On October 3, the CRTC concluded the oral hearing portion of its “Review of wholesale mobile wireless services” with a statement: “as stated in the Notice of Consultation, we expect to issue a decision within four months of the close of the record.”

The record closed October 20, which would have made February 20, 2015, last Friday, the self-imposed deadline for the CRTC – coincidentally, the one-year anniversary of the original Public Notice.

When will the CRTC release its decision?

There are a number of issues being reviewed:

• Should the CRTC regulate wholesale roaming rates?
• If so, at what level?
• Should the CRTC mandate resale to enable MVNO – mobile virtual network operators?

On this last point, the CRTC’s work should be pretty easy. Consistently, Industry Canada has rejected calls to mandate resale as a “condition of license” for mobile operators.

In the original AWS spectrum auction that gave rise to today’s competitive entrants such as Wind Mobile, Mobilicity, Videotron and Eastlink, Industry Canada created license conditions that stated: “Roaming as provided for in this condition does not include resale.”

Since that time, Industry Canada has had a number of reviews of its license conditions and associated network infrastructure sharing rules, each time remaining consistent. For example, in its March 2013 “CPC-2-0-17 — Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements“, Industry Canada determined:

A carrier must therefore be offering service on its own network before its subscribers may benefit from roaming on another network, thus it does not include resale.

At the same time, Industry Canada’s perspective has been that “Nothing in the policy, however, is intended to limit the ability of carriers to conclude commercial agreements that are not mandated by this policy.”

Next Tuesday at noon, just one week from now, Canada’s wireless industry will be placing multi-billion dollar bids on spectrum, having built business plans under the December 18, 2014 Framework released by Industry Canada. At that time, Industry Canada reaffirmed the “conditions of license” with no mandated resale.

The CRTC’s wholesale wireless decision should have been released already (it was promised to be out by last Friday), allowing carriers to adjust their business models in advance of the single bid submission deadline.

A fundamental change in the regulatory framework, such as the CRTC mandating resale, could mark the return of Calvinball to Canada’s wireless sector.

There is already lots to talk about at The 2015 Canadian Telecom Summit, June 1-3 in Toronto. Early bird rates are available through Saturday February 28. Have you registered yet?

A few weeks ago, in a speech in London Ontario, CRTC Chair JP Blais said:

In our opinion, providers such as Bell and Vidéotron that offer linear content via their mobile TV apps cannot provide undue preferences or advantages. We therefore ordered Bell and Vidéotron to eliminate their unlawful practices.

The Mobile TV Decision, Broadcasting and Telecom Decision 2015-26, starts off by stating:

The Commission finds that Bell Mobility Inc. (Bell Mobility) and Quebecor Media Inc., Videotron Ltd. and Videotron G.P. (collectively, Videotron), violated subsection 27(2) of the Telecommunications Act by exempting their mobile TV services Bell Mobile TV and illico.tv from data charges. Subsection 27(2) prohibits Canadian carriers from conferring an undue disadvantage to others, or an undue preference to itself or others.

Keen eyes noticed that the Decision was issued as a Broadcasting and Telecom Decision; it deals with a TV service, but starts off with a citation claiming a violation of the Telecom Act.

What is a broadcast undertaking? That appears to be the core question for the Federal Court of Appeal in determining whether to grant Bell’s application to review the CRTC’s Mobile TV decision.

The Chair’s speech calls the service “linear content” – broadcast TV. At paragraph 15 of that decision, the CRTC said that Bell and Videotron’s Mobile TV service is broadcasting:

The Commission considers that Bell Mobility and Videotron, in acquiring the mobile distribution rights for the content available on their mobile TV services, in aggregating the content to be broadcast, and in packaging and marketing those services, are involved in broadcasting. In this regard, it notes that no party to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMBU exemption order.

In the “Concurring Opinion” appended to the Decision, Commissioner Raj Shoan reiterates this point:

The majority decision considers that Bell Mobility and Videotron are involved in broadcasting and notes, in this regard, that no party to this proceeding disputed that mobile TV services constitute broadcasting services as contemplated by the DMEO. I agree.

The problem arises in Paragraph 17 of the decision, where the majority decides that the Mobile TV broadcast is taking place over a separate telecommunications network.

The Commission finds that in order to transport their mobile TV services from their servers to subscribers’ mobile devices, Bell Mobility and Videotron use their respective wireless access networks. These are the very same networks they use to deliver their wireless voice and data telecommunications services, which are clearly telecommunications services subject to the Telecommunications Act.

So, the Mobile TV decision was based on a view that the Mobile TV broadcast (regulated under the Broadcast Act and the Digital Media Exemption Order) was still captured under Telecom Act regulation by virtue of the transmission facilities being used to deliver the service.

Bell points out that under the Broadcast Act, the transmission facilities are integral to the broadcast:

2.
(1) In this Act,
“broadcasting” means any transmission of programs, whether or not encrypted, by radio waves or other means of telecommunication for reception by the public by means of broadcasting receiving apparatus, but does not include any such transmission of programs that is made solely for performance or display in a public place;
• • •
“program” means sounds or visual images, or a combination of sounds and visual images, that are intended to inform, enlighten or entertain, but does not include visual images, whether or not combined with sounds, that consist predominantly of alphanumeric text;
• • •
(2) For the purposes of this Act, “other means of telecommunication” means any wire, cable, radio, optical or other electromagnetic system, or any similar technical system.

Of course this makes sense. A TV station generates the programs and transmits them, without its operations coming under Telecom Act regulation. The TV services from a cable company are governed by the Broadcast Act.

All broadcasting, by definition, are transmitted using a kind of telecommunications, be it radio waves, copper, fibre or string and soup cans. But the Broadcast Act includes consideration of those transmission facilities and indeed, Section 4 of the Telecom Act specifically carves out broadcasting from its mandate:

4. This Act does not apply in respect of broadcasting by a broadcasting undertaking.

How much more clear can it be? The CRTC argues that “[t]he threshold issue in dispute in this proceeding is whether Bell Mobility and Videotron, in the transport of the mobile TV services to end users’ mobile devices, are operating as Canadian carriers providing telecommunications services and are therefore subject to the Telecommunications Act and policies made pursuant to that Act.” Bell says that its Mobile TV service is sold as a broadcasting undertaking, as acknowledged by the CRTC.

If the Court agrees that the Telecom Act does not apply to the Mobile TV service, then it is simply not possible for the CRTC to have ruled the service to be unlawful under the Telecom Act.

Indeed, this argument would also appear to apply to complaints filed by PIAC about Shomi and Crave TV, which may be why the CRTC issued a note that it was suspending those processes.

These issues and more are certain to be explored during the Regulatory Blockbuster at The 2015 Canadian Telecom Summit, taking place June 1-3 in Toronto. Early Bird savings are available through February 28. Be sure to reserve your place today!

A few weeks ago, I wrote a piece called “Preventing a fragmented internet” that discussed the issue of global internet governance.

In that piece, I wrote that former Secretary of the U.S. Department of Homeland Security, Michael Chertoff, will be addressing these kinds of issues at The 2015 Canadian Telecom Summit, taking place June 1-3, in Toronto. His remarks will address “One Internet or Thousands: Preserving the World Wide Web in a Diverse Globe.”

Earlier this week, Mr. Chertoff released a paper he co-authored with Tobby Simon entitled “The Impact of the Dark Web on Internet Governance and Cyber Security” [pdf].

The paper observes that much of the debate on internet governance has been over privacy and security on what they term “the visible Web”. The paper asserts the need to consider the governance of the “deep Web” and the “dark Web.”

Like any technology, from pencils to cellphones, anonymity can be used for both good and bad. Users who fear economic or political retribution for their actions turn to the dark Web for protection. But there are also those who take advantage of this online anonymity to use the dark Web for illegal activities such as controlled substance trading, illegal financial transactions, identity theft and so on.

The authors say it wouldn’t be surprising to see the dark Web’s criminal underbelly become more fragmented, and therefore more complicated to investigate, given wide-spread online surveillance by states and the recent arrests of cyber-criminals.

Cyber security and internet governance are important issues facing an increasingly hyperconnected economy.

In addition to the keynote address on the afternoon of June 1, The 2015 Canadian Telecom Summit has a panel Monday afternoon, June 1, that will look at Cyber Security. That panel will be moderated by renowned cyber attack expert Carl Herberger, VP of Security Solutions at Radware, who is a frequent guest on Fox Business News, CNN and Bloomberg Broadcast News.

How will new models of Internet governance balance freedoms with cyber security?

Panel discussions and keynote addresses at The 2015 Canadian Telecom Summit will explore these issues and much, much more. Early bird rates are available through February 28 – that’s just a week away. Book your seat, today.

Today’s post is going to be getting into the mathematics of telecommunications.

For years, a number of so-called industry analysts have had trouble with the concept that wireless rates are coming down, but monthly bills are going up. Maybe we need more precision in the way terms are used, consistently. The language is important.

For clarity, I think most of us view a “bill” as the total amount we pay. Rates refer to the prices for the things on that bill. The two are related, but comparisons are only meaningful if the number of things being bought are considered.

In telecommunications, rates have declined over time, but monthly bills are, in many cases, going up. More of us are buying more stuff. We have added data plans, or increased the speeds and data volumes. Our voice plans include more features, better roaming, more long distance. In most cases, we are buying more, precisely because the relative value proposition has improved for the things we are buying: the prices are lower and we see more utility from these capabilities.

While that may seem obvious, there was confusion about bills versus rates in a Twitter response to a Globe and Mail story (“SaskTel says regional wireless carriers overlooked in federal policy“) from Industry Canada’s spokesman:

There are two problems in this tweet.

First, there is the confusion between bills and rates. Second is the question of correlation versus causality. It would have been correct to say that consumers are paying 22% less for wireless services. But, how do we know that the change in rates is due to “our policies”? In the same period, wireless rates in Australia also fell by 22%. was this due to the Canada’s wireless policies? US wireless rates fell by 31% in that period. What does that say about “our policies”?

Panel discussions and keynote addresses at The 2015 Canadian Telecom Summit will explore these issues and much, much more. Early bird rates available through February 28. Book your seat, today.

TELUS released its financial results this morning, rounding out 2014 reporting season for the major wireless carriers [Rogers reported two weeks ago and Bell’s results came out last week].

All three reported an increase in ARPU – average revenue per user – as more customers added data plans with smartphones.

But the number that I want to explore is churn. Churn is a measurement of how many customers choose to leave the company each month – it is a good proxy for customer satisfaction. Happy customers are less likely to leave their current service provider.

With the old 3-year contracts, on average, nearly 3% of your customers had contracts come due each month. Under the CRTC’s Wireless code, there are effectively no contracts anymore. Well over half of Canada’s wireless customers can leave their service provider without penalties. Many stay with their service providers for 2 years, the maximum period for amortizing their smartphones. That means about 2% of these customers are shopping each month.

As reported in the Globe and Mail, TELUS reported churn of just 0.94% for the last quarter (0.93% on the year); Bell had 1.3% and Rogers 1.46%.

On a base of 8.1 million customers, the difference in churn means that TELUS lost about 40,000 fewer customers each month. That is 120,000 customers per quarter. Customers that generate an average of almost $65 per month in revenue.

Last year, when describing the Customer Experience Management panel at The Canadian Telecom Summit, I wrote “It pays to be nice“. TELUS reported that its cost of acquisition – money spent for each new customer – was $440.

TELUS said: “TELUS’ low blended churn rate reflects the Company’s successful customers first service approach, investments in customer retention as well as a greater proportion of postpaid clients in TELUS’ subscriber base.”

It pays to invest in delivering an improved customer experience. Once again, The Canadian Telecom Summit will explore this, during panel discussions. The Canadian Telecom Summit takes place June 1-3 in Toronto. Early bird savings are available through February 28. Have you registered yet?