Paying for Touchtone

Victor Dwyer, writing in this weekend’s Globe and Mail, asked why he is paying for Touch tone service.

Would you still need to pay for obvious features like this in a truly competitive world of local telecom? Call your local cable company and ask them if they charge for tone dialing. Try to get service without it.

Ask Bell why they still charge. Their initial answer will be that they have to – it is in their tariffs, and they will likely add that the CRTC won’t let them waive the fee. Technically, that is correct, but don’t forget to ask if Bell has asked the CRTC for permission to reduce the price of local service to eliminate the charge. That would be the CRTC’s response: Bell is free to apply for a rate reduction. But what company could reasonably be expected to offer such a discount to every customer.

That is not how competition works.

A fully competitive market means that the price reduction would not have to be applied across the board. Some people would get better discounts than others.

Not fair, you say? Gee, I know of lots of people who paid less for their car than me; less for their clothes, their computer, their flowers and lots of other stuff. Of course, I paid less for a few things – I think.

Don’t get me started talking about prices for hotel rooms.

But these are all fully competitive markets.

So, keep asking why you still have to pay for touchtone. It’s a good example of the benefits that can arise from opening up the Local Services market.

Capitalism to the core

We’re heading to a Muskoka auction today, since the weather has made for less than ideal boating, golfing, or anything else cottage-like.

I can’t help but think of the use of auctions as the perfect tool to match the value of a good to the willingness of a buyer to pay. A little discipline is needed to help prevent the excitement driving you to spend $5 too much on a butter churn.

An auction is the system that Barrett is seeking for determining the recipient of an underserved territory subsidy. It is the system that the Telecom Policy Review panel recommended. Barrett has launched a Cabinet appeal of the deferral account decision which awarded the subsidy to the incumbent telephone companies.

Broadcasting Act Quiz

A holiday weekend guest blog from a broadcast associate. The following blog entry is an unpaid announcement. The views may not represent the views of this station, its owners or affiliates… or whatever they say on late night TV.

Which of the following principles are found in the Broadcasting Act?:

  1. maximum use of Canadian creative and other resources
  2. readily adaptable to scientific and technological change
  3. reliance on market forces
  4. do not inhibit the development of information technologies

Broadcasting has always been its own particular world, but observers of that world are saying that it’s getting harder and harder to divine what exactly is behind the CRTC’s thinking.

Radio broadcasters are up before the Commission this week, and while it seems pretty clear the radio business is facing some serious challenges — youth now listening to half the radio their elders do; using the cell phone, computer and the Internet to satisfy a third or more of their media/entertainment needs — radio is profitable now, and hence, indications are, the Commission will extract some form of greater “Cancon” contribution. On the other hand, as this site has discussed, the Commission has walked away from broadcast regulation of the mobile space and imposed a minimalist regulatory regime on satellite radio. How all this gets squared in the future is anybody’s guess.

Then witness the Pay TV decision this week. As the Globe reported Friday morning, 4 years of Burger’s life gone, and he’s left wondering why the other guy got the nod, why the Commission introduced a modicum of competition but went back to its old practice of “picking winners” rather than letting the market decide. And new specialty services (basically pay services, but with advertising) are left wondering why they no longer get guaranteed access, but this Allarco service does.

If there’s a consistent pattern here, it doesn’t seem to be in the Broadcasting Act.

And by the way, the answer is all but #3.

Stimulating the talent pool

U of TI have spent a couple days this week participating in activities at University of Toronto. It is particularly satisfying to be part of this advisory board.

On Monday, I delivered a lecture on telecom policy and regulation to the Executive Development Program – helping set the stage for a week of professional development for 51 executives from carriers and suppliers.

On Thursday, I was involved with advisory board meetings for the Master of Engineering in Telecom program. One of our key concerns was ensuring there will be continuing development of relevant talent for companies to recruit; an equal concern is ensuring that there will be a continued pool of newly created, entrepreneurial Canadian telecommunications companies to do the recruiting.

We are looking at some innovative projects to stimulate the pool of well qualified candidates for the Master of Engineering in Telecom programme and expand the breadth of scope for the program: call it MET 2.0. How would you approach the challenge of stimulating telecom career development on campus? I’ll report back as work continues.

Strange bedfellows

As a conference organizer, I am used to seeing a bunch of competing corporate logos on the same sign or list of sponsors.

However, since the demise of the Stentor Alliance and the old Trans Canada Telecom System, it has been more unusual to see all of these rivalrous companies submitting joint comments. We are a little more used to collaboration on the wireless side and every so often we see a joint submission to appeal a decision. Last week’s cabinet appeal was noteworthy in that it was signed by the CEOs of TELUS, Sasktel, Bell and Aliant.

The level of cooperation reached a new post-Stentor high in the CRTC proceeding on the Do Not Call List. TELUS, Sasktel, MTS, Bell, Aliant, Norterntel, Northwestel and Telebec joined forces. Yes, even MTS was part of the club.

I understand that there are common issues and interests. But, the last time I looked, telemarketing was a sizable piece of business for these companies. Somehow, it just doesn’t look right for every single one of the carriers to be working together to jointly propose the best way to move forward on the operation of the DNCL, and the restraints to be imposed on their customers.

Similar forms of ‘rational competition’ strike me as limiting delivery of competitive benefits to consumers.

I know it saves costs if carriers combine their efforts. It would help profits if they agreed on prices as well.

In today’s post-Enron corporate governance and post-sponsorship government ethics, world of distrust of government, I think the public deserves the appearance of more independence between the competing factions.

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