Message-ID: <10097737.1075860054443.JavaMail.evans@thyme>
Date: Wed, 12 May 1999 07:21:00 -0700 (PDT)
From: mark.taylor@enron.com
To: thomas.gros@enron.com
Subject: On-line Bandwidth Derivatives
Mime-Version: 1.0
Content-Type: text/plain; charset=ANSI_X3.4-1968
Content-Transfer-Encoding: 7bit
X-From: Mark - ECT Legal Taylor
X-To: Thomas D Gros
X-cc: 
X-bcc: 
X-Folder: \Mark_Taylor _Dec_2000\Notes Folders\Sent
X-Origin: Taylor-M
X-FileName: mtaylor.nsf

Tom:

I saw this on the Internet today:



ARBINET COMMUNICATIONS INTRODUCES ON-LINE
 TRADING OF BANDWIDTH DERIVATIVES BUSINESS
 EDITORS/TECHNOLOGY WRITERS SAN
 DIEGO--(BUSINESS WIRE)--MAY 11, 1999--ARBINET
 COMMUNICATIONS, INC., THE WORLD'S 
 [Business Wire ? Rcvd: May 11, 08:08 AM EDT ] 



BW0167 MAY 11,1999 5:09 PACIFIC 8:09 EASTERN 

( BW)(CA-ARBINET-COMMUNICATIONS) Arbinet Communications Introduces On-Line 
Trading of Bandwidth
Derivatives 

Business Editors/Technology Writers 

SAN DIEGO--(BUSINESS WIRE)--May 11, 1999--Arbinet Communications, Inc., the 
world's leading trading network for
telecommunications capacity, will inaugurate Internet trading of forwards and 
options in telecommunications bandwidth later this
month. 

Trading in the bandwidth derivatives is being facilitated through Arbinet's 
access-controlled website where buyers and sellers
can post prices anonymously. Execution occurs offline, subject to a screening 
process for credit, documentation and
interoperability issues. The announcement was made at the TRA Conference, 
Booth No. 1004. 

As a second phase of the project, Arbinet is developing a physically settled 
derivative product that will allow anonymous
web-based execution, culminating in delivery to Arbinet switching hubs. 
Implementation of this product is an extension of
Arbinet's physically settled minutes trading system, the Arbinet Global 
Clearing Network(TM) (AGCN(TM)). 

Forward and option derivative trading in bandwidth provides distinct 
advantages for clients who wish to hedge their exposure
to future moves in the price of capacity. Furthermore, it provides a level 
playing field where even small operators can realize the
pricing advantages which were, until recently, available only to large 
incumbent telecommunications carriers. Buyers and sellers
can manage risk allowing them to better plan for the future. 

Sellers of the forward contract can be natural suppliers of capacity such as 
submarine cable operators. Buyers can be natural
consumers (e.g. Internet Service Providers and Competitive Local Exchange 
Carriers) or speculators. 

"Arbinet aims to be the premier provider of risk-management solutions for the 
bandwidth market," said U. Kanad Chakrabarti,
vice president of Bandwidth Trading, Arbinet. "As a non-proprietary player, 
we can offer impartial execution for our clients,
which is important in a non-transparent and illiquid market like this." 

All bandwidth contracts will be posted on Arbinet's bandwidth trading site, 
www.ebandwidth.net, beginning May 21, 1999.
The forward contract allows buyers and sellers to reserve transmission 
capacity. The option contract allows buyers and sellers
to realize the optionality value present in the bandwidth market, but 
currently not fully priced by telecommunications players. 

"We provide customers with a service not offered by any other on-line trading 
company," said Alex Mashinsky, chairman and
founder, Arbinet. "Of key importance, we don't trade for ourselves, which 
gives us complete objectivity in trade execution. 

"This new service is a natural outgrowth of our experience in trading telecom 
minutes on behalf of international and multinational
telecommunications carriers." 

For more information, contact U. Kanad Chakrabarti at (212) 230-1200 or via 
e-mail at kchakrabarti@arbinet.com. 

Arbinet (www.arbinet.com) is the world's leading Internet trading exchange 
and switch-based clearing network for global
telecommunications capacity. Arbinet routed over 174 million minutes for 
international carriers in 1998, which it estimates
represented over 80% of all exchange-traded minutes traffic for that year. 
The Arbinet Global Clearing Network is presently
clearing and settling minutes for all types of communications companies 
including Internet Telephony Service Providers and
major carriers. Founded in 1994, the company has 52 employees and is 
headquartered in New York with offices in Tokyo,
Sao Paulo, and Hong Kong. AGCN was recently awarded Internet Telephony 
magazine's prestigious Editor's Choice Award
for 1999. 

Arbinet Global Clearing Network and AGCN are trademarks of Arbinet 
Communications, Inc. 

This press release is available on the KCSA Worldwide website at www.kcsa.com 

     --30--jb/ny*

     CONTACT:  KCSA Public Relations Worldwide, New York
               David Riley, 212/896-1245
               E-mail: driley@kcsa.com
                         or
               Chris Milligan, 212/896-1224
               E-mail: cmilligan@kcsa.com
                         or
               Henry Feintuch, 212/896-1212
               E-mail: hfeintuch@kcsa.com

     KEYWORD:  NEW YORK CALIFORNIA
     INDUSTRY KEYWORD: INTERACTIVE/MULTIMEDIA/INTERNET

COMPUTERS/ELECTRONICS COMED TELECOMMUNICATIONS RETAIL PRODUCT 

Today's News On The Net - Business Wire's full file on the Internet 

with Hyperlinks to your home page. 

URL: http://www.businesswire.com 

Copyright 1999, Business Wire