Leading up to Industry Canada’s release of the list of qualified bidders on Monday evening, there had been considerable speculation about which applicants had the support of global players. Some were certain that AT&T; or T-Mobile were behind certain bids. Other names were circulated as documented in Peter Nowak’s story on CBC.

As the dust settled Monday, there is certainly foreign capital getting involved in the auction, but no evidence yet of major brands lending their marketing experience, buying power or names to any of bidders.

The equity markets breathed a big sigh of relief with incumbents Rogers and Telus seeing nice gains on their stock prices.

The reality is that it may not be smart for a serious partner to declare their intentions, yet. The Industry Canada rules for the auction may make it more advantageous for carriers to be sitting back at this stage. There is plenty of time to pounce later.

For now, there are a number of possible new national carriers to emerge, plus a collection of regional or niche players. At least 6 bidders have sufficient bid points to try to acquire 20 MHz coast to coast, including Globalive, Shaw, MTS Allstream, Videotron, DAVE Wireless and 6934579.

It seems to me that last company, 6934579, a partnership to be funded by Novacap Technologies, is going to need a better name or alternatively, will they adapt the song Jenny by Tommy Tutone for their ads?

As you know, Rogers has announced caps, called “usage allowances,” on downloading for its range of internet access products: 95GB for Extreme and Extreme Plus; 60 GB for Express; 25 GB for Lite; and, 2 GB for Ultra-Lite. Considerable discussion has taken place on a number of blogs and newspaper articles.

It seems to me that these caps are a necessary step in aligning revenues with costs, which will ultimately alleviate much of the need to arbitrarily apply network management to applications. But it is just the first of a number of steps.

I compared my recent downloading to some friends and neighbours and an trend emerged: many of the heavy downloaders report a marked reduction in January and February from previous months. Why? When asking their kids what is going on, the answer is uniformly: writers’ strike. There haven’t been new TV shows to download.

A caution to parents that when TV production gets back to normal, almost coinciding with real charges for exceeding download caps, you may want to watch the ‘bit-meter’ or risk some hefty charges.

It will be interesting to see the impact of the price increases for people exceeding their usage allowance. Paying for higher consumption may result in some people changing their patterns of usage; it will also lead to an appropriate alignment of revenue to capital drivers.

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The qualifying round is over and now Industry Canada has sifted through the applications and reduced the field from 30 down to 27 [the official list of qualified bidders can be found here].

Eliminations could have resulted from any number of defects in the applications that were unable to be cured over the past two weeks. Many, I suspect, were due to failures in coming up with the appropriate form of deposit.

Canadian consumers are clearly going to see increased choice for wireless services, whether in major cities or in many rural areas that seem to be attracting specialized regional players.

On a national level, at least 3 of the bidding groups have substantial funders behind them: Data & Audio Visual Enterprises (DAVE) Wireless has enough points to assemble 10 MHz nationwide with spare points to increase its bandwidth to 20MHz for half of the country’s population. DAVE is a venture controlled by XM Canada’s John Bitove with funding from Paul Allen’s Vulcan Capital.

I continue to see Sasktel to be a likely partner in all of the national alliances thanks to the anomaly in the AWS rules that defines them to be a ‘new entrant’ despite their overwhelmingly dominant position in the Saskatchewan marketplace.

What happened to Niagara Networks, the company it seems everyone had been speculating about for the past two weeks? For all the previous talk, it appears their cheque didn’t clear.

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Update [March 31, 10:20 pm]
As we review the pages describing each bidder, it appears that some of the qualified bidders are going to need to rework their business plans.

Triple Five Universal Enterprises, currently 100% owned by Nader Ghermezian, has had a significant change from the time of the original application. Two weeks ago, Triple Five asked for 1240 bid points, sufficient for 20 MHz in every part of Canada. However, it has only qualified for a fraction of that, 280 points or 10 MHz for a little less than half the national population.

Golden Spike, a company that appears to be partly owned by former 360 Networks CTO Steve Baker, also came up short. Its original application called for 384 points for $23.8 M, but it only qualified for 12 points, the equivalent of enough to bid for 20 MHz in Regina.

Last week’s posts [here and here] that looked at traffic management on Bell’s wholesale DSL services generated a record amount of traffic for this website, a lot of comments – attached to my blog postings, as well as on DSL Reports and Michael Geist’s blog – and I found out all sorts of new adjectives to be applied to my CV. When I read the forum on DSL Reports, I was struck by the amount of misunderstanding and misinformation that is being circulated by its contributors.

I note the press release from the NDP’s Charlie Angus and Michael Geist’s recent reference to a piece from the CEO of Glance Networks.

Let me provide you with a link to a March 25 paper written to address both wireless and conventional net neutrality. It is an interesting read to help maintain some balance.

As certain parties rush to introduce legislation and new regulations to enforce net neutrality, the paper points out:

The Department of Justice concluded in September 2006 that because of significant oversimplifications, “proponents of ‘net neutrality’ regulation do not agree on a definition of what conduct should be prohibited, nor what networks would be regulated, or even the extent to which pieces of the Internet need to be regulated.”

I’m certain that we’ll get back to net neutrality before The Canadian Telecom Summit in June. Still, I’ll again note that the Summit will host what should be an interesting discussion of the issue at Canada’s preeminent gathering of telecom industry stakeholders. Have you booked your place yet?

As Jed Bartlett used to say in The West Wing so often, “What’s Next?”

It will be worthwhile to check back here at the end of the day. I plan to provide a summary of the Industry Canada list of the qualified bidders in the AWS spectrum auction. And, I’ll have some comments on new bandwidth caps being introduced on some of the unlimited internet plans.

Sasktel CEO Robert Watson was in Toronto yesterday with members of his team, providing a number of analysts with an update on the activities of the largest crown-owned ILEC in Canada.

It is somewhat notable in that Sasktel provides these outreach sessions, despite the lack of disclosure requirements imposed by the equity markets.

Much of the information was of the nature of helpful background and setting a context for our future analysis.

A few factoids stood out.

• High speed now available to 86% of the population.
• All communities with at least 200 people and many with more than 100 people have either DSL or wireless internet service.

Think about what these mean taken together: 14% of Saskatchewan’s population must be in these extremely small communities of less than 200 people.

Sasktel continues to be a world leader in IPTV, deploying technology in 9 Saskatchewan communities allowing 2 HDTV sets in a household. Sasktel has its Max TV service in more than a quarter of the homes it passes.

On June 12, Sasktel will celebrate 100 years of operation in the province. Ahead by a century.

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