Overnight Newspapers Online. 01-29-2014 | Sc

Details of an alleged GCHQ programme codenamed Squeaky Dolphin have been published by NBC News.

It reports that the UK cyber-spy agency showed off its abilities to the US National Security Agency in 2012.

Facebook has since started encrypting its data, but Google's YouTube and Blogger services remain unencrypted. Both firms have said that they did not give GCHQ permission to access the data.

The alleged operation's leaked logo - showing a dolphin holding a canister branded GTE - appears to refer to Global Telecoms Exploitation, a GCHQ division believed to be capable of collecting data from fibre-optic cables.

According to an earlier leak, published by the Guardian, GCHQ has been tapping fibre-optic cables to create a "buffer" of information it could search through since at least 2011, as part of a scheme called Tempora.

The paper said that by 2012 the agency had tapped more than 200 cables - including transatlantic communication links - and was able to process phone and internet data taken from up to 46 of them at a time.

GCHQ declined to comment on the specifics of the latest report.

However, the prime minister has previously said that: "I'm satisfied that the work these agencies do is not only vital but is properly overseen."

Real-time activity The NBC report is based on a presentation entitled Psychology: A New Kind of Sigdev [signals development]. It was part of the trove of documents former NSA contractor Edward Snowden passed to journalist Glenn Greenwald, who contributed to NBC's report.

The papers refer to the use of Splunk Dashboard to provide real-time analysis of how people use YouTube, Facebook and Blogger.

Splunk is commercially available software designed to let organisations "listen" to their own data. Examples that GCHQ is said to have shown off include: a table showing how many people based in the city of Lagos looked at a specific job vacancies blog over a 24-hour period a graph showing how many London-based internet users "liked" links about former Defence Secretary Liam Fox on Facebook over a week-long period a pie chart highlighting 20 trending YouTube video tags a day before planned anti-government protests in Bahrain

Icahn, who argues the shares are undervalued, has provided a blow-by-blow on Twitter of every new investment he's made in the company since last Wednesday, when he first disclosed a $500 million purchase that took him to a $3 billion position. He did so again on Thursday.

On Tuesday, he tweeted: "Just bought $500 million more $AAPL shares."

"My buying seems to be going neck-and-neck with Apple's buyback program, but hope they win that race."

Icahn is waging a public campaign to get Apple to return more cash to shareholders, and has filed a resolution proposing that it gives back $50 billion more through share buybacks.

Apple, on its part, argues it already has one of the industry's largest capital-return programs in place.

It said on Monday it had returned an additional $7.7 billion in cash to shareholders through dividends and share repurchases during the December quarter, bringing cumulative payments to over $43 billion, out of a total plan to dole out $100 billion.

Google also announced a deal with Vision Service Plan, the largest U.S. optical health insurance provider, that will allow consumers to get prescription lenses specially fitted to the device.

A stamp-sized electronic screen mounted on the side of a pair of eyeglass frames, Google Glass can record video, access email, provide turn-by-turn driving directions and retrieve info from the Web by connecting wirelessly to a user's cell phone.

The version of Glass available until now was mounted on a titanium band that rested on the bridge of the wearer's nose, resembling a pair of glasses without lenses and inspiring a bit of ridicule - from a parody on "Saturday Night Live" to a popular blog poking fun at its users.

Google's website on Monday showed off a new selection of four different frames, in styles including "Bold" and "Curve", available for $225 each, and a couple of different sunglass shades for $150 each.

"This new collection marks a step into an entirely new category of smart eyewear," Google said in a statement.

Google said it has been training an unspecified number of VSP eye care specialists in New York, San Francisco and Los Angeles to combine the device and special Glass frames with prescription lenses.

Consumers who have VSP's insurance, VSP Vision Care, will be able to receive a reimbursement on the special Glass frames up to the allowance provided with their current vision benefit, Google said.

A Google spokeswoman said there were financial terms to the partnership with VSP, but declined to provide any details.

Glass is currently available only to a limited number of early users in the U.S. for $1,500, a price that Google says will be lower when the consumer version of Glass goes on sale to the general public towards the end of 2014.

Apple's shares fell as much as 8.8 percent on Tuesday, their steepest decline in a year, a day after the company's weak revenue forecast for the current quarter renewed fears about Chinese smartphone demand and a tepid global market.

The world's most valuable technology company had lost $43 billion of its market capitalization - more than the entire market value of Twitter Inc - at the stock's intra-day low of $502.07.

Activist investor Carl Icahn, who is waging a public campaign to get Apple to return more cash to shareholders, bought up $500 million worth of Apple stock - his third purchase of the same size in less than a week - to boost his total investment in the iPhone maker to more than $4 billion.

At least 14 brokerages lowered their price targets on Apple, reflecting concerns that it was becoming harder to sell high-end phones as markets get saturated.

The record 51 million iPhones sold by Apple in the quarter ended December 28 fell short of the 55 million expected by Wall Street.

Analysts on Tuesday attributed some of this shortfall to the pricing of the iPhone 5C. Apple's low-cost alternative to its iPhone 5S was unable to grab market share from cheaper rivals using Google Inc's Android software, they said. "We don't think Apple has created a meaningful new product category with the iPhone 5C," BMO Capital Markets analyst Keith Bachman wrote in a report.

He said Apple should create a "more impactful medium-price iPhone", with a lower price tag than the iPhone 5C launched in September.

The iPhone 5C sells for $549 without a two-year contract with a telecom carrier. Samsung Electronics Co Ltd's flagship Galaxy S4 now sells for $530 without a contract in the United States, while Google Nexus 5 sells for $350.

Analysts said they were looking to the launch of the iPhone 6, a mid-range smartphone, and wearable devices such as iWatch in the second half of the year to boost investor confidence.

"Apple has the ability to lower the price of the iPhone to compete more aggressively in the midrange, and we believe the resulting elasticity would yield net profit improvements," Goldman Sachs analysts said.

Apple maintained its gross profit margin of 37.9 percent for the quarter just ended, as more people opted for the high-margin iPhone 5S than the 5C.

The first real concessions by Yanukovich since the crisis erupted two months ago brought cheers from several thousand demonstrators on Kiev's Independence Square, focal point of the protests. Opposition leaders said they would continue to harness street power to wring more gains.

"We have to change not only the government, but the rules of the game as well," declared boxer-turned-politician Vitaly Klitschko. "We are sure the struggle will continue," he said.

The 66-year-old Azarov tendered his resignation as parliament met for an emergency session to work out a deal that would satisfy the opposition and end protests in the capital Kiev and in other cities in which six people have been killed.

Yanukovich quickly accepted his resignation and that of his cabinet. First Deputy Prime Minister Serhiy Arbuzov will step in as acting prime minister and other ministers will stay on in caretaker roles until a cabinet is formed.

Azarov, a loyal lieutenant of Yanukovich since the president was elected in February 2010, said he was stepping down to help find a political compromise "for the sake of a peaceful settlement of the conflict".

A Russian-born hardliner who has referred to the protesters as "terrorists", Azarov was publicly humiliated by Yanukovich's offer at the weekend to give his job to former economy minister Arseny Yatsenyuk, another opposition leader, in an effort to stem the rising protests against his rule.

The opposition has been calling consistently for the resignation of the Azarov government since the crisis started. But Yatsenyuk and other opposition leaders rejected Yanukovich's offer of top government posts, seeing it as a trap intended to compromise them in front of their supporters on the streets.

The steward of the heavily-indebted economy through hard times and recession, Azarov backed the November decision to walk away from a free trade pact with the EU - the move which sparked the mass street protests. He took the heat in parliament, defending closer ties with Russia in a stormy debate.

REPEAL OF LAWS

Parliament went into emergency session on Tuesday with ministers loyal to Yanukovich saying they would press for a state of emergency to be declared if the opposition leaders did not rein in protesters and end occupation of municipal and government buildings across the country.

Obama will make clear in his 9 p.m. address that he is willing to bypass U.S. lawmakers and go it alone in some areas by announcing a series of executive actions that do not require congressional approval.

The White House said Obama would announce he is issuing an executive order to raise the minimum wage to $10.10 an hour for federal contract workers with new contracts.

In his address, Obama will also call on Congress to pass a bill to increase the federal minimum wage for all workers to $10.10 an hour from $7.25 and index that to inflation.

The executive order raising the level for federal workers, which applies to new contracts or existing contracts in which terms are being changed, will take effect at the beginning of next year, with janitors and construction workers among the beneficiaries. Issuing the order allows Obama to bypass Congress, where Republicans oppose a broad increase in the minimum wage.

White House officials said Obama would also announce new executive actions on retirement security and job training to help middle-class workers expand economic opportunity.

"What you'll hear in the speech tonight is very concrete, realistic proposals as it relates to wages, as it relates to education, as it relates to training, high-tech manufacturing, retirement security, those are the things that he's focused on," White House Chief of Staff Denis McDonough said on NBC's "Today Show."

With three years left in office, Obama has effectively reduced for now his ambitions for grand legislative actions.

Obama is expected to renew his appeal for a long-stalled immigration overhaul that has been stymied by Republicans. He will promote his signature healthcare law, four months after its disastrous initial rollout.

White House officials said the president would try to work with Congress to accomplish his agenda, but would also try to advance it through executive actions if necessary.

Diplomats had talked up the importance of getting the two sides in the same room in Geneva, but at one point things were so bad that it looked like that room might be the departure lounge at the city's airport.

But meet in the conference chamber they did, cajoled by officials who arranged the agenda to allow each delegation something it could live with. None of the diplomats Reuters spoke to for this article wanted to contemplate the consequences of failure.

"If this conference fails then the situation will explode regionally," said one diplomatic source, like others speaking on condition of anonymity because of the delicate negotiations.

U.N. mediator Lakhdar Brahimi began by focusing on a deal on humanitarian access to the besieged and starving city of Homs before steering the talks towards the highly contentious question of a political settlement of a war that has killed 130,000 and forced millions to flee their homes.

While both sides are ready to discuss a 2012 document which called for political transition, their interpretations of it are wildly divergent. The opposition say it means President Bashar al-Assad must step aside while the government says calls for his departure are the stuff of fantasy.

Diplomats said that to square that kind of circle, they will have to keep the talks going for months or perhaps even years.

The hope is that over time the membership of delegations will evolve, with the opposition becoming more representative of the people doing the fighting and the government side reflecting a reappearance of doubts about Assad's durability.

"The longer the talks last, the more likely different opponents will join the process," said the diplomatic source. Other sources said if the Geneva process takes off, support for Assad on the government side of the table may weaken.

But opposition unity is at least as fragile and will be sorely tested if the talks drag on without result. The continued acquiescence in the negotiations shown by some rebel groups in Syria can also not be taken for granted, and al Qaeda-linked fighters reject them outright.

STAGE MANAGEMENT

Vodafone shareholders voted for one of the biggest payouts ever as 71 percent of the deal's net proceeds - or $84 billion including stock - will be returned to Vodafone shareholders from the sale of Vodafone's 45 percent interest in Verizon Wireless to majority owner Verizon.

"This is the largest single return of value to shareholders in history," Vodafone Chairman Gerard Kleisterlee told the shareholders at a meeting in London.

He said it left Vodafone in a strong financial position and represented "the opening of an important new chapter in the history of Vodafone."

Lowell McAdam, Verizon chairman and CEO, said the purchase will give Verizon more financial flexibility to invest in new technologies. "This is critical because we believe that, when it comes to wireless growth, we are just getting started," McAdam said in a statement.

With Vodafone selling one of its largest divisions and the biggest U.S. wireless service, speculation has mounted that the British firm could itself become a bid target.

AT&T (T.N), the second largest U.S. mobile operator, on Monday ruled out a bid for Vodafone after being forced to make its intentions clear by Britain's takeover panel but bankers and analysts say it may still make a bid in the future.

When asked by an investor about AT&T's reported interest in buying Vodafone, Kleisterlee said: "I read the newspapers as you do, and I cannot comment on the speculation around Vodafone and AT&T at this point of time."

Holders of 99.76 percent of Vodafone's shares backed the Verizon Wireless sale, which is expected to conclude on February 21, with the share consolidation and return of value taking place three days later.

In a preliminary count, about 97 percent of Verizon votes cast were in favor of the proposal, according to the company.

Under the terms of their deal announced in September, Vodafone is to get $58.9 billion in cash, $60.2 billion in Verizon stock, and an additional $11 billion from smaller transactions.

Verizon needed shareholder approval to issue up to 1.28 billion shares to Vodafone shareholders to proceed with the deal.

At its special meeting on Tuesday shareholders also gave Verizon the go-ahead to increase the number of shares issued by an additional 2 billion. This was not a condition for the Verizon Wireless deal, but will allow for additional stock to support Verizon's growth and provide flexibility, the company said.

Two men have been charged with running and three others with being customers of websites that allegedly offered to obtain access to email accounts.

The swoop against the sites was co-ordinated with police forces in Romania, India and China.

Six other alleged administrators of such sites were arrested as part of the overseas element of the operation.

Mark Anthony Townsend and Joshua Alan Tabor, both of Arkansas, have been charged with operating the needapassword.com website that, according the FBI, charged people to find passwords for about 6,000 email accounts.

If the two are found guilty they face up to five years in jail for computer fraud offences.

The other three people have been charged with paying, between them, more than $23,000 (£14,000) to similar hacker-for-hire websites outside the US to find passwords for a wide variety of email accounts.

Paying a hacker to act on your behalf is a "misdemeanour offense" and if found guilty each defendant could go to a federal jail for 12 months.

In a statement, the FBI said it expected all five defendants to plead guilty.

Federal prosecutors in New York announced charges against Charlie Shrem and Robert Faiella, both operators of bitcoin exchange businesses, for attempting to sell $1 million in the digital currency to users of the underground black market website Silk Road, which was shut down by authorities in September.

According to the charging document, Shrem, 24, chief executive officer of the exchange BitInstant.com, changed cash into bitcoins for Faiella, 52, who ran an underground bitcoin exchange through the username BTCKing on Silk Road's website. The criminal complaint says that Shrem, in addition to knowing that Faiella's business was funneling money into Silk Road, also used Silk Road himself to buy drugs, including marijuana-infused brownies.

"Wow, Silk Road actually works," Shrem told an acquaintance in an online chat, according to the complaint.

U.S. law enforcement officials have vowed to pursue any criminal activity in the nascent bitcoin world as regulators try to formulate their approach to the digital currency.

"When Bitcoins, like any traditional currency, are laundered and used to fuel criminal activity, law enforcement has no choice but to act," Preet Bharara, the U.S. attorney for Manhattan, said in a statement emailed to the press on Monday. "We will aggressively pursue those who would co-opt new forms of currency for illicit purposes."

Bharara has said recently that prosecutors are not going after bitcoin itself and view it as they view any other currency in which transactions are sometimes made illegally.

The U.S. Attorney's office in Manhattan said in the statement that authorities arrested Shrem on Sunday at New York's John F. Kennedy International Airport. Faiella was arrested on Monday at his home in Cape Coral, Florida.

The tech investors Cameron and Tyler Winklevoss invested $1.5 million in BitInstant last year.

"When we invested in BitInstant in the fall of 2012, its management made a commitment to us that they would abide by all applicable laws - including money laundering laws - and we expected nothing less," the Winkelvoss twins said in a statement.

"Although BitInstant is not named in today's indictment of Charlie Shrem, we are obviously deeply concerned about his arrest," they said. "We were passive investors in BitInstant and will do everything we can to help law enforcement officials."

Technology news website Re/code, which reported news of the deal earlier, said the price was $400 million, without disclosing where it got the information.

A Google spokesman declined to comment on the price. DeepMind representatives could not be immediately reached for comment.

Founded in London in 2012 by Demis Hassabis, Shane Legg and Mustafa Suleyman, DeepMind uses general-purpose learning algorithms for applications such as simulations, e-commerce and games, according to its website.

Google, which is working on projects including self-driving cars and robots, has become increasingly focused on artificial intelligence in recent years.

Megafon has not been able to sell iPhones since 2009 as the company and its rivals could not guarantee the sales volumes demanded by Apple, industry sources had said.

Megafon said it would buy various iPhone models under the new three-year deal with Apple.

It follows Vimpelcom which in October became the first Russian carrier to sign a new direct contract to sell the iPhone 5s and 5c. Market leader MTS still buys the smartphones from distributors.

Apple has a 20 percent share of a $6.50 billion Russian smartphone market in money terms, or 9 percent of units sold in 2013, according to cellphone retailer Euroset. Apple also sells in Russia through its online store and electronics retailers.