The cabinet shuffle and communications

January 4, 2007
How was telecom affected by today’s Cabinet shuffle, despite no changes in the posts most directly concerned with the sector? Early reports had all sorts of rumours about Industry Minister Maxime Bernier, who has direct responsibility for telecom and Heritage Minister Bev Oda, who is responsible for broadcasting. Both were left in place.

The message seems to be to stay the course and provides some consistency in direction for the sectors, with a vote of confidence from the PM. We’ll be watching for cabinet to approve selection of a new CRTC chair.

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AT&T and the fountain of youth

January 4, 2007
ATTAT&T; (NYSE: T), like its logo, has evolved over the past year, following its acquisition by SBC and the conclusion of its deal to integrate BellSouth, thereby gaining 100% control of Cingular. Forbes has named AT&T; Company of the Year for its expansion through acquisition enabling it to transform into a wireless and video powerhouse.

These transactions restore AT&T;’s status as the world’s largest telecom carrier, according to the Wall Street Journal. The new AT&T; has 58.7 million wireless customers, 67.5 million local-phone customers and corporate accounts with the Fortune 1000, 300,000 employees and 1.8 million shareholders.

In the WSJ article, CEO Ed Whitacre is quoted:

The biggest asset we bought here was Cingular. We’re about to become a company with wireless at its heart.

Now that it controls the entirety of Cingular, AT&T; is in a position to bundle wireless with the remainder of its corporate communications services. And since Cingular is GSM based, AT&T; can leverage its global intercarrier relationships to drive roaming deals in competition with T-Mobile.

In Canada, we watched TELUS (TSE: T) transform itself five years ago to become heavily weighted as a wireless carrier. AT&T; approaches the corporate market from a different perspective, but the net result is similar: wireless bundles drive increased revenue, innoculate against the impact of substitution and reduce churn. At the same time, with US broadband lagging its economic allies, there are still lots of opportunities for DSL revenue growth without betting the company with a fibre strategy like Verizon (NYSE: VZ).

Ma Bell has undergone substantial reconstruction – well beyond a cosmetic facelift. The transactions have invigorated the grand dame with the potential for a youthful vibrance.

What are AT&T;’s plans for north of the border?

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Politics and regulation

January 25, 2017

With a number of interventions by cabinet over the past year, we have seen Industry Minister Bernier taking steps to implement some of the recommendations of the Telecom Policy Review panel.

One of the easy to overlook recommendations of the report is the streamlining of the policy direction process, coupled with the removal of the cabinet appeal process. Recommendation 9-5 says:

The policy direction power should be transferred into a more effective policy-making instrument by … (c) repealing the Cabinet power to review individual CRTC telecommunications decisions.

An article in the Wall Street Journal yesterday said that the Communication and Technology sector was the leading spender of lobbyist dollars in the US in the first half of 2006, ahead of healthcare, finance and energy sectors. Telecom lobbying is obviously not just a Canadian phenomenon. Over the holidays, a Canadian Press article expresses concerns about the nature of backroom dealings associated with the appeals processes. It is worth reading.

Former CRTC commissioner Andrew Cardozo said:

If you do your job properly as CRTC chair or member, at some point or another you will have ticked off every member of the industry, and you will have ticked off the government too. You’ve just got to go in there and do what you believe is the right thing to do, and you want to keep clear of the lobbyists.

Ian Angus was quoted in the CP article:

I would wonder whose self-respect would be so low that they’d be willing to be CRTC chair?

Why would you want to be chair of an independent regulatory body when the government has made it clear it will override you when it disagrees.

Still, policy is an important component of an evolving regulatory framework. Shouldn’t policy be set by government? So, you need a CRTC chair who agrees at least with the direction that the government wants to take with communications. For telecom, the roadmap for change has been laid out with the report of the Telecom Policy Review panel. The world of broadcasting is less clear.

Is this what is delaying the appointment of a new CRTC Chair?

$1.65 trillion is a lot of music downloads

January 25, 2017
AllofMP3A group of major record labels filed suit just before Christmas against Russian music down loading site, AllofMP3, reportedly asking for 1.65 trillion dollars in damages, $150,000 for each of the 11 million songs that have been downloaded from the site without compensation to the rights holder.

Let’s put a little perspective on that amount of money. If you put $1.65 trillion in to a bank certificate and get, say 4% interest, you earn almost $200 million per day in interest. It is $125,000 per minute in interest.

It should be enough to grab someone’s attention, at least for a few minutes. Recall that Danish courts ordered an ISP to block the website back in October. We’ll watch this file – at $2,000 per second, are you interested?

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