Two of the biggest questions in the high-tech world this week are whether Nortel CEO Frank “Silent Man” Dunn and Google Inc. will provide insight into what's happening with their companies. On Thursday, Nortel will post its first-quarter results, and during a conference call analysts are expected to ask Dunn questions such as: when do you expect the investigations into the company's accounting woes to be completed; why did you give your CFO and controller extended paid vacations even though you have directly or indirectly been the CFO since 1999; and will you give back any of the bonuses and options granted as a result of Nortel's improved financial performance if the accounting re-statements show the results weren't that good?
As for Google, it has to cough up financial information by Thursday to comply with SEC regulations. The search engine giant could file for an IPO or it could issue disclosure statements and put off the IPO exercise for a little while longer. The pressure to go IPO is enormous given that you have several high-profile VCs, who have not enjoyed a home run in years, chomping at the bit for a “liquidation event”. And you have to believe that Tiger Woods, who owns a few Google shares, needs the cash.

After being pestered by several carriers, the Canadian Radio-television and Telecommmunications Commission has decided to extend the process to create new rules for Internet telephony. Rather than an April 28 deadline for submissions, the CRTC will now give interested parties – mostly incumbents carriers – until June 18. A two-day discussion session will be held in September, rather than May. This decision makes total sense given the political, technical and business issues to be addressed. It seems, however, the CRTC has already made up its mind to regulate VOIP in the same way as circuit-switch technology – even though VOIP could transform the industry and leave incumbent carriers behind if they are shackled with old rules while new rivals are unregulated.
For the CRTC, this is just another example of how it tries to pull off the delicate balancing act of promoting competition AND regulating a market that is becoming increasingly difficult to oversee as IP technology lets service providers to deliver products to Canadians from anywhere in the world. At a recent conference in Cambridge, Ont. where the who's who of the Canadian telecom industry gathered – the media weren't allowed to attend – the overwhelming sentiment was a mounting sense of frustration with the CRTC about its lack of vision. This halestorm might have had more to do with the fact CRTC chair Charles Dalfen had to cancel his keynote speech due to personal reasons but it is also a sign that no matter what the CRTC does these days, they are going to piss someone off.

By Mark Evans
With the playoffs in full swing and three Canadian teams still in contention for the Stanley Cup, hockey fans may be happy to discover they can now buy the theme song from Hockey Night in Canada.
For the first time since Dolores Claman wrote The Hockey Theme in 1968, fans can purchase the song for $1.99 by downloading it at Puretracks.com.
Ms. Claman, who has written music for advertisements, television shows, film and theatre, is thrilled the song is finally available. “I think a lot of people really will be happy because you have no idea how many people have contacted [her representative John Ciccone] or me on where can they get it. People ask for it from all over the world such as ex-pats who are lonely.”
Ms. Claman wrote her popular and enduring song in 1968 after being contract by MacLaren Advertising, which was trying to give Hockey Night in Canada a new look and feel.
“I wrote a couple of things knowing this was the best one because it flowed right away,” she said. “They said they wanted it to be like an adventure so I was thinking about Roman people on horses and in armour.”
Over the years, there were many requests for the song to be put on record and CD but it never happened, mostly due to the high cost of hiring the 21 musicians needed, renting studio time and producing it.
In 2002, Ms. Claman decided it was a project that had to be done and she financed the entire process.
Mr. Ciccone said the recording started to get into the hands of consumers in late-2002 when he entered into ring tone agreements with Telus Mobility and Bell Mobility. The ring tones have been even more popular than The Hockey Theme sheet music, of which more than 20,000 copies have been sold since 2000.
Talks with Puretracks.com started two weeks ago and gained steam as the NHL playoffs got underway. Alistair Mitchell, co-founder of Moontaxi Media Inc., which owns Puretracks.com, said he is hoping people watching the games at home on television will be inspired to walk over to their computers and download the song. “We will have a big banner ad for the song at the top of site,” he said. “It’s pretty special to us.”
Mr. Ciccone said royalties from The Hockey Theme will not make a rich woman of Ms. Claman, who also wrote A Place to Stand [Ontari-ari-ario], but she is “pleased as punch” the song has hit the market after three decades as an integral part of the lives of millions of Canadians … at least on Saturday nights.
National Post

I'm not sure about you but the suspense about Nortel's first-quarter results is excruciating – okay, that's somewhat melodramatic but you don't get this kind of telecom suspense too often. With Lucent, Motorola and Sony Ericsson posting good quarterly results this week, all eyes will be on how Nortel fares. From the outside looking in, it appears the company has enjoyed a solid quarter with a steady stream of contract wins. The big question is whether CEO Frank Dunn and his senior management team have been able to stay focused on the business amid the accounting troubles that emerged in February. My take is Dunn's hold as CEO will be in the balance when he addresses questions from analysts following the first-quarter results. If he successfully bobs and weaves, and comes across as sincere but legally hamstrung, he could weather the storm. If, however, Dunn comes across as indecisive, testy and difficult, it could turn the investment community against him. I suspect Nortel will not answer any questions about its accounting problems until the regulatory investigations are over but that shouldn't stop Dunn from doing what he can.

Looks like the Canadian Radio-television and Telecommunications Commission may be re-thinking its expedited process to establish new rules for VOIP. Today, it announced an April 28th deadline for industry participants to make submissions has been put on hold. This could mean the VOIP process will be extended so that a more in-depth discussion and thinking can happen. The initial reaction from telecom carriers, who are clearly the most vulnerable to inroads made by VOIP, is the CRTC has already made its decision that incumbents carriers offering VOIP services will be regulated, while new players will not be regulated so competition can be encouraged.

Mark Evans
Financial Post, April 15
Amid the regulatory investigations into Nortel Networks Corp.'s accounting troubles, there has been little attention paid to the telecom equipment maker's business and the modest improvement happening in an industry recovering from a severe three-year slump.
Granted, it is difficult to seriously look at Nortel's fundamentals when there are U.S. Securities & Exchange Commission and Ontario Securities Commission investigators looking to interview the company's executives and sift through the books.
With little information available, it is difficult for investors to tell whether Nortel is about to be engulfed in a complex accounting scandal or whether the company's independent audit committee and regulators will discover minor issues that could see it receive a slap on the wrist and be sent to a corner for a corporate time-out.
For anyone considering an investment in Nortel or trying to figure out what to do with shares they own, April 29 will be a crucial date when the company reports first-quarter results.
Nortel chief executive Frank Dunn, who has been invisible since the company disclosed last month it will likely need to re-state financial results from 2000 to the third quarter of 2003, will be available to analysts on a conference call.
There is a distinct likelihood Mr. Dunn will attempt to bob and weave around questions about the accounting problems and the regulatory investigations. This will frustrate analysts looking for insight into issues such as why chief financial officer Doug Beatty and controller Michael Gollogly were placed on paid leave last month.
With this in mind, investors with a healthy appetite for risk will have to examine Nortel's business. Investors who pursue this exercise will discover Nortel is well-positioned to capitalize on growing demand by carriers for new equipment to roll out wireless and Internet-based services.
“Their industry is improving, their competitive position is strong and continues to get better, and gross margins are historically higher than they have ever been,” said Duncan Stewart, a partner with Tera Capital. “The products Nortel seems to be best at seem to be the ones likely to grow faster than overall market, and have higher margins. From a fundamental perspective, the company is very well positioned.”
Mr. Stewart said the challenge facing investors is balancing Nortel's improved prospects with the regulatory and financial uncertainties looming over it. He said Nortel stock is worth $10 to $12 but it should trade at a 25% discount to fair value to account for the regulatory risk.
“If everything comes up roses, it goes back to $10,” he said. “If everything comes to a likely level of badness, it goes to $5. I do not see the SEC and OSC investigations culminating in the company going bankrupt. The scenario is they go into the penalty box, the stock could go to $5. I believe it is much more likely that if it goes to $5, it won't stay there long, and if it goes to $10, it will go higher.”
Nortel shares closed down 17 cents to $7.70 in Toronto yesterday. According to Bloomberg News, 20 analysts rate Nortel a “buy,” 11 a “hold” and two a “sell.”
From a business perspective, Nortel is poised to do well because of its strength in the wireless and Internet Protocol markets. In 2003, wireless sales accounted for 44% of Nortel's US$9.8-billion in revenue.
During the past couple of years, the company's willingness to aggressively invest in research and development has played a key role in helping it produce leading-edge wireless technology at a time when carriers are looking to boost the speed of their networks to launch new revenue-generating services.
This has given Nortel a competitive lead over rivals such as Ericsson Telephone Co., Siemens SA, Nokia Oyj and Lucent Technologies Inc. A big advantage is Nortel's strength in different wireless technology sectors, compared with Lucent, which has pinned its wireless hopes on a single standard called code-division multiple access.
Nortel is also benefiting from the growing interest in Internet-based technologies as carriers look to migrate their networks from older circuit-based systems. Carriers are buying Internet equipment because they can reduce costs by putting voice, video and data traffic on a single network. This makes these networks less expensive to operate and maintain.
An important driver is Internet telephony, otherwise known as Voice over Internet Protocol. Nortel should see healthy sales as carriers look to reduce operating expenses, and cable companies move into the telephony market.
Mr. Stewart said VoIP is an attractive business because it is software-intensive, which creates a large barrier to entry. It also requires high standards before the technology is adopted by carriers, which is something Nortel has established as a long-time industry supplier.
Mr. Stewart said another important issue is Nortel's ability to attract business by offering carriers new Internet telephony features such as call-waiting and 911 that can generate additional revenue.
“As Nortel comes up with solutions, it tends to lock the customers in more than selling them a photonics part,” he said. “This [business] is unlikely to be commoditized as quickly.”
While Nortel has an attractive product portfolio at a time when industry conditions are starting to rebound, its accounting and regulatory woes cannot be brushed aside.
Kevin Mitchell, directing analyst with Infonetics Research Inc., said these problems may deter customers from entering large, long-term deals until the investigations are completed.
“I don't think anyone thinks they will go out of business but one of the chief concerns is financial stability of technology suppliers, and it will be a question mark and a red flag for a while until it's resolved,” he said. “Nortel has been clicking and doing pretty well. [The accounting and regulatory investigations] are an unfortunate stain on their record. These things can drag on for quite some time, and it can hurt larger three- to five-year deals service providers would sign.”