Thursday, June 21, 2007

Telephone merger? Nyet!

Back in 1979, when Lee Iacocca asked the US government to guarantee (i.e. co-sign) $1.5 billion in new loans to save Chrysler from bankruptcy Big Business -- and especially his competitors at Ford and GM -- were deeply opposed to the idea. Not the front-line auto dealers, and especially the competition. One dealer, who sold Chevrolets and Hondas, said he was behind Iacocca because competition was good for the industry and especially the consumer.

The rest is history.

Now, Telus wants to join forces with BCE, effectively creating a monopoly landline company everywhere except in the territories, Saskatchewan, Manitoba, and northern British Columbia. Bad idea? Definitely.

People are still scared about the security issues with VOIP. They may hate their phone company but they hate their cable company even more. And many "local" phone companies are fly-by-night operators and not user-owned telephone co-operatives like those that exist in many parts of the US. One of the most successful examples that comes to my mind is the co-op in Horry County, South Carolina -- which includes the resort city of Myrtle Beach. They're extremely rare in Canada, though, and that's a pity.

What's good for the shareholder is not always good for the consumer. If we're to have competition in Canada, we should mean it. The only reason why there are even exploratory talks at all was because of the income trust decision last year. People should have a choice, no matter how bad the choices are. No merger.

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