Michael Geist is chairing the conference. Between our two blogs, I am certain we’ll provide reports of interest.
Watch this space for updates.
Technorati Tags:
hate, Racist, Illegal Content, Canadian Jewish Congress, Michael Geist, Mark Goldberg
On Thursday, Michael Geist wrote about the CBC’s submission to the CRTC proceeding examining the future of broadcasting.
He pointed out that CBC raises the issue of Net Neutrality:
The business case analysis for Internet video is complicated by the fact that suppliers of broadband connections may also have incentives to control the bandwidth available for Internet video. Canadian cable companies engage in “bandwidth shaping” which allocates different levels of transmission capacity to different services according to the operational preferences of the cable company. This type of bandwidth shaping can ensure efficient use of transmission capacity. It can also ensure that Internet video by third parties does not become a threat to the business of the cable company, whether it be the delivery of traditional television programming to cable subscribers, VOD or the distribution of cable company-owned Internet video services.
[emphasis in original]
The CRTC has looked at this issue twice in relation to VoIP. In the original 2005 VoIP Decision in 2005, the CRTC said
The Commission considers that it can rely on subsection 27(2) of the Act, where appropriate, to prohibit a Canadian carrier from restricting its broadband customers from dealing with an alternative service provider of the customer’s choice. This issue can therefore be addressed by the Commission on a case-by-case basis, should it arise. Such competitive disputes are likely to be resolved by the Commission in a timely manner, using its expedited procedures.
[P. 475]In light of the foregoing, the Commission concludes that it would not be appropriate to impose a general obligation on all broadband access providers to unbundle quality of service capabilities that these providers offer to their own customers at this time.
[P. 482]
In its recent reconsideration of the VoIP regulatory regime. the CRTC again declined to create specific Net Neutrality regulations, again citing S. 27(2) of the Telecom Act:
In Decision 2005-28, the Commission considered that it could rely on subsection 27(2) of the Act, where appropriate, to prohibit a Canadian carrier from restricting its broadband customers from dealing with an alternative service provider of the customer’s choice. The Commission also considered that any such issues could be addressed on a case-by-case basis using expedited procedures and denied parties’ requests for the imposition of an access condition.
[P. 132]
Accordingly, the Commission denies the requests of Vonage and Cybersurf to re-examine the need for an access condition at this time.[P. 134]
In relation to voice service, twice the CRTC looked squarely at whether specific conditions needed to be imposed on facilities-based ISPs. Both times, the CRTC determined that there is already sufficient protection contained within the current regulatory framework.
What is Section 27(2)? It is the Unjust Discrimination provision of the Telecom Act:
No Canadian carrier shall, in relation to the provision of a telecommunications service or the charging of a rate for it, unjustly discriminate or give an undue or unreasonable preference toward any person, including itself, or subject any person to an undue or unreasonable disadvantage.
This provision has seen a lot of action through the years – there are special meanings that we can help you understand for every “un” word.
Will the CRTC reach the same conclusions as it did with VoIP in respect of neutrality provisions for broadcasting over the internet?
Technorati Tags:
CRTC, CBC, Net Neutrality, VoIP, broadcasting, Michael Geist, Mark Goldberg
In a posting at the time the Decision was released, we followed up on a Mark Evans summary of 4 areas of concern in the CRTC’s original Decision. At that time, we looked at
The mobile issue has been getting re-examined since June. The 25% criteria is now under review. The time lag issue can be dealt with fresh data, which the ILECs have been invited to submit.
That leaves the matter of the definitions of geographic areas. The issue is how big an area to apply the 25% criteria.
As we wrote in April:
the CRTC had to pick a reasonable geographic territory in which to measure the competitor entry. They picked Statistics Canada’s census areas. Why? Why not. It lets the CRTC point to another government agency. But it does introduce yet another regional separation into telephonic regulatory lexicon. We already have wire centres, exchanges, local calling, LIR, provinces, operating territories, etc. Again the issue of symmetry arises: why use something as broad as a census area when competitors enter the market exchange by exchange. While on one hand the CRTC argues that “there are economic, social and practical factors that will allow locations to be aggregated into a larger geographic area”, does the petrochemical driven economy of Sarnia really have anything more than an Area Code in common with Chatham? Given the alignment of CMAs in Ontario, we could see forbearance approved sooner in Guelph, Barrie and Oshawa than in Toronto, only because of closer alignment of the CMA to exchanges.
It is somewhat ironic that the CRTC chose Statistics Canada CMA boundaries. It was Stats Can’s release of its residential telephone survey that first poked holes in the Local Forbearance Decision, the very day it was released.
Is it going to take a third review of 2006-15 or will the CRTC expand the scope of its current review to examine geography as well?
Almost exactly a year ago, the cover story on the September 15, 2005 issue of The Economist was entitled “How the internet killed the phone business.” If that was so, over the past year, we have seen various signals that indicate a reincarnation.
I think it would have been more accurate to talk about ‘energizing’ the phone business, not killing it. Indeed, it isn’t just the internet that is catalysing change, we see wireless technologies, computer processing, entertainment and societal behaviours also driving a renewal of investment and employment growth.
TELUS has just announced a capital program to upgrade its high speed infrastructure to support TV and other bandwidth intensive services. Earlier this week, Toronto Hydro Telecom launched its downtown WiFi umbrella.
Bell is investing in extending its Optimax offering to more cities, pushing optical nodes closer to the home. Last week, Rogers entered into a multi-media marketing arrangement with Maple Leaf Sports. Most Canadian cable companies have been raising the speed of their basic internet services – in some cases to 10Mbps.
All signs point to active, vigorous rivalry in the market. Prices (at least per bit per second) are falling, at least for wireline services. We have written over the past month or so about the vitality of some companies, investing in new buildings, offering innovative new bundles.
On the periphery, there are IP-enabled companies, some small and some very large, offering voice and TV services riding over customer provisioned internet access streams. A recent CATA/Monster report says that the telecom sector has among the greatest number of job postings.
To paraphrase Mark Twain once said, reports of the demise of the phone business have been greatly exagerated.
Update:
Mike Urlocker has a good post-script that looks at The Economist story a little more and asks some good questions.
So what is going on at the CRTC with the Local Forbearance file? The CRTC set rules for loosening regulation in local phone service in an April 6 Decision. Last week, the CRTC decided to review that Decision, for the second time in 5 months.
Mark Evans asked Did the CRTC Goof? when it is looking at the rules again after less than 5 months?
Paul Vieira of the National Post suggested the CRTC is defying Ottawa on VoIP, while starting a fresh look at the local forbearance Decision. In his article on Saturday, he quotes Ken Engelhart, who said he is pleased the CRTC stuck to its VoIP ruling, but at the same time dismayed with the move to review the rules governing local deregulation.
It is hard when companies like Rogers make massive investments based on one set of rules, and then the government keeps changing those rules in the middle of the process. We are a bit disappointed by that.
In April, the CRTC decided deregulation could occur in a specific region once monopoly phone providers lose 25% of their market share. Until that time, incumbent services are price regulated. Why have a fresh look at the 25% market share loss criteria?
When the CRTC picked the 25% number, it said
In the Commission’s view, setting the level of applicant ILEC market share loss to be used as a criterion for the purposes of the local forbearance framework is not a precise scientific exercise; nor did any of the parties to the proceeding pretend that it was. The Commission considers that the level of applicant ILEC market share loss should be set at a sufficiently high level that the Commission can have confidence that a critical mass of customers have decided to receive their local exchange services from competitors, and as a consequence there is a wider acceptance by customers within a relevant market of the reality of local exchange service competition, and an openness to trying competitive alternatives. In short, the Commission considers that the applicant ILEC market share loss level should be set at a level that, when taken into consideration with the other criteria, demonstrates that competition in that relevant market is sustainable.
[p. 247, Decision 2006-15]
What has changed since April? We really need to see what has changed since the end of 2004, the data period upon which the CRTC based its Decision in April 2006.
The CRTC sought a number that would enable it to “have confidence that a critical mass of customers have decided to receive their local exchange services from competitors” prior to forbearing from price regulation. It says that its selection of 25% was based in part on high churn rates at the time. In the Commission’s view, high churn is reflective of customers not having “wider acceptance … of the reality of local exchange service competition.”
The fact is that the bar was set too high last April for consumers to see a forborne marketplace in most of the country. Business customers are another matter.
The CRTC is finally on a path to getting out of the way of full competition between the cable companies and telephone companies. Its Local Forbearance Decision started to unravel the day it was released when Statistics Canada showed that it had better data on the state of competition and released its report the same day. The local forbearance decision had problems that had to be fixed – the CRTC had to choose whether to open it up on its own, or force the Cabinet to order them to give it a fresh look.
As unappealing as it is to have such instability in the regulations, it is worse to have the wrong rules in place. My next question is whether the Commission is reviewing enough elements of the Local Forbearance Decision.
We’ll look at that tomorrow.