The consulting firm of Lemay-Yates was commissioned by the 4 biggest cable companies together with Allstream and Primus, to prepare a study of international regulatory regimes treatment of VoIP. The report was attached to the submission of the cable companies in the CRTC VoIP reconsideration proceeding. In the report’s summary, the authors note:
A significant difference between Canada and other countries including European countries, derives from the fact that, in these countries, the underlying physical infrastructure (namely the local loop) is a different market segment from local calling services.
This sounds somewhat consistent with the solution we proposed last year – unbundling the access from the voice application. Examine the state of competition for the access link separately from the application riding on the access.
Our approach did not require a mandated unbundling of voice from the local loop. We suggested that the loop could continue to be regulated as a bottleneck facility. If any applications, including voice, are bundled with the loop, then the CRTC’s bundling rules would apply. However, if applications are not bundled with the loop, then there is no reason to apply economic regulation to the application, which is fully competitive.
Such an approach allows technical neutrality, while the regulatory analysis is done on the basis of proper decomposition of the component parts. This approach accommodates wireless and wireline in a consistent manner.
Forbes.com has an article about some of the thinking behind AT&T; replacing the Cingular brandname upon completion of the acquisition of Bell South. Some of the Cingular wireless customers will find themselves switching back to AT&T;, having been spun out to Cingular when AT&T; shed its wireless operations in 2004.
A couple months ago, we wrote that Israel continues to be a hotbed for telecom technology development, especially photonics and IP. It is amazing that such a small country can be such fertile ground for technology development.
We have been watching and participating in the Israeli telecom market and encourage others to look at attending the Israel Telecom trade fair taking place November 6-9 in Tel Aviv. We’re planning to go and we would love to be part of a Canadian contingent. Let me know if you’re interested in joining us!
As would be expected, the cable companies said the CRTC got everything right the first time around.
The phone companies, as would be expected, said the CRTC got it all wrong first time around.
It was a little less obvious how some of the other parties would deal with the CRTC re-opening its VoIP regulatory file.
The Coalition for Competitive Telecommunications came out with a very strong position to keep hands-off in the first go-around two years ago. It largely echoed its initial position to keep out of economic regulation, but applauded the CRTC’s strong hand in social regulation. In general, not a major surprise, although it was nice to see a concession that in one of five areas examined by the Coalition, the CRTC got it somewhat right.
The bigger surprise was Nortel stepping back into the fray. The question is, why did Nortel risk alienating its cable company customers by voicing support for the telephone company position? Their intervention includes language like “Nortel is not a service provider for VoIP services, but Nortel offers technologies that make VoIP services possible.”
Why would an arms dealer want a seat at the peace talks?
The submission states that Nortel supplies VoIP solutions to Bell, TELUS, Sasktel, Allstream and Rogers, yet the positions put forward by Nortel seem to contradict the views of Rogers and the rest of the cable companies.
Nortel says:
In this submission, we provide a technology perspective on issues that the Commission may find useful to consider as it reviews current regulatory policy. Specifically, we discuss:
how the most significant disruptive force in the industry today  network convergence  is impacting the evolution of networks and the telecom industry;
how the use of IP technology continues to lower market entry barriers for new service providers and positions service providers of all types to change their network business cases; …
Rogers, on behalf of itself, Videotron and Cogeco, said
The principle is based on the idea that the regulator should not decide competitive outcomes by favouring one type of technology over another. This allows carriers to make technology choices based on economic characteristics and technical capabilities of a given technology, rather than on gaming the regulatory regime. Following the principle of technological neutrality also encourages carriers to pursue new technologies and least-cost solutions to service issues, demographics or topography.
In a joint press release, the cable companies said
The original decision to treat VoIP as a telephone service and not simply as a new technology, continues to make sense today as it did last year. The submission notes the fact that all industry participants agree that VoIP and traditional local exchange services offer the same end product in the minds of consumers.
In other words, Nortel says that the CRTC has to consider the impact of new technologies like IP while Rogers and the rest of the cable industry says that the CRTC should stick with its principle of technological neutrality.
It doesn’t matter which side is correct or even if both are correct. What matters is that a supplier of technology is publicly taking a position that may be in conflict with its cable company customers, while mentioning that it supplies Rogers. In this proceeding, Nortel looks like it picked sides, when it had very little to gain in participating in this regulatory dispute.
When each customer, whether telco or cableco, needs to be so carefully cultivated and nurtured, you have to wonder why this global communications leader forgot that silence is sometimes the most meaningful way to communicate.
Consumers need to be able to access all the content that’s available over the Internet without being impeded by the access provider. But at the same time, we recognized that the people that are deploying these networks may offer differentiated speeds and differentiated products to the consumer.
And if you offer different tiers of speeds, a consumer chooses the lowest tier, and he wants to access content that would require higher speeds than he has purchased, he’s not being blocked from access. He just hasn’t purchased the speed that’s necessary.
