The Economist had an article about the court ruling on the Globalive – Wind Mobile case entitled “Three is the magic number,” claiming that Canada’s big three incumbents, “fearful of losing their monopoly—and fat profit margins” are “using their formidable resources to uphold the letter of the law.”

The article should cause Canadians to pause and reflect. In the eyes of The Economist, our courts are a sham.

There is a paragraph that implies our courts are susceptible to lobbying, rather than act based on the evidence set in front of them.

Because Orascom, an Egyptian company, owns 65% of its shares, the court concluded that it breaks antiquated foreign-ownership rules requiring all operators to be Canadian-controlled.

The ruling came after intense lobbying by Canada’s “big three” operators, Bell Canada, Rogers Communications and Telus.

Regardless of your views on the case, on the ownership rules, on mobile competition, do any of us really believe that the court ruling came after intense lobbying by the big three? In fact, wasn’t it intense lobbying by Globalive that led to Cabinet overturning the CRTC? So much for the effectiveness of any lobbying by the incumbents!

The article is filled with so many flaws, such as wireless penetration rates, not the least of which is its conclusion:

The big three, fearful of losing their monopoly—and fat profit margins—don’t see it that way.They are using their formidable resources to uphold the letter of the law. That may yet backfire. Some are suggesting that Mr Clement simply amend the Telecommunications Act, rendering their objections worthless.

I always get a kick out of the Yogi Berra-esque use of the term “monopoly” in describing our market structure. I thought a magazine called “The Economist” would be staffed by writers who are more careful when using economics terminology.  In any case, at least some of the incumbents have asked for the amendments to The Telecom Act, so it is hard to see how any lobbying on the matter would be worthless. As for upholding the letter of the law, I think that is what most of us would want of our court system, not having one industry participant being granted favours outside the law.

It is an unsigned piece – which means it is either an official perspective of the editors at The Economist, or perhaps the author was just too embarrassed to admit it.

 

A number of government funded research networks operate in Canada, under the supervision of  non-profit, independent boards, such as CANARIE and ORION. As we approach budget time for governments across Canada, serious questions should be asked about whether increased public benefits can be derived from our national and regional research networks.

These fibre-based networks provide communications capabilities for virtually all of Canada’s universities, many school boards hospitals and private sector research institutions [see ORION’s “Who’s connected” page for a sample listing]. Are these projects doing enough to help promote the roll-out of advanced networking to Canadians?

I often wonder if the private network approach is the best way to stimulate increased backbone capacity throughout Canada. If these research network requirements were embedded within multi-carrier commercial networks, why couldn’t the same technical capabilities be possible? Could such an architecture accelerate the commercialization of new networking technologies and the delivery of higher speed services to more Canadians? Would the public funding requirements be the same or less? Would the research facilities requirements help justify increased investment by the commercial carriers in more remote communities?

Does the migration of major “anchor tenants” to the private research networks in smaller locales handicap the rest of the community by reducing some of the financial incentive for investment by commercial internet service providers? Universities, hospitals, school boards, municipal institutions can (and should) purchase their communications strategically to advance policy objectives for the benefit of their local stakeholders.

Almost all of the keynote speakers have now been confirmed for The 2011 Canadian Telecom Summit. Virtually all of the major service providers and suppliers will be participating again this year and there should be lots of interesting issues to review. A highlight last year was the open conversation with CRTC Chair Konrad von Finckenstein – and we look forward to his return this year.

The 2011 Canadian Telecom Summit features cutting-edge topics for its panel discussions. This year, in addition to our always popular Regulatory Blockbuster panel, we are featuring sessions devoted to LTE: The future of mobile; Connecting Canadians: Delivering broadband to all; Wireless Broadband: Our insatiable thirst for spectrum; Privacy & Security: Guarding information in a transparent world; Unified Communications: The evolving future of business; Evolution of Consumer Communications: Compete or collaborate; Tablets, TVs and Smartphones, Oh My!: The explosion of the multiscreen universe; and, Cloud Computing. With so much public attention is focused on telecommunications issues, no other event is quite like The 2011 Canadian Telecom Summit in covering the industry from every angle.

Government policy and regulation is always brought to life at The 2011 Canadian Telecom Summit. At last year’s event, Minister Tony Clement launched the consultation into liberalization of foreign direct investment in the sector. What has been the impact of a year of uncertainty in the capital markets? Submissions for the 700 MHz consultation will have just concluded, and the whole area of usage based billing and wholesale access for high speed services should continue to figure prominently.

Early Bird registration for ends on Monday. You can save more than $200 by registering now! Download the latest version of our brochure here.

PwC’s Vision to Reality awards program celebrates Canada’s most successful technology companies. Its Innovator of the Year Award seeks to acknowledge the company that has best demonstrated the commercialization of an innovative technology solution.

The program shines a spotlight on companies that have made a difference in Canada by “having the courage to expose their visions, and then turn them into the reality of revenues, profit and benefits to the industry.”

Nominations are open between now and March 31. More information is available on the Vision to Reality website.

PwC is a premier sponsor of The Canadian Telecom Summit. For many years, PwC has provided an on-site business centre, facilitating meetings and productivity for delegates at our premier industry conference. We have appreciated the support of PwC for our event. Programs such as Vision to Reality exemplify the kind of support that we have seen provided by PwC to companies of all sizes in the innovation sector.

I hope you will take the time to nominate a Canadian firm deserving  recognition.

Last week, the CRTC called for comments on whether it should expand the scope of its Review of Usage Based Billing (more formally known as: Telecom Notice of Consultation CRTC 2011-77: Review of billing practices for wholesale residential high-speed access services).

The “scope letter” asked for comments to be filed by yesterday, in effect creating a proceeding within a proceeding. For my readers that are new to regulatory proceedings (and who are taking their legal training from US law shows on TV), you can think of this as a part of the preliminary motions.

A lot of submissions were received – many were not circulated to the parties per the instructions. As an interested party, I received the materials from the major players and have made many of them available here:

• TELUS
• Union des Consommateurs
• Allstream
• Vaxination Informatique
• BC Broadband
• Cable carriers (Cogeco, Rogers, Eastlink, Quebecor, Shaw)
• Sasktel
• Bell / Bell Aliant
• Mark Rubenstein
• Netflix
• CAIP

There may be others that were not served to all parties, or that arrived late last night. In today’s blog post, I won’t even begin to scratch the surface in reviewing these submissions.

As the CRTC’s letter indicated:

The Commission is in receipt of a letter dated 10 February 2011 from the Public Interest Advocacy Centre (PIAC) on its own behalf and as counsel to the Consumers’ Association of Canada (CAC) requesting that the Commission expand the scope of the proceeding to consider the utility of usage-based billing as an Internet Traffic Management Practice for all retail customers. PIAC and CAC further requested the removal of the first subparagraph (i) of paragraph 12 and subparagraph (ii) of paragraph 13 of the Notice of Consultation.

The Commission is also in receipt of a letter dated 11 February 2011 from the CanadianNetwork Operators Consortium (CNOC) requesting that the Commission expand the scope of the proceeding to include a review of the regulatory framework for wholesale high-speed access services. CNOC also requested the Commission to establish online consultations and an oral public hearing as part of this proceeding at the outset as well as other modifications to the structure of the proceeding.

My regular readers are aware that I found the phrasing of the original objectives to be off. I characterized it as a potential typo. However, I was somewhat surprised that PIAC sought to remove the offending paragraph, because it may have opened the door for the proceeding to look at retail pricing. The problematic paragraph is 12(i)(a) in the Notice of Consultation:

a.       As a general rule, ordinary consumers served by Small ISPs should not have to fund the bandwidth used by the heaviest retail Internet service consumers.

I wonder if it may have been a tactical error for PIAC to have raised the question of removing the offending paragraph, while asking for the scope to be expanded to include retail. On those lawyer TV shows, I thought the senior partner says that you don’t ask a question unless you are ready for the answer. Would retail have arguably been fair game based on the wording of 12(i)(a)? Is PIAC now giving the CRTC an opportunity to slam the door closed on extraneous references to retail at the outset?

BC Broadband was rightly pragmatic in its comments: expanding the scope will ultimately lead to delays which inhibits the implementation of Speed Matching:

The BCBA is extremely concerned that expanding the scope of 2011-77 may further delay theimplementation of speed matching opportunities at reasonable wholesale pricing.

Remember, usage based billing was the pricing mechanism associated with introduction of higher speed wholesale access. It is somewhat surprising that CAIP and other associations representing alternate ISPs didn’t ask for the CRTC to lift its stay and instead make the rates interim in order to allow them to be corrected retroactively and permit access to higher speed access services.

I remain convinced that the outcome of the review needs to ensure that all ISPs have the flexibility to structure their pricing as they choose. Despite the rhetoric, there is a vibrant marketplace for internet services in this country and, once the wholesale rate structure is fixed, alternate ISPs will be able to structure unlimited plans, should they choose.

As the cable companies highlighted, this is consistent with Minister Clement’s statements on February 5 on CBC Radio:

Well I guess our approach as a government is that we should allow different Internet service providers to offer different packages to customers and then customers get to choose which one best suits their lifestyle.…

So, I guess my answer is, to Bell: If you want to pursue user-based billing, go right ahead.  And if your customers want to pay for that because they like Bell services, that’s fine

As I wrote yesterday, “Consumers benefit from having a wide array of choices in the market – choice of service providers and choice in pricing models.”