IN ORBIT: Broadband in Japan, Cisco, Microsoft, Siemens

IN ORBIT: Broadband in Japan, Cisco, Microsoft, Siemens

Japanese broadband subscriptions hit 5 millionBy Martyn WilliamsTOKYO - The number of broadband subscribers in Japan has hit 5 million, according to the most recent data from Japan's Ministry of Public Management, Home Affairs, Posts and Telecommunications (MPHPT).

At the end of June, the total number of broadband subscribers was 5.0 million, said the MPHPT in its monthly statistical report. Two-thirds of all subscribers, or 3.3 million homes, are connected via DSL (digital subscriber line) with almost the entire remainder being via cable Internet. Fibre to the home (FTTH) services are starting to make their presence felt with almost 70,000 subscriptions registered at the end of June, said the MPHPT.

It took Japan two and a half years to reach the 5 million point although the vast majority of growth came in the last year and a half. Foot-dragging by local loop provider Nippon Telegraph and Telephone. (NTT) in connecting customers to private providers meant the first year saw very slow growth, despite significant demand, with just over 1,200 people signed up for DSL after six months of service. Once NTT started its own DSL service at the end of 2001, the pace of new subscriptions picked up and is now running at around 300,000 per month.

The latest figure represents a penetration rate of around 11 per cent of Japan's 45.5 million households, putting the country far behind East Asian neighbour South Korea, which last week reported broadband subscriptions at the end of June had passed 9 million, representing two out of every three households in the nation.

Cisco denies rumours after stock fallsBy Jim DuffySAN JOSE - Cisco Systems stock fell more than 8 per cent earlier this month amid rumours that CEO John Chambers and/or CFO Larry Carter would resign without attesting to the accuracy of the company's fourth quarter and fiscal year 2002 financial results.

Cisco does not typically comment on rumours, but this one was apparently too hot to resist. Cisco told Reuters that it has a "strong financial process to ensure that our disclosures are appropriate, complete and accurate".

"Cisco's CEO and CFO stand behind our filings and have always approached our disclosures with the degree of seriousness and responsibility they warrant. Formalising this process does not give us any concern. We fully intend to comply with this regulation, and will sign accordingly,"Cisco said.

Government security regulators recently mandated large companies must swear to the accuracy of their financial statements.

"Because our fiscal year ended on July 27, our deadline to file is October 25. We plan to file our certification with our 10K in late September, consistent with our practice of filing well in advance of deadlines," Cisco said.

Some analysts were quick to dismiss the rumours.

"I don't see any merit in the Cisco CFO/CEO certification [or resignation] rumours, which unfortunately may be a result of short sellers creating the negative buzz in order to buy Cisco on a dip before its earnings [are announced]," said Bill Lesieur, director of Technology Business Research.

"If CFO Larry Carter wanted to leave Cisco for career or personal growth reasons, I don't see him leaving before 2003. Carter is one of the most accomplished high-tech CFOs ever, so I imagine he would want to leave Cisco on a high note, when the market is on a stronger recovery path in 2003," he added.

"As for CEO John Chambers leaving Cisco, I don't envision that happening in the near future, unless President Bush offers him a new cabinet position as high-tech czar of the United States of America," Lesieur said.

Microsoft loosens grip on software before rulingBy Scarlet Pruitt BOSTON - Microsoft has announced it is moving ahead to adopt some remedies of its proposed antitrust settlement with the US Department of Justice (DOJ) and nine states, such as allowing the unbundling of its "middleware" products and revealing some key intellectual property to competitors, enabling them to create products that are interoperable with Microsoft software.

The announcements came as part of what Microsoft said will be periodic updates to its progress on the settlement agreement.

Microsoft said that it is on track to release Service Pack 1 for Windows XP by the end of September, allowing end users and original equipment manufacturers (OEMs) to select default programs that are displayed on the Start Menu and in other locations. Using the Service Pack, users will be able to remove five of the company's key "middleware" products: the Internet Explorer (IE) browser, Media Player, Outlook Express, Microsoft Messenger and Microsoft Java Virtual Machine.

Additionally, the company said that it is unveiling nearly 300 new APIs (application programming interfaces) related to these five components, and posting them on the Microsoft Developer Network on August 28. The APIs will be provided for free, allowing developers to create software that is interoperable with Windows.

The company said that it will only be withholding one API related to the five middleware features, a Windows file protection API that allows replacement of critical Windows assistant programs.

"In the wrong hands, [the withheld API] would expose users to more viruses and worse viruses," explained Charlie DeJong, director of development in the Windows Platform group.

The software maker was quick to douse accusations that it was holding back on key technical information, after some critics predicted last year that it would hoard critical APIs.

"This API is a single exception. We are clearly not swallowing the rules," said Brad Smith, senior vice president and general counsel for Microsoft.

However, Dan Kusnetzky, vice president of system software at market research firm IDC, questioned how long the newly revealed APIs would stick.

"Is Microsoft committing to live with these APIs for a specific period of time, or is this transitory?" he said, noting that companies would be rightfully chagrined to invest money in research and development only to have Microsoft change the technology.

The software maker also announced a licensing program for its internal communication protocols, which will allow third parties to create server software that is interoperable with or can communicate with Windows 2000 Professional, Windows XP and future operating systems. The licensing program is divided into 12 tasks, such as licensing for file serving, print serving and streaming media, Smith said. The company said that the program will be royalty-based and the pricing will only be available to third parties entering into nondisclosure agreements.

As part of the licensing program, Microsoft will also be providing 50 base protocols that are needed regardless of which task a developer wants to perform, Smith said.

"There is very substantial intellectual property and valuable technology in these protocols."

Smith conceded that it was an unusual licensing program, calling it "the first of its kind".

"It's hard to imagine any other competitors licensing their intellectual property . . . but we have an obligation and a responsibility to live up to this decree," he said, referring to the proposed settlement.

But although the software juggernaut is being forced to reveal its APIs under the terms of the settlement, one cannot overlook the fact that the new licensing plan presents a revenue opportunity, Kusnetzky said.

"Not only are they trying to comply with the current consent decree, they're also looking at IBM revenue from licensing their technology. IBM makes a couple of billion a year just from their intellectual property," he said.

However, Smith shunned the implications that the company was looking to the licensing plan as a new source of revenue.

"The prices [of the licensing plans] are very small compared to the prices of the products involved," Smith said.

The DOJ released a compliance advisory on the announcement, saying that it received drafts of the licences earlier this month.

"The licences are complex and present novel issues that require comprehensive analysis," the statement said. "The Department has not pre-cleared the licences."

Acknowledging that the DOJ has yet to approve the licensing scheme, Smith added that Microsoft is eager for feedback from the government and industry.

US technology advocacy group Association for Competitive Technology (ACT), which is known to support Microsoft, applauded the announcements.

"This is a promising new development and we hope part of a continuing process toward letting the industry move beyond this case," the group said in a statement.

"While Microsoft's settlement with the Department of Justice and nine states hasn't been finalised yet, independent software developers and consumers are already seeing the benefits," the group concluded.

Microsoft's announcement comes as US District Judge Colleen Kollar-Kotelly considers a remedy ruling in the DOJ's five-year antitrust case against the software maker. The government and nine of the 18 states that pursued the antitrust case against Microsoft reached a settlement last year, although the nine remaining states refused to go along, saying the settlement did not do enough to rein in the software maker.

Kollar-Kotelly is expected to announce at any time whether she accepts the settlement terms or wants to impose harsher remedies. The nine non-settling states have proposed more stringent remedies of their own, and Kollar-Kotelly is also expected to rule on these remedies. The judge has a number of options, one of which is to combine elements of both proposals.

Microsoft's pre-emptive moves appear to be an attempt to ease anticompetitive concerns about the software maker and fend off more stringent remedies.

Microsoft has already made an effort to shake off its anticompetitive moniker by loosening its licensing terms with OEMs. Under pressure from the federal court case, the software maker made concessions last year such as allowing OEMs to remove access to the company's Internet Explorer (IE) Web browser and giving them choices on how to configure the Windows XP desktop.

Showing further compliance with the settlement terms, the company released Service Pack 3 for Windows 2000 this month, which allows users to choose what middleware programs, such as the Web browser and media player, they want to use.

Smith said that concessions such as these constituted an effort by Microsoft to regain faith in the company's dealings.

"We need to take these types of steps to win back the confidence of the government and industry," Smith added.

Gartenberg seemed sceptical of the company's goodwill, however.

"Microsoft has learned the value of the court of public opinion as much as the court of law," he said.

Microsoft has set up a Web page at to explain the remedies it is putting into place before Kollar-Kotelly's settlement ruling is released.

Siemens may cut more jobs at telecommunication unitsBy John BlauDÜSSELDORF - Siemens is considering further job cuts at its troubled networking and mobile communication units, a company spokeswoman has announced. The German engineering and electronics company is reducing its global workforce in response to a sharp decline in global demand for telecommunication equipment.

"Discussions are underway with employee representatives and with the labor union, but no definite decisions have been reached," the spokeswoman said, declining to comment on the number of job cuts being discussed in the two units. "The talks are still at an early stage," she said.

Job cuts in Germany must be approved by labor representatives, including members of the IG Metall trade union. IG Metall is represented on Siemens' supervisory board.

In an interview with the daily business paper Frankfurter Allgemeine Zeitung, Wolfgang Müller, an official with IG Metall, said that Siemens plans to cut more than 4,000 jobs in its fixed-line unit, Information and Communication Networks (ICN), and around 1,000 in its Information and Communication Mobile (ICM) unit.

If agreed, the staff cuts will come on top of the 16,500 already announced in the ICN unit over the past year and the 4,600, including 2,600 contract workers, in the ICM unit. The cuts, which began in April 2001, are to be completed by December 2003, the spokeswoman said.

A sharp decline in equipment purchasing by Europe's debt-ridden carriers has hit the two telecommunication infrastructure units particularly hard. Both were loss-making in the third quarter.

Last month, the company's IT consulting unit, Siemens Business Services, said it planned further job cuts after eliminating around 2,000 jobs last year.

Siemens currently employs 438,000 people worldwide. Of these, 177,000 work in Germany.

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