Why the US government is so suspicious of Huawei

A man walking past a Huawei P20 smartphone advertisement is reflected in a glass door in front of a Huawei logo, at a shopping mall in Shanghai, China December 6, 2018. 

Aly Song | Reuters
A man walking past a Huawei P20 smartphone advertisement is reflected in a glass door in front of a Huawei logo, at a shopping mall in Shanghai, China December 6, 2018.

The arrest of Huawei CFO Meng Wanzhou in Canada for possible Iran sanctions violations yesterday has deeper roots in a difficult legal history between the hardware giant and U.S. regulators and intelligence agencies.

The U.S. government has spent the better part of the last decade taking issue with the company over topics including the firm’s alleged espionage ties to the Chinese government and allegations of a long history of intellectual property theft. Huawei is one of China’s largest companies, with a reported $100 billion in revenue in 2018 and 180,000 employees across 170 global offices.

Starting around 2010, U.S. intelligence officials began warning agencies, and then private companies, of what it said were clear-cut cases of the company serving as a proxy for espionage conducted by the Chinese government, a claim frequently made publicly by former National Security Agency director Michael Hayden.

In 2012, the U.S. House Intelligence Committee released a report which followed an investigation into the company and its competitor ZTE.

“The Committee received almost no information on the role of Chinese Communist Party Committee within Huawei or specifics about how Huawei interacts in formal channels with the Chinese government,” the report said. “Huawei refused to provide details about its business operations in the United States, failed to disclose details of its dealings with the Chinese military or intelligence services and would not provide clear answers on the firm’s decision-making processes.”

At that time, the Intelligence Committee also called into question the company’s dealings in Iran, which Huawei had pledged to scale back in accordance with international sanctions.

“Huawei refused to provide any internal documents relating to its decision to scale-back operations in Iran or otherwise ensure compliance with U.S. laws,” the report said.

Huawei has also had trouble breaking into the U.S. market because of the U.S. intelligence reports. In 2011, the company tried to acquire 3Leaf, a deal that was nixed after government pressure.

The company’s equipment has been banned by several different agencies because of the espionage and security fears, and those bans ramped up in 2018, when President Trump disallowed U.S. government use of Huawei products and those made by ZTE, following a CIA and NSA warning in February. In January, AT&T abandoned its plans to launch a new flagship phone from Hauwei.

Huawei was also heavily rumored to be behind Trump’s decision to stop the Broadcom/Qualcomm merger. Also this year, a start-up backed by Microsoft and Dell, sued Huawei for alleged widespread IP theft. Most recently, the FCC also banned Huawei equipment from small and regional carriers earlier this year.

Huawei has strongly denied the claims made against it. Donald Purdy, both a Huawei executive and the former top cybersecurity official at the Department of Homeland Security, said in an op-ed in Fortune in June that the moves would hurt development expansion of 5G service in the U.S.

“Policymakers should bear in mind that overreaching or poorly targeted regulations usually have unintended consequences, such as those that will surely result from the FCC’s proposal to force rural carriers to remove China-sourced equipment from their networks,” he said. “In many cases, Huawei’s is the only equipment that America’s small, independent carriers can afford.”

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Cloud stocks Okta and Cloudera surge on better-than-expected quarterly results

Todd McKinnon

Anjali Sundaram | CNBC
Todd McKinnon

Cloud stocks continue to be a bright spot on the Nasdaq as two more surged on earnings beats.

Okta shares spiked 10.4 percent on Thursday after the cloud software company reported a narrower loss than analysts’ expected and raised its revenue guidance for the year. Cloudera, a machine learning and analytics platform for the cloud, finished the day up 12.3 percent after reporting a 25 percent revenue increase compared to last year, at $118.2 million.

Okta’s stock ended the day at $66.95, bringing its gains for the year to 161 percent. Since going public in April 2017, Okta has been one of the best performers among a growing number of cloud-based software providers that are almost all outperforming the broader market. Cloudera, on the other hand, is still down more than 21 percent for the year.

Okta’s earnings report follows better-than-expected results last week from cloud companies Salesforce and Workday. Okta, which sells identity management software, also said it was cash flow positive for the first time.

Okta lost 4 cents per share in the quarter, excluding some items, compared to the 11-cent average analyst estimate, according to Refinitiv. Revenue climbed 58 percent to $105.6 million, also topping estimates and the company’s own guidance.

For the full year of fiscal 2019, Okta said it now expects revenue of $391 million to $392 million, an increase over its prior expectation for sales for $372 million to $375 million.

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Cheesecake Factory’s free cheesecake promotion goes awry, one person arrested

Cheesecake from The Cheesecake Factory

Source: The Cheesecake Factory
Cheesecake from The Cheesecake Factory

A free cheesecake promotion celebrating Cheesecake Factory’s 40th anniversary turned ugly as orders and DoorDash delivery drivers flooded restaurants. A brawl broke out at one location, and one person was arrested.

The nationwide promotion, which kicked off at 11:30 a.m. local time Wednesday, offered 40,000 free slices of cheesecake to customers who ordered through the DoorDash app. The promotion comes at a time when more restaurants are adding delivery and digital ordering capabilities to meet growing consumer demand for fast and convenient access to food.

Within two hours, all free slices had been ordered, leading some disappointed respondents to complain on social media that they were not able to get their hands on a piece of cheesecake, or if they did, it arrived hours after it was ordered.

“Our Day of 40,000 Slices promotion had such a tremendous response from our guests that we extended it and delivered more than 60,000 complimentary slices,” a spokeswoman for Cheesecake Factory told CNBC. “We were truly humbled by the popularity of the offer and by how quickly our fans responded as all of the 60,000 complimentary slices were ordered within an hour of the promotion’s start time.”

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Obamacare enrollment sinks 11% — historically low unemployment is at least partly to blame

Sign-up rates for Obamacare health coverage have fallen 11 percent from the same time last year, but at least part of the decline is being attributed to something good.

More Americans are getting their health insurance from employers thanks to the tightest U.S. labor market in nearly 50 years, health policy experts say. Low unemployment rates, at 3.7 percent in October, mean fewer people need to buy insurance on the federal Affordable Care Act exchanges, they say.

President Donald Trump’s changes to the ACA are still being blamed for a lot of the drop. It’s the first enrollment season since Congress repealed the so-called individual mandate, a key part of former President Barack Obama’s health-care law. The mandate imposed a tax on the uninsured to persuade people to buy insurance instead of paying a penalty.

The repeal of the federal mandate last December, along with Trump’s push for cheaper, less comprehensive short-term health plans and a substantial slash in outreach funding, was expected to damper ACA enrollment rates this year.

Consumers still have another week to sign up, so researchers can’t draw any hard conclusions until the final numbers are in.

Policy experts are also taking a close look at states such as New Jersey, which enacted its own individual mandate in May. As of Dec. 1, the Garden State saw enrollment numbers down 13 percent compared with the same time last year, according to figures released by the Centers for Medicare and Medicaid Services.

Historically low unemployment

Regardless, the tight labor market is helping reduce dependence on the federal program, said Joel Cantor, the founding director of the Center for State Health Policy at Rutgers University in New Jersey.

“The economy has increased employment rates and encouraged more firms to offer decent benefits in order to be competitive in labor markets,” he said.

While the ACA law doesn’t require small businesses to offer health coverage, more may now be doing so to attract and retain workers, he said.

The unemployment rate in New Jersey is at its lowest level since June 2001, according to Bureau of Labor Statistics data. It fell to 4.1 percent in October after remaining at 4.2 percent for three months. The national unemployment rate is 3.7 percent, its lowest level since 1969.

Chris Sloan, director at Avalere Health, said it’s too soon to quantify whether higher employment, the end of the mandate penalty or short-term plans are impacting overall exchange open enrollment. He notes that the exchange market is primarily a low-income market of people who receive subsidies.

“It’s way too early; we don’t have any way to quantify these effects yet,” he said.

Additionally, Sloan said he doesn’t think the end of the mandate is a big deal, because it was so easy to get out of it even during the Obama administration.

“The Obama administration, and subsequently the Trump administration, did not enforce it; and it’s hard to have a powerful mandate if the administration is giving millions of exemptions and creating really broad exemption categories, which the Obama administration did for political reasons,” Sloan said.

Cynthia Cox, director of the Program for the Study of Health Reform and Private Insurance at the Kaiser Family Foundation, agreed with Cantor’s assessment, adding the economy is improving and “when the economy improves, people have jobs and don’t have to get health-care coverage elsewhere.”

However, she added that the economic impacts on health coverage would vary by state.

Massachusetts, Vermont and the District of Columbia, which operate on locally run exchanges, have also passed laws restoring the individual mandate. As of Nov. 26, enrollment in Massachusetts is up 4 percent compared with last year. Massachusetts’ unemployment rate was 3.5 percent in October. Data isn’t yet available in Vermont and D.C.

Nearly 90,000 people have signed up for health coverage through New Jersey’s Obamacare marketplace so far this season, CMS data show, down from 104,142 this same time last year.

Meanwhile, Democratic New Jersey Gov. Phil Murphy’s administration has been pushing for public awareness on open enrollment. On Monday the governor warned residents they had 12 days left to sign up for coverage.

Looking ahead to enrollment deadline

Open enrollment began Nov. 1 and runs until Dec. 15 in most states. People who do not sign up for an Obamacare plan by the end of open enrollment will not be able to obtain coverage until the fall of 2019, unless they have a so-called qualifying life event such as getting married or having a child.

Cox of Kaiser said it’s worth considering whether New Jersey residents know the state enacted its own individual mandate and assessing how big the New Jersey governor’s outreach was. Cox also said it’s worth seeing whether the newly created jobs in New Jersey provided health coverage.

Judy Solomon, a senior fellow at the Center on Budget and Policy Priorities, a Washington think tank, said the tighter labor market could possibly be playing a factor in lower enrollment but qualified that it would likely vary by state.

Solomon said it’s worth waiting until the Dec. 15 deadline before reaching any conclusions.

“I’m not sure the mandate [in New Jersey] itself would drive enrollment, because there isn’t a lot of knowledge about repeal and likely about N.J. adopting its own,” Solomon added. “We’ve been worried about the impact of cuts in outreach and enrollment assistance but seems like N.J. is doing at least some outreach on its own and the state has seen decreases in premiums.”

Most policy experts expect to see a surge in enrollment as states near the mid-December deadline.

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Cloud stocks Okta and Cloudera surge on better-than-expected quarterly results

Todd McKinnon

Anjali Sundaram | CNBC
Todd McKinnon

Cloud stocks continue to be a bright spot on the Nasdaq as two more surged on earnings beats.

Okta shares spiked 10.4 percent on Thursday after the cloud software company reported a narrower loss than analysts’ expected and raised its revenue guidance for the year. Cloudera, a machine learning and analytics platform for the cloud, finished the day up 12.3 percent after reporting a 25 percent revenue increase compared to last year, at $118.2 million.

Okta’s stock ended the day at $66.95, bringing its gains for the year to 161 percent. Since going public in April 2017, Okta has been one of the best performers among a growing number of cloud-based software providers that are almost all outperforming the broader market. Cloudera, on the other hand, is still down more than 21 percent for the year.

Okta’s earnings report follows better-than-expected results last week from cloud companies Salesforce and Workday. Okta, which sells identity management software, also said it was cash flow positive for the first time.

Okta lost 4 cents per share in the quarter, excluding some items, compared to the 11-cent average analyst estimate, according to Refinitiv. Revenue climbed 58 percent to $105.6 million, also topping estimates and the company’s own guidance.

For the full year of fiscal 2019, Okta said it now expects revenue of $391 million to $392 million, an increase over its prior expectation for sales for $372 million to $375 million.

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Microsoft is making its first web browser for the Mac in 15 years

Microsoft CEO Satya Nadella at a company event in New York in May 2017.

Source: Jason DeCrow, AP Images | Microsoft
Microsoft CEO Satya Nadella at a company event in New York in May 2017.

Microsoft’s web browsing technology is coming back to the Mac.

On Thursday Microsoft said that its Edge browser, which was introduced in 2015 as part of Windows 10, will be coming to the Mac as part of a broader rethinking of the company’s browser strategy.

Edge was one of the biggest new features of Windows 10 when it became available in mid-2015. But it hasn’t taken off, despite Microsoft’s attempts to promote it in its own properties, like the Bing search engine. Google’s Chrome had around 62 percent share in November, while Edge had about 2 percent, according to StatCounter. Apple’s Safari had 15 percent, and Microsoft’s old browser, Internet Explorer, had 3 percent share.

In the past few years, under the leadership of Satya Nadella, Microsoft has come to embrace open-source technologies more openly. It has added broader support for Linux in Windows and in the cloud, for example. Now, after depending heavily on its own browsing engine technology, Microsoft will make Chromium, the open-source heart of Google’s Chrome browser, a key part of Edge, essentially acknowledging that Google’s technology has become dominant.

Microsoft will also become a major contributor to the Chromium project as it looks to make Edge even more widely available.

“Microsoft Edge will now be delivered and updated for all supported versions of Windows and on a more frequent cadence,” Microsoft Windows corporate vice president Joe Belfiore wrote in a blog post on Thursday. That language implies Edge will become available for Windows 7, for one thing.

One report previously suggested that the company would release a browser to replace Edge. Instead, the company is refining Edge to benefit multiple constituencies.

“People using Microsoft Edge (and potentially other browsers) will experience improved compatibility with all web sites, while getting the best-possible battery life and hardware integration on all kinds of Windows devices,” Belfiore wrote in the blog post.

“Web developers will have a less-fragmented web platform to test their sites against, ensuring that there are fewer problems and increased satisfaction for users of their sites; and because we’ll continue to provide the Microsoft Edge service-driven understanding of legacy IE-only sites, Corporate IT will have improved compatibility for both old and new web apps in the browser that comes with Windows.”

This isn’t the first time Microsoft is building for the Mac, and it certainly isn’t the first time Microsoft is packaging up a browser for Apple’s Mac operating system. Apple offered Internet Explorer for the Mac but said it would stop coming out with new versions of the software in 2003.

Microsoft expects to have a preview build for developers to try in early 2019, Belfiore wrote.

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Apple is in talks to buy a violent Israeli TV show and sign Richard Gere as lead, dispelling the myth that it wants only family-friendly video

Actor Richard Gere filming on location for 'Arbitrage' on the streets of Manhattan on April 11, 2011 in New York City.

Bobby Bank | WireImage | Getty Images
Actor Richard Gere filming on location for ‘Arbitrage’ on the streets of Manhattan on April 11, 2011 in New York City.

Apple is in advanced talks to buy rights to a gritty Israeli TV show called “Nevelot” (English translation: “Bastards”) and adapt it for the U.S., beating out bids from competitors including Showtime, FX and Amazon, according to several people with knowledge of the deal. The show’s plot involves two military veterans who go on a youth-focused killing spree because they believe today’s kids don’t understand the sacrifices of their generation.

While the details are still being worked out, show-runners Howard Gordon and Warren Leight are in negotiations to reformat it for the American market, perhaps under a different name, according to people familiar. Both have had critical success as TV show-runners, with Gordon co-helming “24” and “Homeland” and Leight behind “In Treatment,” “Law and Order: SVU” and “Law and Order: Criminal Intent.”

Richard Gere is also in talks to star in the series. Apple and 21st Century Fox will be co-producing. The project was previously in development at HBO.

All sides are still talking, and the deal is not yet finalized. It could fall though, the people said, if certain agreements were not reached, including budget.

Apple, Gordon and Gere declined to comment. Leight did not immediately respond to requests for comment. Fox said no deal is done and declined to discuss details.

The purchase of a violent show seems in contrast to Apple’s traditionally prudish standards for apps it sells in the App Store. In that vein, the Wall Street Journal reported in September that Apple did not want shows that included violence, politics or rude language.

But multiple people who have spoken to Apple and have knowledge of their thinking in recent months say that’s simply not true, and TV-MA content is fair game.

Apple’s heads of programming, Zach Van Amburg and Jamie Erlicht, who started in June, have been working overtime to dispel the myth that Apple is interested only in family-friendly material.

In general, Apple wants high-impact content based on things people have heard of, like books, franchises or ideas that have resonance, according to people who have spoken to the company. It’s not wedded to existing formats that need commercial breaks, emphasizing unusual formats like anthologies and content that doesn’t fit within the traditional 30-minute and 60-minute time slots. The company is emphasizing it’s looking for “different” content, as long as it has substance and isn’t gratuitous.

The push is pitting them directly against deep-pocketed distributors like Netflix and Amazon, who also are hungry for content that is likely to get acclaim. Apple has indicated it is willing to pay premium prices for shows that have awards potential.

Looking for Apple’s ‘Breaking Bad’

Van Amburg and Erlicht, who were previously presidents of Sony Pictures Television, are highly respected in the entertainment industry. One of their biggest successes was bringing “Breaking Bad” and its showrunner Vince Gilligan to Sony.

The duo has made it very clear they are now looking for Apple’s version of the series, which revolved around an high school teacher turned meth dealer.

But so far, the projects Apple has announced aren’t rocking the boat. “Amazing Stories” has been described as a softer version of Netflix’s “Black Mirror,” while “Top of the Morning” is a broadcast news drama — basically a safer version of HBO’s “Newsroom,” as one person characterized it.

Despite the push for its “Breaking Bad,” Apple is not only interested in adult content. It’s also in the market for kids’ programming, focusing on buying shows for preschoolers this year. Starting next year, the company will start looking at shows for school-aged children. It is expected Apple will have parental controls to help parents shield children from watching inappropriate content.

The immediate goal is to build a content library for an upcoming media service, several people said. At some point next year, Apple will announce the product and offer the content for free on its devices. The first slate of shows have a tentative deadline of spring 2019, and the company is expected to spend $4.2 billion on content through 2022 per Variety.

But in conversations with TV show creators and agents Van Amburg and Erlicht have also painted a long-term vision of more advanced interactive and immersive content. These plans are not imminent and are not driving which shows they’re aiming to buy, but are rather an example of the kind of advantages Apple could bring to the table.

Some industry executives have questioned if Apple has a chance to steal eyeballs away from Netflix, Amazon and other industry leaders considering the already competitive landscape. WarnerMedia has indicated it too is willing to invest heavily into new shows and movies.

Still if the money is there, there’s no reason for show makers to turn it down. More services mean more players to bid up prices. As one executive noted, everyone is more than happy to take Apple’s money until it ends.

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Indian IT firm Infosys continues push into US

Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018. 

Rebecca Cook | Reuters
Fiat Chrysler Automobiles assembly workers build 2019 Ram pickup trucks at the FCA Sterling Heights Assembly Plant in Sterling Heights, Michigan, October 22, 2018.

Fiat Chrysler, riding a wave of strong truck and SUV sales, is planning to build a new final assembly plant in Detroit even as other American automakers scale back operations in the U.S., according to people familiar with the plan.

The assembly plant, an old Mack II Engine Plant that closed in 2012, will build a new three-row, Jeep Grand Cherokee SUV starting in 2020 as the automaker moves to keep up with strong demand for utility vehicles, the people said. A spokesperson for Fiat Chrysler would not comment on the report, nor confirm the automaker’s plans.

The move comes as the industry faces pressure from President Donald Trump to keep manufacturing jobs in the U.S. and stands in stark contrast to the recent decision by General Motors to stop production and idle five plants in North America including four in the United States.

Daimler CEO arrives at White House for auto meeting

Daimler CEO arrives at White House for auto meeting   11:43 AM ET Tue, 4 Dec 2018 | 02:01

GM has come under fire after announcing last week that it plans to cut 14,000 jobs in the U.S. and Canada, citing a weakening economy, the escalating trade war and a desire to reposition itself as a smaller, more nimble company. Ford is also scaling back, saying last week that it planned to cut a shift at two of its U.S. plants in an attempt to avoid more onerous layoffs.

Detroit will lose two GM facilities altogether. Both were performing well under capacity and contributing to a dismal capacity utilization rate of just 76 percent across the United States, far below Fiat Chrysler’s rate of 90 percent.

Fiat Chrysler’s plants are running at close to capacity due to continued strong demand for trucks and SUV’s. Overall, Fiat Chrysler’s sales in the U.S. are up 8 percent this year, easily outpacing the industry less than one percent according to the market research firm Autodata.

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Southwest Airlines flight overruns runway in Burbank

A Southwest Boeing 737 lands at Los Angeles International Airport on May 24, 2018. 

Hollywood Burbank Airport remains open. All Terminal B gates remain open and Terminal A Gates A1-A5 remain open. Runway 8/26 has been closed due to the incident. Runway 15/33 remains operational. Please check your flight status with your airline.

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Watch: Marriott CEO Arne Sorenson, CVS Health’s Larry Merlo discuss health care innovation

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CEOs of top companies, government leaders, and industry experts are set to meet at the Business Roundtable CEO Innovation Summit this Thursday to discuss a national innovation agenda to ensure that the United States remains a global leader in innovation across all industry sectors.

More than 200 retailers, banks, and technology companies are expected to attend. Among those slated to take part in discussions are Jamie Dimon, chairman and CEO of JP Morgan Chase, Doug McMillon, president and CEO of Walmart, and Virginia M. Rometty, chairman, president, and CEO of IBM.

These companies will release new recommendations for national privacy legislation which will ask the United States to adopt a national privacy law, specifically one that would apply the same data collection requirements all companies. This legislation will also increase both staffing and funding to enforce this new rule and provides consumers with more control of their data.

In addition to those mentioned above and others, Ivanka Trump, daughter of President Donald Trump and advisor to the president is expected to attend. She is scheduled to speak with Jamie Dimon while attending the event.

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