The issue of illegal content on the internet is one that I have discussed a number of times on this site. Still, there are a lot of difficult issues that need to be explored and that merit discussion.

Michael Geist is hosting a good conversation in the wake of this week’s announcement about Canadian ISPs finally adopting the UK Cleanfeed technology, based on a blacklist to be supplied by Cybertip.ca.

The Canadian Telecom Summit will again explore the issue of dealing with Illegal Content on the Internet.

There continue to be many serious issues to be explored.

The CRTC issued a Decision yesterday that allows increased price flexibility for the incumbent telephone companies for services other than VoIP.

Earlier this year, the CRTC granted substantial pricing flexibility for ILEC VoIP services.

Yesterday, the CRTC added conventional local phone service.

The Commission notes that the use of rate ranges will permit an ILEC to change rates within an approved range, at any time, without delay and without the requirement to file a tariff application and obtain Commission approval, thus reducing regulatory burden for both the ILECs and the Commission.

Rate reductions will be subject to CRTC restrictions on price de-averaging, so the telephone companies cannot target price changes.

Consumer groups were concerned about the impact on contracts. The groups asked for consumers to be given an opportunity to terminate their contracts if rates increased. In denying this request,

The Commission notes that there is no such requirement in the case of price changes applicable to single-rate tariffs.

I think the CRTC forgot an important point. Under the former single-rate tariffs, the process included notice of a price change, especially price increases, and often an opportunity for consumer groups to intervene.

Under the new framework, consumers apparently will just have to accept a price change with no recourse.

Let’s look at a potential scenario.

Assume a current service is $30 per month, but has costs of only $20. Now, the telephone company drops rates down to the floor. People love the service and love the rate even more. They sign-up in droves. The contract says rate is subject to CRTC approved tariffs. With a big piece of the market now under contract, the telco decides to raise the price. If the customers are lucky, ther service falls into the category of capped services, so there is an upper limit on the price range. Uncapped services will have no upper pricing constraint. Rates could go through the roof and consumers are stuck with substantial price increases.

You might try to argue that consumers will simply switch providers when the contract comes due. Don’t forget – this is happening in a market that is not subject to sufficient competition to justify forbearance. So it certainly isn’t going to discipline such behaviour by the ILEC.

Take a look at what happened with Centrex this past summer. Look at 25% system access fee hikes.

Long terms contracts for consumers are looking more like signed blank cheques. Where are the consumer safeguards?

Canada’s largest internet service providers have announced that they are installing filters to block illegal child exploitation content from their customers.

The participating ISPs, which so far include Bell Aliant, Bell Canada, MTS Allstream, Rogers, SaskTel, Shaw Communications Inc., TELUS, and Videotron. The ISPs, all of which are carriers, have the overwhelming majority of Canadian internet access subscribers.

It is my understanding that the carriers do not intend to apply to the CRTC for authority to implement “Project Cleanfeed Canada”.

An article in this morning’s National Post suggests that the federal government will be among the first to benefit from wireless number portability.

There is an RFP on the street for supplying the government with about 100,000 mobile devices (cel phones and PDAs) The government contract will be split between two providers, one bidder getting a guaranteed 60% of the business and the other 20%. The remaining 20% will be apportioned between the two.

An observer is quoted, suggesting that this approach is politically motivated:

… the contract’s structure suggests influence from political lobbying. If the government wanted to spur competition between providers and drive its cellphone bill lower, it should be looking to award its services to one company rather than two.

“It’s totally political… maybe the western half of politicians and government workers want to see Telus there and the eastern folks want to see Rogers or Bell. This is probably a compromise to avoid a lot of in-fighting that’s going on.”

I disagree.

Splitting the contract is an excellent way to buy communications services, especially mobile wireless, where network realities have proven that not all networks provide identical coverage. Under this type of contract, PWGSC will have the ability to ensure the suppliers stay sharp and competitive – always trying to increase their share of the 20,000 lines that are up for grabs.

If smart contracting is “totally political,” then I like those politics.