The tweet from Keith McIntosh at CWTA summed it up:

After 28 years, WSPs are no longer simply a customer of the phone companies.

He was referring to the CRTC decision that updates “Network interconnection for voice services”. In today’s decision, the last major telecom proceeding to be issued under the signature of Chairman Konrad von Finckenstein, the CRTC decided to treat wireless and wireline networks as peers:

Currently, independent wireless carriers are responsible for paying the entire cost of interconnection unless they allow alternative long-distance providers access to their networks. The Commission has decided that wireless carriers can interconnect with LECs for the exchange of local voice traffic on a shared‑cost basis (with the bill‑and‑keep compensation method)

This decision was made, despite the CRTC determining that it would not be in the public interest to impose equal access to alternative long distance. Prior to today’s decision, wireless companies that wanted to be treated as peers (for the purpose of sharing interconnection costs) needed to offer equal access, as well as directory listings and file details of all their service options with applicable prices and applicable service charges to the Commission.

The decision also addressed the technical aspects of evolution of interconnection circuits for competitive carriers. We’ll look at that in another post.

In many ways, today’s decision was a recognition by the Commission of the heightened level of competition present in today’s wireless space, contrary to the views of an Open Media campaign that seeks increased government intervention in the space.

In its upcoming policy for the auction of the 700 MHz band, it will be interesting to see if Industry Canada shares that view of the competitive landscape.

A reseller learned that the CRTC has powerful tools to ensure compliance with its orders.

In December, I wrote about the CRTC having threatened Brama Telecom with disconnection for failing to comply with the requirement to become a member of the Commissioner for Complaints for Telecommunications Services (CCTS) Inc.

According to the CRTC, the saga started 10 months ago, when the service provider failed to respond to letters from the CRTC. Subsequent discussions failed to produce fruit and so in August, the Commission ordered Brama to produce:

• proof that it had become a member of the CCTS or arguments demonstrating that Brama does not provide services within the scope of the CCTS’s mandate; and
• identification of the service providers from which Brama obtained service from as well as a list of the services provided to it.

It still did not comply so the CRTC took the extreme step of ordered the company to appear before it on March 22, 2012. In addition, all service providers in Canada were told to check their records to see if they are providing any services to Brama and if so, describe the services to the CRTC.

Whether it was the threat to its business continuity – or perhaps simply being summoned to Ottawa in late March – Brama has acceded to the requirement to join the CCTS. As such, the CRTC has terminated its proceeding. Return to DefCon 4.

Registrations are now open for The 2012 Canadian Telecom Summit, taking place June 4-6 in Toronto. The theme this year is Competition and Innovation: Celebrating our Legacy, Developing the Future.

Join your colleagues in listening to and participating in executive presentations from those who have the greatest influence on the direction of Canadian telecommunications, broadcasting and information technology. Hear from global leaders and local trend-setters. Meet with your suppliers, customers and partners. Challenge your competition.

For three full days, The 2012 Canadian Telecom Summit will again deliver thought-provoking insights from the prime movers of the industry. The Canadian Telecom Summit gives you the chance to hear from and talk with them in both a structured atmosphere of frank discussion and high-octane idea exchange and schmooze in a more relaxed social setting of genial conversation over espresso or cocktails.

The Canadian Telecom Summit reviews where we have been as an industry, provides an understanding of the dynamics that propel it and forecasts future trends & expected developments.

Now celebrating its tenth anniversary, attendance is a must for telecom, broadcast and IT industry professionals – corporate users, carriers, content providers and manufacturers – financial analysts, consultants and investors. Attracting the senior-most professionals from around the globe, The Canadian Telecom Summit is the forum for the broad cross-section of stakeholders to meet, exchange views, share ideas, challenge assumptions and plan for the future.

Be sure to take advantage of early bird pricing by completing your registration before February 29.

Why do we still have a regulatory differentiation between business and residential users on a wholesale level?

I understand the retail purposes for market segmentation and to help with cross subsidization. But it seems to me that mandated access to wholesale services should be more cost based. The CRTC agreed. In the case of business services, the CRTC said:

The Commission has decided that the flat rate tariff structure for wholesale business high-speed access services remains appropriate. The Commission has also decided that rates for these services should be based on the incumbent local exchange carriers’ (ILECs) incremental costs of providing the services plus an appropriate markup.

And for residential services, the Commission said:

The Commission has also decided that rates for either model should be based on each of the individual large cable and telephone companies’ costs to provide the service plus a reasonable markup, and further, that these markups be comparable for all cable and telephone companies.

So if these rates are cost based, and if the commission got those rates right, why is it a problem if wholesale ISPs route residential traffic over a business tariff? If the tariffs are costed properly, then it shouldn’t be a problem – costs are being recovered.

Filings associated with wholesale internet services leave me believing that the artificial segmentation for wholesale purposes should be abandoned.

In the case of wholesale internet access, Bell is concerned that the tariffs may have incentives for competitors to “circumvent Capacity Based Billing charges by diverting residential traffic onto a business interface.” In other words, the CRTC regime for wholesale has somehow made it less expensive to carry business traffic than residential. Does that strike anyone else as bizarre?

If the tariffs were actually cost based with the correct driving variables, then it shouldn’t matter what the source of the traffic is on a retail level.

There are small businesses that operate from homes; there are large businesses with very low use compared to some power residential users. The need to segregate business and residential users and guard against ISPs “gaming” the system by putting residences into the business traffic mix should be telling the regulators that their decision needs to be revisited.

Something is wrong with the wholesale regime.

It started with a report in the New York Times, citing a study from Arieso, saying that “Top 1% of Mobile Users Consume Half of World’s Bandwidth“:

The world’s congested mobile airwaves are being divided in a lopsided manner, with 1 percent of consumers generating half of all traffic. The top 10 percent of users, meanwhile, are consuming 90 percent of wireless bandwidth.

The Times article had another tidbit in it:

Arieso researchers, in their latest survey, found that users of Apple’s iPhone 4S downloaded 276 percent more data from an operator’s network than did people with the Apple 3G, which has been on the market since June 2008.

Arieso said that part of the reason for the increase in download volumes may be Apple’s Siri voice feature on the iPhone 4S which allows consumers to dictate to the phone and enter more text and data into the network in an easier way.

Other news outlets picked up the story and lost all perspective. The Globe carried a Reuters story titled “iPhone 4S devours data twice as fast as previous model“. Let’s overlook the mathematical incorrectness of the headline (“twice as fast” would have meant only 100% more data, not the 276% – or nearly 4 times as much). The Financial Post carried a Bloomberg story proclaiming in its headline “Siri doubles iPhone data usage“.

The Globe/Reuters story more accurately hints at user consumption patterns, rather than the device itself, but it doesn’t do much more than recite raw data:

IPhone 4S users transfer on average three times more data than users of the older iPhone 3G model which was used as the benchmark in a study by telecom network technology firm Arieso.

Data usage of the previous model, the iPhone 4, was only 1.6 times higher than the iPhone 3G, while iPad 2 tablets consumed 2.5 times more data than the iPhone 3G, the study showed.

It is possible – and more likely – that the data is demonstrating important market information: that the heaviest users of mobile data are the ones most likely to own the latest devices. It isn’t the device that is “devouring” data; it is power users that own the devices. These are the early adopters – the people who line-up to buy the latest device on launch day.

That was what I found most interesting, with important implications for consumer marketing and network development strategists.