When I watched the Industry Committee meeting on Friday, I was struck by what appeared to be a lack of understanding of basic accounting by some of the Members of Parliament. I suppose I shouldn’t have been surprised; let’s call it disappointment.

Of note was the apparent inability to reconcile the “$149M book value” of the Nortel wireless business unit with the substantially higher amount ($1.13B) being paid by Ericsson. These numbers are important, because the foreign investment review rules kick into play if the book value of the asset being acquired exceeds $312M.

Considering that this business unit is basically a group of knowledge workers, it isn’t really surprising to have such a discrepancy between the book value and the market value.

What would make up the book value? Depreciated computers and office equipment, some lab equipment, inventory, some cash, accounts receivable? The total value of the employees and the utility of their collective knowledge would not likely be reflected on the books – we outlawed ownership of staff about 175 years ago.

I found that part of the meeting troubling.

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Update [August 10, 10:00 am]
Mike Z. has stepped down from Nortel and Nortel’s board has been reduced from 9 people to 3.

A story on the front page of the Wall Street Journal caught my eye yesterday. It talks about the concerns that coffee shops are having about their internet access policies.

Many people set up temporary offices in places with public WiFi access and use the real estate for hours at a time for the cost of a cup of coffee.

I remember a decade ago advising a property management company on the risks associated with enabling free WiFi in their food court – a space that already had challenges providing sufficient seating. How would the business model work? It isn’t the communications link that is expensive; the issue is the opportunity cost of a table that isn’t generating revenue.

Is this the start of a serious trend to inhibit free access?

In the meantime, find a way to compensate the owners for use of their space – buy an extra sandwich or muffin and give it to that homeless person you passed on the way in.

The opposition parties have succeeded in calling an emergency meeting of the House of Commons Industry Committee to wade into the sale of Nortel’s business units.

While the trigger event is the recent Ericsson deal, the committee might as well be looking at the entire business liquidation process, since wireless is just the first of a number of business units to go.

The NDP industry critic, Brian Masse said in a press release:

The Conservatives are using taxpayer money to help a foreign company steal very valuable assets at a lowball price, while a leader in Canadian innovation who is offering a higher price, is blocked. It is outrageous.

The Committee meeting allows opposition members to get their views into the transcripts, helping to build campaign literature for the next election.

Will the minority government resist the calls for intervention in Ericsson’s acquisition of Nortel’s wireless business?

Members should remember that there are a large number of Canadians who are employed by foreign technology firms, including 1500 Ericsson’s research labs in Montreal.

Last week, I commented on the harsh language used by Ontario’s Finance Minister, who was quoted saying that “LTE was partly funded with Canadian taxpayer money, and he doesn’t want it going to a foreign company.” This came from the guy signing cheques for more than a quarter billion taxpayer dollars for France-based game studio Ubisoft.

So, last Friday, Democrat US Representatives Ed Markey and Anna Eshoo introduced a Net Neutrality Bill that has been attracting a lot of attention.

I caught a tweet on Monday evening from CIPPIC that asked “where’s ours!!”

Of course, when you read the bill [ pdf, 49KB], you’ll realize that most of these proposed protections are already part of Canada’s Telecom Act. The one novel proposed amendment to the 75 year old US Communications Act was one that seeks:

to ensure that consumers receive meaningful information regarding their communications services;

In other words, increased transparency, as was suggested by a number of parties in the recent network management proceeding.

Canada’s regulatory framework already captures protections that the US is just starting to consider in legislation. What more is needed?

I find it interesting that the FCC has waded into the Google Voice / iPhone kerfuffle. This is the US regulatory body that enjoys taking up populist causes, such as its defense of our mores harmed by nine sixteenths of a second of exposure to parts of Michael Jackson’s sister that distracted the February 1, 2004 broadcast Super Bowl XXXVIII.

In case you haven’t heard, the FCC wants to know why Apple’s iPhone does not support Google Voice, the reincarnation of Grand Central. Many commentators south of the border suggest that Apple’s US carrier partner, AT&T, is the cause of the application block, but this would be improbable, since the Google app is being marketed for Blackberry support, including AT&T’s Blackberry devices. Politicians are already up in arms over exclusive deals for cell phones. Somebody has to do something!

Fortune’s Philip Elmer-DeWitt writes about the FCC investigation, with links to the letters sent to Google, Apple and AT&T.

Alec Saunders has a great post on why the AT&T conspiracy theory doesn’t add up.

He writes:

Perhaps Apple themselves are quietly developing features that are competitive to Google Voice?

The questions posed by the FCC may probe beyond the statutory authority to compel answers from companies that aren’t regulated by the Commission.

How will Apple and Google respond? Will they even bother to respond?

The companies compete as evidenced by the resignation of Google CEO Eric Schmidt from Apple’s board. They are both big and don’t need government protection. Is government going to start dictating business models?

Are we equally troubled by exclusive soft drink deals with certain restaurants? Exclusive coffee suppliers at some hotels? Exclusive credit cards at the Olympics?

While we are busy legislating open access, are we going to require RIM to enable Blackberry Messenger on iPhones?

What raises the level of passion over such business arrangements in the wireless industry?