create 50,000 jobs in the city it chooses. The 19 U.S. cities on the list include Chicago, Boston and New York.
Trudeau’s trip also comes as Canada and Mexico strive to address U.S. demands for NAFTA reform, with the fate of the trade pact uncertain. Last week, Trudeau reiterated a tough stance, saying Canada could walk away if he was not happy with talks to modernize the agreement.
Trudeau is due to give a speech in Chicago on Wednesday to sell the merits of bilateral trade.
Reporting by Leah Schnurr and David Ljunggren; Editing by Bernadette Baum
WASHINGTON (Reuters) – The U.S. Justice Department on Wednesday announced indictments of 36 people in a global internet identity theft scheme that caused more than $ 530 million in losses to consumers, businesses and financial institutions.
International law enforcement authorities arrested 13 defendants from the United States, Australia, the United Kingdom, France, Italy, Kosovo and Serbia.
“Today’s indictment and arrests mark one of the largest cyberfraud enterprise prosecutions ever undertaken by the Department of Justice,” said Acting Assistant Attorney General John Cronan.
Reporting by Sarah N. Lynch; Writing by Doina Chiacu; Editing by David Alexander
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(Reuters) – AT&T Inc, the No. 2 U.S. wireless carrier, said it would launch fifth-generation (5G) mobile network service in a dozen cities in the United States by late 2018, after international wireless standards for the network were finalised last month.
The 5G technology is expected to provide higher speed and response times than 4G networks used today.
Reporting by Rama Venkat Raman in Bengaluru; Editing by Amrutha Gayathri
NEW YORK/SAN FRANCISCO (Reuters) – Music streaming service Spotify has filed confidentially for an initial public offering with the U.S. Securities and Exchange Commission (SEC) and is moving ahead with a direct listing in the first half of the year, a source familiar with the matter said on Wednesday.
If Spotify, with was valued at as much as $ 19 billion last year, goes ahead with its plans, it would make it the first major company to carry out a direct listing, an unconventional way to pursue an IPO without raising new capital.
It also mainly eliminates the need for a Wall Street bank or broker to underwrite an IPO along with many associated fees and could change the way companies approach selling shares to the public.
The confidential filing was initially reported by news outlet Axios.
Spotify is the biggest global music streaming company and counts Apple Inc (AAPL.O) and Amazon.com Inc (AMZN.O) as its main rivals. Reuters has previously reported Spotify was aiming to file for an IPO in late 2017 and list with the New York Stock Exchange early this year.
Spotify could not be reached for comment.
Spotify was sued by Wixen Music Publishing Inc last week for allegedly using thousands of songs, including those of Tom Petty, Neil Young and The Doors, without a license and compensation to the music publisher. It was unclear what the lawsuit’s effect would be on its IPO plans.
Wixen, an exclusive licensee of songs such as “Free Fallin’” by Tom Petty, “Light My Fire” by the Doors, “(Girl We Got a) Good Thing” by Weezer and works of singers such as Stevie Nicks, is seeking damages worth at least $ 1.6 billion along with injunctive relief.
Spotify still intends to proceed with a U.S. direct listing in the first half of 2018, despite the lawsuit, according to a source familiar with the matter. It has filed for the listing confidentially with the SEC, with Goldman Sachs, Morgan Stanley and Allen & Co helping arrange it, the source added.
Reporting by Greg Roumeliotis in New York and Liana B. Baker in San Francisco; Editing by Meredith Mazzilli
(Reuters) – Two consulting firms hired to help the United States police ZTE Corp’s compliance with trade sanctions have resigned, according to four people familiar with the matter.
China’s second-largest telecommunications company agreed earlier this year to pay a nearly $ 900 million penalty – the largest in a U.S. export controls case – and open its books to a U.S. monitor as part of a guilty plea for illegally shipping goods to Iran and North Korea. To read the Reuters report that exposed the practice, click goo.gl/rvNwr6
Guidepost Solutions and Larkin Trade International were hired in June by the U.S. monitor in charge of the oversight regime – Texas lawyer James Stanton – to help assess the company’s compliance with U.S. export control and sanctions laws, and reduce its risk of future misconduct, said the people, who wished to remain unnamed because the matter is not public.
In late August, the two firms parted ways with the monitor after clashing over his approach to the job, the people said. Although Reuters was unable to determine the exact reasons for the departure , Stanton initially restricted the consultants’ access to ZTE documents and officials, hindering their ability to help monitor the company, one of the people said.
Stanton did not respond to multiple phone calls and emails seeking comment.
Tina Larkin, the chief financial officer of Larkin International, declined to comment, as did a spokeswoman for Guidepost Solutions.
A lawyer for ZTE declined to discuss the departure of the consulting firms, or the company’s relationship with the monitor.
“We’re looking to be cooperative and have a successful monitorship,” said Matthew Bell, the head of compliance for ZTE in the United States.
The problems with efforts to monitor ZTE, unreported to date, are rooted in how a U.S. judge set up the policing program in March, according to interviews with more than half a dozen people familiar with the matter and a review of court documents related to the plea deal between ZTE and the U.S. government.
U.S. District Judge Ed Kinkeade presided over the ZTE sanctions case because the Justice Department filed the plea agreement between the United States and ZTE in his court in Texas, where the company’s U.S. headquarters are located.
Before signing off on the plea deal, Kinkeade took the unusual step of having the agreement rewritten to put Stanton, a civil and personal injury lawyer, in charge of monitoring ZTE’s compliance with U.S. export controls, several people familiar with the matter said.
The appointment was made despite the Dallas-based attorney’s lack of experience in U.S. trade controls. The order naming him was sealed, leaving additional details about the judge’s decision unclear.
Generally, the Department of Justice chooses an independent monitor in a corporate criminal case from candidates proposed by the company, which is how the deal was originally set.
But ZTE and the Justice Department felt compelled to agree to Kinkeade’s choice and the changes to the monitorship agreement, sources said, because the plea had already been negotiated and filed in the judge’s court and a temporary license allowing ZTE to obtain U.S. made goods – crucial for the company’s output – was about to expire.
While courts have been weighing in more often on monitors, John Hanson, president of the Virginia-based International Association of Independent Corporate Monitors, said it was extremely rare for a judge to modify a major part of a plea agreement between a company and the government to select his own monitor.
Kinkeade and his courtroom deputy did not respond to inquiries about the monitorship and requests for comment.
A spokesman for the U.S. Department of Justice, which negotiated the guilty plea with the company, declined to comment. A spokesman for the Commerce Department referred questions to the U.S. Attorney’s office in Texas, which also declined to comment.
Stanton has to issue three reports, the first of which is due in January, on ZTE’s compliance with U.S. trade rules. The reports will help determine whether the company is liable for an additional fine of $ 300 million or, worse, should lose its access to the U.S. market.
Both Washington and Beijing have a lot riding on the reports and the success of the monitorship, which is set to last three years. The agreement allows the company continued access to the U.S. market, which provides 25 to 30 percent of the components used in its networking gear and smart phones. It is also part of a wider push by the United States to get China’s cooperation in combating nuclear proliferation and marks the first time that a Chinese company has submitted to such scrutiny.
Kevin Wolf, a former Commerce Department official who worked on the ZTE case, said the first few months of a monitorship do not always determine success or failure.
“With any monitorship involving a complex situation, inevitably there will be start-up problems but in my experience the issues work out in the long run,” said Wolf, who is now a lawyer in Washington D.C.
“MY MENTOR, ED KINKEADE”
Kinkeade has known Stanton for over a decade. Both graduates of Baylor law school in Waco, Texas, Stanton dedicated a 2016 book, titled “What Judges Want” to Kinkeade, who he described as his mentor.
“He guided me with grace and judgment as I became a lawyer, a husband, a father and a judge,” Stanton wrote of Kinkeade in his book. Stanton was appointed as a Texas state civil judge in 2009 and lost the election the following year.
In the modified ZTE plea agreement, references to required qualifications and experience were removed, and a clause about professionals assisting the monitor was added, according to a review of the original and modified documents.
To compare the plea agreements, click tmsnrt.rs/2BV5Duq
Kinkeade also gave his own court a key role in overseeing the monitorship, including replacing the Justice Department as the arbiter in any dispute, and the monitor’s description was changed in one paragraph from “independent third-party” to ”judicial adjunct.” In an unusual move, the judge used a civil rule to make the monitor a judicial adjunct, despite it being a criminal case.
“Anyone who looked at this scratched his or her head,” said Washington lawyer Jacob Frenkel, who specializes in government investigations at Dickinson Wright and has represented monitors. “How do you appoint someone without requisite qualifications to the monitorship?”
While monitors are not always subject experts, they generally are not appointed in major cases without some relevant experience, Frenkel added.
With the original consultants out, Stanton turned to Ernst & Young in August to advise him, two people familiar with the monitorship, said.
Since Ernst & Young has been ZTE’s auditor since 2004, some ethics experts including University of Virginia law professor Brandon Garrett said the hiring raised conflict of interest concerns about how independent the firm would be in assessing the company’s adherence to U.S. trade rules.
A spokeswoman for Ernst & Young declined to comment, as did a lawyer for ZTE.
Editing by Carmel Crimmins and Edward Tobin
WASHINGTON (Reuters) – The Trump administration is expected on Tuesday to publicly blame North Korea for unleashing a cyber attack that crippled hospitals, banks and other companies across the globe earlier this year, said two sources familiar with the matter.
The accusation that the North Korean government was behind the so-called WannaCry attack comes as worries mount about North Korea’s hacking capabilities and its nuclear weapons program.
The U.S. government has assessed with a “very high level of confidence” that a hacking entity known as Lazarus Group, which works on behalf of the North Korean government, carried out the WannaCry attack, a senior administration official said. The official spoke on condition of anonymity to discuss details not yet public.
The White House did not immediately respond to a request for comment.
The public condemnation will not include any indictments or name specific individuals, the official said. But the shaming is designed to hold North Korea accountable for its actions and “erode and undercut their ability to launch attacks,” the official said.
North Korean government representatives could not be immediately reached for comment. The country has repeatedly denied responsibility for WannaCry and called other allegations about cyber attacks a smear campaign.
Lazarus Group is widely believed by security researchers and U.S. officials to have been responsible for the 2014 hack of Sony Pictures Entertainment, which destroyed files, leaked corporate communications online and led to the departure of several top studio executives.
Sony also suspended release of a comedy film that portrayed North Korea’s ruler, Kim Jong Un, because of threats issued by the hackers.
Then-U.S. President Barack Obama condemned Pyongyang for the Sony hack, vowing at the time to “respond proportionally.” No indictments have been brought in the Sony case.
Reporting by Dustin Volz; Editing by Jonathan Weber and Peter Cooney