Sony tries to save face with 'Interview' flip-flop

ATLANTA — Sony's flip-flop on releasing "The Interview" shows the studio is working furiously to try to chart the right course through political and public-opinion minefields.

Although analysts don't believe the decision will have any effect on Sony's image, it will at least give the movie-going public a chance to vote with their wallets and send North Korea a protest message.

Last week, Sony canceled the Christmas Day release of "The Interview" in the wake of an extensive hacking attack and release of confidential emails by a group linked with North Korea. The movie stars Seth Rogen and James Franco as journalists tasked by the CIA with killing North Korean leader Kim Jong Un. The hackers threatened violence if Sony didn't pull the movie. Sony did so after major theater chains decided not to screen it.

But the company then wavered in the face of public outcry and criticism from President Barack Obama. On Tuesday, Sony Entertainment CEO Michael Lynton said Seth Rogen's North Korea farce "will be in a number of theaters on Christmas Day."

The film is set to open in over 200 theaters, down from an original release planned in 3,000. Atlanta's Plaza Theater and 16 theaters that are part of the Alamo Drafthouse chain in Texas are among those that plan to show it.

Lynton said Sony also is continuing its efforts to release the movie in more theaters and through more platforms — namely digital channels, such as Internet streaming or video on demand on cable systems. But Sony isn't offering specifics. Starz, which has first pay TV and streaming rights to Sony releases, didn't respond to requests for comment. Streaming service Netflix declined comment, while YouTube didn't respond to requests.

Plaza Theater owner Michael Furlinger said he was thrilled to be showing the movie. He canceled plans to fly to Long Island, New York, to see his parents for the holidays.

"We play a lot of controversial pictures, things I don't necessarily agree with, but I will never censor them," he said. "It's not for me to decide. It's for the customer to decide. If they want to come, they'll spend their money. If they don't, that's their choice. It should not be the choice of somebody from North Korea or China or anywhere else."

Atlanta Police spokesman Sgt. Greg Lyon said police will monitor the location for potential threats, but he wouldn't discuss specifics. Furlinger said the theater will take some precautions, though he said he wasn't worried about the threats.

If anything, the controversy has raised awareness about the movie. Although fewer theaters are showing it, those theaters might be more packed than they would have been otherwise.

Anthony LoRusso, 54, of Atlanta, thought the premise of the movie was "silly" and initially planned to wait for the DVD. Now, he plans to see it at The Plaza.

Colby Cohen, 29, of Atlanta said he probably would have seen it anyway, but the brief cancellation made him want to see it more.

"I'm going to get to fight terrorism on Christmas Day now," he said.

Because Sony has been wavering on its release of "The Interview" since last week, deciding to release it after all should not have a major effect on its image. Laura Ries, president of Atlanta-based branding consulting company Ries & Ries, said most moviegoers don't tie movies with the studio that makes them in the first place.

If Sony ends up expanding the theatrical release and sells the movie through digital channels, it could end up recouping some of its box offices losses. Doug Stone, president of film industry newsletter Box Office Analyst, had estimated domestic box office for the movie would be $75 million to $100 million, of which Sony keeps about 55 percent. But the release is too limited so far to give Sony much of a financial bump.

Furthermore, costly damage from the email leaks to relationships and future projects cannot be recouped, and there is a threat of more leaks as Sony plans on releasing the film now.

"Panic-based decisions are not sound crisis management," said Jonathan Bernstein, president of Los Angeles-based crisis management company Bernstein Crisis Management. The studio is making decisions too quickly and could face more embarrassment if hackers leak additional documents and emails in retaliation for showing the movie, he said. He said Sony should have waited until it is sure it can protect itself.

Still, moviegoers seemed enthusiastic Tuesday. Isaac Sokol, a 21-year-old university student in the Dallas suburb of Richardson, bought two tickets for a Christmas night show at the Alamo Drafthouse theater in Richardson.

"The only way to tackle world conflicts and human rights violations and all of the dreaded things around the world is to take them with a grain of salt," he said. "If you don't, it's going to just be sadness."

The Alamo Drafthouse said many showtimes across the chain were selling out for Christmas Day, but the company did not provide specifics.

Once James Wallace, the Richardson theater's creative manager, received word Tuesday morning that the movie was back on, the theater got to work preparing for several shows. Among other touches, the theater will offer a patriotic menu featuring burgers, "freedom fries" and apple pie.

"You better believe it's going to be all-American," Wallace said.

___

AP Film Writer Jake Coyle in New York and AP writers Kathleen Foody in Atlanta, Nomaan Merchant in Dallas, Joseph Pisani in New York and Michael Liedtke in San Francisco contributed to this report.

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Record Dow, U.S. growth spurs biz, consumer hopes

Business is booming again, the economy is going "gangbusters" and there's no end in sight, as even recession-weary economists are taking heart from yesterday's record high Dow and a revised report showing the biggest quarterly growth in the U.S. in more than a decade.

"This market is on a tear. There's momentum in place that will continue. All good things are happening right now," said Christine Armstrong, a senior vice president at Morgan Stanley in Boston.

"We have kicked and clawed and scratched our way to these record highs," Armstrong said. "We don't have anything that's taking our focus away from what's a good, solid, strengthening economy that looks good in the future as well."

The Dow closed at an all time high of 18,024.17, up 0.36 percent, after the government revised gross domestic product growth in the July-September third quarter to a whopping
5 percent — the largest quarterly gain since the summer of 2003. The GDP was revised upward from 3.9 percent.

"The higher numbers instill greater consumer or business confidence to add some credence to the durability and sustainability of the recovery," said Doug Handler, chief U.S. economist for IHS Global Insight. "It was really gangbusters."

The Standard and Poor's 500 index also posted a record high — its 50th record high this year, according to Armstrong.

The third-quarter growth came on the heels of 
4.6 percent growth in the GDP in the April-June second quarter.

"The revisions were reflective of a stronger consumer, and more business investment," said Lindsay Piegza, chief economist of Stern Agee, in a research note. "In a word, wow!"

The Commerce Department yesterday also reported that consumer spending increased 0.6 percent in November, the most in three months, and income rose 0.4 percent, the biggest gain in five months. Consumer spending accounts for 70 percent of the GDP, so that increase is likely to contribute to strong economic growth in the fourth quarter.

"It's pointing to a better fourth quarter than anticipated," said Handler. "November looks like it was a really good month."

Consumer spending has been buoyed in large part by a strengthening job market and plunging gas prices. According to AAA, gas prices have fallen for 88 straight days, the longest stretch on record, and cheaper fuel has acted as an unexpected tax cut for consumers, experts said.

In its research note, IHS said third-quarter GDP did not include a bump from lower gas prices, but Armstrong sees a bright forecast for the economy in the new year.

"It continues to be a good market and we'll probably have another few good years left," she said. "We're going to be seeing these big ups and big downs. It's going to be two or three steps forward, one step back."

Sal Guatieri, senior economist at BMO Capital Markets, said he expects consumer spending to fuel economic growth of 2.6 percent in the current October-December period. Guatieri also foresees solid growth of 3.1 percent next year, which would be the best performance since the economy grew 3.3 percent in 2005.

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US economy accelerates and helps lift Dow to 18K

WASHINGTON — A surge in U.S. economic growth lifted stocks Tuesday to record highs and showed that the United States is putting distance between itself and struggling economies around the world.

Fueled by hiring gains, cheaper gas and rising confidence, consumers and businesses drove growth to a sizzling 5 percent annual rate last quarter. Though the economy is likely cooling a bit, its solid pace is brightening hopes for 2015.

The economic strength could also shape the Federal Reserve's timetable for raising interest rates from record lows.

The government's third and final estimate of growth for the July-September period was the strongest for any quarter in 11 years. The result cheered investors. The Dow Jones industrial average ended the day up about 64 points to 18,024, the first time it's surpassed 18,000.

In its report Tuesday, the government sharply upgraded third-quarter growth from its previous 3.9 percent estimate. Much of the increase came from consumer spending on health care and business spending on structures and software.

The economy has been benefiting from sinking energy prices, which have helped keep overall inflation ultra-low. Gas prices have fallen for 88 straight days, according to AAA, the longest consecutive decline on record. Cheaper gas has acted like a tax cut to free up money for Americans to spend on other items, including cars, clothes and appliances.

Last quarter's growth was the fastest since summer 2003, and it followed a 4.6 percent annual rate in the April-June quarter. The government separately reported Tuesday that in November, consumer spending rose the most in three months and income by the most in five months. Both figures brightened hopes for the 2015 economy.

"After four years of rocky recovery the U.S. economy is now hitting its stride with a notable acceleration in growth," said Gus Faucher, senior economist at PNC Financial Services Group. "Growth should remain good next year, with lower gasoline prices a big plus for consumers."

Sal Guatieri, senior economist at BMO Capital Markets, said he now expects healthy consumer spending to fuel economic growth of 2.6 percent in the current October-December period. And Guatieri foresees solid growth of 3.1 percent next year. That would be the best performance since the economy grew 3.3 percent in 2005, two years before the Great Recession began.

Since the recession officially ended in June 2009, the economy has struggled to regain full health. Five years of growth have averaged an anemic 2.2 percent.

Tuesday's figures are sure to be closely studied by the Fed. Last week, the Fed ended a policy meeting by saying it would be "patient" in deciding when to raise rates because the economy wasn't yet fully healthy. Many investors concluded that no rate hike was likely before mid-2015 at the earliest, and they drove stocks to record highs.

Unexpectedly strong expansion, though, could escalate pressure on the Fed to raise rates, even though inflation remains well below its 2 percent target. One reason the Fed has kept its benchmark short-term rate near zero since 2008 has been to try to lift inflation from excessively low levels.

The government's figures Tuesday showed that the inflation gauge the Fed most closely watches has risen just 1.2 percent over the past 12 months. Partly as a result, few analysts think Tuesday's figures will prompt the Fed to raise rates in early 2015.

"We don't see the Fed moving before June," said Doug Handler, chief economist at IHS Global Insight.

And when the Fed does begin raising rates, Handler and others think the increases will be gradual and have only a slight effect on growth.

Also on Tuesday, the University of Michigan said its index of consumer sentiment found that U.S. consumers were more optimistic about the economy than at any other point in the past eight years, buoyed by more jobs and falling gas prices.

Two other reports Tuesday were more cautionary: The government said sales of new homes fell in November, evidence that job gains have yet to boost the housing sector. And it said factory orders for long-lasting manufactured goods slumped last month.

Still, the overall U.S. economy is showing resurgent strength and separating itself from others around the world. Europe is struggling to grow. So is Brazil. Japan has slid into recession. China is straining to manage a slowdown. Russia envisions a recession next year.

Many economists think U.S. growth will continue to strengthen as more businesses grow confident enough to hire. The country is on track to have its healthiest year for job growth since 1999. In November, employers added 321,000 jobs, the sharpest one-month increase in three years.

With more people working and having money to spend, solid gains are expected in consumer spending, which accounts for about 70 percent of the economy.

For the third quarter, consumer spending grew at a 3.2 percent annual rate, the best showing this year and a full percentage point above the government's estimate a month ago. The upward revision was driven by higher spending on health care.

Business investment spending rose at a 7.2 percent annual rate, 2.1 percentage points above the government's previous estimate. Much of the new strength came from investment in structures and computer software.

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Bitcoin now available at local stores

You can now pick up some bitcoin with that bottle of soda and bag of chips at the store down the street.

LibertyX, a company that originally made and operated bitcoin vending kiosks, has expanded to let any store sell bitcoin for cash at the register, just like anything else they have in stock.

"You hand over cash, you get a code," said Kyle Powers, co-founder of LibertyX, formerly known as Liberty Teller. A cashier gives the customer a pin number, which can be redeemed for bitcoin. LibertyX is working with 2,500 stores, mostly local businesses including convenience and computer stores, across the country in the obvious places — Cambridge and San Francisco — and some less obvious, such as Lowell and Missoula, Mont.

The move away from dedicated ATMs that sell bitcoin came from overwhelming demand, Powers said.

"We had people driving for hours," Powers said. "The whole thing was to reach areas that we couldn't otherwise."

The ATMs are still operational, including the one at South Station.

"We're doing the same thing (as the ATMs), just cheaper, faster, more convenient," Powers said.

To help LibertyX expand, the company has raised a little more than $400,000 in private investment. Project 11, the venture capital firm headed by Katie Rae, Reed Sturtevant and Bob Mason, formerly of TechStars Boston, led the investment.

Powers said much has been made of bitcoin's ups and downs, but he continues to have faith in the online currency.

"Bitcoin is like gold, except the market is a thousand times younger" he said. "What we're doing is a fundamental, foundational piece of the bitcoin ecosystem."

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Florida business helps artisans from India

BOCA RATON, Fla. — As a family, the Mehtas would often travel to India and bring back crafts from artisans.

But enjoying the crafts, which are made with ancient techniques in danger of disappearing, was not enough.

"I felt we should do something about it," said Sonali Mehta-Rao, now 26, who in 2010 co-founded Mela Artisans with her father, medical-device entrepreneur Navroze Mehta.

The Boca Raton-based company sells artisans' goods in the U.S., Europe and South America, while reinvesting in the artisan communities.

Mela Artisans designs jewelry and home decor that is crafted by the artisans and then distributes the goods to stores including Bloomingdale's in Boca Raton. It also sells them directly to consumers online at www.melaartisans.com.

Products include picture frames and bowls made from buffalo bone, gold, silver and gem jewelry, silk pillow covers, cashmere shawls, embroidered bags and handcrafted trays, coasters, place mats and runners. Prices vary from around $25 to hundreds of dollars.

The company devotes 1 percent of its revenues to help sustain the artisan communities. One recent project provided safety equipment for artisans working with dust-intensive bone.

Mela's business model so impressed Aavishkaar, a Mumbai, India-based venture and private equity group, that it earlier this year invested $3 million in the company. The funds are helping Mela reach out to a wider range of artisan communities in India.

The company said it has generated enough direct income for artisans to support more than 800 individuals working full-time for two months. Those artisans typically contribute more than 50 percent of the household income.

"We're helping them generate income so they can decide their own future," Mehta-Roa said.

Last year, the company partnered with New York City designer Dipali Patwa, who is both familiar with the artisan techniques in India and has worked for American designers including Ralph Lauren and Martha Stewart.

Patwa leads a team of designers who keep on top of the trends and give the artisans design concepts. The artisans then use the techniques they know to fulfill those designs.

CEO Navroze Mehta said that combination results in a style that is contemporary while maintaining tradition.

Mehta said the private company has tripled its sales — now in the millions — since its start in 2010. Mela Artisans works with 50 groups across 10 states in India that employ 4,500 full-time artisans, of which 77 percent are women.

Every item sold comes with tag, some hand-painted, that tells a story about the artisans. The company also blogs stories about the artisans, their craft and community on its website.

"We want to give voice to our artisans," said Kirsten Gilbert, who heads marketing and sales.

Mehta-Rao grew up in Boca Raton but spent summers in India visiting her grandmother and working for an organization that helped low-income people.

While in the U.S., Sonali said she got tired of seeing crafts from India marketed "with a sad picture of a child."

Besides high-end retailers, the company's crafts are sold on specialty goods websites including OneKingsLane.com.

Fort Lauderdale resident Theresa Hickler has purchased silk and cotton pillows, silver jewelry and a handcrafted tray from Mela. "They're more unique than anything you can find shopping around," she said.

Mela's give-back philosophy also makes a difference to her. "You know you're helping keep their traditions alive," she said.

Mehta has started many South Florida medical and technology businesses including NovaVision, Dermdex, and Boca Research.

But he gets particular pleasure from working with his daughter on Mela.

While it was essential for Mela to have an operation in Manhattan, the design center of America, Mehta said he will maintain Boca Raton as the company's home because of the team he has built.

"Get talented people who know more than you" is Mehta's advice for any start-up.

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©2014 Sun Sentinel (Fort Lauderdale, Fla.)

Visit the Sun Sentinel (Fort Lauderdale, Fla.) at www.sun-sentinel.com

Distributed by Tribune Content Agency, LLC

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PHOTOS (for help with images, contact 312-222-4194):

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Topics: g000362667,g000224320,g000362686,g000065577,g000362661,g000066164

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China cracks down on environmental crimes

BEIJING — China's environmental regulators nearly doubled the number of cases they referred to police involving suspected polluters over the first three-quarters of this year compared to all of last year, amid a larger push by the government to crack down on the country's severe environmental problems, state media reported.

The official Xinhua News Agency said Tuesday that environmental agencies also penalized about 190,000 enterprises for violating environmental laws over the past two years.

In total, Xinhua said, Chinese authorities have investigated and handed down punishments in 103,707 cases over the past two years. They issued about $633 million in fines during that period.

Xinhua said environment regulators transferred 1,232 cases involving suspected environmental crimes to police over the first three-quarters of this year, compared to 706 all of last year.

Chinese authorities are under intense pressure to clean up the country's environment, with toxic air, water and soil pollution a main source of public discontent. President Xi Jinping has also pledged to stop the growth of the country's carbon emissions by 2030.

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Single-family home sales fall in Nov.

Single-family home sales fell last month while the median price rose, particularly in Greater Boston, driven by a continuing shortage of inventory, according to the Massachusetts Association of Realtors.

Statewide, the number of closed sales dropped by 6.7 percent, from 3,817 in November 2013 to 3,560 last month, while the median price increased 4.4 percent, from $316,000 to $330,000 over the same period, MAR statistics show.

Condominium sales fell even more precipitously — by 10.2 percent — from 1,494 to 1,342, but the median price increased only 1 percent, from $299,000 to $302,000.

"Both the falling numbers of sales and the increasing median prices are a reflection of low inventory," said MAR President Peter Ruffini. "There's a lack of affordable housing for first-time buyers. It's very rare to see new construction priced at under $400,000. That's simply not a viable price point for most people looking to enter the housing market."

In the Metro Boston area, the median selling price for a single-family home rose even more dramatically — by 9.4 percent, the largest percentage increase since April — from $480,000 in November 2013 to $525,000 last month, the highest median home price ever recorded for November in the area, according to the Greater Boston Association of Realtors.

"Even at these prices, what is available is being jumped on pretty quickly," said Michael DiMella, the association's president and managing partner of Charlesgate Realty Group in Boston. "We're still seeing some multiple offers and bidding wars, although not as much."

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The Ticker

Pier 4 owner cashes out

Pier 4 master developer New England Development has cashed out of the 1-million-square-foot South Boston waterfront project, selling 130 and 140 Northern Ave. to the deeper-pocketed Tishman Speyer, the New York owner of properties including Rockefeller Center, Chrysler Center and Yankee Stadium.

The Newton company sold the two Seaport District parcels, which had been slated for an office building, a separate condominium building and waterfront public park, for $70 million, according to Registry of Deeds documents filed yesterday.

New England Development executives could not be reached for comment. Tishman Speyer, which also owns 125 High St. and One Federal St. in Boston, declined comment, but is expected to move faster with the development of the two parcels.

New Balance seeks sneaker design ruling

Boston's New Balance has filed pre-emptive court action against Massachusetts rival Converse to protect its ability to continue selling its 77-year-old PF Flyers brand of sneakers.

The federal lawsuit follows the North Andover-based Converse's October trademark infringement lawsuits against Wal-Mart Stores Inc., H&M, Skechers, Ralph Lauren and 27 other retailers and companies for allegedly knocking off the design of its iconic Chuck Taylor All-Star sneakers that date to 1917.

New Balance, which wasn't included in that round of lawsuits, is asking for a U.S. District court ruling that its PF Flyers don't infringe on Converse's trademark and that Converse doesn't have exclusive rights to use the design.

"Converse brought its case to the International Trade Commission to prevent consumer confusion, to protect its legitimate intellectual property rights, and to stop the sale of knockoff Chucks, all of which remain unchanged," Converse said in a statement.

Quincy hospital to close midnight Friday

The Department of Public Health yesterday signed off on the proposed closure of Quincy Medical Center, set for midnight Friday.

Steward Health Care, the owner of the hospital, said Quincy Medical will halt operations Dec. 26, at 11:59 p.m., with a satellite emergency facility set to open in the same location at 12 a.m. on Saturday, Dec. 27.

Steward said that Quincy Medical, as of yesterday, no longer has any inpatients.

Local elected officials have criticized Steward for the speed with which the for-profit company has moved to close the hospital after it claimed in November that it suffered financial losses and a decreasing number of patients at the Quincy hospital.

Cornerstone Pub to be redeveloped

The Cornerstone Pub and Restaurant in South Boston will soon be history as a developer has filed a project notification form with the city to build a mixed-use development on the 14 West Broadway site. The Southie landmark, which sits across from the Broadway T station, will be razed and replaced with a complex that would include 47 residential units, commercial and retail space, a ground-floor restaurant and garage parking.

THE SHUFFLE

Emmanuelle Debouverie has joined Boston-based criminal defense firm Rankin & Sultan as an associate. Debouverie was previously an associate at Clifford Chance.

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U.S. economy on a roll

The economy grew at a 5 percent annual rate between July and September, the fastest in 11 years.

2010

Q1: 1.7

Q2: 3.9

Q3: 2.7

Q:4 2.5

2011

Q1: –1.5

Q2: 2.9

Q3: 0.8

Q4: 4.6

2012

Q1: 2.3

Q2: 1.6

Q3: 2.5

Q4: 0.1

2013

Q1: 2.7

Q2: 1.8

Q3: 4.5

Q4: 3.5

2014

Q1: –2.1

Q2: 4.6

Q3: 5.0

Source: Commerce Department

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Honda recalls 1,252 Crosstours over side air bags

NEW YORK — Honda is recalling 1,252 Crosstour vehicles due to a faulty side air bag made by troubled air bag supplier Takata.

The Honda recall is for 2015 model year Crosstours. The National Highway Traffic Safety Administration says the side air bag may not inflate properly because of a problem with its inflator tube. Crosstour owners will receive a letter in the mail asking them to take their car to a Honda dealer and have the side air bags replaced free of charge.

Honda said no injuries were reported. Takata Corp. declined to comment.

Takata, a Japanese air bag maker, is at the center of massive recalls around the world. Several automakers have recalled vehicles with air bags made by the company because they can explode and send shards flying at drivers and passengers. In response to the recalls, Takata on Wednesday apologized to those killed or hurt by its faulty air bags and announced it was reshuffling its executives.

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US current account deficit rises to $100.3 billion

WASHINGTON — The U.S. current account trade deficit widened slightly in the July-September quarter, largely due to foreign institutions paying less in fines and penalties to the U.S. government.

The Commerce Department said Wednesday that the deficit in the current account rose to $100.3 billion in the third quarter, up 1.9 percent from a revised $98.4 billion deficit in the April-June period.

The increase occurred despite a drop in the trade deficit for goods and services, reflecting cheaper oil prices and a stronger dollar.

The deficit widened because fines collected by the U.S. government from foreign institutions fell to $27.8 billion from $40.1 billion in the previous quarter, a 31 percent decrease. In the April-June period, the government had fined the French bank BNP Paribas $9 billion for violating sanctions against Iran, Sudan and Cuba.

The current account is the broadest measure of trade, covering not only the flow of goods and services but also investment flows. It faces downward pressure because the dollar has increased in value relative to other currencies and oil prices have fallen by almost 50 percent since June.

The average price of a barrel of oil has dropped below $56 from a summer high of $107. That reflects weakening global demand as Japan has tumbled into a recession, Europe staves off a slowdown, China's economy loses momentum and Russia copes with its collapsing currency. But U.S. consumers have largely been insulated from these pressures and benefited from less expensive oil.

At the same time, the global slowdown has caused more investors to crowd into the dollar as a relative safe haven. The dollar appreciated 7.1 percent against other major currencies during the July-September quarter.

The current account is still relatively low by historical standards. The quarterly deficits regularly topped $150 billion in the four years before the Great Recession of 2007-2009.

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Alcohol calorie counts to be on menus by next year

WASHINGTON — Don't want to be confronted with the number of calories in that margarita or craft beer? Then avoid the menu and order at the bar.

New menu labeling rules from the Food and Drug Administration will require chain restaurants with 20 or more outlets to list the amount of calories in alcoholic drinks, along with other foods, on menus by next November. The idea is that people often don't know — or even think about — how many calories they are imbibing.

But the rules don't apply to drinks ordered at the bar or any drinks that aren't listed on the main menu. The wine list will also be guilt-free — individual calorie amounts aren't required there either. And unlike other beverages and foods, most bottles and cans of alcohol don't have to list full nutritional information.

After years of lobbying for more nutritional information on alcoholic beverages, public health advocates say the menu labeling rules are a first step.

"Alcoholic beverages are a key contributor to the calories Americans are consuming, and most of the time when people have a drink they have absolutely no idea what its caloric impact is," says Margo Wootan of the Center for Science in the Public Interest. Her group petitioned the government more than a decade ago to require that bottles and cans be labeled with robust nutritional information.

The FDA's proposed menu labeling rules in 2011 exempted alcohol. But FDA Commissioner Margaret Hamburg said the agency decided to include it in the final rules this year after those who commented on the rule were largely in favor of such labeling because of its potential impact on public health.

The beer, wine and spirits industries objected, arguing that they were regulated by the Treasury Department, not the FDA, a setup that dates back to Prohibition. Treasury's oversight, which includes minimal input from FDA, has "well served the consuming public," a coalition of alcohol groups wrote in a 2011 comment asking to be left out of the menu labeling rules.

The new rules are designed to not be too burdensome for the alcohol industries or restaurants. Endless combinations of mixed drinks won't have to be labeled at bars, unless they are listed on a menu, and the FDA is allowing restaurants to use estimates of calories and ranges of calories without listing the exact amount in every different drink. That means menus are required to list the average amount of calories in a glass of red or white wine, but won't have to list calories by every brand of wine on the wine list unless they choose to do so. Same with beers and spirits.

So most wineries and craft breweries selling to chain restaurants won't have to pay to have their products' nutritional content analyzed — for now, at least.

The labeling rules have "more of an indirect effect on our business," says Wendell Lee of the California-based Wine Institute. Lee says brand-specific menu calorie labels could be especially burdensome on the wine industry, where every vintage and varietal is different.

Craft brewers, with many varied brands and styles, have similar concerns.

The regulations "could have a slight chilling effect" on small breweries if some restaurants decide to list calories for individual beers, said Paul Gatza of the Brewers Association, which represents craft breweries.

The rules could have advantages too, he said.

"The more customers know about a brewery, the more they feel connected with it," Gatza said.

Off the menu, labeling rules appear further away.

For years, most alcohol companies have tried to put off mandatory bottle and can nutrition labeling as public health advocates have fought for it. Rules proposed in 2007 would have made such labels mandatory, but Treasury never made the rules final.

Last year, Treasury's Alcohol and Tobacco Trade and Tax Bureau said for the first time that beer, wine and spirits companies could use labels that include serving size, servings per container, calories, carbohydrates, protein and fat per serving. The labels are voluntary and will likely be used mostly by liquor companies touting low calories and low carbohydrates in their products.

Current labeling law for bottles and cans is complicated.

Wines containing 14 percent or more alcohol by volume must list alcohol content. Wines that are 7 percent to 14 percent alcohol by volume may list alcohol content or put "light" or "table" wine on the label. "Light" beers must list calorie and carbohydrate content. Liquor must list percent alcohol content by volume and may also list proof, a measure of alcoholic strength.

Wine, beer and liquor manufacturers don't have to list ingredients but must list substances people might be sensitive to, such as sulfites, certain food colorings and aspartame.

Tom Hogue of the Tobacco Trade and Tax Bureau said the current goal is to make sure that companies that want to label may do so, and that labeling is consistent. It is important that labels "don't mislead the consumer," he said.

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Follow Mary Clare Jalonick on Twitter at http://twitter.com/mcjalonick

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Napster co-founder to invest in allergy research

SAN FRANCISCO — Napster co-founder Sean Parker missed most of his final year in high school and has ended up in the emergency room countless of times because of his deadly allergy to nuts, shellfish and other foods.

Now that the former Facebook president is the father of two small children who have a genetic basis to develop allergies, he says he wants to help find a lasting cure to allergies.

Parker announced Wednesday that he is donating $24 million over the next two years to establish an allergy research center at the Stanford University School of Medicine.

"We have been applying Band-Aids for decades by using antihistamines to treat symptoms instead of going after the root cause of allergies," Parker said.

The Sean N. Parker Center for Allergy Research will focus on understanding the dysfunctions of the immune system that result in allergic reactions and on finding the safest and best treatments for allergies through laboratory and data research, clinical trials and community outreach.

The Silicon Valley entrepreneur said he missed most of his senior year of high school because he was hospitalized with a bronchial infection due to severe allergies and asthma. Parker said his severe allergic reactions have sent him to the hospital 14 times in the last six years.

Parker, 35, said neither his 2-year-old girl nor his 2-week-old boy have allergies but he knows they could develop them.

"Now that I'm a father, I'm sympathetic to what my parents went through," he said. "It's terrifying for parents to see their child go through anaphylactic shock because of an allergic reaction."

The center will be led by Dr. Kary Nadeau, an immunology researcher who focuses on allergies on children and adults. Nadeau has developed an allergy treatment that involves giving patients micro-doses of the allergen and increasing the amount ingested — over months or years — to build tolerance overtime.

"The goal is to be able to achieve desensitization in a couple of weeks," Parker said.

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Russians flock to stores to pre-empt price rises

MOSCOW — Russian consumers flocked to the stores Wednesday, frantically buying a range of big-ticket items to pre-empt the price rises kicked off by the staggering fall in the value of the ruble in recent days.

As the government considered ways to ease the selling pressure on the ruble, which has slid 15 percent in just two days and raised fears of a bank run, many Russians were buying cars and home appliances — in some cases in record numbers — before prices for these imported goods shoot higher.

The Swedish furniture giant IKEA already warned Russian consumers that its prices will rise Thursday, which resulted in weekend-like crowds at a Moscow store on a Wednesday afternoon.

Shops selling a broad range of items were reporting record sales — some have even suspended operations, unsure of how far down the ruble will sink. Apple, for one, has halted all online sales in Russia.

"This is a very dangerous situation, we are just a few days away from a full-blown run on the banks," Russia's leading business daily Vedomosti wrote in an editorial Wednesday. "If one does not calm down the currency market right now, the banking system will need robust emergency care."

Alyona Korsuntseva, a consumer in her 30s, says the current jitters surrounding the Russian economy reminded her of the 1998 Russian crisis when the ruble tumbled following the government's default on sovereign bonds.

"What's pressuring us is the fact that many people (back then) rushed to withdraw money from bank cards, accounts," she says. "We want to safeguard ourselves so that things wouldn't be as bad they were back then."

Consumers are buying durable goods because Russian stocks are too volatile as an investment and an overwhelming majority of Russians cannot afford to buy land or real estate.

The ruble has suffered catastrophic losses this week as traders fretted over the impact of low oil prices on the Russian economy, as well as the impact of Western sanctions imposed over Russia's involvement in Ukraine's crisis.

After posting fresh losses early Wednesday, the ruble was up and down all day before settling at 3 percent higher at 65 rubles at 4 p.m. Moscow time (1300 GMT).

The ruble even lost ground on Tuesday after a surprise move by Russia's Central Bank to raise its benchmark interest rate to 17 percent from 10.5 percent — a move aimed to make it more attractive for currency traders to hold onto their rubles.

One reason why the ruble advanced Wednesday is that Deputy Finance Minister Alexei Moiseyev was quoted by the Interfax news agency as saying the government is going to sell foreign currency "as much as necessary and as long as necessary." That, the hope is, would relieve the pressure on the ruble, particularly against the dollar.

Prime Minister Dmitry Medvedev hosted a meeting with the heads of Russia's largest exporters and pledged to implement a "package of measures" to stop the decline of the ruble.

Another option available to Russian authorities could be imposing capital controls, but Russia's Economic Development Minister Alexei Ulyukayev has denied that the government is considering doing so. However, he said the Central Bank rate hike came too late.

Russian officials, meanwhile, have sought to project a message of confidence on state television, dwelling on the advantages of ruble devaluation, such as a boost to domestic manufacturing.

Whatever happens with the ruble, the Russian economy is set to shrink next year by 0.8 percent even if oil prices stay above $80 per barrel. With oil prices now below $60, there are fears the Russian economy could contract by up to 5 percent.

The ruble could come under further pressure this week as President Barack Obama is expected to sign legislation authorizing new economic sanctions against Russia.

The German government's coordinator for relations with Russia, Gernot Erler, said the economic crisis in Russia was largely the result of the drop in oil prices, not the sanctions imposed by the West.

"It's an illusion to think that if the sanctions were to fall away tomorrow, the Russian economy would suddenly be all right again," Erler told rbb-Inforadio on Wednesday.

___

Vladimir Kondrashov in Moscow and Frank Jordans in Berlin contributed to this report from Berlin.

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Pampered pets that don duds move to the mainstream

LOS ANGELES — These clothing designers have to think about pattern, fabric and fit — as well as where to put the poo bags.

Creating on-trend outfits is a whole different animal for pet fashion designers, whose work is becoming mainstream as animal lovers look to further pamper their pets. For some owners, it's a statement; for others, it's a way to match man's best friend; and sometimes it's simply about keeping animals warm this winter. But it's clear the number of dressed-up dogs and cats jumps significantly once holiday photos need to be taken.

"We have gone from the kind of cute reindeer gear or ugly sweater to more functional clothing," said Lauren Darr, founder of the International Association of Pet Fashion Professionals in New York City. "Before it was for a cute picture, now it's more practical. It takes it to a different level, going from being a novelty to understanding how things can be used in everyday life."

Pet fashion got a leg up after American Eagle Outfitters received an outpouring from its April Fool's Day joke this year. To raise money and awareness for an animal welfare group, the popular retailer introduced a fake fashion line called American Beagle Outfitters. But the joke was on the Pittsburgh company.

"Our customers were very clear about their desire for this product to become a reality," company spokesman Michael Leedy said last month when welcoming the pet line for real. Its tiny puffy jackets, sweaters and hats sell for $12.95 to $39.95.

The move made strides for the pet clothing industry, insiders say.

"When a company like American Eagle starts getting into pet fashion, it really puts a spotlight on it and brings visibility to it," Darr said.

For some pet owners, clothing plays into a luxury lifestyle. Dog Fashion Spa in New York sells doggy and mommy bathrobes, a matching fad that comes as many spas and salons are building hers and "furs" facilities — one side to pamper the woman and the other to treat their dogs, CEO Elena Volnova said.

Pampering and style is one thing, but function is also important. Karine Ng, the owner and designer at Central Park Pups in New York City, has developed several step-in coats with hidden harnesses that help pets get dressed without the hassle. Dogs walk right into the coat, so they don't have to put their head through it.

Her pieces are among the many that feature a pouch or pocket to hold unused bags for scooping up pet poop.

Ng's "city chic" styles, which sell online and at boutiques for $60 to $65, aim to reduce aggravation for pets, but she warns: "Never make a dog wear clothing if it doesn't want to."

On the other hand, you might want to start dressing your cat now, Darr said. She predicted huge growth in feline fashions as retailers from 99-cent stores to high-scale boutiques carry more cat clothing.

"I am seeing more pieces that are tailored for cats. It's still a small proportion, but it is growing," Darr said.

The movement comes as more owners teach their cats to go for walks. Plus, "a lot of cats in colder climates have learned to rely on sweaters, coats and vests," Darr said.

Other trends she saw this year that she expects to grow in 2015 include clothing decorated with LED lights to make pets more visible at night, T-shirts for pets of sports fans and still more ugly sweaters.

___

Online:

— www.petfashionprofessionals.com

— www.dogfashionspa.com

— www.centralparkpups.com

— www.ae.com

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Fed pondering change in rate hike signals

WASHINGTON — The U.S. economy is finally doing better, and the Federal Reserve may be ready to acknowledge that fact.

In a statement it will issue Wednesday after two days of discussion, the Fed may no longer say it plans to keep a key interest rate near zero for a "considerable time." Dropping that language would be viewed as a signal that the Fed is moving closer to a hike.

Yet even if it drops the "considerable time" phrase, few envision an imminent rate hike. Most economists think the Fed will wait at least until June to raise short-term rates. It would be the first rate increase since June 2006. The Fed last cut rates on December 2008 when the central bank reduced its key short-term rate to a record low near zero in an effort to battle the worst economic downturn since the 1930s.

In addition to issuing its usual policy statement to close out its final meeting of the year, the Fed will update its economic forecast and Fed Chair Janet Yellen will hold a news conference. The meeting with reporters will give Yellen the chance to explain the Fed's policies in greater detail.

While many believe there will be a slight change in the Fed's guidance about the future course of interest rates, analysts say as long as inflation remain muted, the Fed may be content to leave rates at rock-bottom levels for as long as another year.

Low rates can encourage borrowing and spending, as well as fuel growth. But if left too low for too long, they can accelerate inflation.

"I think the odds are that the Fed will drop the 'considerable time' wording, but I think some people are making more out of that change than they should," said Diane Swonk, chief economist at Mesirow Financial.

Even if that wording is removed, economists expect the Fed will stress that the timing of a rate hike will be driven by the economy's performance, not by any preset timetable.

If the job market and the economy keep improving, a rate increase could come sooner. Yet if the economy slows unexpectedly — or if sinking oil prices keep inflation persistently below the Fed's 2 percent target, the first rate hike might be delayed.

The debate inside the Fed is pivoting on which of those forces — an improved economy or excessively low inflation — should outweigh the other. Complicating the Fed's decision is that other major central banks — in Europe, Japan and China, for example — are moving in the reverse direction to keep rates down to support slowing economies. When central banks move in opposite directions, they risk causing disruptions in the global flow of capital.

The minutes of the Fed's last two meetings showed that officials discussed changing the "considerable time" language. But some worried that doing so might be misread to mean the first rate increase would come soon. In the end, the phrasing was retained.

To soften the market impact, some analysts say "considerable time" may be replaced by language that says the Fed will be "patient" in deciding when to raise rates. In recent weeks, several Fed officials have used that word to describe how the central bank will proceed.

The word "patient" has history behind it. The last time the Fed moved from a prolonged period of low rates in 2004, it shifted from saying it would keep rates low for a "considerable period" to pledging to be "patient" in raising them. Five months after dropping "considerable period" in January 2004, the Fed approved a rate hike.

Vincent Reinhart, who was the Fed's top staff economist then, said it would be a wrong to assume that the lag time between a change in the statement's language and a rate increase would necessarily be the same this time.

The consensus view that the Fed will begin raising rates in June 2015 has held steady for months despite slight ups and downs in the economy's performance.

Recently, the data has been almost all positive with 321,000 jobs created in November, the most in nearly three years.

Mark Zandi, chief economist at Moody's Analytics, foresees economic growth of 3.3 percent next year — which would be the best showing since 2005 — up from 2.2 percent expected this year.

Brian Bethune, an economics professor at Tufts University, noted that while job gains have been solid, wage growth remains weak and inflation is slowing, reflecting the plunge in gas prices and a stronger dollar.

"With inflation falling, it just doesn't make any sense to argue that the Fed should accelerate the timing of its first rate hike," Bethune said.

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UK proposes rules for embryos made from 3 people

LONDON — New rules proposed in Britain would make it the first country to allow embryos to be made from the DNA of three people in order to prevent mothers from passing on potentially fatal genetic diseases to their babies.

In a statement issued on Wednesday, the department of health said it had taken "extensive advice" on the safety and efficacy of the proposed techniques from the scientific community.

"(This) will give women who carry severe mitochondrial disease the opportunity to have children without passing on devastating genetic disorders," Dr. Sally Davies, the U.K.'s chief medical officer, said in a statement.

Experts say that if approved by parliament, these new methods would likely be used in about a dozen British women every year who are known to have faulty mitochondria — the energy-producing structures outside a cell's nucleus. Defects in the mitochondria's genetic code can result in diseases such as muscular dystrophy, heart problems and mental retardation.

The techniques involve removing the nucleus DNA from the egg of a prospective mother and inserting it into a donor egg, where the nucleus DNA has been removed. That can be done either before or after fertilization.

The resulting embryo would end up with the nucleus DNA from its parents but the mitochondrial DNA from the donor. Scientists say the DNA from the donor egg amounts to less than 1 percent of the resulting embryo's genes. But the change will be passed onto future generations, a major genetic modification that many ethicists have been reluctant to endorse.

Critics say the new techniques are unnecessary and that women who have mitochondrial disorders could use other alternatives, such as egg donation, to have children.

"Medical researchers are crossing the crucial ethical line that will open the door to designer babies," said David King of Human Genetics Alert, a secular group that opposes many genetics and fertilization research.

British law currently forbids any genetic modification of embryos before being transferred into a woman.

Earlier this year, the U.S. Food and Administration held a meeting to discuss the techniques, and scientists warned it could take decades to determine if they're safe.

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BlackBerry launches Classic smartphone in last-ditch effort

NEW YORK — BlackBerry is returning to its roots with a new smartphone called the Classic, featuring a traditional keyboard at a time when rival Apple and Android phones — and most smartphone customers — have embraced touch screens.

BlackBerry is courting its core customer, the business user. The physical keyboard is something traditional BlackBerry users prefer because they find it easier to type on than the touch screen devices. The company is also emphasizing battery life and security as a way to set its phone apart from competitors.

The company is trying to stay relevant on the hardware side of the business as it attempts to pivot toward becoming an enterprise security and consumer software company. Whether the Classic will sell enough to keep it in the hardware business is unclear.

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US stocks gain before Fed statement

NEW YORK — U.S. stocks rose Wednesday, breaking a string of declines, as investors waited for the latest statement from the Federal Reserve. Energy stocks led the gains as the price of oil recovered some of its recent losses.

KEEPING SCORE: The Standard & Poor's 500 index rose 18 points, or 0.9 percent, to 1,990 as of 11:28 a.m. Eastern. The Dow Jones industrial average gained 123 points, or 0.8 percent, to 17,195. The Nasdaq composite climbed 34 points, or 0.8 percent, to 4,582.

FED MEETING: Investors will be assessing the statement from the Federal Reserve's final meeting of the year on Wednesday and will be looking to see if U.S. policymakers drop a pledge to keep interest rates low for a "considerable time," as the U.S. economy improves. The Fed will release a statement at 2:00 p.m. Eastern time and will hold a press conference at 2:30 p.m.

THE QUOTE: "I'm looking for an overall more dovish statement, something that still tells me that they are not going to raise interest rates any time soon," said Scott Wren, a senior equity strategist at Wells Fargo Advisors, who believes the Fed will keep its "considerable time" phrase in the statement given that the recent slump in oil prices is driving down inflation.

The Labor Department said Wednesday that plunging gasoline costs pulled U.S. consumer prices lower in November, muting inflation across the entire economy.

Wren is recommending that investors use any pullback in the stock market to add to their stock holdings. He expects companies to keep boosting earnings as the economy continues to strengthen in 2015.

RUSSIA FOCUS: Russia remained in focus on concerns about the impact of the recent slide in the ruble. The currency has lost more than 50 percent of its value this year. After falling again early Wednesday, the ruble recovered and was 11 percent higher at 62 rubles to the dollar.

The currency recovered some of its losses Wednesday after Russian authorities indicated that they would sell foreign currency to relieve pressure on the ruble. The Russian currency has suffered in the wake of sliding oil prices and sanctions imposed over Russia's involvement in Ukraine's crisis.

ENERGY RALLY: Energy stocks led gains for the S&P 500 index as the price of oil recovered some of its recent losses. Stocks in the sector jumped 4 percent, reducing their losses in the last three months to 18 percent. Diamond Offshore Drilling was one of the biggest gainers in the S&P 500, rising $2.62, or 7.2 percent, to $38.95.

OIL: U.S. crude turned slightly higher in midday trading. Oil rose 74 cents, or 1.3 percent, to $56.65 a barrel on the New York Mercantile Exchange.

EARNING FAIL TO DELIVER: FedEx was one of the biggest losers in early trading after in the shipping company reported earnings that fell short of Wall Street's expectations. The company said a jump in plane maintenance costs blunted gains the company reaped from managing costs, lowering its pension expense and growing its export package revenue. The company's stock dropped $9.21, or 5.3 percent, to $165.07.

EUROPE'S DAY: In Europe, Germany's DAX was 0.1 percent lower while the CAC-40 in France rose 0.6 percent. The FTSE 100 index of leading British shares fell 0.1 percent.

BONDS AND CURRENCIES: U.S. government bond prices fell slightly. The yield on the 10-year Treasury note edged up to 2.10 percent from 2.06 percent late Tuesday. The euro was 0.8 percent lower at $1.2399 and the dollar fell 0.3 percent to 117.39 yen.

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FedEx misses Street 2Q forecasts, but profit jumps 23 pct

FedEx's second-quarter earnings soared 23 percent, but the package delivery company missed Wall Street forecasts due partially to a lower-than-expected benefit from falling fuel prices.

FedEx also said Wednesday that a jump in plane maintenance blunted gains the company reaped from managing costs, lowering its pension expense and growing its export package revenue.

Shares of the Memphis, Tennessee, company fell almost 5 percent in midday trading.

FedEx has been saving money from cheaper fuel, but company executives told analysts that fuel delivered only a slight benefit to operating income in the quarter. The company buys its fuel based on contracts tied to prices set during the preceding week or month, and those prices did not decline as quickly as daily rates, which fell almost 30 percent from August to November.

The company said it was working to adjust more quickly to those daily market rates.

Removing the fuel issue, analyst Benjamin J. Hartford said he saw "clear margin improvement in the core Express business" in the quarter. Hartford covers FedEx for Robert W. Baird & Co.

Overall, FedEx Corp. earned $616 million, or $2.14 per share, in its fiscal second quarter, up from $500 million, or $1.57, in last year's quarter. Total revenue climbed 5 percent to $11.94 billion.

Analysts expected FedEx to earn $2.22 per share on revenue of $11.97 billion, according to Zacks Investment Research.

FedEx and rivals like UPS are heading into the final stretch of their busiest period of the year, the peak holiday shipping season. They are hoping to avoid a repeat of last December, when an ice storm and a surge in last-minute online shopping caught them off-guard. About 2 million packages promised for delivery by Christmas Eve didn't make it.

This time, FedEx planned to hire 50,000 seasonal workers and invest in its ground-shipping network to make deliveries on time. The company has forecast a record number of deliveries, 8.8 percent more than the holidays in 2013.

FedEx executives offered no details on shipping volume so far this season, but company executives told analysts during a conference call that they've already had several days that rank among the busiest in company history. They also noted that labor issues at West Coast ports have held up cargo and forced the company to shift resources, which raises expenses.

CEO and Chairman Fred Smith said he expects that the port issues will lead to more retail items being out of stock and could cause more gift card purchases instead of merchandise.

"The slowdown in the West Coast ports has been a much bigger deal than people think," he said.

FedEx also said Wednesday that it still expects full-year earnings of between $8.50 and $9 per share.

Analysts surveyed by FactSet forecast earnings of $9.11 per share for the year.

Shares of FedEx fell $8.45, to 4.9 percent, to $165.81 in midday trading while broader indexes had climbed slightly. The stock had climbed 21 percent since the beginning of the year through Tuesday's close, more than tripling the gain of the Standard & Poor's 500 index.

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Ebola fighters named Time Person of the Year

NEW YORK — Doctors, nurses and others fighting Ebola have been named Time's 2014 Person of the Year, the magazine announced Wednesday.

The runners-up included Ferguson, Missouri, protesters; Russian President Vladimir Putin; Kurdish Regional Government President Massoud Barzani; and Jack Ma, the China-based founder of e-commerce giant Alibaba.

In an article on the Time website, Editor Nancy Gibbs praised "the people in the field, the special forces of Doctors Without Borders/Médecins Sans Frontières (MSF), the Christian medical-relief workers of Samaritan's Purse and many others from all over the world" who "fought side by side with local doctors and nurses, ambulance drivers and burial teams."

Gibbs noted that the disease also struck doctors and nurses.

"The rest of the world can sleep at night because a group of men and women are willing to stand and fight," she wrote. "For tireless acts of courage and mercy, for buying the world time to boost its defenses, for risking, for persisting, for sacrificing and saving, the Ebola fighters are Time's 2014 Person of the Year."

Antoine Petibon, head of international programs for the French Red Cross, which has been active in anti-Ebola efforts in the French-speaking country of Guinea, called it "great recognition for all these people who have been toiling in the shadows."

"If it helps us wipe out this epidemic faster, all the better," Petibon added.

Reached in Nairobi, Birte Hald, head of emergency operations for the International Federation of Red Cross and Red Crescent Societies, welcomed the magazine's choice, but used the opportunity to stress who she thinks deserves the honor and credit.

"I think it should be awarded to the front-line fighters, those who are doing all the dangerous stuff," Hald said. "People like myself, we are working hard, but we are not at risk. People doing the safe and dignified burials, the contact tracing and the transport of the sick, working in the treatment centers — these are the people who deserve our praise and respect."

Pope Francis was last year's person of the year.

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FAA issues commercial drone permits to 4 companies

WASHINGTON — Under pressure from Congress to speed access to U.S. skies for commercial drones, the government granted four companies permission Wednesday to use drones for aerial surveillance, construction site monitoring and oil rig flare stack inspections.

The new permits bring the total number of companies granted permits for commercial operations to 13. They were announced by the Federal Aviation Administration an hour before a House hearing at which lawmakers warned that if the agency doesn't move faster, Congress will step in.

Commercial drone flights are taking off in other countries while the U.S. lags behind in developing safety regulations that would permit unmanned aircraft operations by a wide array of industries, Gerald Dillingham of the Government Accountability Office testified at the hearing.

Several European countries have granted commercial permits to more than a 1,000 drone operators for safety inspections of infrastructure, such as railroad tracks, or to support commercial agriculture, Dillingham said. Australia has issued over 180 permits to businesses engaged in aerial surveying, photography and other work, but limits the permits to drones weighing less than 5 pounds. And small, unmanned helicopters have been used to monitor and spray crops in Japan for more than a decade.

Canada has had regulations governing the use of unmanned aircraft since 1996 and, as of September, had issued over 1,000 permits this year alone, Dillingham said.

The permits announced Wednesday were granted to Trimble Navigation Limited, VDOS Global LLC, Clayco Inc. and Woolpert Inc., which received two permits. The drones weigh less than 55 pounds and the firms have said they will they will keep the unmanned aircraft within line of sight of the operator.

Previously the only permits the Federal Aviation Administrational Aviation had issued were to two oil companies in Alaska and five aerial photography companies associated with television and film production.

The FAA said it has received 167 requests for exemptions from commercial entities.

___

Follow Joan Lowy on Twitter at http://www.twitter.com/AP_Joan_Lowy

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NY man fined for calling boss a foreign spy

ALBANY, N.Y. — An electrical engineer from upstate New York has been fined $5,000 and sentenced to 180 hours of community service for accusing his boss of spying for another country.

Ryan Letcher, of Endicott, was convicted in August of making a false statement to federal authorities.

Prosecutors say the 39-year-old wrote an anonymous letter to the Defense Security Service in March 2012 accusing his boss at BAE Systems, a defense contractor, of being "foreign intelligence," which they say means spying.

The company's facility in Endicott works on electronics systems.

The FBI investigated his supervisor, concluding he isn't a spy.

According to authorities, Letcher said he sent the letter because of conflict with the supervisor over taking credit for his work.

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Reception to GOP tax amnesty plan mixed

Taxpayer activists are divided about a corporate tax amnesty program House leaders and Gov.-elect Charlie Baker are considering to generate cash for state spending needs.

House Minority Leader Brad Jones (R-North Reading) has filed legislation to create a two-month corporate tax amnesty program, which he estimates would yield $15 million to $20 million. Baker said it's not an ideal situation, but one he might support. House Ways and Means Chairman Brian Dempsey (D-Haverhill) said Democratic leadership is actively considering the possibility.

A two-month tax amnesty program for individual filers that ran through the end of October pulled in roughly $57 million.

Michael J. Widmer, outgoing president of the Massachusetts Taxpayers Foundation, said in many cases, businesses, like some individuals, don't pay their taxes because they dispute their assessment.

"The amnesty is a chance to reach an agreement and collect revenues which might otherwise never be received or only after a long period," Widmer said in an e-mail yesterday. "We haven't looked at this, but my one caution would be not to use one-time revenues to support ongoing operating expenses."

But Barbara Anderson, executive director of Citizens for Limited Taxation, was flummoxed by the idea of an amnesty for corporate scofflaws.

"You and I have to pay our taxes, so why don't they? Wouldn't I go to jail if I didn't?" Anderson said. "The bigger ones — I don't see how they could have any excuse; they have accountants ... It seems to me there's a moral hazard here. Once everyone understands that if they don't pay their taxes sooner or later there's going to be an amnesty, there's an incentive to hold out and have that money in the bank, earning interest."

Herald wire services contributed to this report.

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Nearly two-thirds of pay-TV subs now also have Netflix: study

Are Netflix and other streaming-video services contributing to the demise of cable and satellite TV? Some consumers may be deserting TV for streaming services, but for most pay-TV customers, Netflix and its ilk continue to be complementary to traditional television.

About 65% of pay-TV subscribers say they now have Netflix -- up from 41% in 2013, according to a new study by consulting firm PwC. The increases were most pronounced among older demos: Netflix subscribership among pay-TV customers 50-59 rose from 19% last year to 58% in 2014. That's compared with 37% to 66% among those 35-49; 51% to 71% among those 25-34; and 56% to 65% for 18-24.

Those rates of growth indicate a strong affinity for Netflix among pay-TV customers. Overall in the U.S., the net number of Netflix subscribers increased 19.7% over the last 12 months, from 31.1 million in the third quarter of 2013 to 37.2 million in Q3 2014.

In addition, the PwC survey found that overall, Amazon Prime subscriptions jumped from 18% of pay-TV households in 2013 to 32% this year, while Hulu Plus subscriptions rose from almost 8% to more than 11%.

But with more video options than ever, a growing number of consumers may be cutting -- or shaving -- the cord. Overall pay-TV subscriptions have declined among consumers under 35, the study found, while it was flat for those 35-49 and up slightly among the 50-59 cohort. Among those 18-24, cable and satellite subscriptions dropped from 77% in 2013 to 71% this year. Furthermore, only 42% of pay-TV subs answered yes when asked if they saw themselves subscribing to cable 10 years from now, vs. 91% in a year from now and 61% five years from now.

For consumers the consternation with subscription-TV service continues to center around paying for channels they don't watch -- with 41% of survey respondents saying they'd prefer a la carte pricing options, according to the PwC study. But TV remains popular, with 73% of viewers saying that watching TV increasingly is often as good as going to the movies.

The study also found binge-watching of TV series to be a major phenomenon, with about 50% of viewers saying they have watched an entire season of a show in one week.

The data is based on an online survey of 1,024 consumers conducted in September 2014. PwC said the survey sample is representative of the U.S. population across gender, age and income. The 2014 results were compared with a similar 1,008-person study conducted in the fall of 2013.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Finance errors to cost Alibaba Pictures more than $47 million

Alibaba Pictures Group, the film making unit of China's e-commerce giant, will have to restate its net asset value and take losses of at least US$47 million (HK$364 million) after an assessment of the company's financial mismanagement.

The company announced the findings of an auditor that it called in after finding irregularities that related to a period before its acquisition by Alibaba. The Hong Kong-listed company was at the time known as Chinavision.

The auditor found that Chinavision had failed to use correct invoices and had therefore mis-calculated its Enterprise Tax in mainland China. It had often applied incorrect value added tax rates in China, and it has applied the wrong valuation of certain corporate bonds. That in turn meant that the stated value of certain warrants were incorrect.

The group's net asset value would have to be reduced by HK$70 million (US$9.03 million) in the year to end of 2012, by HK$58 million (US$7.48 million) in the year to end of 2013 and between HK$257 million and HK$323 million (US$33.2 million to US$41.7 million) in the as yet unreported six month period to June 2014.

Net profits will have to be restated; by a reduction of HK$61 million (US$7.87 million) in the year to end of 2012; by an increase of HK$21 million (US$2.71 million) in 2013; and by a reduction of between HK$324 million and HK$390 million (US$41.8 million to US$50.3 million) in the six months to June 2014.

Alibaba Pictures said that it will report the results as soon as possible and apply for trading in its shares to start after that. It made no mention of criminal or civil action against the previous management of the company or its financial advisers.

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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Energy stocks sink again as price of crude falls

NEW YORK — U.S. stocks are opening modestly lower as indexes in Europe and China recover from a slump the previous day.

Energy stocks declined the most early Wednesday as the price of crude oil dropped again. Chevron and Exxon Mobil fell the most of the 30 stocks in the Dow Jones industrial average.

The Dow was down 90 points, 0.5 percent, to 17,712 as of 9:35 a.m. Eastern time.

The Standard & Poor's 500 index fell eight points, or 0.4 percent, to 2,051. The Nasdaq composite fell nine points, or 0.2 percent, to 4,756.

The price of crude oil sank $1.56 to $62.26 a barrel in New York.

Government bond prices edged lower. The yield on the 10-year Treasury note rose to 2.22 percent.

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US stocks move lower as crude oil renews its slide

NEW YORK — U.S. stocks moved lower Wednesday, led by declines in energy stocks as the price of oil resumed its slide. Investors are also speculating the Federal Reserve will soon signal that it intends to raise interest rates next year should the economy continue to strengthen.

Oil dropped on reports that OPEC had slashed its estimate of how much crude it will need to produce next year due to rising supplies from other producers such as the U.S.

KEEPING SCORE: The Standard & Poor's 500 index fell 12 points, or 0.6 percent, to 2,047 as of 11:23 a.m. Eastern. The Dow Jones industrial average dropped 123 points, or 0.7 percent, to 17,678. The Nasdaq composite fell 18 points, or 0.4 percent, to 4,746.

ENERGY: Benchmark U.S. crude was down $2.76, or 4.4 percent, to $61 a barrel on the New York Mercantile Exchange. The price of oil has plunged more than 40 percent from a peak of $107 a barrel in June as traders speculate that the supply of oil being pumped by the world's biggest producers will exceed demand.

FLYING HIGH: Airline stocks were among the gainers as the price of oil plunged. Southwest Airlines rose $1.13, or 2.5 percent, to $41.76, taking its gain this year to 125 percent. Delta Air Lines also advanced, rising 55 cents, or 1.1 percent, to $46.81.

LANGUAGE CHANGE: While a slump in stocks this week is being led by a decline in the energy sector, investors are also speculating that the Federal Reserve will signal that it is nearing its first rate increase in more than eight years as the economy strengthens. Policy makers are scheduled to convene a two-day meeting on Dec. 16.

THE QUOTE: "The stronger employment data and economic data that we have gotten has only increased people's confidence that the Fed is going to be raising rates by the (middle) of next year," said Rob Eschweiler, global investment specialist in Houston.

EUROPE'S DAY: European stocks rebounded after a sell-off a day earlier on concerns that Greece might have to hold early general elections and that a left-wing opposition party would win. The Syriza party wants to cut what Greece owes in bailout money, which could potentially derail the country's recovery.

France's CAC-40 gained 0.2 percent to 4,271 and Germany's DAX was up 0.6 percent at 9,857. Britain's FTSE 100 fell 0.2 percent to 6,517.

BONDS AND CURRENCIES: Government bond prices were little changed. The yield on the benchmark U.S. Treasury note, which rises when prices fall, edged down to 2.20 percent from 2.21 percent on Tuesday.

The dollar fell to 118.54 yen from 119.40 late Tuesday. The euro rose to $1.2420 from $1.2385.

___

Kurtenbach reported from Tokyo.

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Appeals court deals blow to US in insider cases

NEW YORK — A federal appeals court dealt a blow to the government's success in insider trading prosecutions Wednesday by reversing two convictions with a decision that also jeopardizes a third — and attempts to further define how far prosecutors can push the law in their quest to clean up Wall Street.

The 2nd U.S. Circuit Court of Appeals overturned the convictions of Anthony Chiasson, of New York, and Todd Newman, of Needham, Massachusetts, finding they were too far removed from inside information to be held responsible for it.

In doing so, the three-judge panel made a sweeping observation about a blitz of Manhattan insider trading prosecutions that has resulted in more than 80 convictions since 2008.

The appeals court criticized the government, describing the "novelty of its recent insider trading prosecutions, which are increasingly targeted at remote tippees many levels removed from corporate insiders." The court said prior cases generally involved tippees directly participating in the passing of secrets.

"We note that the government has not cited, nor have we found, a single case in which tippees as remote as Newman and Chiasson have been held criminally liable for insider trading," it said in an opinion written by Circuit Judge Barrington D. Parker.

Chiasson co-founded Greenwich, Connecticut-based Level Global Investors. He was sentenced to 6½ years in prison and ordered to pay a $5 million fine and forfeit $1.38 million. Newman worked for Stamford, Connecticut-based Diamondback Capital Management. He received 4½ years and was ordered to pay a $1 million fine and to forfeit $737,724. The former portfolio managers were both convicted in December 2012.

The appeals court said the government failed to present sufficient evidence the men willfully engaged in insider trading or conspired to break the law. It instructed a lower court judge to dismiss the indictment against them.

The reversals could jeopardize the insider trading conviction of former SAC Capital portfolio manager Michael Steinberg, which is being challenged on the same principle.

The government said it would issue a statement later Wednesday.

Gregory Morvillo, an attorney for Chiasson, called the ruling "a resounding victory for the rule of law and for Anthony Chiasson personally."

"He is deeply gratified that the decision issued today unequivocally re-establishes his innocence under the law — consistent with what Anthony has steadfastly maintained for the duration of this ordeal," he said.

Stephen Fishbein and John Nathanson, lawyers for Newman, said in a statement that they were "relieved but not surprised by today's decision, which clearly establishes Todd Newman's innocence on all charges."

"This is not a mere technicality, but rather a considered judgment that Mr. Newman did not commit a crime," they added. "Unfortunately, this vindication comes after four years of unnecessary prosecution including a trial in which the Second Circuit held that the wrong legal standard was applied. We are gratified that, going forward, others will benefit from clearer rules in this area."

Barry Berke, Steinberg's attorney, said in a statement that the ruling "clearly means that Michael Steinberg is innocent of any crime and his conviction will be vacated as well. It sends a loud and clear message that the government will be rebuked when it tries to turn innocent conduct into a crime, as it did in the case of Mr. Steinberg."

Eugene Goldman, a former Securities and Exchange Commission enforcement lawyer, said the ruling "could stop multiple insider trading cases in their tracks."

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Ted Kennedy Jr.’s former co. being probed by SEC

Ted Kennedy Jr. says his former company is cooperating fully in an SEC investigation into allegations of insider trading.

The Marwood Group, a health care-focused consulting firm co-founded by Kennedy, received notice from the Securities and Exchange Commission this week that it will be charged with civil insider trading, Fox Business Network reported yesterday. The investigation has focused on alleged government information passed on to Marwood clients in 2010 about a new prostate-cancer treatment.

Kennedy, 53, the son of the late U.S. Sen. Edward M. Kennedy, was elected in November to Connecticut's Legislature. He served as president of Marwood for 12 years before leaving in January. He announced his candidacy for the state Senate in April.

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Medical mistake numbers alarm experts

One of four Bay Staters say they or their loved ones have fallen victim to alarming medical mistakes like misdiagnoses and faulty treatments, according to a bombshell report that has local experts calling for more action to prevent such errors among state hospitals and agencies.

"This is a problem of just incredible magnitude," said Barbara Fain, director of the Betsy Lehman Center for Patient Safety and Medical Error, which funded the survey. "From our perspective there needs to be a greater urgency around making greater progress."

Misdiagnoses were the largest problem among those surveyed, comprising 51 percent of people who had encountered errors. Thirty-eight percent say they were given the wrong surgery or test, and 34 percent say they were given bad instructions.

The survey, conducted by the Harvard School of Public Health, asked 1,224 Massachusetts residents if they or someone close to them had experienced a medical misstep within the last five years.

The survey is one of several new reports funded by the Lehman Center, named after a Boston Globe health reporter who died in 1994 after an overdose of chemotherapy treatments.

Robert Blendon, a Harvard professor of health policy and political analysis who led the survey, said the results speak volumes about how little progress has been made since Lehman's death.

"Twenty years ago there was an event that spurred national and statewide movement with an awful death of a reporter," Blendon said. "What do you have 20 years later? You have an issue that's still a problem in people's lives. This is not a problem that went away decades later."

Patricia Folcarelli, senior director of patient safety for Beth Israel Deaconess Medical Center, said better systems need to be put into place to prevent human error. "The major take-away is that we still have a lot of work to do," said Folcarelli.

She said the sheer number of health care workers involved in the treatment of each patient — and breakdowns in communication among them — is the major problem behind these errors. "There's multiple people delivering care, and there are a lot of opportunities for information to get lost in the hand-off," she said. "The devil happens in the transitions."

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Honda to expand air bag recall nationwide

WASHINGTON — Under pressure from federal regulators, Honda is expanding a recall of driver's side air bags to all 50 states.

The air bags, made by Japanese supplier Takata Corp., can explode with too much force, sending metal shrapnel into the passenger compartment.

Takata insists that current recalls covering 8 million U.S. cars in high-humidity areas are sufficient. But the National Highway Traffic Safety Administration wants the recalls expanded nationwide after some incidents outside the high-humidity zones.

Rick Schosteck, Honda's executive vice president for North America, told House lawmakers Wednesday that Honda will expand the regional recall it began in June, but will continue to prioritize high-humidity areas.

He also said Honda is working with other air bag manufacturers to make sure it has enough parts.

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Takata: Evidence doesn't support national recall

WASHINGTON — Takata Corp. defied a U.S. safety agency's demand for a nationwide recall of driver's side air bags, setting the stage for possible legal action by the government and leaving some drivers to wonder about the safety of their cars.

In a Tuesday letter to the National Highway Traffic Safety Administration obtained by The Associated Press, Takata said its own data and testing support limiting the recall to high-humidity areas, such as along the Gulf Coast. A Takata official repeated those claims Wednesday morning at a hearing before a House subcommittee.

The air bag's inflators can explode with too much force, spewing shrapnel into the passenger compartment. At least five deaths and dozens of injuries have been linked to the problem worldwide.

Under pressure from lawmakers, the U.S. safety agency on Nov. 26 demanded that Takata and a number of automakers broaden a recall of driver's side air bags to all 50 states. At Wednesday's hearing before a House Energy and Commerce subcommittee, an executive from Honda said the automaker would expand its recall nationwide. Honda is one of Takata's biggest customers.

So far automakers have recalled about 14 million vehicles worldwide for Takata air bag problems, including 8 million in the U.S. A nationwide recall would add 8 million vehicles to existing recalls, Takata said.

Up until now, cars were only being recalled in high-humidity areas in Florida, Hawaii, along the Gulf Coast and in some U.S. territories. Takata has maintained that prolonged exposure to airborne moisture can cause the inflator propellant to burn faster than designed, causing it to explode with too much force.

A number of committee members expressed concern that the limited nature of the recall was confusing to consumers outside of the current recall zones.

Rep. Jan Schakowsky of Illinois, the panel's senior Democrat, said she's received letters from constituents "who are literally afraid to drive their cars."

But Hiroshi Shimizu, senior vice president of global quality assurance at Takata, maintained the company's defiant stance, telling lawmakers at the hearing that the available data and scientific evidence on the air bags "doesn't support" a nationwide recall.

Takata also contends that NHTSA only has authority to seek recalls from auto manufacturers and makers of replacement parts, not original parts suppliers. NHTSA disagrees.

Late Tuesday, NHTSA called Takata's decision "disappointing" and said it will review the response to determine the agency's next steps. A week ago, the agency threatened civil fines and legal action if Takata didn't declare the driver's air bag inflators defective and agree to the recall. It can impose fines of up to $35 million.

David Friedman, deputy NHTSA administrator, is also scheduled to appear at Wednesday's hearing.

In calling for a national recall, NHTSA pointed to inflator ruptures that injured drivers in California and North Carolina — both outside the recall zones.

Takata said in its letter that it has tested 1,057 driver and passenger inflators taken from locations outside the high-humidity zone, and none of them has ruptured. The company said it will expand production of replacement inflators for the current recalls and will expand the recalls if warranted.

The dispute between the government and Takata left automakers caught in the middle. Besides Honda, NHTSA has told other affected automakers — Ford, Chrysler, Mazda and BMW — that they need to recall the driver's side inflators soon.

BMW has said its recalls are national already, while Ford and Chrysler wouldn't comment.

Wednesday's hearing is the second in Congress regarding the Takata air bag matter. Earlier this year, Congress held a number of highly-publicized hearings into General Motors' handling of a recall of cars with defective ignition switches that are now linked to deaths. Investigations into that issue are ongoing.

"I'm sorry to say that it has been a bad year for auto safety," said Fred Upton, R-Michigan at the opening of the hearing.

____

Krisher reported from Detroit. Yuri Kageyama in Tokyo and Dee-Ann Durbin in Detroit contributed to this report.

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Steve Grossman blasts $65G raise for state pension chief

The salary of the state pension fund's executive director could catapult past $500,000 after its board yesterday gave him a $65,000 raise, prompting a warning from outgoing board chairman Treasurer Steve Grossman about the pay hike's optics amid financial unrest on Beacon Hill.

"We are ultimately spending taxpayer dollars and (it comes) at a time when cuts are taking place and budgetary belt-tightening is going on," said Grossman, who voted against boosting director Michael Trotsky's salary to $360,000, which, when combined with a bonus of up to 40 percent, could send his pay past a half-million dollars.

The state, Grossman noted, is trying to fill a $329 million budget gap, and the treasurer said he wanted to see a phased-in raise for Trotsky, who he still lauded for "outstanding" work.

Trotsky, who also serves as the $60.2 billion fund's chief investment officer, told the board that the fund's balance was up 9.4 percent in the year ending Oct. 31, but also warned of waves of market volatility amid the recent gains.

"We think this signals the late stage of the boom that we've been in for the past five years and we have prepared for," Trotsky said, according to the State House News Service.

A representative of Glen Shor, Gov. Deval Patrick's administration and finance secretary, was the only other board member to vote against Trotsky's raise.

Treasurer-elect Deb Goldberg said in a statement while a "significant raise" is well-deserved, the spike was "uncomfortable and not necessarily appropriate at this time."

Trotsky said in a statement he's "extremely proud" of the gains the fund has made.

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The Ticker

Three cos. buy retail at hotel in Kenmore Sq.

Three real estate investment firms have purchased the 37,000-square-foot retail portion of Hotel Commonwealth in Boston's Kenmore Square in a $38.5 million deal.

Boston's UrbanMeritage and Novaya Real Estate Ventures and Atlanta-based Invesco Real Estate plan to re-tenant and reposition the more than 10,000 square feet of space that's currently vacant at the Shoppes at the Hotel Commonwealth in the next 12 to 18 months.

"The retail space has never been focused on by any of the hotel owner/operators," UrbanMeritage principal Michael Jammen said. "As a specialist in retail and mixed-use properties, we believe we can find the retail users that will work well with the hotel use and continue the revitalization of Kenmore Square and the Fenway area."

Current tenants in the hotel include the Eastern Standard and Island Creek Oyster Bar restaurants, as well as The Hawthorne, Starbucks and Hunt's Photo & Video.

The sellers were Denver-based Sage Hospitality, which purchased the hotel two years ago, and co-owner Fundamental Advisors of New York. The 149-room hotel is undergoing a 134,000-square-foot expansion that will add 96 more rooms, event space and parking.

Jobs emails in Apple iPod trial

The late Steve Jobs, co-founder of Apple Inc., led the company to violate antitrust laws by restricting music purchases for iPod users to Apple's iTunes digital store, an attorney for consumers suing Apple said in court.

Opening statements began yesterday in an Oakland, Calif., federal court in the long-running class action, which harks back to Apple's pre-iPhone era. The plaintiffs, a group of individuals and businesses who purchased iPods from 2006 to 2009, are seeking about $350 million in damages from Apple for unfairly blocking competing device makers. That amount would be automatically tripled under antitrust laws.

Today

 Labor Department releases revised third-quarter productivity data.

 Institute for Supply Management releases its service sector index for November.

 Federal Reserve releases Beige Book.

THE SHUFFLE

JLL Construction has hired Cosmas Papanikolaous and Bill Guzowski to join the firm's New England Construction group as an estimating manager and senior construction manager, respectively. Papanikolaous comes to JLL from Bond Brothers. He brings more than 14 years of industry experience having previously worked for Suffolk Construction and Tocci Building Corp. Guzowski joins JLL from AZ Corp. He has more than 21 years of experience in the institutional, life sciences, and health care industries.

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Reebok to outfit all UFC fighters

Reebok is expanding its fitness focus by stepping into the Octagon under a six-year deal as the new exclusive outfitter of the Ultimate Fighting Championship mixed martial arts organization.

The Canton athletic brand also will be the official clothing provider for fans of the 21-year-old UFC and will develop a new line of training gear for the 35 million people worldwide who use MMA, boxing and kickboxing in their exercise regimes.

"It's a very significant commitment, and we think it will generate significant commercial opportunity," said Reebok president Matt O'Toole, who declined to put a dollar figure on the deal. "It's one of the few sports that's popular in every continent, and its viewership numbers keep climbing — similar to ... the NBA or other sports leagues."

The alliance is the biggest non-broadcast deal signed by the Las Vegas-based UFC and will further professionalize the sport, chairman and CEO Lorenzo Fertitta said. "Working with another global brand with such a strong history in training and fitness will deliver long-term value for UFC athletes and their brands by elevating and further professionalizing the events and the sport," he said in a statement.

UFC athletes will be required to wear Reebok gear at all official UFC events starting in July and will no longer be permitted to exhibit other sponsors' logos during them. In turn, the UFC will compensate them based on their rankings during event weigh-ins.

Reebok currently sponsors UFC welterweight champion Johny Hendricks and lightweight champion Anthony Pettis and expects to add more UFC fighters to its roster.

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Somerville pols laud $1B for Green Line expansion fed

The economic future of Somerville and Medford is on a fast track after the Green Line extension passed one of the last key financing milestones for a plan that calls for adding six stops to the popular MBTA route.

"The economic impact is unlimited for Somerville," said city Mayor Joseph Curtatone.

Curtatone said the extension will be more transformative to the city than even Assembly Square, a project that was made possible by a new Orange Line station.

The project will add six stations in Somerville and Medford, including a new branch to Union Square and a stop at College Avenue in Medford.

In its evaluation of the extension, federal transportation officials said the area's future development is largely dependent on transportation improvements.

"The corridor's capacity to accommodate additional development depends on the improvement in the transportation access that would be provided by the Green Line Extension," the report says.

The project will get nearly $1 billion in federal money, the Federal Transit Administration said in a letter to a U.S. Senate committee.

The rest of the project will be paid for by 
$996 million in state bonds and $305 million in state operating funds.

U.S. Rep. Michael Capuano, who represents Somerville and served as mayor of Somerville, said the project will have more than just economic benefits, adding that the line "is really intended — in my mind — to serve people who have been underserved for forever."

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Tinkerbell to shine in Walmart ads for NBC's 'Peter Pan'

Don't be surprised if elements of "Peter Pan" show up in the commercial breaks during NBC's live Thursday telecast of the famous 1904 play.

Walmart, which ran ads during NBC's live broadcast of "The Sound of Music" last year that used songs from the play to make a marketing point, will again serve as lead sponsor of the live event, and will use commercials that echo the action that just took place in the play just before the production cuts to advertising. All five of the spots will also feature Tinkerbell (or, at least, the version of the character being used in the NBC production).

Walmart will have the heaviest presence in what is a sold-out program, said Dan Lovinger, executive vice president of entertainment ad sales at NBCUniversal. "I think that the industry, and certainly America, is really falling in love with concepts like this," he said. "It's a great family event. It gives people the opportunity during the holidays to sit down together to watch a show that everyone can be comfortable with."

Set to air live at 8 p.m. on Thursday, December 4, NBC's "Peter Pan" production shows the network doubling down on a gambit that worked well last year - and is gaining traction across the TV-scape. Just as Discovery Channel's recent broadcasts of daredevil Nik Wallenda walking a tightrope over Chicago and in the vicinity of the Grand Canyon have lured viewers, so too has the prospect of seeing up-and-coming celebrities hold forth in the title role of NBC's theatrical events. Allison Williams will play Peter Pan while Christopher Walken will play Captain Hook.

The network's live broadcast of "The Sound of Music" attracted more than 18 million viewers. NBC has already unveiled plans to mount a live production of "The Music Man" in 2015.

Demand for the show has been high, as more advertisers demonstrate a craving to link to the growing number of live events TV networks are testing to lure bigger crowds. NBC sought more than $350,000 for a 30-second spot in the show, Lovinger said, confirming a previous report in Variety. He declined to name other advertisers in the event, but said the show had support from the restaurant, electronics, movie-studio and wireless categories.

In five Walmart ads slated to run at specific moments during the program, viewers will see actress Melissa Joan Hart and her actual family in scenes that play off "Peter Pan" moments while also showcasing products available at Walmart. Hart is currently involved in Walmart's holiday campaign.

In the first of the spots produced by NBCUniversal, Hart will read a bedtime story to her family as they talk about pajamas (available, as it might happen, for purchase at the large retailer. In a second, the family will play with a Tinkerbell toy and Hart will show her family a "Lost Boys" tree hour lit up in the backyard. In a third, Hart's sons play in the tree house while shouting "Wendy." In a fourth, Hart's family sits around the dinner table preparing to make homemade cookies. In the fifth, and last, Hart reads "Peter Pan" to her kids and talks to them about growing up.

NBC was not able to say whether all the Walmart ads will run immediately after the broadcast cuts to an ad break - where they would have the most relevance - or deeper in the mix of promotions that run in each commercial interruption.

The concept sounds easier to put into practice than the idea Walmart used during its 2013 sponsorship of "The Sound of Music." As part of that effort, NBC produced a series of spots featuring the Brooks family of Gardner, Kansas, which has 12 children. The clan was spotted at various points in the broadcast doing activities to the strains of the popular tunes from the play. Each spot appeared after the song being featured had been sung in the show.

NBCUniversal actually did a four-day talent search for the family that eventually appeared in the ads, which were also produced by the company without the use of an ad agency.

Mediavest, an ad-buying firm that is part of France's Publicis Groupe, helped Walmart negotiate the price and placement of its "Peter Pan" campaign.

Marketers have shown new interest in crafting commercials for very specific occasions, a reflection, perhaps, of a desire to emulate the content that drew viewers in the first place, instead of interrupting the experience. "Clients in general are getting more and more creative and more demanding to create content that's relevant and resonates with not only our viewers but their consumers," said Lovinger.

NBC and Walmart have a history of teaming up for family fare. In 2010, the retailer and Procter & Gamble joined with NBC to create a TV movie, "Secrets of the Mountain," that aimed to offer an alternative to what the advertisers viewed as an increase in risqué fare on the boob tube. After "Mountain" ran in April, a similar effort, "The Jensen Project," aired in July of that year. Broadcasts of the films featured both ads from each company as well as placements of their products and logos in the content itself.

Walmart has been spotted sponsoring other pieces of family fare this week. Last night, the retailer had two different commercials run during ABC's "Toy Story That Time Forgot."

© 2014 Variety Media, LLC, a subsidiary of Penske Business Media; Distributed by Tribune Content Agency, LLC

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