Comcast closed its transaction with General Electric, combining NBC Univeral with the largest cable TV provider in the United States. 

The transaction eclipses similar deals we have have seen in Canada – Shaw / Canwest or  BCE / CTV. The conditions set by the FCC and Justice Department may be instructive for what we will see emerging from the CRTC hearings opening today to review the BCE / CTV deal.

The primary conditions set by the FCC south of the border?

• Ensuring Reasonable Access to Comcast-NBCU Programming for Multichannel Distribution;
• Protecting the Development of Online Competition;
• Access to Comcast’s Distribution Systems;
• Protecting Diversity, Localism, Broadcast and Other Public Interest Concerns;
• Broadband Adoption and Deployment;
• Localism;
• Children’s Programming;
• Programming Diversity;
• Public, Educational and Governmental Programming.

NBC Universal brought more than broadcaster assets into Comcast; in Universal, the deal included one of the largest content production companies. As such, while there are similarities to the convergence deals in Canada, there are important distinctions between the US review and what the CRTC will need to consider.

On a Monday morning in the fall of 1988, a few of us at BNR-RTP were chatting about the previous day’s games. A co-worker said that football was a metaphor for life. And for the next few days, everything at work was related by him to gridiron terminology. Moving the yardsticks down the field, Hail Mary efforts, fumbling the ball, and so on.

Which brings me to today – less than a week until the big game. Ever since my son’s hero, John Elway, led the Broncos to back-to-back wins in 1998 and 1999, Super Bowl Sunday has been a special day in our household. I have my rituals – the chili gets started percolating at 6am, followed by cooking the wings and whipping up my dipping sauce (equal parts of mayo and various Louisiana-type hot sauces). It has been a ritual for 14 years now. Forget the diets for one day. And hope for weather that permits barbecuing.

If  football is a metaphor for life, then the Super Bowl may be a metaphor for Canadian communications policy and regulation. Let’s explore some examples.

The CRTC home page has the Super Bowl referenced at the top of its Consumer Information list. Why are the Canadian ads different? The game this Sunday brings out the ire of many over the issue of Simultaneous Substitution. This discussion can then cascade into the issues of intellectual property rights and overall health of the Canadian broadcast system.

After a beer or two, you can then discuss how concerns about Canadian broadcasting are impacting the liberalization of foreign direct investment in the telecom sector. And that opens up another set of arguments. Some will argue that if we only had more open borders, then the competitive landscape would be completely different. Some might stream a US signal over their internet connection – but then, how could you avoid talking about usage based billing? Or other complaints?

Add another beer and by half time, the talk will certain to turn to that famous wardrobe malfunction of Super Bowl XXXVIII. How would the Canadian Broadcast Standards Council respond to a similar complaint? Emboldened by that segue, can this year’s half time show compete with a discussion about Money for Nothing, the role of the CBSC and the CRTC direction for a national review?

I’m only getting started. Feel free to join in with your contributions. It’s pre-game week and football season is coming to an end. so for one day, ignore the impact on your cholesterol count while you eat and drink in moderation. Don’t miss the roasted salami appetizers! The commercials will be available on-line, without a big impact on your download caps.

Vaxination Informatique filed a cabinet appeal of Usage Based Billing [pdf], anchoring the appeal on Telecom Decision CRTC 2010-802, which was issued on October 28, 2010. It raises some procedural issues worth exploring.

Under Section 12(1) of the Telecom Act, a petition to the Governor-in-Council may be filed within 90 days of the decision:

Within one year after a decision by the Commission, the Governor in Council may, on petition in writing presented to the Governor in Council within ninety days after the decision, or on the Governor in Council’s own motion, by order, vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.

So the petition is on time for that Decision, however there is some question as to whether 2010-802 is the right decision to be appealed. The petition attaches a caption of “Usage-based billing for Gateway Access Service” to the decision on the cover of the document. In fact, the approval of Gateway Access Service occured with a May 6 Decision, 2010-255. The October Decision dealt primarily with the rates to be charged and the issue of whether all of the retail customers had to be charged on the basis of UBB prior to any wholesale customers.

Keep in mind that usage based billing was approved in 2009 in Telecom Decision 2009-658.

As set out by the dissenting opinion of Commissioner Molnar in the Decision last May, usage based pricing was already a rating concept that was firmly esptablished in Canada’s internet services market.

Vaxination’s cabinet appeal does not specify the relief being sought, there is no draft order proposed for approval. The closest I can find is the final paragraph of the Executive Summary, which says:

Therefore, The Commission must be told to rescind all decisions related to the TN7181 tariff an ensure that GAS and TPIA tariffs be reviewed to ensure they contain only aspects related to the nature of that service.

Under the law, Cabinet only has the power to rescind a CRTC decision withn 12 months of the original decision. For usage based billing to be eradicated, Cabinet has to act before May 6, just over 3 months from now. The problem is timing, and not just with the petition being filed too late. There needs to be a publication in the Canada Gazette and distribution to the parties who appeared before the CRTC in the original proceedings. Finally, the Minister has to notify the provinces prior to making a recommendation to cabinet. All that in the next 13 weeks if Decision 2010-255 is to be rescinded. Call me skeptical.

The way around this would have been to try to convince Cabinet to review the decision of its own motion. I wrote about that a little over a year ago in my discussion of the Globalive ownership process. In Processes and procedures, I wrote that there is not a lot of procedural definition for a Cabinet review of its motion. In an environment charged with the rhetoric of an election, this might have been a route worth pursuing, engaging legal and government relations assistance. Perhaps these would be beyond the financial means of Vaxination, but surely not Netflix, a company now worth $11B, that “worries” its business model is at risk in Canada.

If the welfare of Netflix Canada and the entire independent ISP community is being threatened by UBB, then it might have been worth someone investing a few dollars to get professional advice on how to put the best foot forward.

Like many Canadians, I may be over-insured. I have extended warranties on my car, I have maintenance agreements for my home appliances and heating. Last year, I bought an extended warranty for my computer when it was nearing the end of its first year.

At that time, my battery wouldn’t hold a charge and I was surprised to find that HP covered its replacement; many companies consider rechargeable batteries to be consumables. I rewarded HP’s support group with an extended maintenance agreement. 

Last week, the machine refused to start up. HP’s support centre diagnosed the problem in a matter of minutes, but warned me that the data on the hard drive might be wiped in the recovery process if it as more than the motherboard, so they advised getting a back-up before sending off the PC.

I did that, so as a result, I didn’t ship my notebook until Monday. The support centre estimated 7-10 days so I wasn’t expecting to see the computer come back until next week. I imagine that this would have allowed for the possibility of out-of-stock parts and it seemed reasonable. In fact, the computer was returned with a new motherboard 48 hours later and all of my files remained intact.

I love seeing companies exceed expectations. Especially when I am at the receiving end.

The CRTC has set the pricing for the usage sensitive component for wholesale internet service.

In Decision 2011-44, the Commission determined that smaller Internet Service Providers (ISPs) will get a 15% discount off the major carriers’ retail usage sensitive rates when the ISPs subscribe to telco gateway access services or cable third-party internet access.

In an interview yesterday, I said that I don’t think this means the end of smaller ISPs. The ISPs have had a lot of time to prepare for this decision, the last component needed to implement usage sensitive billing. The better ISPs have looked at ways to evolve their business model and network configuration.

UBB does not mean the end of flat rate internet, but to be successful, ISPs will have to know more about their customers and work hard to balance their customer mix. Internet service is joining the rest of telecommunications services that have both fixed and variable wholesale cost components.

Long distance prices may have come down dramatically, but there is still a marginal cost for every call you make. Still, there are a number of companies that offer flat rate plans, unlimited calling province-wide, nation-wide, North America or even to many countries overseas. How can they do this?

An all you can eat buffet owner has to balance their customer load; the restaurant needs to attract some patrons that don’t subscribe to the plate loading antics of the high school football players that are also regular customers. I wrote last week that ISPs need to know more about their customers and who they want to attract.

It may be counter-intuitive, but the result should be that consumers will see more differentiation between ISPs as they stake out their turf.