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Wednesday, January 2, 2013

U.S. clears way for wider in-flight Internet deployment

By Jim Wolf

WASHINGTON | Mon Dec 31, 2012 6:29am EST

WASHINGTON (Reuters) - The U.S. Federal Communications Commission has cleared the way for wider adoption of in-flight Internet services, aiming to cut by as much as 50 percent the time needed for regulatory approval.

Newly adopted rules should boost competition in this part of the U.S. mobile telecommunications market and promote "the widespread availability of Internet access to aircraft passengers," the FCC said in a statement Friday.

Since 2001, the commission has cleared companies on an ad hoc basis to market in-flight broadband services via a satellite antenna fixed to an aircraft's exterior.

Under a newly adopted framework, the licensing procedures will be simpler, the commission said.

Airlines will be able to test systems that meet the commission's standards, establish that they do not interfere with aircraft systems and then get approval of the Federal Aviation Administration, the FCC statement said.

The FAA, a Labor Department arm responsible for operating the nation's air traffic control system, said in response that the FCC's effort to establish standards "will help to streamline the process" for airlines to install Internet hookups on planes.

The goal is to speed the processing of applications by up to 50 percent, FCC Chairman Julius Genachowski said in a separate statement.

The FCC drive to promote broadband aboard planes does not change a ban on the in-flight use of cell phones, which is tied to concerns about interference with ground stations.

Genachowski earlier this month urged the Federal Aviation Administration to allow more electronics on aircraft.

The FAA announced in August that it was forming a government-industry group to study aircraft operators' policies to determine when portable electronic devices may be used safely during flight. (Reporting By Jim Wolf; Editing by Claudia Parsons)


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2012 most expensive year for US motorists

Commuters arrive at Holland Tunnel to drive into New York from Jersey City, New Jersey November 7, 2012, in the aftermath of Hurricane Sandy. REUTERS/Eduardo Munoz

Commuters arrive at Holland Tunnel to drive into New York from Jersey City, New Jersey November 7, 2012, in the aftermath of Hurricane Sandy.

Credit: Reuters/Eduardo Munoz

NEW YORK | Tue Jan 1, 2013 10:39am EST

NEW YORK (Reuters) - The average U.S. gasoline price in 2012 was a record-high $3.60 a gallon, topping the previous high of $3.51 in 2011, travel group AAA said on Monday.

AAA blamed refinery outages, major hurricanes and unrest in the Middle East for the rise.

Drivers in states like Hawaii, Alaska, California and New York paid the highest prices.

However, the price fell to $3.30 a gallon in December, the lowest monthly average for the year, AAA said.

(Reporting by Selam Gebrekidan)


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Yale under fire for new campus in restrictive Singapore

Handout image shows an artist's rendition of the learning commons at the Yale NUS College in Singapore. REUTERS/Yale NUS College/Handout

Handout image shows an artist's rendition of the learning commons at the Yale NUS College in Singapore.

Credit: Reuters/Yale NUS College/Handout

By Stephanie Simon

NEW HAVEN | Mon Dec 31, 2012 5:49am EST

NEW HAVEN (Reuters) - For more than 300 years, Yale University has prided itself on training top students to question and analyze, to challenge and critique.

Now, Yale is seeking to export those values by establishing the first foreign campus to bear its name, a liberal arts college in Singapore that is set to open this summer. The ambitious, multimillion-dollar project thrills many in the Yale community who say it will help the university maintain its prestige and build global influence.

But it has also stirred sharp criticism from faculty and human-rights advocates who say it is impossible to build an elite college dedicated to free inquiry in an authoritarian nation with heavy restrictions on public speech and assembly.

"Yale's motto is 'Lux et veritas,' or 'Light and truth,'" said Michael Fischer, a Yale professor of computer science. "We're going into a place with severe curbs on light and truth ... We're redefining the brand in a way that's contrary to Yale's values."

Yale President Richard Levin describes the new venture as a chance to extend Yale's tradition of nurturing independent thinkers to a dynamic young nation at the crossroads of Asia. In the 19th century, Yale scholars fanned out to launch dozens of American colleges, Levin noted in a 2010 memo presenting the concept to faculty. "Yale could influence the course of 21st century education as profoundly," he wrote.

Levin, who spent years expanding Yale's campus in New Haven before initiating the Singapore project in 2010, has announced plans to retire at the end of the academic year. His successor, Yale Provost Peter Salovey, also supports the Singapore venture.

Working with the National University of Singapore, or NUS, Yale is building a comprehensive liberal arts college from scratch. The school will offer majors from anthropology to urban studies, electives from fractal geometry to moral reasoning, and a rich menu of extracurricular activities -- sports, drama, debate, even a juggling club.

Scheduled to open this summer with 150 students, it is slated to grow to about 1,000 undergraduates living in a high-rise campus now under construction.

While American universities have been venturing overseas for decades, they have mostly offered tightly focused degree programs, often for graduate students. The closest analogy to the Yale project may be New York University's branch campuses now under construction in Abu Dhabi and Shanghai.

But the new NYU campuses are extensions of the university. The Yale venture, which targets top students from around the globe, is an unusual hybrid.

It will be called Yale-NUS College. It will draw some faculty -- and its inaugural president, Pericles Lewis -- straight from New Haven. Students will spend the summer before freshman year in New Haven, attending seminars with Yale faculty. When they graduate, they will be welcomed into the Association of Yale Alumni.

Yet Yale officials are emphatic that the new school is not a branch campus. The degrees it issues will not be Yale degrees.

"It is not Yale," said Charles Bailyn, an astronomy professor on leave from Yale to serve as the founding dean of Yale-NUS.

OPPORTUNITY OR "FRANKENYALE"?

The new college will be funded entirely by the Singapore government, which will also subsidize tuition. Singapore citizens will pay about $18,000 a year, including room and board. International students will pay about $43,000 unless they secure a discount by committing to work for a Singapore company for three years after graduation.

Yale and Singapore will get an equal number of seats on the new college's governing board -- but Singapore's education minister must approve all the Yale nominees.

The arrangement exposes Yale to risk because its name is on the college, yet the university does not have control over the end product, said Richard Edelstein, who studies trends in higher education at the University of California at Berkeley. One angry member of Yale's faculty, Christopher Miller, a professor of French and African American studies, has dubbed the venture "Frankenyale."

Those involved in the project say the novel structure is a boon that will enable educational experimentation, with an emphasis on interdisciplinary seminars and student research. It's a "once-in-a-lifetime opportunity to build a new college program from the ground up," said Yale anthropologist Bernard Bate, who has signed on to teach in Singapore.

He and others say they will bring the best of their new approach back to New Haven. And they contend that fears about censorship in Singapore are wildly overblown.

That issue came to the fore last spring, when Yale faculty voted 100 to 69 for a resolution raising concern about the venture in light of "the history of lack of respect for civil and political rights" in Singapore.

Human Rights Watch, the international advocacy group, subsequently accused Yale of "betraying the spirit of the university." This month the American Association of University Professors weighed in, expressing concern about the project's implications for academic freedom.

Singapore, an island nation in southeast Asia, is a democracy but has been dominated by one political party since securing independence from Britain half a century ago. In the name of stability and security, the government restricts public demonstrations to a corner of one park and heavily regulates news and entertainment, according to the U.S. State Department.

Last year a British author was jailed for writing a book critical of Singapore's judiciary. This spring the government prevented an opposition politician from leaving the country to speak at the Oslo Freedom Forum.

Still, Yale faculty working on the new college said they had spoken with foreign professors teaching on other campuses in Singapore and came away convinced that academic freedom would be respected.

George Bishop, a Yale PhD who been teaching psychology at the National University of Singapore since 1991, says he has never felt restricted. In a class on the AIDS epidemic, he and his students freely discuss how Singapore's anti-sodomy laws hinder the nation's public-health response.

"We criticize the government all the time in class," said Bishop, who has joined the faculty of the new college.

PLENTY OF APPLICANTS

Yet Yale-NUS will not be free and open in the way American students may expect.

Singapore bans speech deemed to promote racial or religious strife. As long as they toe that line, students will be free to hear speakers and express views inside campus buildings. But many outdoor assemblies will require a government permit, Yale-NUS President Lewis said. Singapore law defines "assembly" quite broadly, to include a single protester holding a sign or an open-air debate.

"Can you march on City Hall?" asked Bailyn, the Yale-NUS dean. No, he answered -- but said that didn't trouble him, as "that's not really an educational matter." Bailyn said he had been promised complete freedom with "the core mission of the college -- researching, teaching, unfettered discussion."

Indeed, Yale-NUS faculty say they expect Singapore to be cautious about interfering with the new college for fear of provoking an incident and prompting Yale to withdraw its name.

"We know what a liberal arts education is, what intellectual freedom is," said Keith Darden, a professor of social sciences at Yale-NUS, "and we'll accept nothing less than that for ourselves and our students."

Under the philosophical questions lies a pragmatic one: Will the new college succeed?

For all its wealth, Singapore has not always proved an ideal marketplace for higher education. Australia's University of New South Wales opened a campus in Singapore in 2007 -- only to shut it after one semester because of low enrolment. This fall, NYU announced it would close its graduate film school in Singapore because of financial trouble.

Other American ventures in Singapore have done better, including a music conservatory developed by Johns Hopkins University.

Interest in Yale-NUS is running high. Almost 2,600 students from around the globe have applied for the initial 150 spots. Several dozen have already been accepted -- among them, Singaporean students who suggest Yale's faculty might do well to back off the criticism and trust in the value of the liberal arts education they hold so dear.

"Ideological purity and moral righteousness from these critics will not make Singapore a free society, but education and the spread of ideas will," Jared Yeo, a Singapore native accepted to Yale-NUS, wrote on the college's blog.

Perhaps the most pointed critique of the New Haven protests came from E-Ching Ng, a Singaporean who earned an undergraduate degree at Yale and remained on campus to study linguistics. In a column in the Yale Daily News last spring, she urged faculty to respect the rules Singapore has developed to maintain public order.

"Qur'an burning is illegal in Singapore, and we like it that way," she wrote. "We prioritize our values differently, and different doesn't mean wrong. At least, that's what I learned from a Yale liberal arts education." (Reporting By Stephanie Simon in New Haven. Additional reporting by Kevin Lim in Singapore. Editing by Jonathan Weber and Douglas Royalty.)


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Expats who bounce cheques may no longer risk prison in UAE

DUBAI | Tue Jan 1, 2013 10:25am EST

DUBAI (Reuters) - Newspapers printed contradictory reports on Tuesday on whether the United Arab Emirates was ending prison terms for foreign nationals living in the Gulf Arab state who write bad cheques.

The UAE's tough penalties for defaulting on cheques were relaxed for Emirati citizens in October after a royal decree, but the threat of jail for the country's large expat population remains.

In the UAE writing cheques that bounce is a criminal offence instead of a civil one. Post-dated cheques are frequently used as a guarantee by businesses and individuals for everything from apartment rentals to multi-billion dollar deals.

Officials were not available to comment on Tuesday, which is a national holiday.

"In line with the directives of Sheikh Khalifa... and in the spirit of fairness and equality, the courts have stopped as of last month accepting collateral cheques presented as a criminal tool against expatriate debt defaulters," Ali Khalfan Al Dhaheri, head of the legal affairs department at the Ministry of Presidential Affairs was quoted saying by The National.

The paper also quoted judge Jassem Saif Buossaiba, head of the judicial inspection department at the Justice Ministry, as saying: "Federal public prosecutions in the country have, indeed, released expatriate detainees as has been the case of their Emirati counterparts who were freed last October."

However, Gulf News then quoted deputy minister of Presidential Affairs Ahmad Jumaa Al Zaabi as denying the report, saying: "There is no relaxation or debt waiver for expatriates".

In July a British businessman who had been jailed for nearly three years in Dubai for writing bad cheques was released when his conviction was overturned following a seven-week hunger strike.

The UAE has no bankruptcy laws to protect debtors and many have called for the decriminalisation of bounced cheques.

New legislation aimed at simplifying the process of bankruptcy and allowing failing companies to restructure is expected in 2013. (Reporting By Rania El Gamal; Writing by Angus McDowall in Riyadh; editing by Patrick Graham)


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ArcelorMittal to sell $1.1 billion stake in Canada iron ore unit to POSCO group

SEOUL/HONG KONG | Tue Jan 1, 2013 9:23pm EST

SEOUL/HONG KONG (Reuters) - ArcelorMittal (ISPA.AS), the world's biggest steelmaker, will sell a $1.1 billion stake in a Canadian iron ore mine operator to a consortium that includes South Korean steelmaker POSCO (005490.KS) and Taiwan-listed China Steel Corp, China Steel said in a statement.

ArcelorMittal, formed in 2006 when India-born Lakshmi Mittal's steel business bought European peer Arcelor for $33 billion, is battling sluggish steel demand and is looking to offload assets to cut debt.

The sale of a 15 percent stake in Canada's Labrador Trough iron ore mining and infrastructure asset is part of that process.

POSCO, China Steel and ArcelorMittal Mines Canada will own Labrador Trough through a joint venture and will enter into long-term iron ore supply agreements, China Steel (2002.TW) said in the statement on its Website.

POSCO shares were up 2.6 percent, while China Steel rose 0.6 percent.

The transaction is subject to approval from the Taiwanese government, and is expected to close in two installments in the first and second quarters of 2013, the statement said.

The deal will give POSCO, the world's fourth-biggest steelmaker, access to iron ore and coal used to make steel, as it currently imports nearly all of its key raw materials. POSCO already owns a 12.5 percent stake in Australia's $10 billion Roy Hill project.

Earlier on Wednesday, a South Korean wire service Yonhap Infomax reported China Steel and POSCO would jointly contribute $540 million, while the remainder was expected to be paid by financial investors including the National Pension Service.

A POSCO spokeswoman confirmed a consortium involving POSCO signed a stock purchase agreement to acquire a stake in the iron ore mine operator, but declined to elaborate on details.

ArcelorMittal is one of Canada's top exporters of iron ore to steel markets around the world and its operations account for about 40 percent of Canada's iron ore output. It operates two large open-pit mines in the province of Quebec, where it also owns the Port-Cartier industrial complex that includes a pellet plant, storage areas and port facilities for shipping.

Last month, ArcelorMittal wrote down the value of its European business by $4.3 billion, underscoring gloom about prospects for the region's recession-hit manufacturers.

A source had previously told Reuters that POSCO was seeking to buy the stake with South Korea's National Pension Service and other investors.

Credit agency Fitch has cut ArcelorMittal's long-term issuer default rating to BB+, just below investment grade, due to the challenging outlook for Western European steel markets in 2013.

ArcelorMittal, which makes about 6-7 percent of the world's steel, says demand in Europe had fallen 29 percent since 2007 when the financial crisis started.

Goldman Sachs (GS.N) and RBC Capital Markets were advising ArcelorMittal on the deal, while Morgan Stanley (MS.N) is advising the POSCO consortium.

(Reporting by Joyce Lee and Denny Thomas; Editing by Michael Perry)


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Analysis: "Fiscal cliff" deal called a dud on deficit front

Speaker of the House John Boehner (R-OH) arrives at the U.S. Capitol in Washington January 1, 2013. The Senate moved the U.S. economy back from the edge of a ''fiscal cliff'' on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives. REUTERS/Mary F. Calvert

Speaker of the House John Boehner (R-OH) arrives at the U.S. Capitol in Washington January 1, 2013. The Senate moved the U.S. economy back from the edge of a ''fiscal cliff'' on Tuesday, voting to avoid imminent tax hikes and spending cuts in a bipartisan deal that could still face stiff challenges in the House of Representatives.

Credit: Reuters/Mary F. Calvert

By Kim Dixon

WASHINGTON | Tue Jan 1, 2013 7:05pm EST

WASHINGTON (Reuters) - In the controversy surrounding the "fiscal cliff" issue, it's easy to forget that the origin of the entire debate was a professed desire to reduce swollen federal deficits.

Whether the target was $4 trillion over 10 years, as proposed by the Bowles-Simpson deficit reduction commission, or in the $2 trillion range, as tossed around by House of Representatives Speaker John Boehner and President Barack Obama, the idea was to rein in total debt that now tops $16 trillion.

By those standards, the bill passed by the U.S. Senate early on New Year's Day to avoid the cliff's automatic steep tax hikes and across-the-board spending cuts, looks paltry indeed.

The legislation, which as of Tuesday evening had yet to be passed by the House, would add nearly $4 trillion to federal deficits over a decade compared to the debt reduction envisioned in the extreme scenario of the cliff, according to the non-partisan Congressional Budget Office.

This is largely because it extends low income tax rates for nearly every American except the relative handful above the $400,000 threshold.

It's also because it put off for at least two months the automatic budget cuts that were part of the cliff and would have saved about $109 billion in federal spending on defense and non-defense programs alike.

The Senate bill, which ultimately came down to a fight about tax equity rather than federal spending, did to deficit reduction what Obama and congressional leaders always promise to resist: It "kicked the can down the road" to a later date.

In explaining the measure to the news media, the White House, which helped broker it, gave no particular figure for how much it would bring down the deficit, stating only that, somehow, "with a strengthening economy," it would.

Whether it ultimately succeeds will depend in part on what happens to the now-delayed "automatic" spending cuts, including whether Obama follows through on reductions in outlays.

FULL CIRCLE

The Senate bill also sets up what is likely to be an even more heated fight in late February when the Treasury Department must come to Congress to seek an increase in the government's borrowing limit.

That will bring everything full circle to where the cliff originated during a struggle between Obama and Republicans over raising the federal debt ceiling above $14.5 trillion.

That struggle ended in August, 2011 with a bipartisan deal designed to scare Congress into legislating significant long-term cuts in federal spending.

The idea was that by setting a strict deadline of January 2, 2013 and dire consequences in the form of draconian spending cuts for failing to meet it, the White House and Congress would be forced into action.

Republican Representative Paul Ryan, a self-described deficit hawk who served as the Republican vice-presidential candidate, declared the moment a "huge cultural change."

Coincidentally, low tax rates that originated during the administration of President George W. Bush were also set to expire on December 31, making the prospect of inaction so threatening that the Congressional Budget Office determined that failure to intervene could cause a new recession.

But the controversy over taxes, coming on the heels of a presidential campaign built around Obama's demand for middle-class tax justice, ultimately consumed the argument over the cliff, leaving deficit reduction as the forgotten issue.

Among those disappointed by the process was Alice Rivlin, a Brookings Institution scholar, former U.S. budget director and co-author of another widely discussed deficit reduction plan named for herself and former U.S. Senator Pete Domenici, a Republican from New Mexico.

"I'd been optimistic," Rivlin said in an interview with Reuters. "I thought that we might get might get it done" and that Boehner and Obama "might get to a grand bargain."

Maya MacGuineas, a budget hawk who has led a group of corporate chieftains in a group called "Fix the Debt," was also unenthusiastic about the bill.

"This is one of the lowest common denominator deals," MacGuineas said. "I wish I had something nice to say, but not so much."

(Reporting By Kim Dixon, Rachelle Younglai, David Lawder and Richard Cowan and Fred Barbash; Editing by Fred Barbash and Eric Walsh)


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Analysis: Economy would dodge bullet for now under fiscal deal

U.S. Senate Minority Leader Mitch McConnell (C) departs the senate floor with an aide after a senate vote in the early morning hours at the U.S. Capitol in Washington January 1, 2013. REUTERS/Jonathan Ernst

U.S. Senate Minority Leader Mitch McConnell (C) departs the senate floor with an aide after a senate vote in the early morning hours at the U.S. Capitol in Washington January 1, 2013.

Credit: Reuters/Jonathan Ernst

By Jason Lange

WASHINGTON | Tue Jan 1, 2013 7:26am EST

WASHINGTON (Reuters) - A deal worked out by Senate leaders to avoid the "fiscal cliff" was far from any "grand bargain" of deficit reduction measures.

But if approved by the House of Representatives, it could help the country steer clear of recession, although enough austerity would remain in place to likely keep the economy growing at a lackluster pace.

The Senate approved a last-minute deal early Tuesday morning to scale back $600 billion in scheduled tax hikes and government spending cuts that economists widely agree would tip the economy into recession.

The deal would hike taxes permanently for household incomes over $450,000 a year, but keep existing lower rates in force for everyone else.

It would make permanent the alternative minimum tax "patch" that was set to expire, protecting middle-income Americans from being taxed as if they were rich.

Scheduled cuts in defense and non-defense spending were simply postponed for two months.

Economists said that if the emerging package were to become law, it would represent at least a temporary reprieve for the economy. "This keeps us out of recession for now," said Menzie Chinn, an economist at the University of Wisconsin-Madison.

The contours of the deal suggest that roughly one-third of the scheduled fiscal tightening could still take place, said Brett Ryan, an economist at Deutsche Bank in New York.

That is in line with what many financial firms on Wall Street and around the world have been expecting, suggesting forecasts for economic growth of around 1.9 percent for 2013 would likely hold.

At midnight Monday, low tax rates enacted under then-President George W. Bush in 2001 and 2003 expired. If the House agrees with the Senate - and there remained considerable doubt on that score - the new rates would be extended retroactively.

Otherwise, together with other planned tax hikes, the average household would pay an estimated $3,500 more in taxes, according to the Tax Policy Center, a Washington think tank. Budget experts expect the economy would take a hit as families cut back on spending.

Provisions in the Senate bill would avoid scheduled cuts to jobless benefits and to payments to doctors under a federal health insurance program.

AUSTERITY'S BITE

Like the consensus of economists from Wall Street and beyond, Deutsche Bank has been forecasting enough fiscal drag to hold back growth to roughly 1.9 percent in 2013. Ryan said the details of the deal appeared to support that forecast.

That would be much better than the 0.5 percent contraction predicted by the Congressional Budget Office if the entirety of the fiscal cliff took hold, but it would fall short of what is needed to quickly heal the labor market, which is still smarting from the 2007-09 recession.

"We continue to anticipate a significant economic slowdown at the start of the year in response to fiscal drag and a contentious fiscal debate," economists at Nomura said in a research note.

In particular, analysts say financial markets are likely to remain on tenterhooks until Congress raises the nation's $16.4 trillion debt ceiling, which the U.S. Treasury confirmed had been reached on Monday.

While the Bush tax cuts would be made permanent for many Americans under the budget deal, a two-year-long payroll tax holiday enacted to give the economy an extra boost would expire. The Tax Policy Center estimates this could push the average household tax bill up by about $700 next year.

The suspension of spending cuts sets up a smaller fiscal cliff later in the year which still could be enough to send the economy into recession, said Chinn.

He warned that ongoing worries about the possibility of recession could keep businesses from investing, which would hinder economic growth.

"You retain the uncertainty," Chinn said.

(Reporting by Jason Lange; Editing by Eric Walsh)

(This story was refiled to remove extraneous punctuation in the first paragraph)


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