EoW November 2012

Transatlantic cable

† When it comes to the total amount of time Canadians spend online, email accounts for most of it, followed by general research, banking, news and social networking. The online survey among 1,516 randomly selected Canadian adults was conducted on one day in May by Vancouver-based marketing research organisation Angus Reid Forum. The results were statistically weighted to ensure a sample representative of Canada as a whole, including French-speaking Québec.

The administration of President Barack Obama had already declared it the intention of the US to stick with the current system. The assertiveness out of Washington was prompted by the approach of the World Conference on International Telecommunications (WCIT), the treaty-writing conference that the ITU will host 3 rd -14 th December in Dubai. American o cials expect other countries to urge the ITU to take Internet governance away from the Internet Corporation for Assigned Names and Numbers (ICANN) and other organisations now under DOC supervision. As well as pushing for international Internet tra c taxes, some countries may also be expected to push for more surveillance of Internet users in the name of ghting spam or fraud. It is here that the House resolution, sponsored by Representative Mary Bono Mack, throws down the gauntlet. The unanimous vote, Ms Bono Mack said in a statement, “sends a clear and unmistakable message: the American people want to keep the Internet free from government control and prevent Russia, China and other nations from succeeding in giving the UN unprecedented power over Web content and infrastructure. We cannot let this happen.” The California Republican, who asserted that the United Nations has for nearly a decade been “angling quietly” to become the epicentre of Internet governance, warned against back-room wheeling and dealing at Dubai. Secret negotiations leading up to WCIT could be “devastating” to Internet freedom and economic development, she said. Several US tech trade groups supported the House resolution. In a blog post to the IDG News Service (3 rd August), Ken Salaets, director of global policy at the Information Technology Information Council, wrote: “[The vote] was an important step to underscore for the world that the United States will stand rmly against regulation of the Internet and strongly for online freedom.” The practical e ect of all this position-taking may be doubted, as the US cannot be forced to comply with any alterations to the International Telecommunications Regulations (ITR). This is the treaty that sets out rules for the ow of tra c among telecom networks and the calculation of charges for tra c exchanged between carriers in di erent countries. The rise of the Internet and mobile devices has led to calls for revision, and representatives from at least 178 nations will be reviewing the 1988 treaty at Dubai. But the ITU has made it clear that any changes to the treaty must have unanimous support, and says it would block an attempt by any signatory to put any matter to a vote. In brief . . . † Even in the age of smartphones some 83 per cent of Canadians maintain an active phone landline, according to a survey commissioned by Primus Canada, a subsidiary of the largest alternative telecommunications service provider in Canada. For keeping in touch on a regular basis email does top the home phone, but only slightly. Some 33 per cent of Canadians customarily choose email, 30 per cent a phone call, 23 per cent social media, and 11 per cent a text message.

Futures Markets

Betting on derivatives over stocks and bonds, the Chicago exchange CME envisions a London outpost in the New Year With plans for a derivatives market in London by mid-2013, Chicago-based CME Group Inc, owner of the world’s largest futures exchange, is setting up in competition with European counterparts Li e and Eurex, owned by NYSE Euronext and Deutsche Boerse, respectively. Those operators had their plan to merge blocked by European antitrust authorities in February. Phupinder Gill, CME’s chief executive o cer, said in a 20 th August interview in London with Nandini Sukumar of Bloomberg News that his company would start with currency futures for all of the G7 nations. The new exchange, CME Europe, will use its own CME Globex electronic trading system; and its London-based clearinghouse, CME Clearing Europe, will process the transactions. CME planned an early ling with the securities regulator of the United Kingdom as the rst step in the process. Ms Sukumar, who is Bloomberg’s pan-European market structure and exchange correspondent, noted that CME Group has become the most valuable exchange operator in the world, capitalising on the higher pro tability of derivatives while the value of equity trading has declined. The CME Group was formed from the 2007 merger of two of Chicago’s largest futures exchanges: the Chicago Mercantile Exchange and the Chicago Board of Trade. Running exchanges in which investors can trade in energy and metals and other commodities, ten years after going public the company controls 98 per cent of the US futures market. Richard Perrott, exchange analyst at the London o ce of Berenberg Bank, Germany’s oldest private bank, told Ms Sukumar that CME’s new site selection “makes sense, given that close to half of global OTC (over the counter) activity occurs in London.” † Today, the value of outstanding derivatives contracts has surpassed by many times the value of such traditional nancial products as stocks and bonds. To promote greater market transparency, regulators across the globe have been pushing to move derivative trades onto exchanges. The establishment of its London outpost indicates that CME has recognised that this trend holds opportunities for established players.

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November 2012