Quit Your Tweeting Over UBB Challenge the Teleco Monopolies

While thousands of Canadians blogged, tweeted and set up internet petitions about the CRTC's User Based Billing (UBB) decision this week, methinks they protest too much, or at least have missed the real issue. As Michael Geist points out; The widespread use of bandwidth caps in Canada is a function of a highly concentrated market where a handful of ISPs control so much of the market.

The fact is that the Canadian marketplace is dominated by oligopolies; the big Telco's and Cable operators. They already overcharge us for cell phone use as well as internet access. You are already getting gouged even before the CRTC ruling!

Canada’s largest telecoms don’t want to say how much it costs to deliver a gigabyte of bandwidth and have refused to disclose such data, arguing that information is both proprietary and competitively sensitive. They also argue that it’s difficult to calculate the specific cost of delivering bandwidth since the cost varies based on the technology being used, the user’s location and the time of day.

Read more: http://business.financialpost.com/2011/02/05/how-much-does-bandwidth-actually-cost/#ixzz1DCl3hPBl

Of course they don't because as studies have shown we are charged more for our use of these "public utilities" then any other countries. And the reason is that these oligopolies make a profit off of service charges.

It’s 2010 and Canadians pay the highest cell phone bills in the world

Surveying more that 50 developed and developing countries where information is available, one country comes out on top when it comes to the most revenue extracted per subscriber on a monthly basis. And that country is of course Canada. What you are looking at here are the world rankings of mobile ARPU (Average Revenue per User). To you and me ARPU is your monthly bill, before GST/PST/HST etc. (through taxes and high spectrum license fees, our government is culprit here too)

This data is total bill including both voice and data. Canada does not have the highest proportion of data to voice charges though data usage in Canada is growing fast (we’re finally catching up after a late roll-out of 3G compared to many countries). Interestingly, Canadians are estimate to pay slightly less per minute of voice (10 cents vs 11 cents) on average than our nearest neightbour the U.S.. What is really driving bills in Canada over the top are the egregious fees like system access fees (the fees many plans still pay whether you access the system or not in a month), and especially “value pack” fees like 15$ a month for the luxury of call display and handful of voice mails

Now remember when they say that they have legacy costs, those costs are transmission lines, satellite connections, etc. Things that we the taxpayers have invested in. Telus was originally a government of Alberta phone company and it bought our city owned telco; Edmonton Telephones. So its legacy costs are the direct result of being a public utility. The Canadian government satellite program is used by telecos to transmit GPS signals, as well as broadband and mobile phone transmissions. So how come we get charged as if these companies had actually spent some money on this infrastructure.


Instead of protesting over UBB folks should be pissed off that the telecos and cable companies are gouging us using our public airwaves, and our legacy infrastructure and then charging us for it. The right wing likes to talk about how competiton will decrease prices, but that is not the case when the market is dominated by oligopolies who set base prices. While some would say its time for the CRTC to go, I would contend that since there is little interest in nationalization of these public utilities, that we direct the CRTC to set real rates based on the global market prices. Our protests should be over the costs we are charged not for usage but for service fees. Service fees should be eliminated, just as ATM and Bank charges should be.

Last One Out Turn Off The Lights

Nortel has been shedding jobs for over a decade as it lost money every year since the dot com bubble burst. But of course the guy at the top responsible for Nortel's losses keeps his job. Whle advocating layoffs and concessions as the solution to Nortels problems. Unfortunately that has been tried for a decade and it ain't worked.

Nortel has now lost more than $4.5 billion since Chief Executive Officer Mike Zafirovski took over at the end of 2005, pushing him to cut 18 percent of the workforce. Today he said he plans further reorganization aimed at saving as much as $400 million next year, freezing travel, ending salary increases and getting rid of at least four top executives.

The more than 32,000 people who work for shrunken telecom giant Nortel, its investors who have seen share value plunge from $20 to pennies in a year, and analysts following the firm awoke Monday expecting a financial tsunami of an announcement.What they got as Nortel announced a $3 billion red ink bath for the third quarter was a series of announcements that might slosh water out of a nearly full bathtub.Did a reorganization plan accompanied by some job trims and the booting of some top executives save the S.S. Nortel, or did management just reshuffle deckchairs on what many analysts are growing to believe is a business Titanic?

Deregulation and the optical boom
In 1983, due to deregulation, Bell Canada Enterprises (later shortened to BCE) was formed as the parent company to Bell Canada and Northern Telecom. Bell-Northern Research was jointly owned 50-50 by Bell Canada and Northern Telecom. The combined three companies were referred to as the tricorporate.[5][6][7]
As Nortel, the streamlined identity it adopted for its 100-year anniversary in 1995, the company set out to dominate the burgeoning global market for public and private networks.
In 1998, with the acquisition of Bay Networks, the company's name was changed to Nortel Networks to emphasize its ability to provide complete solutions for multiprotocol, multiservice, global networking over the Internet and other communications networks. As a consequence of the stock transaction used to purchase Bay Networks, BCE ceased to be the majority shareholder of Nortel. In 2000, BCE spun-out Nortel, distributing its holdings of Nortel to its shareholders. Bell-Northern Research was gradually absorbed into Nortel, as it first acquired a majority share in BNR, and eventually acquired the entire company.

After the Internet bubble

Nortel Networks Corp (NYSE: NT) stock price (source: ZenoBank.com)
In the late 1990s, stock market speculators, hoping that Nortel would reap increasingly lucrative profits from the sale of fibre optic network gear, began pushing up the price of the company's shares to unheard-of levels despite the company's repeated failure to turn a profit. Under the leadership of CEO John Roth, sales of optical equipment had been robust in the late 1990s, but the market was soon saturated. When the speculative telecom bubble of the late 1990s reached its pinnacle, Nortel was to become one of the most spectacular casualties.
At its height, Nortel accounted for more than a third of the total valuation of all the companies listed on the Toronto Stock Exchange (TSX). Nortel's market capitalization fell from C$398 billion in September 2000 to less than $5 billion in August 2002. Nortel's stock price plunged from C$124 to $0.47. When Nortel's stock crashed, it took with it a wide swath of Canadian investors and pension funds, and left 60,000 Nortel employees unemployed.
CEO John Roth retired under controversy to be succeeded by former CFO Frank Dunn. Despite some initial perceived success in turning the company around, he was fired for cause in 2004 after being accused of financial mismanagement. Dunn and other former Nortel officers have been accused of engaging in accounting fraud by the SEC (for more information, refer to "Accounting scandal").[8]
Retired United States Admiral Bill Owens was hired as the CEO to replace Dunn. In late 2004, Nortel Networks returned to using the Nortel name for branding purposes only (the official company name was not changed).
Nortel acquired PEC Solutions in June, 2005, renaming it Nortel Government Solutions Incorporated or NGS. The wholly-owned subsidiary provides information technology and telecommunications services to a variety of government agencies and departments.[9]
On August 17, 2005, LG Electronics and Nortel signed an agreement to form a joint venture to offer telecom and networking solutions in the wireline, optical, wireless and enterprise areas for South Korean and global customers. Nortel owns 50 percent plus one share in the joint venture.

Here are some key dates in the company's history:
May 1, 2000 - BCE Inc (BCE.TO: Quote, Profile, Research, Stock Buzz), Canada's biggest telecommunications group, completes spinoff to shareholders of 35 percent stake in Nortel, worth about C$88.5 billion ($75.6 billion)
Feb. 15, 2001 - Nortel cuts 2001 earnings and sales forecast in half, blaming severe erosion in U.S. economic conditions. The warning triggers a 33 percent drop in its stock and brings class-action lawsuits.
May 29, 2002 - Nortel plans to cut 3,500 jobs and sell more assets as it pares its revenue forecast.
June 4 - Nortel shares collapse to decade-long lows on concerns a new financing will further dilute its stock. Cash-hungry Nortel raises $1.49 billion June 7.
Oct. 23, 2003 - Nortel reports a quarterly profit, but says it will restate results going back to 2000.
March 15, 2004 - Nortel says it will likely restate results for a second time and delay filing its annual report.
April 5 - The U.S. Securities and Exchange Commission launches a formal investigation into Nortel's accounting
June 29 - Nortel exits manufacturing business, sells plants to Flextronics International, transfers 2,500 staff.
Sept. 30 - Nortel cuts almost 10 percent of its staff, 3,250 jobs, and vacates offices worldwide.
Jan. 11, 2005 - Nortel restates its results and says 12 senior executives will repay $8.6 million of bonuses.
Oct. 17 - Motorola's No. 2 executive, Mike Zafirovski, is appointed CEO, promising renewed growth and focus.
Feb. 8, 2006 - Nortel says it will pay $2.47 billion to settle two class-action suits from its accounting scandal.
Feb. 7, 2007 - Nortel slashes 3,900 jobs and shifts 1,000 positions to lower-cost locations such as China and India.

Oct. 15 - Nortel pays $35 million to settle civil charges filed by the SEC related to its accounting scandal.
Feb. 27, 2008 - Nortel says it will cut 2,1000 jobs as it faces persistently slow demand for its products.
Sept. 17, 2008 - Nortel cuts revenue forecast, plans another round of restructuring and the sale of its Metro Ethernet Networks business. It says it may also look for a partner to develop fourth-generation wireless technology.
Nov. 10 - Nortel announces 1,300 layoffs, a freeze on salary increases and a review of its real-estate portfolio after posting a $3.4 billion quarterly loss.

SEE:

Nortels Chickens Roost

NORTEL: Canada's Enron

Nortel Slash & Burn

NORTEL: REDUX

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