Nortel vs Cisco: The lines are getting drawn

Nortel

I received an interesting package of information in the mail last Friday.

Enclosed were white papers and reports setting out distinctions between Nortel’s and Cisco’s approaches to IP telephony. In various articles, Nortel boasts a uniquely integrated strategic alliance with Microsoft, cross-licensing patents and joint sales and marketing.

The documentation claims Cisco’s approach is more network centric. Is that a bad thing? Is such an approach better for engaging carriers as channels to market, regardless of the technical merits of the architecture? Carriers might prefer network centricity.

I note that Nortel has been named the official supplier of converged network equipment for the 2010 Olympics in Vancouver and Whistler, with plans to converge all of the voice, video and data traffic over a single IP-based network backbone. At Nortel’s AGM this week, Mike Zafirovski spoke of the Olympics contract and others as evidence that Nortel has regained momentum, taking advantage of opportunities created with hyper-connectivity – a theme raised in the blog musings of Nortel CTO John Roese. Nortel is “back in the game“.

John Roese and Microsoft Communications Sector CTO Michel Burger are certain to provide their perspectives on their alliance during keynote addresses at The 2007 Canadian Telecom Summit, June 11-13. Jeff Spagnola, Cisco’s VP Marketing for Service Providers will also be addressing the Summit in a keynote address June 13, preceded by an introduction by Cisco CEO John Chambers.

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Enforcing CRTC orders

MTS Allstream is getting frustrated with the glacial pace of compliance with the CRTC’s orders (Order numbers 2007-20 to 25) to introduce tariff elements for various next generation access services – such as ethernet, wholesale ADSL, etc.

The Commission determines that the incumbent local exchange carriers (ILECs) shall provide to competitors, as part of their Ethernet services, an Ethernet access service, together with the Ethernet transport service and the Ethernet central office (CO) connecting link service.

That is the current law of the land. The CRTC’s orders were issued on January 25 and I wrote about them that week. At the time, I noted

There is an underlying subtext that needs to be explored at another time. The CRTC found that wholesale ethernet and ADSL are non-essential services, yet the Commission is imposing rates and terms that differ from those initially proposed by the ILECs. Contrast this to the Minister’s direction that requires the CRTC to determine the extent to which regulation of non-essential services should be phased out.

Bell, Bell Aliant, Sasktel and TELUS appealed the Orders [in 5 separate review and vary applications], but the CRTC has not yet granted a stay. The January CRTC Orders required these new service elements to be tariffed within 25 days – as in mid-February.

An order was issued – actually, 6 orders were issued – and until they are stayed or overturned, one would think that there should be compliance. Since no stay has been granted, MTS Allstream has now filed a letter with the CRTC asking for it to enforce its orders, if necessary by registering the orders with the Federal Court.

That would turn up the heat on those tariff filings, since people tend to be more concerned about failure to comply with court orders.

Interesting watching.

Canadian wireless market accelerating

Last week, I mentioned a report by Kazam Technologies that was delivered in April 2006 but has only recently been released by Industry Canada.

According to the report, the Canadian wireless telecommunications market is expected to generate over CAN$15B by 2009, representing an 11.5% growth rates from 2005 to 2009. The report expects that, at that rate, the Canadian wireless market will grow at a faster pace than the US, forecasted at 10 percent.

An interesting point in the report, which was also cited at last week’s CWTA forum, is that Canada’s cost of acquisition (which includes handset subsidies) is among the highest in the world: 75% higher than the US. As a result, it is misleading to only look at per minute rates in determining the affordability of services and the competitiveness of the Canadian market.

Operators are faced with the difficult dilemma of reducing handset subsidies (to offset their cost of doing business) vs. driving adoption of new services, such as Mobile TV, that require users to upgrade handsets.

This report is hardly the last word on wireless – first round comments for the auction rules are due toward the end of May, with reply comments due in late June. We have scheduled a session looking at competition in wireless services at The 2007 Canadian Telecom Summit on June 13.

Rogers released its first quarter numbers after the markets closed last night. Net additions, data consumption, ARPU were all strong and churn was significantly better than the prior year. Rogers President and COO, Nadir Mohamed, will be delivering the opening keynote at The 2007 Canadian Telecom Summit on June 11.

Bell’s results are out this morning and are showing continued challenges in the wireless segment. Net additions on post-paid accounts were only a tenth of what Rogers gained. TELUS results are out later today – watch this space for updates.


Update: [May 2, 11:15 am]
TELUS has released its numbers and it has added 6 postpaid wireless customers for every one that Bell captured – leaving it with a total number of customers (4.136M) just shy of Bell’s (4.254M). At the current pace, TELUS will catch up to Bell in 2 more quarters. Rogers has 5.493M postpaid subscribers. The 3 major carriers added about 165,000 customers in the first quarter: Rogers grabbed 57% of them, TELUS 37% and Bell just 6%.

What will this mean for consumers in the coming months?

What happened to neutrality.ca?

What really happened to neutrality.ca?

Kevin McArthur has posted a message on the home of neutrality.ca and kevin-mcarthur.com:

Thank you to all those who have supported our websites. Due to increasing legal concerns resulting from our public participation in the Net Neutrality debate, we have at this time decided to shut down the operation of these sites.

Some are claiming that the telcos shut down the sites. That is some kind of charge. I’d like to see some kind of substantiation or corroboration for that accusation. Can we hear which telco forced the shutdown and how exactly they did that?

On a possibly related note, Michael Geist writes this week about concerns that lawsuits may be putting internet free speech at risk. There is surely a balance to be found, enabling democratized expression of diverse viewpoints while recognizing the need to be accountable for inaccurate or defamatory statements that get broadcast across this medium.

My lawyer friends tell me there is a legal principle in libel law called ‘innocent dissemination’. It applies, for example, to bookstores that don’t know a work contains defamatory material and aren’t negligent in not knowing. The principle says the bookstore is immune until they: a) know; b) are negligent in not knowing; or, c) are put on notice.

It seems to me that our freedom of speech is not without bounds. The question of what constitutes illegal content on the internet and how we should deal with such material will be subjects of a panel discussion on June 11 at The 2007 Canadian Telecom Summit.

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No longer top 10

The EconomistIn co–operation with the IBM Institute for Business Value, The Economist Intelligence Unit has released its e-readiness rankings for 2007.

Canada, now ranked 13th [from number 9 last year], slipped out of the top 10,

owing to a slightly reduced social and cultural environment score, and a lower rating for government policy and vision than other developed-market peers.

Unfortunately, ranking schema will always be marked by biases created by weightings and priorities assigned by their authors to various criteria. For example, in 2007, this study

eliminated fixed-line phones as an indicator and increased the weight of mobile penetration, as mobile phones are generally cheaper, easier to access and, with text messaging and mobile commerce applications, increasingly powerful digital devices.

At first glance, such a shift may seem innocuous but it is based on European pricing practices and therefore may discriminate against historically low pricing for wireline services in North America. Further, as we have discussed previously, European wireless penetration rates are artificially pumped up by users with multiple SIM cards arbitraging roaming rates or gaming ‘on-net’ calling plans.

There are bright spots for Canada in the report. Thanks to “political stability, a positive foreign investment environment and strong support for private enterprise and competition,” Canada is ranked as the world’s best business environment. In addition, Canada’s legal environment for internet issues is ranked in the top 5. The four factors assessed in this area are:

laws must sufficiently protect consumer rights and intellectual property rights (IPR) offline and online; they must foster the development of digital security enablers such as authentication and certification of online transactions; they must not censor; and, they must allow new businesses to be registered quickly and easily.

It is a new category, called “Government Policy and Vision” that led to Canada falling out of the top 10. The category is actually more of ranking of government leadership – tied to performance and adoption of new technologies by departments other than those we traditionally expect to lead the development of internet and e-commerce policy.

E-ready governments supply their constituents—citizens and organisations—with a clear roadmap for the adoption of technology, and they lead by example in their use of technology to create efficiencies. The Economist Intelligence Unit has created this new category to assess the activities of governments in this area, and their ability to lead their countries towards a digital future. Are governments employing technology to operate and provide public services with less resource investment? Are they spending on ICT to stimulate similar spending in the greater economy? Are “savings” translated into service gains for citizens? Can more people interact with, and receive information from, the government regardless of their own access to technology?

Public Works, CRA, and other agencies will all contribute to improving performance on criteria such as total government spend on ICT as a proportion of GDP; digital development strategy; egovernment strategy; online procurement.

Thanks to a regular reader for pointing me to Om Malik‘s reference to this report.

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