Telecom Trends

I keep considering the concept of a stupid network versus an intelligent one. Maybe I can have another educated look. The analogy (not great) likening an operating IP network to dumb plumbing pipes doesn't really hold water - if you'll excuse the pun.

Internet access cannot be stupid any more than our water supply or power supply can be stupid. Think back to the blackout of a few summers ago and you understand the importance for network management of all utilities.

In its final comments, CAIP wrote:

Bell’s modifications of GAS service clearly breach the section 36 prohibition on a carrier “controlling the content” or “influencing the meaning or purpose of telecommunications carrier by it for the public” absent Commission approval of same. At the most basic level, Bell violates the common carrier principle by inspecting and throttling back traffic that it is supposed to transmit from point A to point B at defined speeds in a completely “opaque” fashion.

I don't believe that there is any violation. The operative phrase that is in CAIP's own words: "absent Commission approval of same." The CRTC has correctly approved Bell's Terms of Service (and CAIP's members signed contracts accepting these terms) which provide for taking steps to manage the integrity of the Bell network.

CAIP tries to extend a postal metaphor as well, which the press picked-up on:

postal service customers have the freedom to decide for themselves the urgency of their packages, and to pay the postal service a fee based on how quickly they want their packages delivered.

Except that CAIP's members nor customers aren't paying differential pricing based on the packages (applications) they are using. They want "before 10 am" next-day delivery of all their mail, despite paying a single price for all the mail they can stuff into the mailbox at the corner - a mailbox they share with the whole neighbourhood.

If CAIP members want a dedicated physical channel to their customers, then they can pay for that. But it is more expensive. If they want to enjoy the discounted price associated with logical channels, then the ISPs have to understand that, just like with postal services, you don't get overnight delivery of all packages all the time when you pay for parcel post.

I think that Canadians want our ISPs to manage their networks. Specifically, we want our ISPs to take action on certain types of content. For example, we expect all network operators to act to defend themselves and their customers from denial of service attacks. We want them to implement spam guards. We want them (some argue that we legally compel them) to block known child abuse images, content and website.

These are three examples that clearly contradict the 'dumb plumbing' view of the internet.

We want our water cleaned up; we want fluoride. We want the water company to manage supply. During certain periods, we see limits on certain applications like watering our lawns, washing our cars. The ban on watering is application specific, but it is non-discriminatory; it applies to all. It recognizes the difference between real time requirements for water (drinking, flushing, hygiene, etc.) and more discretionary uses. Sound familiar?

The dumb pipe plumbing metaphor doesn't work, because you have to consider that consumers don't want their water delivered without filtering as well. Sure, we could all be responsible for treating the water at our premises, but that isn't how the system works.

It is time to move on to a new metaphor. If you want to provide dumb pipes, then you should be prepared to build your own water company.

Technorati Tags:
CAIP, net neutrality

Back in January, I wrote a piece that spoke of the simple words: cell phones save lives.

I caught a press release from the folks at "411 on Wireless" that talked about an event held yesterday to promote increased accessibility to prepaid phones as an affordable choice for a "cell phone security blanket" for the elderly.

We have seen various prepaid plans that target our teens; the youth market is sexy and fun and predisposed to try out lots of high margin discretionary services.

While the elderly are among those most likely to benefit from access to a mobile device, they are also among the age groups least likely to have one.

The question is whether service providers will look at special packages for seniors' emergency access?

Technorati Tags:
seniors, mobile, security blanket

A reader sent me a link to a wonky article that claims that a Canadian conspiracy is underway to begin charging to access certain internet sites:

The plans made by the large telecom businesses would change the Internet into a cable-like system, where customers sign up for specific web sites, and must pay to see each individual site beyond a certain point. Subscription browsing would be limited, extra fees would be applied to access out-of-network sites. Many sites would be blocked altogether.

It's too late for April Fools Day, right?

Check out the source article as well.

Technorati Tags:
AFP, net neutrality

An interesting observation about the spectrum auction results.

Look at the total spent by the major new entrants:

Top New Entrant Bidders:
Quebecor	$554,549,000
Globalive	$442,099,000
DAVE	$243,159,000
Shaw	$189,519,000

This totals $1.4B. Does that number sound familiar to anyone?

Check out the news clippings from just under 4 years ago. Rogers bought Microcell for $1.4B in cash.

Remember that Microcell was already an operating carrier, with 30 MHz of national spectrum, 1.2M subscribers, a working network (towers, switches, international roaming agreements, staff), brand recognition, etc.

What would have been the state of mobile wireless in Canada had others foreseen the value?

Technorati Tags:
Industry Canada, AWS Spectrum Auction, Microcell

After 331 rounds, we have finally reached the end of bidding in the AWS spectrum auction.

The final tally: $4,254,710,327.

I suspect there are some long overdue vacations for the bid teams at the various carriers.

Top Bidders:

Rogers	$ 999,367,000

TELUS	$ 879,889,000

Bell Mobility	$ 740,928,000

Quebecor	$ 554,549,000

Globalive	$ 442,099,000

DAVE	$ 243,159,000

Shaw	$ 189,519,000

SaskTel

$ 65,690,000

Technorati Tags:
Industry Canada, AWS Spectrum Auction

Effective today, the CRTC begins operating with a new converged organizational structure.

Activities common to both sides of the Commission, broadcasting and telecom, will be grouped under the Policy Development and Research sector, under Namir Anani's leadership. This will include social policy and dispute resolution. Accessibility issues, currently under the Telecom group moves to a new social policy group in the sector, combined with social policy functions from Broadcasting.

Telemarketing issues (such as the DNCL) will also be transferred to this organization. The Policy Development and Research sector will be responsible for conducting economic analysis on the communications industries, markets and technologies, and will process ownership and acquisitions applications.

The CRTC has talked previously about a converged Communications Act to replace the Broadcast Act and Telecom Act.

Technorati Tags:
CRTC

Mark Evans had an interesting post yesterday that captured some of the thoughts that have been bouncing around my mind recently.

He writes:

I’m not sure whether “paradox” is the right word but for all the digital chatter happening, people are still people with a desire/need to be analog. This explains the plethora of events, conferences (mesh is as much a social as a conference) and meet-ups, as well as why many people still flying around to meetings despite the time, energy and environmental impact involved.

There should be significant pressures to conduct more business using virtual on-line tools - as simple as IM and email through to sophisticated life size video conferencing.

But there still isn't a satisfactory digital substitute for the ability of the human mind to assimilate the analog signals that can only be transmitted and processed with face-to-face communications: the handshake, the warmth of the smile, the nervous jitter.

While there are many meetings that can (and will) be replaced by digital communications, I agree with Mark that sometimes you just have stay analog.

Technorati Tags:
Mark Evans, conferences

In its official Answer to the CAIP application for Bell to cease network management of its DSL lines, Bell suggested that Google is the real internet gatekeeper.

At paragraph 15 of the executive summary, Bell wrote:

The Companies note the particular irony in Google accusing Bell Canada of playing the “gatekeeper role” by traffic shaping P2P and thereby impeding competition. If there is, indeed, any gatekeeping activity on the Internet, which is questionable, the gatekeeping is being performed by the Internet search engines, which are typically the users’ “window” to the near-infinite content available worldwide.

It appears that reports [see also here and here] are also suggesting that Google is taking on the role of Zuul in trickling out its software development kit for Android phones.

In its comments on the CAIP / Bell spat, Google said:

Google’s business is premised on making its services, content and applications available through the internet to any end user who chooses them, without restriction by any gatekeeper.

Maybe they meant "any gatekeeper, other than Google itself."

Who you gonna call?

Technorati Tags:
Bell, Google, CAIP

Don't believe everything you read on blogs - other than this one, of course.

The iPhone sold out in many Rogers stores this past weekend, delivering the best sales weekend in the company's history, despite the hostility expressed towards Rogers on so many blogs and websites.

I have to wonder if this is a case of digerati being too inwardly focussed to have properly measured the pulse of the average person on the street.

Is this a reason that traffic shaping hasn't attracted more public attention?

Technorati Tags:
Rogers, iPhone, Bell, traffic shaping

Last month, in our opening comments at The 2008 Canadian Telecom Summit, Michael Sone and I called for the government to take some of the more than $2B windfall from the AWS spectrum auction to invest in initiatives to stimulate demand for broadband from under-serviced segments.

At the time, we also suggested a new approach to distributing the funds, in order to avoid picking winners by subsidizing one service provider over another. Since then, a number of other voices have joined our call for the proceeds from the AWS auction to be used for a new national broadband program.

Michael Geist wrote about it in his column.

Janet Yale, Michael Jannigan and I wrote an OpEd in last week's Financial Post.

Now, Peter Nowak at the CBC reports that the Liberals and NDP have joined the chorus.

Anyone else want to sing along?

Ironically, I noticed that Industry Canada's broadband website is scheduled to be closed in two weeks.

Technorati Tags:
Canadian Telecom Summit, AWS, broadband

A week ago, I predicted the end of the the end of bidding in the AWS spectrum auction. I might as well have predicted the Leafs winning the Stanley Cup.

Just like the kids singing "This is the song that never ends" on a summer driving trip, it seems that this is the auction that never ends.

For the past week, we have watched bidding on a limited number of spectrum properties go back and forth, but continuing to hover in the neighbourhood of $4.2B. Out of 220 pieces of spectrum that are up for grabs, some rounds have seen activity on only one block. For a number of days, bidding changed by tens of thousands - rounding error when the total is measured in the billions.

Industry Canada is now running 15 auction rounds per day to try to bring this process to close.

In the meantime, uncertainty remains as a market overhang. Would-be new entrants can't finalize their license approvals or get started building their networks, or finalizing their business plans.

Is something wrong with the auction design that is keeping us in limbo? Are there mechanical changes that could help bring the auction to a more timely conclusion?

As a side note, let me refer you to an article written last week by former CRTC vice-chair Rick French in the National Post, talking about changing the spectrum auction from a license to outright ownership.

Technorati Tags:
Industry Canada, AWS Spectrum Auction, Richard French

What is with the continued negative publicity on the Rogers iPhone?

Friday's launch gave Canadians the latest generation device on the same day as it was available anywhere with among the lowest prices in the world.

People seem to still be griping that Rogers has a cap on data at 6GB. Can we try to put 6GB in perspective?

Remember that your cable internet, shared between all the computers in the house, has a cap of 60GB for $45.

I suspect that most people will find that 6GB is virtually unlimited. Indeed, it seems that most US carriers that advertise 'unlimited data' actually impose limits - lower limits than Rogers' 6GB offer.

Of course, some people like to find things to complain about.

Maybe it is time to kvetch about something more important - like the weather.

Technorati Tags:
Rogers, AT&T, iPhone

Showing that Rogers isn't too big to listen to its customers, it has made an announcement to re-energize the buzz surrounding the global launch of iPhone 3G tomorrow morning.

Rogers has come out with a $30 data plan that will provide 6GB of data for customers who activate between now and the end of August.

The plan will also apply to a number of other smart phones from Rogers in addition to the iPhone 3G:

• Samsung i616 ("Jack")
• Motorola Q9H
• HTC TyTN
• Palm Treo 750
• Nokia N95
• BlackBerry Bold (when available)
• HP 910c (when available)

For those who show up as the doors open at 8 am at 6 Rogers Plus store across the country, breakfast will be served as well as draws for special prizes.

Rogers is looking to rebuild its customer relationships, perhaps leveraging the negative press and Ministerial intervention associated with Bell and TELUS introducing charges for inbound text messages. Food and free stuff works for me!

Technorati Tags:
Rogers, iPhone

The news broke yesterday that Bell and TELUS were starting to tell their mobile customers that they plan to start charging for incoming text messages. No news releases were issued, leading to some mis-information. Customers were being notified by billing inserts providing them with 30 days notice of the rate increase, as provided for in their contracts.

Bell's contract reads:

We will not increase your basic monthly voice plan charge or out-of-bundle airtime charge during any Committed Service Period, as long as you remain qualified to receive your chosen plan and Services throughout the Committed Service Period. If you no longer qualify to receive a plan or the Services at the fees offered to you (for example, a corporate plan or employee plan, due for instance to termination of employment or termination of a corporate agreement) then Bell may transfer you to a comparable Service and plan, at the appropriate fees and charges for which you then qualify, and you accept same. During the Term we may increase other fees (including the System Access Fee), and charge additional fees, after giving you 30 days advance notice. Any promotional and upgrade offers are offered at our discretion for limited periods of time [emphasis added]

I generally don't have a problem with services providers charging what they want and what they believe the market will allow. Consumers have choices and can shop around to select the package that best meets their needs. Besides the big 3 (Bell, TELUS and Rogers), there are lots of alternatives out there, many of which have very attractive text messaging plans. In some cases, the 'off brands' like Fido, Solo and Koodo may save consumers lots of money. You even get to take your phone number with you.

One of my contacts tells me the charges won't apply to incoming spam, but I have no idea how service providers will define spam. For example, a new form of school yard bullying could be for kids with text messaging plans to start sending messages to one of their schoolmates without a plan. Do the carriers really want customers calling into the call centres each month looking for text messaging credits?

Will the Canadian service providers provide the same tools as in the US for end-users to manage their incoming messages? If customers are going to have to pay for incoming messages, then they should get to control those charges.

The main issue I have with this new text message plan is changing the rates in the middle of contract periods. People shopped around last Christmas and selected devices and packages based on the pricing that was in effect. They signed 2 and 3 year contracts based on the analysis they did at that time. Now, the rules are getting changed part way through.

It is another example of a one way contract I wrote about in May. At that time, I wrote:

How can it be reasonable for the service provider - a major Canadian telco - to lock up a customer for 2 years, but be free to change the price substantially in the middle of the contract period? What exactly is the meaning of a contract if one side gets to change a key term, price.

Just as I have written about changes to System Access Fees, if service providers want to change the rates, go ahead. But if consumers are tied up under a contract, the service providers should be held to honour their commitment as well, or release them from their contract to go shopping again.

Technorati Tags:
system access fees, SMS, contract

The National Post has a couple commentaries about the AWS spectrum auction this morning.

Terence Corcoran has an editorial entitled "Ottawa's spectrum auction is nothing but a tax grab".

Also on the FP Comment page, there is an article that echoes the proposal that Michael Sone and I set out in our opening remarks at The Canadian Telecom Summit last month. Michael Janigan, Janet Yale and I co-authored the piece calling for the auction windfall to be earmarked for a program to bridge the digital divide in Canada: "Canada needs a national broadband strategy".

The article concludes with:

In the 21st century broadband must be treated as part of a nation’s core infrastructure. Canada has the opportunity — and now the means as well — to do just that.

Technorati Tags:
Canadian Telecom Summit, National Post, Terence Corcoran, Janet Yale, Michael Janigan

A few weeks ago, the Federation of Canadian Municipalities used the final day of The 2008 Canadian Telecom Summit to release a report called "Highway Robbery: How Federal Telecom Rules Cost Taxpayers and Damage Public Roads" [download full report here ].

The report claims that the CRTC deprives local governments the power to recover their costs from companies that tear up roads for their telecom networks, shorting municipal governments about $100M per year in road repairs.

The report and one of the backgrounders takes a cheap shot at the CRTC, blaming staff and commissioners for an insensitivity to municipal issues because of their backgrounds:

Given the technical knowledge and expertise required to fulfill its core mandate, many present and past CRTC members have been drawn from the Canadian telecommunications industry. Former telecommunications business executives, industry lawyers, engineers, and venture capital financiers all bring their perspective to the issues. Looking inside the Commission, one finds a comparable set of skills among the CRTC’s staff.

While such appointments ensure that telecommunications carriers will be well understood when appearing before the Commission, the scenario is quite different when an entity from outside the industry, such as a municipality, appears to defend its interests in this specialized industry forum.

We used to hear the complaints from city councils about the traffic tie-ups due to fibre construction crews working downtown. I found that movie crews tended to close more lanes, but we didn't cry about that because films are more glamourous and perhaps the economic benefits were more visible.

The CRTC recognized those economic benefits in its Decision 2001-23:

The benefits of a competitive telecommunications market and greater access to modern high-speed networks... provide generalized benefits throughout the municipality, attracting industry, creating jobs [and] increasing tax revenue.

FCM fought and lost in front of the CRTC and it has lost judicial appeals of this decision.

Maybe it is time to move on.

For a couple years now [see here and here], I have been challenging municipalities to actively promote positions that promote a friendly approach to investment in telecom infrastructure.

Which communities will be first to recognize the economic benefits to cooperatively building advanced infrastructure?

Technorati Tags:
broadband, FCM

One little word in Michael Geist's column in the Toronto Star today made me decide to write this post.

What is that word?

The word "usage" in the following sentence is just plain wrong.

Canada ranks toward the very bottom among developed countries for cellphone usage as the lack of competition leaves Canadians with some of the highest prices for wireless services in the world.

Actually, Canadian cell phone usage is among the highest in the world, an inconvenient fact that doesn't fit the thesis set out in the article.

Maybe a copy editor didn't like the word "penetration" and decided to change the word to "usage" without checking if it changed the context

I have no trouble with people wanting lower prices for their wireless service - I have written many times before about how much I like free. I might even agree with Professor Geist that users should have the right to remove software and technical locks on handsets as long as they recognize that they are voiding their warranty and don't start complaining to tech support about problems.

Let's try to get the facts right so that we can engage in a real dialog.

Technorati Tags:
Toronto Star

It appears that today may see the end of bidding in the AWS spectrum auction. Friday's rounds 190 through 195 saw bidding stabilize just barely shy of the $4.2B mark. Of course, that is if you consider $5M to be "just barely shy".

$4.2B is a lot of money. More than double the original estimates.

Of course, bidders are spending their cash based on what their business plans say is reasonable, but there is no one in Canada who can say that they honestly expected that the government would raise this kind of cash.

What will we do with that multi-billion dollar windfall?

At The 2008 Canadian Telecom Summit, we laid out a broadband proposal to see the government reinvest in telecommunications as a critical infrastructure.

What do you think? What would you have the government do with the more than $2B extra dollars raised?

Technorati Tags:
Industry Canada, AWS Spectrum Auction, broadband