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The terrorist attacks aimed at causing death and destruction in Mumbai last month seem to have left India’s economy relatively unscathed.

Two of the three hotels and the cafe that were the targets of violence in the nation’s financial capital have reopened for business, and the benchmark stock index has risen 7.6 percent since the market closed for one day after the assaults began.

While growth is slowing, the decline began before the attacks, which killed 164 people. Exports have been falling because of the global recession, and the credit crisis has choked off investment. Job cuts have taken a toll on consumer spending, which accounts for 60 percent of gross domestic product.

“The recession is the real killer for the economy, not the terrorists,” said Sherman Chan, an economist with Moody’s Economy.com in Sydney.

India has become increasingly vulnerable to slowdowns and financial crises in other countries.

Trade represented 35 percent of GDP for the year ended March 31, up from 21 percent in 1997-98, the year of the Asian financial crisis, according to the central bank. The commerce ministry said exporters slashed 65,500 jobs between August and October, when India’s overseas sales declined for the first time in seven years.

Investment, which accounted for about one third of economic growth last quarter, is also suffering as global credit dries up and overseas investors curb their appetite for emerging-market stocks.

Overseas borrowings and the sale of new shares on the stock market provided Indian industry with about 40 percent of total funding in the year to March 31, according to Tehmina Khan, an economist at Capital Economics Ltd. in London.

Consumer Spending

At home, efforts to control inflation by raising interest rates in July to a seven-year high have reduced demand for consumer goods.

Passenger-car sales declined 19 percent in November, the most in more than five years. Mahindra & Mahindra Ltd., India’s biggest maker of sport-utility vehicles and the local partner of Renault SA, shut most of its factories for three to six days this month because of the slowdown in demand.

Inflation has cooled, after peaking at a 16-year high of 12.91 percent in August, giving the central bank room to ease monetary policy. Wholesale prices for the week ended Dec. 13 advanced 6.61 percent, the least in nine months.

Spurring Growth

Measures to spur the economy began on Oct. 6 when Reserve Bank of India Governor Duvvuri Subbarao cut the amount of money lenders need to set aside as reserves with the central bank payday cash advance. On Oct. 20 he presided over the first rate reduction in four years. India’s repurchase rate is now 6.5 percent, down from the 9 percent peak set in July.

The yield on the benchmark 10-year bond has fallen 183 basis points to 5.27 percent, the lowest since June 2004, following the attacks on speculation the central bank will further lower rates.

On Nov. 18, then Finance Minister Palaniappan Chidambaram said the government was planning a series of fiscal measures to boost growth; details were announced Dec. 7.

Under the plan, Prime Minister Manmohan Singh will spend 200 billion rupees ($4 billion), or 0.3 percent of gross domestic product, on roads, ports and other infrastructure spending. Budget constraints are forcing India to rely more on interest- rate cuts to buoy the economy.

Grabbing Headlines

“Global uncertainty and fundamental economic news on the ground is still grabbing more headlines than terrorism at this point,” said Adrian Lim, a fund manager at Aberdeen Asset Management Asia Ltd. in Singapore.

Indian companies should prepare for economic growth of 7 percent in the year ending March 31, down from 9 percent or more the previous three years, the government said Dec. 23.

That pace is still the second-fastest among the major economies — behind only China. Nokia Oyj, the biggest maker of mobile phones, LG Electronics Inc., a South Korean television and personal computer manufacturer, and PepsiCo Inc., the world’s second-largest maker of soft drinks, have all said they intend to expand in India.

Walldorf, Germany-based SAP AG said after the attacks that its plans are still “on track” to invest $1 billion by 2010. India is the software maker’s biggest development center outside Germany.

Stock Market

The benchmark stock index is down 52 percent for 2008 even after the rebound since the attacks. Overseas investors have purchased $650 million of stocks since Nov. 28.

“We can be hurt but we cannot be knocked down,” Ratan Tata, the chairman of Tata Group, said at the reopening of his company’s Taj Mahal Palace & Tower on Dec. 21. Tata’s 139-year- old company controls India’s biggest steel and truck makers, as well as the largest provider of software services.

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Cynthia Goldrick’s daughter is in and out of the hospital for brain surgery, her mother has Stage 4 lung cancer and her father has moved into a home for the elderly.

So when the Goldrick family’s adjustable rate mortgage reset while husband Patrick was off work for a job-related injury, it eliminated the thin margin between their income and the mortgage payment and put them on the road to foreclosure.

While these circumstances may seem extreme — a perfect storm of bad luck — the basic economics of a hike in mortgage rates and a bank’s inability or unwillingness to modify terms have been shared by many Americans over the past year.

The Goldricks took out a $375,000 mortgage in 2005, when they refinanced a previous mortgage on their 1,800-square-foot house in semi-rural Hampton Bays, some 90 miles east of New York city.

At first, the interest rate was 6.5 percent and the monthly payment was $2,370. After two years, it rose to 9.5 percent and suddenly the payment of $3,850 was beyond the means of a family living off Patrick Goldrick’s salary as a cable guy.

Appraised at $605,000 in 2005, the house today is surrounded by others with “For Sale” signs out front and is probably worth less than the outstanding loan.

It is also the only home the Goldrick children have known. “It’s just walls. But this is where my daughter comes home after surgery, so they’re comfortable walls,” Cynthia Goldrick said.

The loan was granted by Rose Mortgage Inc. of New Jersey and is being serviced by Saxon Mortgage Services, a unit of Morgan Stanley payday loans.

But the mortgage is in the hands of neither because it was securitized, pooled with $700 million worth of mortgages into an investment vehicle created by Morgan Stanley known as IXIS 2005-HE4, and sold to investors.

Such pools constitute much of the so-called toxic assets at the heart of the worst financial crisis in the United States since the 1930s.

Today’s investors in IXIS 2005-HE4 include Prudential Insurance, Pimco Advisors, Western Asset Management and Legg Mason — institutions that manage money for the wealthy and the population at large.

NOT JUST A HOUSE BUT A HOME

“We didn’t jump on the refinancing bandwagon to take a cruise or buy a Mercedes,” Cynthia Goldrick said. “We refinanced to give my child a life, not a lifestyle, but a life.”

The Goldricks’ 10-year-old daughter, Erin, has had 10 operations for hydrocephalus, a Chiari malformation and spina bifida. Most of the medical bills are paid by insurance and a fund established from the settlement of a malpractice suit over Erin’s treatment as a baby.

Erin is an honor student who would have made high honors but for a score of 83 in dance. She bears little outward sign of her medical history, unless she pulls up her hair to show scars on her neck and an open wound on her scalp. She looks after her little sister, Emily, 6, and their room is decorated by dozens of stuffed animals. 

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Karen Marshall still waits for a letter to arrive, inviting her back to the job she loved.

One year ago this week, U.S. Sen. Claire McCaskill brokered an agreement between American Airlines and its flight attendants’ union to preserve recall rights for Marshall and nearly 1,200 other former TWA flight attendants.

The flight attendants lost their jobs after the Sept. 11 terrorist attacks crippled the industry. Their recall rights were set to expire between January and July of this year before McCaskill intervened.

Since the extension, no one from that group has been called back, said Roger Graham, a former TWA flight attendant who led the push to extend the recall rights.

"I would say the majority of us left out on the street are hoping and praying," said Marshall of Jackson, Mo. She was furloughed in April 2003 after 18 years on the job. "The majority of us want to come back and continue working," she said. The ones who want to come back love this job."

Prospects began to dim after American cut its flight schedule earlier this year to combat soaring fuel costs. Meantime, the country slipped into a deep recession that has eroded demand for air travel.

American’s parent company, AMR Corp., purchased Trans World Airlines out of bankruptcy in 2001 and agreed to absorb its employees. But the TWA flight attendants — who were represented by the International Association of Machinists — were "stapled" to the bottom of the seniority list covering the combined work force.

That meant they were the first to go during the post-Sept. 11 cuts.

About 1,180 former TWA flight attendants are still in line to be rehired, said Graham of Cape Girardeau, but time is running out. Many have struggled to begin new careers while in their 40s or 50s. Graham works for an online brokerage.

Their right to their old jobs originally expired five years after they were laid off. McCaskill persuaded the airline and the Association of Professional Flight Attendants to extend that by two years.

In exchange, the union agreed to withdraw some long-standing grievances filed by former TWA flight attendants.

Graham, who was a TWA flight attendant for 18 years, said the "anxiety level is quickly rising" for those hoping to get back on the job pay day loans. The first group is expected to lose its recall rights in October.

Graham said he has heard "myriad" reasons why more flight attendants aren’t being called back, including the lousy economy. But there are measures that could help the furloughed ex-TWA workers, such as another extension to the recall rights.

Even flight attendants who were recalled before the extension face their own uncertainties with American.

Former TWA flight attendant Mary Pat Taylor of Kansas City managed a women’s clothing store before being recalled in August 2007 — before the agreement announced last year by McCaskill. Taylor has been back on the job for about a year, based at New York’s LaGuardia Airport. In August, she received a letter warning that her job again was in jeopardy as the airline moved to trim hundreds of flight attendant positions.

"We were just stunned," Taylor said.

She was spared when some flight attendants took voluntary leaves of absence or retirement. Gordon said the airline was able to achieve the necessary reductions through voluntary measures. Now, Taylor is wondering if she will survive future cutbacks, possibly as early as next year.

Gordon wouldn’t speculate about what the future might hold for the former TWA attendants.

"Their recall rights remain in place per our agreement," Gordon said. "It would certainly be terrific to be in a position to be recalling. That is not the case right now."

The airline slashed its domestic flight schedule by more than 12 percent last year, and those cuts will carry over until 2009, said American spokesman Tim Smith. In the meantime, he added, American will "continue to monitor the recessionary economy."

Through it all, Graham, Marshall and other former TWA flight attendants hope their opportunity to return to the skies doesn’t pass them by.

"It’s in my blood," said Marshall, whose father was a TWA mechanic. "All my friends are there. I want to go back."

kleiser@post-dispatch.com | 314-340-8215

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The Hungarian central bank cut its benchmark interest rate for a second time in two weeks and said it may reduce it further as inflation slows more quickly than expected and country risks subside.

The Magyar Nemzeti Bank in Budapest lowered the two-week deposit rate to 10 percent from 10.5 percent, in line with the forecast of 21 of 23 analysts in a Bloomberg survey. Two had expected a 1 percentage-point reduction. The move leaves Romania with the European Union’s highest interest rate at 10.25 percent.

Emerging markets have been battered by the global credit crisis as investors dump riskier assets in a flight to safety. Hungary raised interest rates by 3 percentage points on Oct. 22 to defend the forint and secured an international loan to avert a default. The bank has reduced rates three times in five weeks, by 0.5 percent each time, as the forint and bond markets stabilized.

“The base rate may be reduced in the coming months as long as capital flow is maintained and as the stability of the financial system allows,” the rate-setting Monetary Council said in a statement after the meeting.

The forint strengthened to 264.77 against the euro at 3:20 p.m., from 265.55 late on Dec. 19.

Slowdown’s Impact

An economic slowdown in Europe’s biggest economies, especially Germany, have slowed the flow of goods from eastern Europe and helped eased inflationary pressures. The Hungarian move comes after the Czech Republic and Slovakia also cut their key rates this month. Poland is expected to do the same when its Monetary Policy Council meeting ends tomorrow.

Hungarian policy makers also discussed cutting the interest rate by 0.75 percentage point and a full percentage point and “narrowly” decided to cut by a half-point, Governor Andras Simor told reporters today.

“Strong disinflation” and a slowing economy justify lower interest rates, while financial risks justify a “restrained” pace to rate cuts, he said.

Hungary’s ability to continue cutting rates hinges on the forint, which reflects country risk as perceived by investors, central bank President Andras Simor told Magyar Narancs weekly in an interview published on Dec. 18.

Other considerations for rate-setters include global risk indicators and Hungary’s relative position, as well as liquidity in the banking industry and government bond market and yields on local assets, Simor said.

IMF Bailout

“The only reason why the central bank has not been more aggressive in cutting rates seems to be the risk of a forint sell- off,” Bartosz Pawlowski, an economist at TD Securities Ltd. in London, said in a note to clients.

The forint fell to a record against the euro in October, forcing the central bank to raise the benchmark rate to 11 affordable health insurance.5 percent from 8.5 percent on Oct. 22, the biggest rate increase in five years. The country also secured 20 billion euros ($28 billion) in International Monetary Fund-led loans to shore up the economy, which is headed for its worst recession in 15 years.

The forint has replaced inflation as the top concern of policy makers as price pressures ease with a slowing economy, which contracted in the third quarter and may already be in a recession. The central bank expects the economy to shrink as much as 1.7 percent next year.

“The central bank doesn’t have to worry about inflation any more; the recession will do the job,” Budapest-based Intesa Sanpaolo SpA economists, led by Mariann Trippon, said in a Dec. 18 note to clients.

‘Steep’ Slowdown

Consumer-price growth slowed to an annual 4.2 percent in November, more than a two-year low, from 5.1 percent in the previous month, as crude oil prices, which fueled inflation last year, tumbled. Inflation peaked at 9 percent in March 2007. The bank targets an inflation of 3 percent.

“The inflation rate, based on recent trends, may continue to moderate and drop well below the 3 percent target in the relevant monetary policy horizon,” the Monetary Council said in its statement today.

The “steepness of the slowdown” in consumer-price growth is “surprising to everyone, even for us,” Simor said on Dec. 11. The bank expects the rate, which has exceeded policy makers’ target since August 2006, to fall to between 3.1 percent and 3.4 percent next year and to between 1.5 percent and 1.9 percent in 2010 from an estimated 6.2 percent this year.

Gradual Pace

The central bank voted 8-3 last month to unexpectedly cut the benchmark interest rate by a half-point, to 11 percent, starting to roll back October’s emergency increase in anticipation of slower inflation. Policy makers voted 8-2 to reduce the rate by another half-point at an extraordinary rate- decision meeting on Dec. 8, citing reduced country risk.

Even as slowing inflation opens the way for more rate cuts, the IMF has urged Hungary to use a “gradual and cautious” pace in reducing the key deposit rate.

“The reduction in the interest rate has been appropriate,” James Morsink, the head of the Washington-based lender’s delegation to Budapest, told reporters on Dec. 15. “Further rate cuts should be gradual and cautious.”

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The federal government is teaming with Ontario, Quebec and Alberta to provide a crucial financial backstop to salvage a restructuring plan for a $32 billion slice of the commercial paper market.

The exact amount of the "senior funding facility" was not disclosed yesterday, with a Finance Department spokesperson saying the size of the public support and other details would be released "later."

Ambiguousness in the announcement prompted some retail investors with life savings entangled in non-bank, asset-backed commercial paper to react with skepticism, as they repeated pleas to Finance Minister Jim Flaherty to impose a strict condition on Ottawa’s support of the problem-plagued deal.

Mike and Wynne Miles of Victoria, B.C., are among those pleading with Flaherty to make the government’s backstop conditional on the immediate compensation of retail investors by the securities dealers that sold them the ill-fated ABCP. With the restructuring now in its 16th month, the couple say the financial hardship is becoming too much to bear.

"If the government provides funding for this, it would be really useful to have firm deadlines that ensure the retail owners get paid out soon," said Mike Miles in a telephone interview. "We want out."

Diane Urquhart, an adviser to the retail group, argues that government involvement means the deal is no longer a private-sector solution, adding the "public interest" must be served.

"We think the closing could take several more months. And there is no certainty that it will close …," she said. "We are just saying, `Get us out of the restructuring’."

Not all retail investors agree with that approach bad credit pay day loans. Among them is Brian Hunter, a Calgary-based engineer who started a Facebook group to help galvanize support for retail investors.

"The reality is a deal is a deal. And we have made that deal and we are happy to stick with it," he said.

"If it was going to collapse, then yes, we would have to look at other alternatives. But if it is proceeding along a reasonable path, why would we need to?"

About 2,000 retail investors are affected by the restructuring plan, known as the Montreal Accord. The group represents only about $400 million or 1 per cent of the total ABCP outstanding. Institutional investors hold most of the notes.

Most retail investors have struck separate bailout deals with their brokers, but getting their money back hinges on the completion of the main restructuring.

The Pan Canadian investors committee led by Bay Street lawyer Purdy Crawford has been working on that fix-it plan since 2007. It recently told Ottawa that it needed $9.5 billion in further guarantees.

Flaherty’s announcement could keep the restructuring from collapsing after foreign banks threatened to walk away from the deal.

"We expect that this will allow the investors and asset providers to achieve a stable and effective restructuring agreement," Flaherty said in a statement. "A successful restructuring agreement will protect financial stability and the health of Canada’s financial markets."

With files from the Star’s wire services

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BRUSSELS, Belgium — A European Union high court scrapped on Tuesday a trademark for Anheuser-Busch InBev’s famous "Bud" beer name in Europe.

However, Belgian brewer A-B InBev says the ruling won’t affect its current trademark rights among individual countries within the EU.

The Luxembourg-based Court of First Instance said the EU’s trademark agency had "made several errors" in previously rejecting arguments by Czech brewer Budejovicky Budvar NP against A-B InBev’s trademark application.

Because of the ruling, A-B InBev can no longer claim trademark rights for the entire EU region but must rely on separate national trademarks.

Gwendoline Ornigg, a spokeswoman at AB InBev, said in an e-mail statement that the decision would have "no effect" on the brewer’s "already extensive Bud rights throughout the European Union."

"It is immaterial to the global Budweiser growth strategy," Ornigg said. She said the company still enjoyed trademark protection for Budweiser or Bud in 23 of the 27 EU nations.

She added that the company was reviewing the ruling further before making a decision on an appeal.

The ruling is part of a complex set of decisions about the name "Budweiser" and its derivatives in Europe over the past years.

Anheuser-Busch, which was taken over by Belgian brewer InBev this year to produce A-B InBev, filed several trademark applications between 1996 and 2000 to protect its most iconic beer brand "Budweiser" and "Bud no faxing pay day loans." Its trademark had covered the use of the word "Bud" on signs, beer labels and promotional goods in the 27 nations of the EU.

The exclusive use of the famous names have seen a number of legal challenges by Budvar, which itself lays claim to the use of the brand.

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For about a century, the two companies have struggled over trademarks, including rights to use "Budweiser" and "Bud."

Anheuser-Busch first used the Budweiser brand in 1876. Budvar, founded in 1895, says it has the right to sell beer labeled "Budweiser" because the name of its headquarters city translates to "Budweis" in German and brewers there have been using the name for centuries.

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U.K. unemployment rose at the fastest pace since 1991 in November and the Bank of England considered cutting interest rates to the lowest ever this month as the recession tightened its grip.

The number of people receiving jobless benefits rose 75,700 to 1.07 million, the highest level since July 2000, the Office for National Statistics said today in London. U.K. policy makers voted unanimously to cut the benchmark rate to 2 percent and refrained from a bigger reduction on concern it may prompt an “excessive” drop in the pound, minutes of their decision show.

The U.K. currency dropped to a record low against the euro after the reports. Bank of England Governor Mervyn King has signaled that the bank will cut the interest rate further if needed and Prime Minister Gordon Brown pledged today to do everything possible to counter joblessness.

“Unemployment will continue to rise sharply in 2009,” said Philip Shaw, chief economist at Investec Securities in London. “Rates will fall below 1 percent in the spring. The momentum of sterling means it’s vulnerable.”

The pound dropped to 91 pence per euro for the first time today, and has fallen more than 24 percent this year. The depreciation “should act to support net export growth,” policy makers said in the minutes.

The Monetary Policy Committee voted 9-0 to bring the rate to the lowest since 1951 at the Dec. 4 decision. If they had reduced it further, it would be lower than at any time since the central bank’s foundation in 1694. A larger cut “might be justified by the scale of the downside risks to inflation,” the minutes said.

Job Cuts

Companies from Taylor Wimpey Plc to Nomura Holdings Inc. have axed thousands of jobs in Britain in recent weeks as the worst financial crisis in a century sends shock waves across the economy. Almost 30,000 jobs are under threat at Woolworths Group Plc and MFI Retail Ltd. after the retailers went into administration late last month.

“We must do everything we can to combat unemployment,” Brown said today. He told reporters traveling with him on a visit to Baghdad that “the problem we have to address is how to get more people into jobs. We’re determined to do everything we can against this worldwide situation where unemployment is rising.”

Chancellor of the Exchequer Alistair Darling last month pledged 20 billion pounds ($31 billion) of tax cuts and spending to prevent the recession from turning into a deep and protracted slump.

Credit Rationing

Banks continue to ration loans for companies and households even after the government promised 50 billion pounds to bolster their capital guaranteed payday loans. Business services companies will cut 275,000 workers in the next two years as the recession ravages the advertising and real estate industries, the Centre for Economics and Business Research said Dec. 15.

After almost 16 years of continuous growth, the U.K. economy contracted 0.5 percent in the third quarter, and the Bank of England predicts it will shrink 1.3 percent next year. Policy makers cut the key rate by a percentage point to 2 percent this month after a 1.5 point reduction in November.

The jobless total based on International Labor Organization methods rose 137,000 the quarter through October to 1.86 million, the highest since December 1997, the year Brown’s Labour Party took office. The rate climbed to 6 percent, the most since June 1999, from 5.5 percent in the previous period.

It compares with 7.7 percent in the euro region in October and 4 percent in Japan in September. In the U.S., where policy makers yesterday cut the key rate to zero, the rate was 6.7 percent in November.

Election Calculation

Brown faces the prospect of fighting the next election with unemployment approaching 3 million, a level last seen in the aftermath of the early 1990s recession, economists say. Brown has won praise and improved poll ratings for his handling of the economic crisis, raising speculation he may hold the election before the deadline of June 2010.

Claimant unemployment rose for a 10th month in November, the longest stretch since the 16 months through June 2006, and the increase in October was revised to 51,800 from 36,300. Unemployment was last above 1 million in January 2001. The unemployment rate rose to 3.3 percent, the most since January 2001, from 3.1 percent in October.

Employment fell 115,000 to 29.4 million in the three months through October, the statistics office said today. The number of people made redundant rose 41,0000 to 180,000 and manufacturing jobs fell 2.5 percent on the year to 2.83 million, the lowest since comparable records began in 1978. Vacancies declined 49,000 to 562,000 in the quarter through November.

Wage pressures remained subdued. Pay including bonuses rose an annual 3.3 percent in the three months through October, the same as in the previous period. Excluding bonuses, wage growth was unchanged at 3.6 percent.

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The Canadian Radio-television and Telecommunications Commission new media hearings are not scheduled to begin until mid-February, yet they have already attracted more than their fair share of controversy. With talk of imposing a tax on Internet service providers to fund Canadian content or the imposition new licensing and Canadian content requirements, the outcome could dramatically reshape the Internet in Canada.

The deadline for formal submissions closed 10 days ago, leaving Commission officials to spend the holidays wading through thousands of pages from broadcasters, telecommunications companies, creator groups and a handful of individual Canadians who took the time to voice their views.

At the heart of the submissions are two competing visions of the Internet and new media in Canada. One side – supported by telecom companies, broadcasters, and several industry groups – maintains the CRTC’s 1999 decision to take a hands-off approach to the Internet has largely worked. They argue that new media and the Internet have flourished and the commission should heed the adage that "if ain’t broke, don’t fix it."

These groups have supplemented their policy arguments with legal ones, filing multiple legal opinions, including one from former Supreme Court of Canada Justice Frank Iacobucci, that cast doubt on the CRTC’s legal power to impose certain forms of new Internet regulation.

The counter-argument comes from creator groups such as the Alliance of Canadian Cinema, Television and Radio Artists, or ACTRA, the Society of Composers, Authors and Music Publishers of Canada, or SOCAN, the Canadian Film and Television Production Association and the Writers Guild of Canada, who believe the 1999 decision was a mistake and the CRTC should take this opportunity to reverse it.

Should the commission agree that the hands-off the Internet approach should be revisited, the major question turns to what should be done. There are two approaches on the table – one that focuses on creating an Internet broadcasting framework that matches conventional broadcasting regulation and the second that emphasizes promoting Canadian content by ensuring equal access to it.

The first approach starts with rescinding the 1999 new media exception and introducing new regulatory requirements for the broadcast of new media on the Internet. This would effectively treat Internet-based broadcasting in the same manner as conventional broadcasting.

Those promoting a regulatory approach propose a range of measures. For example, SOCAN calls for the introduction of a minimum of 51 per cent Canadian content requirements for Canadian commercial websites low fee payday loans. ACTRA argues the commission should licence new media undertakings, arguing “the commission should also require that those who are making programs available from Canada, through the Internet or to mobile receiving devices, for viewing at a time and place chosen by the user be licensed.” In fact, ACTRA maintains that the definition of Internet broadcasting should be expansively interpreted to even include user-generated content, which could turn thousands of Canadians into regulated broadcasters.

A handful of broadcasters also support new regulation. The CBC maintains that "new media content aggregators" should be regulated, while Sirius Satellite Radio, itself a beneficiary of modified Canadian content rules, now argues Internet radio delivered to mobile devices should be regulated.

In addition to regulatory and licensing requirements, many (though not all) of these same groups support the imposition of a new tax on Internet service providers to be used to fund the creation of Canadian new media. ACTRA assumes the lead role in this regard, seeking 3 per cent of ISP broadband revenues and 0.6 per cent of wireless service provider revenues. Telecommunications companies, business groups and the Competition Bureau unsurprisingly oppose the ISP tax plan.

Alternatively, many of the submissions provide the commission with a different approach that avoids licensing, new taxes and new media regulation. Instead, these submissions point to the need for net neutrality – the assurance that Canadian new media can be accessed on an equal footing with foreign and conventional content. Supporters of a net neutrality approach to new media include ACTRA, the Canadian Independent Record Production Association, the Canadian Music Publishers Association, the Canadian Conference of the Arts, Maple Leafs Sports and Entertainment, Score Media, the Documentary Organization of Canada and the Canadian Association of Internet Providers.

The new media hearings are still a couple of months away, yet the likely debate has now come into sharper focus with Internet regulation, an ISP tax and net neutrality emerging as the three key battleground issues.

Michael Geist holds the Canada Research Chair in Internet and E-commerce Law at the University of Ottawa, Faculty of Law. He can reached at mgeist@uottawa.ca or online at www.michaelgeist.ca.

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MONTREAL–Ski-Doo and Sea-Doo manufacturer Bombardier Recreational says it is cutting its workforce by nearly 1,000 as it slashes production by 20 per cent to respond to the global recession.

The privately held company – partly owned by the family that owns a big stake in plane and train maker Bombardier Inc. – said 550 administrative "white-collar jobs" will be cut starting this month.

Another 430 shop floor "blue-collar workers" will be laid off temporarily. That’s on top of 370 workers laid off in October.

It wasn’t immediately known where the cuts would fall at Bombardier Recreational, which has operations in Canada, the United States, Europe, Mexico and China.

Founded by Joseph-Armand Bombardier a few years after his creation of a tracked vehicle in 1937, BRP employs about 6,500 people around the world.

The company now makes a variety of vehicles ranging from the Ski-Doo snowmobiles, Sea-Doo personal watercraft, Evinrude and Johnson outboard motors, Spyder three-wheel highway cycles and Can-Am four-wheel all-terrain vehicles and Rotax engines affordable car insurance.

The Quebec-based company said it is cutting expenses to a minimum and implementing major changes to the organization as the power sports industry gets hit hard by tough global economic times.

CEO Jose Boisjoli said the measures to reduce costs will make the company "less vulnerable to drastic declines in revenues caused by events outside our control, such as the current crisis."

The corporate reorganization will create new divisions focused on engines and vehicle development.

Engine manufacturing will continue at plants in Austria, Mexico, Wisconsin and China. Vehicles will be manufactured in Valcourt, Que., Benton, Ill., and Mexico.

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NEW YORK – Consumers hungry for a deal boosted worldwide sales at McDonald's Corp.'s established locations by 7.7 per cent in November, the fast-food leader said Monday.

Even recession-wary consumers in the U.S. were enticed by the Golden Arches during the month. U.S. same-store sales – or sales at locations open at least a year – rose 4.5 per cent.

The Oak Brook, Ill.-based chain said the rise came from strong sales of breakfast items, chicken sandwiches and the chain's value menu options. The increase comes even as U.S. consumers increasingly opt for eating at home to conserve cash.

The past few months have been difficult ones for the restaurant industry due to the deepening of the now year-long recession. McDonald's has been one of the few bright spots in the sector, reporting a same-store sales increase in October of 8.2 per cent while several of its pricier sit-down competitors reported double-digit drops. Many chains have yet to report their November same-store sales, but analysts are expecting a similarly dismal showing.

Same-store sales are a key indicator of restaurant performance since they measure sales at existing locations rather than newly opened ones instant pay day loans.

Total sales worldwide for the month ending Nov. 30 rose 1.9 per cent. Same-store sales were also strong overseas, rising 7.8 per cent in Europe and 13.2 per cent in the Asia/Pacific, Middle East and Africa division.

Overseas sales gains came from the chain's open early and close late – if at all – mantra and its breakfast menu.

"Convenient locations, extended hours and quality food at an outstanding value are all reasons why people are choosing McDonald's," said Chief Executive Jim Skinner.

McDonald's has been focusing on staying open longer to gain customers during the late-night and early morning hours. The company has also added Southern Style chicken sandwiches and breakfast biscuits as well as espresso-based lattes and other drinks in a bid to gain more customers. The espresso drinks – called McCafe – are now being added to the menu at McDonald's locations across the U.S. Many European locations already offer them.

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