(05-16) 04:00 PDT New York —

Comcast Corp.’s interference with Internet traffic has prompted a federal investigation and is at the center of calls for network neutrality laws, but another U.S. cable company appears to be doing the same thing without drawing scrutiny.

A study released Thursday found conclusive signs that file-sharing attempts by subscribers of Cox Communications were blocked, along with customers at Comcast.

Of the 788 Comcast subscribers who participated in the study, 62 percent had their connections blocked. At Cox, 54 percent of subscribers examined were blocked, according to Krishna Gummadi at the Max Planck Institute for Software Systems in Saarbruecken, Germany. The institute examined the network connections of 8,175 Internet subscribers around the world.

Comcast is the country’s second-largest Internet service provider, with 14.1 million subscribers. Cox is the fourth-largest, with 3.8 million; it is part of privately held Cox Enterprises Inc.

Comcast’s practice of interfering with traffic was brought to light by user reports last year and confirmed by an Associated Press investigation in October.

Consumer advocacy groups and legal scholars criticized the interference, saying that letting a service provider selectively block some connections makes it a gatekeeper to the Internet, violating the network’s open principles. Their complaints prompted the Federal Communications Commission to start an investigation, which is ongoing.

Legislation also has been introduced in Congress to guarantee net neutrality, or equal treatment of traffic by Internet service providers.

“This research proves beyond a shadow of a doubt that consumers, Congress and the FCC must urgently pursue the complaints against network providers,” said Ben Scott, policy director of Free Press, one of the groups that urged the FCC to fine Comcast.

File-sharing programs like BitTorrent, which let people exchange documents, songs, movies and other content, can be heavy users of Internet bandwidth.

Comcast maintains that hampering such programs helps ensure that traffic other than file sharing is not impeded by a few big users. The company says that it is delaying file transfers rather than blocking them. Even that will end later this year, Comcast said in March, as it pledged to stop the practice.

At least since 2006, Cox’s subscriber agreement has noted that the company engages in “protocol filtering,” which means it treats different types of Internet traffic, like Web surfing, e-mail and file sharing, differently.

Cox said Thursday that it takes such steps “to ensure the best possible online experience for our customers.” But Cox denied that protocol filtering amounts to discrimination of any specific services.

The blocking observed by Gummadi’s group occurs when a subscriber has downloaded a file using the BitTorrent application and tries to upload it, or share it with others, over the Internet. The main victims are the other Internet subscribers, who will not be able to download a file if a complete version is not available from someone else’s computer.

Persistent attempts by file-sharing software to get through an Internet service provider’s filtering may succeed after several minutes, as experienced in the Associated Press test last year. But Gummadi’s test did not look at the duration of the traffic blocks.

Gummadi found signs of interference at seven other U.S. Internet providers, all of them cable companies.

HONG KONG: Anthony del Rosario, who crews an oil tanker plying the route between the Middle East and South Korea, is sending home less money to his family in the Philippines. Takeshi Okada, a shoe manufacturer in Japan, is concerned about the possibility of declining export sales.

And Brenton Fry, who heads the import-export operation of an old Australian winemaker, Yalumba, is fighting to hold down retail prices for wine sold in the United States by cutting profit margins.

All three have a common worry: The sliding value of the U.S. dollar against most global currencies is putting them under increasing financial pressure.

The decline in the buying power of the dollar is, according to economic analysts, only a high-profile symptom of the economic slowdown and credit crunch in the United States. But for many businesses and workers who once regarded themselves as lucky to be paid in dollars or dollar-linked currencies, the depreciating U.S. currency is a sure sign of tougher economic times ahead in Asia and globally.

“The dollar is a very visible financial variable,” said Duncan Wooldridge, chief Asian economist at UBS in Hong Kong. “But the underlying problem is that the U.S. is going to be working through some of the excesses it built up in recent years, and that is just going to mean less demand for Asian exports than we have grown accustomed to.”

The dollar - in general decline for much of this decade - has fallen nearly 12 percent against the yen and 6 percent against the euro just since the beginning of this year.

The pain is felt well beyond Asia. President Nicolas Sarkozy of France said Wednesday that he wanted to work with Britain to press U.S. policy makers to put an end to the dollars decline.

“Cant we weigh together on our American friends so that the dollar recovers?” Sarkozy said in an interview with BBC, according to a transcript of the interview given to reporters by his press office.

Companies like European Aeronautic Defense Space are cutting jobs and relocating production abroad to offset the competitive disadvantage of selling goods in foreign markets.

On Wednesday, the dollar traded at 99.45, a bit stronger than recent 13-year lows. The euro was also at $1.5709, slightly below a record high.

The real problem for many exporters is a likely U.S. recession, but the “weak dollar makes those goods more difficult to sell into the U.S. market, so it amplifies the downturn,” said Wooldridge.

For Misuzu, a maker of womens shoes based in Tokyo that employs about 175 people, the strength of the yen against the dollar threatens to eat into export sales in Taiwan and China because the shoemakers transactions with those countries are conducted in dollars. When those sales are converted back into yen, Misuzu has fewer yen than it would if the dollar were strong.

“I am very concerned about what effect the weaker dollar will have on our overseas sales,” said Okada, a merchandiser with Misuzu. “It could take a few months before we know, but everything depends on our customers, and we will have to wait and see.”

Deepening Misuzus woes is the rising price of crude oil. High oil prices are forcing up the cost of petrochemical products, which make up about 90 percent of the materials used in Misuzus line of shoes.

Despite having limited price increases to less than a third of the product line and capped them at about 10 percent, Misuzu is likely to be one of many Asian exporters to face declining sales in the coming months.

Weaker consumer demand in both the United States and Europe is forecast by economists to significantly reduce Asian export volumes and slow the pace of regional growth. A forecast by Deutsche Bank that growth will slip from an average of 9.2 percent in 12 Asian economies in 2007 to 7.7 percent in 2008 is typical of the view among private sector economists.

But Michael Spencer, Deutsche Banks chief economist for Asia in Hong Kong, said the declining dollar will have little impact on the competitiveness of Asian exporters.

“The dollar is not in itself going to influence exports in Asia,” he said.

“The main thing is that real income growth in the U.S. is slowing down.” Fierce competition among Asian exporters has been forcing them to find production savings and steadily reduce the dollar prices of exports to the United States since 1994, Spencer argued. European companies have been doing the same as the euro rises.

HONG KONG: Chinese government suggestions that it may allow mainland insurance companies to invest in property could unleash billions of dollars in deals for commercial buildings and embolden developers and foreign investors who want a more active market.

Property investment typically gives insurers the steady income they need to balance long-term liabilities.

But Beijing wants to cool property prices, particularly in a housing sector fueled by an influx of eight million people into cities each year, so it has been wary about giving the green light to the prospective new players.

A slump of over 40 percent in the Shanghai stock market since a peak in October, however, has instilled a sense of urgency, with regulators realizing that insurance companies, flush with $300 billion for investment, need to diversify risk beyond stocks, bonds and deposits.

Yuan Li, a top executive at the China Insurance Regulatory Commission, told a news briefing Wednesday that the authority was studying the possibility of allowing insurers to expand investment into infrastructure and property but gave no time frame.

Such a move could put as much as $30 to 40 billion in investment into Chinese commercial property, said Stuart Leckie, an actuary and Chinese pensions expert who heads the advisory firm Stirling Financial.

“Its not going to happen this week or this month, but maybe over the next five years,” Leckie said, adding that his estimate was based on global industry norms of portfolio allocations of 10 to 15 percent to property.

Mainland Chinese insurers have long been property investors on the sly - taking advantage of being allowed to own their own headquarters and branch offices, but leasing out a lot of the space.

Top-notch offices in Shanghai and Beijing give an annual rental yield of about 8 percent, compared to 3 percent in Tokyo and 4 percent in Hong Kong.

Some insurers, though still technically barred from investing in property, are already getting a nod for specific projects.

The industry leader, China Life Insurance, owns 20 percent of the Oriental Plaza shopping, office and apartment complex in Beijing.

The second-biggest life insurer, Ping An Insurance Group, entered a $127 million joint venture in 2006 to build shopping centers anchored by Wal-Mart Stores.

Big investment by insurers would benefit developers of commercial properties like Guangzhou RF Properties and the Hong Kong developers Sun Hung Kai Properties and Cheung Kong.

It would also encourage foreign investors lured by fast economic growth in China, but who need to know that domestic funds can buy their buildings when it is time to exit and take profits.

“Its certainly going to create more liquidity, but it also creates more competition for foreign players,” said David Dudley, regional capital markets director for the consultants Jones Lang LaSalle in Hong Kong.

Because of a scarcity of big property investors in China, many office and retail buildings are sold by “strata” with buyers taking individual floors, complicating any sale of a whole block.

China has an estimated $678 billion worth of investment-grade property, compared to $1.3 trillion in Japan, according to UBS, and has drawn property funds run by Morgan Stanley, ING and Deutsche Bank.

Beijing is putting up more barriers to foreign property investors, including requirements for the creation of an onshore company and ministerial approval for deals. Newcomers to the market could try to team up with Chinese insurers, analysts say.

Such a deal was struck last year by the property fund manager Aetos Capital, which hired China Life to source deals as a possible precursor to a full-scale tie-up on building purchases.

For other companies, watch the New America Report.

In America these days, it’s getting harder and harder to get away from a TV screen. Whether you’re waiting for a haircut, buying groceries or pumping gas, you may well have video accompaniment.

But when it comes to TV in public places, the U.S. is just catching up with China.

According to Susquehanna Financial Group, almost 17% of Chinese ad spending goes to outdoor media, compared with just 3.5% in the U.S. Some of that goes to more familiar venues like billboards and bus banners. But digital screens also turn up in the unlikeliest of places.

Previous Ad Media

In the last few years, the U.S. stock markets have greeted several Chinese firms specializing entirely in out-of-home TV advertising networks.

First came Focus Media, () which puts the screens in retail stores and commercial buildings. Then came AirMedia, () purveyor of airport video. And now VisionChina Media, () which came out in December, snares an even more captive audience: bus riders.

Although unique in the U.S. market, VisionChina is one of several firms providing TV to China’s jam-packed public transit. But Chief Financial Officer Dina Liu says that unlike its rivals, it offers real-time content rather than recorded DVDs. This lets VisionChina provide news and sports coverage live.

Sports coverage will ramp up this summer as the Olympic Games roll into Beijing. VisionChina will offer special Olympic packages on its screens, including real-time updates such as medal counts.

“During the Olympic period, most people will be encouraged to take buses and subways to the Olympic stadiums,” said Liu. “On our buses and subways, people are going to be able to watch the Olympics.”

Such differences matter, because the industry is a turf war. Providers make contracts with local transit systems for four to 12 years and aim to make exclusive deals.

VisionChina now has contracts in 16 cities, about half of them exclusive. All are among the 20 richest cities in China, says Liu. It added two of these Shenyang and Taiyuan in the first quarter. In April, it also contracted with Guangzhou’s subway service, making Guangzhou the first city where VisionChina operates both above and below ground.

In a Jan. 23 research report on the sector, Susquehanna Financial analysts described the “Bei-Shang-Guang-Shen” effect.

“When a new digital media network operator has obtained coverage of Beijing, Shanghai, Guangzhou and Shenzhen (Bei-Shang-Guang-Shen) cities, it means a creation of a critical mass that makes the entire network a lot more valuable than individual cities combined,” they wrote. “While short of third-party stats, we have been told by people in the industry that more than 50% of ad dollars in China are spent in these four cities.”

VisionChina is in all of those cities except one: Shanghai. Susquehanna says the fact that another company, Oriental Pearl, controls the Shanghai bus market is an “investment concern” for VisionChina. Liu admitted that Shanghai is the firm’s “only missing piece.”

For all the geographic battles, the actual income for outdoor TV providers comes from advertising. Once a provider has installed the screens, it can lure advertisers with viewer demographics.

“Passengers can watch news in the morning when they are traveling to work,” said Liu. “In the afternoon, when kids are traveling home from school, we play cartoons on the networks. This really gives us the ability to reach a target audience for advertisers.”

VisionChina had 381 advertising clients at the end of the first quarter, up from 300 at the end of 2007. The three biggest ad categories are medicine, household goods, and food and beverages. Financial services, restaurants, clothing, travel and other mass consumer items also get pitched to VisionChina’s audience.

In the conference call on first-quarter results, Chief Executive Limin Li said the company has hired a third-party research group to gather data on the network’s effectiveness. Through an interpreter, Li said the data should “enhance advertisers’ understanding of nontraditional media, compared with traditional TV.”

And, presumably, persuade them to allocate more money to it.

Earnings Report

VisionChina reported a strong first quarter, with sales jumping more than 300% to $13.6 million. Profit was 7 cents a share, compared with a 1-cent loss a year earlier.

The results pushed the stock to a new high above 16 as it continued to rebound from its weak start after the Dec. 6 IPO. After pricing at 8, shares were trading below 6 by late January. But since then, VisionChina has steadily gained even as its two Nasdaq rivals have stumbled.

Li said his firm aims to be in 20 cities by the end of the year. The longer-term goal is to get into all of China’s top 30 metropolises.

The firm is also actively looking for strategic buyouts. Liu says the company seeks “complementary networks” within the same public-transit video field.

Analysts foresee more growth from VisionChina, though naturally it will cool down from its current ramp-up phase. Those polled by Thomson Reuters expect profit to rise 241% this year to 58 cents a share, with 45% growth next year and 27% in 2010.

For other companies, watch the New America Report.

With oil prices soaring, the major energy outfits are willing to spend big bucks searching for new sources of supply in deep waters.

The daily rate that operators pay to rent a high-end, deep-water drilling rig is $500,000 to $550,000. That’s up from a day rate of $450,000 to $500,000 a year ago.

“These companies are spending $1 million every two days to rent these rigs,” said Dan Pickering, director of research at Tudor, Pickering, Holt & Co., an energy investment and merchant banking boutique. “That’s a lot of dough.”

As oil prices surged to record levels, major players have the incentive and the means to invest in deep-water drilling.

Move To Deep Water

The push into deep water comes as the oil and gas companies are having a tougher time winning projects around the world in places like Russia and Malaysia than a year or two ago, says Pickering.

At the same time, players are better at identifying and successfully producing in high-water depths.

Offshore drilling contractor Noble Corp. () is cashing in. The company performs contract drilling services with a fleet of 62 mobile offshore rigs. Most are deployed overseas in the Middle East, the North Sea, Brazil and West Africa.

Its fleet includes 43 self-elevating mobile offshore drilling platforms, or jack-up rigs, which can drill in water 150 to 400 feet deep.

It has 16 deep-water floating rigs, which can drill in water up to 10,000 feet deep.

Executives weren’t available for comment, but its fastest-growing area is the market for deep-water rigs that drill in depths of 5,000 feet or more, says Pickering.

Overall, industrywide demand for deep-water rigs is high amid tight supply.

According to industry data, the 42 deep-water rigs under construction and slated for delivery in 2008 and 2009 are all under contract, William Hoffman, Noble’s vice president of marketing, said in a conference call.

For its part, Noble has only three deep-water rigs available before Jan. 1, 2010.

“The market for deep-water drilling rigs globally is undersupplied, which leads to significant pricing power of deep-water assets,” said analyst Kurt Hallead of RBC Capital Markets.

In the first quarter, the average day rate for Noble’s deep-water rigs that drill in water depths of over 6,000 feet rose 12% from the prior year to $291,924 per day.

Since Noble has some contracts inked in 2003 and 2004, the first quarter’s average day rate includes rates that are much lower than current levels, where deep-water rigs are being contracted for $500,000 a day or more, says Pickering.

For instance, in the first quarter, one of Noble’s deep-water rigs received a two-year contract from Shell () at a day rate of $505,000. The contract starts in 2009.

Like many of its peers in the booming energy sector, Noble has seen strong growth.

Earnings climbed for nine straight quarters by at least 54%, and sales by at least 33%.

“Noble is in the right place at the right time with the right assets,” said Pickering.

Noble has a fleet of rigs capable of drilling in varied water depths from 150 feet to 10,000 feet deep.

In the first quarter, earnings climbed 54% from the prior year to $1.43 a share. Sales rose 33% to $861.4 million.

Results were buoyed by increased day rates on several units and attention to cost control, said Chief Executive David Williams in a statement.

“They exceeded my expectations and the consensus,” said Hallead. “The primary differential was lower operating costs.”

The biggest driver of Noble’s better-than-expected performance was lower spending on repairs and maintenance, Chief Financial Officer Thomas Mitchell said in a conference call.

Noble stands to get a nice boost from its growing backlog. During the quarter, it added almost $5 billion in potential revenue backlog.

The company has commitments on eight deep-water rigs for multiyear terms, starting as late as 2010.

In March, Noble said it received a memorandum of understanding for contracts on five deep-water rigs currently in Brazil.

The soft spot is the jack-up market, where pricing has been weak, says Hallead. The day rate for jack-up rigs operating outside the Gulf of Mexico has slipped to $130,000 to $174,000 per day from $160,000 to $200,000 a year ago, he says.

Jack-Up Rates

Hallead says day rates for renting jack-up rigs have come down because there’s been a big increase of new jack-up rigs delivered to the market that have no specific contract.

“The customer is willing to wait and is in no rush to start a drilling program because they know there’s additional capacity in the market,” he said. “And they’re using that added capacity as a lever to negotiate better prices.”

Despite the softness on the jack-up side, watchers expect Noble to keep up its momentum. Analysts polled by Thomson Reuters expect earnings to rise 32% to $6.00 a share in 2008, then 19% in 2009.

“The environment for pricing for deep-water rigs looks very good, and for jack-ups it looks stable,” said Pickering. “Generally, I think the deep-water side is clearly the excitement for the company now. That’s going to be the driver of the earnings growth.”

He figures more than 60% of Noble’s 2009 earnings will stem from the deep-water side of its business.