For anyone who's read this blog, one of my hobby-horses about residential VOIP is the need for it to become more user-friendly. Right now, it's mostly the domain of tech-savvy pioneers who live in single-phone households. That said, it always find it interesting to stumble across companies with technology to make VOIP easier to use. One of them is I2 Telecom, which has started to offer a VOIP service in the U.S. that lets its customers make calls by plugging into a high-speed DSL or cable modem, or a conventional circuit-switch line. I don't know enough about the technology tell you about the quality of calls made over the POTS but it is a neat trick if I2 can pull it off successfully.

With the Attorney General in Dallas asking Nortel for all kinds of documents, Nortel's accounting troubles look like they are headed toward the criminal arena. Can anyone say fraud? It is impossible to tell who the authorities have targeted but you have to believe that no one is going to go down by themselves. Once the Attorney General hones in on someone, you can bet they will squeal like a pig and give up a whole mess of people – most likely finance types who helped goose Nortel's results over the past couple of years. There is speculation the Attorney General was encouraged to move into action by the SEC, which is conducting its own investigation. In this age of corporate governance and Sarbanes-Oxley, the SEC clearly wants to come down hard on any company or executives that breach the rules. This story, my friend, is about to become really hot!

Just when you thought Telus was about to make a hostile bid for Allstream Inc., it catches many people off-guard with a $1.1 billion deal for Microcell Telecommunications. The deal doesn't make much sense from a technological basis because Telus uses different wireless technology – CDMA – than Microcell – GSM. So, it's not like Telus can easily migrate Telus' customers over to its network to improve operating efficiency. This has to be seen as a defensive move because if Telus did not move first, there was a risk Rogers Wireless or Manitoba Telecom Services would launch a bid for Microcell. Rogers appears to be the most likely suitor because it also uses the GSM platform. There are plenty of questions surrounding this deal: is Telus willing to pay too much for Microcell, how is it going to address the two disparate technical platforms, and will Rogers step into the fray. At the very least, this is a bad deal for consumers who will have less choice. Microcell was seen as the one “unreasonable” player in the market that kept everyone else honest on prices. Given how Bell, Telus and Rogers have all adopted the mantra of higher ARPU and bottom-line profits, Microcell's elimination will likely mean one thing: higher prices.

Nortel finally unveiled its highly-secretive Neptune router yesterday – and even invited the media to its facilities in suburban Ottawa. You would think with this kind of hoopla for a new product, the company would have some of its senior executives on hand to provide a little Carol Merrill-like presentation skills. Nope. Newly-appointed CEO Williams Owens or CTO Greg Mumford were nowhere to found – leaving David Hudson, Nortel's vice-president of data product strategy, (whoz dat?) to host the event. Since taking over as CEO two weeks ago, Owens has yet to talk with the media – although he is replacing Frank Dunn as a speaker at a star-studded telecom conference next month in Toronto.

On a recent conference call with analysts, Telus CEO Darren Entwistle reiterated the position his company's interest in Allstream Inc. is not “on the radar screen”. With Allstream's shareholders scheduled to vote this week on the company's acquisition by Manitoba Telecom Services, Entwistle's comments seem to rule out the possibility Telus will make a last-minute, bid for Allstream. Telus' reluctance to get involved makes sense because its balance sheet is just beginning to look healthy again after shedding nearly $3 billion of debt. Telus also has several strategic challenges such as reaching a new collective agreement with its unionized employees, improving operations in Ontario and Quebec, and addressing the looming threat of Internet telephony. Then again, Allstream does look impressive with its roster of large corporate customers and $3-billion of tax-loss carry forwards. One school of thought is Entwistle is content to let the Allstream-MTS marriage be consummated. Then, when the honeymoon is over, he will seek approval from the Telus board to make a move MTS. This is a gamble because MTS shares could climb if the Allstream starts to generate good results. The last time Entwistle bet on the price of stock going down was after Allstream came out bankruptcy protection. He – along with pretty much everyone else – had to be surprised when Allstream shares went from $30 to more than $70 – eliminating Telus' hope to pick up Allstream at a bargain-basement price.

If you listen to Call-Net Enterprise CEO Bill Linton, the emergence of Internet telephony may not be as rapid as many people believe. In announcing plans to roll out a VOIP service later this year, Mr. Linton said he does not think it will been seen as a replacement for the company's traditional circuit-switch offering. Mr. Linton makes a point that few in the VOIP world want to acknowledge – despite the fact VOIP technology works, consumer adoption will be slow until it becomes more user-friendly. As it stands now, consumers moving to VOIP are tech-savvy pioneers, rather than multi-phone households. The real noise in the VOIP market is how incumbent carriers are hoping to reduce costs by migrating voice, video and data traffic to IP networks. In the corporate market, VOIP is being used for many of the same reasons. This explains why Mitel Networks Corp. was easily able to raise $20-million from EdgeStone Capital Partners earlier this week, while converting $50 million of debt into equity – some which came from telecom entrepreneur Terry Matthews.