Showing posts with label Philippines. Show all posts
Showing posts with label Philippines. Show all posts

Wednesday, May 26, 2010

The Man Who Saw Meralco's Future (Ten Years Ago)

Headline: May 25, 2010: MVP is Meralco's new CEO.

Background: 10 years before..... Read below

---------- Forwarded message ----------
From: robert punsalan
Date: Mon, Jul 20, 2009 at 10:40 AM
Subject: Re: The man who saw Meralco's future
To: Street Strategist at Gmail

Dear Thads:
Your prescient outlook and incredible knack of looking at things and determining new possibilities is the distinctive manner whereby knowledge is determined to be the most important path and means for power and resources.  In the book Powershift, Alvin and Heidi Toffler postulated on knowledge as the best source of power.  It adds and infers, is not used up both re-generates, etc.   Your articles since 1999 (gosh, how time flies!) resulted in the following developments (pardon me if I miss some, my memory is not that great anymore, age matters):
PLDT - taken over by the man you described in the Final Merger as the "fox in the ruthless business arena of Asia (Hong Kong)".  He has rebuilt the firm to a nimble and technology focused one that uses the "convergence" of techonologies to create a new meaning for communications.  Interestingly, the former firm is saddled with monopolistic tendencies that, as you correctly pointed out, " a monopoly, and having no competitors degenerates your creative brain cells..."    [ Perhaps that is the problem, having matured into a powerhouse and defeating all possible rivals, management expectedly sits back andgrows comfortable, all the while potential rivals are watching, learning, accumulating resources, and positioning themselves for the momentous struggle at a time of their choosing when they move on the takeover target. ]
SMC - still handled by the "elephant" (again in Final Merger) who with his political connections is now re-focusing the food and beverage conglomerate into a hard asset based monolith.  I never thought he would pounce on Petron (the linkage though is brilliant), Liberty Telecommunications (for his platform to jump into the internet) and his 3-way alliance with Meralco (Lopez family) and the fox (PLDT), and that he would be going into water control and dam operations (Laiban Project, although he will get his fair share of problems herein).
Your observations and insights are borne out within the decade.  Pity you don't write anymore for us disciples (enlighten us Master)  although if I am correct your mind is again communing with the Muses of Wisdom for new insights.  So what will it be Sir Acid, what other visions do you have that we can learn and build upon? 
Your loyal reader,
Robert "May we live in interesting times" Punsalan


In which the Metamorpher conjures up a corporate metamorphosis for power brokers

Power Struggle
Power is the ultimate high.
– Street Strategist, Strategy Myopia
Power is the ultimate high. Power and control. That’s what it’s all about.
I recently had a power lunch with power engineers at the power restaurant on the top power floor of a power company. If that’s not enough power for you, I don’t know what is.
The engineers were probably thrilled with this lunch, after all it’s not everyday that you meet a famous Street Strategist.
Furthermore, it’s not everyday that one of them can claim to have almost flunked one. That’s an exaggeration but you get the picture. It was at this lunch that this article crystallized.
Every time I meet foreign analysts who became instant experts on the Philippines after after a few visits to Makati, I found it expedient not to argue their “mere conclusions.” Eventually they talk about Ayala, San Miguel, or Meralco.
At this point I’d say, “ME-RAL-CO as in Manila Electric Company.” In maximum nonchalance and minimum speed, I’d voice out the syllables, without looking at them, pretending a soliloquy.
It never fails. It takes a few seconds to sink in, culminating in a confused look of a calculus that doesn’t add up – indeed the abbreviation doesn’t sound right. Enough of their expertise.
The final warning
The power lunch in the last week of March 2000 included one of the top five teachers I’ve had, and definitely the most mathematically brilliant, and coming from the Street Strategist, that’s certainly a statement – whether a good or bad one, you be the judge.
That he left the university in one piece was a minor miracle considering the number of students he flunked. He took the occasion to reveal that he found out after graduation it was me who complained to the German priest regarding his tough exams.
“I’ve written warnings about San Miguel and PLDT, and now I think that Meralco is a perfect takeover target,” predictably, I warned my hosts, one of whom heard of quaternion for the first time.
This is not the first time I aired this warning on takeover targets. In The Final Merger I theorized that PLDT could be the technology flagship that El Kapitan needed to complete his conglomerate. After devouring the former government depository and the oldest airline in Asia, his next logical strategic acquisitions could be the biggest food & beverage conglomerate and the biggest telecom player.
Yet again, in another instance of favorable timing similar to the publication of Strategy Myopia, the biggest takeover in Asian history occurred with a theme that eerily echoed The Final Merger scenario, barely three weeks after.
Forthwith, I wrote The Realization of Virtuality, detailing the travails of a huge telecom being swiftly swallowed by an unexpected acquirer.
In the light of these analyses and succeeding events, I warned my hosts: “Meralco is a perfect takeover target but not for reasons that you may have in mind, but for amusing reasons only the twisted Street Strategist’s mind can conjure up.”
The last days of Meralco
“You know who’s our chairman, right?” the host reminded me in an effort to paint that Meralco is powered by executives thoroughly schooled in maximizing profit opportunities.
With the advent of the power sector restructuring, Meralco is focusing hard on the opportunities, especially on buying power from cheaper generation companies (genco).
Well, he is the chairman of the power firm and the past president of the business school alright, who might as well be the author of “What They Teach You at AIM.” He is the epitome of the business school executive.
On the other hand, I’m the guy who’s going to write “What They Don’t Teach You at AIM.” I’m the epitome of the business school reject.
The divergence is tremendous. He may be pre-occupied with how to bring the power firm higher while I’m pre-occupied with what could bring it down.
M&A reasons
In b-school, there is a simple corporate and industry analysis framework called SWOT (strengths, weaknesses, opportunities, threats). The firm may have analyzed all the opportunities under the new regulatory regime with so many committee meetings.
But if they don’t have an anti-takeover committee, it means they are not expecting any threats. Actually, nobody in his right mind would attack Meralco, but let me invent the scenario.
The business of Meralco is one of the most boring in town. It is a basic commodity with no glamour at all.
It is a monopoly; and having no competitors degenerates your creative brain cells. It is a very predictable industry such that its capex over the next ten years are known. Its technology has not changed since the invention of nuclear power.
Even profitability is very predictable because the government sets the selling price. It is a stable business with no feast and famine cycles. The only exciting part of this business is actually predicting the dollar exchange rate.
Power and dominance
While definitely the privatization of Napocor is the holy grail of power investments today, as an M&A whiz, you may take over Meralco for its industry dominance, and your entry strategy is via the government’s 10% stake, soon to be disposed of. That’s if you are content with a company with only an 8% growth.
Meralco’s free float of 40% is fertile ground for a power struggle, but since the current charter allows only the Lopez group to own more than 10% of Meralco, an unfriendly takeover is unlikely. But hey, even the country’s constitution can be amended.
Operational efficiencies
On a favorable note, at least you can immediately save operating costs by removing the entire communications/marketing team because you don’t need to advertise and market a product whose demand is greater than the supply, compounded by being a monopoly.
Furthermore, to maximize cash flow to the firm, you can be innovative in fiddling with the parameter used by the regulatory board in power pricing, the return on rate base (RORB).
Maybe you have a strategy to reduce station and distribution losses, heat rates, and pilferage that should make your management more cost efficient.
If you are an independent power producer (IPP) another reason for a take over is vertical integration, precisely to smoothen the supply chain sine wave, meaning, those parts of the chain that are natural revenue “sinks” can be offset by other links along the chain that are natural revenue “sources.” What did I just say? I can’t believe I said that.
In simple English, I really meant that owning both a genco and a distribution company can allow you to cross subsidize costs.
However, since power utilities are regulated, vertical integration may be prohibited by legislation. Again, don’t let legal precedents stunt your imagination.
Being aware that in investment banking, distribution is a powerful competitive advantage, I have always been fascinated by the distribution capability of electricity suppliers while at the same time fascinated by their sheer lack of imagination in realizing exactly what they possess.
After I wrote a dismissible industry analysis of the power sector as a student, I have always watched this particular competitive distribution advantage of Meralco, one not being enjoyed by Napocor, and one that definitely covers more ground than PLDT.
But I have always been disappointed.
The most distinctive feature of a power company’s distribution capability is its invasiveness, going right through the privacy of the homes.
The distribution capability of Fortune Tobacco or San Miguel Corporation stops at the retail stores and there is no way to get further information about the consumer other than an inference from buying patterns on the aggregate.
With power utilities and telephone companies, the invasion provides information about the economic status of each individual family, information not masked by data aggregation.
Since power consumption, like phone bills, is a quantity that is consciously minimized by users, no other economic indicator can be as invasive while at the same time as truthful as power bills, barring bank statements which are inaccessible by law.
Proxy datum
As I have confessed in the article Quaternion asking questions has become my survival kit, and at one time I wondered: “Since I doubt the accuracy of the government’s income data gathering, what is the proxy quantity that is truthful, comprehensive and easily available?”
Indeed, many marketing companies seem to overlook the power of this proxy indicator. Survey firms, ad agencies, and political parties should stop using the population income profile provided by the National Statistics Office, which is tainted by interview exaggerations and sampling errors, and should start pushing for a power consumption profile from the power companies.
Economic profiling
Since power distribution is more comprehensive than telephone penetration, no other data come closer than the power bill in classifying families into Class A, B, C D or E.
Yes, the power bill is the proxy datum I’ve been searching for. But I have yet to hear of any research or campaign that is based on this more accurate and comprehensive classification.
Now that we have established the accuracy and comprehensiveness of this proxy datum is, what next? Comes another favorite expression of mine, “Do I have to think of everything for you, guys?”
Let’s see: FPJ can send his campaign letters to Class D and E groups. Camella Homes can send its housing offers, and BPI can offer its appliance loans.
The power company may create its own direct-marketing subsidiary selling TVs and financial services. If the company is too lazy, the lame thing to do is to rent out its mailing lists to politicians, and credit card companies.
Since I have yet to hear of any company using the power firm’s mailing list on a massive scale, then I can only surmise that nobody has realized that it has the most accurate, most targeted, and the most comprehensive mailing anywhere.
Come on, guys, let’s form the Meralco Consumer Marketing Corporation. Sony, Sharp, Samsung and Electrolux are furiously knocking at our doors.
Marketing vision
Ah, you knew it was coming. Simply intoxicated with clam bouillon at the Lighthouse, the Metamorpher has engineered the transformation of a power company into a virgin marketing company having a client mailing list with the most comprehensive coverage, the most accurate addresses and the most accurate economic profile around, that is the envy of direct marketers and even politicians.
In addition, we uncovered the opportunity to create Meralco’s own marketing subsidiary.
The game has ceased to be a power game. It has become a marketing war. It’s no longer a war of engineering expertise. It has become a war of marketing strategy.
By the way, remember that entire marketing division that we sacked earlier? We need to recall them after all. We need the best marketing team in town.
This transformation is certainly one thing they don’t teach you at business school, otherwise we would have been buying everything from DVD players to toothpaste from Meralco by this time.
So that’s it guys, our takeover of Meralco is predicated on a marketing vision rather than an engineering one.
As I said earlier, nobody in his right mind would take over this firm, but since we used our left minds, we saw the immense political advantage of having access to a database of 3.3 million voting families. Bye. See ya.
The last mile
Hey, wait, guys, I’m not finished yet. Did you really think the above Street Strategist’s treatise on consumer marketing is what this story is all about?
I guess the foremost strategy in the minds of Meralco executives is how to profit from the restructuring of the power industry and the privatization of Napocor.
And you guess that the foremost strategy in the Street Strategist’s mind is how to profit from obscure visions. This is all about an asset that Meralco has not given any serious consideration.
Sometimes we know that we have a valuable asset but we don’t really have a full appreciation of how valuable that asset is, until somebody else goes after it.
Back to the power lunch, I said, “My reason for taking over Meralco is different from what you may be thinking. Remember those power line carrier telephones that are being used between substations? If that technology been revolutionized since I first saw it, then Meralco’s days are numbered.”
‘That technology is years away and costly,” one said.
“Okay, but I have to find out for myself. If the technology is viable in five years, then Meralco is the perfect takeover target.”
“Meralco is expanding its fiber optic network,” he replied, revealing Meralco’s telecom projects, “because its existing rights of way and its existing poles can be used to carry both power and fiber optic cables. Meralco then charges the cable or telecom companies for the use of such wiring.”
Finding Meralco’s fiber optic cabling project an economic redundancy, I insisted that the powerline technology deserves a second look, an unwise rambling on my part. These power engineers dismissed the technology yet I wanted to judge the technology for myself.
This was absurd because it presupposes that I have the capacity to understand telecom engineering and power systems, in order to go against their judgment.
But then that’s me. As much as possible I don’t accept the experts right away, although I use their judgment as my initial reference point. Being experts, they are almost always right; yet in isolated instances, I discover fresh viewpoints; and in all cases, I learn anyway. It’s a no-loss situation.
Powerline internet
In my research after the Manila weekend, I was overwhelmed by the astounding advance of the powerline technology, confirming my hunch that it has reached a viability worth struggling for.
Bear in mind that when I was rambling during that lunch, my principal concern was merely to maximize the strategic opportunities of the invasive access of Meralco for marketing, and now, for internet delivery.
I never had any idea that this powerline technology was being developed and is going to add a spice of reality to our strategy. I was only exposed to the primitive use of the transmission lines for telephony between substations.
Some call it digital powerline (DPL), some powerline communications (PLC), but I prefer to call it powerline internet (PLI), which should be a familiar term to end-users.
What I have in mind is the takeover for Meralco’s broadband opportunities, yet not for its fiber optic cables but for its power lines.
Here’s what I find ironic: Telecom companies like Nortel whose veins are made of fiber optics are experimenting with power lines, while power utilities like Meralco are dabbling with fiber optics. Confuse me guys, confuse me some more. Fiber optics might be the medium of the future, but powerline internet is certainly the solution of the present.
Again, in an eerie sense of timing, I can’t believe the coincidence that exactly on the same day we had our lunch proposing a takeover of Meralco for its last mile access, about 15 power firms from 12 countries gathered in Switzerland agreeing to hold powerline trials by June 2000.
The only Asian in the Ascom-sponsored trials is SP Telecommunications (a subsidiary of Singapore Power), in a field that included RWE Energie AG Germany, EDF France, and EDP Portugal among others.
Independently, Korea Electric Power has its own trials as well. Although, perhaps, the most publicized independent trials were conducted by Nor.Web.
I suspect Meralco is not even considering the powerline internet in its strategy. While it has publicly announced having the largest private frame relay network in the Philippines and having circuit kilometers of fiber optics being laid out, the only juxtaposition of the words powerline internet and Meralco occurs in this article not in its press releases.
Fourier analysis
The thought of having an internet connection with in-home invasiveness and worldwide pervasiveness is very seductive.
Ascom Powerline Communications in Bern described to me their implementation: “Our powerline communications system is in fact composed of 2 systems: the outdoor system and the indoor system. The outdoor system uses the utility's low voltage grid to provide the last “mile” access to the houses. The indoor system uses the electrical wires of the house for the transport of the information.”
Engineering-wise, the power line is one of the worst media to carry high frequency signals such as those needed in broadband communications. It is designed to carry electricity at 60 Hz, not signals at 10 Mhz. The power line has a pronounced non-flat frequency response.
This is a piece on strategy and not about technology, so I refer you to Meralco’s TJ to explain Fourier transforms (pronounced For-ye).
This undesirable Fourier transform of transmission lines is a minor inconvenience compared to the vast opportunities of having internet connection in each socket in the world. There are other technical problems like electromagnetic radiation, susceptibility to jamming, and even data security, but overall, an assistant vice president of Ascom Powerline concluded: “There are no stumbling blocks.”
The race is now on for the modulation techniques and integrated circuits to be used to deliver the broadband signal.
A director of Power Trunk Corp in Canada explained to me: “We have developed an adaptive communication architecture using Harmonic Multi Tone Spread Spectrum (HMT-SS) modulation. At the very highest level it is able to turn the electrical outlets in your home into “Ethernet networking” outlets and enable a complete network without the need to install wires around the home.”
PolyTrax of Munich described their implementation as follows: “PolyTrax I technology is based on a new, combined FSK (Frequency Shift Keying) and PSK (Phase Shift Keying) modulation method.”
The folks at Enikia of New Jersey think they have the right 10 Mbps solution, that only after signing a non-disclosure agreement can one learn of it.
Free lunch
Anyway, I’m amazed at the sparks of creative imagination that a two-hour power lunch can generate. What was a reminiscing of school days, eventually precipitated into an amusing flash of insight of morphing a rigid power firm into a hyperactive internet company.
One of these days, I might just apply my fancy imagination towards something really useful instead of something only for entertainment.
When I announced to friends via email that they too could have free lunch on a Meralco engineer, the latter demurred that it was not a zero exchange after all: “I had to pay for our lunch in exchange for a complimentary copy of the book “The Misadventures of the Street Strategist, Volume 1.” Watch out for it at the bookstores nearest your place.”
Isn’t it powerful to know that an autographed copy of a mere draft of my book compilation has the power of a checkbook?
Disconnection notice
Wait. You didn’t really think I was leaving you with a high note, did you? This is a rollercoaster ride, my friend.
Nortel’s spokeswoman from Canada told me: “As of late 1999, Nortel Networks and United Utilities, PLC of the UK had disbanded the joint venture Nor.Web. While the powerline access solution was technologically feasible, there were economic issues – meaning it was too costly for service providers to deploy.”
Uughh. So much for street strategizing, but at least for a while I stretched your imagination just a bit.
Since Meralco follows the American model of having 5 to 70 customers per transformer as against the UK model of about 300 per, it would face the same problem of having to put more powerline internet nodes.
Competing technologies providing broadband include xDSL which I am using, cable modems or broadband radio. HomeRF and Bluetooth are some alliances promoting wireless solutions.
The HomePNA technology using the telephone wire shows promise in the emerging home-networking industry. The standardization effort is well established and is under consideration by the IEEE and ITU standards bodies.
Secret vision
Hey, wait again. Don’t discount the powerline internet just yet. In February 2000, with its money, Microsoft recently voted in favor of this technology by teaming up with Itran Communications of Israel, who designs chipsets for the powerline internet capable of high speeds like 12 Mbits/sec.
On April 10, 2000, another vote for this technology was cast by the creation of the Homeplug Powerline Alliance, a non-profit association which counts 3Com, AMD, Intel, Panasonic, and Texas Instruments among others, as members.
This is a perfect motive to finally execute the takeover of Meralco, not by a competing energy concern like an Enron but by a virtual firm like transforming it from a firm with a P/E ratio of 13x to one with a P/E of 120x.
Altogether, we targeted Meralco not for its electricity income but for its unappreciated assets. The power struggle is for its distribution channels, for its last mile access and for its internet opportunities.
Our acquisition of Meralco is predicated on our vision to turn it into a marketing company. That should have been enough by itself.
Yet in a further twist of logic, we have demonstrated that our secret vision is to transform Meralco into an internet company with stratospheric valuations instead of having a defensive stock valuation.
Alas, Meralco perhaps spends all its time strategizing for the omnibus power law while we are spending all our time strategizing for its take over.
Truth to tell, you would have been disappointed if the Street Strategist took the textbook route of acquiring Meralco, right? Thinking what nobody else has thought. There’s a nice ring to it.
It’s time for goodbyes. Hmmm, you know what I’m thinking? I’m going to teach at business school. Then using the same ideas, but now wrapped in ceremonial academic clothes, our street strategies might be viewed by the captains of industry as serious business strategies.
Additionally, I’m going to design and teach an elective course called exactly, “What They Don’t Teach You at Business School.”
A course taught in business school lecturing students what they don’t teach in business school. That would be a paradox, wouldn’t it? But then, isn’t the Street Strategist a living paradox in the first place?
(Thads Bentulan, April 20, 2000)

* * * * * *

Did the Street Strategist steal the idea?

Power Storm
I am the creator of storms, the conjurer of controversies, and the hawker of dissonance. 
If the truth be known, I don’t even have to exert any extra effort become such – I’m a natural.
You don’t know me well enough to concur with this declaration against self-interest but trust me on this one. If you really knew me, you’d know I’m speaking the truth.
Psychological contract
To avoid creating storms, I seek refuge in the discussion of ideas not personalities.
To avoid conjuring up controversies, I seek refuge in outlandish strategies that are not to be taken seriously. 
To avoid hawking dissonance, I stipulated in Lessons from Strategy Myopia the psychological contract between the reader and myself – what I am, what I write, and why I write this or that way. 
Imperfect timing
Don’t get me wrong but I’ve gotten used to receiving several reactions whenever I come out with a new article, but nothing quite prepared me for the reaction I was faced with when my article on Meralco came out.
“This is your best article by far,” swore one of my loyal readers over the IDD line. “This is very practical, unlike your now second best article,” he continued, referring to Strategy Myopia.
Don’t worry guys, I strongly believe Strategy Myopia will remain my insuperable masterpiece.
“But your timing is very, very bad,” he judged. “Who would be reading your article on a Maundy Thursday? Timing is everything.”
By the way he criticized my timing you could tell he is a banker. Frankly, that it was coming out on a holy day slipped my mind. 
All I wanted was to push Power Struggle out of my hard disk because I myself was excited of its bizarre dual strategy. 
I soon found out I wasn’t alone. The fun contaminated a few readers, some of whose reactions were eventually published by BusinessWorld, including that letter calling me a “dangerous” man.
Apparently, the powerline internet idea is still uncommon. 
The Intel country manager was surprised when I casually mentioned it over lunch at Oakwood several weeks ago. A mechanical engineer who is now a top investment banker was likewise surprised of the idea.
I have a few friends at Meralco and after the publication of Power Struggle my circulation figures thereat reached a new high. Some of its staff joined my mailing list.
Even the editors were not spared as they told me they received a few phone calls. I created a storm.
Strategy session
Just as the hyperbole was decaying toward its half-life over the months, out of nowhere a stockbroker told me: “Our senior analyst attended the recent meeting at Meralco. They announced that they are going into your idea of the powerline internet. Ha ha ha ha hah. I am really happy for you. They followed exactly your vision. You have to call your contacts there and tell them to pay you something like a fee for that marvelous idea. I want to write to BusinessWorld about it so I can share my remarks, comments on your Power Struggle article!”
Weeks ago, Meralco had its annual strategic planning session at the Manuel M. Lopez Development Center somewhere in the mountains of Antipolo. Some 76 young and brilliant employees were invited to take part in the three-day workshop.
Somebody who characterizes himself as an “avid fan” of the Street Strategist said that the company president revealed in that forum that some three or four entities have been talking to him and making proposals to pursue the project, and that MML is not averse to the idea.
A judge wrote me that I should definitely send Meralco a consultancy bill, which elicited this impertinent rejoinder from a CPA reader of mine: “Meralco should offer you a comfortable corporate home and directorial powers instead of consultancy fee. When it happens I will borrow money to buy Meralco shares.  Please don't fail to advise me. Happy for you ...”
Power storm
But no matter how I try to avoid controversies by focusing on non-controversial and innocuous topics, I heard rumors that some senior executives at Meralco’s corporate planning were slighted when Power Struggle was circulated there.  
The impression is that these persons felt bad about the article because the idea of “power line internet” never came out during the previous strategic planning sessions in the past two years. 
These persons seem to convey that this idea had been on their minds before I wrote about it. 
These persons find it ironic that the Street Strategist had to pick up the idea from Meralco employees at that, and had the cheek to write about it.
Picked up the idea from Meralco employees? That’s absurd. I didn’t pick up the idea from them.
In fact, they were surprised when I theorized the concept to them.
Ouch. I conjured up a controversy.
Perfect logic  
Of course, I don’t believe these grapevine rumors. I think the executives in question were simply misquoted.
For one thing, majority of my Meralco readers thought the article was amusing, nothing more than that.
In the second place, Meralco is hitching on fiber optics, not powerline internet.
I must admit the assertion that the Street Strategist may have stolen the idea from their own engineers may have some ring of merit to it at first glance.
A person who writes about the convexity of century bonds, or the dishonorable appropriation of the age-old concept of economic value-added by a New York management consultant, or the M&A implications of the elimination of pooling of interests, could not possibly originally think about power utilities.  
It is perfectly logical that I am a moron with respect to the power industry and that any article that I write about the power industry could have come from the Meralco employees.
Yes, perfectly logical but it is possible that what is logical could also be wrong. Truth is stranger than fiction.
I hawked dissonance.
In case you failed to read the article, here are portions:
Back to the power lunch, I said, “My reason for taking over Meralco is different from what you may be thinking. Remember those power line carrier telephones that are being used between substations? If that technology been revolutionized since I first saw it, then Meralco’s days are numbered.”
‘That technology is years away and costly,” one said.
“Okay, but I have to find out for myself. If the technology is viable in five years, then Meralco is the perfect takeover target.”
“Meralco is expanding its fiber optic network,” he replied, revealing Meralco’s telecom projects, “because its existing rights of way and its existing poles can be used to carry both power and fiber optic cables. Meralco then charges the cable or telecom companies for the use of such wiring.”
Finding Meralco’s fiber optic cabling project an economic redundancy, I insisted that the powerline technology deserves a second look, an unwise rambling on my part. These power engineers dismissed the technology yet I wanted to judge the technology for myself. This was absurd because it presupposes that I have the capacity to understand telecom engineering and power systems, in order to go against their judgment. 
But then that’s me. As much as possible I don’t accept the experts right away, although I use their judgment as my initial reference point. Being experts, they are almost always right; yet in isolated instances, I discover fresh viewpoints; and in all cases, I learn anyway.
It’s a no-loss situation.
Escape hatch
As discussed above, yes, I had the guts to write about powerline internet, and yes, it was perfectly logical that the Street Strategist may have stolen the idea from Meralco employees.
Guys, I don’t want to create storms, conjure up controversies, and hawk dissonance.
At least not with the former president of the most famous business school, not with the founder of the largest accounting firm, and definitely not with a former Prime Minister.
But we might have left out one minor detail.
I may be a great miscommunicator because I failed to impress upon the readers that even the Meralco fellows I talked to thought I was crazy thinking about powerline internet.
I thought I wrote that clearly enough.
It was very clear that the chaps listening to me thought I was crazy when I said within the next 18 months their new CEO could be an 18-year old whose dotcom company just swallowed Meralco.
The principal reason I asked about the possibility of powerline internet, is that as usual, I tried to transplant some ideas I gathered from other fields to the instant case.
I exemplified this in applying the business model of delivering roses to Pizza Hut. 
I did this when I applied the concept of the newspaper subscriptions to Triple V.
Anyway, for several decades now, power companies have been using an equipment called the Power Line Carrier (PLC). This is a very expensive setup where the transmission line carrying 138,000 volts connecting the power plant to the substations is simultaneously being used as a telephone line.
As I have said a long time ago, I’ve never been interested in the answer as much in the question. 
Ultimately, in my quest for the perfect question, I learned of the perfect answer: That is, asking the perfect question is better than getting the perfect answer.
So I asked: “What happened to that technology?”  
By the way, what was that minor detail we might have left out?
The Street Strategist, though he hates to admit it, once installed, operated and maintained PLCs for some good years – an experience which some corplan people at Meralco may never have experienced at all.
Indeed, he wrote a technical paper published in Brisbane during a 12-country conference of the electricity and power supply industry; once wrote a paper on the financial strategy for a power utility; and used to work for a power company bigger than Meralco.
The Street Strategist was once a power systems engineer – albeit an incompetent one.
(Thads Bentulan, August 10, 2000)
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