The CRTC’s Communications Monitoring Report was released earlier today, providing a good snap shot of where we are standing – or at least where we were standing when the snap shot was taken.

The CRTC provides some information about adoption of communications services based on income, although the data is a year older because of limitations in the information source from Statistics Canada. As I have written continuously on these pages, more attention needs to be placed on how Canada can increase the affordability of information and communications services and technologies in low income households. It is encouraging to see the CRTC tracking this information. In particular, I was interested in Table 2.2.9, showing Monthly household communications expenditures, by service and by income quintile.

That table shows a big jump – an increase of more than 16% – in the spending by low income households on internet services. It is likely driven by an increase in the number of low income households that actually got an internet connection, but unfortunately, we don’t see comparative adoption figures published by income quintile by year.

The CRTC shows additional information about spending levels as a percentage of income. At 8.4% of income, many of Canada’s lowest income households are spending too much, and this is with nearly half of those households not having a broadband connection.

Most initiatives have looked at the rural/urban divide; it is encouraging to see the CRTC gathering data and monitoring affordability in low income households, a key factor limiting ubiquitous participation in a digital economy. Understanding the nature of the problem is an important step in developing solutions.

When companies submitted applications last week to bid in Canada’s upcoming 700 MHz auction, the public didn’t get to see the size of the deposits. That would help understand the possible strategies of each of the companies. So we don’t really know which of the applicants are planning to bid nationally versus regionally; we don’t know which companies will go after which blocks. Four of the five paired blocks are called prime, because they align with AT&T’s B & C blocks or Verizon’s C1 & C2 blocks in the US. The A block is the remaining paired block and there are two unpaired blocks, D & E that are also available. Opening bids for those unpaired blocks is about half the cost per MHz compared to the paired blocks.

A story in Ars Technica reports that AT&T plans to use its D & E blocks for LTE broadcast – video streaming – to help deal with mass viewing events such as the Super Bowl or March Madness.

Those two “non-prime” blocks just got a little more valuable. Will the major carriers seek to add the D & E blocks to their arsenals?

What will be the impact on smaller fixed wireless players that may have hoped to acquire lower cost licensed spectrum?

The Government of Canada has been running a series of ads with the tag line: “Less noise. More facts.”, with directions to readers to get more information on a special Industry Canada website.

I tweeted earlier this week that I think the campaign is unseemly and sophomoric.

On reflection, I think the government needs to take its own advice and provide less noise and more facts.

There are at least two major points that merit scrutiny.

The ad says “The fact is Canadians pay some of the highest wireless rates in the developed world.”

That simply isn’t true, and the government knows it. Industry Canada and the CRTC commissioned a report [html, pdf] that looked at international pricing; less than 3 months ago, then Minister of Industry Christian Paradis welcomed its release, saying:

Based on Wall Communications’ results, wireless prices have decreased 18 percent since 2008. This impressive decline shows that increased competition is keeping prices down while new technologies become available.

We know that the people responsible for the Government ad campaign are aware of the Wall Communications study; the government cites figures from that report when taking credit for prices dropping by 20%. The Wall Communications report doesn’t stand alone. The School of Public Policy at University of Calgary released a report two weeks ago on Parliament Hill. The report was written by economists who found:

wireless prices in Canada are difficult to compare to international prices because Canadians use their mobile devices differently – with a bias toward monthly plans over pay-as-you-go and with fast networks that encourage smartphone usage. This incorrectly leads to the conclusion that Canadians are paying more, when in fact they are demanding more in terms of mobile services.

The authors of the University of Calgary report are experts in competitive markets, both of them having worked at Canada’s Competition Bureau. As I wrote at the time, The paper takes aim at simplistic analysis that has led various critics to have accused the industry of being “woefully uncompetitive” and “dysfunctional and in desperate need of an overhaul.”

According to their report, “there is no evidence that there is a competition problem in wireless services in Canada.” Yet Industry Canada’s More Choice website ignores this finding. Industry Canada says it is a fiction that “There is already enough competition in the wireless market.”

The University of Calgary report is an inconvenient contradiction – one that cannot be ignored.

As I suggested on Monday, it is time to take stock of where we are. How do we create the right policy framework to encourage the continued investment of billions of dollars each year, delivering advanced, affordable services that enable Canada’s participation in a global digital economy?

I agree with one part of the ads that my taxes paid for. We need less noise and more facts. We can then follow up with thoughtful analysis and leadership.

Industry Minister James Moore released a statement in response to the publication of the list of applicants for the upcoming 700 MHz spectrum auction:

Today, Industry Canada published the list of applicants for the 700 MHz spectrum auction scheduled for January 14, 2014. This high-quality spectrum will soon be deployed across Canada, providing Canadians with dependable, high-speed wireless services on the latest technologies.

Well before this summer’s public debate on wireless policy, our Government introduced a number of measures to create more choice in Canada’s wireless market and to defend consumers. As a result, prices have come down, the number of jobs in the wireless sector has increased and consumers have more choices. This trend will continue as a result of January’s auction.

In addition to this auction, our Government will continue to aggressively pursue policies that ensure consumer interests are at the core of all Government decisions.

Some have read the last sentence as a threat for the government to introduce strong regulatory measures. As I told the Globe and Mail earlier this month, the government has already made a number of changes to the regulatory landscape – most of which have not yet been in place sufficiently long for the impact to be measured:

Over the past year and a half, it has liberalized foreign ownership regulations, implemented a stringent code of conduct for wireless providers, added new mandatory roaming and tower sharing rules and changed the conditions for transfer of spectrum licenses. The government needs to take stock of the impact of all of these changes and reflect on whether these are the most appropriate measures to encourage investment and provide consumers with a vigorous competitive marketplace.

In an interview on BNN, I suggested that perhaps it is time to ask the Competition Bureau to conduct an independent review of the state of wireless competition.

Industry Canada published the list of applicants for those companies that would like to bid in the upcoming 700 MHz auction.

The biggest surprise appears to be that there are no surprises. Despite its best efforts, no new foreign companies have been attracted to Canada’s mobile market.

Industry Canada will need to examine relationships between the bidders (and the companies behind the bidders) in order to ensure that there is no potential for bidding collusion or circumvention of the rules, but there are no new deep pockets threatening to disrupt the Canadian wireless marketplace.

As I described last week, we do not know anything about where these companies plan to bid, or which companies plan to bid for more than one block.

There are 14 different geographic areas that cover the whole of Canada; initial bid prices depend on the population and the amount of spectrum being acquired. Each bid point requires a deposit of $130,000 and covers about 100,000 people per block of 5 or 6 MHz. The paired blocks of spectrum have increased bid points required in the more populous geographies so 1,221 bid points are required for a national paired block license, versus 334 bid points for an unpaired block. A 5% down payment had to be submitted with the application last Tuesday; the remainder is due on October 29. Links to the relevant sections of the Industry Canada rules can be found in last week’s blog post.

It was widely reported last week that none of the major US carriers (AT&T, Verizon, T-Mobile, Sprint) were planning to participate in the Canadian auction. Perhaps some of them were unwilling to face the regulatory risk of being unable to sell at some point in the future. When the federal government denied the TELUS request to acquire Mobilicity, it changed the rules set out in the original AWS auction. As I wrote in late July, “Had the government simply said that the original AWS rules called for a 5 year hold and the acquisition was premature, that would be one understandable, and consistent message.”

Instead, the government continued its game of Calvinball, keeping us all guessing on what the rules will govern multi-billion dollar investments. A favourable investment climate doesn’t just mean that foreign money is welcome. Investors need to be confident about the rules are for taking their money out again.

In its zeal to prevent “undue spectrum concentration—and therefore diminish competition”, did the government’s June 4 announcement diminish the attractiveness of investment in Canadian wireless?