The CRTC is in the midst of hearings on the processes and mandate of the Commissioner for Complaints for Telecommunications Services (CCTS).

The opening comments from the CRTC Chair indicated

This past spring, the government called on the telecommunications industry to establish an independent consumer agency that would, among other things, resolve complaints from consumers and small business customers arising as a consequence of forbearance from regulation of local services. A number of service providers joined forces to launch the CCTS in July 2007.

Further to the government’s directive, the new consumer agency’s structure and mandate is to be approved by the Commission. While the Commission will consider all the issues raised in Telecom Public Notice CRTC 2007-16, this hearing will specifically focus on the following matters:

• whether membership in the consumer agency should be mandatory for all telecommunications service providers;
• whether the consumer agency’s proposed governance structure ensures its independence from the telecommunications industry; and
• whether the consumer agency’s proposed mandate is appropriate.

Among the most interesting exchanges took place in the morning when the CRTC asked about the proposed process for filing a complaint. The CCTS complaints process requires that complaints be made in writing: submitting a form by mail, fax or on-line. What happened to phone?

The CRTC questions indicate that it thinks it would be reasonable for a telecom agency to take phone calls. Representatives of the CCTS board suggested that they need a record of the complaint – that is why they wanted the complaint in writing.

Would it be too much to suggest the ability to record the calls or have representatives take on-line notes?

Doesn’t the telephone industry sell such solutions all the time? If you can order service by phone and pay for service by phone, maybe we should let people express their frustrations by phone as well.

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CCTS

The Associated Press is reporting that Britain is seeking the assistance of ISPs and technology companies to help stop the online distribution of terrorist propaganda.

According to The Guardian:

The prime minister also set out measures to counter the influence of radical fundamentalists in Britain’s schools, universities, mosques, youth clubs and prisons, as well as on the internet.

The Independent is reporting that Home Secretary Jacqui Smith will hold talks with internet service providers and global technology companies on blocking online incitement of terror.

The Prime Minister’s official statement phrased the meetings as targeting a theme that has been raised on this blog many times before:

The Home Secretary is inviting the largest global technology and internet companies to work together to ensure that our best technical expertise is galvanised to counter online incitement to hatred.

We will want to watch how this initiative evolves.

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illegal content, net neutrality, hate

Yesterday’s National Post included an article about MTS and Sasktel that could have been entitled “A Tale of Two Crowns“. The article was written by David Seymour of the Frontier Centre for Public Policy in Winnipeg and it is a digest of a recent report from the Centre.

The report examines the benefits of MTS having been spun off by the Manitoba government from its former crown status, while the Government of Saskatchewan has held onto its ownership in its provincial carrier.

Over the past decade, telecommunications privatization has played out in a continent-sized laboratory. In the middle of North America, two almost identical companies in the almost identical markets of Manitoba and Saskatchewan went divergent ways. While Saskatchewan politicians chose to hang on to Crown corporation SaskTel — the new provincial Premier vows to maintain the status quo — Manitoba politicians cashed out and let go of Manitoba Telephone Services through a 1996 public share offering.

There are some additional facts that might have been relevant for a more complete analysis.

Considering the present focus on mobile services competition, it would be helpful to assess the 5.5% cellular adoption differential in Saskatchewan (67.9%) versus Manitoba (62.4%). In Saskatchewan, 80% of cell phone users subscribe to Sasktel service; only 60% of Manitoban’s subscribe to MTS Mobility. Some might wonder if increased mobile penetration is a side benefit of Sasktel’s overwhelming local presence and whether provincial policies have contributed to higher adoption.

I also have a contrarian view relative to the study’s argument on taxation benefits:

In 2006, MTS racked up an income tax liability of $126.7-million to the governments of Canada and Manitoba, funds that can be used to pay for services or lower taxes in the broader economy. Meanwhile, SaskTel, as a Crown corporation, is exempt from income tax. This tax exemption is one of several hidden subsidies within the Crown corporation model. This subsidy represents a hidden financial loss for governments and taxpayers that is paid for with higher taxes or fewer services elsewhere.

Let’s not forget that MTS has avoided significant levels of tax payments by virtue of its acquisition of Allstream’s losses carried forward. Further, as a Saskatchewan crown, wouldn’t all of the profits go to the provincial government, whether paid as a dividend or reinvested? It might be argued that the people of Saskatchewan get to benefit from 100% of Sasktel’s profits.

MTS today earns twice the revenue, has three times the assets and employs 20% more people.

The Allstream acquisition masks the impact of investment and employment levels within the province of Manitoba. Almost all of Sasktel’s capital spending and employment is in the province; MTS has a national scale – good for growth opportunities, but more difficult to assess from the perspective of benefits to the people of Manitoba.

What I find most interesting is the similarity in services benefits for subscribers. Over a ten year period, the study found that consumers are pretty much equal – benefiting from the same level of service innovation and similar pricing.

Consider that a crown corporation can afford to look at longer term strategies with different pressures from the quarter-to-quarter demands of the public equities markets. I would be interested in hearing views on whether crown ownership may drive some behaviours more reminiscent of firms controlled by private equity.

Deal or no deal? As Howie Mandel asks at the end of each show, did the people of Manitoba make a good deal when “the banker” paid them out 11 years ago?

Private sector versus public sector; PC versus Mac; you say tomato… Is this one of those religious debates that has no answer?

The complete study is worth reading as a stimulus for these discussion. A one page graphical summary is also available.

Some wondering out loud today.

I wonder if the current system of supplier-side subsidies is working effectively to increase broadband adoption in Canada.

There is a higher cost per subscriber to provide services in less densely populated areas, but why does that necessarily translate into a requirement for an across the board subsidy from the government? It is as though the government initiatives for extending broadband begins with a premise that equates “rural” with “poor”.

After all, many residents in unserved areas have made a conscious lifestyle choice to reside outside of an urban landscape. Fresh air, more land, fewer neighbours.

Rural residents read the store ads in the national papers and are envious of prices available to city dwellers. They are used to paying more for many staples, since there is often less competition; bread, lettuce, meat, appliances, among other essential items, often are cheaper in the city.

Still, many draw healthy salaries, and generally, rural residents tend to enjoy lower housing prices.

It is understandable that they would like to get a government subsidy for their broadband service. I would too.

But is it reasonable for government initiatives to focus on universal subsidies on the supply side? Such approaches risk anointing winners and creating losers, potentially precluding opportunities for competitive supply. And we are seeing hundreds of millions of dollars being spent without significant impact on broadband adoption.

Are the funds being spent effectively? Is there another way?

I wonder about a direct end-user incentive such as a broadband tax credit. Using the existing tax system, policy makers could apply the credit as broadly or focussed as they choose.

Perhaps the program could target lower income earners, regardless of where they live, offering $20 per month to connect to entry level broadband. Perhaps an additional amount would be available in rural areas. Maybe there could be a one-time credit to cover equipment installation – or even buying new computers.

Such an approach could create the right environment to encourage multiple service providers to enter more markets. This approach increases the pool of potential subscribers, rather than limiting the number of suppliers to a monopoly.

Such an incentive plan might fit other services like mobile phones or even a program to match Italy’s approach to stimulate the conversion to digital TV. But those are subjects to be explored sometime in the future.

How will broadband figure in platforms for the next election?

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rural, broadband

My friends at Privacy Laws & Business are reporting on proposed legislation in the Netherlands to protect against publication of unauthorized personal information on the web. Last month, the data protection authority (CBP) published recommendations to give people the right to demand that information about them is removed from websites.

The publication of personal details on the internet can follow people for years. Personal details should therefore be used with caution, particularly on the internet.

The recommendations would require that private individuals must give permission for information about them to be put on the internet. Websites which refuse to remove unwanted information face civil court proceedings.

How will the proposed rules apply to foreign websites? Will citizens be able to enforce their privacy rights if targeted from abroad?

The European Privacy Officers Network is holding a roundtable discussion in The Hague tomorrow evening and Wednesday.

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privacy