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Policy versus politics

I have been following the deliberations at Parliament’s Standing Committee on Industry, Science and Technology (INDU), examining competition in telecommunications. The transcripts of the proceedings are slowly getting added to the committee’s website and they can make for interesting reading.

Michael Geist sat in on the committee’s meeting with Minister Bernier last week and observed:

… much of the discussion fails to distinguish between communications services as the discussion frequently veers between local telephony, long distance, wireless, and Internet access without anyone bothering to distinguish between them.

The sessions also drift in and out of broadcast issues, beyond the telecommunications focus of this committee.

There are lots of opportunities for the committee to examine real policy issues:

  • What are the directions for rural broadband?
  • The role of government in adoption of advanced technologies?
  • Going green through telecom?
  • Strategic purchasing of advanced services by the public sector?

Do any others come to mind?

Will any aspects of communications policy be a part of an election platform?

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Parliamentary industry committee hang-ups

INDU CommitteeParliament’s Standing Committee on Industry, Science and Technology (INDU) has been conducting an investigation into Deregulation in Telecommunications, in the wake of Minister Bernier’s decision to proceed with cabinet’s policy direction to the CRTC and its interventions into a few CRTC Decisions. There are a number of sessions taking place through the month of February.In October, the INDU committee recommending the Minister to delay interventions to the CRTC until the Committee had a chance to conduct more studies.

Yesterday’s National Post had an article about CRTC Vice-Chair Rick French appearing as a witness on Monday. Sheridan Scott, from the Competition Bureau also appeared. There is another meeting scheduled for this afternoon, with witnesses from the cable companies and CLEC community.

With news reports breaking about the government’s position on Net Neutrality, it will be interesting to see if the Committee’s agenda gets side tracked. I published my free-market viewpoint on the story last night. For a contrary view, see Michael Geist.

Playing politics in a minority government is delicate work. If there are to be legislative changes to give effect to the report of the Telecom Policy Review panel, we’ll be watching for a compromise approach to working with the INDU parliamentary committee.

Rural broadband without the handout

I recently met with John Maduri, who is now heading up a company with a rather unique approach to rural broadband, Barrett Xplore.

What’s unique? He isn’t looking for a government handout. He hasn’t gone to government agencies saying ‘Give me $$$ and I’ll deliver broadband to the unwashed, underserved, your down-trodden.’ Instead, Barrett is delivering a 99.99% available, city-quality broadband experience to anyone in Canada who wants it, no matter where they live or work.

What Barrett Xplore has done is built a viable business plan that uses various solutions, including Motorola Canopy technology where appropriate or Telesat Ka-band in other areas. They are actually adding customers at a respectable clip, with reasonable prices, and a positive NPV. The entire country is within their potential serving area.

Unfortunately, the CRTC’s Deferral Account Decision has created problems for Barrett. That Decision told the incumbent telephone companies that they could and should use excess payments (that subscribers made to prop up local rates in urban areas) to subsidize the incumbent broadband roll-out to rural areas. It was a Robin Hood decision – taking money from one group to give to another. Bell has appealed a part of the Decision to the courts; we can expect to see an appeal (or more) to Federal Cabinet in the next few weeks.

With the best of intentions, it seems that whenever we see these kinds of programs, there are problems. As I mentioned in my post about ICT Toronto, it just seems that we need to avoid trying to pick winners and we need to resist the temptation to intervene in the market. Like it or not, rightly or wrongly, Decision 2006-9 made it tougher for John and his venture to go out and compete. And it was all with the best of intentions by everyone concerned.

I’d like to think that we should be clearing out of the way of entrepreneurial ventures like Barrett Xplore, not putting obstacles in their way. Hopefully, John and Barrett Xplore will be able to look back at this as just a speed-bump, not a barricade, as they continue to bridge the digital divide.

Deferral Account Appeal

I just received a copy of the 5 inch stack of paper that makes up Bell’s Federal Court Application to appeal the CRTC’s Deferral Account Decision. We wrote about this earlier in the week and I haven’t seen it picked up by the rest of the telecom news business.

There is $650 million at stake here, folks. The appeal seems to be arguing two points: that the spending on rural broadband is actually just an option for ILECs (a $480M option); and, that the CRTC over-stepped its jurisdiction in ordering the ILECs to rebate any of the money that they don’t spend on the broadband program.

Is this a case that the CRTC used poorly chosen language that allows ILECs to make the rural upgrade plan optional? The March 10 follow-up letter to ILECs has some strange language in it as well:

The proposed broadband services should be comparable to those provided in urban areas, i.e., comparable monthly rates, terms and conditions, upload and download speeds, and reliability.

The CRTC didn’t say ‘equivalent’. They said ‘comparable’. Does that mean that, as long as the ILEC provides a table indicating how the proposed services compares, it is permissible to have a slower, higher-priced offering?

In the meantime, the clock is ticking – proposals are supposed to be submitted by June 30. With a half billion dollars in Bell territory alone at stake, this appeal strikes me as something that merits wider coverage and analysis.

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