Lehman's demise etc.

[David Farber <dave () farber net>]

Begin forwarded message:

From: Dave Burstein <daveb () dslprime com>
Date: September 18, 2008 4:14:21 PM EDT
To: dave () farber net
Subject: Lehman's demise etc.

> Dave (for the list if interesting enough.)

    Companies often  come out of Chapter 11, but I just got the  
release below that Lehman's liquidation will proceed starting Friday.  
Some of the other problems are on the front page, and the word around  
the street is much more to come. The bankers' problem will affect us  
in technology, making it much harder to fund startups, IPO, or grow.   
That has a direct policy effect: starting a third truly high speed  
competitor in the U.S. has gone from highly unlikely to almost  
impossible.

     That means that U.S. and Canadian policy has to work well with 2  
1/2 competitors, because that''s all we are going to have. Nearly  
everything we've done since 1996 has been designed to encourage  
competition and assumes there will be strong competition. Two carriers  
are weak competition, and that's U.S. reality for many years forward.   
Cable and the Bells have become quite good at "winking and nodding"  
and holding back what competition is doing in some countries. I wish  
wireless could deliver to tens of millions speeds fast enough to watch  
TV on our regular sets, which I think is what most people will want.

       Nothing I know planned in wireless can deliver 5 meg streams  
to a large volume of homes without far more towers than are planned.  
Wireless is extraordinary, should be universal, and is changing the  
world - especially Asia and Africa. But wireless bandwidth is  
essentially shared. The 13 and 130 megabit hopes are if only one user  
is on the cell site. You can't deliver 5 megabit stream to a quarter  
of your users, much less for two or three TVs, without far more towers  
than any plan I know of. I'm not the expert and I hope that changes,  
but for my thinking ahead I believe most people will want to watch TV  
and therefore will still want cable, fiber, or DSL.

     Comcast will be able to offer 50 megabits to 20 or 30 million  
people by 2010, their CFO just confirmed on Wall Street. (Yes, DOCSIS  
3.0 will be that good if you haven't noticed yet.) Verizon FIOS GPON,  
now going in for about 12M homes, can easily handle 200 megabits in  
both directions. In Japan and France, 100 megabits costs $20-$40 and  
the companies are profitable, and I think that's what most of us want  
for our country. So far, it looks like high speeds will be far above  
the competitive price and not available for a decade for many, because  
we have weak competition. I hope I prove wrong, and I hope the new FCC  
commissioner is effective enough we will all have affordable, truly  
high speed service. Chiago and San Francisco should have an Internet  
comparable to Paris and Tokyo.
db



> SIPC ISSUES STATEMENT ON LEHMAN BROTHERS INC.: LIQUIDATION  
> PROCEEDING NOW ANTICIPATED
>
> WASHINGTON, D.C. - September 18, 2008 - The Securities Investor  
> Protection Corporation (SIPC), which maintains a special reserve  
> fund authorized by Congress to help investors at failed brokerage  
> firms, issued the following statement today in relation to the SIPC  
> member, Lehman Brothers Inc. (LBI).
>
> SIPC President Stephen Harbeck said: “On Friday, September 19, 2008,  
> SIPC will file a proceeding placing LBI in liquidation under the  
> Securities Investor Protection Act (SIPA).  After extensive  
> discussions and consultation with representatives of the firm and  
> its parent company, as well as representatives of the Securities and  
> Exchange Commission, the Federal Reserve, the Commodity Futures  
> Trading Commission, the Financial Industry Regulatory Authority and  
> others, SIPC has decided that such action is appropriate for the  
> protection of customers and to facilitate the transfer of customer  
> accounts of LBI and an orderly unwinding of the business of the  
> brokerage firm.
>
> This action is being taken in connection with a proposed sale of the  
> business of the broker-dealer to Barclays Capital Inc. A hearing on  
> approval of that sale is scheduled for September 19, 2008, at 4p.m.,  
> in the Chapter 11 proceeding of the parent company, LBHI.
>
> To provide clarity to market participants, I would note the following:
>
> * SIPC’s initiation of the proceeding is designed to minimize market  
> disruption and to allow the transfer of assets and customer accounts  
> of LBI to close in a timely manner under the negotiated Asset  
> Purchase Agreement.
>
> * SIPC will ask the court where the SIPA proceeding is filed to  
> allow the Trustee to operate the business of the firm for a limited  
> time so that normal operations can continue.
>
> * SIPC continues to consult and coordinate with the above-mentioned  
> federal agencies and others to ensure orderly market functioning.
>
> SIPC remains vigilant and committed to our core mission of customer  
> protection.”
>
> ABOUT SIPC
>
> The Securities Investor Protection Corporation is the U.S.  
> investor's first line of defense in the event a brokerage firm  
> fails, owing customer cash and securities that are missing from  
> customer accounts. SIPC either acts as trustee or works with an  
> independent court-appointed trustee in a brokerage insolvency case  
> to recover funds. The statute that created SIPC provides that  
> customers of a failed brokerage firm receive all non-negotiable  
> securities - such as stocks or bonds -- that are already registered  
> in their names or in the process of being registered. At the same  
> time, funds from the SIPC reserve are available to satisfy the  
> remaining claims of each customer up to a maximum of $500,000. This  
> figure includes a maximum of $100,000 on claims for cash.  From the  
> time Congress created it in 1970 through December 2006, SIPC has  
> advanced $505 million in order to make possible the recovery of  
> $15.7 billion in assets for an estimated 626,000 investors.
>
> For more information about SIPC, see "The Investor's Guide to  
> Brokerage Firm Liquidations" at http://www.sipc.org/pdf/SIPC_brochure_Investors_Guide_To_BD_Liquidations.pdf 
>  .
>
> MEDIA CONTACT:  Leslie Anderson, (703) 276-3256 or landerson () hastingsgroup com 
> .  All investor inquiries of SIPC should be directed to asksipc () sipc org 
>  or (202) 371-8300. Inquiries about LBHI should be directed to  
> Monique Wise, 646-333-9056.
>
>
>
> This email was sent to daveb () dslprime com




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