Wednesday, December 13, 2006

Income Trust Payback

Conservatives, conservative pundits, and Blogging Tories have been cheering Industry Minister Maxime Bernier's autocratic decision to politically interfere directly in a CRTC decision, regarding eliminating the price caps that the two Big Telco Monopolies can charge, Telus and Bell.

How does this increase competition? It doesn't. Note the highlights in the excellent article below by Timothy LeRiche of the Edmonton Sun (note folks the right wing Edmonton Sun). It allows the big Telcos to drop their prices in areas where they are a virtual monopoly. How does that help competition? It doesn't it merely insures and increases their monopoly.

How come the BT and other conservative cheerleaders miss this point. Hello,can you say monopoly. Supposedly our Tory government and their cheerleaders in the press and blogosphere hate monopolies.What they hate is public ownership like the Wheat Board, they hate medicare, because they are State Monopolies. But they love private monopolies. Go figure.

How will this help Vonage, or the cable companies that are the real competiton to Bell and Telus. Well it won't. Will it mean lower prices for you and me, well perhaps as Telus and Bell lowball their bids to gain more market share. But as always with lowballing, it ends up after the initial honeymoon, the prices go up, and up, and up.....

Ringing in new firms?
Further federal phone deregulation could see new Alberta companies in 2007

Spring may bring new competition for phone services in Alberta as a result of federal moves yesterday, a Telus spokesman said.

The federal government said yesterday it was poised to further deregulate phone services in regions where competition is already at work.

In Alberta's urban areas, incumbent Telus already battles against the likes of Bell, Primus and Shaw.

"We've been prohibited from competing on an equal playing field with those companies," said Jim Johannsson of Telus. "We've been subject to something called a price cap regime, which means we can't modify the price we charge for local services. Whereas our competitors are free to price their services below market."

Phone service is regulated by the Canadian Radio-television and Telecommunications Commission (CRTC), and part of its mandate is to ensure consumers have affordable access to residential service.

It had put in place price ceilings and floors on how much Telus and Bell and other telephone giants could charge in markets where they controlled more than 75% of the local phone game.

Industry Minister Maxime Bernier said yesterday the Harper government intends to reverse the CRTC stance regulating local services.

"It's a positive step," said Johannsson. "Telus will be able to put its best offers forward to its best customers."

Critics have slammed the idea, warning it could drive up prices in areas where competition is weak.

But consumer groups and the small local-phone players say there is no real competition in the local phone market.

They fear that the bigger companies will simply drive down their prices in order to stave off the competition, and then raise prices.

What bugs me is that the Conservative government isengaging in direct political interference in the CRTC.

While claiming to be in the best interests of competition and consumers it is actually a kick back to the two Telco's for having been good boys and not protesting the governments plans to tax income trusts.

Both Telus and Bell were named by Finance Minister Flaherty as being one of the reasons he was forced to say Boo on Halloween to further expansion of Income Trusts in Canada. And scared the bejesus out of the marketplace with his Frankenstien like announcement that yes the Tories were about to break an election promise and TAX, yes Tax the Income Trusts.

Hey that's not just a broken promise that is a break with the very core ideology of our Neo-Con Government which is all about tax cuts. Well it was until Halloween now they are all about Tax Fairness, adopting the platform of the NDP. Anyways since that fateful day, the Tories have been doing backflips to help out the big corporations that were about to become trusts.

Not only does this interference in the market place give a big kick back to the Telcos but Multiculturalism Minister Bev Oda has given Encana, the other big corporation that was planning to become an Income Trust, a kick back.

Plans are afoot, yet not officially announced ,to move the National Portrait Gallery to Calgary, not exactly the Nations Capital except in its own mind, where it will be built as a P3 in partnership with Encana. What does Encana get for its investment, as I said here before, probably naming rights and long term leasing arrangements, which is money in their pockets.

The Conservatives are making up to the big Three Companies that were directly affected by their Income Trust announcements by putting more of your money and mine in their pockets.



Income Trusts




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Geoffrey Laxton said...

Murray Edwards, Income Trust Opponent and Member of the Industrial Military Complex?

Well folks, it looks like the so called Military Industrial Complex of North America somehow has a hand in kyboshing the oil and gas trusts. I tend to use a combination of intuition and facts, move towards Occam's razor's_Razor and then back to intuition and end with facts.

I came across a linkage between Edco Financial Holdings Ltd. and Alcan recently, but as Edco is private equity, I can no longer seem to find it. Alcan just announced a huge deal with the Government of Quebec. I will try to flesh out the linkages. This is just preliminary research.

More importantly, it would appear that Murray Edwards attended a meeting recently:

Secret Banff Meeting of CEOs and the Defense Establishment : Militarization and the Deconstruction of North America

This meeting brought together:

Top execs from the military-industrial complex and the oil companies were present including Lockheed Martin, Chevron, Mexico's PEMEX and Suncor Energy.
Top officials and policy analysts from the military's research labs and thinks tanks including Livermore were invited to integrate several of the specialized panels.

The meetings focused on the interrelationship between North American defense systems, militarization, national security, borders, immigration, military production and the control over North America's energy reserves.

The venue had more to do with profit driven militarization than "continental prosperity" .

It would seem that neither Murray Edwards nor the Military Industrial Complex favour oil and gas income trusts.

Geoffrey Laxton

Geoffrey Laxton said...

Gwyn Morgan-Quebec Linkage

This smirks of collusion.

-Gwyn Morgan on the Board of Directors of Alcan

-Alcan to build state-of-the-art smelter in Quebec

-Quebec provincial government is giving Alcan a $400-million interest-free-loan over 30 years, in addition to $112 million in tax breaks.

-Bloc Quebecois votes to kybosh Income Trusts

-Bloc Quebecois wants to mysteriously extend income trust tax implementation to 10 years as if they have leverage and bargaining power.
Here are some articles to ponder...

Geoffrey Laxton
From beautiful Thunder Bay, Ontario


Geoffrey Laxton