A couple of us were talking about Wednesday’s speech by Industry Minister Maxime Bernier. When researching the text of the speech, I noticed that the Minister had a recent speech announcing the Bovine Mastitis Research Network. Maybe it’s just me, but that kind of research is not the kind of thing you would normally associate with Industry Canada.
As noted earlier in the week, in his telecom speech at the Economic Club of Toronto, the Minister said:
…many people believe that it is up to the government to bring about economic growth. As one once said, such a view of the economy could be summed up in a few short phrases: if it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it. This is not a view that I share.
With reference to the Minister’s interest in bovine research, if it moos, would we still tax it?
Mark Evans looks at satellite radio in the wake of results coming out this week from Canadian Satellite Radio (TSX: XSR), the people who bring XM to Canada. Mark asks whether subscriber numbers of 1 million are attainable.
We’re looking at this right now in our household. We are halfway through our 90 day trial subscription provided as part of the purchase of a new car and we need to decide whether to sign up, as Mark Evans says, to 50 cents a day in programming costs.
I have to admit, I like XM channel 46 – Toptracks. On a recent 4 hour drive to Detroit, I found it played my music the whole way down. My wife had her headphones on watching season 2 of Grey’s Anatomy, so she was able to put up with (or maybe just ignore) me singing along to my kind of music – even I sound good singing back-up to Neil Young and Bob Dylan.
But, are we prepared to plunk down $14.99 per month for (almost) commercial free music?
Mark says:
While I can see how satellite-radio can appeal to certain types of customers (taxi and truck drivers, serious commuters, cottage owners), I’m still not sold on its mainstream appeal.
I’ll tell you about cottage country music. As soon as I get past Gasoline Alley north of Barrie, the car radio seems to tune itself to The Moose (99.5). All cottage music, all the time.
So how does the CRTC fit into this week’s announcement from Cabinet?
The CRTC issued a Circular yesterday to give effect to the Order in Council. The circular noted that the tariffs for Bell Canada’s Digital Voice Lite, Bell’s Business IP Voice for Broadband and SaskTel’s Webcall are no longer of any force.
More is required in order to be consistent with the Order in Council. We believe that there should still be a further review and variance of Decision 2006-53 – the VoIP reconsideration.
As I mentioned in yesterday’s posting, the Cabinet Order left Canada with a strange situation that foreign-based VoIP service providers are free from both price regulation and obligations to provide equal access, while Canadian carriers, ILECs and CLECs alike, need to conform to requirements that were designed for the old world of circuit switching.
the Commission examined the issue of equal access for VoIP services in the proceeding leading to Decision 2006-11. In Decision 2006-11, the Commission reiterated its concern regarding the possibility of a LEC conferring undue or unreasonable preference with respect to access to its networks. It considered that consumers should continue to have options by being able to select interexchange carriers when subscribing to a VoIP service from a LEC. As a result, the Commission considered that Bell Canada should implement equal access capabilities for BDV Lite service within one year. … The Commission considers that eliminating the equal access requirement for LECs in relation to the provision of VoIP services would result in artificial distinctions based on technology. The Commission remains of the view, expressed in Decisions 97-8 and 2005-28, that it is necessary to impose equivalent equal access obligations on all LECs, regardless of the technology used.
A Commission decision may be reviewed and varied if there is substantial doubt as to the correctness of the original decision, for example due to an error of law or fact, a fundamental change in circumstances or facts since the decision, failure to consider a basic principle or a new principle which has arisen as a result of the decision.
According to Decision 2006-53, the Equal Access requirement was predicated, at least in part, on the Commission’s desire to avoid ‘artificial distictions based on technology.’ Since the Cabinet intervention, the CRTC’s principle of technology neutrality no longer holds for access-independent VoIP. There is no longer an artificial distinction being sought. Cabinet has determined “that retail local access-dependent and access‑independent VoIP services are quite different from each other.”
Since access-independent VoIP is now a real distinction and no longer an artificial one, a key premise for imposing equal access obligations no longer holds.
Will the CRTC act of its own motion and demonstrate that it is prepared to work within the full intent of the Minister’s direction, or will it force the entire Canadian carrier industry, ILECs and CLECs alike, to undergo a lengthy industry initiated review and vary process?
How much longer will we delay the consumer benefits of allowing LECs to compete with foreign service providers?
Reuters is reporting that most of Lucent – Alcatel’s 9000 post-merger job cuts will take place in North America and Western Europe.
According to Alcatel Chief Financial Officer Jean-Pascal Beaufret:
Close to 90 percent of headcount [reductions]) will be done in western Europe and North America. [Alcatel and Lucent] know precisely in every country which head will be taken
Are the Ontario and Canadian governments doing their parts to safeguard Alcatel R&D jobs?
In an interview yesterday, I was asked why Cabinet didn’t go further and order lessened regulation on the entire VoIP regime.
As Cabinet noted, it is a non-trivial exercise to determine the division between digital voice and VoIP. But it is very easy to examine distinctions on who controls the access and whether there is any bundling or ability to exercise control on the application itself – for example, “obtain the permission of the network provider to offer the service”.
So, Cabinet ruled that “access‑independent VoIP services are very different” and could easily be regulated using a different regime.
But there remains a question as to why Canadian carriers, ILECs and CLECs alike, will be subject to more onerous obligations than US resellers like Vonage and others. Why is the CRTC still going to require equal access for Canadian carriers and not for others?
What does equal access mean in an environment of access independence? Let’s look at an interesting scenario. I live in Toronto, and buy an access-independent VoIP service from a carrier, with a Montreal number for my kid at McGill and a New York number for my family in the US to call. I take the adapter with me on a business trip to Europe and call Hong Kong. What does equal access mean? How will any of the carriers know where I am at any point?
The answer is that the ILECs just didn’t put forward convincing evidence of the technical challenges associated with defining equal access in an access-independent VoIP environment. The record at the CRTC in the proceeding that led to the approval of Bell Digital Voice (Decision 2006-11) shows the promise of a technically viable solution that will be ultimately be meaningless in the marketplace.
It is what I like to call the ‘Iridium Syndrome’. Engineering solutions solving a non-existant problem resulting in massive flushing of cash.
Left with no evidence to the contrary during the VoIP reconsideration, the CRTC could see no reason to change their ruling in September:
The Commission considers that the Companies have not provided any specific additional evidence regarding the difficulties and costs associated with the provision of equal access for access-independent VoIP services.
It is too bad that there wasn’t more focus on the terms and conditions associated with access-independent VoIP.
As written in the Order in Council:
Whereas the Governor in Council considers that retail local access-dependent and access‑independent VoIP services are quite different from each other; … Whereas the Governor in Council considers that VoIP is a relatively new and rapidly evolving technology used to provide telephone services and that it is in the public interest to enable efficient and timely deployment of innovative new technologies by all telecommunications service providers
So why would we still subject Canadian carriers to the equal access obligations for their version of access-independent VoIP? If VoIP is new and rapidly evolving and quite different from regular voice service, wouldn’t it make more sense to dissociate the obligations that were designed for a circuit-switched world?
I’m concerned that Cabinet’s ruling may not go far enough. Is it sufficient for carriers to have won pricing freedom but still be handcuffed by the legacy CLEC obligations, especially when foreign resellers have no such encumbrances?
We’ll have more thoughts tomorrow on how this can be fixed.
