Mark Goldberg


www.mhgoldberg.com




2014 ISP Summit
Nov 3-5, 2014
Toronto
2014 ISP Summit

Fox Group Dispatch
Digitcom

An exciting new phase

I couldn’t let the WIND Mobile news pass without making a few observations.

It appears that this initial phase of the financial restructuring does not result in a change of control, so regulatory approvals would not be required. The company press release notes “The next stage of the transaction requires regulatory approval, which the parties are seeking forthwith.” Company Cair and CEO Tony Lacavera said:

With stable, long-term ownership and secure financing, WIND Mobile is moving into an exciting new phase. WIND Mobile is now poised to continue to bring True Mobile Freedom to Canadians for many years to come.

That raises the question of what will be involved in the next stage.

As noted by Bloomberg’s report on the transaction, WIND Mobile’s chief executive officer told The Canadian Telecom Summit in June the company needs to acquire more mobile-phone spectrum to take on Canada’s major wireless carriers. “He has also said the company needs $400 million to $500 million to upgrade its network to LTE.”

So it appears that we are only at the first stage of a financial restructuring and refinancing.

It is interesting to see Novus Wireless Communications as a participant in the funding consortium. Novus had acquired G-band spectrum in BC and Alberta in the 2008 AWS spectrum auction, but did not launch service. It later sold those spectrum holdings to TELUS.

The official media release attributes the following quote to Greg Boland, President and Chief Executive Officer of West Face Capital, the lead in the investment group funding this current transaction:

The federal government’s delivery on its promise to create the conditions for viable long-term wireless competition has not gone unnoticed by the investment community.

I agree.

Award winning ICT employers

CCEOC Inc. is now accepting applications for the 2015 Canadian Telecom Employer of Choice award. The “Canadian Telecom Employer of Choice” recognition award is the only national program dedicated to identifying, recognizing and promoting the best employers in the Canadian telecommunications industry.

At The 2014 Canadian Telecom Summit, we partnered in the presentation of Canada’s first “Canadian Telecom Employer of Choice” award.

The 2014 awards were presented to Teksavvy Solutions, Terago Networks and Xplornet Communications. Each one of these companies has demonstrated a strong desire to build a great workplace culture and promote a preferred employer brand.

The “Canadian Telecom Employer of Choice” recognition award is the only national program dedicated to identifying, recognizing and promoting the best employers in the Canadian telecommunications industry. “Telecom companies see real value in this award because it’s industry specific. It provides excellent branding opportunities and has a much bigger impact on helping attract, retain and engage the right fit employees,” says Jeff Doran, President of CCEOC Inc.

As the organizers of The Canadian Telecom Summit, we are pleased to participate in the launch announcement for the award for 2015. CCEOC provides a valuable service for Canada’s ICT sector, recognizing and promoting best-in-class Information & Communications Technology employers.

There is no cost for the assessment portion of the program. Participating in the program is as easy as 1-2-3!

  • Step 1: Go to the website and fill in an application form
  • Step 2: Complete the Company Profile (HR Inventory and Leadership Review), and
  • Step 3: Complete the Employee Commitment survey.

Winners will be recognized and presented with an award at The 2015 Canadian Telecom Summit in Toronto taking place June 1 – 3, 2015.

Deja vu all over again

More than 7 years ago, in the early days of my blog, I wrote a piece called “PoIP?” that spoke of the confusion about how to characterize voice over internet protocol from a regulatory perspective.

I wrote:

For all of the talk that VoIP transforms Voice into another computer application, the industry itself hasn’t done a great job promoting new services with all sorts of new capabilities. It might explain why the CRTC thinks that VoIP is the same as POTS and it has therefore been continuing to apply the same regulatory framework to VoIP as it has to POTS. In the eyes of the CRTC, it’s just a different engine purring under the hood.

I was reminded of this in reviewing the Let’s Talk TV discussion between the CRTC and the panel from Quebecor / Videotron. As Perry Hoffman wrote for Cartt.ca: “The Quebec media giant said it needs “greater latitude” to provide consumers the type of content they want, when they want it and on the platform of their choice.”

It is that last point – the platform of their choice – that prompted me to write.

It might be interesting to observe the difference in how video delivery is being treated, compared to how the CRTC has treated voice.

In the Financial Post account of yesterday’s proceeding, CRTC vice-chair Tom Pentefountas is cited asking why Quebecor doesn’t simply give up its broadcasting licenses and exclusively offer on-demand streaming video.

What exactly is that regulatory straitjacket that keeps you from competing with Netflix?

It seems to me that there is confusion about what product consumers are buying. Is video over the internet a product, or is the product video entertainment more generally?

To find regulatory relief, do yesterday’s heavily regulated video delivery companies (“Broadcast Distribution Undertakings” in CRTC-speak) need to exit their old businesses, abandon their embedded investments and offer the same over the top video? What are the characteristics that make over-the-top video distinguishable from over-the-air or BDU-delivered video?

Can we find a more creative framework that encourages regulatory symmetry across platforms, fostering a more competitive marketplace to increase choice and provide greater consumer benefits?

Do CRTC’s numbers add up?

The CRTC issued a press release earlier today to announce “CRTC publishes a citizen’s guide to participating“.

In the release, the CRTC said “According to Statistics Canada, communication services represent the fifth largest family expense for Canadian households.”

In addition, this was highlighted in a section called “Quick Facts”:

  • Canadians spend an average of $191/month on communication products and services, the fifth largest family expense.

I tried to source these numbers from Statistics Canada, but could not reconcile them against published data. The CRTC tells me that the $191 figure comes from the soon-to-be released version of the Communications Monitoring Report. It represents a modest increase over the $185 spent a year earlier (2012) and $181 in 2011. To clarify, this figure represents average household spending, not spending by the average Canadian.

According to a CRTC spokesperson, calling the amount a “family expense” was sufficiently clear for readers to understand that the press release was not talking about $191 per Canadian. Are we all clear on that point? Do you agree?

It was more of a challenge to reconcile the statement that asserts communications services represent the fifth largest family expense.

The latest Survey of Household Spending from Statistics Canada reports annual spending by Canadian households. At $191 per month, we are talking about annualized spending in the order of $2,292. How does that rank against other Statistics Canada categories?

The survey shows:

  • Shelter ($15,811)
  • Income taxes ($13,060)
  • Transportation ($11,216)
  • Food ($7,739)
  • Personal Insurance ($4,272)
  • Recreation ($3,773)
  • Clothing ($3,461)
  • Health care ($2,285)

It appears that communications is tied with health care in the 8th position.

Can anyone reconcile the statement “According to Statistics Canada, communication services represent the fifth largest family expense for Canadian households”?

Don’t do stupid stuff

Prior to yesterday’s scary admission that there is no strategy to deal with ISIS, US President Obama’s foreign policy was said to be guided by a policy of “Don’t do stupid stuff“, the phrase having been cleaned up for prime-time viewing.

Increasingly, it appears that Canada needs a digital conscience in Ottawa to teach the Obama doctrine: stop doing stupid stuff.

Threatening to introduce legislation to ban charges for paper bills is another in a growing list of actions that are at cross purposes with achieving policy objectives.

According to the Digital Canada 150 strategy,

Digital Canada 150 represents a comprehensive approach to ensuring Canada can take full advantage of the opportunities of the digital age. It envisions a country of connected citizens armed with the skills they need to succeed.

The Government plays a key role in ensuring that consumers are protected and action is taken to end price discrimination. We have introduced measures to protect Canadians and their families while encouraging healthy competition and lower consumer prices.

By Canada’s 150th birthday in 2017, our vision is for a thriving digital Canada, underscored by five key pillars: connecting Canadians, protecting Canadians, economic opportunities, digital government and Canadian content.

As I wrote Thursday, in 2006, a Directive was sent to the CRTC [Order Issuing a Direction to the CRTC on Implementing the Canadian Telecommunications Policy Objectives]. At that time, Canada’s cabinet called for the CRTC to “rely on market forces to the maximum extent feasible as the means of achieving the telecommunications policy objectives, and when relying on regulation, use measures that are efficient and proportionate to their purpose and that interfere with the operation of competitive market forces to the minimum extent necessary to meet the policy objectives.”

Yesterday, the broadcasting and telecom vice-chairs of the CRTC convened a closed door meeting of telephone and cable company executives, representing Bell, Bragg Communications (Eastlink), Cogeco, Globalive (WIND Mobile), MTS Allstream, Rogers, Sasktel, Shaw, TELUS and Videotron. The agenda for the meeting called for discussion on “a clear and predictable approach to fees for paper bills”, examination of “Specific Circumstances: disability / income level / seniors / others”, but the agenda did not say that the CRTC sought elimination of the charges altogether.

So it is not clear why the CRTC chair was disappointed at the outcome: “While the companies agreed to adopt consistent exemptions to such fees, they were unable to reach a consensus to eliminate them entirely.”

The Industry Minister was quick to announce action:

Canadians should ask “why?”

The companies already agreed to provide exemptions for Canadians with disabilities, customers who don’t have broadband, seniors and veterans. At least half of low income Canadians are already captured in those exemptions because the government has yet to deal with embarrassingly low adoption of computers and broadband for that segment.

So what is the problem we are trying to fix?

Why would we discourage incentives for Canadians to adopt digital billing? Why would we disadvantage Canadian companies that will spend millions of dollars sending bills? Why would we introduce legislation that will raise the cost of doing business – costs that are certain to cost Canadians.

I wrote yesterday about “Roadblocks for an innovation economy.” Legislation to mandate no-charge paper bills in a competitive environment is yet another one of those roadblocks.

How many roadblocks would be removed if we could get the government’s digital strategy simplified to mirror Obama’s doctrine?