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Week in Review

TOP STORIES -- Aug. 17-22

August 24, 2003|From Times Staff

Virus Havoc Diverted;

FBI Homes In on Hacker

One of the fastest-spreading e-mail viruses ever threatened to discombobulate computers around the world, but law enforcement officials succeeded in shutting nearly all of the 20 computers that were supposed to give new instructions to the virus dubbed SoBig.F.

As many as 19 of the 20 had been knocked offline by noon Friday, when thousands of computers infected by the SoBig e-mail virus tried to contact them for directions on downloading potentially malicious software, according to anti-virus firm Symantec Corp., one of several companies assisting the FBI, the Department of Homeland Security and other authorities.

Experts expected the virus writer to attempt to send out new instructions through the surviving master computer today or later.

There were signs that the FBI was making progress in its hunt for the author of the virus. The chief technology officer of Easynews Inc., a Phoenix Internet access provider, said his company had been subpoenaed for information about a customer and turned the data over.

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FCC Chairman Vows

to Meet Local Needs

Moving to quell criticism that the Federal Communications Commission went too far in easing media ownership rules, FCC Chairman Michael K. Powell said the agency would take steps to make broadcasters more responsive to local communities.

Powell said the FCC would form a task force to determine whether broadcasters should be compelled to produce more local news and other programming. Powell said the agency staff would begin a formal inquiry into rules that would promote "localism" at TV and radio stations.

The FCC also plans to accelerate the licensing of as many as 1,000 low-powered radio stations that are largely being sought by churches, schools and other nonprofit groups, Powell said.

The initiatives were unveiled nearly a month after the House of Representatives overwhelmingly approved an appropriations measure with a provision that would reverse the FCC by preventing any broadcaster from owning TV stations that together reach more than 35% of U.S. households. The legislation would roll back the 45% TV ownership cap approved by the FCC on June 2.

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HP Posts Disappointing

Fiscal 3rd-Quarter Profit

Hewlett-Packard Co. blamed overzealous discounting in posting disappointing fiscal third-quarter financial results.

The Palo Alto-based high-tech bellwether said profit for the quarter ended July 31 was $297 million, or 10 cents a share, compared with a loss of $2.03 billion, or 67 cents, a year earlier. Excluding $403 million in adjustments for restructuring and other costs, HP profit would have been 23 cents a share; analysts had expected 26 cents.

Sales rose 5% to $17.3 billion from last year's third quarter, HP's first full quarter after completing a $19-billion merger with Compaq Computer Corp.

HP's corporate computer sales group continued to lose money, and its personal computer division fell back into the red after two quarters of meager profit.

Investors were harsh in their assessment, unloading HP shares after the earnings report.

Chief Executive Carly Fiorina, attributing the loss to "overly aggressive pricing actions" that hurt HP's gross margins, said: "We've already made corrective pricing decisions and will return this business to profitability in the fourth quarter."

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Suitors for Vivendi's U.S.

Assets Enter Round Two

Three of the original six suitors for Vivendi Universal's U.S. entertainment assets met last week's deadline for second-round bids, but the company declined to say whether they reached its minimum asking price of $14 billion.

John Malone's Liberty Media Corp. and a consortium headed by Vivendi Vice Chairman Edgar Bronfman Jr. submitted offers for Universal's movie studio, theme parks and TV businesses. General Electric Co.'s NBC has proposed a merger of assets, sources said.

The offers pose stark choices for Paris-based Vivendi, which is trying to unload its U.S. operation to focus on its French telecom and pay-TV businesses.

Executives are expected to decide whether to accept cash now to pay down debt or agree to a merger with NBC that could be lucrative in the long term.

A Vivendi spokesman confirmed that Vivendi had received "proposals and confirmations" but would not elaborate.

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Californians May Win

Right to Sue Brokerages

A state court ruling could allow some California investors to pursue legal claims against brokerage firms in court rather than before industry-sponsored arbitration panels.

The decision by an appellate court in Los Angeles marked the latest chapter in a battle between the state and the securities industry over ethics standards for arbitrators.

Investor Jordan Alan filed a complaint in Los Angeles County Superior Court against UBS Financial Services after refusing to waive California ethics disclosure rules or agree to leave the state for a hearing.

UBS tried to force the case to arbitration, and a trial judge agreed in December.

But the appellate court overruled that decision.

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