Olympic Upset

Despite the fact that Cindy Klassen is from Winnipeg, I wasn’t expecting MTS / Allstream to be her telecom sponsor. With all the money that Bell Canada is pouring into the Olympics, I sure thought that Cindy would have ended up with Canada’s biggest phone company, not the underdog from Manitoba. Maybe this speaks volumes about support for the hometown company by Canada’s most decorated Olympian, rather than her succumbing to the easy temptation of endorsing the wares of the highest bidder.

Let’s see if MTS is able to translate this gold-medal win into a momentum that leads their sales teams to upset Bell and TELUS in the marketplace.

Ramblings about the Income Trust

I have been continuing to wonder about the proposed income trust spin out of rural lines at Bell Canada. I somewhat understand why the lines aren’t being sold to the existing structure at Bell Nordique. After all, Bell Nordique has long been operated as a separate company and it has its own maintenance crews, etc. The model for the new income trust, as I understand it, is for the staff to remain at Bell and to be working under contract for the income trust company.

Question: doesn’t this model leave open the possibility to manipulate the transfer payments. If Bell is looking for some extra revenues, it increases the management fees. Or vice versa? How do we ensure that the fees are representative of arms length transactions?

Interesting calls about RIM

I’ve recently fielded some questions asking about the RIM/NTP case. The questions had to do with whether it was really so tough for carriers to implement an injunction, should the judge decide to side with NTP. NTP is saying that they would give an exemption to the US government and relief workers (police, ambulance, etc. ) and now are conceding that the injunction need only apply to new installations.

Among the issues that people don’t quite understand are the challenges in identifying who is allowed and who isn’t. Although RIM claims it has developed a work-around, it requires users to install new software in the devices and in the Blackberry Enterprise Servers.

If one new employee starts, you presumably have to convert over the entire user base to the work-around solution. Any solution dependent on users doing something is bound to lead to angry customers.

No matter how much publicity goes out up front, a lot of people will ignore the messages until their device goes dead. And if that happens to enough executives, you should be able to hear the shouting all the way up here in Toronto.

By the way, Canadians shouldn’t be smug about this. We still have no idea about what this means for RIM services for travellers in the US.

What else do you want us to do?

So, what happens when a marketing firm violates its own privacy policy? Even worse, what happens when that firm does it to a telecom industry consultant? How should it make amends?

Well, violating my trust relationship is exactly what happened recently. A company called N5R.com sent me an invitation to respond to a promotion on behalf of one of their clients – a car company. The problem is that N5R addressed the email to an address that I used for a one time only promotion from one of their other clients.

There is an advantage to owning an entire domain: everytime I sign up for a website, I use a different email address. That way I know who is selling my name.

In this instance, I was pretty sure that the original client had not sold their list to a car company. According to its website, N5R does work in the telecom sector – my area of business. It just seems to me that companies operating as an outsourcer – running promotions on behalf of major firms – should not be able to blow the trust that comes with people giving them information.

Maybe in baseball you get three strikes before you get called out – but I think this is more like sudden death play-offs; you lose once and you are out of the tournament.

Musings on the Deferral Account

Last week’s CRTC Decision on the Deferral accounts has 95% of the money going to fund expanded broadband access in rural and remote territory. There is an interesting twist that has gone without notice by the majority of analysts. Paragraph 194 says

As indicated above, the Commission considers that any backbone facilities constructed with funds from the deferral accounts should be made available to alternative broadband service providers on the same terms as the ILECs. The Commission considers that allowing all providers to use backbone facilities on the same terms will encourage competition while also providing direct benefits to consumers. The Commission further considers that, since the ILECs would be compensated from the deferral accounts for the uneconomic portion of these initiatives, all service providers should have access to these backbone facilities at a minimal rate. The Commission considers that the maintenance rate applicable to dark fibre backbone facilities could be a reasonable proxy rate in these circumstances. This rate will be established when the Commission approves each ILEC’s broadband expansion proposal. [emphasis added]

What does this all mean? It looks like a return to the old days of Construction Program Reviews when the ILECs file their plans this summer. For each of the projects, it looks like the ILECs will need to identify what portion of the draw from the deferral account is attributable to backbone facilities (versus access facilities). If deferral account money is going to subsidize the construction of the backbone, then competitors stand to get access at reduced (or free) rates. That kind of stimulation of competition will be interesting to manage.

Presumably, we will see tables that identify reduced prices for competitors on a route-by-route basis. What rules will apply for this access? If backbone is free to competitors for a given community, will a user sharing group get together in order to qualify a service provider and thereby get free service? Will the route get forborne if someone else builds facilities (such as the electric utilities)?

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