Defiant Assad pledges to continue fighting

A defiant Syrian President Bashar Assad rallied a chanting and cheering crowd Sunday to fight the uprising against his authoritarian rule, dismissing any chance of dialogue with "murderous criminals" that he blames for nearly two years of violence that has left 60,000 dead.
In his first public speech in six months, Assad laid out terms for a peace plan that keeps himself in power, ignoring international demands to step down and pledging to continue the battle "as long as there is one terrorist left" in Syria.
"What we started will not stop," he said, standing at a lectern on stage at the regal Opera House in central Damascus — a sign by the besieged leader that he sees no need to hide or compromise even with the violent civil war closing in on his seat of power in the capital.
The theater was packed with his supporters who interrupted the speech with applause, cheers and occasional fist-waving chants, including "God, Bashar and Syria!"
The overtures that Assad offered — a national reconciliation conference, elections and a new constitution — were reminiscent of symbolic changes and concessions offered previously in the uprising that began in March 2011. Those were rejected at the time as too little, too late.
The government last year adopted a constitution that theoretically allows political parties to compete with Assad's ruling Baath Party. It carried out parliamentary elections that were boycotted by his opponents.
Assad demanded that regional and Western countries must stop funding and arming the rebels trying to overthrow him.
"We never rejected a political solution ... but with whom should we talk? With those who have an extremist ideology, who only understand the language of terrorism? "Or should we with negotiate puppets whom the West brought?" he asked.
"We negotiate with the master, not with the slave," he answered.
As in previous speeches and interviews, he clung to the view that the crisis was a foreign-backed plot and not an uprising against him and his family's decades-long rule.
"Is this a revolution and are these revolutionaries? By God, I say they are a bunch of criminals," he said.
He stressed the presence of religious extremists among those fighting in Syria, calling them "terrorists who carry the ideology of al-Qaida" and "servants who know nothing but the language of slaughter."
He said the fighters sought to transform the country into a "jihad land."
Although he put up a defiant front, Assad laid out the grim reality of the violence, and he spoke in front of a collage of photos of what appeared to be Syrians killed in the fighting.
"We are now in a state of war in every sense of the word," Assad said, "a war that targets Syria using a handful of Syrians and many foreigners. It is a war to defend the nation."
He said Syria will take advice but not dictates from anyone — a reference to outside powers calling on him to step down.
The speech, which was denounced by the West, including the U.S. and Britain, came amid stepped-up international efforts for a peaceful way out of the Syrian conflict. Previous efforts have failed to stem the bloodshed.
U.N.-Arab League envoy Lakhdar Brahimi met Assad last month to push for a peace plan for Syria based on a plan first presented in June at an international conference in Geneva. The proposal calls for an open-ended cease-fire and the formation of a transitional government until new elections can be held and a new constitution drafted.
The opposition swiftly rejected Assad's proposals. Those fighting to topple the regime have repeatedly said they will accept nothing less than his departure, dismissing any kind of settlement that leaves him in the picture.
"It is an excellent initiative that is only missing one crucial thing: His resignation," said Kamal Labwani, a veteran dissident and member of the opposition's Syrian National Coalition umbrella group.
"All what he is proposing will happen automatically, but only after he steps down," Labwani told The Associated Press by telephone from Sweden.
Haitham Maleh, an opposition figure in Turkey, said Assad was offering the initiative because he feels increasingly besieged by advancing rebels.
"How could he expect us to converse with a criminal, a killer, a man who does not abide by the law?" he asked.
Assad has spoken only on rare occasions since the uprising began, and Sunday's speech was his first since June. His last public comments came in an interview in November to Russian TV in which he vowed to "live and die" in Syria.
On Sunday, he seemed equally confident in the ability of his troops to crush the rebellion despite the recent fighting in Damascus.
"He did not come across as a leader under siege, nor as a leader whose regime is on the verge of collapse," said Fawaz A. Gerges, head of the Middle East Center at the London School of Economics.
"He seemed determined that any political settlement must come on his terms, linking those terms with the Syrian national interest as if they are inseparable," he said.
U.S. State Department spokeswoman Victoria Nuland said in a statement that Assad's speech was "yet another attempt by the regime to cling to power and does nothing to advance the Syrian people's goal of a political transition."
British Foreign Secretary William Hague called Assad's speech "beyond hypocritical." In a message posted on his official Twitter feed, Hague said "empty promises of reform fool no one."
European Union foreign policy chief Catherine Ashton's office said in a statement that the bloc will "look carefully if there is anything new in the speech, but we maintain our position that Assad has to step aside and allow for a political transition."
Foreign Minister Ahmet Davutoglu of Turkey said the speech was filled with "empty promises" and repetitive pledges of reform by a leader out of touch with the Syrian people.
"It seems (Assad) has shut himself in his room, and for months has read intelligence reports that are presented to him by those trying to win his favor," Davutoglu told reporters in the Aegean port city of Izmir on Sunday.
Turkey is a former ally of Damascus, and while Ankara first backed Assad after the uprising erupted, it turned against the regime after its violent crackdown on dissent.
Observers said the speech signaled the violence would continue indefinitely as long as both sides lacked the ability to score a victory on the battlefield.
Randa Slim, a research fellow at the New America Foundation in Washington, said Assad's made clear he has no intention of making way for a political transition.
"He sees himself rather as an orchestrator and arbiter of a process to be organized under his control," she said.
The Internet was cut in many parts of Damascus ahead of the address, apparently for security reasons, and some streets were closed.
At the end of his speech, loyalists shouted: "With our blood and souls we redeem you, Bashar!"
As he was leaving the hall, supporters pushed forward and swarmed around him to try to talk to him. Nervous security guards tried to push them away.
Many shouted "Shabiha forever!" — referring to the armed regime loyalists whom rebels have blamed for sectarian killings.
Amid the melee, Assad quickly shook hands with some of them and blew kisses to others.
Read More..

Analysis: Air assaults raise doubts about Myanmar's reformist rulers

BANGKOK (Reuters) - Unprecedented aerial attacks on ethnic Kachin rebels by Myanmar's military have raised doubts about whether the retired generals in a government hailed for its reforms have really changed their harsh old ways.
Assurances by the quasi-civilian government that it wants a peace deal with the Kachin Independence Army (KIA) and that the military is exercising "maximum restraint" are starting to ring hollow as jets and helicopter gunships take to the air.
The 18-month conflict is back under the spotlight, with U.N. Secretary-General Ban Ki-moon voicing concern last week about reports of air strikes in Kachin State. The U.S. State Department said they were "extremely troubling".
Western countries that suspended most sanctions as a reward for political, social and economic reforms after the new government took power in March 2011 are now in a tricky spot.
Questions have been raised about the sincerity, or authority, of the former soldiers who had convinced them of their "irreversible" course of liberalization when they ended nearly half a century of military rule.
"Skeptics had warned the international community not to get too caught up in all the excitement of the changes going on," said Christopher Roberts, a Myanmar expert at the Australia National University.
"This escalation is enough to spark a debate on whether sanctions were removed too soon."
The United Nations has repeatedly demanded humanitarian access to an estimated 70,000 people displaced by fighting that resurfaced in June 2011, ending a 17-year truce agreed after decades of bloody battles. The number of casualties is unknown, but they are estimated to be high on both sides.
The KIA says it is under attack in seven areas and that the military wants to seize its headquarters in Laiza, close to the Chinese border. It says the military has been using air strikes since December 24 to try to weaken the rebels and force them to the negotiating table -- claims the government strenuously denies.
Despite 11 rounds of peace talks, the KIA is the only ethnic minority army that has not agreed to a ceasefire with the government and won't stand down until it is offered a political deal. It says the current, army-drafted constitution won't guarantee their rights and wants it changed first.
BITTER HISTORY
State peace negotiators have a three-stage plan starting with a truce before any political dialogue, followed by a parliamentary congress in which permanent deals offering unspecified guarantees and concessions are signed.
The two sides have a bitter history and deep distrust. Political leaders are determined to ensure their people are treated fairly and get a share of the vast mineral resources they have long accused the military of looting.
"It's difficult to cease fighting while not knowing what will happen after," said KIA vice commander-in-chief, Major-General Gun Maw. "What should we do after a ceasefire? That's the answer we're looking for," he told the 7-Day News journal.
The decision to use air power against ethnic militias, a tactic unheard of even under military rule, runs counter to reformist President Thein Sein's assurances that troops were acting only in self defense.
Official Myanmar newspapers have said air support was used on December 30 to thwart KIA fighters who had occupied a hill and were attacking logistics units of the Tatmadaw, as Myanmar's military is known.
The former junta heavyweight has twice publicly ordered the military chief, a protégé of reviled former dictator Than Shwe, to ensure troops don't launch any offensives. The recent escalation has raised questions about him that are almost impossible to answer in a country where the inner workings of the leadership in Naypyitaw remain highly secretive.
Zaw Htay, a president's office spokesman, said on Friday troops were responding defensively to KIA aggression and destruction of transport and power infrastructure and the army was committed to protecting the civilian population.
Nobel laureate Aung San Suu Kyi, now a lawmaker, has always urged a cautious approach to the changes. While lauding Thein Sein for his leadership, she has repeatedly said the role the military plays in Myanmar will dictate the country's future.
Thein Sein and his loyalists appear to be driving the reforms but the extent to which he controls the Tatmadaw remains unclear. Diplomats and analysts say either he is insincere about peace or the military is acting independently.
"He's just Mr. Nice Guy, the human face to the world and he has no authority to tell the army what to do," said Bertil Lintner, a journalist, author and expert on Myanmar's ethnic conflicts, who recently visited Kachin State
"Fundamentally, nothing has changed, it's the same people in power, they're just much more clever at managing things."
A more aggressive approach to the conflict could be embarrassing for the United States, which welcomed Thein Sein to Washington in September and has offered support to try to reform Myanmar's military, including an invitation to observe the annual U.S.-led Cobra Gold exercises in Thailand.
DOMINANT MILITARY
Any indication the military was pulling rank over the civilian government might concern foreign firms planning to invest in a country with a power structure dominated by retired or serving soldiers and plagued by vested interests.
The military remains a major player in many industries through its Myanma Economic Holdings Ltd and the Myanma Economic Corporation, both blacklisted by the U.S. Treasury Department. Those firms, or their close business allies, might not take kindly to competition.
The international community has been guarded in its criticism, wary not to upset Myanmar's notoriously thin-skinned rulers and drive them back into China's orbit. China was Myanmar's lifeline when sanctions were in place and once backed the KIA.
An alliance of Kachin groups issued an open letter on Friday urging the International Crisis Group to reconsider presenting Thein Sein with its highest peace award, accusing his office of a "duplicitous strategy" and "outright lies" that have undermined his credibility.
Experts say it's too soon to tell how Western powers would respond in the coming months, but confidence in Thein Sein could start to slow if the military follows its hard line against the KIA and risks killing off the peace process altogether.
"It doesn't look good for Thein Sein now and this (escalation) may not have been his intention," said Roberts.
"It's unlikely to threaten the broader reforms going on, but could damage the momentum and it'll certainly dampen the enthusiasm about progress.
Read More..

Egypt's Mursi to meet IMF aide on $4.8bln loan request: newspaper

CAIRO (Reuters) - A senior official in the International Monetary Fund (IMF) will meet Egyptian President and other top officials on Monday to discuss Cairo's request for a $4.8 billion loan, a major state-run Egyptian newspaper reported on Saturday.
The IMF loan is seen as crucial to easing Egypt's budget deficit and an economic slump caused by the turmoil that followed the popular uprising that ousted autocratic president Hosni Mubarak in February 2011.
"Egyptian President Mohamed Mursi will receive on the day after tomorrow Masood Ahmed, the IMF director for the Middle East and Central Asia... and it is expected that the meeting will include talks about the IMF's loan to Egypt," the Akhbar Al-Youm daily reported.
It said Masood would also meet Prime Minister Hisham Kandil, some ministers and the central bank governor. Officials from the cabinet, presidency and IMF were not immediately available to comment on the report.
Egypt's currency has lost about 10 percent against the dollar since the start of 2011. But about a third of that plunge has come in the last week alone, since the central bank began auctioning $75 million a day out of its reserves on December 30.
The pound slid further on Thursday at the central bank's fourth auction of foreign currency, with $74.9 million sold to banks at a cut-off price of 6.386 pounds, weaker than Wednesday's 6.351 to the dollar.
The cabinet spokesman said on Thursday that an IMF mission would visit in January to discuss the loan deal, which was postponed last month at Cairo's behest because of violent anti-Mursi protests raging at the time.
The IMF said last week that it welcomed steps Egypt had taken to stop a drain on its international reserves, which had driven the Egyptian pound down to record lows.
Egypt's budget deficit in the year to end-June 2013 could widen by 50 percent from the original forecast made in July, according to a figure released by the planning minister last Monday.
Read More..

Merkel highlights economy in German election year

BERLIN (AP) — Chancellor Angela Merkel highlighted Germany's economic strength as she kicked off campaigning Saturday for an important state vote that comes months before national elections, and she brushed aside worries about the weakness of her party's coalition partner.
Merkel's center-right party faces a tough battle to extend its 10-year hold on Lower Saxony state, a northwestern region of 8 million people, in the Jan. 20 election there. Polls suggest the center-left opposition has a good chance of winning, which would give it a significant boost ahead of September national elections in which Merkel will seek a third term.
Merkel made clear that her Christian Democrats will make "economic competence, together with jobs — and jobs that are well-qualified and fairly paid," along with economic strength, a keystone of this year's campaigns. She identified opposition plans for tax increases as one battleground.
"We believe that we do, of course, need income for the state, so we are not talking about tax cuts at this point," Merkel said at a televised news conference after her party's leadership met in Wilhelmshaven, a port city in Lower Saxony.
"But we believe that tax increases ... are not good for current economic developments, for medium-sized companies in particular but also for big companies," she added.
The number of Germans out of work averaged just under 2.9 million last year, the lowest since 1991. Germany's jobless rate of less than 7 percent contrasts with figures well over 20 percent in troubled eurozone partners Greece and Spain.
The strong German economy, and Merkel's hard-nosed management of Europe's debt crisis, have helped keep her popularity high and her party ahead in polls.
But the weakness of the pro-market Free Democratic Party, her junior coalition partner, means that her center-right alliance lacks a majority in surveys. The party, which campaigned at Germany's last election for tax cuts that it failed to obtain, has taken much of the blame for frequent coalition squabbling.
In Lower Saxony, polls show the FDP short of the 5 percent support needed to stay in the state legislature, which endangers popular conservative governor David McAllister's chances of keeping his job.
However, Merkel said she is "very optimistic that the (Free Democrats) will, on their own strength, with their ideas and their share in the success of the work of both the Lower Saxony state government and the federal government, be able to convince people."
The Lower Saxony election follows a rough start for Merkel's center-left challenger in the national elections, former Finance Minister Peer Steinbrueck.
He drew criticism this week for saying the chancellor earns too little and that Merkel has an advantage because she's a woman — adding to earlier controversy over his high earnings from public speaking. Merkel coolly dismissed a question about her challenger's performance.
"To be honest, I take care of my own performance and I'm very satisfied with that," she said. "The rest is for others to comment on.
Read More..

Obama says U.S. can't afford more showdowns over debt, deficits

HONOLULU (Reuters) - Fresh from the long legislative fight to prevent a "fiscal cliff" of tax hikes and spending cuts, President Barack Obama warned on Saturday that the United States could not afford further budget showdowns this year or in the future.
Obama, who returned to Hawaii for a family vacation shortly after the House of Representatives passed a compromise bill on Tuesday, said in his weekly radio and Internet address that the new law was just one step toward fixing the country's fiscal and economic problems.
"We still need to do more to put Americans back to work while also putting this country on a path to pay down its debt, and our economy can't afford more protracted showdowns or manufactured crises along the way," he said in the address, broadcast on Saturday.
"Because even as our businesses created 2 million new jobs last year - including 168,000 new jobs last month - the messy brinkmanship in Congress made business owners more uncertain and consumers less confident."
Government data released on Friday showed the U.S. unemployment rate remained at 7.8 percent in December.
Lawmakers in the Senate and the House passed legislation this week that raised tax rates for the wealthiest Americans while making Bush-era tax cuts for the middle class permanent.
It was a victory for Obama, who campaigned for re-election largely on a promise to achieve that goal.
Republicans have indicated that they are ready for another fight over the U.S. debt ceiling. Representative Dave Camp, delivering his party's weekly address, warned, at least indirectly, that they would expect spending cuts in return for raising the ceiling again.
"Many of our Democrat colleagues just don't seem to get it. Throughout the fiscal cliff discussions, the president and the Democrats who control Washington repeatedly refused to take any meaningful steps to make Washington live within its means," Camp said.
"As we turn our attention toward future discussions on the debt limit and the budget, we must identify responsible ways to tackle Washington's wasteful spending."
Obama repeated that he would not negotiate on the debt ceiling, hoping to avoid the 2011 conflict that led to a credit rating downgrade and pushed the country close to default.
"If Congress refuses to give the United States the ability to pay its bills on time, the consequences for the entire global economy could be catastrophic," he said. "Our families and our businesses cannot afford that dangerous game again."
Obama said he was willing to do more on deficit reduction and suggested that the hike in tax rates for wealthy Americans was not the last tax change he expected to make.
"Spending cuts must be balanced with more reforms to our tax code," he said. "The wealthiest individuals and the biggest corporations shouldn't be able to take advantage of loopholes and deductions that aren't available to most Americans.
Read More..

Selling flak jackets in the cyberwars

SAN FRANCISCO (Reuters) - When the Israeli army and Hamas trade virtual blows in cyberspace, or when hacker groups like Anonymous rise from the digital ether, or when WikiLeaks dumps a trove of classified documents, some see a lawless Internet.
But Matthew Prince, chief executive at CloudFlare, a little-known Internet start-up that serves some of the Web's most controversial characters, sees a business opportunity.
Founded in 2010, CloudFlare markets itself as an Internet intermediary that shields websites from distributed denial-of-service, or DDoS, attacks, the crude but effective weapon that hackers use to bludgeon websites until they go dark. The 40-person company claims to route up to 5 percent of all Internet traffic through its global network.
Prince calls his company the "Switzerland" of cyberspace - assiduously neutral and open to all comers. But just as companies like Twitter, YouTube and Facebook have faced profound questions about the balance between free speech and openness on the Internet and national security and law enforcement concerns, CloudFlare's business has posed another thorny question: what kinds of services, if any, should an American company be allowed to offer designated terrorists and cyber criminals?
CloudFlare's unusual position at the heart of this debate came to the fore last month, when the Israel Defense Forces sought help from CloudFlare after its website was struck by attackers based in Gaza. The IDF was turning to the same company that provides those services to Hamas and the al-Quds Brigades, according to publicly searchable domain information. Both Hamas and al-Quds, the military wing of the Palestinian Islamic Jihad, are designated by the United States as terrorist groups.
Under the USA Patriot Act, U.S. firms are forbidden from providing "material support" to groups deemed foreign terrorist organizations. But what constitutes material support - like many other facets of the law itself - has been subject to intense debate.
CloudFlare's dealings have attracted heated criticism in the blogosphere from both Israelis and Palestinians, but Prince defended his company as a champion of free speech.
"Both sides have an absolute right to tell their story," said Prince, a 38-year old former lawyer. "We're not providing material support for anybody. We're not sending money, or helping people arm themselves."
Prince noted that his company only provides defensive capabilities that enable websites to stay online.
"We can't be sitting in a role where we decide what is good or what is bad based on our own personal biases," he said. "That's a huge slippery slope."
Many U.S. agencies are customers, but so is WikiLeaks, the whistle-blowing organization. CloudFlare has consulted for many Wall Street institutions, yet also protects Anonymous, the "hacktivist" group associated with the Occupy movement.
Prince's stance could be tested at a time when some lawmakers in the United States and Europe, armed with evidence that militant groups rely on the Web for critical operations and recruitment purposes, have pressured Internet companies to censor content or cut off customers.
Last month, conservative political lobbies, as well as seven lawmakers led by Ted Poe, a Republican from Texas, urged the FBI to shut down the Hamas Twitter account. The account remains active; Twitter declined to comment.
MATERIAL SUPPORT
Although it has never prosecuted an Internet company under the Patriot Act, the government's use of the material support argument has steadily risen since 2006. Since September 11, 2001, more than 260 cases have been charged under the provision, according to Fordham Law School's Terrorism Trends database.
Catherine Lotrionte, the director of Georgetown University's Institute for Law, Science and Global Security and a former Central Intelligence Agency lawyer, argued that Internet companies should be more closely regulated.
"Material support includes web services," Lotrionte said. "Denying them services makes it more costly for the terrorists. You're cornering them."
But others have warned that an aggressive government approach would have a chilling effect on free speech.
"We're resurrecting the kind of broad-brush approaches we used in the McCarthy era," said David Cole, who represented the Humanitarian Law Project, a non-profit organization that was charged by the Justice Department for teaching law to the Kurdistan Workers' Party, which is designated by the United States as a terrorist group. The group took its case to the Supreme Court but lost in 2010.
The material support law is vague and ill-crafted, to the point where basic telecom providers, for instance, could be found guilty by association if a terrorist logs onto the Web to plot an attack, Cole said.
In that case, he asked, "Do we really think that AT&T or Google should be held accountable?"
CloudFlare said it has not been contacted about its services by the U.S. government. Spokespeople for Hamas and the Palestinian Islamic Jihad, told Reuters they contracted a cyber-security company in Gaza that out-sources work to foreign companies, but declined to comment further. The IDF confirmed it had hired CloudFlare, but declined to discuss "internal security" matters.
CloudFlare offers many of its services for free, but the company says websites seeking advanced protection and features can see their bill rise to more than $3,000 a month. Prince declined to discuss the business arrangements with specific customers.
While not yet profitable, CloudFlare has more than doubled its revenue in the past four months, according to Prince, and is picking up 3,000 new customers a day. The company has raked in more than $22 million from venture capital firms including New Enterprise Associates, Venrock and Pelion Venture Partners.
Prince, a Midwestern native with mussed brown hair who holds a law degree from the University of Chicago, said he has a track record of working on the right side of the law.
A decade ago, Prince provided free legal aid to Spamhaus, an international group that tracked email spammers and identity thieves. He went on to create Project Honey Pot, an open source spam-tracking endeavor that turned over findings to police.
Prince's latest company, CloudFlare, has been hailed by groups such as the Committee to Protect Journalists for protecting speech. Another client, the World Economic Forum, named CloudFlare among its 2012 "technology pioneers" for its work. But it also owes its profile to its most controversial customers.
CloudFlare has served 4Chan, the online messaging community that spawned Anonymous. LulzSec, the hacker group best known for targeting Sony Corp, is another customer. And since last May, the company has propped up WikiLeaks after a vigilante hacker group crashed the document repository.
Last year, members of the hacker collective UgNazi, whose exploits include pilfering user account information from eBay and crashing the CIA.gov website, broke into Prince's cell phone and email accounts.
"It was a personal affront," Prince said. "But we never kicked them off either."
Prince said CloudFlare would comply with a valid court order to remove a customer, but that the Federal Bureau of Investigation has never requested a takedown. The company has agreed to turn over information to authorities on "exceedingly rare" occasions, he acknowledged, declining to elaborate.
"Any company that doesn't do that won't be in business long," Prince said. But in an email, he added: "We have a deep and abiding respect for our users' privacy, disclose to our users whenever possible if we are ordered to turn over information and would fight an order that we believed was not proper."
Juliannne Sohn, an FBI spokeswoman, declined to comment.
Michael Sussmann, a former Justice Department lawyer who prosecuted computer crimes, said U.S. law enforcement agencies may in fact prefer that the Web's most wanted are parked behind CloudFlare rather than a foreign service over which they have no jurisdiction.
Federal investigators "want to gather information from as many sources as they can, and they're happy to get it," Sussmann said.
In an era of rampant cyber warfare, Prince acknowledged he is something of a war profiteer, but with a wrinkle.
Read More..

U.S. drops China's Taobao website from "notorious" list

WASHINGTON (Reuters) - The United States on Thursday dropped a website owned by China's largest e-commerce company, Alibaba Group, from its annual list of the world's most "notorious markets" for sales of pirated and counterfeit goods.
Taobao Marketplace, an online shopping site similar to eBay and Amazon that brings together buyers and sellers, "has been removed from the 2012 List because it has undertaken notable efforts over the past year to work with rightholders directly or through their industry associations to clean up its site," the U.S. Trade Representative's office said in the report.
The move came just before an annual high-level U.S.-China trade meeting next week in Washington.
Taobao Marketplace is China's largest consumer-oriented e-commerce platform, with estimated market share of more than 70 percent. The website has nearly 500 million registered users, with more than 800 million product listings at any given time. Most of the users are in China, Hong Kong, Taiwan and Macao.
The U.S. Chamber of Commerce has called Taobao "one of the single largest online sources of counterfeits."
The Chinese Commerce Ministry strongly objected to Taobao's inclusion on the USTR's 2011 notorious markets list. A ministry spokesman said it did not appear to be based on any "conclusive evidence or detailed analysis.
Alibaba hired former USTR General Counsel James Mendenhall to help persuade USTR to remove Taobao from its list.
The Chinese company's bid to shed its "notorious" label won support from the Motion Picture Association of America, a former critic of Taobao, which praised its effort to reduce the availability of counterfeit goods on its website.
But U.S. software, clothing and shoe manufacturers urged USTR to keep Taobao on the list.
To stay off in the future, USTR urged "Taobao to further streamline procedures ... for taking down listings of counterfeit and pirated goods and to continue its efforts to work with and achieve a satisfactory outcome with U.S. rights holders and industry associations."
USTR said it also removed Chinese website Sogou from the notorious markets list, based on reports that it has made "notable efforts to work with rights holders to address the availability of infringing content on its site."
U.S. concerns about widespread piracy and counterfeiting of American goods in China are expected to be high on the agenda at next week's meeting in Washington of the U.S.-China Joint Commission on Commerce and Trade.
The 2012 notorious markets list includes Xunlei, which USTR described as a Chinese-based site that facilitates the downloading and distribution of pirated movies.
Baixe de Tudo, a website hosted in Sweden but targeted at the Brazilian market, was also put on the list along with the Chinese website Gougou.
Warez-bb, which USTR described as a hub for pre-release music, software and video games, was also included. The forum site is registered in Sweden but hosted by a Russian Internet service provider, USTR said.
Read More..

Online gambling companies struggle to clear EU hurdles

LONDON (Reuters) - A partnership stuck on Friday between bwin.party Digital Entertainment and a Belgian casino group has defused one of many disputes pitting online gambling companies against governments across Europe.
The agreement came a month after bwin.party's co-CEO was questioned by Belgian authorities in an escalating license dispute the company said was costing it 700,000 euros ($916,000) in monthly revenue.
By joining forces with Belcasinos, a unit of local casino owner Group Partouche, bwin.party neatly met a requirement to have a presence in Belgium to win a license for online poker, casino and sports betting.
The agreement is a rare bright spot in a tough regulatory environment for online gambling companies across the continent.
Betting online on sports events or playing poker on the Internet are increasingly popular pastimes in Europe, where operators say they are held back by unfair and discriminatory rules in many European Union countries.
"It is not a European Union in any way, it is a patchwork of different countries who happen to be in the EU," said Professor Leighton Vaughan Williams, director of the betting research unit at Nottingham Business School in central England.
"Different countries have different vested interests and different ideas they are trying to promote. Are they trying to protect consumers or to maximize their tax take?" he said.
The 27 EU member states retain the right to regulate their gambling sectors as they see fit, but rules must comply with EU law, broadly meaning they must be consistent and proportionate.
Some companies are scaling back activities in European markets where, they say, regulatory risks are too high or tax rates are punitive.
Betting exchange operator Betfair for instance said this week it was halting marketing and investment in unregulated markets, including EU members Cyprus, Germany and Greece.
William Hill, Britain's largest bookmaker, has joined Betfair in pulling out of Greece and has also stopped offering sports betting to German residents because of a 5 percent turnover tax.
STAKES RISE
The stakes are high. Online gambling is growing at an annual rate of almost 15 percent in the EU and will be worth an estimated 13 billion euros ($17 billion) by 2015, according to EU figures.
The European Commission, the EU's executive, stepped in to the debate in October when it published a medium-term plan to clarify regulations and promote cooperation between member states, ruling out EU-wide legislation for the time being.
"All citizens must be adequately protected, money laundering and fraud must be prevented, sport must be safeguarded against betting-related match-fixing and national rules must comply with EU law," Internal Market and Services Commissioner Michel Barnier said, setting out his approach.
The online operators accuse the European Commission of failing to follow through properly on complaints lodged about regulation in no fewer than 20 or the 27 EU member states.
Barnier has written to member states accused of breaching EU law in the way they handle gambling, seeking an update on the situation by the end of the year.
However, the industry questions whether the EU will go into battle over gambling when it is facing so many other problems.
"They will chip away at some of the most blatant ones," said Clive Hawkswood, chief executive of trade body the Remote Gambling Association. "What we really need is for them to take some to the European Court and take enforcement action."
BRITISH TAXES
Gambling companies themselves have taken advantage of different tax regimes where they work in their favor.
This is illustrated in Britain, historically the biggest betting market in Europe and a place with a well-developed gambling culture where bookmakers have operated in town centers for 50 years.
In recent years, most betting companies have moved their British online betting operations to Britain's overseas territory of Gibraltar. There they are sheltered from a 15 percent tax on gross profit faced by operators based in Britain.
New legislation will close off that loophole after 2014. The shift to a taxation model based on the location of the consumer was expected to cost gambling companies as much as 270 million pounds ($435 million) by 2016-17.
Analyst Nick Batram at brokerage Peel Hunt said smaller players would likely be picked off because of the impact of higher tax and regulatory burdens across Europe.
"It is getting more complicated and more expensive. There is more change afoot but it should ultimately play into the hands of the better-capitalized companies."
In that vein, William Hill has provisionally agreed a 485 million pound takeover of smaller rival Sportingbet, keen to get its hands on the company's regulated Australian betting business.
"I think there is a lot more M&A activity to come," said Batram.
Read More..

Internet regulation seen at national level as treaty talks fail

SAN FRANCISCO (Reuters) - The world's major Internet companies, backed by U.S. policymakers, got much of what they wanted last week when many nations refused to sign a global telecommunications treaty that opponents feared could lead to greater government control over online content and communications.
In rejecting even mild Internet language in the updated International Telecommunications Union treaty and persuading dozens of other countries to refuse their signatures, the U.S. made a powerful statement in support of the open Internet, U.S. officials and industry leaders said.
But both technologists and politicians fear the Internet remains in imminent danger of new controls imposed by various countries, and some said the rift that only widened during the 12-day ITU conference in Dubai could wind up hastening the end of the Net as we know it.
"If the international community can't agree on what is actually quite a simple text on telecommunications, then there is a risk that the consensus that has mostly held today around Internet governance within (Web-address overseer) ICANN and the multi-stakeholder model just falls apart over time," a European delegate told Reuters. "Some countries clearly think it is time to rethink that whole system, and the fights over that could prove irresolvable."
An increasing number of nations are alarmed about Internet-based warfare, international cybercrime or internal dissidents' use of so-called "over-the-top" services such as Twitter and Facebook that are outside the control of domestic telecom authorities. Many hoped that the ITU would prove the right forum to set standards or at least exchange views on how to handle their problems.
But the United States' refusal to sign the treaty even after all mention of the Internet had been relegated to a side resolution may have convinced other countries that they have to go it alone, delegates said.
"This could lead to a balkanization of the Internet, because each country will have its own view on how to deal with over-the-top players and will regulate the Internet in a different way," said another European delegate, who would speak only on condition anonymity.
Without U.S. and European cooperation, "maybe in the future we could come to a fragmented Internet," said Andrey Mukhanov, international chief at Russia's Ministry of Telecom and Mass Communications.
HARD LINE IN NEGOTIATIONS
Spurred on by search giant Google and others, the Americans took a hard line against an alliance of countries that wanted the right to know more about the routing of Internet traffic or identities of Web users, including Russia, and developing countries that wanted content providers to pay at least some of the costs of transmission.
The West was able to rally more countries against the ITU having any Internet role than agency officials had expected, leaving just 89 of 144 attending nations willing to sign the treaty immediately. They also endorse a nonbinding resolution that the ITU should play a future role guiding Internet standards, along with private industry and national governments.
Some delegates charged that the Americans had planned on rejecting any treaty and so were negotiating under false pretenses. "The U.S. had a plan to try and water down as much of the treaty as it could and then not sign," the second European said.
Other allied delegates and a U.S. spokesman hotly disputed the claim. "The U.S. was consistent and unwavering in its positions," he said. "In the end—and only in the end—was it apparent that the proposed treaty would not meet that standard."
But the suspicion underscores the unease greeting the United States on the issue. Some in Russia, China and other nations suspect the U.S. of using the Net to sow discontent and launch spying and military attacks.
Ror many technology companies, and for activists who are helping dissidents, the worst-case scenario now would be a split in the structural underpinnings of the Internet. In theory, the electronic packets that make up an email or Web session could be intercepted and monitored near their origin, or traffic could be subjected to massive firewalls along national boundaries, as is the case in China.
Most technologists view the former scenario as unlikely, at least for many years: the existing Internet protocol is too deeply entrenched, said Milton Mueller, a Syracuse University professor who studies Net governance.
"People who want to `secede' from that global connectivity will have to introduce costly technical exceptions to do so," Mueller said.
A more immediate prospect is stricter national regulations requiring Internet service providers and others to help monitor, report and censor content, a trend that has already accelerated since the Arab Spring revolts.
Jonathan Zittrain, co-founder of Harvard University's Berkman Center for Internet Society, also predicted more fragmentation at the application level, with countries like China encouraging controllable homegrown alternatives to the likes of Facebook and Twitter.
Zittrain, Mueller and other experts said fans of the open Net have much work to do in Dubai's wake.
They say government and industry officials should not only preach the merits of the existing system, in which various industry-led non-profit organizations organize the core Internet protocols and procedures, but strive to articulate a better way forward.
"The position we're in now isn't tenable," said James Lewis, a cybersecurity advisor to the White House based at the Center for Strategic and International Studies. "For us to say 'No, it's got be an ad hoc arrangement of non-governmental entities and a nonprofit corporation ... maybe we could get away with that 10 years ago, but it's going to be increasingly hard."
Lewis said the United States needed to concede a greater role for national sovereignty and the U.N., while Mueller said the goal should be a "more globalized, transnational notion of communications governance" that will take decades to achieve.
In the meantime, activists concerned about new regulation can assist by spreading virtual private network technology, which can national controls, Zittrain said.
Backup hosting and distribution could also be key, he said. "We can devise systems for keeping content up amidst filtering or denial-of-service attacks, so that a platform like Twitter can be a genuine choice for someone in China."
Read More..

Pope needs help sending out blessing in first tweet

VATICAN CITY (Reuters) - After weeks of anticipation bordering on media frenzy, Pope Benedict solemnly put his finger to a computer tablet device on Wednesday and tried to send his first tweet - but something went wrong.
Images on Vatican television appeared to show the first try didn't work. The pope, who still writes his speeches by hand, seems to have pressed too hard and the tweet was not sent right away. So, he needed a little help from his friends.
Archbishop Claudio Maria Celli of the Vatican's communications department showed the pontiff how to do it, but the pope hesitated. Celli touched the screen lightly himself and off went the papal tweet.
"Dear friends, I am pleased to get in touch with you through Twitter. Thank you for your generous response. I bless all of you from my heart," he said in his introduction to the brave new world of Twitter.
The tweet was sent at the end of weekly general audience in the Vatican before thousands of people.
The pope actually has eight linked Twitter accounts. @Pontifex, the main account, is in English. The other seven have a suffix at the end for the different language versions. For example, the German version is @Pontifex_de, and the Arabic version is @Pontifex_ar.
The tweets will be going out in Spanish, English, Italian, Portuguese, German, Polish, Arabic and French. Other languages will be added in the future.
The pope already had just over a million followers in all of the languages combined minutes before he sent his first tweet and the number was growing.
PAPAL Q AND A
Later on Wednesday after the audience was over and the television cameras turned off, the pontiff answered the first of three questions sent to him at #askpontifex.
The first question answered by the pope was: "How can we celebrate the Year of Faith better in our daily lives?"
His answer: "By speaking with Jesus in prayer, listening to what he tells you in the Gospel and looking for him in those in need."
The pope, who, as leader of the Roman Catholic Church already has 1.2 billion followers in the standard sense of the word, won't be following anyone else, the Vatican has said.
After his first splash into the brave new world of Twitter on Wednesday, the contents of future tweets will come primarily from the contents of his weekly general audience, Sunday blessings and homilies on major Church holidays.
They are also expected to include reaction to major world events, such as natural disasters.
The Vatican says papal tweets will be little "pearls of wisdom", which is understandable since his thoughts will have to be condensed to 140 characters, while papal documents often top 140 pages.
The Vatican said precautions had been taken to make sure the pope's certified account is not hacked. Only one computer in the Vatican's secretariat of state will be used for the tweets.
After Wednesday, Benedict won't be pushing the button on his tweets himself. They will be sent by aides but he will sign off on them.
The pope's Twitter page is designed in yellow and white - the colors of the Vatican, with a backdrop of the Vatican and his picture. It may change during different liturgical seasons of the year and when the pope is away from the Vatican on trips.
The pope has given a qualified welcome to social media.
In a document issued last year, he said the possibilities of new media and social networks offered "a great opportunity", but warned of the risks of depersonalization, alienation, self-indulgence, and the dangers of having more virtual friends than real ones.
In 2009, a new Vatican website, www.pope2you.net, went live, offering an application called "The pope meets you on Facebook", and another allowing the faithful to see the pontiff's speeches and messages on their iPhones or iPods.
The Vatican famously got egg on its face in 2009 when it was forced to admit that, if it had surfed the web more, it might have known that a traditionalist bishop whose excommunication was lifted had for years been a Holocaust denier.
Read More..