UPDATE 1-US regulator unveils plan for universal broadband

* Genachowski offers plan for modernizing USF

* Cable group says gives phone companies unfair advantage

* Proposal set for agency vote on Oct. 27 (Adds comments from industry and analyst)

By Jasmin Melvin

WASHINGTON, Oct 6 (Reuters) - The U.S. communications regulator unveiled on Thursday a proposal for achieving universal broadband coverage by the end of the decade.

Some 18 million Americans do not have access to broadband where they live and work despite some $4.5 billion in public money spent each year to subsidize telephone service for rural families.

Federal Communications Commission Chairman Julius Genachowski proposed a strategy for revamping that government subsidy program to help deploy high-speed Internet service to millions of Americans living in rural and costly-to-serve areas.

"The costs of this broadband gap are measured in jobs not created, existing job openings not filled and our nation's competitiveness not advanced," Genachowski said in a speech on Thursday, acknowledging that the current program is broken.

The FCC earlier in the year proposed modernizing the $8 billion universal service fund -- paid for through fees added to consumers' telephone bills -- to spur infrastructure investment while removing inefficiencies in the program.

Genachowski's proposal would gradually move the largest program within the universal service fund, the program that subsidizes telephone service, to directly support fixed and mobile broadband.

His plan would also phase out funding for duplicating services offered by several phone companies serving the same area.

Broadband buildout to unserved areas could begin in early 2012 under the plan, bringing high-speed Internet to hundreds of thousands of homes in the near-term.

"It will help cut the number of Americans bypassed by broadband by up to one half over the following five years, and it will put us on the path to universal broadband by the end of the decade," Genachowski added.

The comprehensive set of reforms will be circulated to the other commissioners on Thursday, and are set for a vote at the FCC's Oct. 27 meeting.

CABLE INDUSTRY NOT HAPPY

Genachowski outlined a new competitive bidding process for securing funds from the program, but the American Cable Association said it bent heavily to incumbent phone companies.

The proposal would quickly move to this bidding process in some areas, but others would not shift until later years.

ACA said this would give incumbent phone carriers first dibs at monies from the fund while other broadband providers, like cable, wait years for the option to competitively bid to receive support in those areas.

"The chairman's plan locks in a sole-source contract worth billions of dollars for over ten years to a handful of incumbent large telecom companies," ACA Chief Executive Matthew Polka said in a statement.

ACA represents independent companies providing broadband service to 7.6 million subscribers.

But Genachowski argued in his speech that "a flash-cut to competitive bidding in some parts of the decades-old program risks consumer disruption, build-out delays, and other unintended consequences."

In order to push reform through, certain policy and political trade-offs must be made, and that may limit cable companies' prospects for receiving federal broadband support, said Medley Global Advisors analyst Jeffrey Silva.

"The political sensitivities almost demand that in order to get any sort of consensus that's politically viable, you have to get buy-in by rural telephone companies," Silva said.

"That may be the best this chairman or any chairman is going to be able to do because it's not just about policy, it's about politics," he added. (Reporting by Jasmin Melvin, editing by Bernard Orr)

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UPDATE 2-Sony near buying Ericsson out of phone venture-WSJ

* Sony talking to Ericsson about 50:50 joint venture-WSJ

* Sony and Ericsson decline to comment on reported talks

* Deal would be positive for both companies - analysts (Adds details in paragraphs 2, 8-11, byline)

By Tarmo Virki, European Technology Correspondent

Oct 6 (Reuters) - Sony Corp (6758.T) is nearing a deal to buy Telefon AB LM Ericsson's (ERICb.ST) stake in their 50:50 smartphone joint venture, The Wall Street Journal reported on Thursday, citing people familiar with the matter.

Sony and Ericsson have been talking for weeks about the future of the venture because the companies' 10-year-old pact is up for renewal this month, two industry sources told Reuters.

The Wall Street Journal said the talks were ongoing and could break apart at any time.

Ericsson and Sony declined to comment on the reported talks. "We have a long-term commitment to our joint ventures," said an Ericsson spokesman.

Many analysts say Japan's Sony needs to assert control over Sony Ericsson if the venture is to recoup market share in the cut-throat world of smartphones. [ID:nLDE74N0FB]

The joint venture, formed in 2001, thrived after its breakthrough with Walkman music phones and Cybershot cameraphones, both of which leveraged Sony's brands.

But it lost out to bigger rivals Nokia (NOK1V.HE) and Samsung Electronics (005930.KS) at the cheaper end of the market, and was late to react to Apple's (AAPL.O) entrance into the high-end of the market.

It has refocused its business to make smartphones using Google's (GOOG.O) Android platform, but it has dropped to No. 9 in global cellphone rankings from No. 4 just a few years ago.

It is making some progress and turned a net profit of 90 million euros last year after booking a loss of 836 million in 2009. But it reported another loss for the April-June quarter.

The venture is due to report its September quarter results on Oct 14.

DIVORCE GOOD FOR BOTH PARTNERS?

"A buyout would make a lot of sense for Ericsson as I believe their share in the joint venture is worth to them between zero and minus 1 billion euros," said Bernstein analyst Pierre Ferragu.

"Whatever price they agree on, it would be a positive for Ericsson," he said.

Shares in Sweden's Ericsson gained on the report and closed 6 percent higher at 69.20 crowns on Thursday.

A full takeover of the venture would boost Sony's overall offering, which includes content, gaming devices, consumer electronics and even tablet computers. But the company still lacks its own smartphones.

"The buyout allows Sony to move development in-house and better integrate other products like gaming into newer phones," said Steven Nathasingh from U.S. technology research firm Vaxa Inc.

Last month at the IFA trade fair in Berlin, Sony Ericsson's phones were presented inside the Sony hall, mixed with Sony's TV sets and new tablets. [ID:nN1E77U0KO] (Additional reporting by Yinka Adegoke, Anna Ringstrom, Sven Nordenstam and Liana Balinsky-Baker; Editing by Erica Billingham and John Wallace)

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UPDATE 2-BBC to shrink as it shares in UK spending cuts

* Follows 20 percent reduction in budget

* 2,000 jobs to be axed, senior manager roles to be cut

* Labour unions warn programming, journalism will suffer (Adds detail, background)

By Kate Holton and Georgina Prodhan

LONDON, Oct 6 (Reuters) - The BBC is set to axe over 10 percent of staff in its management, programming and news divisions after Britain's cash-strapped government imposed deep spending cuts on the world-renowned, publicly-funded broadcaster.

The corporation set out the changes on Thursday in response to a 20 percent cut to its annual 3.5 billion pound ($5.4 billion) budget imposed by the government a year ago as part of the deepest public spending cuts in decades.

Unions said the changes would damage independent journalism at a time when a phone hacking scandal has revealed embarrassingly close ties between the Prime Minister David Cameron and Rupert Murdoch's right-leaning News Corp , a long standing critic of the BBC.

The BBC budget was imposed by the government with very little negotiation. Around 600 BBC News posts will now go.

"By 2016, the BBC will be significantly smaller than it is today," it said.

With eight national TV channels, 50 radio stations and an extensive website, the BBC's size and resources had already attracted envy and criticism from rivals, led by James Murdoch at the dominant pay-TV group BSkyB .

As the recession gathered steam in 2008, that criticism intensified as advertising-funded groups such as ITV struggled to cope, cutting staff and budgets.

Under the new plans, the corporation will cut 2,000 jobs, reduce the budget for buying sports and other rights, slash the number of senior managers and share more content.

More repeats will be shown on television and property in west London will also be sold. The changes will result in savings of around 670 million pounds a year by 2016/17.

"The realities of what this country looks like in 2011 and what households up and down the country are going through, what other public institutions are going through, (means) it would be a bit odd if the national broadcaster wasn't feeling some of the same pressures," Director General Mark Thompson said.

LAST MINUTE DEAL

Last year, the BBC agreed to freeze the annual licence fee, payable by every TV-owning British household, at 145.50 pounds. It is also taking on extra costs from the government including funding the BBC World Service, which is broadcast overseas.

The agreement was hammered out in a matter of days, stripping out the months of negotiation normally involved in setting a licence fee, as the coalition government scrambled to cut spending after taking power.

The National Union of Journalists condemned the move and called again for the licence fee to be renegotiatied "especially given what has since emerged about the close relationship between the government and Rupert Murdoch at the time the deal was done."

The media and entertainment union BECTU said the cuts were a direct result of the "shocking 11th hour deal" on the licence fee which "will be the cause of regret for years to come".

The BBC towers over Britain's media landscape with a rich offering of drama, comedy and children's programming, a huge newsgathering operation and some of the UK's most popular websites.

In a lecture more than two years ago, News Corp executive and BSkyB Chairman James Murdoch lashed out at the BBC, accusing it of making a land grab for power and calling for a radical overhaul of British television regulation.

The pendulum has since swung back in favour of looser regulation more favourable to commercial rivals and lower public spending, especially since the recession and the installation of a centre-right coalition government in 2010.

Alex DeGroote, media analyst at London brokerage Panmure Gordon, said the slimming down of the BBC would help level the playing field in Britain, where commercial media companies were up against a far stronger public rival than their peers abroad.

"There's always been a BBC discount for commercial media in this country. It got particularly high in 2002-05. That's when you had a massive expansion of the BBC's inventory -- more digital radio, BBC3 and BBC4, lots of Internet sites," he said.

BSkyB should be well placed to benefit. It is increasing the budget it spends on programming and has recently signed a deal to share the broadcasting of Formula One with the BBC. It is also already very aggressive in acquiring sports rights and drama from the United States. (Editing by Will Waterman and David Cowell)

View the original article here

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UPDATE 2-BBC to shrink as it shares in UK spending cuts

* Follows 20 percent reduction in budget

* 2,000 jobs to be axed, senior manager roles to be cut

* Labour unions warn programming, journalism will suffer (Adds detail, background)

By Kate Holton and Georgina Prodhan

LONDON, Oct 6 (Reuters) - The BBC is set to axe over 10 percent of staff in its management, programming and news divisions after Britain's cash-strapped government imposed deep spending cuts on the world-renowned, publicly-funded broadcaster.

The corporation set out the changes on Thursday in response to a 20 percent cut to its annual 3.5 billion pound ($5.4 billion) budget imposed by the government a year ago as part of the deepest public spending cuts in decades.

Unions said the changes would damage independent journalism at a time when a phone hacking scandal has revealed embarrassingly close ties between the Prime Minister David Cameron and Rupert Murdoch's right-leaning News Corp , a long standing critic of the BBC.

The BBC budget was imposed by the government with very little negotiation. Around 600 BBC News posts will now go.

"By 2016, the BBC will be significantly smaller than it is today," it said.

With eight national TV channels, 50 radio stations and an extensive website, the BBC's size and resources had already attracted envy and criticism from rivals, led by James Murdoch at the dominant pay-TV group BSkyB .

As the recession gathered steam in 2008, that criticism intensified as advertising-funded groups such as ITV struggled to cope, cutting staff and budgets.

Under the new plans, the corporation will cut 2,000 jobs, reduce the budget for buying sports and other rights, slash the number of senior managers and share more content.

More repeats will be shown on television and property in west London will also be sold. The changes will result in savings of around 670 million pounds a year by 2016/17.

"The realities of what this country looks like in 2011 and what households up and down the country are going through, what other public institutions are going through, (means) it would be a bit odd if the national broadcaster wasn't feeling some of the same pressures," Director General Mark Thompson said.

LAST MINUTE DEAL

Last year, the BBC agreed to freeze the annual licence fee, payable by every TV-owning British household, at 145.50 pounds. It is also taking on extra costs from the government including funding the BBC World Service, which is broadcast overseas.

The agreement was hammered out in a matter of days, stripping out the months of negotiation normally involved in setting a licence fee, as the coalition government scrambled to cut spending after taking power.

The National Union of Journalists condemned the move and called again for the licence fee to be renegotiatied "especially given what has since emerged about the close relationship between the government and Rupert Murdoch at the time the deal was done."

The media and entertainment union BECTU said the cuts were a direct result of the "shocking 11th hour deal" on the licence fee which "will be the cause of regret for years to come".

The BBC towers over Britain's media landscape with a rich offering of drama, comedy and children's programming, a huge newsgathering operation and some of the UK's most popular websites.

In a lecture more than two years ago, News Corp executive and BSkyB Chairman James Murdoch lashed out at the BBC, accusing it of making a land grab for power and calling for a radical overhaul of British television regulation.

The pendulum has since swung back in favour of looser regulation more favourable to commercial rivals and lower public spending, especially since the recession and the installation of a centre-right coalition government in 2010.

Alex DeGroote, media analyst at London brokerage Panmure Gordon, said the slimming down of the BBC would help level the playing field in Britain, where commercial media companies were up against a far stronger public rival than their peers abroad.

"There's always been a BBC discount for commercial media in this country. It got particularly high in 2002-05. That's when you had a massive expansion of the BBC's inventory -- more digital radio, BBC3 and BBC4, lots of Internet sites," he said.

BSkyB should be well placed to benefit. It is increasing the budget it spends on programming and has recently signed a deal to share the broadcasting of Formula One with the BBC. It is also already very aggressive in acquiring sports rights and drama from the United States. (Editing by Will Waterman and David Cowell)

View the original article here

READ FULL STORY

UPDATE 1-Oracle to pay $199.5 mln to resolve false claims case

* Case involves contract dating back to 1998

* Oracle denied engaging in fraud, but agreed to settle (Adds details of case, Oracle comment)

WASHINGTON Oct 6 (Reuters) - Oracle Corp (ORCL.O) has agreed to pay $199.5 million plus interest to settle allegations that the software giant failed to give promised discounts to the federal government, the U.S. Justice Department said on Thursday.

The world's No. 3 software company was also accused of making false statements about its sales practices and discounts and failing to meet its contract obligations to provide complete information about its sales practices.

Additionally, Oracle did not disclose higher discounts given to other customers and as a result the federal government paid more for its products than it should have, according to the Justice Department.

The settlement over false claims allegations is the largest involving the General Services Administration, which handles procurement for the federal government.

"Resolutions like this one - the largest GSA false claims settlement in history - demonstrate our commitment to ensure taxpayers are not overpaying for the products and services they receive," Tony West, head of the Justice Department's Civil Division, said in a statement.

Oracle denied any wrongdoing or that it engaged in fraud as part of the contract, which dates back to 1998, and argued that many of the witnesses were no longer available or did not remember the events.

Nevertheless, company spokeswoman Deborah Hellinger said "Oracle has therefore decided to avoid the distraction and high cost of litigating this case by settling."

The settlement represents about 11 percent of the $1.84 billion in net income Oracle had in the quarter that ended Aug. 31.

The case involved a former Oracle employee who became a whistleblower, Paul Frascella, and he will receive $40 million as his share, according to the Justice Department.

Oracle shares closed up 56 cents, or 1.9 percent, at $30.07 in regular trading on the New York Stock Exchange. (Reporting by Jeremy Pelofsky in Washington and Jim Finkle in Boston, editing by Carol Bishopric, Gary Hill)

View the original article here

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UPDATE 2-Sony near buying Ericsson out of phone venture-WSJ

* Sony talking to Ericsson about 50:50 joint venture-WSJ

* Sony and Ericsson decline to comment on reported talks

* Deal would be positive for both companies - analysts (Adds details in paragraphs 2, 8-11, byline)

By Tarmo Virki, European Technology Correspondent

Oct 6 (Reuters) - Sony Corp (6758.T) is nearing a deal to buy Telefon AB LM Ericsson's (ERICb.ST) stake in their 50:50 smartphone joint venture, The Wall Street Journal reported on Thursday, citing people familiar with the matter.

Sony and Ericsson have been talking for weeks about the future of the venture because the companies' 10-year-old pact is up for renewal this month, two industry sources told Reuters.

The Wall Street Journal said the talks were ongoing and could break apart at any time.

Ericsson and Sony declined to comment on the reported talks. "We have a long-term commitment to our joint ventures," said an Ericsson spokesman.

Many analysts say Japan's Sony needs to assert control over Sony Ericsson if the venture is to recoup market share in the cut-throat world of smartphones. [ID:nLDE74N0FB]

The joint venture, formed in 2001, thrived after its breakthrough with Walkman music phones and Cybershot cameraphones, both of which leveraged Sony's brands.

But it lost out to bigger rivals Nokia (NOK1V.HE) and Samsung Electronics (005930.KS) at the cheaper end of the market, and was late to react to Apple's (AAPL.O) entrance into the high-end of the market.

It has refocused its business to make smartphones using Google's (GOOG.O) Android platform, but it has dropped to No. 9 in global cellphone rankings from No. 4 just a few years ago.

It is making some progress and turned a net profit of 90 million euros last year after booking a loss of 836 million in 2009. But it reported another loss for the April-June quarter.

The venture is due to report its September quarter results on Oct 14.

DIVORCE GOOD FOR BOTH PARTNERS?

"A buyout would make a lot of sense for Ericsson as I believe their share in the joint venture is worth to them between zero and minus 1 billion euros," said Bernstein analyst Pierre Ferragu.

"Whatever price they agree on, it would be a positive for Ericsson," he said.

Shares in Sweden's Ericsson gained on the report and closed 6 percent higher at 69.20 crowns on Thursday.

A full takeover of the venture would boost Sony's overall offering, which includes content, gaming devices, consumer electronics and even tablet computers. But the company still lacks its own smartphones.

"The buyout allows Sony to move development in-house and better integrate other products like gaming into newer phones," said Steven Nathasingh from U.S. technology research firm Vaxa Inc.

Last month at the IFA trade fair in Berlin, Sony Ericsson's phones were presented inside the Sony hall, mixed with Sony's TV sets and new tablets. [ID:nN1E77U0KO] (Additional reporting by Yinka Adegoke, Anna Ringstrom, Sven Nordenstam and Liana Balinsky-Baker; Editing by Erica Billingham and John Wallace)

View the original article here

READ FULL STORY

UPDATE 1-US regulator unveils plan for universal broadband

* Genachowski offers plan for modernizing USF

* Cable group says gives phone companies unfair advantage

* Proposal set for agency vote on Oct. 27 (Adds comments from industry and analyst)

By Jasmin Melvin

WASHINGTON, Oct 6 (Reuters) - The U.S. communications regulator unveiled on Thursday a proposal for achieving universal broadband coverage by the end of the decade.

Some 18 million Americans do not have access to broadband where they live and work despite some $4.5 billion in public money spent each year to subsidize telephone service for rural families.

Federal Communications Commission Chairman Julius Genachowski proposed a strategy for revamping that government subsidy program to help deploy high-speed Internet service to millions of Americans living in rural and costly-to-serve areas.

"The costs of this broadband gap are measured in jobs not created, existing job openings not filled and our nation's competitiveness not advanced," Genachowski said in a speech on Thursday, acknowledging that the current program is broken.

The FCC earlier in the year proposed modernizing the $8 billion universal service fund -- paid for through fees added to consumers' telephone bills -- to spur infrastructure investment while removing inefficiencies in the program.

Genachowski's proposal would gradually move the largest program within the universal service fund, the program that subsidizes telephone service, to directly support fixed and mobile broadband.

His plan would also phase out funding for duplicating services offered by several phone companies serving the same area.

Broadband buildout to unserved areas could begin in early 2012 under the plan, bringing high-speed Internet to hundreds of thousands of homes in the near-term.

"It will help cut the number of Americans bypassed by broadband by up to one half over the following five years, and it will put us on the path to universal broadband by the end of the decade," Genachowski added.

The comprehensive set of reforms will be circulated to the other commissioners on Thursday, and are set for a vote at the FCC's Oct. 27 meeting.

CABLE INDUSTRY NOT HAPPY

Genachowski outlined a new competitive bidding process for securing funds from the program, but the American Cable Association said it bent heavily to incumbent phone companies.

The proposal would quickly move to this bidding process in some areas, but others would not shift until later years.

ACA said this would give incumbent phone carriers first dibs at monies from the fund while other broadband providers, like cable, wait years for the option to competitively bid to receive support in those areas.

"The chairman's plan locks in a sole-source contract worth billions of dollars for over ten years to a handful of incumbent large telecom companies," ACA Chief Executive Matthew Polka said in a statement.

ACA represents independent companies providing broadband service to 7.6 million subscribers.

But Genachowski argued in his speech that "a flash-cut to competitive bidding in some parts of the decades-old program risks consumer disruption, build-out delays, and other unintended consequences."

In order to push reform through, certain policy and political trade-offs must be made, and that may limit cable companies' prospects for receiving federal broadband support, said Medley Global Advisors analyst Jeffrey Silva.

"The political sensitivities almost demand that in order to get any sort of consensus that's politically viable, you have to get buy-in by rural telephone companies," Silva said.

"That may be the best this chairman or any chairman is going to be able to do because it's not just about policy, it's about politics," he added. (Reporting by Jasmin Melvin, editing by Bernard Orr)

View the original article here

READ FULL STORY

UPDATE 1-Oracle to pay $199.5 mln to resolve false claims case

* Case involves contract dating back to 1998

* Oracle denied engaging in fraud, but agreed to settle (Adds details of case, Oracle comment)

WASHINGTON Oct 6 (Reuters) - Oracle Corp (ORCL.O) has agreed to pay $199.5 million plus interest to settle allegations that the software giant failed to give promised discounts to the federal government, the U.S. Justice Department said on Thursday.

The world's No. 3 software company was also accused of making false statements about its sales practices and discounts and failing to meet its contract obligations to provide complete information about its sales practices.

Additionally, Oracle did not disclose higher discounts given to other customers and as a result the federal government paid more for its products than it should have, according to the Justice Department.

The settlement over false claims allegations is the largest involving the General Services Administration, which handles procurement for the federal government.

"Resolutions like this one - the largest GSA false claims settlement in history - demonstrate our commitment to ensure taxpayers are not overpaying for the products and services they receive," Tony West, head of the Justice Department's Civil Division, said in a statement.

Oracle denied any wrongdoing or that it engaged in fraud as part of the contract, which dates back to 1998, and argued that many of the witnesses were no longer available or did not remember the events.

Nevertheless, company spokeswoman Deborah Hellinger said "Oracle has therefore decided to avoid the distraction and high cost of litigating this case by settling."

The settlement represents about 11 percent of the $1.84 billion in net income Oracle had in the quarter that ended Aug. 31.

The case involved a former Oracle employee who became a whistleblower, Paul Frascella, and he will receive $40 million as his share, according to the Justice Department.

Oracle shares closed up 56 cents, or 1.9 percent, at $30.07 in regular trading on the New York Stock Exchange. (Reporting by Jeremy Pelofsky in Washington and Jim Finkle in Boston, editing by Carol Bishopric, Gary Hill)

View the original article here

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