Michael Geist’s column in the Toronto Star this week claims Canada is in the slow lane on traffic shaping regulation or enforcement. The article claims that “there has been near-complete inaction from Canadian regulators and politicians.”

What action from regulators and politicians is expected? Are additional laws and regulations really required? Are there complaints that aren’t being investigated?

The article acknowledges that there are already bodies that could address complaints.

The Canadian Radio-television and Telecommunications Commission and its chair Konrad von Finckenstein could seize responsibility for this issue. The Competition Bureau’s Fair Business Practices Branch could investigate the lack of transparency with Canadian ISP services. Industry Minister Jim Prentice could pursue net neutrality legislation or encourage the Industry Committee to conduct hearings on the issue.

I would think that CIPPIC – The Canadian Internet Policy and Public Interest Clinic – would be precisely the right body to launch a Part VII application with the CRTC if there are violations of the Telecom Act. Has the CRTC been unresponsive to a filed complaint? Is there really a Competition Bureau issue?

Do we really need the Industry Committee to hold hearings when the Telecom Policy Review Panel looked at the issue and came out with a statement that promotes market forces, not increased regulation, as I wrote last year.

The Star article raises the TELUS blocking incident as a reason why we need more legislation. One glaring violation in all the years of the internet’s existence – is this it? Almost a year ago, I wrote about Net Neutrality and rolling through stop signs. Do we need new laws to get people to obey the rules of the road or enforcement of the existing rules?

Net Neutrality will be the subject of a panel discussion on Wednesday June 18, the closing day of The 2008 Canadian Telecom Summit.

Initial impression of the CRTC’s Essential Services Decision [news release or full decision] is that it appears to deliver on what most of us would want from our government institutions: predictability and consistency.

I say that in a positive way.

The first thing I looked for was how the CRTC dealt with Billing and Collection – the concern had been that wholesale B&C; arrangements would be phased out, leading to the end of dial around companies like YAK and Telehop. The CRTC determined that B&C; was integral to long distance interconnection and will be preserved as part of the interconnection category.

Another bellwether was the treatment of unbundled local loops – maintained as a conditional essential service. In this case, the CRTC determined that it wasn’t enough that the cable companies had a retail service that was analogous to the services built with unbundled loops. The key determinant was making sure that there is really a wholesale alternative available.

Think about the approach to price deregulation on a retail level. We have a presence test: are there other players in the specific retail market. It isn’t enough that there could be other service providers – we require that there are choices available. The CRTC seems to be using the same kind of approach: do service providers have alternatives available to them for wholesale capabilities?

It is a reasoned approach – a reasonable approach. The decision delivers what we would expect [and should want] from a regulatory body.

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CRTC, wholesale, essential services

As expected, Industry Canada released its final Conditions of Licence for Mandatory Roaming and Antenna Tower and Site Sharing and to Prohibit Exclusive Site Arrangements on Friday.

These rules were initially going to make every tower in Canada available for sharing by mobile service providers – providing two benefits: easier entry for winners of spectrum in the upcoming auction; and, reducing the proliferation of towers that nobody wants in their backyard.

Industry Canada backed down from its original intent to apply the new sharing conditions on all current spectrum holders: broadcasters, utilities, emergency service radios, among others. Instead the rules will only be applied among mobile license holders.

The public utilities had complained that:

Public utilities noted that their sites are generally located within the confines of enclosures around utility installations (e.g. hydroelectric transformers and switching facilities). Admission to such enclosures is highly restricted and requires and could compromise the integrity of critical utility infrastructure.

The others had similar cop-outs:

Public safety agencies expressed similar concerns to those applicable to national security sites requiring highly restricted access. It was also submitted that broadcast sites already tend to be the subject of extensive sharing among broadcasters for technical and economic reasons while generally being poorly suited for other radiocommunication system architectures.

So what?

Industry Canada could have kept to its principles. Tower owners could easily impose conditions on which crews are permitted to perform installation and maintenance in order to deal with the “specialized training, equipment and procedures to protect personnel.” If the broadcast towers aren’t suitable for other “radiocommunication system architectures” then there won’t be many requests. These could all of been handled in the course of operators requesting access and tower owners responding with conditions in their proposal.

Why did Industry Canada back down?

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Industry Canada

Jeff Fan at UBS released his interpretation of Industry Canada’s clarifications from last Wednesday evening. The document was released in response to questions following the initial AWS spectrum policy release last November.

Bottom line:

We believe this is a net positive for the incumbents, especially for Rogers, because the clarified rules are not as favourable to new entrants as previously feared.

The main reasons cited by UBS are:

• Mandated roaming does not include resale: Industry Canada will not require resale of services outside of a new entrant’s licensed area;
• New entrants need to build network before launching service: A new entrant must offer service on its own network before its subscribers may benefit from roaming on another network;
• No requirement for seamless handoff: Calls in progress that are transferring from a new entrant’s own network to a roaming network may drop and have to be re-launched, leading to enormous frustration among the customers of new entrants;

The Industry Canada Q&A; is reasonably readable and can be found here [pdf]. The UBS analysis explains the winners and losers from the answers found in that paper.

There are significant changes expected to be announced by two different government bodies over the next few days that will impact the regulatory framework for wholesale telecommunications services.

Ironically, the environment for wireless services will come under greater regulatory intervention while wireline services will continue to follow a path to lighten the touch of government.

Industry Canada is expected to announce the outcome of its consultation on mandated roaming and tower sharing on Friday. On Monday, the CRTC will be releasing its decision on the Wholesale and Essential Services proceeding, a process that was launched in late 2006. We have written about that proceeding a number of times over the past year or so.

The changes that are coming will have a lasting impact on the state of telecommunications for the foreseeable future. More fodder for discussion at The Canadian Telecom Summit in June.