Risks for SaskTel

June 21, 2016

As was widely reported, last month I was asked “to conduct an analysis of the impacts and risks that the MTS acquisition [by BCE] may have for SaskTel.”

The report was released yesterday [link to press release; link to full report].

As SaskTel reported in its press release, the following are the key risks that are outlined in detail in the report:

  • The possibility that reduced numbers of facilities-based carriers in Manitoba could lead Federal government policy makers to create incentives for additional wireless competition to develop through lower costs for new entrant spectrum or other measures. Such measures could reduce the costs for competitors and increase costs or restrict capacity expansion for SaskTel.
  • The further concentration of the market in Manitoba could see removal of the four carriers objective by the Federal government, possibly enabling Shaw to sell its acquired WIND Mobile business or partner with other telecoms. If Shaw launches a competitive mobile service, there is a risk that SaskTel’s consumer communications services will face significant pressure from a second bundled service package in Saskatchewan.
  • There is a risk the establishment of Winnipeg as a western headquarters for Bell could lead to an erosion of SaskTel’s share of the Saskatchewan business market.
  • There is a risk that Rogers will look to replace its lost partnership with MTS by developing retail partnerships with cable companies in Manitoba and Saskatchewan. This would improve the competitive positions of Rogers, as well as local cable companies.
  • For the reasons identified in the report, there is a risk that SaskTel’s net income will be unable to support the level of dividends that have been returned to the province in recent years.

Here is a collection of media coverage:

Powering an innovation economy

November 1, 2022

I have been traveling in Israel, a country that is frequently called the “Startup Nation.” The book, by Dan Senor and Saul Singer, examines how Israel – a country with about 20% of Canada’s population, in a constant state of war since its founding in 1948, with no natural resources – produces more start-up companies than larger nations like Japan, China, India, Korea, Canada and the UK.

Over the past week or so, I have tweeted somewhat facetiously from some of the better restaurants in Israel about how it is the food that powers the country’s innovation economy.

Last week, the Canadian Government announced its “vision to build Canada as a global centre of innovation“.

To achieve this vision, the Government of Canada will focus on six areas for action:

  • promoting an entrepreneurial and creative society
  • supporting global science excellence
  • building world-leading clusters and partnerships
  • growing companies and accelerating clean growth
  • competing in a digital world
  • improving ease of doing business

According to Minister Bains, “We don’t need another report on what our challenges are. We need fresh ideas and a joint action plan that will make innovation a national priority and put Canada on a firm path to long-term economic growth.”

The government plans to launch an interactive website to allow Canadians “to offer their suggestions on positioning Canada as a global leader in innovation.”

In addition, round-table discussions will take place across the country. They will be hosted by leaders who are innovators in their own right. These leaders represent the private sector, universities and colleges, the not-for-profit sector, social entrepreneurs and businesses owned and operated by Indigenous people. This collaborative approach is essential because the Government cannot act alone. Every sector of society must be mobilized for action. Each sector must also have a stake in determining what the targets to measure progress should be and how those targets should be tracked and reported.

What kinds of government action promotes an innovation economy? What kinds of government actions deter an innovation economy?

Nearly two years ago, I wrote a post called “Don’t do stupid stuff,” in which I wrote “Increasingly, it appears that Canada needs a digital conscience in Ottawa.”

Real innovation needs government to get out of the way, allowing successful businesses to thrive and letting unsuccessful ones fail.

We need to be concerned about governments’ propensity for handing out cash – picking winners and choosing which firms are deserving of state welfare. I wrote about this a few months ago when Sandvine apparently needed a $200,000 per job subsidy in order to continue growing its already profitable development centre in Waterloo. I asked if picking winners might actually create more losers.

Innovation and entrepreneurship are not terms usually associated with government. Knowing (and being willing) to get out of the way, may be the biggest challenge in the development of the government’s action plan.

My travels in Israel indicate that it takes great food to help power an innovation economy. Canada has some of the basic ingredients: Saskatchewan is already a world leader in chick pea production. It is time to harness more of our natural resources to develop a creamier Canadian humous!

Now that’s an idea I would like to see make it into the action plan.

Canada should take a close look at what factors have led to Israel’s successes in innovation and fostering a startup economy. We have great opportunities to collaborate and learn.

Nanny-state telecom regulation

June 9, 2016 / 1 Comment

On Tuesday, Conservative leadership hopeful Maxime Bernier said the CRTC only took the Policy Direction seriously for a few years before reverting back to its old ways. Yesterday, CRTC staff issued a letter that seems to prove him right.

Bernier said “Canadian consumers are best served when telecom providers are free to compete and invest, not when bureaucrats tell them what to do.”

On Wednesday, CRTC staff sent a letter to Iristel and NetTalk, admonishing the companies for holding Canadian consumers “hostage”.

NetTalk was buying wholesale telecom services from Iristel to offer deeply discounted home phone service. Iristel disconnected NetTalk customers after a prolonged commercial dispute.

Commission staff notes that Iristel informed netTALK in advance that it would cease providing telecommunications services and traffic to netTALK as a result of an ongoing dispute. Despite that information, it does not appear that netTALK immediately took measures to port its numbers to a new underlying carrier. Commission staff believes that netTALK could have minimized the chances of disconnection, and impacting tens of thousands of Canadians, if it had taken actions more quickly and followed the progress more closely.

The CRTC goes on to provide the two companies with “reminders”:

  • Commission staff reminds both parties that any dispute, commercial or otherwise, is never a legitimate reason to not abide by any of the Commission’s regulatory requirements.
  • Parties are reminded that the Commission provides services to help parties resolve disputes related to the Broadcasting Act or the Telecommunications Act.

As to the latter point, keep in mind that the CRTC has not shown any sense of urgency in resolving a customer impacting commercial dispute between Sugar Mobile and Rogers. That file (8620-J106-201601633) has been in front of the CRTC since mid February. So, it might be reasonable to ask if the CRTC can deal with resolution of commercial disputes in a timely manner.

As to the former point, it is unclear that any of the CRTC’s regulatory requirements were violated, so what exactly are the regulatory requirements of which the parties needed to be reminded? The CRTC’s letter was written and signed by staff, not Commissioners, although the CRTC’s Twitter stream gives the appearance that the letter carried the weight of an official CRTC order.

One might question what the recipients of the letter are expected (or required) to do.

At the end of the day, keep in mind NetTalk offers consumer services that cost about one-tenth the price charged by incumbent carriers, with basic plans starting at about $50 per year.

I bought a hammer last summer at a local dollar store. I paid a dollar for it. It worked just fine for putting up a picture hook into dry wall, but when I tried to drive a nail into my deck, the head of the hammer broke off the handle. I didn’t go running to a regulator because the dollar store product didn’t perform the same way a hardware store hammer works. At a certain point, consumers should take responsibility for their own choices. If you buy a phone service that only costs a couple bucks per month, that might be a clue that might not perform the same way as a service that costs 10 times as much.

Bernier said “As the industry evolves, the CRTC finds new reasons to continue to regulate it, in order to justify its existence. In doing so, it is not protecting consumers, it is only protecting its own power.” Yesterday’s letter from CRTC staff shows that he may be absolutely correct.

Day 3 coverage

June 9, 2016

The 2016 Canadian Telecom Summit wrapped up yesterday. Here are more stories that we found about the proceedings:

The 2017 Canadian Telecom Summit will take place June 5-7, 2017 in Toronto, marking 25 years of communications competition in Canada. Plan to join us!

Day 2 coverage

July 4, 2016

Stories from day 2 of The 2016 Canadian Telecom Summit:

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