Looking forward to Videotron wireless

January 25, 2017

I was happy to read about the likelihood that Videotron plans to evolve from reseller to facilities-based provider of wireless services.

Regular readers will recall that I tend to believe in letting market forces work, especially when there is so much choice available. We have 3 real, facilities based carriers and a host of resellers who are keeping the marketplace pretty competitive for consumers.

People often neglect to mention the MVNOs and resellers – companies like Amp’d, PC, Virgin and others. I know that Virgin has some real differentiators for customers – my daughter has been using their service this past year. No system access fees, real live customer service reps, aggressive price plans – easy, no-charge number changes (for when she is back in Toronto for the summer).

I think additional competitors would be great, but I get concerned with calls for government subsidies and intervention into the marketplace. A set-aside of the spectrum to be reserved for new entrants is a subsidy. I don’t like the implications for distorting market economics if one industry participant pays less than market value for its infrastructure – it ends up with an artificially subsidized cost structure. The need to guard against speculators that might use the subsidy to inventory spectrum waiting for foreign investment restrictions to be lifted.

I don’t believe lower wireless pricing leads to increased market penetration. If it did, then the US should be leading the world.

There are a lot more complicated forces at work. I’ll be speaking about some of these issues on Monday at the CWTA AWS Forum in Ottawa.

I wonder if the proper correlation, if any, may be that a decline in the rate of change in market penetration leads to more aggressive pricing. In other words, as the market becomes saturated, service providers drop prices to try to grab each others’ customers.

Any economists want to do a study?

Test driving the RIM 8800

January 25, 2017
8800I received a little package from Rogers last week – an opportunity to test drive the new Blackberry 8800.

I have been using a 7200 series Blackberry for the past few years and my family will attest that I am a certified addict. I need the full keyboard, so I have been waiting for the 8800’s full keyboard combined with the Pearl trackball. It takes some getting used to – but there is so much more.

The system boots up almost immediately – a welcome change from what I have been used to. Starting from removing the battery is a longer initialization process. Quad-band, GSM/GPRS and EDGE networks with resultant zippy download speeds.

The built-in GPS came in handy for a road trip yesterday. While Pierre Karl Peladeau, chief executive of Quebecor, was in Ottawa calling for an acceleration of the AWS spectrum auction, I spent the day testing the Telenav turn-by-turn voice navigation to help us get through the streets of Montreal. At $10 per month, it is a nice package that is priced competitively to services like GM’s OnStar.

One-touch voice activated dialing and a speaker phone are other useful tools – especially when driving. The system responds to other voice commands as well. Has anyone built an application to get the system to read my incoming emails to me while I drive?

Of course, it is also Bluetooth equipped and I was able to easily pair one of my Motorola earpieces. The demo unit I have also came with wired stereo ear buds – the system can play audio and video files (MP3, WMA, MPEG4 and WMV among others).

Will RIM design one that can float when I drop it into Lake Muskoka?

Jim Balsillie, Co-CEO of Research In Motion, will be a keynote speaker at The 2007 Canadian Telecom Summit on June 12.

Adding clarity to quality: CQoS

January 25, 2017

Just when we might have thought that the Cabinet’s criteria for local forbearance were pretty clear, the initial wave of ILEC forbearance applications triggered a CRTC public notice on how to deal with exceptions for the Competitor Quality of Service (CQoS) metrics.

Of course, you are asking yourself, “Why would the CRTC consider exceptions? Either they beat the numbers or they don’t.” Well, long before CQoS was considered as a forbearance criterion, the 14 indicators were used to determine if rebates should be paid to competitors when the ILECs provide inadequate service levels. As part of the rebate plan, in Decision 2005-20, the CRTC created a mechanism for considering exclusions from CQoS results where an ILEC might have failed to meet a performance standard due to circumstances beyond its control.

So, the CRTC is now calling for comments on whether that ‘get out of jail free card‘ for rebates should apply for the local forbearance test as well.

The clock is ticking quickly on this file; comments are due on April 27 and replies are due just one week later. It has to be an expedited process. After all, the first applications for forbearance have to be answered in 120 days from last week’s applications.

Competition and prices

April 16, 2007
Globe and MailOn Saturday, the Globe ran an article by Derek DeCloet, who repeated the now familiar view that deregulating local phone service will lead to price increases. Mark Evans described the article as Finally, Someone Gets It. Rob Hyndman joined in and Michael Geist pointed to the article as well.

I disagree with that viewpoint and I am more aligned with Andy Abramson‘s rebuttal. I know that we weren’t going to see vigorous competitive behaviour without the regulatory handcuffs being removed from the incumbents. After all, why would competitors price agressively when incumbent prices were fixed and publicly posted.

Under the rules of the tariffs, the ILECs aren’t even allowed to waive service charges, can’t contact people who had left them, couldn’t create fall promotions to coincide with student moving dates. When the ILECs have retail prices from which it is impossible to vary, how creative does the competition have to get?

There are also more competitors than just the cable companies. While Canadians don’t have access to Skype-In, we do have Vonage, Comwave, Babytel and a wide variety of other VoIP providers. Primus Canada offers both VoIP and conventional telephone competition for residential and business applications. Canada is well beyond a duopoly or oligopoly for substitutable products.

Mark Evans argues that Bell is unlikely to offer across the board price decreases because of the impact on its revenues. He is likely correct on that point. But normal behaviour would suggest targetted price discounting, rather than across the board rate changes. Maybe it will be special rates for students. Maybe it is a promotional deal on your first year of local phone, internet and TV service when you buy a new home or move into a certain apartment building.

More fierce competition for business services – large and small. Bundled promotions: commit to 2 or 3 years on your cell phone and we’ll throw in integrated voice mail. Buy Digital Voice and get half price on Digital Voice Lite.

What kind of pricing will unregulated local prices bring? We’ll have to see. But it is a certainty that under a regulated environment, we weren’t getting lower prices from either the ILECs or their competitors.

The state of competition in residential, business and wireless markets will be the subject of panel discussions at The 2007 Canadian Telecom Summit in June, featuring business unit leaders from Bell, Rogers, TELUS, Toronto Hydro Telecom, Videotron and Vonage.

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E-911 emergency showdown

April 15, 2007
There is a Canadian Interconnection Steering Committee (CISC) Emergency Services Working Group (ESWG) that has been trying to sort out how VoIP service providers can deliver E-911. After recent conference calls on March 27 & 28, about the only thing the ESWG members could agree on was that they will never agree, according to a report by the Canadian Association of VoIP Providers.

Almost as if to prove the dependency that new entrants still have on ILECs for certain bottleneck services, a flare-up arose in architectural design for a solution for E-911. The four major cable carriers, Cogeco, Videotron, Rogers and Shaw, called for an immediate stop to activities at the ESWG. In a letter filed with the Commission, the Cable Companies are reported to have expressed “deep concern with the direction being taken within the ESWG” and labelled the process as “abusive”.

There seem to be three or four irreconcilable positions: ILECs; Cablecos; Quebec ISPs and CAVP. It is unclear that the CRTC will be willing nor able to choose an approach – certainly not in a timely fashion.

As a result, access independent VoIP customers may be the losers, having to wait for an industry-wide solution. At the same time, we may be seeing whether VoIP customers really rely on 911.

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