To very little surprise, Bell Canada was awarded two licenses yesterday by the CRTC to offer digital television service in 11 communities in Ontario and Quebec. Bell will provide the service over its high-speed Internet network but did not tip its hand when the product will be rolled out. Bell's sister company, ExpressVu, is already offering TV-over-copper service into more than 200 apartment buildings and condominiums using VDSL technology so you would think Bell will use the same technology to go after residential customers. An issue Bell may still have to work through is not so much the delivery of TV signals but the value-added features that will convince consumers to give up their cable connections. Bell has a trial going on with Microsoft Corp., which signed a US$400-million software deal with SBC Communications Inc. earlier this week to do IP-TV next year. Differentiation – whether it's carriers getting into TV, or cable companies moving into telephony – will have to be done on something more than price. This will be a huge challenge for players trying to cross into new markets that should not be under-estimated.

Not sure if Bell Canada was ready to tell the world about its decision to jump into the residential Internet telephony market but the cat is now out of the bag. According to Alek Krstajic, Bell Canada's chief marketing officer, the carrier will be ready to offer service to its Sympatico high-speed customers in 2005, before it is rolled out to “everyone and everywhere”. To date, Bell has only said it was conducting tests of Internet telephony technology, but clearly it has been more aggressive as rivals such as Rogers Cable Inc. prepare to get into the market next year. Bell's move should not be a surprise given the moves it has been making in delivering IP-TV to apartments and condominiums. Compared to delivering video service over IP, voice should be a snap.
The big question is whether Bell is going to cannibalize its local phone base by offering what will likely be an inexpensive product in a market where price will likely be king. I suspect Bell will make it part of their bundles. If you want to buy Internet telephony, you'll also have to purchase wireless and/or satellite-TV and/or IP-TV. The good news for consumers is Bell will do a good job of educating the market about the advantages of Internet telephony and alleviate concerns people have about issues such as 911 and back-up power.
For Canadian consumers willing to jump into the fray, their choices in 2005 will include Bell, Rogers, Shaw Communications, Primus Telecommunications, Yak Communications, BabyTel, Vonage and AOL Canada. If high-speed Internet access and IP-TV penetration are any indication, Canada could prove to be a leading Internet telephony market.

The folks in Redmond have to be smiling from ear to ear today after SBC Communications Inc. decided to spend US$400-million over the next 10 years on Microsoft software as part of a plan to offer digital television services to 18 million customers over high-speed Internet connections. For many carriers, IP-TV is a must-have product if they want to offer consumers a “triple-play” bundle to compete with cable rivals. SBC's move is a sign that IP-TV technology is finally ready for prime time – something that may convince carriers, who have been running “trials” for the last several years, to finally climb onboard. In Canada, SaskTel and Manitoba Telecom Services Inc. have been offering IP-TV service for the past year – proving that we are on the leading-edge when it comes to broadband access and services. The proliferation of IP-TV in Canada should gain momentum as Bell Canada rolls out its VDSL platform to apartments and condominiums in Toronto, Montreal and Ottawa.

I'm rarely in the habit of criticizing other media organizations for their coverage but CBC's latest torque of a class-action lawsuit involving Nortel is misleading and exploitive. The CBC is making a huge deal today of an “exclusive” interview they did with a fellow named John Foster, who worked as a scheduling engineer with Nortel in Dallas before being laid off in 2001. Foster claims he told the U.S. Securities and Exchange Commission in 2001 that Nortel was doing some odd things when it came to revenue recognition. It is important to note as a scheduling engineer, Foster did not have access to Nortel's accounting systems so he's making assumptions and guess-timates rather than basing his assertions on real figures.
Now, anyone can say anything in a class-action lawsuit but it doesn't mean it's newsworthy. The CBC's decision to interview Foster about his allegations is what I would describe as “news manufacturing”. If you wanted to sift through all the class-action lawsuits against Nortel, you could write nothing but allegation stories until the cows came home. But this “let's turn a lawsuit into news” approach is nothing new to the CBC, which pulled off a similar stunt a couple weeks ago. If ex-CFO Doug Beatty or ex-CEO Frank Dunn decided to spill the beans (which they won't do because they still have severance/settlement issues) that would be huge news that the CBC could justify leading off their newscasts with. I'm not suggesting the Foster interview isn't news, it's just not that good.
Just to hammer home the point, here's are parts of an interview done with Foster today.
When asked to comment on CBC's assertion he's a key whistle-blower:
“They [the CBC] are making some of that up because I don't [know where the money went.] I wasn't saying Nortel is worse than Enron or anything. All I was saying was that the records weren't good enough to say what was happening. All I was trying to do was get the scheduling system fixed. It only becomes intentional if you don't fix it.”
On the total revenue that could have been misrepresented, which claims could have been as high as US$900-million:
“It was a big figure and I have no way of knowing the actual figure…..It wasn't even just a best guess. It was just a ball park figure.”
On why he went to the SEC after he was fired:
“Partly, because I couldn't take it to the company, could I?”
The CBC's believes they have a huge scoop. I think their enthusiasm got the best of them.
For a good take on Nortel's corporate governance woes and the CBC's flawed “investigation” check out Terence Corcoran's editorial in the National Post.

CityFido is apparently alive and well, although you may have a tough time
recognizing it in the future. Rogers rolled CityFido into Montreal
yesterday, and quietly raised the price of the “local line killer” to $51.95
from $45 by slapping on a $6.95 a month charge for network access. What is
now offficial is the days of any semblance of price wars in the Canadian
wireless market are long gone. Microcell was the one rebel willing to play
the discount game – a practice that drove Telus, Rogers and Bell wild.
Anyone who believes Virgin Canada will fill the void will be disappointed
given Bell owns a 50% stake. It is interesting to see Virgin has lost all
kinds momentum with its decision to shift its launch from the key
fourth-quarter to some time early next year. Virgin claims its delay has
nothing to do with the billing problems that hurt Bell Mobility in the
third-quarter, or a examination being done by the Ministry of Canadian
Heritage into downloads of ringtones. There's noise that all's not well
between Virgin and Bell.

After having the motherboard of my Dell laptop melt down, I've been left computer-less at home for the past three weeks. To be honest, I've felt out of sorts ever since. It has dawned on me that I could easily live with TV. With the exception of a few shows and NFL football, I'm constantly reminded of Bruce Springsteen's “57 Channels (And Nothin' On)” whenever I channel surf. These days, I would be more unhappy if my high-speed connection went on the fritz as opposed to my cable connection. There must be a lot of people in the same boat, which explains why Bell, Telus, Rogers et al are able to keep high-speed prices at healthy levels.