Rising Oil Prices & the Link to Telecom

Rising Oil Prices & the Link to Telecom

June 9th, 2004 Issue

Life was great for me in 1972. My family had just moved to a bigger house in a neighborhood full of kids. We were two houses down from a community pool and I could hop the fence to get to school. My older sister, who was 21, moved back into the house, so we had the whole family together again. But the optimism I felt in 1972 turned into a dark cloud in 1973 with the imposition of the Arab oil embargo. We felt that embargo first hand, as my dad struggled to keep gas stations open. My mom still thinks the pressure of the situation contributed to his death by massive heart attack in the spring of seventy-three.

Enough of Your Blather….Click Here to Get to the Point…

And the dark cloud that hovered above me seemed to be all around America. Words like recession, inflation and stagflation were all over the newspapers and the periodicals (yes, I was a pretty oddball kid, as I read my dad’s Newsweek). And the more government did to fix things, the less anything changed. I remember President Ford’s program to just WIN (Whip Inflation Now) and President Carter’s suggestions that we just turn down the thermostats and put on a sweater.

Things just seemed to get worse with every passing year. The Shah of Iran was overthrown and U.S. hostages were taken in Iran. This led to a second energy crisis, just about the same time I purchased my first vehicle. The shortages caused some interesting things like even/odd days for purchasing gasoline. There were predictions that there would be no more oil by the turn of the century. The long-term outlook was pretty depressing.

Then, someone came along to remind us that it was only “morning in America”. He reminded us that the only resource that matters is the God-given talents between each and everyone of our ears. Of course, more than just a cheerleader, he also advanced the deregulation that had begun and soon industries and the economy were thriving again. America had confidence in itself and the dark cloud of limited expectations gave way to a sunshine filled day of hopes and dreams. I came away with a faith that markets are the natural way for humans to fully realize their talents and capabilities.

So, by now you are asking what does this have to do with Telecom? As President Reagan might say, “Well, there you go again”, asking for a point to the story. So, here is the point.

The Telcos’ Answer to the Energy Crisis

As oil prices rise, people get upset; they get upset at government; they get upset at oil companies; they get upset at oil producing countries. For some reason, a rise in the price at the pump is very upsetting to a large portion of the population. I saw this general anger in 1973, 1979 and around the time of the Gulf War in the early 1990s. Of course, the best answer is substitution or more efficient use of existing products, such that less oil is used and demand drops (like what happened after deregulation).

Broadband is a telco’s product that can be a “substitute” for petroleum. For instance, telecommuting one day a week could yield up to 20 percent savings in petrol. Utilizing video conferencing is another way to avoid travel and the resulting fuel consumption. On a personal basis, using broadband to comparison shop is a way to reduce trips to the store.

I can imagine an ad campaign that played off of people’s strong emotions about the cost of gasoline. I imagine taglines like:

Sky High Gas Prices Bringing You Down - Boycott Big Oil, Get Broadband
Tired of Making the Middle East Sheiks Rich – Fill ‘er Up with Broadband
Save Money, Save Gas, Save the Environment – Take Broadband for Your Next Commute
Go Around the World for Less than a Tank of Gasoline

I can imagine some interesting images that could be put together for a print, web or video campaign for this sort of campaign. I also think there could be some interesting text to reinforce the basic message that broadband can “save money” (e.g. a 30 mile round trip commute translates into about $10 per day….telecommuting four days per month pays for the cost of broadband).

This would be another ideal ad campaign to put together for a group of telcos, as we could create a common campaign for multiple telcos. If this is of interest, please let me know and, if there is enough interest from enough telcos, we can put together a cost-effective campaign along these lines. If you don't want to work with me on this, that's fine too. Feel free to take the concept. I just ask for the chance to see what you come up with and to share it your telco brethren.

Back to Main Page