Trying to subscribe to XM

XM Satellite Radio reported its 2006 subscriber numbers on Friday. Their Canadian arm (TSX: XSR) is holding its AGM on Thursday at the Hockey Hall of Fame.

In November, I wrote about needing to make a purchase decision for extending our satellite radio service when the free trial ended at the end of last year.

As it turns out, XM had a year-end promotion (which has been extended to the end of January), knocking $50 off the annual subscription price – roughly a 30% savings. So I called in to buy on December 22. Despite a friendly agent taking all of the billing and credit card information, our radio stopped working December 30, marking the end of our 90 day trial.

Our agent was friendly, but not trained well enough to know how to work the order entry systems. So he signed us up for a year’s subscription, but forgot to tell the systems not to de-activate our service following the end of our trial.

We had to keep the radio running, tuned to channel 0, waiting for the activation signal to be sent for a second time. XM had to bear the extra cost of a customer service call on top of their discounted rates and a car full of less than impressed customers. The CSR said it happens all the time. If so, that’s no way for XM to make money.

Once again, I have to ask if company executives buy their services through the regular channels, or do they receive complimentary service from an executive response centre. I remain convinced that customer service problems gets fixed fastest if executives see the way normal customers get served.

Brazil orders content blocking

AP is reporting that a judge has ordered YouTube to find a way to block a video from access in Brazil. YouTube was first ordered in September to remove the video showing Daniela Cicarelli in intimate scenes along a beach. The clip still appears periodically on YouTube, prompting the expanded order to block access. The case now goes automatically to a three-member panel of judges who will decide whether to make the order permanent and whether to fine YouTube as much as $119,000 for each day that the video was viewable.

Asserting national sovereignty over the internet. Italy acted on Wednesday with respect to child pornography. Now Brazil.

The 2007 Canadian Telecom Summit in June includes a session examining Illegal Content on the Internet.

Why telecom is so different

What is the special fascination with telecom regulation? Why is telecom regulated differently from other industries?

That was the question asked of me, only somewhat rhetorically, a few weeks ago by a telecom carrier executive.

Why do we still need to have a government body, the CRTC, that cares so much about regulating incumbent carriers? More than any other industry, why is telecom so heavily regulated?

Why don’t we simply let the cable companies and phone companies fight it out and let the customers benefit from the pricing bloodbath?

Right.

That scenario isn’t going to happen for a whole bunch of reasons that I would be pleased to discuss. Over the holidays, I was working on my February lectures to the 2007 class for the University of Toronto Master of Engineering in Telecommunications. My notes on the subject of regulation in a competitive market framework are still fresh. I would be happy to share my views.

In the meantime, those executives can still dream of a future world with no specialized telecom regulation. After all, there are a lot of kids who will return to school next week with a firm belief in Santa.

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The cabinet shuffle and communications

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

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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