The 2008 Canadian Telecom Summit opens on June 16 at the Toronto Congress Centre. Registrations are strong again this year and we are grateful for the industry support.
Prices go up on June 1, so if you haven’t registered yet, take advantage of savings available today and tomorrow.
Once again, we will be exploring topical issues of interest to policy makers (such as net neutrality) and business leaders (strategic sourcing, Green IT). Two sessions will examine the importance of content – Consumers in a Multi-screen World and Entertainment & Content over Broadband.
A delegation of leading technology companies from Israel will be attending. You can download a catalog of the companies attending and pre-book meetings with them.
I have noticed that some of the reports coming out of the first day of the spectrum auction may be based on some confusion about the auction process.
Let me try to help.
Yes, it is true that after the first two rounds, Shaw and Globalive are currently leading with ‘standing high bids’, but that is not necessarily the best measure of who will end up with the most spectrum.
This isn’t an auction where people are sitting around in a room cautious about scratching their noses or rubbing their brows. Each round, the incremental price for a block of spectrum in a specific geography is offered for about 15% more than the current high bid. Qualified bidders decide if they want to put their names into that piece of spectrum. If there are multiple bidders for a specific block, then the system chooses a temporary winner at random. That is the ‘standing high bidder’.
One of the articles says “Telus Corp. is expected to win the most amount of licenses as it is the top bidder for 60 licenses.” It may be true that TELUS will ends up with the most licenses, but it is way too early to see that from the bidding after just 2 rounds.
You need to look deeper at bidder activity to see that Globalive has actually bid more money than Shaw among all auction participants, and Rogers has bid more than TELUS among the incumbents. You can also detect interesting gaming going on by looking deeper at lot-by-lot bidding activity.
This tournament has a long way to go. We’re still in the preliminaries. Two more rounds are scheduled for today.
As promised, here is my final word on last week’s OECD broadband report that was released as a background note in preparation for the organization’s Ministerial meeting on the Internet Economy, taking place in Seoul in a few weeks.
Summarized in the accompanying press release, there were a number of policy recommendations that are to be discussed at the meetings. I think it is worth highlighting a couple of them:
• Governments need to promote competition and give consumers more choices.
I am still waiting for the first municipality, county or region to declare itself to be a telecommunications free zone.
Come one, come all – we welcome telecom expansion. You want to build fibre? Here is our road building plan; there is conduit available for you. Here are our municipal towers and some places that we have found for your wireless base stations. We want people to see 5 bars throughout our community. We want to help service providers offer the fastest connections in Canada to our business parks.
Am I dreaming?
Here is another of the recommendations:
• Governments providing money to fund broadband rollouts should avoid creating new monopolies.
I am concerned that our current approach to broadband expansion – giving cash to one service provider – has the effect of picking winners and establishing subsidies to one supplier to the detriment of others. This does not seem to me to be sustainable or consistent with a greater reliance on market forces.
At last week’s WiMAX forum, I wondered aloud if the root of such programs is a patronizing viewpoint that “rural and remote” equates to impoverished. If it costs more to serve a region, why are we embarrassed about allowing service providers to charge more? If we believe that the resultant price is too high for some residents or certain businesses, then it seems to me that an answer is to provide direct subsidies, perhaps through the tax credit system.
Once we approach broadband expansion in that manner, we have the benefit of helping other Canadians who are not yet connected. For example, there are many households in urban areas that can’t afford to equip their homes with a computer and connectivity. Shouldn’t our connectivity strategy be as concerned about that kind of digital divide?
We might find that a direct subsidy, needs-based, costs less and benefits a broader group of Canadians caught on the wrong side of the digital divide. Which political party will include universal broadband access as a plank on their next election platform?
Did you feel your tax burden lighten a little bit this morning?
The first round of bidding in the AWS spectrum auction has concluded and so far, the high bids total $490M going to the federal treasury to lighten our collective tax burden.
Some areas have seen no bids entered – so far. There are fascinating strategies being employed by some of the bidders.
You can follow the action on various Industry Canada websites, including this bid tracking site and this interactive map. Another round is under way – and the action will heat up over the coming days as bidders get used to the systems.
Last Thursday, the CRTC issued a Decision that lightened its regulatory oversight over promotions.
That means that it will be easier for incumbent telephone companies to offer special deals to business and residential subscribers. Keep in mind that there are significant parts of the population where the CRTC no longer approves prices for most telecom services.
For the remaining ‘non-forborne’ areas, this Decision brings forbearance for promotions as long as:
the combined enrollment and benefit period does not exceed 12 months,
there is a cooling-off period equal to at least one-half the combined enrollment and benefit period, and
there are no existing or recently elapsed promotions that involve any of the same tariffed service(s) or underlying service(s) in the same geographic area.
The considerations make interesting reading. The CRTC wanted to provide a lightened regulatory burden – consistent with the policy direction – but wanted to ensure that promotions weren’t being used as a back-door to effectively unregulated rates prior to the forbearance criteria being met.
While new entrants may have preferred that the ILECs’ rates flexibility was limited more, the Decision seems to strike a reasonable benefit to help give consumers more vibrant competitive pricing activity in markets that have not yet offered sufficient choice of service providers to warrant forbearance.
