Month: January 2009

Answers to the CRTC’s first round of questions in the network management proceeding have been filed. They will be available on the Commission website soon.

Twelve companies were asked 15 questions. Many of the answers have been filed with confidentiality claims – reasonable, considering the competitive nature of some of the information being sought.

It would be interesting to see a table that summarizes key information from the respondents. Any students up for the task?

Technorati Tags:
CRTC, network management

Pity poor Cybersurf. They know that the Rolling Stones taught us that you can’t always get what you want, but these days, Cybersurf must be feeling like it is having trouble ever getting anything that it wants.

They thought they had won a major victory with the CRTC when the Commission ruled in their favour to permit wholesale access to all the same speeds of ADSL service that the incumbents offer.

I thought the executive summary of the Decision was pretty clear in the Commission’s intent:

that incumbent local exchange carriers be required to provide speeds for wholesale asymmetric digital subscriber line services that match the speeds made available to their retail Internet service customers.

I read that as meaning that if an incumbent sells a retail internet service rated at X Mbps, then a reseller can buy a wholesale version of that service to be able to offer the same speed. I’m pretty sure that most people read the decision that way.

Nay, nay, says Bell.

In a letter to the CRTC on Monday, Bell argued that the Commission did not intend for the Decision to apply to all of Bell’s retail internet services. In Bell’s view, there is some kind of special mystique behind the Commission’s use of the term “copper” in paragraph 22 of the Decision, where it says:

With respect to the submissions of Bell Canada et al. and TCC that the relief sought by Cybersurf would dampen investment in alternative facilities (Bell Canada et al.) and broadband in general (TCC), the Commission notes that this proceeding is limited to addressing the issue of matching service speeds of the ILECs’ aggregated ADSL access services, which are provided over copper facilities.

Bell says that its higher speed services are provided over “FTTN” technology and so it feels that the CRTC

explicitly excluded next generation services, such as those that are not pure copper facilities provided over the fibre to the node (FTTN) network.

I’ll observe that the word “pure” doesn’t appear anywhere in the Commission’s decision. Equally, I would note that FTTN is hardly “pure” fibre.

How does Bell think the connection goes from the Node (the “N” of “FTTN”) to the customer premises? Is it a magical mystery connection or maybe the last little bit is using ADSL over copper? [Apologies for mixing the 40 year old musical references]

Further, paragraph 22 is a descriptive paragraph, not a determination. The conclusion of the Decision was pretty clear.

The Commission directs that the ILECs … consult with their aggregated ADSL customers and file, within 45 days of the date of this Decision, proposed revised tariff pages to include any matching-speed with respect to existing retail service speeds offering where there is demand by any such customer.

Customers aren’t being sold technologies – they are sold high speed internet service. And this whole process started when Cybersurf asked to be able to resell Bell’s 7 Mbps service.

The Commission should dispose with this clarification right away, register the original Decision 2008-117 with the courts. The clock is ticking – the telcos have 45 days from December 11 to file matching tariffs. Absent a stay, they need to file matching rate tariffs or face the consequences.

Patience Cybersurf. If you try sometime, well you just might find, you get what you need.

From the “Grass is always greener” files.

The UK regulator, Ofcom, has released a report on consumer internet services. It turns out that the UK internet experience is not that different from what we see in Canada.

For example, according to the report,

UK consumers receive an average broadband speed of 3.6 megabits per second (Mbit/s), comprehensive new Ofcom research reveals today.

That’s less than the average maximum possible speed of 4.3 Mbit/s across the UK and significantly below advertised headline speeds.

Most consumers surveyed were reasonably happy with their broadband service, with only 9% expressing dissatisfaction overall. 93% of consumers were satisfied with their web browsing experience.

UK based Analysys Mason says that the Ofcom study shows that consumer demand for internet services is not far ahead of supply and people understand the limitations of what they are buying. According to their interpretation of the study, the customer satisfaction numbers indicate that consumers understand that speed is dependent on variables including how many people are online at any time.

There are of course ISPs that provide a materially better service than others, but the overall low level dissatisfaction would suggest that accusations of mis-selling have been somewhat over-hyped.

I especially enjoyed the closing paragraph of the Analysys Mason press release:

The telecoms industry is used to hearing tales of consumer dissatisfaction and of ‘pent-up’ demand for bandwidth – often from excitable bloggers, or from parties that have an obvious interest in promoting that view. Research often misinterprets long-term predictions of bandwidth usage as indicators of demand. What this survey shows above all else is that, so long as people are aware of what they are buying, supply to a large extent informs demand and that the two are in truth substantially aligned.

Good lessons for Canadians to keep in mind as we prepare to see the filings for the CRTC’s network management proceeding.

Technorati Tags:
internet, Ofcom, Analysys Mason

Let’s continue with a theme I raised on Friday.

Last week, as Videotron expanded the reach of its DOCSIS 3.0 ultra-high speed broadband [ pdf, 32KB], it also increased the download caps for its users of 30 and 50 Mbps internet services. It adds pressure to Canadian telephone companies to consider the massive investments (such as a Verizon-like FTTH approach) to compete with cable internet speeds.

In the past, I have called for all levels of government to create more favourable environments for increased broadband investment by all service providers. The most basic incentives would be for the public sector to liberalize access to public rights of way, support structures and vertical real estate such as towers.

Last week, Portugal went even further, setting up an €800M line of credit for operators to roll-out next-generation broadband networks. Governments have many levers that can help stimulate investment in next generation network equipment, including accelerated depreciation for certain classes of capital and matching funds for rural service improvements. Telecom service providers have a track record of being to move quickly to implement their infrastructure projects – much faster than roads, public transit, sewers and bridges.

As governments look for ways to stimulate various sectors of the economy, incentives for investment in digital infrastructure may be among the lowest cost, while delivering the highest returns and most sustainable benefits.

Despite the dire economic conditions, the year 2009 could be a banner year for telecom industry investment. Regarding just the wireless sector, I wrote in the current issue of Foxgroup Media Telecom Journal:

It has been encouraging to see recent announcements from new entrants and incumbents that there are substantial investments in wireless over the next 12 months; so much investment that it will tax the ability of Canadian workers to install all of the equipment.

Between Bell, TELUS and Videotron, more than 4000 cell sites will be built or enhanced this year.

In an interview with the Globe and Mail on Monday, TELUS CFO Bob McFarlane observed that while other sectors of the industry are lining up for government handouts,

This summer we had $4.3-billion extracted from the Canadian wireless industry to purchase spectrum due to a unique set of rules that, in my view, were counterproductive.

Of course, this “extraction” was actually a voluntary purchase of public assets, spectrum, by industry players.

Still, we need to think back to the original wave of 3G auctions. In the year 2000, immediately preceding the collapse of the technology industry, world governments raised about $145B in those spectrum auctions. The amount of money raised at auction equaled the sum of the annual revenues of the major equipment vendors. By June of 2000, Ericsson was already warning about the potential backlash. The chart at right is from a presentation I delivered in May 2001.

We need to consider the extent that capital investment in spectrum auctions impacts the ability of operators to build out their networks.