I just got off the phone with a telemarketer for a local phone carrier that will remain un-named to protect the guilty.

I refused to tell them who my current local phone carrier is (would you want them collecting that kind of detail about you?). The pitch was savings over my current rate. As the representative tallied up the options, it was $XX for basic service and yy cents for 911 and yada-yada-yada and then my ears perked up as she mumbled something about $4.95 for a ‘system access fee’.

I don’t need one of those, thank you. She said the fee is mandatory and that all the carriers charge a system access fee – it covers costs like the network. Gee, I thought that the monthly rate was for the network and all that jazz.

This ‘System Access Fee’ concept started with the cellular industry as a thought that a discrete charge could be attributed to recover the costs of spectrum licenses. Quickly, the fees became a source of substantial extra profit as the number of subscribers rose and the monthly rates climbed well above the amounts needed to pay for spectrum.

As long as people think that this must be some kind of government license fee, carriers would hold their rates fixed, but continue to have the System Access Fee rise outside the contract. Industry Canada tried to intervene in the latest set of license conditions to have carriers clarify that this was not a tax. Many consumers still blame the government and continue to be misled by some confused sales representatives.

Despite the best efforts of some of the incumbents and long distance phone companies to convince you otherwise, Network Access Fees are not charged by ‘all carriers’ and they are not mandatory.

These fees sound like airline and courier fuel surcharges.

Hint to the local phone competitors: if you are going to charge a separate Network Access Fee, then show me a service that can provide a correlated benefit. Like, how about using the money to provide access to alternate long distance networks?

Every time I read parts of the report from the Telecom Policy Review panel, I pick up on something else. It continues to validate my view that this is a well thought piece of work with considerable depth.

I noticed a comment in Section 9 this afternoon:

The report’s recommendation 9-2 attempts to address this:

With the recent cynicism about areas of research such as the mating habits of flying squirrels expressed by Ontario’s Tory leader, I hope a Conservative Minister of Industry takes this issue seriously. It seems to me to be one of the easier recommendations to implement and one that will be able to have both immediate and long term benefits, on our under-funded campuses and for our institutions of government.

With the investor euphoria surrounding the IPO of Tim Hortons, I couldn’t help but write some thoughts about such a great Canadian institution. After all, what other firm holds such a tender place in our collective nationalistic hearts that the Royal Canadian Mint would launch its Remembrance Day commemorative quarter exclusively through Tim Hortons.

But Professor Goldberg, this blog is about Telecom Trends. How is Tim Hortons relevant?

Good question – and yes, this will be on the final exam. Tim Hortons is an example of how a Canadian icon can be acquired by a multi-national firm and yet retain its special character and keep its roots. This view, of encouraging foreign investment in Canadian telecommunications, is shared by the Telecom Policy Review panel in its report.

Tim Hortons impresses me with its success in a fiercely competitive market, a market that has seen entry from major global competitors, transforming its product line and implementing technology change. Sounds like the telecom business.

There are lessons to be learned from Tim’s place. Why did Tim Hortons succeed while Krispy Kreme battles accounting issues and Atkins diets? Beating Country Style and commanding their turf while letting Starbucks and others go after a different segment.

They have created new products, liked Steeped Tea last year, hot smoothies, yogurt and berries and other ‘healthy’ choices while continuing to dominate the market for coffee and donuts. On my drive home from the cottage, a drive-through clerk at one of their competitors asked if my dog would like a Timbit. Their brands have become generic terms among Canadians.

Succeeding in a commodity business – I think more of us in the telecom industry should take a look at how at least one company has done this. I’ve always got time for Tim Hortons.

The consolidation dance party is on again. Lucent and Alcatel are in talks again, according to AP. Partly driven by the consolidation among customers, the AP story says that the combination would benefit from Lucent’s strength in the wireless business and Alcatel’s strength in DSL. Lucent isn’t too bad in that area itself!

I think consolidation talks are also a statement about the rise of new suppliers from Asia. Reports out of the CeBit show in Hanover are talking about the presence of equipment suppliers from China and Korea and software houses in India. This is a global business and companies may feel a need to combine in order to gain appropriate global perspectives and efficiencies derived from even greater scale.

What does consolidation mean for Canadian R&D;? Alcatel’s acquisition of Newbridge kept high quality research jobs in Ottawa. Ericsson continues to operate a major R&D; presence in Montreal. Both of these companies would seem to demonstrate that Canada provides a favourable environment for such positions to remain. Lucent has a variety of R&D; functions in Canada as does Siemens.

Canada’s concern, from an industrial policy perspective, should be to ensure that any of these combinations see opportunities for R&D; growth in Canada. That means looking beyond the companies heaquartered here, like Nortel or RIM and continuing to foster conditions to encourage high quality employment, entrepreneurship and competitiveness.

Lucent and Alcatel have dated before but never made it to exchange vows – so don’t start figuring out whether the new name is Alcacent or Lucatel. In what talks are Mike Z. involved to ensure Nortel isn’t left alone plopping Alka Seltzer?

Industry Minister Bernier can’t wait ’til June 14 at the Canadian Telecom Summit to respond to yesterday’s report from the Telecom Policy Review panel.

So he is going to speak on June 13th instead!

The conference website, www.telecomsummit.com is always the most current view of the schedule.