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Technology Stocks : The *NEW* Frank Coluccio Technology Forum -- Ignore unavailable to you. Want to Upgrade?

To: Frank A. Coluccio who wrote (36029)	10/4/2010 3:24:30 AM
From: elmatador	Respond to of 46821

Dump pipes, legacy copper, regulatory regime and delivering content. Telecoms fear impact of EU regulation By Stanley Pignal in Brussels Published: September 23 2010 20:58 \| Last updated: September 23 2010 20:58 Senior European telecoms executives reacted coolly to the European Union’s proposals on regulating the next generation of broadband internet networks, warning that excessive regulation could make large-scale investments less likely. Stéphane Richard, chief executive of France Telecom, said he was “not fully comfortable” with the proposals, released on Monday by Neelie Kroes, EU telecoms commissioner. They will extend the obligation for large telecoms operators to provide their competitors with cheap access to their infrastructure. Many network owners – often former state monopolies – had hoped they would be able to shed the regulatory regime, which is currently used on legacy copper telephone networks, as an incentive for them to invest the €300bn ($400bn) they say is needed to upgrade internet connections throughout Europe. “If the underlying philosophy of the European Commission is to look at networks like a commodity, or a utility . . . [next-generation internet] is not the best investment case we can offer our shareholders,” warned Mr Richard at a conference organised by the European Telecommunications Network Operators’ Association in Brussels. Franco Bernabè, chief executive of Telecom Italia, said he feared that European networks could be turned into “dumb pipes” with little opportunity to profit from innovative web applications delivered by the likes of Google, Skype or Facebook. Many European telecoms operators, including France Telecom and Spain’s Telefónica, have been lobbying for the ability to charge content providers for delivering content to their customers, an idea that Ms Kroes has said in the past she did not support. Zeinal Bava, head of Portugal Telecom, said the proposals on competition are “not the right balance. There’s more work that needs to be done to ensure that the industry doesn’t end up in ‘survival mode’”. Ms Kroes had tried to sound a conciliatory tone as she opened the conference. “Let me be clear. All investing companies have my strong support in this transition to fibre,” she said, stressing that the access rules only applied to larger networks where there was little competition. “Our approach is consistent with attractive returns on capital for telecoms companies.” But she firmly excluded the possibility of “regulatory holidays” demanded by some companies considering investments, which would have allowed them to exploit new networks without granting access at near-cost levels to competitors. Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.

To: Frank A. Coluccio who wrote (36029)	10/4/2010 3:14:47 PM
From: Maurice Winn	4 Recommendations Respond to of 46821

Frank, there wasn't a problem on Flash Crash day. Long ago [like 14 years and from time to time since], you will find rants by me about computers playing "poker" for the pot while regular humans blunder around betting too. It's a crowded room. Like a crowded theatre. Of course some million mile a minute computer is going to shout fire in the crowded room to see what the other mile a minute computers do and what the humans do and what the half mile a minute computers do. They don't hire PhD mathematicians and high performance software programmers and pay serious money to have their million mile a minute computers closer to the bidding table to sit around doing nothing. They are trying to model not just human behaviour but competitor computer behaviour. Of course, one of the things to test is panic reactions, and also the simple fun of agreeing to a sophisticated game of chicken in which a couple of computers see each other lining up to shout "panic" so they and maybe others join in to see how low the market will go and who is too scared to wait to the bottom to buy, or sell. The Flash Crash was not only not surprising, it was obvious that such things would happen. The fact that the people in authority were surprised is not surprising and their reaction, to cancel the trades which didn't somebody or other, is indicative of them being untrustworthy too. As usual, when incompetent authorities do things to solve problems, they make it worse due to their unintended consequences. I had even made arrangements with my broker to lie in wait for the million mile a minute computers to try it on the shares I'm interested in. But I canceled because I can't afford to take the risk that my trades will be canceled. Therefore, by their actions, the authorities have reduced liquidity, which was exactly the problem during the Flash Crash = people were not present to buy shares on the way down. Because I don't act at a million miles a minute, I have withdrawn my liquidity so the market will next time fall further than it would have done if I was allowed to lie in wait for the crazed panicking sellers, stampeded by the million mile a minute computers. The authorities have therefore done the opposite of what they planned, which was to reduce volatility. They have increased it [inadvertently]. Volatility can do real harm as actual companies doing real work go bust. The authorities can introduce "Let's all have a nice cup of tea" breaks in trading, but they can't dictate what people and computers think shares are worth. When the tea break is over, perhaps there will be an immediate greater crash as people and half million mile a minute computers try to flee before they are trampled in the mayhem. Panic is a natural reaction to dire threat. The more tea breaks the authorities enforce, the greater the panic as people realize they are trapped in the burning building with authorities not letting them escape. They will be like the girls in Saudi Arabia burned to death because the authorities would not let them out without their proper head covering. The authorities will panic in the stock market too and thereby ensure maximum disaster. Just as with the overblown panic about the Transocean accident in the Gulf of Mexico, in which the dumb authorities shut down exploration, thereby causing hugely more economic harm than BP is accused of causing, the authorities are no doubt unaware of my reaction, reducing liquidity, and think they have done a good thing. Other people will also want to protect themselves against dumb authority, so now we wait to see the size of the bigger crash which happens. There is no upside to trying to guess the bottom now. If you are right, you get your trade cancelled and the panicking seller has had free protection at your expense. If you are wrong and it wasn't the bottom, and your trade isn't cancelled, you are going down for the count. It's a lose-lose bet. So of course, I will not take it. I will see what's worth buying when the authorities have finished their wreckage. The best answer to the Flash Crash is to say "What fun. Good luck with the next round folks. Heck, I might dabble myself." There was no need for a big expensive investigation which came to dopey conclusions. When panic is primed and ready to go, it just takes a butterfly taking off in a forest in Russia from a falling tree which nobody heard to start the apocryphal storm. Banning butterflies in Russia won't solve the problem. There are also butterflies in Guatemala and as per quantum financial physics, the random action can happen anywhere. Mqurice PS: Have many people understood yet that the BP accident was a huge net gain for the USA? Huge cash flow has been and will be transferred from BP shareholders around the world and much of it to the Gulf of Mexico area. There are about 30% USA shareholders of BP so on average, the money came from elsewhere. There has been much more money made by shrimp catchers by harvesting oil than by conducting their normal operations. The accident was great for people in the area. Otherwise unemployed people were paid to go to the beach and aimlessly wander around pretending to look for oil.