Norway's oil riches and Canadian cord-cutting: BUSINESS WEEK WRAP
One of our most-viewed pieces of journalism this week was CBC reporter Aaron Saltzman's look at the growing trend of homeowners of new units noticing that their fibre optic internet connections are under control of one of the Big 3 such as Bell, Rogers or Telus. They have no obligation to open them up to other companies.
The result is that people find they're locked into certain telecom contracts based on where they live. Whether it's a Toronto condo tower, or a low-rise townhouse complex in Ottawa, whoever secures the rights first basically owns everyone there as an exclusive customer base.
Smaller players are concerned that they won’t be able to afford to compete if they’re not allowed to piggyback on new fibre optic cables. And they've taken their fight all the way to the CRTC, to force the incumbents to open up their gates.
"We have to be able to have access to that kind of infrastructure or else we’ll be essentially infrastructured out of the market," George Burger of startup VMedia, says in the report.
Cord-cutting a growing business
On the subject of taking on the Big 3, a number of entrepreneurs have sprung up in recent months trying to eke out a business catering to people looking for a different way.
Ever heard of a cord-cutting consultant? How about an anti-cable guy? Because that's what entrepreneurs like Sean Whitehead, Geoff Tebbutt and John Brillhart call themselves. They're just three of the names in the burgeoning cord-cutting world, where they offer customers fed up with sky high telecom bills a helping hand in cutting the cord in favour of streaming options that often cost a fraction of the fees for conventional television.
For a few hundred dollars, such consultants can walk you through your different options to get content, and help you set up the sometimes tricky connections.
Lessons from Norway
Without a doubt, however, our most-read story of the week was this piece by the CBC's Susan Ormiston, outlining how Norway's oil riches have led the tiny country on a much different path than the one chosen by other governments, including Alberta.
In 1990, when North Sea oil riches were only starting to be developed, Norway set up a fund with the proceeds of that exploration. Its only mandate was to invest in things outside the energy sector, and outside of Norway, to give the country diversification when tough times returned to the always-cyclical oil business.
Alberta has a similar fund, called the Heritage Fund, which the province set up in 1976, with an ostensibly similar goal. The difference? Today's Alberta's fund is worth $17 billion and a frequent target for governments eager to bridge temporary spending gaps. Norway's has grown into a colossus worth $1 trillion, investing in 9,000 companies, including 200 in Canada.
Every year, the Norwegian government is mandated to take out no more than four per cent (a cool $40 billion a year) of the fund, to ensure that the capital remains sustainable.
The piece set off quite the debate in and outside of Alberta this week, as the province was getting ready to table its budget. Although a direct comparison between Norway and Alberta isn't entirely fair, it's certainly food for thought and well worth a read.
Heinz-Kraft merger deal
And finally, the biggest corporate news of the week was likely the proposed merger of two food giants that just about everyone has heard of: Kraft foods and Heinz.
Backed by Warren Buffett and 3G Capital (the company that recently took over Canada's Tim Hortons), the deal would create one of the biggest food conglomerates in the world. And reverse a recent trend that had seen some big companies get smaller, including Kraft — which had previously spun out of a larger food company now known as Mondelez International.
So far it doesn't seem like the plan is to change much of anything, but 3G Capital has a very well-earned reputation for turning around company balance sheets with aggressive cost-cutting.
Those were some of our biggest stories this week. Be sure to check out our website often for more, and don't forget to follow us on Twitter here. In the meantime, here's a day-by-day list of what you were checking out this week.
- Norway's sovereign wealth fund offers lessons for Canada
- WestJet uncovers fake Las Vegas fare scam
- This just in: Your internet and phone bill is too high
- Cutting the TV cord? Call the anti-cable guy
- DON PITTIS: The incredible rise of China's currency
- Cuba is booming as tourist hotspot 'before the Americans come'
- Heinz buying Kraft in major food deal
- Gap betweem houses and condos widens to $300K
- CRTC blasts Bell for meddling in CTV coverage of cable hearings