A reader sent me a note asking if I had any views on a recent Michael Geist posting that deals with an allegation that Bell’s wholesale internet service is throttling traffic.

In the interest of being responsive to a loyal reader (are there more of you out there?), these observations are dedicated to “GS”.

In his post, Professor Geist describes the issue as:

third party ISPs that buy their connectivity from Bell (“resellers”) are being left with irate customers who are suddenly subject to packet shaped services.

Michael posted the original news on Monday in response to chat room activity. He provided an update on Tuesday saying:

Bell has now reportedly confirmed that full throttling will be in place by early April. It claims that it is entitled to do so based on its contractual terms. Note that several people have written to emphasize the anti-competitive effects of this policy, given its impact on resellers servicing the business market.

Anti-competitive is a strong term. His readers’ comments on the blog are even stronger, with some suggesting that criminal charges should be filed. Others suggest nationalizing the internet – “Is the internet any less important that highways?”

Let’s try to look at this away from the hysteria.

What does it mean to say that there will be full throttling in place by early April? Does anyone really believe that no traffic will get through? Or, does it mean that Bell will apply the same types of traffic management to all of its customers, retail and wholesale? That is what a news report seems to be saying.

What can be meant by accusing Bell of anti-competitive behaviour.

The standard test for discrimination or undue preference is found in Section 27(2) of the Telecom Act. A carrier cannot unjustly discriminate against a competitor or confer an undue preference to itself or any of its customers.

No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.

It seems to me that no one has said that Bell is providing its own customers with a different quality of service than that provided to its wholesale customers. Wouldn’t that be the first test? Then we could see if there is even a preference, let alone an undue preference.

It is worth looking at a number of cases where the CRTC has found that certain types of discrimination may exist, but are not unjust. Or, finding that certain preferences are not undue. I have written about some of these findings over the past two years – such as in Decision 2006-61, dealing with cable company VoIP versus over-the-top VoIP.

One of the affected resellers, Teksavvy, has been indicating in chat room postings that they do not believe in throttling traffic. In that case, I would suggest that the time has come for ISPs to start building out more of their own networks, if they want to remain true to their beliefs.

If an ISP is going to rely on reselling other carriers’ services, then its own beliefs are less relevant than the delivery practices of the underlying carrier.

An article in last Saturday’s New York Times talks about fading hopes for municipal wireless networks.

According to the article, the momentum from announcements in Philadelphia, Chicago, Houston and others has sputtered, “tripped up by unrealistic ambitions and technological glitches.”

The challenge has been to define a business model that works.

In Minneapolis, the Internet service provider agreed to build the network as long as the city committed to becoming an “anchor tenant” by subscribing for a minimum number of city workers, like building inspectors, meter readers, police officers and firefighters.

This type of plan is more viable, according to market analysts and city officials, because the companies paying to mount the routers and run the service are guaranteed a base number of subscribers to cover the cost of their investment.

Some others advocate a model of complete municipal ownership, as if taxpayers shouldn’t worry about the economic viability of the business plan.

Almost in passing, the NYT article noted that prices for internet services have been dropping below what municipal Wi-Fi providers were offering.

It again raises the question of whether across the board government subsidies should be replaced with an income-based credit.

The CRTC issued a policy decision last week (2008-27) dealing with access to telecom services by credit challenged subscribers.

Under a pilot plan, for customers seeking reconnection, a debt repayment schedule would be established; no interest would be charged on the amounts owing; security deposits would be waived; and the reconnection fees would be spread over six months. The CRTC has dispensed with this arrangement, since the pilot program did not seem to deliver better levels of default on debt than non-regulated plans.

At the end of the day, the Commission is going to rely on a clause in each of the ILECs’ Terms of Service that prohibits them from disconnecting or threatening to disconnect, for non-payment, any of a customer’s tariffed services if that customer (a) has made partial payments; and/or (b) is willing to enter into and honour a reasonable deferred payment agreement.

According to the consumers groups, not all of the ILECs have been as reasonable as others in structuring deferred payment plans.

However, in the interest of lessened regulation, the CRTC is going to migrate monitoring of such issues to the Commissioner for Complaints:

the Commission requests that the CCTS track and monitor complaints related to (a) credit management issues and (b) the reconnection policies of its telecommunications service provider members with a view to determining whether further action, for example, the development of an industry code, is required.

The Commission noted that the average debt for involuntarily disconnected consumers ranged from $400-$500, with certain debts exceeding $3,300.

Will the CCTS order telcos to write off some of the bad debt in cases where the ILEC was less than reasonable in defining a repayment plan?

With the Good Friday holiday, I have been catching up on my reading, which lets me check out some of the proxy circulars that arrive this time of year. It is another sign of spring – who knows when (dare I say, “if”) we might actually see the birds return this year.

A year ago, when I was flipping through the 2007 proxy materials from Nortel, I observed the remarkably low tenure of the senior officers.

At the time, I wrote:

Only one officer, the treasurer, has been in their role more than a few years. Of the 28 listed executives, just one was appointed in 2004, 12 in 2005 and 14 in 2006.

Fast forward to this year’s proxy circular. Now, there are no officers that pre-date 2005, when President and CEO Mike Zafirovski joined the company. Besides Mike Z., there are now just 4 others from 2005, and 13 remain from 2006.

Last month, I referred to John Roese writing about the journey to transform Nortel. The proxy statements demonstrate the amount of change that is leading the company.

Nortel President and CEO, Mike Zafirovski will be speaking at The 2008 Canadian Telecom Summit in June.

Have you registered yet?

While it is now officially Spring, it seems hard to imagine tulips emerging with all of the snow still on the ground. Still, it is the beginning of another season and there are some interesting industry dynamics at play.

I received an email asking for help in finding people to fill a number of director level jobs at a mobile wireless company. Some of the applicants in the AWS auction are already starting to gear up staffing for their wireless operations.

Spring also means there are less than 3 months to go before The Canadian Telecom Summit, June 16-18.

Our brochures are now in the mail. The brochure will also be an insert in the next issue of Wireless Telecom and in TechMedia’s Telemanagement. Or, you can download it by clicking here.

Register soon!