A regular reader and I corresponded this week and he shared some interesting thoughts related to the announcement this past weekend for the government to invest $500M over the next 5 years in rural broadband. We were also looking at the article in Tuesday’s Globe and Mail about Rural Broadband? A chicken-egg question.

What kind of capacity is reasonable for our tax dollars to subsidize? I would love to have unlimited broadband, but I would also like to see an emergency room doctor in less than 4 hours.

The Telecom Policy Review Panel described a program called U-CAN, the Ubiquitous Canadian Access Network that had two fundamental guidelines: funding based on a competitive bid process and on the basis of least cost.

Recommendation 8-13: The U-CAN program should provide subsidies to broadband network providers by means of least-cost subsidy auctions.
Recommendation 8-14: Auctions should be run for large service areas at a time, in order to increase efficiencies of service provision. These service areas should be designated in consultation with provincial or territorial governments, after assessing current and planned coverage of existing broadband network operators.

By definition, the projects that are seeking government funding are unable to produce a reasonable rate of return. As CAIP president Tom Copeland says in the Globe article:

Phone, cable and, in some cases, local hydro companies will run broadband cable wherever there are enough users to achieve an acceptable return on investment.

So how do we decide how much capacity to engineer for communities that don’t meet this test? Today, they can only access broadband over satellite connections.

It would seem that rural networks are likely to encounter more capacity limitations than those in urban centres, given the more limited (and more costly) access to internet backbone facilities in remote regions. As such, rural networks are even more at risk of having capacity exhausted by heavy users. Do we apply network management controls to ensure that the capacity is fairly distributed among all of the users in these communities?

Given the economics of rural networks it is not an acceptable answer to say that the network operator will simply have to build much larger capacity to meet the demands of all users, since this will require even more of a government subsidy.

Government funding is finite. The more government money that goes into building extra capacity, the fewer communities that can be subsidized. So it would seem to be a matter of public policy for us to agree on what should be reasonable capacity – “reasonable” being defined as something less than “unlimited”, in order to maximize the number of Canadians that can get access to any form of terrestrial broadband subsidy.

Once we have crossed over to agreement on that point, it seems that we would then have to agree on how to ensure that a few heavy users in a subsidized community should not be able to exhaust the limited resources to the detriment of the rest of the community.

As my reader wrote:

If network operators have no choice but to apply some “reasonable network management” tools to ensure that all their users have a fair chance to use the network (which the community and the public have funded for them), doesn’t that mean we not debating whether to control bandwidth-heavy usage at peak hours but rather how to do it fairly for all users, large and small?

By the end of this month, the CRTC is expected to release its decision on CAIP’s complaint about Bell Canada’s network management practices on wholesale internet.

We’ll watch to see if the CRTC launches a public notice to examine the practice by all ISPs when it releases its determination.

The CRTC has officially launched its proceeding to examining broadcasting and new media.

In effect, the proceeding is looking at how Canada’s broadcasting system is affected by new delivery mechanisms, such as the internet and point-to-point transfers to mobile devices, as contrasted with over-the-air and cable.

The Commission is focusing on responses to six main themes:

1. Defining broadcasting in new media
2. The significance of broadcasting in new media and its impact on the Canadian broadcasting system
3. Are incentives or regulatory measures necessary or desirable for the creation and promotion of Canadian broadcasting content in new media?
4. Are there issues concerning access to broadcasting content in new media?
5. Other broadcasting or public policy objectives
6. The appropriateness of the new media exemption orders

The CRTC has a New Media website. There are a couple of research studies that were commissioned by the CRTC that can be found there: Changing Channels, that I referred to in a blog post last August, and TV or Not TV, Three Screens, One Regulation, prepared by Eli Noam of Columbia University.

In CRTC parlance, new media refers to broadcasting content over non-traditional broadcast distribution facilities. In other words, this proceeding, issued under the banner of the broadcast side of the CRTC, should be of interest to all telecom service providers and internet service providers.

Comments are due on December 5 and there will be an oral public hearing in Hull beginning on February 17, 2009.

There was a time that I thought the easiest job in the world must have been the sales position at Nortel responsible for servicing the Bell Canada account.

It wasn’t really sales as much as collecting orders. Nortel was the only supplier of network technology. In those days, of course, Bell owned Nortel. Who else would you call?

Those days are long gone.

Few people were surprised by last week’s announcement that Bell and TELUS would be working together to roll-out a new mobile network based on HSPA technology.

The news story that hasn’t been covered is the appearance of two new brands on Canadian wireless equipment racks: Nokia Siemens and Huawei. While most news accounts have listed the vendors as a one sentence suffix to their main stories, Global Insight noted the

significant shot in the arm for the two vendors at a time when the indications have been that capital expenditure on wireless networks by the large carriers has been repressed as the implications of the credit crunch are digested.

For Huawei, this is an especially significant breakthrough in North America, establishing its first supply relationship with Canada’s largest carriers.

The equipment suppliers with the most dominant Canadian R&D; presence, Ericsson and Nortel, were shut out. What kind of technology jobs could have been created with some of that capital investment being retained in this country.

Nortel’s stock is trading at a discount of almost 99.9% off its high, assets are being spun out and the company is a target for a merger or acquisition. Microsoft has been rumoured to be courting RIM.

While the government looks at the financial and automotive sectors, it should pause to examine and consider where telecommunications technology, a key enabler of greener business, fits in Canada’s industrial policy.

Technorati Tags:
Nortel, Ericsson, Huawei, Nokia Siemens

Canadians go to the polls today and unless something extraordinary happens, the Conservatives will likely not emerge with the majority they sought when Stephen Harper visited Rideau Hall 6 weeks ago. A lot of questions come to mind.

We’ll be watching results tonight to see the list of MPs that will be sent to Ottawa, from which key cabinet positions (and opposition critics) will be drawn.

Will the government gain sufficient support to enact the changes called for in the report from the Telecom Policy Review Panel, which has largely been languishing for 30 months?

How will the government deal with the last minute promise to provide $500M in rural broadband subsidies – based on $100M per year for 5 years beginning in 2010? This kind of recurring amount, said to be tied to private sector and other levels of government participating, could be effeciently delivered through a direct subsidy or tax credit to users, as we have suggested on this blog.

What will be the impact of the global economic turmoil on how Canada’s new government approaches telecom policy?

While Canadians are celebrating Thanksgiving, the Wireless History Foundation is hosting a dinner in Chicago this evening, marking the 25th anniversary of the first cellular mobile phone call which was made October 13, 1983 down the road at Soldier Field.

We have come a long way since the days of phones mounted in the trunks of our cars, evolving into phones carried in a shoulder bag.

And let’s not forget that major leap forward with the development of the classic Motorola brick-phone – the DynaTAC 8000X – which was approved by the FCC just 3 weeks earlier, on September 21, 1983. That phone, weighing in at 28 ounces, seemed nearly indestructible. I recall magazine ads in the 80’s that celebrated its ability to survive fire and water damage which sure beats the heck out of today’s phones (which frequent readers of mine know just don’t float).

Andrew Seybold made an interesting observation when reflecting on the first 25 years of cellular service:

I often meet new, young companies or talk to executives at one of the larger companies who are telling me about something new that, in reality, was new in the 1980s or early 1990s and did not make it in the marketplace. Some of these ideas can be and are being dusted off and put forward again now that times are different. Network coverage is far better than it was in those days, devices cost less, service costs far less and we have two things we really didn’t have back then: wireless broadband and the Internet.

Which applications from the past are now getting ready for prime time re-release today?

Who would have or could have thought that mobile wireless service would be such a disruptive force – not only on the telecom industry, but on the way business is conducted and society itself?

What will the next 25 years bring?

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Update [October 13, 1:20 pm]
Good story by Alana Semuels in today’s LA Times called An evolution from talk to text.