Starbucks: Unqualified Service Guarantee

If you have spent any time with me, you already know I am somewhat passionate about my coffee. We go to great lengths to serve above average coffee at The Canadian Telecom Summit. My brother says that my philosophy is that anything worth doing is worth doing to excess.

For that reason, I have been quite upset with the demise of my Starbucks espresso maker this morning. I would sit Shiva for it, but I have no coffee to serve at the shiva and so, what’s the point?

The point is that Starbucks has amazing warranty support – unheard of since the days of Eaton’s. It is a two year, unconditional guarantee. So, despite close to 2000 shots of coffee being brewed on this machine, it is going back this afternoon for a full refund.

This posting represents the second coffee oriented article in a blog dedicated to Telecom Trends. What is the relationship between coffee and moving bits, beyond the obvious cafeine as a major food group to all of us in the world of ICT? Both coffee and bits per second are commodities.

I think the telecom services industry can learn some lessons from successful coffee retailers. How do you differentiate yourself in a commodity business? How do you find your own profitable niche? How do you justify premium pricing when people can easily build their own?

I’m heading out for a coffee.

ISPs taking responsibility

Interesting article in Red Herring that was brought to my attention by my colleague Brian Gordon.

The article cites U.S. Attorney General Alberto Gonzales saying that:

Internet service providers aren’t doing enough to fight the child pornography traded and sold over their networks

The article says that he plans to introduce legislation to get US ISPs to crack down on such illegal content. We have been concerned about this for some time and have suggested that ISPs need to do more than simply support end-user education and blocking tools.

In our view, it isn’t enough for ISPs to wash their hands after simply chasing the content off Canadian servers. We are looking at this issue in greater depth in a special session on June 12, to be moderated by Hank Intven [from the Telecom Policy Review panel] at The Canadian Telecom Summit. You can read more about this session by searching some of my earlier postings.

The trouble with lists

A colleague steered me to the Branham 300 list of Canada’s top technology companies.

The problem with lists is that they are almost immediately outdated. But I think there are more fundamental problems with this list. I’m happy to overlook whatever glitch or typo led to RDM Corp being listed as number 97 and number 101. But there are more fundamental problems that seem to infest this particular listing.

I can understand how it must be difficult to gather financial information about private companies. But there are a lot of private firms that make the list, and a fairly abbreviated list of companies that are excluded from the listing in a note on the front page. This is hardly an inventory of software firms of any measurable substance. Keep in mind that company number 250 has revenues of less than $2.5M.

In addition, there are a number of public companies that are mysteriously absent from the list. Companies that are listed on the TSE, the London Exchange, the Venture exchange. Some independent phone companies appear to be missing, despite SEDAR information that confirms internet revenues that would put them into the top 250. [It is unclear why Branham chooses to ignore wireline voice revenues, despite including, for example, Nortel’s and Aastra’s equipment sales that support voice services].

Why take the time to point out these problems? Because policy makers may try to draw conclusions based on these flawed studies. The Branham Group claims “The listing has become pre-eminent the world over as the authoritative indicator of the health of the Information Technology industry in Canada.” An article on the Branham website presents some conclusions of its own that must be challenged based on missing company information.

Since it was so easy for me to find obvious problems in the list, it makes me wonder what else may be missing, if we were to take some time digging. Maybe the right conclusion is that there is tremendous activity in ICT going on in Canada, so much activity among the medium and smaller firms that we can’t produce an accurate listing.

A flawed inventory can be a problem for initiatives such as ICT Toronto. If they start with a list such as Branham’s, that understates the current level of activity, then it will be difficult to accurately measure the efficacy of their new initiatives. We would not want bad data to take the credit in 3-5 years for new ICT activity, when all they may have actually achieved is a better census.

Mobile subscription radio follow-up

Nice of the National Post to pick up on my blog entry from last week suggesting that the CRTC’s Mobile TV Decision could be used to let cel phones carry audio programming without further regulatory intervention.

After all, radio is TV without the pictures. Spending time at the cottage listening to the 70’s music channel over Expressvu makes you appreciate the value of a good audio feed. If folks are concerned about whether a specific, supplementary CRTC ruling is required on radio, then go ahead and transmit a screen full of information to add a picture (name of station, supplementary ads, whatever).

Rural broadband without the handout

I recently met with John Maduri, who is now heading up a company with a rather unique approach to rural broadband, Barrett Xplore.

What’s unique? He isn’t looking for a government handout. He hasn’t gone to government agencies saying ‘Give me $$$ and I’ll deliver broadband to the unwashed, underserved, your down-trodden.’ Instead, Barrett is delivering a 99.99% available, city-quality broadband experience to anyone in Canada who wants it, no matter where they live or work.

What Barrett Xplore has done is built a viable business plan that uses various solutions, including Motorola Canopy technology where appropriate or Telesat Ka-band in other areas. They are actually adding customers at a respectable clip, with reasonable prices, and a positive NPV. The entire country is within their potential serving area.

Unfortunately, the CRTC’s Deferral Account Decision has created problems for Barrett. That Decision told the incumbent telephone companies that they could and should use excess payments (that subscribers made to prop up local rates in urban areas) to subsidize the incumbent broadband roll-out to rural areas. It was a Robin Hood decision – taking money from one group to give to another. Bell has appealed a part of the Decision to the courts; we can expect to see an appeal (or more) to Federal Cabinet in the next few weeks.

With the best of intentions, it seems that whenever we see these kinds of programs, there are problems. As I mentioned in my post about ICT Toronto, it just seems that we need to avoid trying to pick winners and we need to resist the temptation to intervene in the market. Like it or not, rightly or wrongly, Decision 2006-9 made it tougher for John and his venture to go out and compete. And it was all with the best of intentions by everyone concerned.

I’d like to think that we should be clearing out of the way of entrepreneurial ventures like Barrett Xplore, not putting obstacles in their way. Hopefully, John and Barrett Xplore will be able to look back at this as just a speed-bump, not a barricade, as they continue to bridge the digital divide.

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