Google emerges from FTC probe relatively unscathed

 Google has settled a U.S. government probe into its business practices without making any major concessions on how the company runs its Internet search engine, the world's most influential gateway to digital information and commerce.
Thursday's agreement with the Federal Trade Commission covers only some of the issues raised in a wide-ranging antitrust investigation that could have culminated in a regulatory crackdown that re-shapes Internet search, advertising and mobile computing.
But the FTC didn't find any reason to impose radical changes, to the relief of Google and technology trade groups worried about overzealous regulation discouraging future innovation. The resolution disappointed consumer rights groups and Google rivals such as Microsoft Corp., which had lodged complaints with regulators in hopes of legal action that would split up or at least hobble the Internet's most powerful company.
Google is still trying to settle a similar antitrust probe in Europe. A resolution to that case is expected to come within the next few weeks.
After a 19-month investigation, Google Inc. placated the FTC by agreeing to a consent decree that will require the company to charge "fair, reasonable and non-discriminatory" prices to license hundreds of patents deemed essential to the operations of mobile phones, tablet computers, laptops and video game players.
The requirement is meant to ensure that Google doesn't use patents acquired in last year's $12.4 billion purchase of Motorola Mobility to thwart competition from mobile devices running on software other than Google's Android system. The products vying against Android include Apple Inc.'s iPhone and iPad, Research in Motion Ltd.'s BlackBerry and Microsoft's Windows software.
Google also promised to exclude, upon request, snippets copied from other websites in capsules of key information shown in response to search requests. The company had insisted the practice is legal under the fair-use provisions of U.S. copyright law. Nonetheless, even before the settlement, Google already had scaled back on the amount of cribbing, or "scraping," of online content after business review site Yelp Inc. lodged one of the complaints that triggered the FTC investigation in 2011.
In another concession, Google pledged to adjust the online advertising system that generates most of its revenue so marketing campaigns can be more easily managed on rival networks.
Google, though, prevailed in the pivotal part of the investigation, which delved into complaints that the Internet search leader has been highlighting its own services on its influential results page while burying links to competing sites. For instance, requests for directions may turn up Google Maps first, queries for video might point to the company's own site, YouTube, and searches for merchandise might route users to Google Shopping.
Although the FTC said it uncovered some obvious instances of bias in Google's results during the investigation, the agency's five commissioners unanimously concluded there wasn't enough evidence to take legal action.
"Undoubtedly, Google took aggressive actions to gain advantage over rival search providers," said Beth Wilkinson, a former federal prosecutor that the FTC hired to help steer the investigation. "However, the FTC's mission is to protect competition, and not individual competitors."
Two consumer rights groups lashed out at the FTC for letting Google off too easily.
"The FTC had a long list of grievances against Google to choose from when deciding if they unfairly used their dominance to crush their competitors, yet they failed to use their authority for the betterment of the marketplace," said Steve Pociask, president of the American Consumer Institute.
John Simpson of frequent Google critic Consumer Watchdog asserted: "The FTC rolled over for Google."
David Wales, who was the FTC's antitrust enforcement chief in 2008 and early 2009, said the agency had to balance its desire to prevent a powerful company from trampling the competition against the difficulty of proving wrongdoing in a rapidly changing Internet search market.
"This is a product of the FTC wanting to push the envelope of antitrust enforcement without risking the danger of losing a case in in court," said Wales, who wasn't involved with the case and is now a partner at the law firm Jones Day.
FTC Chairman Jon Leibowitz said the outcome "is good for consumers, it is good for competition, it is good for innovation and it is the right thing to do." Before reaching its conclusion, the FTC reviewed more than 9 million pages of documents submitted by Google and its rivals and grilled top Internet industry executives during sworn depositions.
The Computer & Communications Industry Association, a technology trade group, applauded the FTC for its handling of the high-profile case.
"This was a prudent decision by the FTC that shows that antitrust enforcement, in the hands of responsible regulators, is sufficiently adaptable to the realities of the Internet age," said Ed Black, the group's president.
The FTC has previously been criticized for not doing more to curb Google's power. Most notably, the FTC signed off on Google's $3.2 billion purchase of online advertising service DoubleClick in 2008 and its $681 million acquisition of mobile ad service AdMob in 2010. Google critics contend those deals gave the company too much control over the pricing of digital ads, which account for the bulk of Google's revenue.
If Google breaks any part of the agreement, Leibowitz said the FTC can fine the company up to $16,000 per violation. Last year, the FTC determined that Google broke an agreement governing Internet privacy, resulting in a $22.5 million fine, though the company didn't acknowledge any wrongdoing.
Google's ability to protect its search recipe from government-imposed changes represents a major victory for a company that has always tried to portray itself as force for good. The Mountain View, Calif., company has portrayed its dominant search engine as a free service that is constantly tweaking its formula so that people get the information they desire more quickly and concisely.
"The conclusion is clear: Google's services are good for users and good for competition," David Drummond, Google's top lawyer, wrote in a Thursday blog post.
Google's tactics also have been extremely lucrative. Although Google has branched into smartphones and many other fields since its founding in a Silicon Valley garage in 1998, Internet search and advertising remains its financial backbone. The intertwined services still generate more than 90 percent of Google's revenue, which now exceeds $50 billion annually.
Throughout the FTC investigation, Google executives also sought to debunk the notion that the company's recommendations are the final word on the Internet. They pointed out that consumers easily could go to Microsoft's Bing, Yahoo or other services to search for information. "Competition is just a click away," became as much of a Google mantra as the company's official motto: "Don't be evil."
Microsoft cast the FTC's investigation as a missed opportunity.
"The FTC's overall resolution of this matter is weak and — frankly —unusual," Dave Heiner, Microsoft's deputy general counsel, wrote on the company's blog. "We are concerned that the FTC may not have obtained adequate relief even on the few subjects that Google has agreed to address."
FairSearch, a group whose membership includes Microsoft, called the FTC's settlement "disappointing and premature," given that European regulators might be able to force Google to make more extensive changes.
"The FTC's inaction on the core question of search bias will only embolden Google to act more aggressively to misuse its monopoly power to harm other innovators," FairSearch asserted.
Yelp also criticized the FTC's handling of the case, calling "it a missed opportunity to protect innovation in the Internet economy, and the consumers and businesses that rely upon it."
Investors had already been anticipating Google would emerge from the inquiry relatively unscathed.
Google's stock rose 42 cents Thursday to close at $723.67. Microsoft, which is based in Redmond, Wash., shed 37 cents, or 1.3 percent, to finish at $27.25.
In a research note Thursday, Macquarie Securities analyst Benjamin Schachter described the settlement as "the best possible outcome" for Google. "We believe that the terms of the agreement will have very limited negative financial or strategic implications for the company." Schachter wrote.

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Ivory Coast stampede survivors blame barricades

ABIDJAN, Ivory Coast (AP) — Survivors of a stampede in Ivory Coast that killed 61 people, most of them children and teenagers, after a New Year's Eve fireworks display said Wednesday that makeshift barricades stopped them from moving along a main boulevard, causing the crush of people.
Ivory Coast police said unknown people put tree trunks across the Boulevard de la Republique where the trampling took place.
"For security, because there were so many important people at the event, we closed certain main streets," said a police officer who was overheard briefing Ivory Coast President Alassane Outtara on the incident. The police officer said the tree trunks were put out unofficially by people who are not known.
"After the fireworks we reopened the other streets, but we had not yet removed the tree trunks from the Boulevard de la Republique, in front of the Hotel Tiana near the National Assembly (parliament) building," she said. "That is where the stampede happened when people flooded in from the other streets."
Ouattara ordered three days of national mourning and launched an investigation into the causes of the tragedy.
Two survivors, in interviews with The Associated Press, indicated why so many died in what would normally be an open area, the Boulevard de la Republique. An estimated 50,000 people had gathered near the Felix Houphouet Boigny Stadium and elsewhere in Abidjan's Plateau district to watch the fireworks. As they streamed away from the show some encountered the blockades.
"Near the Justice Palace we were stopped by some people who put blockades of wood in the street," 33-year-old Zoure Sanate said from her bed in Cocody Hospital. "They told us we must stay in the Plateau area until morning. None of us accepted to stay in Plateau until the morning for a celebration that ended at around 1 a.m.
"Then came the stampede of people behind us," she said. "My four children and I were knocked to the ground. I was hearing my kids calling me, but I was powerless and fighting against death. Two of my kids are in hospital with me, but two others are missing. They cannot be found."
Another hospital patient, Brahima Compaore, 39, said he also was caught in the pile of people stopped by the roadblock.
"I found myself on the ground and people were walking on me," said Compaore. "I was only saved by people who pulled me onto the sidewalk."
Local newspapers are speculating that thieves put up the roadblocks so that pickpockets could steal money and mobile phones from the packed-in people.
Ouattara pledged to get answers. Some observers wondered why police did not prevent the tragedy.
"The investigation must take into account all the testimonies of victims," he said Wednesday. "We will have a crisis center to share and receive information."
Ouattara also postponed the traditional New Year's receptions at his residence, which had been scheduled for Thursday and Friday.
The leader of a human rights organization said that deadly incidents were predictable because the police and civil authorities had not taken adequate protective measures.
"The situation is deplorable," said Thierry Legre, president of the Ivorian League of Human Rights. "It is our first tragedy of 2013 but in 2012 we could already see possibility of such a tragedy because there are not adequate authorities patrolling our roads and waters."
Legre said the New Year's stampede "exposes our weak and dysfunctional civil protection system. This must be corrected immediately. The government cannot invite people to this kind of public gathering without taking adequate precautions to protect their safety and their lives."
He called on the government "to implement measures to avoid such tragedies in the future by reinforcing the civil protection system."
The government organized the fireworks to celebrate Ivory Coast's peace, after several months of political violence in early 2011 following disputed elections.
Just one night before the New Year's incident, there had been a big concert at the Felix Houphouet-Boigny Stadium where American rap star Chris Brown performed. That Sunday night event was for the Kora Awards for African musicians. No serious incidents were reported from that event.
In 2009, 22 people died and over 130 were injured in a stampede at a World Cup qualifying match at the Houphouet Boigny Stadium, prompting FIFA, soccer's global governing body, to impose a fine of tens of thousands of dollars on Ivory Coast's soccer federation. The stadium, which officially holds 35,000, was overcrowded at the time of the disaster.
Another African stadium tragedy occurred on New Year's Eve in Angola where 13 people, including four children, died in a stampede during a religious gathering at a sports stadium in Luanda, the capital.
Angop, the Angolan news agency, cited officials as saying Tuesday that 120 people were also injured. The incident happened on New Year's Eve when tens of thousands of people gathered at the stadium and panic ensued. Faustino Sebastiao, spokesman for the national firefighters department, says those who died were crushed and asphyxiated.
U.N. Secretary-General Ban Ki-moon expressed "deep sorrow" at the heavy human toll and put "a medical team and all available logistical means at the disposal of the government," to help deal with the situation, U.N. spokesman Martin Nesirky said.

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C. African Republic leader faces rebel threat

DAMARA, Central African Republic (AP) — More than 30 truckloads of troops from Chad line the two-lane highway just outside of Damara, supporting Central African Republic government forces who want to block a new rebel coalition from reaching the capital.
In a display of force, the turbaned fighters hold their rocket-propelled grenades and other weapons they threaten to use if the rebels seeking to oust President Francois Bozize push this far south.
Gen. Jean Felix Akaga, who heads the regional force known as FOMAC, says a push on Damara, just 75 kilometers (45 miles) north of the capital, would be "a declaration of war" on the 10 Central African states.
"For us, Damara is the red line that the rebels cannot cross," Akaga said Wednesday. "If they attack Damara, we will attack."
The United Nations called for talks between the government and rebels and the Security Council scheduled closed consultations on the Central African Republic on Thursday afternoon.
The multinational force brought journalists up to Damara, where they touted the strength of the Chadian troops, who along with forces from Republic of Congo and Gabon are helping to stabilize the area.
The rebels, though, appear to be holding their positions after taking a string of towns including Sibut, which is 70 miles (112 kilometers) further north from Damara.
Back in 2003, troops under Bozize seized the capital amid volleys of machine-gun and mortar fire, and he then dissolved the constitution and parliament. Now a decade later it is Bozize who himself could be ousted from power.
On Wednesday, he announced through a decree read on state radio that he was dismissing his son, Francis, as defense minister. Chief of Staff Guillaume Lapo also was being replaced.
The president already has promised to form a coalition government with rebels and to negotiate without conditions. It's a sign of how seriously Bozize is threatened by the rebel groups who call themselves Seleka, which means alliance in the Sango language.
Bozize says there's one point not up for negotiation: he does not intend to leave office before his term ends in 2016.
"We can't destroy the country. I don't think that a transition is a good solution for the rebels, for Central African Republic or for the international community," said Cyriaque Gonda, a spokesman for the political coalition behind Bozize.
But mediators for the government and others note the rebels — an alphabet soup of acronyms in French, UFDR, CPJP, FDPC and CPSK — want Bozize gone. And that's the only issue the disparate group seems unified on. Seleka is a shaky alliance that lumps together former enemies.
In September 2011, fighting between the CPJP and the UFDR left at least 50 people dead in the town of Bria and more than 700 homes destroyed.
"Even if they show unity in the military action, we know that they are politically very disunited, the only thing that holds them together is the opposition to the current president," said Roland Marchal, a Paris-based expert on Central African Republic. "If they take control of the capital I think that divisions would appear quickly."
Gonda, who has negotiated on behalf of the government with the rebels, says some of them couldn't even accept sitting together as recently as 2008.
Meanwhile, in some parts of the capital, Bangui, a city of 700,000, life continued as normal, while in others the military buildup was evident.
Trucks full of soldiers bounced on rutted roads dotted with shacks where people can charge mobile phones. Police officers stopped vehicles at intersections. Troops from neighboring nations have arrived including about 120 soldiers each from Republic of Congo and Gabon to help stabilize the area between rebel and the government forces.
In the Bimbo neighborhood, traders went about their business, selling everything from leafy greens to meat at roadside stands.
"We don't support what the rebels are doing," said banana farmer Narcisse Ngo, as a young boy played nearby with a monkey corpse for sale along with other meat. "They should be at the table negotiating without weapons. We are all Central Africans."
Bozize, who seized power while the democratically elected president was traveling outside the country, managed to win elections in 2005 but in the years since he has faced multiple low-level rebellions that have shattered security across the northern part of this large but desperately poor country.
He won the 2011 election with more than 64 percent of the vote, though the United States said the voting was "widely viewed as severely flawed." The U.S. evacuated its diplomats from Bangui last week.
The most prominent among the rebel groups in Seleka is the UFDR, or Union of Democratic Forces for Unity.
Human Rights Watch, which has documented abuses by both government forces and rebel groups operating in the country's north, says the UFDR rebellion "has its roots in the deep marginalization of northeastern CAR, which is virtually cut off from the rest of the country and is almost completely undeveloped."
The rebels, though, also have included some of Bozize's former fighters who helped bring him to power in 2003 but later accused him of failing to properly pay them, among other grievances, Human Rights Watch says.
For the people now caught in the middle, they want life to return to normal.
"Everyone is suffering here — we have nothing to eat," said Daniel Ngakou, 55, as he watched the Chadian troops patrol his hometown of Damara. "The women are searching in the bush all day for food. We just don't know what will happen."
The United Nations called on the government and the rebels Wednesday to focus on dialogue that can avert violence and lead to a peaceful resolution of the conflict and respect for the 2008 Libreville Comprehensive Peace Agreement. That deal was signed by the government and three major rebel groups.
U.N. spokesman Martin Nesirky reiterated the U.N. Security Council's call last week for all parties to refrain from any acts of violence against civilians, respect human rights and seek a peaceful solution.
"We welcome regional efforts to seek a political solution and reinforce security," Nesirky told reporters at U.N. headquarters in New York.
While the United Nations has temporarily withdrawn its staff from Central African Republic, Nesirky said the world body remains engaged in efforts to resolve the crisis.
He said U.N. special representative Margaret Vogt "has remained in close dialogue with the key parties in the Central African Republic and the region and has offered support to political negotiations," he said.

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Venezuela's opposition demands "whole truth" about Chavez health

CARACAS (Reuters) - Venezuela's opposition on Wednesday demanded the government tell "the whole truth" about the health of cancer-stricken President Hugo Chavez, who has not been heard from in three weeks after undergoing a grueling operation in Cuba.
Officials have acknowledged the usually garrulous former soldier's health is delicate after his fourth cancer surgery in 18 months, but they have offered scant details on his condition.
He has not spoken in public in more than three weeks.
Ramon Aveledo, head of the opposition Democratic Unity coalition, slammed the government for not keeping its word about keeping Venezuelans informed.
"The official version (of Chavez's health) hides more information than it gives," Aveledo said at a press conference.
"The vice president himself has promised to tell the truth, whatever it is. Fine, he should tell it. He should tell the whole truth," said Aveledo.
Vice President Nicolas Maduro, whom Chavez last month designated as his heir apparent, on Tuesday said in an interview from Havana that Chavez had recognized the complexity of his post-operative condition.
Maduro said he was returning to Venezuela after several days visiting with Chavez and his relatives, which may quell rumors his trip to Cuba signaled the president was in his final days.
The president's son-in-law and Science Minister Jorge Arreaza, who is in Havana, said via his Twitter account on Wednesday that the medical team told him Chavez's condition "remains stable" but that his health is still delicate.
"Commander Chavez is fighting hard and he sends his love to the people. Dedication and patience!!!" he tweeted.
Chavez's abrupt exit from the political scene would be a shock for Venezuela, where his oil-financed socialism has made him a hero to the poor majority but a nemesis to critics who call him a dictator.
He is still set to be sworn in on January 10, as laid out in the constitution. If he dies or steps aside, new elections would be held within 30 days, with Maduro running as the Socialist Party candidate.
DELICATE HEALTH
Chavez suffered unexpected bleeding and a respiratory infection after a six-hour operation on December 11. Terse official statements have said nothing about when he might be expected back or whether his life is in danger.
The government has provided none of the signature videos or pictures released after Chavez was diagnosed with cancer in June 2011 and his relapse in 2012. And allies have refused to discuss the possibility that he could hand over power or resign.
Chavez last year staged what appeared to be remarkable comeback from the disease to win reelection to a third six-year term in October despite being weakened by radiation therapy. He returned to Cuba for new treatment within weeks of his win.
Officials from the ruling Socialist Party are now suggesting his inauguration could be postponed indefinitely to accommodate his health.
Aveledo insisted the government should stick to the January 10 timeline called for in the constitution.
"Trying to make the country believe that the president is governing is absurd to the point of being irresponsible," he said. "January 10 marks the end of one presidential term and the start of another. As such, there is no continuation of the current government."
Aveledo said if Chavez cannot make it back in time, he should hand power over to the president of Congress - who would temporarily run the country while elections are called.
Congress, controlled by Chavez allies, on Saturday elects a new president. Current Congress chief Diosdado Cabello, a close Chavez ally who could be reelected to head the legislature, has at times been considered a rival of Maduro. The two have taken great pains in recent weeks to publicly deny this.
While the constitution cites January 10 as the start of the new term, it does not explicitly state what happens if the president does not take office on that date.
Chavez's condition is being watched closely by Latin American countries that have benefited from his generous assistance, as well as Wall Street investors who are drawn to Venezuela's lucrative and heavily traded bonds.

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Myanmar military admits airstrikes against Kachin

YANGON, Myanmar (AP) — Myanmar's military acknowledged launching airstrikes against ethnic Kachin rebels in the north and said it captured a hilltop post from where the insurgents had attacked government supply convoys.
The statement broadcast on state television Wednesday contradicted government claims two days earlier that the military was not carrying out offensive air attacks on the Kachin, raising questions about how much control the elected government of reformist President Thein Sein has over the army.
The United States said Wednesday the use of air power in Kachin state was "extremely troubling." In Washington, State Department spokeswoman Victoria Nuland urged the government and the Kachin rebel group to cease their conflict and begin a real dialogue for peace.
U.N. Secretary-General Ban Ki-moon called on Myanmar's authorities "to desist from any action that could endanger the lives of civilians living in the area or further intensify the conflict in the region," U.N. spokesman Martin Nesirky said. Ban called on the government and rebels to work toward political reconciliation.
Myanmar state television, quoting the Defense Ministry, said the military on Sunday occupied a Kachin Independence Army hilltop post during a mopping-up operation of the area where attacks had been launched against supply convoys.
The government has been seeking to supply a base at Lajayang very close to KIA headquarters at Laiza, the rebel group's last major outpost.
The government delivered an ultimatum to the Kachin to clear a road by Christmas Day so it could supply its base. The Kachin rejected the ultimatum for fear of a government attack on their own outpost.
KIA spokesman La Nan charged Monday that the supplies being sent to government troops included ammunition as well as rice.
"We will obstruct any army convoy that carries arms and ammunition that will be used against us," he said. "This is the nature of war."
Each side blames the other for intensified fighting that began a little over a week ago.
The Kachin said Monday they were being attacked by helicopter gunships and fighter jets, but President's Office director Maj. Zaw Htay said the aircraft were being used mainly to supply government units whose access to supplies by road had been cut off by the Kachin guerrillas.
"During the attack, the army used air support," Wednesday's report said. It added that the military did not want to launch an offensive but attacked the outpost to maintain security and stability.
The report said government troops seized weapons including mortars, hand grenades, mines and 4,000 rounds of ammunition.
The military announcement highlights a seeming disconnect between the government and the military, which retains much power behind the scenes. An order late last year by Thein Sein to halt offensive operations against the Kachin was not honored in practice.
The Kachin, like Myanmar's other ethnic minorities, have long sought greater autonomy from the central government. They are the only major ethnic rebel group that has not reached a cease-fire agreement with Thein Sein's government, which came to power in 2011 after almost five decades of military rule.
His government has been hailed for instituting democratic reforms.
But tension with ethnic minorities, evidenced by the fighting with the Kachin, is considered a major long-term problem for the government and a threat to the nascent democracy.
Fighting erupted in Kachin state in June 2011 after the KIA refused to abandon a strategic base near a hydropower plant that is a joint venture with a Chinese company. There have been off-and-on skirmishes between the KIA and government troops, often escalating into serious bombardment by government troops.

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APNewsBreak: Google exec chairman to visit NKorea

SEOUL, South Korea (AP) — Google's executive chairman is preparing to travel to one of the last frontiers of cyberspace: North Korea.
Eric Schmidt will be traveling to North Korea on a private, humanitarian mission led by former New Mexico Gov. Bill Richardson that could take place as early as this month, sources told The Associated Press on Wednesday. The sources, two people familiar with the group's plans, asked not to be named because the visit had not been made public.
The trip would be the first by a top executive from U.S.-based Google, the world's largest Internet search provider, to a country considered to have the most restrictive Internet policies on the planet.
North Korea is in the midst of what leader Kim Jong Un called a modern-day "industrial revolution" in a New Year's Day speech to the nation Monday. He is pushing science and technology as a path to economic development for the impoverished country, aiming for computers in every school and digitized machinery in every factory.
However, giving citizens open access to the Internet has not been part of the North's strategy. While some North Koreans can access a domestic Intranet service, very few have clearance to freely surf the World Wide Web.
It's highly unlikely Google will push to launch a business venture in North Korea, according to Victor Cha, a former senior Asia specialist in the administration of President George W. Bush.
"Perhaps the most intriguing part of this trip is simply the idea of it," said Cha, an analyst with the Center for Strategic and International Studies think tank in Washington. Kim Jong Un "clearly has a penchant for the modern accoutrements of life. If Google is the first small step in piercing the information bubble in Pyongyang, it could be a very interesting development."
It was not immediately clear who Schmidt and Richardson expect to meet in North Korea, a country that does not have diplomatic relations with the United States. North Korea has almost no business with companies in the U.S., which has banned the import of North Korean-made goods.
Schmidt, however, has been a vocal advocate of providing people around the world with Internet access and technology.
As Google's chief executive for a decade until 2011, Schmidt oversaw Google's ascent from a small California startup focused on helping computer users search the Internet to a global technology giant making inroads into mobile phone markets as well as mapping.
Google now has offices in more than 40 countries, including all three of North Korea's neighbors: Russia, South Korea and China, another country criticized for systematic Internet censorship.
After being accused of complying with China's strict Internet regulations, known as "the Great Firewall of China," Google pulled its search business from the world's largest Internet market in 2010 by redirecting traffic from mainland China to Hong Kong. The company maintains other businesses in China, but a recent transparency report shows Google's services there sporadically are blocked.
Since stepping aside as CEO, Schmidt has served as Google's executive chairman, largely responsible for the company's external relationships with policymakers, business partners and governments around the world.
And in recent months, Schmidt had been working with Jared Cohen, a former U.S. State Department policy and planning adviser who heads Google's New York-based think tank, on a book about the Internet's role in shaping society. "The New Digital Age" is due to be published in April.
Schmidt's message: The Internet and mobile technology have the power to lift people out of poverty and political oppression.
"The spread of mobile phones and new forms of connectivity offer us the prospect of connecting everybody," he said in commencement speech at Boston University in May. "When that happens, connectivity can revolutionize every aspect of society: politically, socially, economically."
The Richardson-Schmidt trip comes at a delicate time politically. In December, North Korea defiantly shot a satellite into space on the back of a three-stage rocket last month, a launch Pyongyang has hailed as a major step in its quest for peaceful exploration of space.
Washington and others, however, decry it as a covert test of long-range ballistic missile technology designed to send a nuclear-tipped warhead as far as California. The U.N. Security Council quickly condemned the launch, and is deliberating whether to further punish Pyongyang for violating bans on developing its nuclear and missile programs.
The visit also follows North Korea's announcement that an American citizen of Korean descent has been jailed in Pyongyang on suspicion of committing "hostile" acts against the state. Conviction could draw a sentence of 10 years of hard labor under North Korea's penal code.
Kenneth Bae, identified in North Korean state media by his Korean name, Pae Jun Ho, is the fifth American detained in North Korea in the past four years. The exact circumstances of his arrest were not clear. The Korean Central News Agency said he was taken into custody in Rason, a special economic zone in the far north near China and Russia, while touring the area.
Richardson, a former U.S. ambassador to the United Nations who often serves as an envoy to countries that do not have diplomatic relations with the United States, will try to meet with North Korean officials, and possibly Bae, to discuss the case, the sources said.
Richardson has been to North Korea at least a half-dozen times since 1994, including two trips to negotiate the release of Americans detained by North Korea. His last visit to Pyongyang was in 2010.
Also leading the trip is Kun "Tony" Namkung, an Asian affairs expert who has made numerous visits to North Korea over the past 25 years. Namkung also has been a consultant to the AP.
North Korea and the U.S. fought on opposite sides of a three-year war on the Korean Peninsula before signing a truce in 1953. The Korean Peninsula remains divided by a heavily fortified border, and the U.S. stations 28,000 troops in South Korea to protect the ally.
However, even before late leader Kim Jong Il's death a year ago, North Korea indicated interest in repairing relations with Washington.
Last year, a group of North Koreans even visited Google headquarters in Mountain View, California.

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Congress tightens belt, trims spy budget for 2013

WASHINGTON (AP) — Congress has drastically trimmed the budget for U.S. spies and satellites for 2013, though not quite as deeply as the White House wanted.
In one of the last votes of the year, House lawmakers voted Monday 373-29 in favor of a Senate-passed bill to slightly boost the president's $72 billion budget request for intelligence agencies including the CIA, adding extra cash for the counterterrorism fight against al-Qaida, and the counterintelligence fight against foreign governments trying to spy on the U.S.
That's down sharply from roughly $80 billion in 2012, which marked the peak of intelligence spending since the attacks of Sept. 11, 2001.
"The bill holds personnel levels, one of the biggest cost drivers, generally at last year's levels," said House Intelligence Committee Chairman Mike Rogers, R-Mich. "Even so, the bill adds a limited number of new personnel positions for select, high-priority positions, such as FBI surveillance officers to keep watch on terrorists."
The House Intelligence Committee's ranking member, Rep. Dutch Ruppersberger, D-Md., said the bill "invests in personnel and programs that are working and cuts things that aren't."
The bill was stripped of several measures meant to block the leaking of classified information, including a provision that would have limited which government officials could brief journalists on intelligence. The measures had been drafted after lawmakers objected to a series of news stories that anonymously quoted senior administration sources describing sensitive intelligence programs, such as the process by which targets are chosen for lethal drone strikes overseas.
The chairwoman of the Senate Intelligence Committee, Dianne Feinstein, D-Calif., says the measures were taken out to get the bill passed but that the issue remains a problem.
"Unfortunately, I am certain that damaging leaks of classified information will continue, and so the committee will need to continue to look for acceptable ways to address this problem," Feinstein said Friday after the Senate version of the bill passed.
The legislation, if signed into law by President Barack Obama, will require the White House to inform Congress when it decides to share classified information with reporters, giving lawmakers a heads-up before they read about it in the media.

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Shell drill ship runs aground on island off Alaska

ANCHORAGE, Alaska (AP) — Royal Dutch Shell PLC's foray into Arctic offshore drilling has suffered a serious setback after one of its two Alaska drilling rigs ran aground in shallow water off a small island.
Officials at a unified command center run by the Coast Guard, Shell, state responders and others said the Kulluk grounded Monday night on rocks off the southeast side of Sitkalidak Island, an uninhabited island in the Gulf of Alaska.
The Kulluk was being towed by a 360-foot anchor handler, the Aiviq, and a tugboat, the Alert. The vessels were moving north along Kodiak Island, trying to escape the worst of a North Pacific storm that included winds near 70 mph and swells to 35 feet. Sitkalidak is on the southeast side of Kodiak Island.
About 4:15 p.m., the drill ship separated from the Aiviq about 10 to 15 miles off shore and grounding was inevitable, Coast Guard Cmdr. Shane Montoya, the acting federal on-scene coordinator, told reporters.
"Once the Aiviq lost its tow, we knew the Alert could not manage the Kulluk on its own as far as towing, and that's when we started planning for the grounding," he said.
The command center instructed the nine tug crew members to guide the drill ship to a place where it would cause the least environmental damage. The tug cut the unmanned ship loose at 8:15 p.m. and it grounded at 9 p.m. near the north tip of Ocean Bay on Sitkalidak.
"The Alert was not able to do anything as far as towing the Kulluk but tried to maintain some kind of control," Montoya said.
The drill ship drafts 35 to 40 feet of water. The Coast Guard planned to fly out early Tuesday to plan a salvage operation and possible spill response. It is carrying 150,000 gallons of diesel and about 12,000 gallons of lube oil and hydraulic fluid, Montoya said.
Susan Childs, Shell's on-scene coordinator, said it was too early to know how the vessel would react to the pounding of the storm when it was aground and stationary.
She was optimistic about its salvage prospects and chances for staying intact.
"The unique design of the Kulluk means the diesel fuel tanks are isolated in the center of the vessel and encased in very heavy steel," she said. "When the weather subsides and it is safe to do so, we will dispatch crews to the location and begin a complete assessment."
The Kulluk is designed for extended drilling in Arctic waters and underwent $292 million in technical upgrades since 2006 to prepare for Alaska offshore exploration. The drill ship worked during the short 2012 open water season in the Beaufort Sea off Alaska's north coast. Its ice-reinforced, funnel-shape hull can deflect moving ice downward and break it into pieces.
Attached to a drilling prospect, the Kulluk is designed to handle waves 18 feet high. When disconnected from a well, it's designed to handle seas to 40 feet. Garth Pulkkinen of Noble Corp., the operator of the drill ship, said it was never in danger of capsizing.
The vessel first separated from a towing vessel Thursday night south of Kodiak Island. It was carrying a skeleton crew of 17 as it was towed by the Aiviq from Dutch Harbor in the Aleutian Islands to Seattle for maintenance. The tow line broke at a shackle attached to one of the vessels.
"It was new. It was inspected before it left Dutch, but it broke," said Shell Alaska spokesman Curtis Smith.
Before a line could be reattached, the Aiviq's engines failed, possibly from contaminated fuel. The Coast Guard cutter Alex Haley attempted to secure the drifting drill ship but that line failed and wrapped itself around one of the cutter's propellers, requiring the cutter to return to Kodiak on one propeller.
With bad weather predicted, the Kulluk's crew was evacuated Saturday. They hooked up emergency tow lines and left them trailing behind the vessel in case they were needed.
The Aiviq, with its engines restored, and a tug re-established lines to the drill ship, but lines broke Sunday. During a lull in the storm early Monday, the crew of Alert grabbed the original 400-foot line trailing the drill ship and later the Aiviq grappled aboard one of the emergency lines.

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Analysis: Economy would dodge bullet for now under fiscal deal

WASHINGTON (Reuters) - A deal worked out by Senate leaders to avoid the "fiscal cliff" was far from any "grand bargain" of deficit reduction measures.
But if approved by the House of Representatives, it could help the country steer clear of recession, although enough austerity would remain in place to likely keep the economy growing at a lackluster pace.
The Senate approved a last-minute deal early Tuesday morning to scale back $600 billion in scheduled tax hikes and government spending cuts that economists widely agree would tip the economy into recession.
The deal would hike taxes permanently for household incomes over $450,000 a year, but keep existing lower rates in force for everyone else.
It would make permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.
Scheduled cuts in defense and non-defense spending were simply postponed for two months.
Economists said that if the emerging package were to become law, it would represent at least a temporary reprieve for the economy. "This keeps us out of recession for now," said Menzie Chinn, an economist at the University of Wisconsin-Madison.
The contours of the deal suggest that roughly one-third of the scheduled fiscal tightening could still take place, said Brett Ryan, an economist at Deutsche Bank in New York.
That is in line with what many financial firms on Wall Street and around the world have been expecting, suggesting forecasts for economic growth of around 1.9 percent for 2013 would likely hold.
At midnight Monday, low tax rates enacted under then-President George W. Bush in 2001 and 2003 expired. If the House agrees with the Senate - and there remained considerable doubt on that score - the new rates would be extended retroactively.
Otherwise, together with other planned tax hikes, the average household would pay an estimated $3,500 more in taxes, according to the Tax Policy Center, a Washington think tank. Budget experts expect the economy would take a hit as families cut back on spending.
Provisions in the Senate bill would avoid scheduled cuts to jobless benefits and to payments to doctors under a federal health insurance program.
AUSTERITY'S BITE
Like the consensus of economists from Wall Street and beyond, Deutsche Bank has been forecasting enough fiscal drag to hold back growth to roughly 1.9 percent in 2013. Ryan said the details of the deal appeared to support that forecast.
That would be much better than the 0.5 percent contraction predicted by the Congressional Budget Office if the entirety of the fiscal cliff took hold, but it would fall short of what is needed to quickly heal the labor market, which is still smarting from the 2007-09 recession.
"We continue to anticipate a significant economic slowdown at the start of the year in response to fiscal drag and a contentious fiscal debate," economists at Nomura said in a research note.
In particular, analysts say financial markets are likely to remain on tenterhooks until Congress raises the nation's $16.4 trillion debt ceiling, which the U.S. Treasury confirmed had been reached on Monday.
While the Bush tax cuts would be made permanent for many Americans under the budget deal, a two-year-long payroll tax holiday enacted to give the economy an extra boost would expire. The Tax Policy Center estimates this could push the average household tax bill up by about $700 next year.
The suspension of spending cuts sets up a smaller fiscal cliff later in the year which still could be enough to send the economy into recession, said Chinn.
He warned that ongoing worries about the possibility of recession could keep businesses from investing, which would hinder economic growth.
"You retain the uncertainty," Chinn said.

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Bill to avert fiscal cliff heads to House

WASHINGTON (AP) — Legislation to negate a fiscal cliff of across-the-board tax increases and sweeping spending cuts to the Pentagon and other government agencies is headed to the GOP-dominated House after bipartisan, middle-of-the-night approval in the Senate capped a New Year's Eve drama unlike any other in the annals of Congress.
The measure cleared the Senate on an 89-8 vote early Tuesday, hours after Vice President Joe Biden and Senate Republican Leader Mitch McConnell of Kentucky sealed a deal.
It would prevent middle-class taxes from going up but would raise rates on higher incomes. It would also block spending cuts for two months, extend unemployment benefits for the long-term jobless, prevent a 27 percent cut in fees for doctors who treat Medicare patients and prevent a spike in milk prices.
The measure ensures that lawmakers will have to revisit difficult budget questions in just a few weeks, as relief from painful spending cuts expires and the government requires an increase in its borrowing cap.
House Speaker John Boehner pointedly refrained from endorsing the agreement, though he's promised a vote on it or a GOP alternative right away. But he was expected to encounter opposition from House conservatives.
"It's three strikes in my book and I'll be voting no on this bill," Rep. Tim Huelskamp told CNN Tuesday morning. Huelskamp says the legislation would impose a hardship on small businesses around the country and falls short of addressing the need for cuts in spending.
The measure is the first significant bipartisan tax increase since 1990, when former President George H.W. Bush violated his "read my lips" promise on taxes. It would raise an additional $620 billion over the coming decade when compared with revenues after tax cuts passed in 2001 and 2003, during the Bush administration. But because those policies expired at midnight Monday, the measure is officially scored as a whopping $3.9 trillion tax cut over the next decade.
President Barack Obama praised the agreement after the Senate's vote.
"While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay," Obama said in a statement. "This agreement will also grow the economy and shrink our deficits in a balanced way — by investing in our middle class, and by asking the wealthy to pay a little more."
The sweeping Senate vote exceeded expectations — tea party conservatives like Pat Toomey, R-Pa., and Ron Johnson, R-Wis., backed the measure — and would appear to grease enactment of the measure despite lingering questions in the House, where conservative forces sank a recent bid by Boehner to permit tax rates on incomes exceeding $1 million to go back to Clinton-era levels.
"Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members — and the American people — have been able to review the legislation," said a statement by Boehner and other top GOP leaders.
Lawmakers hope to resolve any uncertainty over the fiscal cliff before financial markets reopen Wednesday. It could take lots of Democratic votes to pass the measure and overcome opposition from tea party lawmakers.
Under the Senate deal, taxes would remain steady for the middle class but rise at incomes over $400,000 for individuals and $450,000 for couples — levels higher than President Barack Obama had campaigned for in his successful drive for a second term in office. Some liberal Democrats were disappointed that the White House did not stick to a harder line, while other Democrats sided with Republicans to force the White House to partially retreat on increases in taxes on multi-million-dollar estates.
The measure also allocates $24 billion in spending cuts and new revenues to defer, for two months, some $109 billion worth of automatic spending cuts that were set to slap the Pentagon and domestic programs starting this week. That would allow the White House and lawmakers time to regroup before plunging very quickly into a new round of budget brinkmanship, certain to revolve around Republican calls to rein in the cost of Medicare and other government benefit programs.
Officials also decided at the last minute to use the measure to prevent a $900 pay raise for lawmakers due to take effect this spring.
Even by the dysfunctional standards of government-by-gridlock, the activity at both ends of historic Pennsylvania Avenue was remarkable as the administration and lawmakers spent the final hours of 2012 haggling over long-festering differences.
Republicans said McConnell and Biden had struck an agreement Sunday night but that Democrats pulled back Monday morning. Democrats like Tom Harkin of Iowa said the agreement was too generous to upper-bracket earners. Obama's longstanding position was to push the top tax rate on family income exceeding $250,000 from 35 percent to 39 percent.
"No deal is better than a bad deal. And this look like a very bad deal," said Harkin.
The measure would raise the top tax rate on large estates to 40 percent, with a $5 million exemption on estates inherited from individuals and a $10 million exemption on family estates. At the insistence of Republicans and some Democrats, the exemption levels would be indexed for inflation.
Taxes on capital gains and dividends over $400,000 for individuals and $450,000 for couples would be taxed at 20 percent, up from 15 percent.
The bill would also extend jobless benefits for the long-term unemployed for an additional year at a cost of $30 billion, and would spend $31 billion to prevent a 27 percent cut in Medicare payments to doctors.
Another $64 billion would go to renew tax breaks for businesses and for renewable energy purposes, like tax credits for energy-efficient appliances.
Despite bitter battling over taxes in the campaign, even die-hard conservatives endorsed the measure, arguing that the alternative was to raise taxes on virtually every earner.
"I reluctantly supported it because it sets in stone lower tax rates for roughly 99 percent of American taxpayers," said Sen. Orrin Hatch, R-Utah. "With millions of Americans watching Washington with anger, frustration and anxiety that their taxes will skyrocket, this is the best course of action we can take to protect as many people as possible from massive tax hikes."

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