May 19, 2024

Legislation Seeks to Bar N.S.A. Tactic in Encryption

Representative Rush D. Holt, a New Jersey Democrat who is also a physicist, said Friday that he believed the N.S.A. was overreaching and could hurt American interests, including the reputations of American companies whose products the agency may have altered or influenced.

“We pay them to spy,” Mr. Holt said. “But if in the process they degrade the security of the encryption we all use, it’s a net national disservice.”

Mr. Holt, whose Surveillance State Repeal Act would eliminate much of the escalation in the government’s spying powers undertaken after the 2001 terrorist attacks, was responding to news reports about N.S.A. documents showing that the agency has spent billions of dollars over the last decade in an effort to defeat or bypass encryption. The reports, by The New York Times, ProPublica and The Guardian, were posted online on Thursday.

The agency has encouraged or coerced companies to install back doors in encryption software and hardware, worked to weaken international standards for encryption and employed custom-built supercomputers to break codes or find mathematical vulnerabilities to exploit, according to the documents, disclosed by Edward J. Snowden, the former N.S.A. contractor.

The documents show that N.S.A. cryptographers have made major progress in breaking the encryption in common use for everyday transactions on the Web, like Secure Sockets Layer, or SSL, as well as the virtual private networks, or VPNs, that many businesses use for confidential communications among employees.

Intelligence officials say that many of their most important targets, including terrorist groups, use the same Webmail and other Internet services that many Americans use, so it is crucial to be able to penetrate the encryption that protects them. In an intense competition with other sophisticated cyberespionage services, including those of China and Russia, the N.S.A. cannot rule large parts of the Internet off limits, the officials argue.

A statement from the director of national intelligence, James R. Clapper Jr., criticized the reports, saying that it was “not news” that the N.S.A. works to break encryption, and that the articles would damage American intelligence collection.

The reports, the statement said, “reveal specific and classified details about how we conduct this critical intelligence activity.”

“Anything that yesterday’s disclosures add to the ongoing public debate,” it continued, “is outweighed by the road map they give to our adversaries about the specific techniques we are using to try to intercept their communications in our attempts to keep America and our allies safe and to provide our leaders with the information they need to make difficult and critical national security decisions.”

But if intelligence officials felt a sense of betrayal by the disclosures, Internet security experts felt a similar letdown — at the N.S.A. actions.  

“There’s widespread disappointment,” said Dan Kaminsky, a prominent security researcher. “This has been the stuff of wild-eyed accusations for years. A lot of people are heartbroken to find out it’s not just wild-eyed accusations.”

Sascha Meinrath, the director of the Open Technology Institute, a research group in Washington, said the reports were “a startling indication that the U.S. has been a remarkably irresponsible steward of the Internet,” which he said the N.S.A. was trying to turn into “a massive platform for detailed, intrusive and unrestrained surveillance.”

Companies like Google and Facebook have been moving to new systems that, in principle, would make government eavesdropping more difficult. Google is in the process of encrypting all data that travels via fiber-optic lines between its data centers. The company speeded up the process in June after the initial N.S.A. disclosures, according to two people who were briefed on Google’s plans but were not authorized to speak publicly about them. The acceleration of the process was first reported Friday by The Washington Post.

Claire Cain Miller contributed reporting.

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NEC to Exit Japanese Smartphone Market

The retreat in the face of competition from an American and a South Korean company highlighted the country’s shift from electronics industry leader to laggard over the course of the last decade.

“We were late to enter the smartphone market, and we were unable to develop attractive products,” Isamu Kawashima, the chief financial officer of NEC, said at a news conference here. “That’s what it comes down to.”

Like other Japanese phone makers, NEC clung to old-fashioned flip phones — great for making phone calls, taking pictures or playing simple games, but not for much else — as rivals elsewhere were developing smartphones that put the entire Internet and more in users’ pockets. The first NEC smartphone did not appear until 2011, four years after Apple’s iPhone.

The strategic failure cost NEC hundreds of millions of dollars in losses as its share of the Japanese cellphone market slipped into the single digits. And corporate Japan suffered another blow to its once vaunted reputation for innovation.

“NEC was like the face of the Japanese phone industry,” said Nobuyuki Hayashi, a technology consultant and writer. “Losing them will be very upsetting for those who take pride in Japanese manufacturing.”

NEC’s surrender is the latest in a series of consolidations. In 2010, NEC absorbed the remnants of the mobile phone divisions of two other Japanese stalwarts, Casio and Hitachi, with NEC holding a controlling stake. In 2008, Kyocera acquired the phone-making arm of Sanyo. In 2010, Fujitsu and Toshiba combined their handset businesses; Fujitsu bought out its partner last year. Mitsubishi, another big electronics company, got out of the phone business entirely.

Analysts say NEC and other Japanese cellphone makers were tied too closely to Japanese network operators, developing what has come to be known in that country as a “Galápagos” effect; devices were cut off from the evolution of the phone business elsewhere. As a result, the makers failed to grasp the significance of the rise of the smartphone.

As Japanese consumers embraced the smartphone in a big way, the companies had nothing to offer. Although flip phones from NEC and other Japanese makers are still in wide use in the country, smartphones now make up a majority of new sales. Japanese brands struggle to compete with imported smartphones, especially the iPhone.

“As the market for mobile phone handsets, including the rapid spread of smartphones, has dramatically changed, economies of scale have become increasingly important for the maintenance and strengthening of competitiveness,” NEC said in a statement. “However, NEC’s mobile phone handset shipments are following a downward trend, and it is difficult to foresee improved performance in the future.”

By last year, Apple had become the market leader in Japan, where the iPhone had won 25.5 percent of overall cellphone sales, according to the MM Research Institute. Even Samsung, which has been slower to establish a foothold in Japan than elsewhere, surpassed NEC last year, with a 7.2 percent market share.

In smartphones, Apple is even more dominant, with 40 percent of the Japanese market in the first quarter, according to another research firm, IDC.

For NEC, the final straw may have come when NTT-Docomo turned to a Samsung smartphone, the Galaxy S4, in an effort to stem the loss of subscribers to two rival network operators, SoftBank and KDDI, which have been marketing the iPhone aggressively.

Docomo does not offer the iPhone; instead, it has been featuring the Galaxy S4 and a Sony smartphone, the Xperia A, in a summer sales promotion. It is the first time that Docomo has featured a Samsung phone so prominently. Given the longstanding ties between Docomo, a former state-owned monopoly, and domestic phone makers, the decision was widely seen in Japan as a slap in the face to the Japanese industry.

There could be further bad news in store for the Japanese smartphone makers. Docomo has been talking with Apple about adding the iPhone to its range.

“Nothing has been decided and we’re always considering which models to launch,” Docomo said in a statement.

“There will be further consolidation in the industry,” said Jean-Philippe Biragnet, a partner at the Bain Company consulting firm in Tokyo. “There is not space for more than two or three of these players. The question is, Who?”

Among the domestic brands, the leaders last year, according to MM, were Fujitsu, with a 14.4 percent share of the overall mobile phone market; Sharp, with 14 percent; and Sony, with 9.8 percent.

Panasonic and Kyocera are much weaker, though they were slightly ahead of NEC, whose share of the business had fallen to about 5 percent last year from nearly 28 percent in 2001, according to MM.

Among the remaining contenders, only Sony has a significant presence outside Japan. The other Japanese phone makers have been outflanked at the high end of the smartphone business by Apple, Samsung and others, and at the low end by a growing number of Chinese manufacturers.

NEC was in talks with one of the Chinese companies, Lenovo, about a partnership aimed at saving the smartphone business, but the negotiations broke down several weeks ago, making the company’s announcement Wednesday inevitable, analysts said.

For fans of retro-styled Japanese flip phones, which have come to be known here as “gara-kei,” short for “Galápagos phone,” there was at least one saving grace in NEC’s announcement. The company said that even though it was quitting the smartphone business, it would continue “developing and producing conventional mobile handsets.”

Joshua Hunt contributed reporting.

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Motion Picture Academy Seeks to Expand Membership

LOS ANGELES — Reversing a policy that has more closely restricted membership in the last decade, the Academy of Motion Picture Arts and Sciences on Friday invited an unusually large group of film professionals — 276 in total, including the actors Milla Jovovich and Joseph Gordon-Levitt — to join its ranks.

The invitation list represents a sharp increase from last year, when 176 new members were invited. That number was roughly calculated to maintain the size of the group, which annually awards the Oscars, and was generally consistent with the practice since 2004, when the Academy moved to tighten its rolls by focusing heavily on credentials, including any recent Oscar nomination, in deciding whether to extend an invitation.

This year, however, the Academy — which has been concerned about a lack of diversity within its ranks, and is searching for new connections to emerging aspects of cinema — dropped a system by which each of its branches was held to a quota.

It particularly encouraged the expansion of its documentary branch, which had been one of its smallest. That branch has only 173 members, but this year it invited 42 documentarians to join, compared with just 11 last year. Among those invited were Marcel Ophuls, whose work includes “The Sorrow and the Pity,” and both Ricki Stern and Annie Sundberg, who directed “Joan Rivers: A Piece of Work.”

Other actors on a list of 22 invitees — actually fewer than the 25 invited last year — include Michael Peña, Lucy Liu, Jennifer Lopez, Charles Grodin and Jason Bateman. Among the 15 directors invited to join, an increase from last year’s 11, were Paul Feig, Benh Zeitlin and Steve McQueen.

Kevin Tsujihara, recently named chief executive of Warner Bros., was perhaps the best-known of the 17 executives invited to join. In a twist, Neil Meron, who was a producer of this year’s Oscar telecast and whose film credits include “Hairspray” and “The Bucket List,” was invited to join as a member at large rather than as a producer.

Jason Blum, whose credits include “The Purge” and “Paranormal Activity,” was among nine producers invited to join, a decline from the 12 who were invited to join last year.

The short films and features animation branch sharply increased its invitations, to 19 from 11. Among those invited this year was Matt Groening, whose feature film credits include “The Simpsons Movie.”

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Revelations Give Look at Spy Agency’s Wider Reach

The partnership between the intelligence community and Palantir Technologies, a Palo Alto, Calif., company founded by a group of inventors from PayPal, is just one of many that the National Security Agency and other agencies have forged as they have rushed to unlock the secrets of “Big Data.”

Today, a revolution in software technology that allows for the highly automated and instantaneous analysis of enormous volumes of digital information has transformed the N.S.A., turning it into the virtual landlord of the digital assets of Americans and foreigners alike. The new technology has, for the first time, given America’s spies the ability to track the activities and movements of people almost anywhere in the world without actually watching them or listening to their conversations.

New disclosures that the N.S.A. has secretly acquired the phone records of millions of Americans and access to e-mails, videos and other data of foreigners from nine United States Internet companies have provided a rare glimpse into the growing reach of the nation’s largest spy agency. They have also alarmed the government: on Saturday night, Shawn Turner, a spokesman for the director of national intelligence, said that “a crimes report has been filed by the N.S.A.”

With little public debate, the N.S.A. has been undergoing rapid expansion in order to exploit the mountains of new data being created each day. The government has poured billions of dollars into the agency over the last decade, building a one-million-square-foot fortress in the mountains of Utah, apparently to store huge volumes of personal data indefinitely. It created intercept stations across the country, according to former industry and intelligence officials, and helped build one of the world’s fastest computers to crack the codes that protect information.

While once the flow of data across the Internet appeared too overwhelming for N.S.A. to keep up with, the recent revelations suggest that the agency’s capabilities are now far greater than most outsiders believed. “Five years ago, I would have said they don’t have the capability to monitor a significant amount of Internet traffic,” said Herbert S. Lin, an expert in computer science and telecommunications at the National Research Council. Now, he said, it appears “that they are getting close to that goal.”

On Saturday, it became clear how close: Another N.S.A. document, again cited by The Guardian, showed a “global heat map” that appeared to represent how much data the N.S.A. sweeps up around the world. It showed that in March 2013 there were 97 billion pieces of data collected from networks worldwide; about 14 percent of it was in Iran, much was from Pakistan and about 3 percent came from inside the United States, though some of that might have been foreign data traffic routed through American-based servers.

A Shift in Focus

The agency’s ability to efficiently mine metadata, data about who is calling or e-mailing, has made wiretapping and eavesdropping on communications far less vital, according to data experts. That access to data from companies that Americans depend on daily raises troubling questions about privacy and civil liberties that officials in Washington, insistent on near-total secrecy, have yet to address.

“American laws and American policy view the content of communications as the most private and the most valuable, but that is backwards today,” said Marc Rotenberg, the executive director of the Electronic Privacy Information Center, a Washington group. “The information associated with communications today is often more significant than the communications itself, and the people who do the data mining know that.”

In the 1960s, when the N.S.A. successfully intercepted the primitive car phones used by Soviet leaders driving around Moscow in their Zil limousines, there was no chance the agency would accidentally pick up Americans. Today, if it is scanning for a foreign politician’s Gmail account or hunting for the cellphone number of someone suspected of being a terrorist, the possibilities for what N.S.A. calls “incidental” collection of Americans are far greater.

United States laws restrict wiretapping and eavesdropping on the actual content of the communications of American citizens but offer very little protection to the digital data thrown off by the telephone when a call is made. And they offer virtually no protection to other forms of non-telephone-related data like credit card transactions.

Because of smartphones, tablets, social media sites, e-mail and other forms of digital communications, the world creates 2.5 quintillion bytes of new data daily, according to I.B.M.

Reporting was contributed by David E. Sanger and Scott Shane from Washington, Steve Lohr and James Glanz from New York, and Quentin Hardy from Berkeley, Calif.

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You’re the Boss Blog: This Week in Small Business: Healthier Owners

What’s affecting me, my clients and other small-business owners this week.


A proprietary trader and hedge fund manager explains the benefits of hiring good people instead of nice ones. Carl Bass distinguishes between the myths and the truths of 3-D printing. Working mothers are now the top earners in 40 percent of households with children. Carl McCoy advises college grads not to do what they love.

Economy: Give People Cash

Robert Frank explains why millionaires are still holding on to their money, and Chris Blattman suggests that to help the poor and transform the economy, governments should just give people cash. The economy grew at a modest 2.4 percent in the first quarter, and the global economy is advancing but the pace of recovery varies, according to the Organization for Economic Cooperation and Development. The expectations of chief financial officers rise. Joshua M. Brown welcomes the new RD (repurchases and dividends). More Americans are feeling the effects of sequestration. A Gallup survey finds that more small businesses are letting workers go than are hiring, and another survey from Sage finds that the majority of small and midsize businesses are not seeing enough demand to justify hiring. Anthony Ha, meanwhile, pokes fun at surveys.

Data: Healthier Owners?

Consumer confidence is the strongest in five years, home prices accelerated the most in seven years, and Jared Bernstein credits the Federal Reserve. But these charts show we’ve still got a long way to go to return to the levels of last decade. Banks report record earnings. Real median household incomes were up 0.5 percent in April. Christopher Drose offers the “real reason” inflation hasn’t hit, and Nathan Lewis suggests one thing “classical” economic thinkers agree about. A study finds small-business owners are living healthier.

Social Media: What’s New on Facebook

Research released by Microsoft dives into the raging debate over whether social tools like Twitter, Facebook, and Microsoft Lync belong in the business realm (Microsoft Lync?). Christopher Mims explains why Facebook’s stock is dropping. Jennifer Van Grove believes the hashtag symbol is Facebook’s “obvious hole.” Danielle Cormier suggests the best time for posting Facebook updates, and Jefferson Graham shares what’s new on Facebook for small businesses. A report says social media advertising is about to explode. Megan Bernstein has five tips for using social media in the real estate industry. Here are seven tips to improve your LinkedIn company page.

Marketing: A Marijuana Brand

Douglas A. McIntyre predicts these 10 brands will disappear by next year. Casey Newman says data is at the heart of marketing. Some savvy marketers are reaping benefits from an olive oil shortage. Evan Pennisi lists three reasons to attend an international trade show. Here is what Jon Stewart and “The Daily Show” can teach you about branding, and here are four small-business promotion ideas. An ex-Microsoft manager plans to create the first national brand of marijuana.

Cash Flow: Finding $10,000

A former baseball player is offering microloans to start-ups, and a new crowdfunding platform for young entrepreneurs focuses on education. What prosecutors call a $6 billion money-laundering scheme is uncovered. These are the basics of business leasing in 2013, and here is how to minimize expenses when shipping from China. A 10-year-old finds $10,000 in a hotel room. An accountant explains how to master the financial side of your business, and Jon Stow lists a few common purchasing mistakes.

People: Conflict Management

America is the only wealthy country that does not guarantee paid vacations or holidays. A Taco Bell job application spurs a Reddit debate. Greg Giesen says the fourth rule of conflict management is to take the initiative. A webcast this week explains how to create an exceptional workplace. Jessica Stillman says you will encounter problems if you squeeze employees too hard, and Amanda MacArthur offers five methods to improve employee loyalty and reduce turnover. Executives at small companies say they give their staffs enough recognition. Jimmy Fallon introduces the “Game of Desks.”

Entrepreneurs: 27 Books

Martin Zwilling explains why technologists need to team up with an entrepreneur. Eric Tyler discusses the momentum behind the social entrepreneur movement, and here are five examples of great social franchises. A modern-day Robin Hood applies his business skills to philanthropy. Melissa Anders reports on an age group that is starting new businesses. Here are 27 books every entrepreneur should read. These three businesses go together like peas in a pod.

Retail: Angry Customers Do You a Favor

Some retailers in the United States are starting to communicate with shoppers through a smartphone app that uses in-store sensors to track location in the shop and send personalized offers and recommendations. After decades of decline, independent bookselling has become a growth industry. Here’s how to find the perfect space for a pop-up store. George Rodriguez lists 10 ways small businesses can compete with the big boys. Andy Sernovitz shares tips for dealing with angry customers, including: “Remember, the folks actually speaking up are doing you a favor.” Virtual fitting rooms may be in our future.

Management: Storm Season

A Staples survey says natural disasters are the top safety concern among office employees, but the majority of businesses said recent disasters haven’t led them to reassess their safety plans. Here are a few questions to ask yourself before storm season. Here are six ways small businesses can take advantage of the summer slowdown. The editors at Entrepreneur think these 100 companies are brilliant, and J.D. Harrison has advice to prepare your business for growth. Alina Dizik offers thoughts on managing a business partner. These three games can teach you business skills. New research shows that busy people are happier. Here is what you should consider when choosing a business location.

Around the Country: Too Much Money

Arvind Mahankali of New York wins the National Spelling Bee. Texas cities lead the nation in population growth amid an expansion in manufacturing and potential tax cuts for businesses. A Hiscox survey finds Austin small-business owners are socially connected and well financed. A report says New York small businesses are hiring and expanding again as confidence improves. California has too much money, and after decades of decline the Great Lakes region is pinning its hopes for an economic comeback on water riches. A Philadelphia business remains frozen in time, and here are the winners of Memphis’s small-business awards. A teenager from Nashville has been awarded a $100,000 two-year fellowship to start a company — as long as he does not return to his college classes in the fall. In South Florida some organizations are mobilizing to immerse talented college and high school students in start-up life. A Lemonade Day in three New Jersey locations throughout June aims to provide hands-on business experience for youths. Angie Hicks will headline National Small Business Week.

Around the World: Australians Are Happy

Unemployment hits a record high in the euro zone, and Ashoka Mody warns: “the euro zone is operating under the pretense that public and private debts will, at some point, be repaid, although, in many countries, the distress now is greater than it was at the start of the crisis almost five years ago.” Australia is again ranked the happiest developed nation. A start-up hub at the old port of Haifa, Israel, is a magnet for entrepreneurs. Stefano Bernardi gives advice for going global with your start-up.

Online: Gmail’s New Inbox

Mary Meeker and Liang Wu share their presentation on Internet trends. McAfee says that the security needs of small businesses have not been met. Kevin Woodcock shares a few e-mail forwarding tips, and Gmail gets a new inbox. Online video may be more popular than Facebook and Twitter by 2017.

Mobile: How to Break a Contract

Each of the big PC makers has a stake in Android, and a new survey says mobile is now a top priority for corporate app builders. Megan Totka says these five mobile apps will help you take care of business, and ATT introduces a new mobile workplace for small businesses. Nelson Aguilar explains how to get out of your ATT contract early. Here are 10 things the BlackBerry Z10 does that the iPhone can’t. A French Open player uses his iPhone to dispute a call.

Technology: Budgets Are Up

Tech budgets are up the most in three years. Here are five ways to improve technical skills without spending a dime. Danny Stieben assesses the pros and cons of Skydrive and Google Drive. A “hairdo archaeologist” solves an ancient fashion mystery. Here are 10 “Star Trek” technologies that have almost come true. Apple suggests that more wearable devices are in our future. This is a summary of some new wireless products that could improve your business. Jason Nazar suggests 30 tools for small business, and here are three tips for getting the most from small-business technology. Dane Carlson likes this free online appointment scheduling tool, and McKinsey notes 12 disruptive technologies. Dropbox suffers a service interruption but communicates the situation well. Manufacturers are designing the factories of the future.

Tweet of the Week

@Navy_Bean_Soup: I’ll never be as passionate as the people willing to debate economic policies of the varying Star Trek universes on an internet forum.

The Week’s Best Quotes

Dayna Steele lists ways to create a Disney-like addiction to your company, including: “Every Disney employee looks you in the eye and smiles. Every employee I passed in the hotel and in the parks — from managers to ride operators to cleaning staff and more. Every. Single. One.”

Kevin Colleran says that if you don’t need the money, be grateful: “If you’re in a position where you can comfortably turn down funding, you must be doing something right. So if you are considering taking an investment, don’t rush into it. Take your time by exploring all these issues to make sure it’s the right partnership for you, your company and your potential investors.”

This Week’s Question: Does your small business make you healthier?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

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Devoted to Politics, MSNBC Slips on Breaking News

It’s not all altruism. The destruction MSNBC also wants to avoid is the havoc such news has been wreaking on its competitive standing.

In May, MSNBC, which generally runs second to the dominant leader, Fox News, among cable news channels, plunged all the way to fourth place, dropping behind not only its closest rival, CNN, but also that network’s sister channel, HLN (formerly Headline News).

At a time of intensely high interest in news, MSNBC’s ratings declined from the same period a year ago by about 20 percent. The explanation, in the network’s own analysis, comes down to this: breaking news is not really what MSNBC does.

“We’re not the place for that,” said Phil Griffin, the channel’s president, in reference to covering breaking events as CNN does. “Our brand is not that.”

The brand, one MSNBC has cultivated with success, is defined by its tagline, “The Place for Politics,” and a skew toward left-wing, progressive political talk, the opposite of the conservative-based approach that has worked well for Fox News.

MSNBC began to commit itself to presenting a liberal spin on political coverage in the middle of the last decade, partly because it had not found success in previous models (like trying to be a news channel for younger viewers) and mostly because it had one host, Keith Olbermann, whose ratings were exploding based on his outspoken criticisms of the Bush administration and the conservative voices on Fox News.

MSNBC has ridden this formula to a consistent edge over CNN. It has topped that network about 80 percent of the time over the last three years, Mr. Griffin noted, by relying on a lineup of prime-time shows with strong hosts like Rachel Maddow. CNN has never made ideologically impassioned shows the basis of its appeal. Instead, it has thrived when its potent brand identity, the channel for breaking news, has come into play.

Mr. Griffin acknowledged that CNN, which has experienced ratings gains near 100 percent in the last two months, shines in periods of intense news interest. But, he said, this will pass.

“You do have to look at the long term,” Mr. Griffin said in May. “In the first quarter of this year, Fox News had its lowest quarter in a decade. A year ago CNN had its worst month ever. I tip my hat to what CNN has done this month, but let’s not be so myopic as to think the whole world has changed.”

For the second quarter so far, MSNBC has averaged 704,000 viewers in prime time, down 18 percent from last year. Among viewers that news advertisers pay to reach, those 25 to 54, MSNBC has averaged 214,000 for the quarter, down 11 percent.

The network has experienced steady growth in ratings over the last several years, however, and profits have followed. For example, a Pew Research study put the network’s annual profit at $186.6 million for 2011, up from $168.8 million the prior year. The research firm SNL Kagan estimated MSNBC’s 2012 profit at $202 million.

Mr. Griffin pointed out that CNN has surged ahead of MSNBC (and occasionally even Fox News) when enormous news was breaking, like the tsunami in Japan in 2011 — but fell back once the news cooled. And on three nights last week, MSNBC edged back ahead of CNN in the prime-time hours, though CNN maintained a lead over the full day.

But there is speculation that something different may be happening this time, that a combination of a more aggressive approach from CNN, dimming interest in political news in general, and a sense that MSNBC has less to offer in hard news coverage, may be eroding the advantage that the channel has enjoyed.

Mr. Griffin acknowledged that with Jeff Zucker, the former NBC chief executive and an experienced news producer from the “Today” show, now leading CNN, the competition is going to increase.

“We have to be aware of it,” he said. “We’ll figure out how to deal with their aggression in our own way.”

The way will be consistent with the political brand — and that could be a risk.

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Sony’s Bread and Butter? It’s Not Electronics

Sony has made money making Hollywood movies and selling music. That profitable part of the business is what Daniel S. Loeb, an American investor and manager of the hedge fund Third Point, wants Sony to spin off to raise cash to resuscitate its electronics business.

But as Mr. Loeb pressures Sony executives to do more to revive the company’s ailing electronics arm, some analysts are asking, Why bother?

Sony, it is suggested, might be better off just selling insurance.

Or just making movies and music. But not electronics.

A new report from the investment banking firm Jefferies delivered a harsh assessment of Sony’s electronics business. “Electronics is its Achilles’ heel and, in our view, it is worth zero,” wrote Atul Goyal, consumer technology analyst for Jefferies, in the report, released this week.

“In our view, it needs to exit most electronics markets.”

The maker of the Walkman and the Trinitron without electronics? What would it do?

Although Sony sells hundreds of products as varied as batteries and head-mounted 3-D displays, it so happens that Sony’s most successful business is selling insurance. While it doesn’t run this business in the United States or Europe, Sony makes a lot of money writing life, auto and medical policies in Japan.

Its financial arm accounts for 63 percent of Sony’s total operating profit last year. Life insurance has been its biggest moneymaker over the last decade, earning the company 933 billion yen ($9.07 billion) in operating profit in the 10 years that ended in March.

Sony’s film and music divisions, which produced hits like the Spider-Man movies and “Zero Dark Thirty” and recorded musicians like the cellist Yo-Yo Ma and the electronic music duo Daft Punk, have contributed $7 billion to the company’s bottom line over the last decade.

In that time, Sony’s electronics division has lost a cumulative $8.5 billion.

Hardly Sony’s crown jewels, experts say.

“The problem is that the board is still absolutely focused on fixing electronics,” said Kouji Yamada, a visiting professor at Hitotsubashi University in Tokyo and research director of Mission Value Partners, a Sonoma, Calif., investment company.

Sony’s chief executive, Kazuo Hirai, said last Wednesday that its board would consider Third Point’s proposal, even as it emphasized that the discussions were preliminary and that it had not set a time for a response.

But to a small band of analysts, Mr. Loeb’s prescriptions for Sony are shortsighted, merely milking the company’s profit-making content business for good money to throw after the bad.

As proof of the untenable future facing Sony’s electronics, critics point to its televisions and smartphones. Competition is intense, and in cellphones Sony remains a bit player. Even where it is more successful, in digital cameras or game consoles, it is struggling to stay abreast of stronger companies.

Sheer lack of managerial attention could soon start to hurt Sony’s insurance and entertainment divisions, Mr. Yamada warned. Sony Financial Holdings, a publicly traded company of which Sony owns 60 percent, has been underperforming its peers on the Tokyo stock exchange. Its share price has risen just 4 percent this year, compared to a 36 percent increase in shares of its rival, Dai-ichi Life Insurance.

And in the entertainment business, where alliances and tie-ups are starting to dominate strategy, Sony’s film and music units could be slowed by having to deal with a board that sits in Tokyo and does not have its hand on the pulse of a fast-moving industry, Mr. Yamada said.

“Maneuvering three completely different industries, that’s too much,” Mr. Yamada said. “These should all be separate companies.”

Sony maintains that its varied units make up a coherent whole. But the history of how it acquired its hodgepodge of companies suggests otherwise.

Sony’s co-founder, Akio Morita, first got the idea of buying a finance company on a trip to the United States in the 1950s to promote the company’s new transistor radio, according to an official recounting of its corporate history. On that trip, Mr. Morita was stunned by the sight of Chicago’s skyscrapers, especially the Prudential Building that dominated the Chicago skyline.

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NBC Looks to Past Stars for Prime-Time Turnaround

Looking for what has been an elusive turnaround in prime time, NBC announced an aggressive new schedule on Sunday, crowded with new shows and familiar names both in front of and behind the camera.

The network will try to rebuild its once-formidable Thursday night comedy lineup behind two of its stars from the past — Sean Hayes and Michael J. Fox.

It will try to use the strength of its hit singing competition, “The Voice,” to introduce a new drama on Mondays and new comedies on Tuesdays in the second half of the season.

NBC is also adding new dramas from Dick Wolf, who created the “Law Order” series, and J. J. Abrams of “Lost.”

NBC plans to introduce a record 17 new series in the season, aiming to keep fresh programming on the air as much as possible year-round.

In all, the network will add six new comedies, eight new dramas and three new reality shows.

The schedule, announced by NBC’s chairman of entertainment, Robert Greenblatt, amounts to a full-scale effort to reconstruct NBC’s schedule with every night of the week affected, except Sundays in the fall, which will still be devoted to the network’s strongest asset, N.F.L. football.

Perhaps the most crucial changes come on Thursday, where NBC loses the only true hit comedy it has developed over the last decade, “The Office.”

NBC will introduce three new comedies on that night, with the new series starring Mr. Hayes (“Will and Grace”) getting the central spot at 9 p.m. That show, “Sean Saves the World,” is about a gay divorced father trying to raise a teenage daughter.

It will be followed by Mr. Fox’s return in a show named after him, in which he plays a father coping with his family and Parkinson’s disease.

The other new Thursday night comedy is “Welcome to the Family,” about a couple who have to meld their quarrelsome families. NBC will lead off the night with the return of “Parks and Recreation” at 8 and end it with the drama “Parenthood,” a positive story for NBC this year and now getting the once-prime drama spot on the network.

But the drama NBC clearly has highest hopes for is “The Blacklist,” which stars James Spader as a most-wanted criminal who agrees to help the authorities track top criminals, but only with the help of a new, obscure F.B.I. agent. It will take the 10 p.m. Monday slot, after “The Voice.”

The previous occupant of that time period, “Revolution,” posted some early good ratings. Now it will try to survive on its own on Wednesdays at 8.

NBC also is going for horror on Friday by adding to its successful “Grimm” series with a limited run of “Dracula,” starring Jonathan Rhys Meyers.


MONDAY 8-10 p.m. — “The Voice”; 10-11 p.m. — “The Blacklist”

TUESDAY 8-9 p.m. — “The Biggest Loser” (new day and time); 9-10 p.m. — “The Voice” (new time); 10-11 p.m. — “Chicago Fire” (new day and time)

WEDNESDAY 8-9 p.m. — “Revolution” (new day and time); 9-10 p.m. — “Law Order: SVU”; 10-11 p.m. — “Ironside”

THURSDAY 8-8:30 p.m. — “Parks and Recreation” (new time); 8:30-9 p.m. — “Welcome to the Family”; 9-9:30 p.m. — “Sean Saves the World”; 9:30-10 p.m. — “The Michael J. Fox Show”; 10-11 p.m. — “Parenthood” (new day and time)

FRIDAY 8-9 p.m. — “Dateline NBC”; 9-10 p.m. — “Grimm”; 10-11 p.m. — “Dracula”

SATURDAY Encore programming

SUNDAY 7-8:15 p.m. — “Football Night in America”; 8:15-11:30 p.m. — “NBC Sunday Night Football”


MONDAY 8-10 p.m. — “The Voice”; 10-11 p.m. — “The Blacklist”

TUESDAY 8-9 p.m. — “The Voice”; 9-9:30 p.m. — “About A Boy”; 9:30-10 p.m. — “The Family Guide”; 10-11 p.m. — “Chicago Fire”

WEDNESDAY 8-9 p.m. — “Revolution”; 9-10 p.m. — “Law Order: SVU”; 10-11 p.m. — “Ironside”

THURSDAY 8-8:30 p.m. — “Parks and Recreation”; 8:30-9 p.m. — “Welcome to the Family”; 9-9:30 p.m. — “Sean Saves the World”; 9:30-10 p.m. — “The Michael J. Fox Show”; 10-11 p.m. — “Parenthood”

FRIDAY 8-9 p.m. — “Dateline NBC”; 9-10 p.m. — “Grimm”; 10-11 p.m. — “Crossbones”

SATURDAY 8-10 p.m. — Encores and specials programming; 10-11 p.m. — “Saturday Night Live” (encore)

SUNDAY 7-8 p.m. — “Dateline NBC”; 8-9 p.m. — “American Dream Builders”; 9-10 p.m. — “Believe”; 10-11 p.m. — “Crisis”

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Drug Makers Use Safety Rule to Block Generics

But federal regulators contend the latest strategy — which relies on a creative interpretation of drug safety laws — is illegal.

The Federal Trade Commission recently weighed in on a legal case over the tactic involving the drug maker Actelion, and earlier this month a federal suit was filed in another case in Florida.

“We definitely see this as a significant threat to competition,” said Markus Meier, who oversees the commission’s health care competition team.

The new approach is almost elegant in its simplicity: brand-name drug makers are refusing to sell their products to generic companies, which need to analyze them so they can create the copycat versions. Traditionally, the generic drug makers purchased samples from wholesalers. But because of safety concerns, an increasing number of drugs are sold with restrictions on who can buy them, forcing the generic manufacturers to ask the brand-name companies for samples. When they do, the brand-name firms say no.

Brand-name companies say they are protecting themselves — and patients — in case the drugs are somehow used improperly. They say no law requires one company to do business with another.

Advocates for generic drugs say the practice could limit access to the low-cost drugs, which they say have saved more than a trillion dollars over the last decade. They say the companies that have most aggressively pursued the tactic tend to be those with drugs that are nearing the end of their patent life.

Actelion, a Swiss company, is withholding samples of its flagship product, Tracleer, which treats a lung disorder. Its patent is set to expire in 2015. The company’s other product in question, Zavesca, has a patent that expires later this year. Tracleer costs about $79,000 a year, while Zavesca costs about $229,000.

The issue has its roots in a 2007 law that allowed the Food and Drug Administration to require detailed safety programs for drugs with serious side effects or the potential for abuse. In many cases, those programs simply direct the company to educate doctors or patients about risks. But in other cases, they require that distribution be limited to approved pharmacists and health care providers.

About 70 drugs carry mandatory drug safety plans, and of those, 34 have more restrictive requirements, according to the F.D.A.

Although the 2007 law said the programs should not be used to block development of generic drugs, brand-name companies said the language was vague and began restricting access to drug samples soon after it was passed.

In 2009, generic companies began complaining that Celgene had refused to sell them samples of Thalomid, the drug better known as thalidomide that is now used to treat cancer and leprosy, and a related drug, Revlimid. Lannett, a generic company, sued Celgene, claiming its practices were anticompetitive, and the case was settled. The trade commission and the Connecticut attorney general started investigations, which Celgene has said are still under way.

At least one company, Gilead Sciences, explicitly restricts access to samples. Pharmacies and other institutions that buy its drug Letairis, which treats a serious lung condition, must agree not to “use product in clinical trials or other studies without the prior written consent of Gilead Sciences,” according to an order form sent to customers by Accredo, a specialty pharmacy that distributes Letairis for Gilead. A spokesman for Gilead declined to comment.

Brand-name manufacturers are also limiting access to drugs even when the government does not require it. In a federal lawsuit filed April 1 in Florida, Accord Healthcare, an Indian generics manufacturer, said the drug company Acorda refused to turn over samples of its multiple sclerosis drug Ampyra, even though there are no restrictions on its distribution.

In a letter to Accord from Acorda that was submitted to the United States District Court for the Southern District of Florida, in Fort Lauderdale, Acorda echoed other companies’ positions and said it was under no obligation to sell its products to another manufacturer.

Apotex, a Canadian company, said the drug maker Novartis denied it access to Tasigna, a leukemia drug, until Apotex threatened to sue. Another company, Lundbeck, has so far declined to provide Apotex with samples of the drug Xenazine, which treats a movement disorder caused by Huntington’s disease.

Julie Masow, a spokeswoman for Novartis, said Apotex ultimately purchased samples of Tasigna through the drug’s sole distributor. She said the delay was the result of a misunderstanding, adding “generic companies are free to buy Novartis products through distribution channels.”

Representatives of brand-name manufacturers say there are good reasons to restrict drugs to approved pharmacies or health care providers. Lundbeck said it sells Xenazine, also known as tetrabenazine, to a limited network of specialty pharmacies because it treats fewer than 25,000 people nationwide.

“Not many retail pharmacies would stock the product for so small a patient population,” said Sally Benjamin Young, a spokeswoman for Lundbeck.

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Economix Blog: Housing Trends, Short and Long Term

Home construction this spring in Matthews, N.C., near Charlotte.Chuck Burton/Associated Press Home construction this spring in Matthews, N.C., near Charlotte.

Home prices in the United States have been on a roller coaster ride for the last decade — soaring through 2005, then plunging in the steepest decline since the Great Depression. In 2012, though, prices began moving upward.

How solid is the incipient housing recovery, and what are the prospects for home prices in the decade ahead?

Some fresh clues about the short-term trends began arriving this week. And an analysis of the long-term prospects for home prices began appearing in a three-part series of columns in Sunday Business by Robert Shiller, the Yale economist.

First, the short-term trend: based, at least, on a report on Monday morning, it appeared to be taking a zigzag path rather than a straight line upward. According to the National Association of Home Builders/Wells Fargo Housing Market index, sentiment among home builders declined in April for the third consecutive month, to 42 from 44 the previous month. While that index climbed in 2012, it has not been above the neutral level of 50 since April 2006, when the market collapse was already under way.

Another report is due on Tuesday. That’s the Commerce Department’s tally of housing starts and building permits in March. Both numbers rose sharply in February and Wall Street economists were expecting another set of strong numbers.

The short-term trend for the housing market seemed clear and strong enough for Michael E. Feroli, chief United States economist at JPMorgan Chase, to conclude in a report on April 10 that residential investment – including homebuilding, repairs, renovation and brokers fees – would rise enough this year to add 0.5 percent to G.D.P. growth.

As for home prices, no major reports were imminent. But in the fourth quarter of 2012, the latest home period included in the Standard Poor’s Case-Shiller 20-city index, prices rose sharply, at the fastest rate since June 2006.

Professor Shiller, who helped devise the Case-Shiller index, says in his Economic View column on Sunday even if the upward trend for prices continues for a while, historical data shows that it’s not necessarily meaningful over the long haul.

“One-year home price increases, after correcting for inflation, have had almost no statistical relationship to increases 10 years down the road,” he writes. “Thus, the upturn last year is irrelevant to long-run forecasting. Booms are typically followed by busts, usually in far less than 10 years. In a decade, an entire housing boom, if there is one in inflation-corrected terms, is likely to have been reversed and completely washed away.”

Source: Robert J. Shiller, “Irrational Exuberance,” Second Edition (Princeton University Press), as updated by author.

In assessing long-term price trends, he says, prospective home buyers ought to emphasize fundamental factors like inflation and construction costs, which he discusses in his first column. While inflation creates the illusion that real home prices are increasing, rising productivity in the construction industry often drives down the cost of housing.

Next Sunday’s column will deal with real estate bubbles, and with the speculative effects of years of declining interest rates on housing and other markets. The third will consider cultural and demographic trends, including the stimulative market influence of a rising population — and the potential constraints on prices that could occur as America ages..

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