Some people who represent various disabled communities may be cheering a CRTC decision that maintains a 50% discount for hearing impaired and speech impaired teletypewriter phone users. It is a hollow victory for the hearing and speech impaired. Further, it is disappointing that the CRTC missed an opportunity to take a stand on system access fees.

I suspect that their stakeholders can find a better deal. After all, basic rates remain in the order of 40-50 cents per minute (rounded up to the next minute). Yep, these are still mileage sensitive relics from days of old. For the purposes of pure nostalgia (and to educate our kids about the good old days) here is the ‘inside Canada’, inter-provincial rate table for Manitoba based customers:

Rate Distance (Miles)	Rate Per Minute or Fraction
0 – 8	$0.13
9 – 20	0.13
21 – 36	0.29
37 – 56	0.35
57 – 80	0.40
81 – 110	0.42
111 – 144	0.43
145 – 180	0.44
181 – 228	0.45
229 – 290	0.46
291 – 400	0.47
401 – 680	0.48
681 – 1200	0.49
1201 – 1675	0.50
Over 1675	0.51

So the CRTC says that the hearing impaired can get 50% discounts off rates that are 10 times higher than market prices.

Try dial-around on YAK or Telehop and pay 4 cents to most places on the planet that Canadians call. Telehop will give you 15 minutes for a quarter for those countries. But we will allow the hearing and speech impaired access to rates that are only 5 times higher than what people should be paying.

Bell and TELUS supported the 50% discount but wanted the program extended to all competitors:

Bell Canada indicated that it would not be opposed to retaining the 50 percent discount for TTY users. Bell Canada submitted that, to be made compliant with the principles of symmetry and competitive neutrality, the 50 percent discount must apply to any telecommunications service provider offering or providing toll services within the company’s operating territory. TCC also supported this view.

The CRTC rejected imposing the obligation on the competitive industry, hopefully recognizing that market prices are already well below the manufacturer’s suggested retail price.

Ho-hum. Would it have been a political hand grenade for the CRTC to have said ‘go shopping’?

50% off. What a deal!

The CRTC failed to address a substantive concern raised by PIAC and endorsed by YAK: will consumers be protected from the phone companies introducing mandatory system access fees. Until now, basic rate subscribers could avoid the cash grab from these official-sounding fees by refusing to accept a toll plan.

the Commission is of the view that there is a variety of cost-efficient alternatives available to consumers who do not wish to subscribe to a toll plan, including various dial-around services, prepaid calling cards, and toll plans of competitive long distance service providers. In many cases, these toll services are offered at lower rates than are available under the ILECs’ toll plans and some do not have subscription or network access charges.

So, when the phone companies add on a universal $4.95, or $7.95 or $10.95 toll network access fee, how do customers avoid the rip-off? Will the Commissioner for Complaints for Telecommunications Services be empowered to deal with system access fees?

How will we dial around that?

Technorati Tags:
CRTC, Bell, TELUS, Yak, Telehop, PIAC, system access fee

The OECD has released its latest OECD Communications Outlook.

On his blog, Michael Geist provided an overview of his opinions on reading the report last week.

I agree with one aspect of Michael’s review, that I would encourage you to download the report and read it yourself. As Michael says, it is necessary to have an objective reading of the report.

there is so much in this report that everyone can find something to either gloat or criticize

Personally, I don’t end up with the same conclusions that some people have found in the report. It just seems to me that there is much that is being taken out of context.

While Canadian wireless prices were found to be better than US prices in all OECD baskets, I would like to suggest that this was not evidence of anything other than the inability to compare pricing in global markets. There are just too many variables.

For example, some countries offer substantial handset subsidies that simply aren’t counted in any monthly pricing study I have seen.

Further, the OECD study was biased by Euro-centric usage models with low volumes of outbound calls and high numbers of SMS messages. For example, the low volume basket had one call per day, 1.1 SMS messages per day and 8 MMS messages per year. High volume had only 4.5 calls per day (any of you ever had that light a day of usage, excluding days you forgot your phone at home?), nearly 2 SMS per day and a MMS per month.

What the OECD has demonstrated is that pricing studies can show different results based on the baskets being studied.

Contrary to impressions you may have picked up elsewhere, I don’t think the OECD study found that Canadian ARPU increased because of lack of competition. Indeed, the OECD had a review of the competitive landscape in various global markets (see Table 2.2) and Canada’s marketplace looks pretty good. In fact, if you want to get selective in excerpting factoids, the OECD study acknowledges that

The largest growth in total cellular mobile traffic from 2003 to 2005 was in Turkey (67%), followed by the United States (43%), Greece (40%), Denmark (36%) and Canada (36%).

In its comments on the issue of Average Revenue per User (ARPU), Michael Geist says that

The OECD found that, on average, mobile revenue per subscriber dropped from 2003 to 2005 due to increased competition. In Canada, revenue increased during that period.

Let’s have a look at what the report says:

Fierce competition in mobile markets has led to a decline in the average revenue from mobile subscribers in the OECD. Between 2003 and 2005, the average revenue per mobile subscriber fell just over 0.3%. The largest drops in income per subscriber were in the Netherlands, Poland and the United States. Revenues tend to fall in areas with intense competition among operators, areas with increasing proportion of pre-paid accounts, or areas that have historically had very high mobile prices and are now experiencing more competition. Japan leads the OECD in mobile revenue per subscriber at USD 860 per year. The lowest revenues per subscriber are in Turkey, Poland and the Czech Republic.

The OECD report failed to mention another factor that impacts ARPU: SIMs per user. The OECD is really reporting revenue per SIM; the more SIMs per user, the lower the revenue per SIM.

Figure 3.8 on page 77 of the report graphically shows the ARPU shift in the OECD countries. The average reduction is more or less rounding error – 0.3%, or $0.12 per month on a $40 per month bill. Canada’s ARPU increase is in line with that of most countries usually proclaimed as ‘more advanced’ in their states of competition: Austria, Belgium, Korea, Norway, Denmark, Greece, France, the UK, Germany, Italy and on and on.

ARPU rose in Canada and these countries because users found value in adopting additional mobile services. As we all know, rates fell and are continuing to come down. Obviously, people in almost all of the OECD markets have purchased more services.

Comparative studies are far more complex than the simplistic and self-serving excerpts that are typically getting presented by all kinds of groups. Let’s make sure that we’re not selective in presenting partial facts.

I would love to see a more academic and more complete discussion and review of the factors that lead to differences between countries. Without an agenda.

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By the way, the OECD report is marred by at least one glaring data error: BCE’s revenues in Table 1.1 ($3.345B) appear to be for one quarter, rather than the entire year. As a result, BCE is listed farther down the table than it should be.

What other errors aren’t as obvious?

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Update [July 24, 11:00 am]
FCC Commissioner Robert McDowell has an Opinion piece in today’s Wall Street Journal, called Broadband Baloney. He also notes Euro-centric methodological flaws in the OECD report.

He concludes:

When it comes to broadband policy, let’s put aside flawed studies and rankings, and reject the road of regulatory stagnation. In the next few years, we will witness a tremendous explosion of entrepreneurial brilliance in the broadband market, if the government doesn’t micromanage. Belief in entrepreneurs and a light regulatory touch is the right broadband policy for America.

Technorati Tags:
OECD, wireless, Michael Geist

What the heck is a Yoggie?

I’m glad you asked. I was introduced to Yoggie by my friend Jeff at Gentek, around the corner in Concord, Ontario.

Yoggie is a security tool for a computer – designed primarily for corporate users of laptops – that keep them secure when on the road. I think Yoggie can be useful for home users as well.

Once loaded, the computer will not connect to the internet without going through the Yoggie device – an off-board processor to physically separate security functions from the rest of the machine, including its Layer 8 Security Engine, protecting the machine from unknown attacks, spyware, etc.

There are two versions – USB and in-line – and the Yoggie can be used as a device to physically limit kids access to the internet; just remove the Yoggie and the computer is isolated – it simply won’t connect to the internet. When it is plugged in, Yoggie provides a safer surfing environment.

For anyone who has found that their software-based virus protection is killing processing power of their computer, Yoggie may also be a solution.

I sense we’ll be seeing more about Yoggie.

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Yoggie

Roberto Rocha of the Montreal Gazette is working on an interesting experiment for new media writing. His blog, TechnoCité, includes a platform for a ‘crowdsourcing’ effort, Your Call Is Important to Us, which asks Canadians to help create a feature story on poor customer service.

I think this is a fascinating concept, rising above and beyond the Sanctuary for the proletariat about which I wrote last month, or the piece a couple weeks ago called A world of mediocrity.

Roberto’s project gathers input from the masses (especially appropriate for the subject of customer service) and still adds the value of the editorial discretion and professional journalism through the offices of The Gazette.

Roberto interviewed me on Tuesday and he has posted the conversation. I think it will be interesting to follow this project.

Associated Press is reporting that Duke University is having significant network trouble as a result of iPhones beginning to show up on campus.

There are already 100-150 of the smart phones on campus and classes don’t start for another few weeks. According to the AP story, iPhones have flooded parts of the campus’ wireless network with access requests, freezing parts of the network.

Apple and Cisco are working with the campus IT department to try to resolve the network congestion issues.

It is not clear if this is something unique to Duke’s network configuration or if this is a first of other incidents to come.

Technorati Tags:
Apple, iPhone