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Google said its Internet services in China are functioning properly after a minor overnight disruption.

More videogame companies, angling for larger audiences for big-budget online games, are making their products free to play in the hopes they can make more money by charging players for virtual goods.

Oracle is hit with fraud charges ... Japan wants to hear from Apple about overheating iPods ... Microsoft's working with partners on better slate PCs ... and YouTube gives uploaders more time. Jim Chesko reports.

I’ve stated before that “The real barrier to innovation isn’t the cost of bandwidth” and it looks like Netflix’s 10K filing confirms this. Despite a huge increase in online content and users, bandwidth costs have barely risen. However, it would seem that the US Postal Service is a significant and increasing cost to Netflix’s bottom line.

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Stakeholders to meet at FCC for Saturday meeting

After a week of meetings at the FCC, major industry stakeholders will head into the agency on Saturday for an additional meeting, sources confirmed. Meanwhile, telecom talks on Capitol Hill take a breather this week.

NCTA, Verizon, AT&T as well as Google, the Open Internet Coalition, and Skype met with top FCC officials this week for discussions on possible legislative language for net-neutrality rules.

Leahy to hold EPCA hearings in light of administration proposal

Senate Judiciary Chairman Patrick Leahy (D-Vt.) said his committee will hold hearings this year on updating the Electronic Communications Privacy Act (EPCA), which Google, Microsoft, and AT&T have all pushed for. The law has not seen an update since 1986.

His announcement came in light of a proposal from the Obama administration that would give the FBI permission to take, without warrants, more information about citizens from their Internet service providers. The information could include browser history and possibly the dates and times that users sent e-mails but not the content of e-mails.

Leahy raised concerns about that proposal.

“While the government should have the tools that it needs to keep us safe, American citizens should also have protections against improper intrusions into their private electronic communications and online transactions. We must also address past government abuses of these authorities,” he said in a statement on Thursday.

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Hill notes

Boucher-Stearns bill gives FCC power to hold incentive spectrum auctions. Reps. Rick Boucher (D-Va.) and Cliff Stearns, who lead the House Communications Subcommittee, introduced a bill to allow the FCC to offer incentives to broadcasters to relinquish their airwaves so that spectrum can be auctioned to commercial wireless providers. 

CEO Steve Ballmer said Microsoft needs to do better in the market for tablet computers that Apple has found success in with the iPad.

Samsung Electronics reported a record profit, but executives said that may have been the peak for the year as pricing pressures are likely to overwhelm sales growth in the second half.

Hundreds of customers in New Zealand hoping to buy Apple's new iPhone 4 were turned away Friday, in what one frustrated would-be buyer called a "nightmare" for customers.

Australian PM Julia Gillard unveiled an expanded plan for a national high-speed fiber Internet network that will reach 93% of homes and businesses.

Telecommunications-equipment maker Alcatel-Lucent reported a second-quarter net loss on Friday, but confirmed its full-year forecast.

Intel won a key ruling in a suit against the company on behalf of computer buyers, which found no evidence that consumers have been hurt by the company's discounting practices in the market for computer chips.

Motorola reported higher profit and stabilized its long revenue decline, as the company's wager on smart-phones running Google's software began to pay off.

Cuomo launched a fraud investigation into the life-insurance industry for practices that allegedly denied families of deceased military personnel and others from collecting cash from their policies.

Panasonic said it will spend up to $9.4 billion to buy all remaining shares in Sanyo Electric and Panasonic Electric Works.

As 3-D software costs have dropped, more small consumer-product companies are finding it cost-effective to purchase sophisticated modeling tools.

Telefónica said net profit rose 16% as revenue growth in its Latin American business compensated for a weaker Spanish market.

PartyGaming plans to merge with Austrian sports-book operator Bwin Interactive Entertainment, creating the world's largest listed online-gambling business.

The U.S. Justice Department accused Oracle of defrauding the federal government on a software contract that involved more than $1 billion in sales.

Nintendo reported its first quarterly loss in more than two years, as Japan's strong currency and a lack of major new products further pinched the videogame maker.