Rogers cracks the IT-100

June 26, 2006
65

Business Week released its listing of the top 100 performers in information technology and Rogers Communications was the sole Canadian firm to crack the list. Number 65 on the list of global titans – but don’t sniff at the relatively low placement. Take a look at who isn’t there.

No Bell, no TELUS, no Nortel nor RIM. Not even Markham-based graphics company ATI is on the list. They are in good company as well: Samsung, IBM, France Telecom and Intel are former Top 100 companies that fell off the list this year.

With revenue growth as one of the key criteria, Rogers’ M&A; activity helped propel it onto the charts. Will there be any Canadian companies on the list in 2007?

Shareholders versus subscribers

June 26, 2006

AliantBell

Last Friday, the CRTC approved Bell Canada’s application for the creation of a portfolio of tariffs to accommodate its regional income trust structure. The tariff pages are another of the procedural steps required in order to get to the closure of the deal.

It was interesting that there was a minority dissenting opinion issued from Commissioner Stuart Langford. In his view, at least some of the tax benefits to be obtained under the new corporate structure should be shared with the subscribers. The majority of the Commissioners applied their own ‘test’ of whether an exogenous event had occurred that would merits revisiting the rates. Events or initiatives are considered to qualify for an exogenous factor adjustment if:

  1. they are legislative, judicial, or administrative actions which were beyond the control of the company;
  2. they are addressed specifically to the telecommunications industry; and
  3. they have a material impact on the company.

The income trust creation was caused by the company and could hardly be considered to be beyond its control. Income trusts are not limited to telecom and therefore both of the first two tests fail, despite the obvious material impact on the company.

Commissioner Langford disagreed. He recalled the special adjustment made to accommodate the privatization of MTS and the need for the company to pay taxes for the first time.

Imagine this scenario: MTS, as it was, is privatized. It appeals to the Commission for permission to raise rates so as to offset this new expense, saying that its going-in prices are no longer correct. The Commission, as it did, agrees. A short time later, MTS converts itself into an income trust. Surely no one would allow consumers to be gouged in such a way on the grounds that a true exogenous event had not triggered the transition of MTS back to a non taxpayer.

What’s good for the goose…

Rebranding

June 25, 2006
Bell Old Logo

I noticed that Bell replaced the signs on their Central Office in one of the towns up north. The old lettering for ‘The Bell Telephone Company of Canada’ still shows through on the brick wall.

I wonder how soon the new Bell Aliant Regional Trust sign will go up. I also wonder how many customers are going to switch carriers because the new company name just isn’t as familiar as ‘The Bell’.

Bell often owns the one brick building in many small towns. The building might be seen as emblematic of the strength and permanence of the company.

In an era of ad agency-created corporate brands, like Cingular, Verizon, and even Aliant, you need to be cautious before shedding a brand name like Bell in small town Ontario and Quebec.

Need for public notice on privacy?

June 24, 2006

Yesterday’s posting seems to have struck a chord with some people, based on calls, emails and formal blog comments.

In the coming days, I’ll be continuing to explore some issues in relation to privacy issues and the telecom industry.

In the meantime, let me suggest that folks who are truly concerned with these issues should consider attending a conference run by my good friend Stewart Dresner, who heads up the advisory firm ‘Privacy Laws & Business’. For 19 years, Stewart’s firm has successfully helped organisations integrate data protection and privacy law into good business practice.

His conference takes place July 3-5 in Cambridge (UK).

Privacy concerns

June 23, 2006
ATTEarlier this week AT&T; announced changes to its statement of its privacy policy, driven by its response to lawsuits over the handover of customer records to US law enforcement agencies.

The new policy states that customer information constitute:

business records that are owned by AT&T.; As such, AT&T; may disclose such records to protect its legitimate business interests, safeguard others, or respond to legal process.

AT&T; says that this isn’t a change to their operational procedures, just making the language more clear to customers.

It is unclear how this position would hold in Canada where the CRTC and Federal Privacy Commissioner both have views on who owns customer information. In the latest annual report of the Privacy Commissioner, we find:

It is perhaps appropriate to remind everyone that once data is outside of Canada, the ultimate control of it rests in the hands of the authorities in that state.

Such realities have implications for AT&T; customers in Canada. Will the CRTC look at this issue and will it lead to conditions on the licensing of international carriers?

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