US firms object to source code rules

29 January 2015 Last updated at 14:35 By Kevin Rawlinson BBC News

US business groups are seeking "urgent discussions" over new Chinese rules requiring foreign firms to hand over source code and other measures.

The groups wrote to senior government officials after the introduction of the cybersecurity regulations at the end of last year.

The US Chamber of Commerce and other groups called the rules "intrusive".

The regulations initially apply to firms selling products to Chinese banks but are part of a wider review.

"An overly broad, opaque, discriminatory approach to cybersecurity policy that restricts global internet and ICT products and services would ultimately isolate Chinese ICT firms from the global marketplace and weaken cybersecurity, thereby harming China's economic growth and development and restricting customer choice," the letter read.

The groups said that the rules would force technology sellers to create backdoors for the Chinese government, adopt Chinese encryption algorithms and disclose sensitive intellectual property.

Firms planning to sell computer equipment to Chinese banks would also have to set up research and development centres in the country, get permits for workers servicing technology equipment and build "ports" which enable Chinese officials to manage and monitor data processed by their hardware, Reuters reported.

Source code is the usually tightly guarded series of commands that create programs. For most computing and networking equipment, it would have to be turned over to officials, according to the new regulations.

Tension

In the letter, a copy of which has been seen by the BBC, the groups have asked the Chinese government to delay implementation of the regulations and "grant an opportunity for discussion and dialogue for interested stakeholders with agencies responsible for the initiatives".

They added: "The domestic purchasing and related requirements proposed recently for China's banking sector... would unnecessarily restrict the ability of Chinese entities to source the most reliable and secure technologies, which are developed in the global supply chain," the letter, which was dated 28 January, read.

The letter from the American groups, including the US Chamber of Commerce, AmCham China and 16 others, was addressed to the Central Leading Small Group for Cyberspace Affairs, which is led personally by Chinese President Xi Jinping.

It comes at a time of heightened tension between the USA and China over cybersecurity. In May last year, Beijing denounced US charges against Chinese army officers accused of economic cyber-espionage.

Pressure

It was also alleged that the US National Security Agency spied on Chinese firm Huawei, while the US Senate claimed that the Chinese government broke into the computers of airlines and military contractors.

American tech firms, such as Cisco and Microsoft, are facing increased pressure from Chinese authorities to accept rigorous security checks before their products can be purchased by China's sprawling, state-run financial institutions.

Beijing has considered its reliance on foreign technology a national security weakness, particularly following former National Security Agency contractor Edward Snowden's revelations that US spy agencies planted code in American-made software to snoop on overseas targets.

The cyber-space policy group approved a 22-page document in late 2014 that contained the heightened procurement rules for tech vendors, the New York Times reported on Thursday.

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Google profits up nearly 30%

29 January 2015 Last updated at 22:09

Internet giant Google reported fourth-quarter profits of $4.76bn (£3.16bn), up nearly 30% from the same period a year before, but revenue missed Wall Street expectations.

The company's revenue increased by 15% to $18bn - nearly the same amount as Apple's profit last quarter.

Google, like other US firms, was hurt by the strength of the US dollar.

It said revenues would have been $541m higher had foreign exchange rates been more favourable.

The cost-per-click - or the amount Google can charge advertisers for placing ads on its network - decreased by 3% over the quarter, indicating that Google is still having difficulty raising the price it charges for mobile ads.

The metric is closely watched by investors, who worry that the firm's mobile ad business is not as strong as its desktop search business - which is troubling, given that consumers are increasingly switching to accessing the internet on their smartphones and mobile devices.

Google shares dipped nearly 2% in trading after markets had closed, but recovered later in the evening.

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BT attacked on rural broadband costs

30 January 2015 Last updated at 16:11 By Jane Wakefield Technology reporter

BT has been accused by MPs of "vastly overestimating" the cost of providing broadband to rural areas.

It follows a National Audit Office (NAO) report, which revealed that the rollout will cost at least £92m less than BT had originally said.

The government said that the spare cash would be ploughed back into offering fast broadband to more remote areas.

BT said that the claim - made by MPs on the Public Accounts Committee (PAC) - was "bizarre".

PAC told the BBC it questioned why BT had told the committee it would cost so much more.

"Although it's reassuring that the cost to the public purse could end up being £92m (25%) less than what BT had originally forecast in its bid, I worry that this does not stack up with what BT told my committee in 2013 - that it factors in a contingency of between 5% and 8%, which might not get spent, a much smaller proportion than 25%," Margaret Hodge, chair of the PAC, told the BBC.

"It is very concerning that it looks like BT could have abused its dominant position in the market by vastly overestimating forecast costs in the first place when it put in its original bid, and we also have broader concerns about whether the deal represents value for money."

In response BT said that its initial cost estimates were "based on our initial view of how much it would cost to deploy fibre in rural areas".

"We have come in under budget in several areas which is good news for the taxpayer as we only charge for the costs we incur, not those we first forecast. The savings can now be reinvested to take fibre to additional areas."

"The suggestion we inflated those costs is bizarre as by doing so we would have hindered our chances of winning the work."

"The NAO report this week confirmed our costs were 20% below those others would have charged in a sample area, so we are clearly delivering excellent value for money."

Rural disadvantage

The distribution of broadband is overseen by Broadband Delivery UK (BDUK), part of the Department for Culture, Media and Sport (DCMS).

The report found "significantly lower" costs than listed in BT's financial model for the first phase of the scheme.

"As at September 2014, BT's total reported capital spend on phase 1 of the programme was £142 million (38%) under the estimated price, including work in progress not yet invoiced," the NAO said.

Taking into account possible further costs, BT would still have spent "approximately £92m less", the report concludes.

This sum will be ploughed back into rural rollouts, the DCMS said.

"The savings realised so far, along with with projected future savings, will be reinvested in extending the current rollout plans."

Several reports have found that rural businesses, schools and homes are at a significant disadvantage because of poor broadband.

Bringing faster services to remote areas has proved to be highly controversial.

Questions have been raised about the time it has taken the government to start the rollout and whether the plans are ambitious enough.

Last year the Public Accounts Committee accused the government of mismanaging the project, and said BT released "wildly inaccurate" estimates of costs.

Mrs Hodge said at the time: "The taxpayer has been ripped off, with £1.2bn going to the shareholders of BT."

Ultra-fast broadband

BT's status as the only operator providing rural broadband could actually be one of the reasons for costs being cut, said Andrew Ferguson, editor of the ThinkBroadband news site.

"It is interesting that a chunk of the savings are down to the fact that only one supplier won all the contracts, increasing the economies of scale, at the expense of competition," he said.

Mike Kiely, a former adviser to BDUK, has long argued that BT's estimates of the cost of distributing broadband to rural areas were far too high.

He felt vindicated by the findings, saying: "Thirty-eight per cent excess costs have been confirmed in the cost models used to calculate the milestone payments. Those monies - and there will be more - need to be used to extend the fibre rollout further."

He and others argue that BT should think about offering even faster broadband - by taking so-called "fibre-to-the-premise" technology, which offers significantly higher speeds than BT's preferred technology of "fibre-to-the-cabinet".

BT hopes to deliver speeds of up to 500Mbps (megabits per second) to homes via an innovative technology known as G.fast.

"We believe G.fast is the key to unlocking ultrafast speeds and we are prepared to upgrade large parts of our network should the pilots prove successful," chief executive Gavin Patterson said.

The firm expects to offer initial speeds of a few hundred megabits per second to millions of homes and businesses by 2020.

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First-class fliers get virtual reality

29 January 2015 Last updated at 11:43

First-class passengers flying between Australia and the US will soon be able to watch content via a virtual reality headset, airline Qantas has announced.

In the first tie-up of its kind, the airline has teamed up with Samsung to provide the headsets for in-flight entertainment.

The Samsung Gear VR headsets will show a variety of tailored content.

Experts have questioned how much content will be available and what the impact on fellow passengers might be.

Qantas said the headset would offer new experiences for passengers.

"Whether the user wants a virtual tour of our new Los Angeles First Lounge or to experience an A380 landing from the tarmac, this technology gives us a completely new way to connect with our customers," said Qantas group executive Olivia Wirth.

"It's also a fantastic tool to feature our network's destinations, inspiring travel and promoting tourism."

She also promised "the virtual worlds of favourite Hollywood blockbusters," although it is unclear how much film content is currently available in the format.

Qantas said that it was working with production company Jaunt to develop more content for the device.

Immersive experience

Ben Wood, director of research at the telecoms consultancy CCS Insight, said that getting good content would be the biggest challenge for Qantas.

He was also not convinced that an aircraft was the best place for virtual reality.

"I couldn't think of anything worse than sitting next to someone wearing this on a plane," he said.

"They would be fidgeting, looking behind them - it would drive me mad."

He also questioned how safe the experience would be.

"It is such an immersive experience, people would be completely unaware of what is going on around them and presumably it would not be linked in to the in-flight safety announcements."

Initially the trial will last for three months and will be made available to customers on certain flights between Australia and Los Angeles from mid-March. The headsets will also be available in the first-class lounges at Sydney and Melbourne airports, from February.

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Office puts chips under staff's skin

29 January 2015 Last updated at 17:01

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The chip allows employees to open doors and use the photocopier without a traditional pass card

Want to gain entry to your office, get on a bus, or perhaps buy a sandwich? We're all getting used to swiping a card to do all these things. But at Epicenter, a new hi-tech office block in Sweden, they are trying a different approach - a chip under the skin.

Felicio de Costa, whose company is one of the tenants, arrives at the front door and holds his hand against it to gain entry. Inside he does the same thing to get into the office space he rents, and he can also wave his hand to operate the photocopier.

That's all because he has a tiny RFID (radio-frequency identification) chip, about the size of a grain of rice, implanted in his hand. Soon, others among the 700 people expected to occupy the complex will also be offered the chance to be chipped. Along with access to doors and photocopiers, they're promised further services in the longer run, including the ability to pay in the cafe with a touch of a hand.

On the day of the building's official opening, the developer's chief executive was, himself, chipped live on stage. And I decided that if was to get to grips with this technology, I had to bite the bullet - and get chipped too.

The whole process is being organised by a Swedish bio-hacking group which was profiled by my colleague Jane Wakefield recently. One of its members, a rather fearsome looking tattooist, inserted my chip.

First, he massaged the skin between my thumb and index finger and rubbed in some disinfectant. The he told me to take a deep breath while he inserted the chip. There was a moment of pain - not much worse than any injection - and then he stuck a plaster over my hand.

Before trying my chip out, I wanted to know more about the thinking behind it. Hannes Sjoblad, whose electronic business card is on his own chip and can be accessed with a swipe of a smartphone, has the title chief disruption officer at the development. I asked him whether people really wanted to get this intimate with technology.

"We already interact with technology all the time," he told me. "Today it's a bit messy - we need pin codes and passwords. Wouldn't it be easy to just touch with your hand? That's really intuitive."

When I tested my chip, I found that it was not all that intuitive - I had to twist my hand into an unnatural position to make the photocopier work. And while some of the people around the building were looking forward to being chipped, others were distinctly dubious. "Absolutely not," said one young man when I asked him if he'd sign up. An older woman was more positive about the potential of the technology but saw little point in being chipped just to get through a door.

But Hannes Sjoblad says he and the Swedish Biohacking Group have another objective - preparing us all for the day when others want to chip us. "We want to be able to understand this technology before big corporates and big government come to us and say everyone should get chipped - the tax authority chip, the Google or Facebook chip." Then, he says, we'll all be able to question the way the technology is implemented from a position of much greater knowledge.

I've returned to Britain with a slightly sore hand - and a chip still under my skin which has my contact details on it. Not that useful, but no doubt more sophisticated chips will soon replace wearable technology like fitness bands or payment devices, and we will get used to being augmented. All sorts of things are possible - whether it becomes culturally acceptable to insert technology beneath our skin is another matter.

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Bill Gates insists AI is a threat

29 January 2015 Last updated at 18:05 By Kevin Rawlinson BBC News

Humans should be worried about the threat posed by artificial Intelligence, Bill Gates has said.

The Microsoft founder said he didn't understand people who were not troubled by the possibility that AI could grow too strong for people to control.

Mr Gates contradicted one of Microsoft Research's chiefs, Eric Horvitz, who has said he "fundamentally" did not see AI as a threat.

Mr Horvitz has said about a quarter of his team's resources are focused on AI.

During an "ask me anything" question and answer session on Reddit, Mr Gates wrote: "I am in the camp that is concerned about super intelligence. First the machines will do a lot of jobs for us and not be super intelligent. That should be positive if we manage it well.

"A few decades after that though the intelligence is strong enough to be a concern. I agree with Elon Musk and some others on this and don't understand why some people are not concerned."

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Watch: Stephen Hawking has warned of the threat AI poses

His view was backed up by the likes of Mr Musk and Professor Stephen Hawking, who have both warned about the possibility that AI could evolve to the point that it was beyond human control. Prof Hawking said he felt that machines with AI could "spell the end of the human race".

Mr Horvitz has said: "There have been concerns about the long-term prospect that we lose control of certain kinds of intelligences. I fundamentally don't think that's going to happen."

He was giving an interview marking his acceptance of the AAAI Feigenbaum Prize for "outstanding advances" in AI research.

"I think that we will be very proactive in terms of how we field AI systems, and that in the end we'll be able to get incredible benefits from machine intelligence in all realms of life, from science to education to economics to daily life."

Mr Horvitz runs Microsoft Research's lab at the parent company's Redmond headquarters. His division's work has already helped introduce Cortana, Microsoft's virtual assistant.

Despite his own reservations, Mr Gates wrote on Reddit that, had Microsoft not worked out, he would probably be a researcher on AI.

"When I started Microsoft I was worried I would miss the chance to do basic work in that field," he said.

He added that he believed the firm he founded would see "more progress... than ever" over the next three decades.

"Even in the next 10 [years,] problems like vision and speech understanding and translation will be very good."

He predicted that, in that time, robots would perform tasks such as picking fruit or moving hospital patients. "Once computers/robots get to a level of capability where seeing and moving is easy for them then they will be used very extensively."

He said he was working on a project with Microsoft called "Personal Agent", which he said would "remember everything and help you go back and find things and help you pick what things to pay attention to".

He wrote: "The idea that you have to find applications and pick them and they each are trying to tell you what is new is just not the efficient model - the agent will help solve this. It will work across all your devices."

But he admitted that he felt "pretty stupid" because he cannot speak any language other than English.

"I took Latin and Greek in High School and got As and I guess it helps my vocabulary but I wish I knew French or Arabic or Chinese.

"I keep hoping to get time to study one of these - probably French because it is the easiest... Mark Zuckerberg amazingly learned Mandarin and did a Q&A with Chinese students - incredible," he wrote.

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Amazon posts modest holiday profits

29 January 2015 Last updated at 22:43

The online retail giant Amazon has reported weaker profits for the busy Christmas period, but a 15% rise in sales has cheered investors.

The company made a net profit of $214m (£142m) for the last three months of 2014, which is a drop of $25m on the same period in 2013.

However, it was an improvement on the previous quarter, in which Amazon made a net loss of $437m.

The company's shares rose by nearly 8% in after-hours trading.

But despite net sales of $89bn, Amazon made a loss of $241m for 2014 as a whole.

The firm also warned that its finances were "inherently unpredictable".

It sounded a note of caution for the next few months, saying it could make an operating loss of up to $450m.

The web giant added that profits may be "materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce".

Continuing trend

Amazon has become notorious for its lacklustre earnings, and has tended to focus on expanding its business rather than increasing its profitability.

True to form, Amazon's boss, Jeff Bezos, emphasised the success of a new service in the company's results, rather than addressing the firm's figures.

He referred to Amazon's membership scheme, Amazon Prime, as a "one-of-a-kind, all-you-can-eat, physical-digital hybrid", adding that its user base grew by 53% last year.

However other recent projects have not been quite as successful.

Amazon's foray into the smartphone market, with the shopping-focused Fire phone, has hardly been a bestseller, and there have been reports that the tech firm is winding up its mobile payments service.

Most recently, it was forced to shut down its entry into the nappy market just six weeks after launching the initiative.

What is after-hours trading?

• When investors buy and sell shares outside the regular opening hours of major exchanges
• It exists because big financial institutions want to trade large blocks of shares 24 hours a day
• Adopted in the 1990s by financial institutions and some rich investors; the growth of online trading led to ordinary investors being able to take part a few years later
• Riskier than trading during regular hours - trading volumes are lower and share prices can be more volatile, meaning the spreads between the buying and selling prices of shares can be wider
• With less information available it can be harder to work out what's behind some after-hours price movements, leaving small investors at a disadvantage
• But potential profits can be higher

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