Month: April 2007

Over the past few years, there had been a trend toward extreme sports – people pushing the limits of human physical capacity and perhaps pushing the limits of common sense as people seek fame and glory.

There are extremist views that keep percolating from some elements in the discussion that threaten the nationalization of telecommunications infrastructure unless carriers embrace net neutrality. Whoa!

There is something about the threat of such expropriation of assets that makes you say ‘hmmm’. My experience is that the investment community doesn’t take kindly to doing business in countries that: a) nationalize infrastructure or private property; or, b) engage in extortion.

I would prefer to be able to simply ignore the extremist rants of some Canadian members of the Hugo Chavez fan club. They seem to be a loud minority, pining for simpler days of Ministries of Posts, Telephone and Telegraphs. Sorry – those days of central government planning and the associated glacial or geological pace of network evolution have been eradicated from most of the planet.

I’d prefer to discuss the issue of net neutrality on a level with some of the deeper thinking academics. There are serious questions to be addressed.

I’m even willing to acknowledge there are certain service provider misbehaviours that may warrant a modicum of contrition, consistent with my view that we generally have in place the necessary laws to safeguard reasonable rights.

Later in the week, I’ll look at some examples of why I think the objectives of net neutrality just aren’t realistic for customers who want advanced services.

The rapid pace of internet innovation we have witnessed to date has taken place without specialized net neutrality legislation. It seems to me that network neutrality is overly broad regulation that will serve stifle innovation.

The internet has proven itself to be a turbo-charged engine for economic growth in the information age. Network neutrality may result in shifting into neutral the enormous power of the internet in effectively moving information.

That is a risk that we can’t take idly.

Technorati Tags:
nationalization, Hugo Chavez, net neutrality

All businesses are regulated in some way or another, whether it is workplace safety, public health or consumer protection. Wednesday’s announcement from the Minister represents a move toward the continued normalization of regulation of the telecom industry.

As the statement from the CRTC says,

Both the Commission’s original framework and the modifications made by the Government today have the common objective of fostering competition in the Canadian telecommunications market.

The Cabinet directive gets us to that state faster.

Still, existing consumer safeguards, such as a price ceiling for stand-alone residential service will be maintained as well as continued price regulation in regions where there is little competition. Further, safety and social regulations, such as 9-1-1 and services for the disabled will remain.

The Competition Bureau will be an increasingly important guardian to address anti-competitive issues in the deregulated markets. The government has added $10.5 million over five years to its budget in order to strengthen its role in policing newly deregulated telecommunications markets.

Sheridan Scott, Commissioner of the Competition Bureau, will be a keynote speaker at The 2007 Canadian Telecom Summit on the afternoon of June 13.

Technorati Tags:
CRTC, Sheridan Scott, Competition Bureau

Wednesday’s final version of the variance on Local Forbearance establishes a simplified presence test to determine if there are at least two sources of facilities-based competition for consumers to from, in addition to the incumbent.

In the descriptive section of the Industry Canada Regulatory Impact Statement, this test is described as:

Forbearance can occur in a residential market if there are, in addition to the incumbent, at least two independent facilities-based telecommunications services providers, including providers of mobile wireless services, each of which offers services in the market and is capable of serving at least 75% of the number of residential lines that the incumbent is capable of serving in that market, and at least one of which, in addition to the incumbent, is a facilities-based, fixed-line telecommunications service provider.

But, in the actual Order, the phrase is slightly different, changing the general term “services” to specify “local exchange services”:

… if the ILEC offers residential local exchange services, there are, in addition to the ILEC, at least 2 independent facilities-based telecommunications service providers, including providers of mobile wireless services, each of which offers local exchange services in the market and is capable of serving at least 75% of the number of residential local exchange service lines that the ILEC is capable of serving, and at least one of which, in addition to the ILEC, is a facilities-based, fixed-line telecommunications service provider [emphasis added]

Does the clause “each of which offers local exchange services” also apply to the clause “providers of mobile wireless services”?

The phrase “local exchange service” has a specific meaning by the CRTC. Recently, it appears in the CRTC’s VoIP Decision as “local exchange service (i.e. PES or local VoIP service)”. In the Decision that was the subject of the Cabinet variance order, “Local exchange services have, historically, been provided on a monopoly basis by the incumbent local exchange carriers (ILECs).”

By definition at the CRTC, most of Canada’s mobile service providers do not generally provide local exchange services, presumably unless they are also CLECs, such as Fido.

Considering how some significant dollars have depended on the regulatory interpretation on a lowly comma, will the phrase “local exchange service” create anxious moments?