Finance and Economic

Verizon Wireless was working to get its 4G network back up and running on Wednesday, following a nationwide outage that began in the early morning hours.

Customers across the country, from California to Ohio to Virginia, took to Verizon’s forums to complain that service was knocked out, though gripes were mostly limited to the new 4G LTE data network, which Verizon began to roll out a year ago. Voice calls, texts and 3G data were unaffected, according to the company.

Verizon (, Fortune 500) spokesman Tom Pica confirmed that service returned to normal at around 2 p.m. ET after engineers worked all morning to fix the issue. He did not comment on the cause of the problem.

It was the second nationwide outage in as many weeks for Verizon’s 4G network, and the third since April. That’s a tough pill to swallow for Verizon, which has built its brand on network reliability.

The bad news for Verizon and its customers is that wireless infrastructure experts expect this isn’t the last time the 4G network will go down. Since Verizon was the first company in the world to deploy a 4G LTE network at any great scale, it is dealing with the usual early adopter growing pains.

"Verizon is a pioneer, and it’s suffering the fate that all pioneers face," said Ken Rehbehn, analyst at Yankee Group.

Indeed, each new wave of network technology involves some degree of pain. When the last next-generation network (3G) first deployed, it was brought down by widespread capacity constraints that the carriers had not anticipated. Most notably, AT&T’s (, Fortune 500) 3G network became close to unusable in New York and San Francisco following Apple’s (, Fortune 500) launch of the iPhone 3G in 2008.

4G is a myth (and a confusing mess)

So what’s the trouble with Verizon’s 4G network? Verizon isn’t saying, and it would be very unusual for a network operator to reveal specifics about why it’s having a problem. But experts believe it has to do with the complexities of LTE, which is a much more intricate technology than its predecessors cash advance.

Unlike previous systems that use switches to control traffic, 4G uses "cores," that act like large, centralized command-and-control centers. Switches covered city blocks, but 4G cores are now serving multiple states. If one goes out, entire regions could lose service.

Since it’s a nationwide event, experts believe all the cores may have been affected by a software or hardware issue.

"This is truly indicative of a larger problem," said Robert Laracuente, vice president of business development at Telenetworks in Puerto Rico. "Best case scenario, some routing isn’t programmed as it should be. The worst case scenario is an undetected hardware fault that systemically disrupts the network under certain conditions."

Because this has happened three times now, Laracuente said it would be surprising if Verizon faced a software problem, since the company prides itself on its scrutiny of its engineering. If it is a hardware malfunction, that can be very hard to detect and prevent in the future.

"This is a whole new paradigm of network technology, so I expect that issues will continue to occur," said Akshay Sharma, analyst at Gartner.

Next-generation networks are based end-to-end on Internet Protocol, which routes packets of information over the Internet rather through circuits. That makes 4G about 10 times faster and gives it significantly more capacity for data traffic than 3G, but it also brings a new host of issues to the table.

"IP by its nature is not resilient from day one," Sharma said. "You don’t get resiliency and quality of service for free — you have to engineer that in. That’s a new wrinkle that adds to the challenge."

Verizon’s 4G customers may have to get used to a few bumps as their first-of-its-kind technology gets all the glitches smoothed out. It’s the price pioneers always pay.  

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Fitch ratings agency said Friday that it will put a default rating on Greece’s government bonds as a result of the eurozone’s new plan to get banks to share the burden of helping the country.

The eurozone plan says banks will be asked to contribute billions to Greece by rolling over debt, swapping bonds or selling them back at low prices.

As expected, Fitch said that because that would mean a loss for those banks, it will lower Greece’s rating to “restricted rating.” That rating could be lifted, however, as soon as Greece issues new bonds to the banks.

Those new bonds would be guaranteed by eurozone governments.

The banks’ contribution is part of a broad deal to help Greece.

The country will get euro109 billion ($156 billion) in new financing in a complex package that includes new loans, buybacks of Greek debt, and credit guarantees under the deal agreed Thursday by the leaders of the 17 countries that use the euro.

The European plan will help ease Greece’s burden by cutting interest rates and extending repayment on bailout loans, and by asking Greek bondholders such as banks and investment and pension funds to accept less than the full value of their investments through bond swaps and rollovers. Those transactions will give them bonds that pay less interest _ around 4.5 percent on average _ over a much longer period of 30 years.

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CALGARY

The U.S. Justice Department is investigating Credit Suisse Group’s offshore business with wealthy American clients as part of a larger probe into suspected U.S. tax evaders, the Swiss bank said Friday.

Credit Suisse said it was informed of the investigation Thursday and will cooperate with U.S. authorities within the limits set by Swiss banking secrecy.

“The investigation concerns historical private banking services provided on a cross-border basis to U.S. persons,” the bank said in a statement. “It has been reported that the U.S. authorities are conducting a broader industry inquiry,” it added.

Credit Suisse is the most high-profile Swiss bank to be targeted by U.S. investigators since rival UBS AG became embroiled in a tax evasion probe three years ago. Zurich-based UBS admitted to helping U.S. clients hide money on offshore accounts and ended up paying a fine and giving U.S. authorities details on thousands of American account holders instant credit report. The case prompted Switzerland to soften its strict banking secrecy rules in response to international pressure.

Observers had expected a formal investigation against Credit Suisse after three former and one current employee of the bank were indicted by U.S. authorities in February on charges of conspiring to help American tax cheats.

Analysts at Zuercher Kantonalbank noted that a new treaty currently being discussed by Bern and Washington _ which would automatically tax the accounts of American bank clients in Switzerland _ might ease the pressure on Credit Suisse and other Swiss banks.

Shares in Credit Suisse were down 1.5 percent at 30.13 Swiss francs ($36.88) on the Zurich exchange.

The bank releases its second-quarter results July 28.

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Italian markets are buoyant on expectations that the Senate will approve a package of austerity measures that is key to shoring up confidence in the country’s financial future.

The benchmark FTSE MIB was up 0.5 percent, the only European index to trade higher Thursday morning.

Italy’s finance minister has vowed that the austerity measures, which aim to balance the budget by 2014, will get final approval by the lower house of parliament on Friday.

The government fast-tracked the approval _ from an original deadline of August _ to soothe jittery markets.

Italy will also hold its second bond sale this week, seeking to raise euro5 billion ($7 billion) in 5- to 15-year bonds from the markets. Italy easily raised euro6.75 billion in 12-month debt on Tuesday, though at higher rates.

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Australia and Japan sparred verbally Tuesday at a meeting of the International Whaling Commission, after Japan called on Australia to better protect its whaling ships from sabotage raids by anti-whaling activists.

Confrontations with activists forced Japan to cut short its annual hunt south of Australia this year. Protesters threw paint, smoke bombs and rancid butter in bottles toward the Japanese whaling ships. They also got a rope entangled in the propeller on a harpoon vessel, causing it to slow down.

Australia rebuffed Japan’s request, with Environment Minister Tony Burke saying that while Australia would abide by the principles of safety at sea and international maritime law, his country “simply can’t agree” to providing more protection to Japanese ships than other vessels operating in the area.

Japanese whalers regularly hunt in Antarctic waters south of Australia, a feeding ground for 80 percent of the world’s whales, and the commission has no enforcement powers to stop them. Japan insists the hunt is for scientific research, something anti-whaling nations dispute.

“This so-called scientific whaling lacks any scientific argument behind it,” Burke said. “What’s going on there is commercial whaling. Australia is opposed to commercial whaling.”

Australia has launched a complaint against Japanese whaling at the International Court of Justice in The Hague, the U.N.’s highest court.

Commercial whaling is banned by a 1986 moratorium. Talks on allowing limited commercial whaling broke down last year, and no breakthroughs are expected at IWC talks in Jersey.

Britain has proposed reforms to make the commission more transparent and effective, including by forcing governments to pay their membership fees by bank transfers, which can be easily traced, instead of cash or checks.

The move comes in the wake of allegations last year that Japan has been using aid money and personal favors to buy votes, which Japan denies.

“I still hear that people are paying their dues in cash. I think that’s unacceptable … and leaves an organization open to accusations,” British Fisheries minister Richard Benyon said. “These may be perceptions not reality, but it’s something this organization has to tackle.”

The British proposal was held up by procedural issues Tuesday and will be re-tabled Wednesday.

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Former Missouri Gov. Roger Wilson is out as chief executive of Missouri Employers Mutual Insurance Co., the state’s largest workers’ compensation provider, and a search is under way to replace him.

Wilson had been on administrative leave since May 13.

The departure comes as MEM, which was created in 1993 by the Missouri Legislature to provide insurance for small businesses, faces turmoil over criminal charges filed against two former members of the insurer’s board of directors.

The Columbia, Mo.-based insurer issued a statement Thursday announcing its board of directors decided to make a leadership change, and Wilson is no longer employed by MEM.

Wilson, who lives in Columbia, joined MEM’s board in January 2009 and became its acting president in June 2009. He was named CEO in January 2010.

MEM is not disclosing why Wilson was on leave or why he was removed.

“Since this is a personnel matter, we will not be making any additional comments regarding Mr. Wilson,” MEM’s statement read.

In a separate statement, Wilson said he was proud of his work at MEM. “I wish them very continued success in building on the strong record we compiled together,” Wilson’s statement read. Through a spokesman, Wilson declined to comment further.

Wilson was lieutenant governor of Missouri for two terms, beginning in 1992. He became governor upon the death of Gov. Mel Carnahan in 2000 and served for three months.

MEM’s leadership has gone through a shake-up in recent months. Douglas Morgan, a longtime MEM board member who was named chairman last fall, was indicted in April on charges that he allegedly defrauded Commercial Bank of St. Louis and owes the bank $1.5 million. Morgan also was charged with wire fraud in connection with efforts to build a casino in the Spanish Lake area while he was chairman of the St. Louis County Planning Commission. Morgan, who was removed as MEM’s chairman and resigned from the board on May 30, has pleaded not guilty to the charges.

Attorney Jim Owen of Chesterfield succeeded Morgan as board chairman. Owen is now serving as interim president and CEO of MEM.

Owen said MEM is looking for a chief executive with insurance industry leadership experience and financial expertise.

“Obviously, we want to fill this position as quickly as possible,” Owen said Thursday.

Another former MEM board member, Karen Pletz, was indicted in March on embezzlement charges. Prosecutors allege Pletz fabricated documents over several years authorizing more than $1.4 million in payments from the Kansas City University of Medicine and Biosciences, while she was the school’s president. Pletz was fired from the medical school in 2009.

Pletz, who resigned from MEM’s board in March 2010, has pleaded not guilty to the charges.

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General Mills Inc.’s fiscal fourth-quarter net income rose 51 percent on stronger sales but was hampered by higher ingredient costs.

The Minneapolis-based maker of Cheerios, Lucky Charms and other foods also gave a 2012 earnings outlook below analysts’ expectations.

General Mills earned $320.2 million, or 48 cents per share, for the period ended May 29. That’s up from $211.9 million, or 31 cents per share, a year ago.

Adjusted earnings increased to 52 cents per share from 41 cents per share, meeting analysts’ forecasts.

Revenue climbed 3 percent to $3.63 billion from $3.53 billion, but missed Wall Street’s estimate of $3.66 billion.

The company saw its biggest sales gain in its Small Planet Foods organic and natural foods division, with its snacks and Yoplait divisions also reporting increased sales.

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The ash cloud from a Chilean volcano that has been erupting for nearly two weeks has circled the globe and come home again.

The returning cloud _ which has disrupted flights in Argentina, Brazil, Uruguay, Australia and New Zealand on its around-the-world trip _ on Friday forced Chilean officials to cancel domestic flights for the first time since the Cordon Caulle volcano began erupting June 4.

LAN airlines suspended flights to the cities of Puerto Montt, Coyhaique and Punta Arenas in the far south of the South American country. While ash from Cordon Caulle has wreaked havoc with air travel abroad, it had left Chile’s internal flights largely untouched until Friday.

“The tip of the cloud that has traveled around the world is more or less in front of Coyhaique,” said Civil Aviation Office chief Pablo Ortega. Coyhaique is 800 kilometers (500 miles) south of the volcano.

Chilean authorities evacuated 3,500 people living near the volcano after it began erupting but some have since returned.

The governor of Ranco province, Eduardo Holck, said the volcano is emitting a fine ash that is scattering over the Nilahue river valley.

The government, however, maintained a red alert for communities near Cordon Caulle. Chile’s National Geology and Mines Service warned that volcanic activity could begin again “with episodes similar or greater in intensity that was has occurred.”

On Thursday, the government of the Argentine province of Neuquen declared an economic emergency to aid towns where falling ash from Chile’s volcano is endangering livestock and keeping tourists away.

The decree by Gov. Jorge Sapag will mean that those affected can receive tax benefits, among other measures.

The ash has blanketed towns across the border in Argentina.

In the area of Villa La Angostura up to one foot (30 centimeters) of ash has accumulated on the ground. The eruption came just as resorts in the mountain towns were preparing for ski season.

Argentina’s regional airports in Patagonia have also been shut down for more than a week due to the cloud of fine grit, which can damage airplane engines.

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OTTAWA