The myth of regional monopolies

TELUSAn oft-repeated myth is that Canada’s industry is characterized by players that keep to their home turf. A press release caught my eye this morning that contradicts that view.

TELUS has teamed up with the IWK Health Care centre in Halifax to deliver a specialized portfolio of solutions to break down the walls that separate hospitalized kids from friends and family.

Created by Kids’ Health Links Foundation, Upopolis.com provides the best features of social networking for young patients who often feel disconnected when they’re in the hospital.

Kid’s Health Links and TELUS launched the program in 2007 at McMaster Children’s Hospital in Hamilton, Ontario. Since then, it continues to expand to hospitals across Canada, including B.C. Children’s Hospital and the Children’s Hospital of Eastern Ontario.

Of significance is the evidence of TELUS’ active presence in eastern Canada – Bell and Bell Aliant territory – with the service in Ottawa at CHEO and in Hamilton at Mac. TELUS has chalked up a number of significant wins in the public and financial sector.

The battle goes both ways: just look at Bell’s Olympian efforts to equip the Vancouver winter games and delivering Alberta’s Supernet.

Consumers benefit from this level of competition as well. Choice between phone companies, cable companies and various fibre owners enable the smarter smaller operators to leverage competitive wholesale arrangements for delivery of customer solutions.

More on the Harvard study

BerkmanI have to believe that some of the more vocal critics of the Canadian broadband scene know that the data is biased, but have avoided acknowledging the problems.

Suzanne Blackwell has detailed some econometric concerns with the recent Harvard study [ pdf, 2.92MB]. In a number of cases, the study recognized problems with the OECD data and tried to modify the results.

While the steps taken to improve the pricing data were helpful, it is curious why the Berkman Center decided to create its overall ranking on price based on both the OECD price observations and a combination of the OECD and its own updated and expanded data. The latter would, for the most part, encompass the former observations so there is no reason to use both.

Suzanne notes that the Harvard study ignored high speed service data that it had available for Canada (recall, it showed that information in one of its figures), Canada was again artificially pushed lower in the rankings.

The Harvard study is marked “Draft”. Will the authors acknowledge these and other obvious errors and issue a revision?

Focus on adoption

Lagging or LeadingThe release of our report [ pdf, 944KB] was greeted by the popular media with an interesting reception.

We have provided a Canadian interpretation of the body of studies regarding broadband services. Many folks, despite evidence to the contrary, seem averse to any consideration that studies issued by reputable foreign institutions could contain errors.

Some criticisms of our report seem to reflect naivete, ignorance of econometrics or a lack of real world experience. I was struck especially by comments that ridicule the role of satellite in completing the job of providing universal access to broadband in our country – together with most nations. If Australia’s NBN can’t reach more than 90% of its population with wireline facilities, despite plans to spend more than $40B over the next 8 years, exactly what policy will do better in Canada?

Is satellite a perfect substitute for terrestrial solutions? No. But, it is unrealistic to expect any other technology to be able to serve the minority of Canadians who live in areas with low household density. Would armchair critics prefer to have rural Canadians wait indefinitely for fibre to the farm, rather than improve their accessibility through next generation satellite?

The current federal broadband program recognizes this reality:

The Broadband Program will be technology neutral, accepting a variety of wireline and wireless technology solutions, such as fibre, digital subscriber line (DSL), cable and wireless networks (ground based and satellite).

Canadian ISPs aren’t done; there is an ongoing need for more investment, to continue to compete to attract more customers and increase the service levels to those already on-line. Facilities-based competition isn’t just the domain of cable companies and telcos; there are hundreds of entrepreneurs with regional and national networks, competing with all forms of infrastructure.

The report indicates that service providers are already investing about $8B-$10B per year on their networks and there is no indication that this is coming to an end. That is a lot of money – about $50 per month per Canadian household in capital expenditures.

Broadband adoption has two components: supply and demand. Among the recommendations in our report were two suggestions to support each of these factors.

On the supply side, we have recommended that the government should continue to encourage private sector investment in infrastructure:

  • Continue policies focused on fostering facilities-based competition
  • Build on the past success of private sector investment by removing current policy and regulatory uncertainty regarding investments in next-generation networks

And on the demand side, an area generally overlooked by policy makers, we suggested that research is needed:

  • Shift more attention to adoption issues (including adoption of next-generation services) and encourage socio-economic research focused on better understanding the obstacles to, and inhibitors of, broadband adoption
  • Consider programmes to improve digital literacy and the use of incentives (tax-based or otherwise) to target and overcome any barriers to broadband adoption

Supporting programmes to increase demand and overcome barriers to broadband adoption are a competitively neutral approach to get more Canadians on-line.

What do you think we need to do to improve Canada’s broadband adoption rates.

AT&T says Google Voice not neutral

AT&T Google VoiceAT&T; has turned up the volume on Google Voice in a filing with the FCC.

At issue is Google’s decision to block calls that are routed to certain rural areas with higher than average termination costs.

Google questions regulating its service – a web application – the same as traditional phone services, but AT&T;’s letter claims that at the end of the day, Google Voice is routing PSTN to PSTN calls.

AT&T; calls Google’s behaviour – actions by one of the leading advocates for net neutrality – hypocritical:

Google’s double-standard for “openness” – where Google does what it wants while other providers are subject to Commission regulations – is plainly inconsistent with the goal of preserving a “free and open” Internet ecosystem.

The AT&T; letter raises interesting questions of how far open access regulation should go.

Google’s call blocking begs an even more important question that the Commission must consider as it evaluates whether to adopt rules regarding Internet openness. If the Commission is going to be a “smart cop on the beat preserving a free and open Internet,” then shouldn’t its “beat” necessarily cover the entire Internet neighborhood, including Google? Indeed, if the Commission cannot stop Google from blocking disfavored telephone calls as Google contends, then how could the Commission ever stop Google from also blocking disfavored websites from appearing in the results of its search engine; or prohibit Google from blocking access to applications that compete with its own email, text messaging, cloud computing and other services; or otherwise prevent Google from abusing the gatekeeper control it wields over the Internet?

While these are hypothetical cases being raised, so are most of the concerns behind the additional rules being sought by those advocating special net neutrality legislation.

Is AT&T; using a reductio ad absurdum argument against Google as part of its net neutrality campaign?

How far would open access regulation extend?

A fair and full review

BerkmanLast week’s release of our report [pdf, 944KB] on the state of broadband services in Canada has led to some interesting dialogue. As an aside, let me state that I was willing to tolerate some of the more juvenile name-calling in engaging some critics on Broadband Reports, but yesterday’s use of Nazi metaphors crossed a line, making it very clear that my participation was not welcome.

I hope to be able to deal more completely with yesterday’s release of a study [pdf, 2.92MB] from Harvard’s Berkman Center for Internet & Society in a later posting.

That study was commissioned by the FCC in July with the following terms of reference:

The Berkman Center for Internet & Society at Harvard University will conduct an independent expert review of existing literature and studies about broadband deployment and usage throughout the world. This project will help inform the FCC’s efforts in developing the National Broadband Plan.

The report will be the subject of comments to the FCC over the next few months, helping to inform the FCC’s National Broadband Plan.

Preliminary examination seems to indicate that many of the Harvard rankings appear to incorporate the same problematic data points from reports and measurement tools that we have already discussed, but I will reserve commentary until I have an opportunity for a more complete review of the 232 page report.

I noticed that the Harvard report speaks of the benefits of examining high rankings in one metric versus a lower than expected ranking under another metric.

Keeping an eye out for these kinds of discrepancies allows us to identify false “successes” and false “failures,” or be more precise about what aspects of a country’s performance are worth learning for adoption, and which are worth learning for avoidance.

I agree that looking at such discrepancies are important, for these reasons, as well as to help detect errors in the data itself.

It was precisely such discrepancies that helped us immediately detect the errors in OECD’s use of arbitrary advertised price and speed data.

It is not clear why the Harvard researchers did not explore their own discrepancies, such as its statement on page 111:

[Canada] does not appear in the rankings for prices of very high speeds, because there were no offerings of service speeds of 35Mbps or higher in Canada in September of 2008.

Contrast this with Videotron’s 50Mbps service showing up 3 pages later in the chart on page 114. Had such flaws been detected in their data, would the same conclusions have been drawn about Canada’s regulatory framework?

It isn’t as though the researchers accepted the OECD data as delivered. Other obvious errors in the OECD data were detected and results were massaged to account for them, such as Slovak Republic reporting of FTTH on page 55. Considering the report was commissioned just 3 months ago, the task of scrubbing the data may have been too daunting.

The most rapid commentaries on the FCC-commissioned study came from folks eager to see how Canadian’s measured up. Like checking out the pictures without reading the articles.

Who will give this latest report a fair and full review from a Canadian perspective?

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