Inspiring excellence

I am heading to a meeting at University of Toronto this morning – part of my activities on the advisory board of the Masters of Engineering in Telecom. It is somewhat appropriate to keep alive last week’s thread of stimulating excellence in our schools.

My son is taking an interesting course this year that looks at poetry and mathematics. It is an unusual combination.

His math professor, Peter Taylor, seeks to inspire excellence. He believes we need to go way beyond repetitive arithmetic exercises found in our text books. In reviewing his writings, he argues that our traditional system of teaching math is failing our kids.

A few years ago, Professor Taylor wrote an article that is worth a fresh look. He noticed that high school English exams had a level of sophistication that was not found in the routine arithmetic that is characteristic of high school mathematics.

No mathematician I know would read any part of the Grade 12 text book for intellectual or spiritual pleasure. I don’t know how that statement strikes you but it strikes me as scandalous.

It seems to me that we need more professors like Peter Taylor, combining poetry and math, to transform the math and science curriculum in our schools. We need enhanced support of science centres, such as TELUS‘ gifts in Toronto, Vancouver, Calgary, Edmonton and Montreal. We also need to get right into the schools, school boards and ministries of education.

We need to inspire an innovation generation.

In search of good governance

Former Worldcom CEO Bernie Ebbers is heading off to jail today to serve his 25 year sentence. Former Enron CFO Andrew Fastow was sentenced to 6 years for his activities.

We have often heard that competition brings out the best in all of us. Unfortunately, the telecom sector has had its share of scammers, spammers and charlatans. Perhaps we should put together a special panel at next year’s Canadian Telecom Summit?

So it was with great interest that I saw evidence of the good side of corporate Canada last week.

TELUS received recognition from Report Watch for producing the world’s best annual report. According to the announcement, TELUS has improved its ranking from 18th in 2004 and second in 2005 to number one today. A copy of the Annual Report of Annual Reports can be obtained by sending an email to the editor, Mike Guillaume.

Also, GovernanceMetrics International recognized BCE as being among the top 3 companies (together with Colgate-Palmolive and Pepsico) for overall governance according to a Reuters story.

These aren’t the kinds of things that make for sizzling ads on TV, but it can only benefit investors and customers alike that Canada’s leading telecom carriers were recognized for their corporate governance practices.

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Quintuple play

For all the talk about triple and quadruple plays in the telco / cable battlefield (choose from wireline phone, mobile phone, internet and TV), there are two Western Canadian telephone companies positioning themselves with a quintuple play – adding security into the mix of options.

We like the stickiness of security services. For all sorts of reasons, home security monitoring just doesn’t churn. It is a high margin business, often delivering more than 80% margin, even when the service is completely outsourced. People never seem to switch.

MTS AAA AlarmsSecurTekMTS Allstream has been playing in this area for some time, having acquired AAA Alarms back in 1998. SaskTel has seen success with its SecurTek operation since 1999, and is also a major wholesaler of alarm monitoring. Jon Arnold has recently written about the MTS bundles.

MTS Allstream and SaskTel have also been leading in deployment of IP-TV services. MTS TV has reportedly grabbed 25% share in Winnipeg and has successfully launched High Definition services.

There was a time that other phone companies and cable companies played in this space. With the availability of low cost intelligent, pan-tilt-zoom cameras, it seems to me that there are some interesting opportunities for integration of video monitoring over high speed networks and mobile TV – perhaps a return to this space by the major carriers. It is a natural bundle with telecom services.

From my days living in USWEST territory, I recall a slogan from an advertising poster: In the west, you either make dust or eat dust. Watch the west for innovation. We’ll keep an eye on consumer adoption of the quintuple-play in Manitoba and Saskatchewan.

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One small win for consumers

Notwithstanding the Globe and Mail’s preliminary headline, it may not be fair to call it a win for consumers, but it is certainly a start. When the Federal Court granted the Consumers groups leave to appeal the CRTC’s February 16 Deferral Account Decision, it represented another set-back for a Commission that has fielded a number of Cabinet and Court appeals this year.

This was a Decision that didn’t seem to make anyone happy, other than a few provincial governments. Even Bell appealed the Decision, despite the apparent $650M windfall to offset their capital programs.

The consumers’ groups are arguing that the money (around $50 per subscriber) rightfully belongs to the subscribers that overpaid for services; don’t use their money to fund a rural broadband program that should be administered out of tax revenues.

Barrett Xplore felt that the CRTC’s rural broadband program distorted the economics of private sector investment.

Back in June, the Court denied a Stay application, ruling that consumers would not suffer irreparable harm should the stay not be granted. However, the landscape has now changed. The phone companies would be wise to look at asking the CRTC or the Courts for a Stay of their Decision.

The phone companies are spending time engineering rural broadband plans based on a presumption that the program will be funded by the Deferral Account. They will likely seek authorization to stop all work on the projects, now that the source of funds has been put at risk.


Update: [Sept 26 9:50 am]
Mark Evans has a blog posting about rural broadband as well as a story in today’s National Post.

Not sure where one of my colleagues buys his beer, but he is quoted in the Post story as trivializing the rebate, saying that it wouldn’t buy a beer or two. I think it was great for the Consumers’ groups to recognize that $50 is fifty bucks – that’s two beers, movie tickets and a baby sitter – and it is worth fighting for.

I hate system access fees

I hate the term ‘system access fee’. It sounds so official. The cellular industry wants consumers to think that it is a government mandated charge. ‘System access fee’ sounds better than ‘profit fee’ or ‘our way to increase prices even though you have a 3-year contract fee’. But that is all it is.

I say, if you want to raise prices – do it. It’s your business. Hiding behind an add-on like ‘system access fees’ is just plain misleading. It’s unfair and inappropriate to raise prices on consumers who have a contract.

The ability to raise the ‘system access fee’ from $6.95 to $8.95 is more evidence of what the investment industry calls ‘rational competition’ in Canada – the avoidance of a price war. Good for investors, lousy for consumers.

It isn’t clear that wireless number portability (coming in March 2007) is going to bring pricing benefits to consumers. The signals being sent from the carriers seems to trending prices upwards. One carrier is raising domestic long distance rates to an astounding 30 cents per minute plus air time (we note that their cost is around a penny). Now this other carrier is signalling higher system access fees.

If a carrier raises the system access fee for people under contract, what was the value for the consumer of the agreement itself?


Postscript: [8:20am]
A month ago, the CRTC issued its Consumer Bill of Rights decision. That Decision doesn’t help in the case of System Access Fees for two reasons: first, wireless carriers are not covered – the Bill of Rights applies to ILECs only; second, there is nothing that prohibits such add-on charges.

Perhaps another reason why the Telecom Policy Review Panel called for the establishment of a body with a greater focus on consumer issues.

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