As I suggested two weeks ago, the major wireless carriers have filed an application [2 MB, pdf] seeking leave to appeal certain aspects of the CRTC’s Wireless Code.

The appeal deals with the timing of the Code coming into effect. There are contradictory messages in the Decision itself (in paragraphs 368 and 369), followed by a tweet from the CRTC:

At that time, I responded via Twitter to ask if the CRTC planned to issue an erratum to clarify the decision.

The CRTC tweet was followed by a letter of clarification from CRTC staff (responding to a request from CWTA) that appears to contradict the Twitter statement.

There had been a legal opinion filed during the proceeding that led to the Wireless Code which identified the problems with the CRTC issuing a decision that would result in retrospective application to as many as 5 million existing contracts.

The carrier application seeks an award of legal costs if it is successful.

Will lawyers advising the CRTC suggest settling, retracting the staff opinion, before risking a sizable bill for having ignored the evidence, (based in part on a 2009 Supreme Court decision in CRTC vs Bell)?

The legal filing appears to demonstrate inconsistencies between the Decision, the social media feed and the staff letter. Does the CRTC need to examine its social media policy to ensure that its public messages are clear and consistent?

Lots of people are wondering what Verizon is up to in its discussions with a number of Canadian new entrants.

Plenty of folks are giving reasons why it makes no sense; I’d like to understand why Wind Mobile might be worth the $700M being reported.

When you think of AWS players in the US market, T-Mobile is the carrier named most frequently. But Verizon has been busy acquiring AWS spectrum as well, with about $4B in deals to secure spectrum from cablecos: Comcast, Time Warner Cable, Bright House Networks and Cox Communications. According to a report in March, Verizon plans to add support for AWS to 5,000 of its towers by the end of this year, about a quarter of its total towers.

Verizon has been offering LTE devices that are equipped to run LTE on the AWS band. Its new Samsung Galaxy S4 will run LTE over AWS.

If Verizon acquires Canadian AWS spectrum owners, it may be a play to offer seamless cross border data roaming. Data roaming rates for US customers coming north of the border can run $2 per MB or $25 per 100MB. Demand for data by roaming customers can be expected to continue to grow with new, faster devices.

That is why I wonder to what extent is Verizon looking at reducing its settlement payments for cross border data roaming to justify a capital investment in Canada.

With the new entrants using AWS in Canada for HSPA, and the continued delays in Canada’s 700MHz auction, there is currently a challenge for Verizon to find  negotiating leverage in setting up roaming agreements for its LTE customers.

But this leads me to wonder what the impact could be on existing customers of the AWS new entrants in Canada. If it proceeds in acquiring a Canadian operator or two at bargain prices, would Verizon focus on quickly changing the Canadian networks to the LTE protocol in order to tear down the border for its US clients?

This may not bode well for current clients of the Canadian targets who will find their devices unable to connect to the LTE network. It isn’t clear that Verizon would target average Canadian consumers. Will Verizon even want to keep the low ARPU customers that are currently on Wind Mobile and Mobilicity, the Canadian networks under discussion?

On the other hand, if Verizon buys both carriers, with largely overlapping spectrum, it may signal a migration plan: move the customers of one network over to the other for HSPA, while converting the first network to LTE. Customers would need new devices to take advantage of LTE, but could still keep their existing HSPA service running..

To what extent is Verizon entering Canada in order to defend and extend its US roaming position? To what extent is Verizon playing hardball in its roaming negotiations?

Canada’s new entrants need a migration strategy for LTE in any case. Will Verizon be the catalyst to bring the new entrants together?

Shortly after the CRTC’s Wireless Code of Conduct [Telecom Regulatory Policy CRTC 2013-271] was released, I observed a problem:

I was referring to the timings given by the CRTC in Paragraphs 368 and 369 of the Code that say:

368. In light of the above, the Commission determines that all aspects of the Wireless Code will take effect on 2 December 2013.

369. The Commission finds that where an obligation relates to a specific contractual relationship between a WSP and a customer, the Wireless Code should apply if the contract is entered into, amended, renewed, or extended on or after 2 December 2013. In addition, in order to ensure that all consumers are covered by the Wireless Code within a reasonable time frame, the Wireless Code should apply to all contracts, no matter when they were entered into, by no later than 3 June 2015.

Note the use of the word “will” in paragraph 368 versus the word “should” in paragraph 369. The CWTA asked the Commission to clarify these dates and these terms in a letter dated June 12. The CRTC replied on June 18, saying that by its calculation approximately 80% of wireless customers “would be covered by the Code by 3 June 2015.”

It is clear that the Commission intended the final 3 June 2015 implementation date to be a mandatory date. Consequently, after 3 June 2015, early cancellation fees for all wireless service contracts will be determined in accordance with the formula set out in the Code.

Frankly, the clarity of June 3, 2015 date might have been more evident had the CRTC more precisely used the word “will” or “shall” in paragraph 369, instead of the more discretionary term “should”.

But that isn’t the key point. The CWTA asked the CRTC to provide detailed interpretations of possible operational scenarios. The CRTC obliged in its response.

During the CRTC proceeding that led to the release of the Code, SaskTel filed a legal opinion prepared by Hank Intven of McCarthy’s, in respect of whether the CRTC had the jurisdiction to apply the Wireless Code to existing contracts. It is worth noting that Mr. Intven is a noted regulatory and policy expert, as a past Executive Director of Telecom at the CRTC, a member of the federal Telecom Policy Review Panel and author of The Canadian Telecommunications Regulatory Handbook. The CRTC’s interpretation of at least one of the operational scenarios is in apparent conflict with his Opinion.

As the CWTA letter states:

if the 3 June 2015 application of the Wireless Code is intended to reduce the length of all contracts to 24 months, than [sic] the three-year contracts signed between the release of this decision and 2 December 2013 are de facto two-year contracts, which would necessitate significant changes to carriers’ systems and contracts.

The CWTA letter asked for a speedy reply in order that parties’ rights to seek leave to appeal the Decision. Has the CRTC overstepped its authority?

The CRTC letter appears to be in conflict with the McCarthy’s Opinion; will we see an appeal filed with the Federal Court of Appeal?

My neighbour is putting in a pool. As I sit at my desk looking at the construction crew, I think back twenty-five years to a day that I went out for lunch with my office-mate from Bell Labs. We were envious of the road workers on the Garden State Parkway. They were outside on a beautiful spring day. At the end of a shift, construction workers get to see what they accomplished: a hole was dug; a half mile of road was paved; a pile of dirt got moved from one place to the next.

Compared to our office jobs, it looked kind of satisfying. We were planning network development – with features and capabilities that would need 5 years to implement. Some of the capabilities would never see the light of day. We wondered if we would ever get to celebrate the completion of our work. Still, we have objectives; we knew what we were trying to achieve.

The construction workers probably looked at Sam and I driving by, thinking that they envied our jobs: after all, we got to take off in our car for lunch; we had an air-conditioned office; we didn’t have to worry about rain interfering with our work schedule.

The grass is always greener?

Parliament has recessed and we are expecting another cabinet shuffle this summer, likely bringing another new face to head up Industry Canada. When Christian Paradis was appointed two years ago, we had been expecting the imminent release of a national digital strategy. That was understandably delayed until the new minister was able to get a grasp of the file. Two years later, Canada continues to drift aimlessly without any clarity on the objectives. As I wrote a few weeks ago, the absence of a clear strategy has led to us having inconsistent messages and somewhat predictable turmoil.

The objectives keep changing. If Canada had truly wanted a viable “fourth” player in wireless, then the AWS auction was structured in a way that worked against that objective. If a stong national new entrant was the objective, then the 40 MHz new entrant set aside should have been auctioned as a single tier one license. Foreign ownership should have been liberalized in advance. If the new entrant spectrum wasn’t supposed to fall into the hands of the incumbents, then the five year restriction should have been 10-years or longer. If the auction winners were supposed to forfeit their spectrum if they didn’t deploy, then this should have been a condition of license.

No clear strategy. No clear objectives. No scorecard for measuring progress.

The absence of a strategy isn’t just an issue for telecom services and the digital economy. Yesterday, in a new paper looking at “The Resurgence of Industrial Policy and What It Means for Canada“, the Institute for Research in Public Policy observed:

Like other countries, Canada is once again engaging actively and more openly in industrial policy. In fact, it has a profusion of industrial policies, what it lacks is a strategy.

What are we trying to accomplish? How do we measure success? As I said last week [here and here]:

Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.

The guys working in my neighbour’s yard know they are building a pool. They have an objective, with a timeline. The site supervisor can see how they are progressing toward their objective and make management decisions to keep the project on schedule.

How do we celebrate success in digital policy, if we aren’t clear about what we are trying to do?

I wrote a piece a couple weeks ago called “Inconsistent messages; predictable turmoil“.

In the piece, I said:

The lessons for Ottawa: Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.

Maybe the Industry Minister was thinking of Peter Drucker teachings (“you can’t manage what you can’t measure”) in coming up with his simple formula:

We will continually review the regulations and policies that apply to the wireless telecommunications sector to promote at least four wireless providers in every region of the country so that Canadian consumers benefit from competition.

Is that it? Four wireless providers in every region? On the surface, that seems pretty clear as a measurable objective.

But let’s parse the statement to have a little more clarity on what is meant.

What qualifies as a “wireless provider”? Is it brands, companies or networks? Do affiliates count? For example, are Fido and Rogers counted as one or two? Koodo and TELUS? Does President’s Choice count separately, or is it included with its underlying network provider. If so, why? If not, why not?

What is defined by “a region”? Is it a license area? Is there a reason to expect the service area to expand?

Keep in mind that in the 700 MHz licensing framework, the rural build-out requirement is a subset of the existing network HSPA footprint. There isn’t even an obligation imposed on winners of two blocks of 700 MHz spectrum is to cover their entire existing operating area – only 97% of the population within 7 years. There is no rural build obligation imposed on winners of a single block of 700 MHz spectrum.

Surely the Minister isn’t looking for 4 operators across the entire Canadian geography, when the 700 MHz spectrum auction doesn’t seek to expand wireless coverage at all. Consistency suggests that the objective may be for at least 4 wireless providers to be available for 97% of the current level of HSPA customers. Or for 97% of the total population currently covered by an HSPA network.

That should be a measurable number. What are the “pops” covered by various numbers of service providers?

For bonus points, let’s look at a little more detail. How do you determine success? For example, in Manitoba and Saskatchewan, the so-called Big 3 share about a third of the market, while the so-called new entrants, Sasktel and MTS have about two thirds of the customers. Does it make sense to reassess our definition of new-entrant? Is the presence of 6 network-based providers good or bad for sustainable competition? Such questions may be more a part of some associated subjective analysis.

Objectively, shouldn’t there be a dashboard to monitor success against the objective? As a nation, where are we green, yellow and red? How are we performing on a national and regional basis? What percentage of the population has access to 4 or more wireless providers? What percentage of population has no coverage?

This could be an interesting summer project for a group of student interns.

You can’t manage what you can’t measure. With the right tools, policies and decisions can be expected to include a measurable impact analysis. With each market intervention, shouldn’t we expect more people to be getting coverage by more providers? How will this decision help in the achievement of the policy objective?

Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.

Let’s start with the clarity in the objectives. Then we need to proceed – and proceed quickly – to start measuring how we are doing.