BCE : Of baling wire and bubble gum

Sean:

This so called BCE “deal”, is only being held together with baling wire and bubble gum.......oh yeah, and that $1 billion reverse break fee payable by Teachers' if they can't raise $34 billion in junk bond financing and destroy BCE's credit worthiness and cost of capital in the process.

The company has now resorted to canceling the payment of dividends on its common shares, in the latest exercise in high finance meets baling wire.

Look at the cost and consequences that will be borne by all Canadians in order for Teachers’ to avoid paying its $1 billion reverse break fee. Time for the government to step in and restore sanity....and $800 million a year in otherwise foregone taxes not to mention the litany of other adverse consequences.

BCE "touches" a lot more Canadians that MacDonald Detwiller ever did, and the Conservatives took action to stymie that deal. Plus these very Conservatives stymied BCE becoming an income trust on the premise that the government would lose taxes. Well now that we know that tax loss outcome is a certainty under Teachers' LBO of BCE, where is Harper now? Flaherty? Prentice?


Brent,

You are absolutely right and the lack of investment by a cash strapped Bell has already started (see below). Instead of investing in expanding their internet infrastructure Bell is throttling back on internet speed of their customers. Instead of making the necessary investment to keep up with demand they are punishing and blaming the users. Isn’t there any way the Board of Directors and senior management can be replaced (shareholder revolt). These guys haven’t done anything right for decades.

Best Regards,

Sean

Internet traffic jam angers Bell critics
Company blames peer-to-peer users. Must prove congestion a problem: regulator

ROBERTO ROCHA, The Gazette

There was a fresh upsurge of anger toward Bell Canada last week when the telco released details of the congestion on its Internet network. Its critics still don't believe the company needs to slow the Internet speeds of some clients for the sake of others.

The numbers, which the CRTC ordered Bell to disclose, show the parts of its network that are feeling the most strain. Bell has blamed this congestion on bandwidth-hungry peer-to-peer software users, and limits the connection of people who share files using such programs.