picking the bones of nortel

Having come at last to a protracted and painful end through public neglect and corporate incompetence, Nortel seems to have become more interesting as a corpse than it was as a living entity.

Having come at last to a protracted and painful end through public neglect and corporate incompetence, Nortel seems to have become more interesting as a corpse than it was as a living entity.

Research in Motion Ltd (which makes the famous Blackberry) raised a public stink last July when the Swedish company LM Ericcson offered to buy up the assets and patents of Nortel’s wireless technology division.

According to RIM (which apparently was prevented from making a bid by some technicality), Canada stands in danger of losing its competitive advantage in wireless, because the Nortel patents around Long Term Evolution (LTE) technology will be leaving the country with the new owners.

This month, Verizon Communications in the USA is crying wolf, because the American corporation looking to buy up the remainder of the Nortel’s assets has indicated it will no longer support some of the Nortel communications machinery Verizon uses on its network.

According to Verizon, this decision puts in danger “communications networks critical to the operation of the federal government and the defence, safety, health and security of the American public.”

What this means, really, is that Verizon is ticked that nobody is going to support the crappy machinery they were dumb enough to buy off a flagrantly failing – and, be it noted, foreign-owned – enterprise.

The governments in both Canada and the US took some heat for their passivity in the matter of Nortel’s ignominious demise, but for my money both of them made the right decision.

Whatever its achievements in the LTE field, Nortel was a bad idea from the get-go, and it became a progressively worse idea as one set of corporate noodle-brains after another took turns running it into the ground.

A poster child of the ill-fated dot-com boom of the late ‘90s, it burgeoned to a size and importance completely out of proportion to its business capabilities and managerial competence.

After a brief flurry of profitability as it rolled out fibre infrastructure services in the US, the company quickly and predictably hit a productivity wall, as the market for their fibre and routing machinery dried up.

The only thing they did worse than making money was accounting for it.

An investigation in 2003 showed that the company had incorrectly accounted for as much as $3 billion between 1998 and 2000; corporate heads rolled, and other heads (not much brighter) were brought in, to no good effect.

Last year, the RCMP laid fraud charges against the two men who were the chief financial officer and the controller at that time.

I confess to feeling a certain amount of spiteful satisfaction at seeing the furniture finally go out the door at Nortel; because some of their lousy machinery made my life a hell, for a while, during my the old days in the internet industry.

Northwestel, probably because its parent company was a part owner of Nortel, chose to use a Nortel router to supply internet gateway services to the Yukon government and YKnet, which was the point-man company for a consortium of now-defunct private ISPs that purchased service from them.

That decision occasioned a good deal of head- and heartache, for a number of reasons.

First of all, it put Northwestel in the position of using a router with uncertain and inconsistent compatibility with the routers used by its customers – which were, with the exception of the cable internet company, WHTV, universally the much superior and more industry-standard Cisco machinery.

Second of all, the Nortel router itself was notoriously loopy and prone to crap-downs – a fact about which the technical staff at the telco (who, by the way, I always respected as very good, sound technicians) had to maintain a diplomatic silence.

My techs and I had to spend many a late (and sometimes testy) night, trying to sort out some technical glitch or other, with our communicative capabilities with the other side compromised by the fact that we were talking different languages about different machinery.

My own sufferings, though, amount to nothing compared to the financial suffering the company inflicted on people with pension fund investments in its stock, when they saw their savings go to vapour because of business incompetence.

So, a very un-fond farewell to Nortel, the company I loved to hate; and kudos to our government for refusing to throw good money after money that has shown itself to be not just bad, but even at one time actively dishonest.

Whatever advantage we might be surrendering in the LTE technology is speculative, and, anyway, probably moot, since Nortel was in no position to exploit that advantage in the first place.

And, as for Verizon and its noble concerns about the “defence, safety, health and security” of the USA – well, they should have thought more clearly about those things before they invested in questionable machinery from an even more questionable company.

Last time I checked, the Cisco company was still profitably in business, and making a good product.

Maybe its time the guys at Verizon spent a little money. Lord knows they make enough of it.

Rick Steele is a technology junkie

who lives in Whitehorse.

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