Article 43
Friday, February 29, 2008
Nortel Loses More, Fires More
By Dial Zero
February 28, 2008
Nortel Networks announced a new wave of job cuts after posting a wider loss for the fourth quarter and said it was looking for acquisitions to increase its market share amid slower spending by its US carrier customers.
The Canadian equipment maker posted a loss of $844 million or $1.70 a share, compared with a prior-year net loss of $80 million, or 19 cents a share, after a $1.04 billion charge for increased tax reserves, because of a lower tax rate and the strengthening of the Canadian dollar.
Nortel said it would cut 2,100 jobs and move another 1,000 to lower-cost areas to keep margins high while awaiting growth from its core businesses, investment in new technologies and acquisitions.
“We want to be much more significant in the areas where we compete,” Chief Executive Mike Zafirovski said in a telephone interview. “If the right opportunity comes at the right price, there is a management team in place that will be able to integrate that.”
Zafirovski stressed that Nortel was trying to transform itself into a company that could compete against much larger rivals based in Europe, such as Ericsson and Alcatel-Lucent, and against lower-cost entrants from China, such as Huawei. It predicted sales growth in the low single-digits for 2008. Nortel has been in discussions with Motorola to combine wireless infrastructure businesses, which would allow Nortel to sell upgrades to more customers
Nortel’s results disappointed most analysts. In composite trading on the New York Stock Exchange, the stock was down $1.52, or 13%, to $9.93, after having lost 24% this year before yesterday.
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Nortel Reorganization Plan Draws Skepticism
By Ian Austen
International Herald Tribune
February 28, 2008
In it, the company, a telecommunications equipment maker, announced another large accounting charge, $957 million lost in 2007, and another reorganization, this time cutting 2,100 jobs and moving 1,000 positions from North America to low-wage countries.
Not only did the staff reductions fail to impress investors - shares fell 13.28 percent to $9.93 a share in New York - but several analysts are also questioning Nortel’s long-term prospects.
The company’s disproportionate reliance on a fading cellphone network technology, its decision to withdraw from a crucial new technology and its declining market share in many sectors are all problems, they say, that will not be cured by more job cuts.
“The big question that looms over the company’s head is: When we look out over three or four years, is Nortel still relevant to their target markets?” said David Hodgson, an analyst with Genuity Capital Markets in Toronto. “Nortel continues to cover a lot of bases, and one questions whether the company has the money and the scale to continue its very broad-based approach.”
The loss, announced Wednesday, was mainly the result of a $1 billion write-down in the value of future tax write-offs.
During a conference call, Paviter Binning, the chief financial officer, said the write-offs had been revalued because of reduced corporate tax rates and the increase in the value of the Canadian dollar relative to the U.S. dollar. The accounting measures also caused the company to report a loss of $844 million, or $1.70 a share, for the fourth quarter.
Mike Zafirovski, Nortel’s chief executive, acknowledged during the call that the company was not a market favorite. “We’re not blind to the skepticism facing us,” he said.
But he was quick to portray other financial results as a sign that the turnaround plan was working. In particular, he pointed to a 43.7 percent gross margin in the last quarter and an operating profit - a measure that accounts for sales, production and administrative costs - of 7.6 percent.
For many analysts, however, those figures are also a source of concern. Both Hodgson and Kim Noland, the director for research at Gimme Credit, a debt analysis firm, said that Nortel’s revenue and profit had come almost entirely from sales of wireless software and equipment based on an aging technology known as CDMA.
The technology never found much of a following outside of North America, leaving a system known as GSM, for which Nortel is a relatively small supplier, as the global standard.
Now both CDMA and GSM are being replaced by a faster, more data-friendly technology, UMTS. But Nortel has abandoned its efforts in UMTS.
That leaves the question of how Nortel will offset what analysts say is an inevitable decline for CDMA, one that could be well under way within two years.
The answer is unclear. Nortel lags behind Cisco Systems and Avaya in selling integrated voice and data systems to large businesses, sectors the company aspires to grow in.
Having given up on UMTS, Nortel is working on products for the next generation of wireless networks. But it will face stiff competition from larger firms. And a decade has passed since Nortel began promoting a unit that makes equipment for high-speed local, rather than nationwide or global, networks. Its promise remains unfulfilled.
Nikos Theodosopoulos, an analyst with UBS Securities, said it was not clear which, if any, of those efforts would succeed. But he added that Nortel should jettison most of its current businesses and focus its limited resources on select products and services.
“I don’t know what the magic formula is,” he said. “But I know the magic formula is not ‘all of the above.’ “
Noland agreed that Nortel was spread too thin. “Right now they’re muddling along,” she said. Though there is not a crisis, she added, there also “doesn’t seem to be a clear path for improvement.”
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Thursday, February 28, 2008
Clinton, McCain and Obama On H-1B Visas
By Ephraim Schwartz
InfoWorld
February 26, 2008
With the deadline for H-1B visa applications fast approaching - April 1, 2008 for 2009 work permits - you would think one of the three major presidential candidates WOULD BE TALKING about THIS ISSUE.
And, frankly with 19 debates for the Democrats and almost as many for the Republicans, I dont recall one question from one reporter asking any of these presidential candidates where they stand on the H-1B visa cap and whether or not they want to see it increased, decreased or remain the same.
You will also be hard pressed to find any statements pro or con on any of the three candidates official Web sites on the issue of H-1B. In fact a search found no comments whatsoever despite the fact that all three have links to “issues” and where they stand.
So, with the help of Kim Berry, president of the Programmers Guild, I came up with the following:
A YouTube moment with Hillary Clinton plus two sites, an interview between Barack Obama and TechCrunchs Michael Arrington, and an eWeek news story by Roy Mark that quotes McCain.
When you do read the full statements in context you will see that the premise of all three is based on the BELIEF that there is a SKILLS shortage in the United States.
None talk about the H-1B visa being used as a tactic to hire workers at wages lower than the prevailing market. Rather they imply once the skills shortage of American workers is closed then they would review the H-1B program.
I strongly suggest you go to the sites to get the full import of what they said lest I be accused of taking their words out of context.
So, without further ado, and as a public service, here are the candidates statements on H-1B visas.
HILLARY CLINTON
“I also want to reaffirm my commitment to the H-1B visa program and to increase the current cap. Foreign skilled workers contribute greatly to our technological development. That is well understood in Silicon Valley.”
JOHN McCAIN
“I will continue to support H-1B visas, but, IҒm telling you, the American peoples priority is, either rightly or wrongly, and we live in a democracy, is that we secure the borders first.”
BARACK OBAMA
“We can do better than that and go a long way toward meeting industrys need for skilled workers with Americans. Until we have achieved that, I will support a temporary increase in the H-1B visa program as a stopgap measure until we can reform our immigration system comprehensively.”
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Computer Security’s Dubious Future
Unprepared to Fight Worldwide Cyber Crime
By Patrick J. Dempsey
Internet Evolution
February 28, 2007
Although the Internet may be considered the greatest achievement of the past 50 years, the technology behind it has created a sanctuary for various types of computer criminals. The unfortunate and ugly truth is that the Web is providing a brand new world where international cyber criminals can thrive, and the worlds numerous criminal justice systems just aren’t ready to address these crimes in their entirety.
Cyber criminals dont necessarily need to leave the comfort of their homes to commit their crimes. Today, for example, bank robberies can be committed in Southeast Asia via a computer that’s being controlled by an individual in Russia. Identity theft is achieved through a complex network of individuals residing in North America, Europe, and Africa, all effectively working together on the Internet to profit from shared information. And organized crime has ties to spam campaigns, identity theft, denial-of-service attacks, and organized hacking rings.
The fact is that Internet crimes are almost always INTERNATIONAL crimes. When you read about a bank system being hacked in order to steal 100,000 accounts, more than likely this crime was committed by perpetrators OVERSEAS, and there will almost definitely be a connection to organized crime. This part of the story is rarely conveyed to the everyday reader, but it is critical to understand this fact if we are going to fix the problem.
In the world of cyber crime, law enforcement officials in most countries have recognized that they must move much faster than the average investigator due to the fact that computer evidence can disappear rather quickly. These same cyber investigators realize they must be willing and ready to cooperate with law enforcement officials in other countries if they actually plan to capture the Internet criminals.
Laws, treaties, and conventions, such as the Convention on Cybercrime, have attempted to address the international cooperation issue. Although the Convention on Cybercrime is an outstanding step in the right direction, is not a law that applies to all countries. Regardless of whether the country is a member of this Convention, the punishments levied are based on the local laws of the land.
But the problem with investigating international cyber crimes and capturing criminals on the Internet is not necessarily due to lack of cooperation among international law enforcement bodies. The issue has much more to do with the fact that the legal systems throughout the world vary greatly and take a very long time to change. These two facts make it extremely difficult for law enforcement to cooperate, investigate, capture, and ultimately prosecute the cyber criminals today.
If we accept the fact that the greatest hurdle in arresting international cyber criminals is that various legal systems just arent prepared to address the speed at which these crimes occur or the various nuances that are unique to computer crimes, then the question is: What can we do to fix the problem?
It’s obvious that the Internet requires some type of governance. But it is just as obvious that trying to establish this governance through the numerous legal systems might not be practical. The other possibility for governing the Internet, and, more specifically, the criminal activity that occurs on the Internet, would be to change the structure of the Internet. Although I dont support ideas like the national firewalls put in place by some countries, this type of solution does afford some level of control over Internet traffic flowing through said country.
However, knowing all the possibilities with disguising or “spoofing one’s” information on the Web, Im not sure that there is a way to truly protect our borders when it comes to the Internet. The solution might be to establish TWO INTERNETS - the current Internet and a new, more secure Internet where users would be required to register prior to gaining access. Once again, though, we’re confronted with the issue of what would be the governing body that would manage the user registrations? Would it be an organization similar to the IANA (Internet Assigned Numbers Authority) or InterNIC that would manage user registrations on the new Internet, or do we need to establish an entirely new entity to manage a more secure Internet?
The fight against international cyber crime is going to take a concerted effort from large and small corporations, law enforcement in all countries, as well as the governments and legislative bodies of those same countries. Most importantly, the average end user will have to join the fight to bring about change on the Internet, or create a newӔ Internet using the lessons weve learned.
Patrick J. Dempsey, Chief Information Security Officer for Janney Montgomery Scott and former FBI agent
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InfoWorld’s Roger Grimes Weighs In On Why Security Expert Bruce Schneier Thinks Computer Security Won’t Get Any Better In The Next 10 Years
By Roger A. Grimes
InfoWorld
February 22, 2008
As longtime readers already know, I’m a big fan of Bruce Schneier, CTO and founder of BT Counterpane. Besides being a cryptographic and computer security authority, cryptographic algorithm creator, and author of many best-selling books on security, Bruce produces some of the most relevant conversations on computer security. I consider his books, his Cryptogram newsletter, and his blog must-reads for anyone in computer security.
Bruce is a guy who pushes us to rethink our currently held paradigms. He lays bare unsubstantiated dogma. I don’t always agree with Bruce. But many of the potent ideas that I disagreed with when he espoused them a half decade ago, I find myself agreeing with years later, ideas like how two-factor authentication won’t stop malicious hackers from stealing gobs of money from the online banking industry, and how the biggest problem with security, in general, is us and our irrational ranking of threats.
I distinctly remember Bruce telling me a decade ago how computer security, with all of its advances, was more than likely going to get worse in the future. This was in the face of increasingly accurate anti-virus programs, improved patch management, and solid improvements in OS security across all platforms. He said this in the days of Windows 95 with almost no security, and today weve got User Access Control and security so tight on a Windows system that vendors are frequently complaining. At the time, Bruce was the only voice saying that computer security was going to get worse. And he was right.
But it’s a decade later now. ISS ANNUAL REPORT announced that the number of vulnerabilities went down for the first time in a long time, along with the amount of spam. (Interestingly, they also said that 50 percent of reported vulnerabilities could not be fixed by a patch.) The latest evolving security technologies (such as IPv6, IPSec, Network Access Protection/Network Access Control, anti-malware software, and so on) are promising. End-user education is higher than it’s ever been. Many professional entities and governments are requiring baseline security compliance. My friends only send me half the hoax virus warning messages now that I used to receive.
So, I asked Bruce the same question again, Will computer security get better or worse over the next decade?
Heres his response:
“Computer security is not likely to improve in the near future because of two reasons. One, bad guys are getting better at attacking us. And two, we’re not getting better at defending ourselves.
The overarching reason for both of these trends is complexity. Complexity is the worst enemy of security; as a system gets more complex, it gets less secure. There are several reasons for this, which I explained in an essay from 2000. And the Internet is the most complex machine mankind has ever built. We barely understand how it works, let alone how to secure it.
Complexity makes it both harder for us to secure our systems and easier for the attacker to find a weakness. Carl von Clausewitz talked about this with respect to war. Defenders have to defend against every possible attack, while attackers just have to find one weakness. Its called “the position of the interior,” and complexity makes that position less tenable.
Complexity explains one of the most perplexing questions about computer security: Why isn’t it getting better? We in the computer world are used to technology making things better. Moore’s Law means that computers get more powerful. Graphics get better. Printing gets better. Video gets better. Networking gets better. Everything gets better - except security. Why? Complexity is an explanation of that. The reality is that security really is improving, just not when measured against the complexity juggernaut. Every year there’s new research, new techniques, and new products. But complexity is making things worse faster. So we’re losing ground even as we improve.
The result is the Wild West: a lawless society. On the Internet, there really isn’t a rule of law imposed from above. Its every man, or every network, for himself. Those that can afford bespoke security have it, but those who can’t - think home computer users - have to make do. This is very much the world of Internet security. It’s hard to find Internet criminals, hard to build cases against them, and hard to prosecute them. Oh, there are the few high-profile exceptions, but by and large malicious hackers can commit Internet crime with impunity.”
So, there you have it—Bruces thoughts on the near-term future of computer security. And if his comments make you a little more despondent over the future, it might be piling on to realize that this time around almost no one disagrees with him. Usually it takes years for a lot of us to understand BruceҒs central points. This time we understand him with immediate clarity.
Even sadder is the fact that there are things we can do to resolve the key security issues but we, as a society, arent going to do them. It makes you wonder whether Bruce’s answer will be any different in another 5 years. Another 10 years? What tipping point event might have occurred - how bad was it?—to make us change the way we do business? Or is it possible for Internet crime to hum along at current levels, never getting better or worse, and we live with it as a NORMAL COST OF DOING BUSINESS, and living? My money is on the tipping point event. Luckily, when we do decide to get serious about computer security, there are intelligent voices, everywhere, that are ready to lend assistance.
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Wednesday, February 27, 2008
Legalizing Pension Wear Away
February 1, 2008
US Treasury
HP-796
Treasury, IRS Provide Guidance on Backloading in Pension Plans
The Treasury Department and the Internal Revenue Service (IRS) today issued REVENUE RULING 2008-7 that addresses the application of the accrual rules for pension plans under section 411(b)(1) of the Internal Revenue Code (commonly referred to as “backloading” rules).
Revenue Ruling 2008-7 analyzes a traditional pension plan that was converted into a cash balance pension plan prior to the effective date of the new conversion requirements under the Pension Protection Act of 2006. The scenario analyzed in the revenue ruling is one in which certain participants had their pensions determined using the greater of (1) the benefit under a continuation of the pre-conversion plan formula for a limited number of years after the conversion date and (2) the benefit under the new cash balance formula.
The ruling illustrates how, under the current regulations, the backloading rules apply to this scenario. The ruling provides relief to ensure that plans that have requested or received a determination letter from the IRS and certain other plans will not be disqualified for plan years beginning before January 1, 2009 solely because the plan provides benefits based on the greatest of two or more formulas.
In addition, Treasury and the IRS anticipate proposing amendments to the regulations that will allow separate testing of backloading with respect to the scenario under the revenue ruling and other “greater of” formulas. It is expected that the regulations will be issued soon and will be proposed to be effective for plan years beginning on or after January 1, 2009.
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Corporations’ Abusive Pension Practices Must Be Stopped
By Jane Banfield, ACER President
The U.S. Treasury Department has issued Revenue Ruling 2008-7 that allows companies to selectively freeze the pension accruals of older workers in certain cases without violating laws that were intended to protect retirement nest eggs.
According to the Wall Street Journal, Treasury’s ruling validates pension WEAR AWAYS and could tip the outcome of long-running lawsuits alleging age discrimination in pension benefits by a number of major companies, including AT&T.
ACER, with support from the National Retiree Legislative Network, urges you to use the NRLN’s Capwiz system and sample letter to express your outrage over Treasury’s ruling to your U.S. Representative and Senators and the three Senators who are leading presidential candidates: Hillary Clinton, John McCain and Barack Obama. Go HERE and look for the Action Alertwith the headline: AT&T RETIREES: CORPORATIONS’ ABUSIVE PENSION PRACTICES MUST BE STOPPED! Click on “Take Action” and then type in your zip code. The Capwiz system will allow you to send the same letter to all of these individuals.
If you have a problem accessing the above link to the NRLN’s Capwiz web page, go HERE and click on the Take Action Now! link at the top of the home page.
For your letter to be most effective, edit into the letter your personal experience with AT&T’s pension freeze, if it applies to you personally. Otherwise, add your personal comments on how unfair AT&T’s and Treasury’s actions are to your fellow retirees.
Because an email address is not available for Treasury Secretary Henry M. Paulson, Jr. please consider writing a letter similar to the email message and faxing it to the Treasury Department at 202-622-6415 or mailing it to:
The Honorable Henry M. Paulson, Jr.
Secretary of the Treasury
Department of the Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
In addition to sending your letter, please consider calling the Washington, D.C. or district offices of your elected U.S. Representative and Senators. The phone numbers are available from links on the NRLN website HERE. Also, forward this email to other AT&T retirees and urge them to speak out against this injustice.
Credit: Pension_Watchdog
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Tuesday, February 26, 2008
Siemens To Cut 7,000 Telecom Jobs
By Dial Zero
February 26, 2008
German engineering conglomerate Siemens plans to fire nearly 4,000 people from its telecom equipment division that supplies corporate customers and transfer about 3,000 other workers elsewhere. The restructuring comes as Siemens continues to seek a partner for the business or to sell it outright. The job cuts highlight the difficulties facing European telecom suppliers, which are grappling with falling prices and rising competition from rivals in countries such as CHINA where labor costs are lower.
The move could spark public outcry in Germany, where unions remain powerful. Earlier this year, Nokia of Finland faced protest marches and criticism from politicians when it announced it would close a German plant, affecting about 2,300 jobs. Siemens, one of Germany’s largest employers, also has faced criticism for job cuts.
Siemens already has dismantled most of the unprofitable telecom unit, which was its largest revenue source earlier this decade when it had almost $30 billion in annual sales. Since 2005, the company reshaped its business, narrowing its focus to factory automation, energy and health care.
The telecom-equipment unit has been at the center of a bribes-for-business scandal that erupted in late 2006. The company also is the subject of CRIMINAL INVESTIGATIONS on several continents. Peter Lscher, who took the helm at Siemens in July, has embarked on a restructuring drive to boost profit and steer the engineering company out of the corruption scandals.
Siemens’s remaining telecom business provides equipment to corporate customers, and has about 17,500 workers world-wide. The business has become less labor-intensive in recent years as telecommunications systems rely increasingly on software.
Siemens began dismantling its telecom unit in 2005, when it agreed to transfer its cellphone business and about 6,000 workers to BenQ of Taiwan. In 2006, it transferred tens of thousands of workers into a joint venture with Nokia that now is one of the largest suppliers to telecom carriers.
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