Euronext speech

I attended a luncheon sponsored by the National Investor Relations Institute featuring a speaker from NYSE Euronext, the exchange which merged with Archipelago in Chicago, who was speaking on the globalization of financial markets.

Up until 2004 each of the exchanges were essentially single asset classes. The NYSE then changed its strategy to use globalization, diversity asset classes, & leverage technology. In 2006, the NYSE & Archipelago holdings hooked up & went public. In 2007, NYSE merged with Euronext which had 4 exchanges in Europe, to create the 1^st “global markets,” & started their asset diversification in derivatives. They trade $141 B daily, which is 1/3 of the cash trade in the world. They own 5% of the Indian exchange (capped by the government), & 1% in Brazil. They have interests in Tokyo, (which is not yet publicly traded), Malaysia, & the Philippines

There is increasing global competition for capital formation. In 1995, 57% of global proceeds were listed in the U.S. That # has dropped to 18% in 2006. In 1999, private placements were $57B. In 2006, that had risen to $137B. Europeans no longer need to access capital in the US. Brazil is getting deeper & more liquid. Of 64 public exchanges worldwide, only 2 are in the US. Growth in derivatives is 30% to $450B dwarfs others. American holdings overseas was in $7.2B in 59 funds 5 years ago to $87B in 217 funds now. Foreign investment is up 90% in the US.

In the future, consolidation into 5-6 groups is inevitable. Regulation is becoming more global & there will be more convergence with consolidation. Europe offers “fast path” listings for US companies which are already listed with SEC documents instead of European listings.

My purpose in attending was to find out what was left of Archipelago in Chicago.  It seems as if only those responsible directly for the Arca Trading Platform.  Everyone else has relocated to New York.

foreigners view of intellectual property in the US

The German American Chamber of Commerce of the Midwest in cooperation with Brinks Hofer Gilson & Lione held this event: Avoiding US Intellectual Property Pitfalls The event featured a user’s view from the General Counsel of Robert Bosch, 1 of Germany’s largest electronics firms along with 2 attorneys from Brinks, 1 from Chicago & 1 from Detroit (Ann Arbor actually) with the law firm’s view.  Bosch is a prolific patent filer with an average of 14 filings/working day placing them 3rd in the US Patent office & 1st in Germany. Their goal is not to monetize their patent portfolio, rather to simply protect their  core manufacturing base.  Their best example is anti-lock braking systems.  The lawyers admitted intellectual property litigation is more expensive & extreme in the US, but 98% of cases settle.   Patent clearance searches can help an IP user avoid litigation.  IP owners can be sued when accused of infringements on patents, trademarks, & copyrights.  There are new standards for filing:  “justiciable controversy” judged by the “totality of the circumstances.”  They also offered 10 IP red flags, i.e. instances when IP should be secured

1 hiring an employee

2 disclosing information

3 selling product ideas

4 internal product development

5 co-development projects

6 solving customer problems

7 contracting engineering services

8 contracting software services

9 licensing in or out

10 acquiring business operations

The target audience apparently was German members of the GACCOM, but I’m not sure how many/what percentage of the attendees were German lawyers.  I requested copies of the presentations or links to them from the organizers, but have yet to receive them.

Jeffrey Sachs Managing Globalization

I checked out this event sponsored by the Chicago Council on Global Affairs.  There was a good crowd to hear this internationally-acclaimed economist over the lunch hour.

His general point was we’re @ a pivotal time in history where technology is enabling us to do much more, but it’s not sustainable, which will lead to a crash.  He cited numerous economic & population statistics, as economist do (of which I am 1)  which support his statements.  His main suggestion is we need sustainable development to avoid this crash.  I was disappointed that there was no opportunity to pose questions to the speaker.

Here are his 10 suggestions for our next President:

1.  end the Iraq war becasue money spent there can be better spent elsewhere

2.  end the Bush tax cuts

3.  invest in sustainable energy

4.  dispatch a climate envoy to the BRIC countries, Brazil, Russia, India, China

5.  stop 1/3 of our corn crop going to produce gas (ethanol)

6.  sign the convention on biodiversity

7.  invite African & Middle East leaders to the drylands initiative to address hunger & H2O shortages

8.  reestablish the United Nations Population Fund

9.  reinstitute the Millennium Development goals to get US out of last place @ donating .16% of our income

10.  create a cabinet-level Department for international sustainable development

I became familiar with Jeffrey Sachs when I went to Poland after he suggested economic shock therapy for the country, i.e., don’t waste time with easing in economic changes, rather jump right in, make them, & force people to make 1 radical adjustment instead of making many small incremental changes.  It seemed to work in Poland, so there’s wasn’t much flak against it.

While I understand his arguments for a better world, I think what’s missing is the recognition that things don’t change unless people see a direct benefit for themselves as a result of it.  I’m all for limiting population growth & supporting alternative energies, but until the poor see the gains from agricultural technologies & wind/solar power prices come down, they’re going to keep producing more babies (future farmers) & not buy expensive energy sources.

Indian longshot to bid for Motorola’s phones?

Wailin Wong must be scraping the bottom of the barrel @ the Tribune to come up with this beauty,  Indian firm may make offer for Motorola’s cell phone division

This just doesn’t seem to make sense from any angle.  Videocon makes appliances which have little to do with mobile phones.  Videocon doesn’t appear to have the capital resources to pull this off & pulling the $ together these days is extremely difficult, so I don’t see them raising much capital for this venture.  Sure growing Indian companies are interested in expanding when times for them are good, but let’s be realistic.  There may be a synergy in managing outsourced manufacturing, but otherwise I don’t see much of a fit.  So why write this article?  Is there some quota for the # of articles WW must contribute to Sam Zell?  Why am I writing an entry on an article that shouldn’t be written…?

banking on Israeli IT

The Israeli Economic Mission to the Midwest hosted an event last week entitled “Banking on Israel IT” sponsored by Grant Thornton, The Israel Export & International Cooperation Institute, AeA, America-Israel Chamber of Commerce, Bird Foundation, Illinois Dept of Commerce & Economic Opportunity, & Katten Muchin Rosenman LLP.

Michael Strauss of the Chicago Federal Reserve Bank made the Keynote presentation on an economic assessment of the US economy which is attached:  strauss israel presentation  It didn’t contain any interesting new international information, so there’s not much I can add.

Mark Schittig, Director of the Division of Risk Management @ the Fed in Chicago, made a presentation on Regulation & IT solution management but since much of the focus was on security, I guess they didn’t want to give hackers any fodder for thought.

Israel Tenenbaum, Director of the ICT Dept of the Israel Export & International Cooperation Institute made a short presentation which essentially introduced the visiting Israeli firms  tenenbaum ieici presentation Although it’s somewhat repetitive, here’s some additional information on the visiting companies  israeli IT co. details  He pretty much just read through the presentation, so there’s not much for me to add to what he presented.

Illinois exported electrical & non-electrical machinery & transportation equipment & other things worth over $148 million in 2005, down 4.68% from 2004. Other products exported to Israel include optic, photo, medical surgical instruments, organic chemicals, precious stones, plastics, non-railway vehicles, pharmaceuticals, articles of iron or steel, & aircraft.  About 200 Illinois companies have subsidiaries in Israel, such as American National Can Co.,  A.Epstein & Sons International, Motorola, Bi-Logic Systems, & Sara Lee.

Israel lists 100 NASDAQ companies & exports $3.6 billion worth of software.   It appeared as if Grant Thornton had arranged all the meetings for the visiting firms & held them in their offices.

Tellabs to attack international markets

I read this article by Jon Van in the Chicago Tribune Tellabs looks within where it states  ” Part of Pullen’s strategy will include tapping new foreign & domestic customers, such as telecom carriers in Asia & the U.S. government at home.”  Duh, that’s where the growth is.  Tellabs is already pretty international.  Tellabs generated 29% of its revenue outside
of North America in the fourth quarter of 2007.  It has customers outside the U.S. like Ericsson (Sweden), NTT (Japan), Telecom Italia, Telekom Malaysia, Telstra (Australia), Vodacom SA (South Africa) and Vodafone (Hungary).  Tellabs has regional headquarters in Singapore — Asia Pacific; London— Europe, Middle East and Africa; Ft. Lauderdale, FL— Latin America and Caribbean.  Tellabs employs about 3,700 people,  about 1,100 of which   are based outside the United States. I’m kind of surprised the past CEO Krish Prabhu, an Indian, didn’t pursue this strategy.  I also had to mention this article because an analyst with Robert W. Baird & Co. named Ken Muth, (no relation) commented on the hire in the article as well.

Chinese interested in Motorola’s cell phone’s?

I checked out this in the Chicago Tribune Motorola’s cell phone unit may draw looks from Chinese firms by Wailin Wong.

Like IBM selling its hardware business to Lenovo, this makes a lot of sense.  Motorola is failing in this business & needs a respectable way out.  The Chinese have lots of dollars because of all we import from them. Despite their fall, Motorola is still a widely recognized brand.  The Chinese competitors are not well-known outside of China & acquiring Motorola would bring them a global presence fast.

The consequences for the remains of Motorola’s cell-phone business could be bleak.  I believe with Lenovo, much of the manufacturing already took place in China.  I’m sure with Motorola, that’s mostly the case.  However, there are still many design & development functions which take place outside of China which would be relocated there, & that would mean lots of lost tech jobs elsewhere if that happens.  Even if these jobs stay in the U.S, they’d likely move to Texas, a growing hub & the US HQ’s of the Chinese  telcos in the southwest.

Also, like anything techy these days, Google also could be involved.  They’ve bid on the  spectrum allocation.  Motorola needs more resources in software development, so that’s another potential hook-up.

internet disruptions abroad

I caught this article by Jon Van in the Chicago Tribune Apparently a fishing trawler dragged its anchor across the bottom of the Mediterranean & severed a cable that was part of the backbone between the Middle East & Europe. To quote the article: “Anything that interrupts international connections is a big deal,” said Tom Weekland, a managing partner at the Chicago-based Diamond Management and Technology consultancy. “Hospitals get imaging diagnostics from Asian radiologists. Even small companies have payrolls prepared in India. If connections are broken, or even degraded, it impacts business here.”

It blows my mind that something as innocuous as an old fishing boat can screw up the international digital network. It paints a pretty surreal picture of an incredibly antiquated old schooler sabotaging all of the crack/blackberry-heads. I’m surprised we haven’t seen more terrorist attempts at these kinds of disruptions. If they really want to mess with the developed world, they should disrupt the money flow, & bringing down the internet does that. If they do, Chicago will be a target, as 1 of the biggest internet connection points in the world. Obviously, redundancy is the solution, but with varied routes rather than just along the same track.

Abbott builds in Singapore

I saw this tidbit by Bruce Japsen in the Chicago Tribune

Abbott is apending $280 million to build a plant to manufacture nutritional products in Singapore to serve southeast Asia. By way of background, Singapore is trying to establish itself as the “Biopolis of Asia” as a biomedical services hub for Asia. It already claims to be the hub for southeast Asia. This appears to fit within the specific clusters the local government is seeking to develop. Why Asia? Asia’s population is expected to grow from 3.2 billion people now to 5.6 billion in 2050.

I visited Singapore for a localization conference a few months before 9/11. It certainly is a high-tech society. I was surprised at how tropical the weather is. It didn’t even cool down at night. I understand the government is loosening up a little bit-you might even be able to chew gum on the subway now.

Pakistan Software Export Board visit

The evening of 23 January, the Trade Consul for Pakistan Asad Hayauddin hosted a reception for the visiting Pakistan Software Export Board There were 10 individuals from 8 companies who visited Chicago after Houston & California, (which sent a bit of a chill up their spines, I’m sure), in addition to representatives from Islamabad & the Pakistani Consulate in Houston. Of those I met, most already had offices in the States, but were considering other locations. I was told they were on a tour to survey where to expand their operations here in North America. There were a number of other folks from the international community as well as representatives of the local Pakistani business community. If you were there, I think some stereotypes would have been broken. With all of the press we get decrying the actions of extremists in that part of the world, I think you might have been surprised to find how similar these visitors are to you & me. I met a banker, formerly with JPMorgan Chase, who is now with the National Bank of Pakistan. He wears a scruffy beard & no tie! If you’re interested in getting in contact with any of the Pakistani software developers I met, just let me know. Thanks.

crm helper in china

I read this article in the Chicago Tribune Sunday on how Darren Liu helps the Chinese with CRM in China. What stood out to me is that although Darren is a native of China, he emmigrated to America 10 years ago & his language skills are self-admittedly “at a 6th grade level.” Microsoft had Darren provide multiday training sessions on CRM while he was on vacation in Beijing & even named him 1 of 4000 “Most Valuable Professionals.” This is just 1 great example of the need for foreign language education, & Chinese in particular. It blows my mind that someone with those skills is so lauded. It just goes to show what you can do when you’re able to communicate with people in their own language. Although I’ve never claimed to be as fluent as a native speaker, I did live & work in Germany for 2+ years, so I do wonder how my German would be rated.

new world work hours 24/7, almost literally

Time-zone shifters caught in loop

Workday never ends when you must deal with business cycles from around the world

It’s Sunday dinner in the Khanna family’s spotless three-bedroom condo, and the matriarch, Ritu, is happy. She munches a spicy stew of cauliflower, carrots and peas with her husband, Vivek, and their teenage son, Kanishka. She and Vivek swap memories of growing up in Calcutta and sip chardonnay.

Daylight slips away. Then, so does her husband.

“There it starts,” she says.

Vivek sits up a little straighter. His BlackBerry begins to buzz more frequently. He seems ready to spring from the table.

That’s because his attention is shifting to another place and time: Mumbai, nearly 9,000 miles away. There, it’s just before 9 a.m. Monday, 12 1/2 hours ahead of California, and he can imagine his colleagues at the back-office outsourcing company he works for filing into the office, turning on their computers, chatting about their weekends.

They will soon want to talk with Khanna, the company’s U.S. director of business development, about processing payroll forms, health-care claims and accounting vouchers. They might have leads to help him drum up more clients.

The 40-year-old multitasker will take their calls and e-mail from a desk in his garage, where he sits wedged between a foosball table and some bicycles, until 11 p.m. He will wake up to resume work before 5 a.m. so he can catch the end of the Indian workday.

“If you look at it,” he said, “I’m never at work, and I’m never off work.”

Khanna is a new breed of globalized worker, testing the limits of international commerce, his body and his family’s patience. It is an often overlooked side effect of sending jobs overseas: Work spread across many time zones demands that managers and co-workers attune to the world’s business cycle while living out of sync with those around them.

“It’s the sun-never-sets model,” said Jonathan Spira, chief analyst at Basex Inc., a business research firm in New York.

His company estimates that about half of the 46 million so-called knowledge workers in the U.S., a category that covers anyone whose primary job is to work with information, are engaged in some kind of time-zone shifting, extending the day beyond the normal 9 to 5.

Technology makes it all possible. Workers and managers can brainstorm, strategize and review via e-mail, instant messaging, cheap Internet-based phone calls and online videoconferencing.

Time-zone shifting means knowing that if you arranged your schedule to accommodate business in India, then dealing with Shanghai isn’t that much harder. Just add an extra 2 1/2 hours to your day.

Tacking on Japan, however, can be brutal, especially for a self-described “morning guy.” It’s only an hour later, Khanna said, but “the peak comes before dinner and goes through midnight.” He knows people who deal daily with India and Europe, plus clients in the U.S. It’s a killer combination, providing no predictable daily downtime.

“They have three eight-hour shifts,” he said, laughing.

One can get lost trying to figure out who’s where and what time it is there. From his office in the Silicon Valley, Alok Aggarwal, chairman of Evalueserve, a research and analysis firm, once miscalculated the time difference and missed a conference call with Tel Aviv. He thought the 9 p.m. appointment was at 9 a.m.

“I felt terrible for a couple of days,” he said.

His life’s “time complexity,” as he calls it, increased in September when the company, which has offices in New Delhi and Shanghai, added Chile. Setting up conference calls requires negotiation. Whose turn is it to get up at 4 a.m.? Last year, Aggarwal hung three extra clocks in his office: one for New York, one for India and one for Austria, where Evalueserve’s chief executive lives.

Many time-zone shifters erase all boundaries between work and life, never wanting customers or co-workers with urgent needs to feel they are not around or can’t be bothered. They sleep with their cell phones, Treos and BlackBerrys near their pillows.

Ritu Khanna tries to inject some balance into husband Vivek’s globalized workday. She has caught him checking his BlackBerry e-mail in the bathroom in the middle of the night. When the telephone rings at 3 a.m., Vivek is able to bounce awake on the first ring and strike a professional tone.

“Some country is awake all the time,” Ritu often tells him in a teasing voice. “When do we get to sleep?”

mm comment: I”ve lived this life when I was doing virtual international business development in Williams Bay, WI (pop 2100) for Computer Mail Services. I’d call Europe in the a.m. until 11:00, then across the Atlantic calling Latin America through the afternoon. @ night I’d be calling Asia & work my way westward until I was calling India before I went to bed. It’s the new reality. With cheap international telecom, e-mail, webex, etc., it’s possible to do business anywhere as long as the client is awake & available. It still feels a little weird to talk with someone for whom it’s already tomorrow. That just seems to be a strange time/space continuim.

competition for Boeing, other than Airbus

Chicago-based Boeing Co. and France-based Airbus SAS have enjoyed the spoils from their duopoly in a record-breaking market. But now other countries want in.

Scott Carson, president and CEO of Boeing Commercial Airplanes, called this dynamic market “the new reality” in a market overview Monday. “Boeing has to adapt to that reality.”

That new reality, for Boeing, soon could mean facing tough competition from other players beyond Airbus. Russia and China are keen to establish themselves as aerospace powers.

Indeed, Boeing has hired more than 1,000 engineers in Russia, one of the countries with aerospace aspirations, and is helping a Russian manufacturer develop a regional jet.-Chicago Tribune 20 June, 2007
mm comment: historically, aerospace has been a tough industry, both domestically as well as internationally. In the past, Boeing dealt with McDonnell Douglas. Although now firmly entrenched because of government support, Airbus is a relatively new entrant. China hasn’t been a world-wide competitor as far as I know. I don’t think Aeroflot ever manufactured any world-class airplanes. Russian & Chinese space exploration haven’t exceeded our efforts. Airbus grew to compete with Boeing in a relatively short period of time. It will take awhile, but eventually the ex-communists could compete. 1 way to preclude that is to hire away their best engineers.

world wide dsl penetration

Numbers Need More Precision
Countries may be closer than they appear in the rankings
Key Takeaway: Most countries are much closer together than the rankings suggest
Shara Evans’s remarkable labor of love is a 60 page report that looks deeply at how the broadband statistics are derived internationally. The handful of us who care about the details of the numbers will spend hours pouring over the analysis. Most interesting to everyone else is her discussion of “bands” - a set of nations essentially so close that they are identical even if one is ranked 4th and another 8th. There’s no simple test for the “margin of error” in data compiled from many sources, but clearly differences of a few percentage points could be data errors rather than actual results.

mm comment: statistics may lie, but the bigger issue is getting quality data across borders that is comparable. I also think we need more data. To look @ these general #’s out of context leaves something to be desired.

The OECD figures are carefully collected and sensibly analyzed. In general, they are highly accurate. In particular, I have looked several times over the years at individual numbers in the OECD tables I had reason to doubt, and confirmed them. However, Evans found reputable data sources in many of the countries with substantially different figures than the OECD, both higher and lower. Few countries have totally accurate official record collection, with definitions, dates and accuracy varying between the different sources. Some countries effectively separate business from residential figures, but other make arbitrary or no differentiation.

An extreme example of bad data from reputable sources is the Pew Study. This respected non-profit contacted 3,000 U.S. adults and claimed “the margin of error on the overall sample is +/- 2%.” They however had a massive error, claiming “As of March 2006, DSL connections constitute half (50%) of all home broadband connections and cable modems have a 41% share.” In fact, the cable share was then about 5 points higher than DSL, based on the audited financial statements of the companies filed with the SEC. Errors that large are rare, but available figures should be presumed precise to 1%, and errors of 5 points are certainly possible. (I have no clue on why Pew was so far off, only some of which is a high count of wireless. I hope they go back and check.)

I’ve long suspected that Beijing figures did not include many apartment complexes that were wired for 10 to 100 megabits by the builder. I’ve recently heard from Russia that similar “building provided” broadband is a very large factor not in the government count.

This study (and others less reputable) is already being abused to pretend that real policy failures are simply misinterpreted data. Korea, Singapore, Hong Kong and most of Scandinavia are well ahead. Canada, Taiwan and Switzerland are doing well. The U.S., UK, and Australia are significantly behind. Spain, Germany, and Italy have even lower penetration.

In Shara’s spirit, here’s a banded ordering based on households rather than population, using Point-Topic’s Global Broadband statistics. Point-Topic (like OECD) offers an highly accurate data set. P-T gives household as well as population rankings, which the OECD has avoided because the count of “households” is notoriously hard to pin down. Rankings by populations are generally similar, however.

Banded Country Ranking, by households

Band 1 Proving what’s possible
South Korea 89%
Hong Kong 84%
Iceland 76%

mm comment: note each of these countries has a highly dense population concentrated in 1 major urban center.

Band 2 Doing well
Netherlands 71%
Denmark 70%
Singapore 70%
Israel 69%
Switzerland 67%

mm comment: all of these countries are small, with populations concentrated in just a few cities. Is it fair to compare the vast US with such vastly different countries?

Band 3 Not embarrassing
Canada 62%
Taiwan 61%
Norway 60%
Finland 59%
France 56%
Japan 54%

mm comment: what’s amazing here is that countries like Canada, France, & Japan, with large land areas, have achieved such high penetration. I do think France’s earlier Minitel system gave them a predisposition to the internet.

Band 4 Muddling

UK 52%
Belgium 52%
Sweden 52%
Estonia 50%
USA 50%
Australia 50%

mm comment: if we could examine breakdowns of urban/rural, or broadband internet users as % of telephone &/or cable users, I think each would tell us a lot more about broadband penetration in large countries. I don’t know what it means, but interestingly, English-speaking countries do seem to be bunched together here.

Band 5 Disappointing
Spain 46%
Ireland 43%
Portugal 42%
Austria 42%
Slovenia 40%
Italy 39%
Germany 38%
New Zealand 34%

mm comment: A cultural context has to be taken into account as well. The big mediteranean countries are typically technology laggards. While the deutsch-sprecher (german-speakers) are tech savvy, they rarely jump on the bandwagon early on.

I have an item I held over explaining some of these numbers. Martin’s comment rural areas are lower was suggestive, because rural areas are also poor. The U.S. with a Gini coefficient of 45 has more relative poverty than any other developed country, which is a thoroughly unattractive explanation of why reason we are behind. In affluent countries like this, the key variable explaining take rate is price, which explains 50-80% of the differences. Price in turn is largely a function of competition - more than four (Korea, Japan, France) produces leaders, duopolies like the U.S. generally fall behind, and countries close to monopoly (Spain, Italy, and Germany until recently) have the worst results.

-dsl prime

social responsibility vs. drug profits

Abbott, activists tangle
Drug giant’s chief defends response to Thailand patent break

By Bruce Japsen
Published April 28, 2007

Despite a flurry of international criticism, Abbott Laboratories will not back away from its controversial decision to withhold drug applications in Thailand, Chief Executive Miles White told AIDS activists at the company’s annual shareholder meeting Friday.

White lashed out at the activists for being misinformed about Abbott’s situation as he reiterated the North Chicago-based company’s determination to protect its intellectual property. His comments were his strongest since the medical products giant became embroiled in a dispute with Thai officials over pricing of the AIDS drug Kaletra and Thailand’s efforts to make generic copies of the medicine that effectively would break Abbott’s patent protection.

Thailand earlier this year said that it could not afford the price Abbott charges for Kaletra, and planned to use a provision of international trade law that would have allowed it to skirt Kaletra’s patent protection and choose other companies to copy the drug. That move represented a significant challenge to Abbott’s patent protections.

Abbott countered by announcing that it would not register any newly developed drugs in Thailand, depriving that country of a new form of Kaletra that — in contrast to the current form — does not require refrigeration.

AIDS activists have condemned Abbott’s action as “blackmail,” suggesting that withholding the Kaletra that does not require refrigeration is putting patients’ health at risk. Given Thailand’s hot climate and underdeveloped health-care infrastructure, many people do not have access to Abbott’s AIDS drugs, the activists charge.

“I think we’ve done a lot more than you give us credit for,” White said in response to AIDS activists as he addressed more than 1,400 people at the company’s sprawling Lake County headquarters.

White suggested that Thailand’s government is aiming to ignore patent protections on all kinds of drugs by issuing compulsory licenses under international law. “I do think there is a hidden agenda. I think the agenda is to set the precedent with compulsory licensing to compulsory license numerous drugs,” he said.

Activist groups had publicized plans to speak at Abbott’s annual meeting while also protesting and picketing Thursday and Friday at company facilities around the world. More than 100 people also protested at Tribune Tower, headquarters of Tribune Co. White is a board member of Tribune Co., which publishes the Chicago Tribune.

At the annual meeting, however, stockholders applauded White, and at times shouted down the handful of activists who lined up to protest Abbott’s actions in Thailand.

Among the protesters was Jon Ungphakorn, a former member of Thailand’s senate and a longtime AIDS activist who accused Abbott of holding drugs “for ransom,” and making “hostages” of patients in Thailand. “Abbott is certainly no ‘Promise for Life’ in Thailand,” Ungphakorn said, a reference to the company’s slogan.

White claimed some activists not at the shareholder meeting had even visited his house last Halloween. “Some of the colleagues that came with you that Trick or Treated at my house and harassed my neighbors and so forth … that’s not advocacy. Doing what we did is advocacy. Because we did it with our own money.”

Last year the company, White said, spent more than $300 million on humanitarian relief, patient assistance programs and AIDS-related programs that helped “millions.”

He also said that submitting the tablet form of Kaletra for approval in Thailand would not make sense from a business standpoint.

“Why would we submit” the new drug for approval, White asked, if Thailand plans to make generic forms of patented Abbott drugs anyway?

In response to Thai officials who had concerns about Kaletra’s price, Abbott cut the price to $1,700 a year from $2,200 last fall. Thai officials, however, issued a compulsory license for Kaletra and certain other companies’ drugs in January, prompting Abbott’s decision to not launch new medicines in that country.

Earlier this month Abbott lowered the price of Kaletra to $1,000 a year in Thailand and more than 40 other developing countries.

MM comment: This is a tremendously difficult issue for which there are no easy answers. In my mind it boils down to costs, & what is the value to the company & government to make a deal to make the drug available to its citizens. Cost for these kinds of drugs are difficult to determine because so much R&D is invested, it’s almost like fixed overhead. For a government to ask that these drugs be provided @ cost is a specious request because determining a real cost is so difficult to do. Alternatively, to continue to wrangle only hurts patients, so there are vested interests in both sides to reach a compromise. For the government to unilaterally make a move won’t wash. For the company to cave in sets a bad precedent as well. This has been & will continue to be argued. Your comments are welcomed.

WTO charges against IP protection in China

U.S. to file 2 China trade cases
Copyright piracy, sales barriers alleged

Associated Press
Published April 10, 2007

WASHINGTON — The Bush administration announced Monday that it is filing two new trade cases against China over copyright piracy and restrictions on the sale of American movies, music and books in that country.

The action, announced by U.S. Trade Representative Susan Schwab, represented the latest move by the administration to respond to growing political pressure at home to do something about soaring U.S. trade deficits.

Schwab said the U.S. was filing with the World Trade Organization a case that will challenge Beijing’s lax enforcement of violations of copyrights and trademarks on a wide range of products. American companies contend they are losing billions of dollars in sales because of rampant copyright piracy.

The second case will challenge China’s barriers to the sale of U.S.-produced movies, music and books.

“Piracy and counterfeiting levels in China remain unacceptably high,” Schwab said. “Inadequate protection of intellectual-property rights in China costs U.S. firms and workers billions of dollars each year.”

The two new cases represent the latest effort by the administration to increase pressure on China now that Democrats, many highly critical of China’s trade practices, have won control of the House and the Senate.

The U.S. trade deficit set a record for a fifth consecutive year in 2006, at $765.3 billion, with the imbalance with China climbing to $232.5 billion, the highest ever recorded with a single country.

In late March, the administration announced it was imposing penalty tariffs on Chinese glossy paper imports in a case that broke a 23-year precedent that had barred U.S. companies from seeking protection from unfair subsidies provided by the Chinese government.

In February, Schwab announced the administration was bringing a WTO case against China on the government subsidy issue.

The decision to go to the WTO with the two new trade cases will trigger a 60-day consultation period during which trade negotiators from both countries will try to resolve the two disputes. If that fails, WTO hearing panels would be convened. If the U.S. wins the cases, it would be allowed to impose economic sanctions on Chinese products.

In a statement, the Motion Picture Association of America said American industries lost an estimated $2.3 billion in revenue to copyright pirates in China in 2005, with only one out of every 10 DVDs sold in China a legal copy.

m2 comment: many chinese are very poor, & thus would never be able to pay western market prices for copyrighted, trademarked, & patented western goods. Thus the $2.3 billion figure is specious because given the choice of paying full price & not buying at all, many would have to decline since they simply can’t afford it.

“China is, by virtually any and every measure, the world’s largest marketplace for pirated goods,” said the association’s chairman, Dan Glickman.

Mitch Bainwol, chairman of the Recording Industry Association of America, said his industry welcomed the administration’s decision to file the WTO cases.

“The theft of music is pervasive in China and takes place virtually without meaningful consequence,” he said.

Deutsche Telecom opens up a little bit to competitors

Watchdog says D.Telekom to grant network access

FRANKFURT, April 3 (Reuters) - Deutsche Telekom (DTEGn.DE: Quote, Profile, Research) is set to suffer another blow as Germany’s telecoms regulator plans to obligate the former state monopoly to grant rivals access to its network cables.

The decision by Bundesnetzagentur, due to be published on Wednesday and seen by Reuters, will enable rivals to lay their own cables to reach customers using Deutsche Telekom infrastructure, as the incumbent operator rolls out its new super-fast broadband network. In areas where they can not lay cables, rivals will be granted access to Deutsche Telekom’s fibre-optic network.

Deutsche Telekom and Bundesnetzagentur declined to comment.

Currently, Deutsche Telekom charges rivals a monthly fee to use its copper wires from phone exchanges into homes and businesses.

Last week the regulator cut the monthly price the dominant phone carrier can charge competitors by 1.4 percent, while Deutsche Telekom had hoped for an increase, arguing it had to compensate for high staff costs.

M2 comment: it would be nice to know how much DT charges competitors. Cutting it 1.4% could be a little or a lot, depending on the scope. It still sounds like a regulated utility by arguing for justification of high staff costs.

Deutsche Telekom is struggling to fight a drain of customers switching to smaller, cheaper rivals. It issued a second profit warning within six months in January, due to competition and regulation.

The company, Europe’s largest telecoms group by sales, hopes to lure back customers with better service and new products on its new 3 billion-euro super-fast VDSL broadband network.It wants VDSL to be exempt from regulation, arguing it needs to negotiate access and prices with rivals on its own to recoup its investment.

Deutsche Telekom has threatened not to expand VDSL further should it fall under regulation.

But the telecoms watchdog has said unless the company can prove it is offering new products not accessible without the new network, VDSL will be subject to regulation.

Competitors have demanded access to the VDSL network from local exchanges, similar to renting the last mile. Alternatively they have said they could access Deutsche Telekom’s infrastructure into homes and install their own fibre-optic cables.

“If things work out that way, we will be satisfied,” said a spokesman for the Federal Association for Broadband Communication (Breko).