What is going on with the Cabinet and the appeal of the CRTC’s Deferral Account Decision, which was issued Feb 16, 2006?

Under the rules (Telecom Act, Section 12), Cabinet has one year to “vary or rescind the decision or refer it back to the Commission for reconsideration of all or a portion of it.”

The appeal is also in front of the courts. Time runs out tomorrow.

Will Cabinet ‘punt the ball’ by sending it back to the CRTC for reconsideration – perhaps instructing it to have a fresh look with a view to the Policy Direction? That allows the issue to continue being open while the concurrent Court case proceeds without having to worry about the calendar restrictions imposed by the Telecom Act.

Incidentally, a reader pointed out that CRTC Vice Chairman Richard French was asked about the size of the potential rebate during the INDU Committee meetings last week.

We would have returned something like $2 or $3 to each consumer, on one bill. We looked at that money in one place and we thought, what can we do that would make a fundamental change in the infrastructure of the country?

Can someone help me with the arithmetic there? I thought we were looking at $650M in the account which works out to $20 per person living in Canada. It varies by region with Bell Canada having $480M just for its territory. How can we make sure that everyone has got the right facts?

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Update: [February 17, 10:15 pm]
I understand that Cabinet has denied the appeal. Although the Order in Council is dated February 8, it did not hit the Privy Council website until yesterday afternoon:

…whereas the Governor in Council notes that the Commission established conditions for funding the expansion of broadband services initiatives and that, among other things, those conditions address competitive neutrality issues;

Therefore, Her Excellency the Governor General in Council, on the recommendation of the Minister of Industry, pursuant to subsection 12(1) of the Telecommunications Act, hereby declines to vary or rescind Telecom Decision CRTC 2006‑9 or to refer it back to the Canadian Radio‑television and Telecommunications Commission for reconsideration.

Technorati Tags:
CRTC, cabinet, Bell, MTS Allstream, TELUS, deferral account

Corus Entertainment, controlled by the Shaw family, entered into an agreement with MTS to provide Movie Central on Demand to MTS TV customers.

Keep in mind that Shaw is the incumbent cable company in MTS territory – where MTS has been extraordinarily successful in its TV offering.

Cooperative competition or just plain pragmatism? Maximizing viewership for its property Movie Central? Is there a lesson to be learned for net neutrality about the effectiveness of the marketplace to do the right thing for consumers?

Profit has proven itself to be a good motivator for content owners and distribution channels to maximize the value of their products, even when the content owners compete with the distributor.

Money makes the world go around.

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MTS, Shaw, Corus, Movie Central

Pronunciation: “ä-li-‘gä-p&-lE, “O-
a condition in which a few sellers dominate a particular market to the detriment of competition by others

You’ll find that a lot of people use the term oligopoly in reference to the Canadian mobile market. They point to wide price differentials between Canadian and US mobile calling plans; seeming indifference from the carriers; disciplined pricing; reduction in competition due to mergers; etc.

However, last week’s disappointing wireless results from Bell may be signalling that the unregulated, free marketplace is actually working, managed by the power of consumer choice.

A report last week from RBC Capital Markets includes a section called Bell Mobility Rate Increases Help Profitability But May Be Going Too Far. In it, RBC CM says:

Bell’s $2/month SAF increase to postpaid plans was frequently noted in our discussions with independent retailers and contributed to the slowdown in subscriber growth this quarter, in our view. …

While the rate increase should narrow the ARPU gap with its peers and improve EBITDA flow-through …, we nevertheless believe that Bell’s pricing increase by way of the SAF may be a hindrance to future growth as:

1. neither Rogers nor TELUS plan to match the increase, which leaves Bell at a potential disadvantage as the SAF is one of the few billable items that is directly comparable across rate plans;
   
2. with rising penetration we believe there is less scope for such obvious rate increases (Rogers and TELUS achieved higher ARPU through stimulating usage and data services – not by having premium prices); and
   
3. with ongoing regulatory examination, frequent media reports comparing Canada’s higher prices vs. the U.S., and a potential spectrum auction approaching in the next 12 months, rate increases may help to skew public sentiment against the industry.

In other words, RBC CM and the financial community wasn’t any happier about the SAF increase than anybody buying mobile phone service.

Net adds were down because potential new customers shopped elsewhere – signs that the competitive marketplace may be able to discipline itself. While existing customers had little choice – for now – watch what happens at renewal time.

We’ll be looking at churn as contracts come due in the next quarter. Wireless number portability is coming in one month.

Technorati Tags:
Bell Canada, WNP, RBC, System Access Fee, Rogers, TELUS