Maybe I am too much of a glass half full kind of guy. I disagree with the way some have spun the legal battle between Bell and Rogers over internet speed claims, which is hardly settled. [So far, we have just had a ruling on an interim injunction.]

I see the case as evidence that the state of competition in Canada’s communications industry is not the cosy, managed marketplace that some like to suggest.

While this $50M lawsuit is over competition for internet speeds, it is interesting that one of the precedents cited by the judge [in determining whether there is irreparable harm] was a 2006 case between TELUS and Rogers.

Competing on services, quality and features are attributes of a working competitive market. Pushing the envelop on competing claims sounds like more intense competition than some might have you believe. Truth in advertising is essential; regulatory intervention in a competitive market is not.

Yesterday, the OECD released a new study of mobile pricing and the CBC interpreted it with a leadoff paragraph saying

The average Canadian cellphone user is paying among the highest bills in the developed world, according to a new international study.

Actually, the OECD study said nothing of the sort.

What the OECD study said was that in their mythical world, if the average Canadian used their mobile phone the way they constructed an average handset user, we would be paying rates that are higher than most European countries, but less than Americans. The OECD service definitions should cause serious researchers to laugh.

There are so many problems with the OECD study that I am troubled with where to begin. To start with, the OECD defines a light user as someone who uses their phone for one minute a day (30 minutes a month) and sends a text a day, plus an extra one each week. In OECD-land, a medium user is someone with 65 minutes per month and 12 texts per week while a heavy user is 140 minutes per month and 55 texts per month. The OECD says our heavy users pay about $42 per month.

Well guess what Canada, our average users are actually using way more than double the OECD model of heavy users. According to Rogers recent financials, their average monthly minutes of use was 604 – more than 4 times the OECD heavy user. Bell and TELUS average customers weren’t as high but were still well off the charts by OECD standards (316 and 402, respectively).

Of course an explanation for these numbers also reveals the most significant flaw in interpreting the OECD figures. The OECD doesn’t look at users costs, they look at phone costs. And since so many European users have more than one phone, the average European user is paying more than one bill. When you normalize the data to consider those supernormal penetration rates, suddenly you start to understand what is really going on.

If you have penetration rates of more than 150%, who do you think is paying the bill for the extra phones?

I won’t even get into the fact that outside of Canada and the US, it costs the caller an outrageous premium to call a mobile handset. Those costs, incurred by the caller, were ignored by the OECD. I’d call that a cost of mobile.

Oops.

Of course, in depth analysis won’t produce as eye catching a headline.

I have noticed a couple new blogs this summer that I have started to follow.

Jeff Wiener of Digitcom started The Telecom Blog in May and he has some interesting perspectives as the head of a company focussed on customer network implementation.

I also enjoy reading Michael Hennessy’s too infrequent rants [and his Dylanesque references] on When Dogs Ran Free.

Check out their sites; I am happy to hear about other voices with fresh and diverse thoughts.

Random thought for the day: I noticed that some of the people who want more legislation for internet regulation are the same ones who are saying that we have sufficient laws for copyright – that there is no evidence that the current laws don’t offer enough protection. Just saying.

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Update [August 11, 7:30 pm]
I was correctly advised this evening that my aside comment should have distinguished between the issue of counterfeiting and copyright. The link points to a story that specifically deals with counterfeiting, shut down using trademark and copyright law.

When I watched the Industry Committee meeting on Friday, I was struck by what appeared to be a lack of understanding of basic accounting by some of the Members of Parliament. I suppose I shouldn’t have been surprised; let’s call it disappointment.

Of note was the apparent inability to reconcile the “$149M book value” of the Nortel wireless business unit with the substantially higher amount ($1.13B) being paid by Ericsson. These numbers are important, because the foreign investment review rules kick into play if the book value of the asset being acquired exceeds $312M.

Considering that this business unit is basically a group of knowledge workers, it isn’t really surprising to have such a discrepancy between the book value and the market value.

What would make up the book value? Depreciated computers and office equipment, some lab equipment, inventory, some cash, accounts receivable? The total value of the employees and the utility of their collective knowledge would not likely be reflected on the books – we outlawed ownership of staff about 175 years ago.

I found that part of the meeting troubling.

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Update [August 10, 10:00 am]
Mike Z. has stepped down from Nortel and Nortel’s board has been reduced from 9 people to 3.

A story on the front page of the Wall Street Journal caught my eye yesterday. It talks about the concerns that coffee shops are having about their internet access policies.

Many people set up temporary offices in places with public WiFi access and use the real estate for hours at a time for the cost of a cup of coffee.

I remember a decade ago advising a property management company on the risks associated with enabling free WiFi in their food court – a space that already had challenges providing sufficient seating. How would the business model work? It isn’t the communications link that is expensive; the issue is the opportunity cost of a table that isn’t generating revenue.

Is this the start of a serious trend to inhibit free access?

In the meantime, find a way to compensate the owners for use of their space – buy an extra sandwich or muffin and give it to that homeless person you passed on the way in.