While the OECD continues to respond to criticisms of its flawed wireless methodology, few people have addressed the failure to include the cost of incoming minutes on most mobile plans.

Let’s step back a second. In North America, our mobile services work on the basis of Mobile Party Pays: incoming and outgoing calls are paid for by the user with the mobile handset. In most of the rest of the world, the Calling Party Pays: incoming calls are free for the mobile user, but the person who placed the call pays an often outrageous fee per minute.

The OECD study ignores this important point. When commenting on my posting from last week, an OECD researcher wrote:

Users in other countries don’t pay for incoming minutes as Canadian and US users do.

Why does the OECD ignore the cost of these incoming minutes – incoming minutes aren’t free; the cost to the caller is relevant.

Our mainstream media failed to apply a critical eye on this story.

For a US perspective on the report, check out PwC’s Communications Direct News.

Globalive filed its responses to the CRTC in respect of its ownership review and sent heavily redacted copies to interested parties in the proceeding.

It wasn’t surprising that the company would try to maintain confidentiality over much of the information. However, the transmittal email contained language that was unusual.

Most of the time, when I receive copies of a submission, the body of the email will say something like “the attached material was filed today with the CRTC…”

Globalive filed its responses in 6 packages of 2MB each, with a lengthy legalistic cover message on each email. The message had 3 sections:

• the first was a more formal version of “here’s the stuff and some of it is subject to confidentiality claims”;
• the third was an explanation of why there are 6 separate 2MB emails;
• the middle section has a copyright claim that I haven’t seen before.

2. YOUR RIGHT TO USE THESE DOCUMENTS

These documents are provided to you to fulfill a CRTC requirement. Copyright in many of these documents is held by Globalive companies or its investors. Copyright in certain others is held by third parties.

They are provided to you for a direct, limited purpose — so that you may improve the evidentiary record of the proceeding initiated by TNC 2009-429. No one has granted you any right to store or reproduce them for any other purpose. No one has authorized you to store them for longer than is necessary to fulfill this purpose.

The copyright owners will reserve the right to vigorously pursue any unauthorized and, therefore, illegal use of these documents. If you feel that you are authorized to use any of these documents in any way that exceeds the use described above, or wish to use those in which Globalive or its investors holds rights for some other purpose, contact us at the e-mail address above.

Now, I’ll let the lawyers out there determine what all this means. Does “any unauthorized” really translate to “therefore, illegal”?

In any case, I found it interesting that the copyright claim appears in the email, but not in the body of the attachments.

In a day or so, all the attachments will be available on the CRTC website, without the email message. I don’t know how someone downloading the material from the CRTC’s website is supposed to know that Globalive’s lawyers consider it to be illegal to store the material just for your own reference purposes.

Keep in mind that the CRTC set out in the original Public Notice [right in paragraph 2] that the reason Globalive is going through this process was to help others understand the structure to use as a precedent for other corporate arrangements:

The Commission determined that a Type 4 review would be conducted where an ownership and governance structure is of a complex or novel nature, such that in the Commission’s view its determination would hold precedential value to industry players and the general public, …

As such, it is unclear that Globalive can really limit the purpose of the document retention or how the material.

Comments?

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Update [August 14, 12:30 pm]
Blake’s has filed a letter with McCarthy’s [counsel to Globalive] saying “We intend to respect any copyrights that your clients, or any other party in this proceeding, may assert. However please me advised that we will not be governed by any other restrictions which your letter purports to impose which are beyond the restrictions established under Canadian law”.

A recent report out of Merrill Lynch – Bank of America says that Canadian mobile data pricing is fully competitive with the US.” Its July 27 report notes that all Canadian carriers are offering $15 unlimited email plans, while none of the Tier 1 carriers in the US have such low prices available.

We find that Canadian pricing is reasonably competitive with US pricing at the middle and upper price points – and more attractive for BlackBerry service and for light users. In the next few quarters, we believe that Canada will have an unmatched combination of data network quality, breadth and competitiveness, following the launch of the TELUS/Bell HSPA network.

The report also says that coverage, bandwidth and network performance are generally better in Canada, arguing that that today, Rogers’ 7.2Mbps HSPA network is North America’s best.

The Merrill Lynch report concludes that as a result of the new competitive entrants and continued investment by incumbents, Canada should have an unmatched combination of data network quality, breadth and competitiveness.

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.