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Listen, Beware When Silent CEOs Speak


Vonage In Print News

Listen, Beware When Silent CEOs Speak

December 8, 2003

By Tyler Hamilton

If there were two words to describe events last week in the Canadian telecom world, I'd have to say they were "unified messaging."

First, Michael Sabia breaks with recent tradition and decides to give one-on-one interviews with Toronto's big-three newspapers. The chief executive of BCE Inc., the country's largest communications company, has not approached media in this way since taking over the top job from Jean Monty.

Three days later, we hear from Frank Dunn, another silent CEO. The head of Nortel Networks Corp. delivered a speech at the Fairmont Royal York Hotel, to the Empire Club.

The last time a Nortel chief walked onto such a public stage was nearly three years ago, when John Roth, ex explaining the rise and justifying the coming fall of the Brampton-based investor's gem, experienced his first and last media scrum.

Considering the rarity of these events last week, I wasn't complaining. That is, until their true purpose began to crystalize.

As briefly mentioned in a story Friday, the phone carriers and big telecom equipment manufacturers in North America are organizing into a powerful, unified voice that wants governments to leave their grubby hands off the telecom market.

Their feeling is that organizations like the U.S. Federal Communications Commission and the Canadian Radio-television and Telecommunications Commission are government-created Robin Hoods who steal from the big, rich phone carriers and give to small, poor competitors.

Walter McCormick Jr., CEO of the United States Telecom Association, described the industry's objectives in a memo dated Oct. 17 to its phone-carrier members, just three days before wining and dining the CEOs of the world's 10-largest telecom equipment manufacturers. Frank Dunn was there, along with Craig Barrett, CEO of Intel Corp. and Patricia Russo, CEO of Lucent Technologies Inc.

"Our objectives," McCormick wrote, are "to end government management of competition where the consumer has a choice of telecommunications service . . .

``We are going to describe to them (Dunn and friends) our three-year goal for comprehensive federal legislation to substitute market-based competition for government-managed competition."

McCormick goes on, telling members that they should urge equipment manufacturers to join them in "CEO-level meetings at the White House, on Capitol Hill, and at the FCC" and to "incorporate these objectives into their own corporate messaging, both internally and externally."

We need "regulatory certainty," wrote McCormick. "We need a policy environment that rewards investment in infrastructure . . .We are going to have to come together as a forceful, forward-looking telecommunications industry" that is "looking to grow, to invest, and to compete in a vibrant marketplace free of micro-management by government bureaucrats."

Well, surprise, surprise - that's exactly what Sabia and Dunn had to say last week. Sabia called on the new Paul Martin government to completely revamp the communications policy framework in Canada, arguing that it doesn't serve the needs of an industry in the grips of technological change. In other words, the rules don't serve BCE, though Sabia didn't quite put it that way.

"Believe me, I'm not motivated by finding a way of seeking the private interests of Bell and BCE," he told the Star last week. "I'm just saying, as a Canadian, and someone who spent 10 years in Ottawa, that I think those issues are important."

Uh-huh.

Dunn, on Thursday, more or less called for the same change, citing new technologies such as voice over Internet protocol as having a dramatic impact on traditional networks, so much so that it puts big incumbent carriers like Bell Canada on the defensive and at a disadvantage. Of course, if Nortel's biggest customers suffer, so too do Nortel's earnings. Who can blame Dunn for protecting his dinner?

The thing is, I can't help but be half-sympathetic with their cause. Companies such as Vonage and Net2Phone, which offer cheap flat-rate calling through high-speed Internet connections, are multiplying in number. They don't need to build their own infrastructure. They don't need huge amounts of money. They just need some clever software and a few million dollars and they're up an running with a national broadband phone service.

This is what innovation is about, right? It means competition, choice and cheaper prices for consumers.
But we should remember that all this innovation has the potential of completely gutting the underlying infrastructure that makes it all possible. It's fun to watch the incumbent telcos squirm every now and then, but their concern shouldn't be ignored. Why, as Sabia, Dunn and the U.S. Telecom Association point out, should the big carriers keep investing billions and billions of dollars in infrastructure so that parasites can come along, eat for cheap, and move off to their next easy feast?

Then again, if the government does take a hands-off approach, will the big carriers begin to re-monopolize the markets by choosing who can and can't offer broadband services over their networks?

These are big questions that need to be answered in a comprehensive way, and hopefully the federal government is prepared to take on the challenge in a timely manner. As for Sabia and Dunn and their unified message, perhaps they could hold a press conference together next time and save all of us some time.



 
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†AK and HI residents pay $29.95 shipping. ††Limited time offer. Valid for residents of the United States (&DC), 18 years or older, who open new accounts. Offer good while supplies last and only on new account activations. One kit per account/household. Offer cannot be combined with any other discounts, promotions or plans and is not applicable to past purchases. Good while supplies last. Allow up to 2 weeks for shipping. Other restrictions may apply.

1Unlimited calling and other services for all residential plans are based on normal residential, personal, non-commercial use. A combination of factors is used to determine abnormal use, including but not limited to: the number of unique numbers called, calls forwarded, minutes used and other factors. Subject to our Reasonable Use Policy and Terms of Service.

2Shipping and activation fees waived with 1-year agreement. An Early Termination Fee (with periodic pro-rated reductions) applies if service is terminated before the end of the first 12 months. Additional restrictions may apply. See Terms of Service for details.

HIGH SPEED INTERNET REQUIRED. †VALID FOR NEW LINES ONLY. RATES EXCLUDE INTERNET SERVICE, SURCHARGES, FEES AND TAXES. DEVICE MAY BE REFURBISHED. If you subscribe to plans with monthly minutes allotments, all call minutes placed from both from your home and registered ExtensionsTM phones will count toward your monthly minutes allotment. ExtensionsTM calls made from mobiles use airtime and may incur surcharges, depending on your mobile plan. Alarms, TTY and other systems may not be compatible. Vonage 911 service operates differently than traditional 911. See www.vonage.com/911 for details.

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