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WASHINGTON (Reuters) - Verizon Communications Inc and AT&T Inc, the two largest U.S. mobile phone companies, grabbed the lion's share of a $19.12 billion auction of airwaves being vacated by television broadcasters.

Verizon and AT&T won more than $16 billion of licenses, according to auction results released on Thursday, airwaves they plan to use to enhance existing voice and data services, as well as underpin a new wave of wireless technologies.

The possibility of a nationwide video network was raised by a $711 million slice of the 700 megahertz airwaves won by Frontier Wireless, a partner of satellite television operation DISH Network Corp. DISH declined to comment.

But No. 2 wireless provider Verizon and No. 1-ranked AT&T dominated the Federal Communications Commission auction that started January 24 and ended Tuesday after 260 round of bidding.

“It means that the two big guys just got much bigger,” said Rebecca Arbogast, an analyst with Stifel Nicolaus.

Verizon Wireless, a joint venture with Vodafone Group Plc, won the biggest nationwide block of spectrum, with a $4.74 billion bid that trumped $4.71 billion offered by Internet leader Google Inc, FCC officials said.

Verizon Wireless also won 25 regional licenses.

AT&T won 227 licenses in regional licenses around the United States. The company can pair those airwave with a large piece of 700-megahertz spectrum it gained earlier this year in its $2.5 billion acquisition of Aloha Partners.

“AT&T's strong spectrum holdings position the company to further enhance the quality and reliability of existing wireless broadband and voice services, and to set the foundation for new-generation wireless broadband technologies and services,” Ralph de la Vega, head of AT&T's wireless unit, said in a statement.

Overall, AT&T spent a total of about $6.64 billion and Verizon spent $9.63 billion at the auction, Arbogast said.

Verizon shares closed 2.8 percent higher to $36.12 on the New York Stock Exchange, while shares of AT&T ended up 2.2 percent at $36.85, also on the NYSE.

The 700-megahertz airwaves are considered valuable because they travel long distances and can penetrate thick walls.

Analysts say the major carriers will be able use them to offer consumers more advanced services such as broadband access via mobile phones and wireless broadband to laptop computers.

FCC Chairman Kevin Martin called the auction “a significant success,” citing the record amount of money raised for the U.S. Treasury and a requirement the nationwide spectrum won by Verizon be accessible to a range of devices and software.

Martin said the auction would enhance competition, citing the spectrum won by Frontier Wireless.

But the auction results dimmed hopes that the newly available spectrum would lead to a major new competitor in the wireless business.

Google's participation in the auction had sparked some hopes that the company could jump into the wireless business. But Google won no licenses in the auction, the FCC said.

Nevertheless, the auction was seen as a victory for Google, since the bidding was high enough to trigger the “open-platform” rules it requested for the nationwide airwaves eventually won by Verizon.

Google called it a victory for American consumers. “Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices,” said a statement from Google lawyers Richard Whitt and Joseph Faber.

Google shares edged up 0.4 percent to $433.55 by Nasdaq's close.

The FCC also said it would set aside a block of the 700-MHz airwaves that did not reach the $1.3 billion minimum bid.

This block was to be shared with public safety agencies and drew a lone bid of $472 million, which was then subtracted from an earlier $19.59 billion tally for the auction.

Industry analysts have speculated that the minimum price was too high, or that the rules for negotiations with emergency responders were too onerous.

The FCC could decide to re-auction the so-called D-block airwaves and perhaps modify the rules to make it more attractive.

(Additional reporting by Sinead Carew in New York; Editing by Tim Dobbyn)

SAN JOSE, Calif. - Palm Inc. posted a third-quarter loss as the troubled smart phone maker’s product lineup struggled against Apple Inc.’s iPhone and Research In Motion Ltd.’s BlackBerrys.

For the quarter ending Feb. 29, Palm lost $31.5 million, or 30 cents per share, compared with a profit of $11.8 million, or 11 cents per share in the year-ago period. Revenue fell 24 percent over the same period last year.

“We’ve come through a tough quarter and continue to have a lot of work ahead of us,” Chief Executive Ed Colligan said in a conference call with investors Thursday. “But I am more confident than ever that we are on the right track to build long-term value.”

Palm is undergoing a reorganization that began last year, and Colligan pointed to the success of the company’s $99 Centro phone as a sign of success. About 833,000 were sold in the third quarter.

“As we continue to increase Centro volume and rebuild our product line at the high end, we expect to see a shift back to higher margins and a return to sustained profitability,” he said. “The Centro has played a critical role in moving our transformational efforts along at a fast pace.”

Excluding one-time items, the Sunnyvale, Calif.-based company lost $17 million, or 16 cents per share, down from the profit of $16.5 million, or 16 cents per share, it reported a year earlier. Revenue was $312.1 million, down from $410.5 million in the year-ago period.

On that same basis, analysts polled by Thomson Financial expected Palm to report a loss of 14 cents per share on $315.3 million in revenue.

Palm laid off 86 people in California last December, according to public records filed with California’s Employment Development Department.

Palm’s stock closed Thursday at $4.72, up 17 cents, or 3.7 percent. The stock fell 18 cents, or 3.8 percent, in after-hours trading following the release of Palm’s results.

The company has said it would stop providing specific guidance for future performance, but Colligan indicated rough times ahead.

“This quarter is going to continue to be a tough quarter relative to top-line pressure,” Colligan said in the conference call. “We’re not going to return to profitability next quarter. There’s a high probability of that.”

Colligan said he expects the company to turn around in the first quarter of fiscal 2009.

“That will be a combination of having been more fully distributed in Centros and Centro momentum and getting those Windows Mobile products into the mix,” he said.

The company is in the process of developing a new Linux-based operating system that will be compatible with Windows Mobile.

Competition from Motorola, Samsung and Apple’s iPhone is one of Palm’s top challenges, Citigroup analyst Jim Suva said in a research note published Thursday.

“We believe Palm is facing numerous challenges, including increased competition due to new entrants into the smart phone, which we believe could impact unit sales” and prices, Suva said.

He noted that many smart phone makers have already sold at least 1 million of their latest models.

NEW YORK/LOS ANGELES (Reuters) - DISH Network Corp's (DISH.O) surprise win of wireless airwaves in an auction may be the first step toward building a mobile television service or a bet on a scarce commodity by CEO Charlie Ergen, analysts said on Thursday.

The second largest U.S. satellite television company spent some $711 million for a nearly national block of licenses with one-way communication capability, according to U.S. regulators.

Wireless telephone companies snapped up most of the spectrum in the $19 billion Federal Communication Commission auction of airwaves being vacated by television broadcasters moving to digital formats.

DISH's spectrum would be difficult to use for two-way

communication, such as on mobile phones and data devices. But such devices could receive communication sent over those

airwaves — such as television.

“That spectrum is best suited for broadcast. The assumption you'd make is that they'd set up some sort of mobile TV service,” said Pacific Crest Securities analyst Steve Clement.

The spectrum is adjacent to mobile video broadcast airwaves owned by Qualcomm Inc's (QCOM.O) Mediaflow broadcast unit. “It makes more sense for one provider to operate both pieces of spectrum,” said Clement, but he declined to speculate on whether a deal might happen between DISH and Qualcomm.

Citi analyst Jason Bazinet in a note agreed that DISH was probably focused on building a wireless video network and would need to pay some $3 billion to $5 billion to build the network.

DISH, which won the spectrum through partner Frontier Wireless, declined to comment. But Bazinet pointed out that DISH in a February annual filing said, “We may make investments in or partner with others to expand our business into mobile and portable video, data and voice services.”

A mobile TV network would cut cash-flow near term, raise long-term growth prospects, and decrease the chance of a takeover by AT&T Inc (T.N), he said.

But Kaufman Bros. analyst Todd Mitchell said the plans weren't clear — beyond the fact that industry maverick Ergen was getting hold of a limited resource that one way or another was likely to increase in value.

“This is quintessential Charlie Ergen,” he said. “It's like there's a road and you don't know where they're going to put the exit ramp but you acquire the property next to the road anyway.”

Shares of DISH rose 2 percent on Nasdaq to close at $28.62.

(Reporting by Sinead Carew and Peter Henderson; editing by Carol Bishopric)

Linksys will offer Trend Micro's ProtectLink Gateway to help smaller businesses ward off spam, phishing, and viruses, while allowing control over what sites are visiting, including blocking of known unsafe sites.

The subscription service, which costs $149.99 per year for five users or $614.99 per year for 25 users, examines incoming email for typical problems, such as spam, phishing messages, spyware, viruses, and other malicious content. Trend Micro also maintains databases of known malicious sites that could otherwise install malware, and blocks access. Businesses can also choose custom filters for restricting access.

Linksys will pair the service as a built-in option on several of its routers, starting with their 10/100 4-Port VPN Router (RV042, $184.99), a router designed to connect securely to remote offices or a central office, and which features a fall-back network connection. The company said they'll add support later for their Ethernet-only and Wi-Fi Wireless-N gigabit Ethernet routers with VPN.

A blog isn't just a welcome vehicle for journalists to escape the editor's red pen or for teens to wax poetic about their latest crush. They can also be a great tool for promoting your business.

Whether it's computer security, San Francisco real estate or pretty much any other business venture under the sun, some of the best info you can find comes from pros who write their own blogs. Namely, people who can apply expert analysis and commentary to the latest trends and practices in their sector, and do just that in a blog format.

Whatever your business, odds are that you've had to become an industry expert in your field as well. And if you share that expertise on a blog, you'll help build trust in your brand as you show you know your business. You'll also put a personal face on your company.

And it's easy. Free sites like blogger.com or wordpress.com get you up and running with your own online soapbox in minutes, and you can even choose a blog URL that incorporates your company name. For example, Roger Thompson of Exploit Prevention Labs has for years run a useful Internet security blog at explabs.blogspot.com. He links to it from his company Web site, and the additional name and brand recognition afforded by the blog no doubt contributed to Grisoft's recent purchase of his company.If you decide to take the digital plunge, here are a few tips for online presentation.1. Be professional, but personal. It's fine and even expected to share your opinions on a blog.

2. Avoid the hard sell. By all means mention your company and/or products in the context of industry news or commentary, but save the direct advertisements for your company site.

3. Write for the Web. Keep your sentences and paragraphs as clear and brief as possible. Most online readers will quickly abandon a page full of dense text.

AT&T has started offering the RIM BlackBerry Pearl 8120, a substantially improved replacement for the Pearl 8100. The earlier model suffered from several problems, including locating the Micro SD card slot behind the battery, which had to be removed to swap cards; a non-standard headphone jack, and EDGE-only data service.The 8120 relocated the Micro SD slot to the side of the phone for easy access, swapped in a standard 3.5 mm headset/headphone jack for the 2.5 mm one found in the 8100, and added Wi-Fi as a connection option. The new phone also ups the camera resolution from 1.3 megapixels (MP) to 2 MP.

This isn't the first Wi-Fi enabled BlackBerry sold, but it's the first model in the U.S. that's in the compact Pearl form factor, instead of the wider original BlackBerry shape, to include Wi-Fi for connections. The phone is still EDGE only, offering speeds of 100 to 200 Kbps downstream and far less upstream.

AT&T offers the Blackberry Pearl 8120 for $199.99 with a two-year service contract, but that requires a minimum $39.99 per month voice contract and the $30 per month unlimited personal or $45 per month unlimited cororate data plans. Rates can be higher for data depending on services. Push To Talk (PTT) is supported and requires an extra $9.99 a month fee.

SAN FRANCISCO (AFP) - US telecom giants Verizon Wireless and AT&T took home the big prizes in a record-setting US wireless spectrum auction while Google got the open access it eagerly craves.

The 700 MHz band currently carries standard television broadcasts, and will be freed up when stations switch to all-digital broadcasting after February 17, 2009.

The spectrum is poised to become a conduit for high-speed telecommunications and Internet services delivered to mobile devices across the United States.

Carriers like the spectrum because signals travel long distances and penetrate buildings better than parts of the radio frequency spectrum they are now allowed to use.

Verizon bid 9.4 billion dollars for most of the licenses in the prime 700 MHz radio spectrum. AT&T won most of the regional licenses with bids totaling 6.6 billion dollars.

Meanwhile, Google's top bid barely surpassed the 4.6-billion-dollar minimum requirement but the online search king won what it really wanted by making certain that spectrum owners can't block out Internet or telecom rivals.

“Although Google didn't pick up any spectrum licenses, the auction produced a major victory for American consumers,” Google lawyers Richard Whitt and Joseph Faber said in a written response to an AFP inquiry.

“We congratulate the winners and look forward to a more open wireless world.”

Google insisted the FCC make open-access a condition of sale in the coveted “C-block” of the spectrum before it signed on as a bidder.

By barely bidding more than the minimum, Google managed to pay nothing while insuring that companies whose life blood is the Internet will be able to offer high-speed services to mobile devices on the spectrum.

“We don't necessarily have to have our own spectrum,” Google co-founder Serge Brin said in an interview prior to the auction.

Google's aim was to make certain people can freely connect with the entire range of mobile telephone and Internet service providers via the spectrum, executives said.

Before the auction, Google chief executive Eric Schmidt assured reporters the California firm had no intentions to buy the spectrum, “build a network and put all these mobile devices out there.”

“Wouldn't it be better if all these other companies do that and we just sit back and reap a benefit?” Schmidt said. “The auction is a tactic to an outcome and the outcome is end-user choice.”

Verizon bought all the licenses in the C-block, except for Puerto Rico, for 4.7 billion dollars.

“We were successful in achieving the spectrum depth we need to continue to grow our business and data revenues … and to continue to lead in data services and help us satisfy the next wave of services and consumer electronics devices,” Verizon Wireless, which is owned by Verizon Communications and Vodafone Group, said in a statement.

The new rules mark a revolution in the US cellphone industry, where customers have largely been tied exclusively to their operators' handsets and applications.

“The locked nature of mobile phones really slows down innovation in the US market with respect to mobile” Brin said in the interview.

“In comparison, Europe is really quite ahead and typically doesn't have the phone locked to the network. We want to do as much as possible to make that happen.”

The FCC raised a record 19.6 billion dollars in 261 rounds of bidding. There were 101 winners among 214 bidders.

“As a result of the auction, consumers whose devices use the C-block of spectrum soon will be able to use any wireless device they wish, and download to their devices any applications and content they wish,” Whitt and Faber said.

“Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices.”

AT&T, the nation's largest telecom, won the bulk of the B-block licenses.

The D-block, which requires the buyer to work with authorities and set aside airwaves for public-safety and emergency uses, went unsold.

SAN FRANCISCO - Losing the battle for a prized piece of the airwaves isn’t necessarily a setback for Google Inc.

If anything, Thursday’s news that Verizon Wireless had won the government-run auction for a pivotal swath of spectrum may even have been the ideal outcome for Google.

That’s because investors no longer have to fret about Google straying from its main business of Internet search to spend more than $10 billion buying and building a wireless network.

Yet Google still positioned itself to profit from the newly available airwaves by ensuring the bids for the so-called “C block” escalated to $4.6 billion. Reaching that price triggered a provision that requires the new wireless network to accommodate all mobile devices, including equipment using a software package called “Android” that is supposed to give Google a better opportunity to sell more advertising.

Verizon bid a total of $4.74 billion to win most of the C block, which Google hopes will make it easier for consumers to access its search engine and other products on “smart” phones and other mobile devices.

Google arguably would have been in an even better position in the mobile market if it controlled its own wireless network, especially one with the potential power the C block figures to offer. The 700 megahertz spectrum, to become available in February 2009, is expected to provide better wireless access because the frequencies travel long distances and easily penetrate walls.

But the time and money that would have had to be invested in the C block probably would have represented another millstone on Google’s sagging market value, which has already plunged by $80 billion, or 37 percent, so far this year.

And any further erosion in Google’s stock price would threaten to depress employee morale because virtually all of its nearly 17,000 workers own shares in the Mountain View-based company. Google shares gained $1.55 to finish Thursday at $433.55.

In a statement, Google congratulated Verizon and described the outcome as a consumer victory. “Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices,” wrote Google lawyers Richard Whitt and Joseph Faber.

“Google has plenty of other things on its plate right now,” said analyst Marianne Wolk of the Susquehanna Financial Group. “This (wireless network) would have been a ‘nice-to-have,” but it’s certainly not a ‘must have.’”

The stalled U.S. economy is a more pressing concern for Google right now.

With most key indicators pointing to a downturn in consumer spending, investors have become increasingly concerned that Google’s once-torrid earnings growth will cool off as advertisers trim their budgets.

Google management also figures to have its hands full trying to blend in a recently acquired online ad service, DoubleClick Inc., that cost $3.2 billion — by far the biggest deal in the company’s 9 1/2-year history.

Meanwhile, rival Microsoft Corp. is hoping to challenge Google’s dominance of Internet search and advertising by buying Yahoo Inc. for more than $40 billion.

Although it’s expected to become a gold mine eventually, the mobile advertising market remains relatively small at somewhere between $1 billion to $1.5 billion in the United States. Wolk predicts U.S spending on mobile ads will reach $3 billion by 2011. Last year, Google’s U.S. revenue totaled $8.7 billion, with most of the money coming from ads viewed on computers.

SAN JOSE, Calif. - Palm Inc., which makes the Treo smart phone, fell short of Wall Street expectations Thursday as it reported a 24 percent drop in third-quarter revenue.

The company lost $31.5 million, or 30 cents per share, compared to a profit of $11.8 million, or 11 cents per share in the year-ago period.

Chief Executive Ed Colligan said Palm’s reorganization is working, however, and emphasized success in sales of its $99 Centro smart phone. Palm sold 833,000 Centros in the quarter.

“We’ve come through a tough quarter and continue to have a lot of work ahead of us,” Colligan said in a conference call with investors. “But I am more confident than ever that we are on the right track to build long-term value.”

Revenue for the fiscal third quarter was $312.1 million, compared to $410.5 million a year earlier. Excluding one-time items, the Sunnyvale, Calif.-based company lost $17 million, or 16 cents per share.

On that same basis, analysts polled by Thomson Financial expected Palm to report a loss of 14 cents per share on $315.3 million in revenue. Excluding one-time items in the third quarter a year ago, Palm earned $16.5 million or 16 cents per share.

Palm laid off 86 people in California last December, according to public records filed with California’s Employment Development Department.

It also has struggled against stiffening competition over the past year, and missteps, including product delays, have compounded its problems.

Elevation Partners, a private equity firm, bought a 25 percent stake in Palm last year.

Palm’s stock, which closed Thursday at $4.72, up 17 cents, less than 4 percent. In after-hours trading after the earnings report was released, it dipped to $4.62.

The company has said it would stop providing guidance on future earnings.

PORTLAND, Maine - At first, it sounded like another in a long line of credit card breaches: Up to 4.2 million account numbers were stolen by thieves who cracked computers at Hannaford Bros. Co., an Eastern supermarket chain.

But the specifics of the crime, revealed this week, included some troubling twists that might expose big holes in the payment industry’s security standards.

For one thing, Hannaford said this sensitive data were exposed when shoppers swiped their cards at checkout line machines and the information was transmitted to banks for approval.

While thieves have commonly pilfered payment card data sitting in databases maintained by merchants or card processors, the Hannaford episode appears to represent a new line of attack: the first large-scale piracy of card data while the information was in transit.

“Catching data on the move is a bit more challenging,” said Aaron Bills, chief operating officer at 3Delta Systems Inc., a transaction processing firm in Chantilly, Va. He compared it to robbing a truckload of merchandise: It’s easier when the vehicle is parked than when it’s zooming down a highway.

Another intriguing facet is that Hannaford was found — while the hack was still going on last month — to be in compliance with the security standards required by the Payment Card Industry, a coalition founded by credit card companies.

The PCI group sets rules governing such issues as how employees should be screened and precautions against hackers, but it does not audit companies like Hannaford to ensure compliance. That is performed by outside assessors. The identity of Hannaford’s auditor was not disclosed.

The fact that Hannaford could be considered up to snuff and yet still be vulnerable to a big heist raised questions about whether other merchants — and by extension, their customers — are falsely confident about their security. Already the PCI standards have been tightened in recent years, after such massive data breaches as the one in 2005 at CardSystems Solutions Inc., a payment processor.

David Navetta, president of InfoSecCompliance LLC, a Denver law firm that concentrates on computer security and regulatory compliance, argues that Hannaford and its assessor may have been tripped up by ambiguity in the PCI standards about when companies must encrypt payment data to cloak it from outsiders.

In particular, the standards require companies to encrypt data that travels over computer networks “that are easy and common for a hacker to intercept.” Whether certain internal networks are “easy and common” to crack is a matter of judgment, so Navetta believes Hannaford may have erroneously felt safe leaving data unencrypted in a spot that turned out to be vulnerable.

Hannaford would not discuss specifics of its security system, so it was unclear to what extent its stores encrypted payment data throughout the transmission process.

Wider use of encryption might seem an obvious answer. Because it’s so difficult to detect when information is being stolen while in transit, companies “need to wake up to the fact that they need to encrypt information along every step,” said Richard Gorman, CEO of Vormetric Corp., a data security firm in Santa Clara, Calif.

But in practice, encryption often goes unused at certain points in a data-processing chain because the computing power it requires can slow down transactions, especially on older hardware.

“Would you like to sit at your gas pump for five minutes to get an authorization?” said Avivah Litan, a security analyst at Gartner Inc.

Litan believes that the PCI standards are strong and clear enough, but that Hannaford’s assessor failed to properly test where the stores’ network was open to intrusion. Or it might have overlooked the threat from insiders such as contractors with access to key systems. Likely, she said, the auditors placed “too much focus on data at rest and not enough on who can see data in transit.”

Litan argues that the biggest lesson is that the banking industry needs to make it harder for thieves to put stolen credit card data to use. Requiring PINs on credit card transactions, she said, “would remove 75 to 90 percent of the fraud in the system.”

The attack on Hannaford stores in the Northeast and its affiliated Sweetbay outlets in Florida revealed 4.2 million card numbers between Dec. 7 and March 10. Apparently about 1,800 cards have been used fraudulently. The U.S. Secret Service is investigating.

In the biggest such data theft, thieves busted the central database of TJX Cos., parent of the T.J. Maxx and Marshalls retail chains. The thieves took information tied to at least 45 million credit and debit cards, and are believed to have gotten the information that gave them undetected access to TJX’s database by intercepting wireless signals in two Marshalls stores.

Hannaford doesn’t store credit card information in its databases and uses a wired network to transfer information, said spokeswoman Carol Eleazer. Hannaford is still trying to figure out, she said, how its thefts occurred.

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AP Technology Writer Brian Bergstein reported from Boston.