Rogers unveiled a new long-distance service that provides consumers with 5 cents/minute prices if you subscribe to at least two other services. The interesting part of the discount LD offer is the stuff in the background. First, it talks to how Rogers will approach telephony pricing when (if?) it launches a cable telephony service in mid-2005. UBS Warburg analyst Paul Fan said he expects Rogers to take an aggressive approach as it goes after customers in rival Bell Canada's backyard. Second, Rogers is rolling out LD with help from Allstream Inc., which is providing the network backbone. While Rogers executives have denied it, I get the distinct feeling that Allstream will be a major part of Rogers' telephony plans. Allstream gets a big customer to use its existing backbone while Rogers gets to save a whole lot of cash to get into the telephony business.

If telecom carriers didn't have enough problems, the Federal Communications Commission adopted rules earlier this week that will let eletrical utilities provide high-speed Internet access services. This is very troubling news for carriers – and cable companies, for that matter – because high-speed access has been one of the few high-growth/revenue generating markets. If electrical utilities decide to get into the broadband powerline (BPL) game, it will no doubt mean reduced consumer prices and fewer customers for carriers and cable companies.
BPL works by connecting computers to the Internet through electrical sockets. Using a specialized modem, computer users can get speeds of one to three three megabits/second. So far, the biggest roll-out of BPL has been done by Current Communications Group and Cinergy Corp., which launched a service in March. To date, the service has attracted more than 16,000 customers. The New York Times reports that widespread BPL service will likely be avaiable for more than a year.

At a time when corporate governance is in the spotlight, you have to love the efforts of the Sisters of the Holy Names of Jesus and Mary, who want Cisco Systems' to reviews its executive compensation policy. The Sisters, who own 10,000 Cisco shares and had their proposal turned down last year, want Cisco to produce a report by January 1 that evaluates whether its executive pay should be modified. They also want an explanation as to whether layoffs or the level of pay of the lowest paid workers should cause any adjustment to executive pay. The proposal comes at a time when Cisco CEO John Chambers received a raise to US$350,000 from US$1. Mind you, Chambers' modest salary (pre-raise) didn't mean he was forced to look for loose change under the cushions when you look at his healthy stock option package.

In an attempt to drive deeper into the consumer market, Vonage is holding a press conference tomorrow with Intrado and the State of Rhode Island to talk about E911 service. Now, I'm not sure how much clout Intrado and Rhode Island sport in the world of telecom, but you can't blame Vonage for trying to get over the 911 hurdle. For whatever reason, consumers get hung up (no pun intended) on VOIP about two issues: 911 and back-up power. Vonage and other service providers are trying to tackle the concerns about 911 by unveiling new technology, so that should fade into the background soon. As for back-up power, I'm sure it will be dealt with as well in the near future. In some respects, consumer reluctance about VOIP reminds me about how many consumers were cautious, if not opposed, about using their credit cards to make e-commerce purchases a few years ago. Today, no one thinks twice about it. Give Vonage credit for making some noise about 911 service – it's a smarter message than yet another price reduction.

It looks like the folks at UBS Warburg don't think that much of Bell Canada's VDSL push into the apartment building and condo market in Toronto. In a new research report, UBS estimates that Rogers will lose just 6,000 customers to Bell by the end of this year, and only 76,000 by 2010. That represents 0.3% of Rogers' 570,000 multi-unit dwelling, or MDU, customers this year, and 3.4% in 2010. With all the talk about convergence and the triple-threat battle between carriers and cable companies, UBS' forecasts for the Rogers-Bell tete-a-tete are surprisingly modest. It will be interesting to see how UBS and other analysts look at Rogers' push into Internet telephony, which is slated to happen some time next year. Don't be surprised to see Rogers enters into an agreement with Allstream Inc./Manitoba Telecom to give its Internet telephony plans some momentum.

CIBC World Markets analyst Steve Kamman got some insight into China's telecom market after meeting with Jia-Bin Duh, the head of Cisco China. Apparently, Cisco's feeling pretty bullish about China and looking for faster-than-market growth. Mind you, Nortel Networks was looking to surpass the market's growth earlier this year – only to change its mind a couple months later. Duh also said Cisco sees “healthy local and foreign compeition”. Given all the talk recently about Chinese rivals such as Huawei Technologies, it would have been interesting to get some deeper perspective on the threat posed by Asian suppliers.