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Why Cabinet didn’t go far enough

Coat of ArmsIn an interview yesterday, I was asked why Cabinet didn’t go further and order lessened regulation on the entire VoIP regime.

As Cabinet noted, it is a non-trivial exercise to determine the division between digital voice and VoIP. But it is very easy to examine distinctions on who controls the access and whether there is any bundling or ability to exercise control on the application itself – for example, “obtain the permission of the network provider to offer the service”.

So, Cabinet ruled that “access‑independent VoIP services are very different” and could easily be regulated using a different regime.

But there remains a question as to why Canadian carriers, ILECs and CLECs alike, will be subject to more onerous obligations than US resellers like Vonage and others. Why is the CRTC still going to require equal access for Canadian carriers and not for others?

What does equal access mean in an environment of access independence? Let’s look at an interesting scenario. I live in Toronto, and buy an access-independent VoIP service from a carrier, with a Montreal number for my kid at McGill and a New York number for my family in the US to call. I take the adapter with me on a business trip to Europe and call Hong Kong. What does equal access mean? How will any of the carriers know where I am at any point?

The answer is that the ILECs just didn’t put forward convincing evidence of the technical challenges associated with defining equal access in an access-independent VoIP environment. The record at the CRTC in the proceeding that led to the approval of Bell Digital Voice (Decision 2006-11) shows the promise of a technically viable solution that will be ultimately be meaningless in the marketplace.

It is what I like to call the ‘Iridium Syndrome’. Engineering solutions solving a non-existant problem resulting in massive flushing of cash.

Left with no evidence to the contrary during the VoIP reconsideration, the CRTC could see no reason to change their ruling in September:

The Commission considers that the Companies have not provided any specific additional evidence regarding the difficulties and costs associated with the provision of equal access for access-independent VoIP services.

It is too bad that there wasn’t more focus on the terms and conditions associated with access-independent VoIP.

As written in the Order in Council:

Whereas the Governor in Council considers that retail local access-dependent and access‑independent VoIP services are quite different from each other;

Whereas the Governor in Council considers that VoIP is a relatively new and rapidly evolving technology used to provide telephone services and that it is in the public interest to enable efficient and timely deployment of innovative new technologies by all telecommunications service providers

So why would we still subject Canadian carriers to the equal access obligations for their version of access-independent VoIP? If VoIP is new and rapidly evolving and quite different from regular voice service, wouldn’t it make more sense to dissociate the obligations that were designed for a circuit-switched world?

I’m concerned that Cabinet’s ruling may not go far enough. Is it sufficient for carriers to have won pricing freedom but still be handcuffed by the legacy CLEC obligations, especially when foreign resellers have no such encumbrances?

We’ll have more thoughts tomorrow on how this can be fixed.

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Telesat IPO

TelesatThe Globe and Mail carried a report today that BCE is putting together a $1B IPO for Telesat as a consequence of a sale falling through. BCE has been quick to say that its intention was always to take a portion of the company public.

Accounts from the original February announcement seem to confirm BCE’s statements. An outright sale would have been a change in course and would have been complicated.

Any sale of a majority of Telesat would require creative ownership structures, due to Canada’s foreign ownership restrictions on such facilities. Many veterans in the Canadian telecom sector are familiar with such arrangements – let us know if you need help putting together your bid.

In any case, BCE selling just 20% of the company by way of an IPO avoids the possibility of running off-side. As the Globe account notes, this is an asset that will benefit from a relaxation of the foreign investment constraints.

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Blocking content

The news will be breaking shortly, so you might as well read about it here first. Late in the day on Tuesday afternoon, I helped in filing the first application requesting the CRTC to authorize Canadian carriers to block internet content.

Recall that last summer, TELUS got into trouble for blocking access to a website without the permission of the CRTC. The basis is Section 36 of the Telecom Act which states:

[Content of messages]
36. Except where the Commission approves otherwise, a Canadian carrier shall not control the content or influence the meaning or purpose of telecommunications carried by it for the public.

So, Section 36 tells us that we need the Commission to approve any control of the content that carriers handle for the public.

A couple points arise from this sentence. First, it only applies to ISPs that are carriers. This means that ISPs that are resellers, including all of the foreign owned and controlled ISPs, are free to play with the content all they want. Second, the Commission has never before been asked to approve such an application.

There are websites operated by a US-based white supremacist which call for the murder of an Ottawa human rights lawyer who successfully fought to put Tomasz Winnicki, a London, Ontario purveyor of hate, in jail for ignoring a court order to stop posting hate on the internet. In the court’s decision, the lawyer’s concern for his own well-being is mentioned:

RW testified that he has been personally harassed and threatened by neo-Nazis and that he now lives in hiding and does not dare to reveal his occupation or address for fear of harassment for his family and himself.

Unfortunately, two US-based websites have now called for this man to be murdered and provided his home address. The sites also call for the violent overthrow of the Canadian Government and for the streets to run red with the blood of Jews.

Enough was enough. I have never seen a more compelling case to put before the CRTC. Working together with lawyers from Papazian Heisey Myers and Bernie Farber, CEO of Canadian Jewish Congress who has experience in hate cases, we filed an application with the CRTC on Tuesday, seeking authorization for carriers to block the websites containing the illegal material.

Frankly, if the CRTC denies our request, they are washing their hands of the powers granted to them by Parliament. The CRTC would be saying that it does not want the power granted by Parliament to regulate content on the internet.

If you look at the CRTC stripping CHOI-FM of the renewal of its broadcast license, when someone engages in name calling (and other personal and inappropriate attacks) on a morning radio program, this new case involving calling for murder and publishing an address for the intended victim should provide for an easier CRTC determination.

We think the CRTC will make the right decision. We hope it will act quickly.

Nationalism and Canadian telecom

At the annual ITAC dinner in Toronto on Tuesday, Ted Rogers delivered a patriotic message, referring to Canada Day on Saturday, supporting increases in military spending and in response to a question from the floor, he expressed concerns about the announcement that Canadian mining giants Falconbridge and Inco are being sold to Arizona-based Phelps Dodge.

In a reference to corporate philanthropy, Ted took a swipe at the challenge of getting a foreign based company interested in making substantive contributions to local hospital.

With Nortel’s CEO Mike Zafirovski facing shareholders today at its AGM, we note that speculation is rampant about what kind of company it will be next year – and will it remain a technology powerhouse, let alone a Canadian business icon. There are lots of Canadian institutions that are watching for signals.

Differentiate not discriminate

I want to return to my earlier metaphorical connection between the debate on Net Neutrality (aka “Save the Internet“) and Canada’s angst over private medical care. In part this is driven by the arrival of this week’s issue of Maclean’s magazine and its “Complete User’s Guide to Private Medical Care in Canada.”

Metaphors aren’t always appropriate; they often don’t fit. Still, there is no reason why we can’t look at other experiences in order to try to learn, develop best practices and improve the end result.

I think that looking at healthcare, as a cloud, can have a number of similarities with ‘the internet’. Like the internet, healthcare is a concept rather than a tangible entity. People are concerned about fair, high quality access to healthcare, and it is sometimes publicly funded, privately provided together with every permutation of these.

Similar to the internet, there is a populist view that a public healthcare system should deliver a uniform quality of care to all. In the view of some, for both healthcare and the internet, such a model just doesn’t work. Loads of experts can examine why this is so, but one can point to the failure of public funding to be able or willing to cope with appropriate levels of capacity planning, technological change and ongoing investment.

As a result, the delivery of healthcare is failing on many measures of satisfaction: it is hardly uniform quality (some regions of the country or province have longer or shorter waiting lists for similar procedures); it is not offering flexibility in solutions; and, public healthcare is not making sufficient use of advances in technology, due to lack of capital and ongoing operating funds.

As seen in the Maclean’s feature, private health clinics are a reality across Canada. To those who predict that this means the end of Canada’s democratized health care, I would argue that this may actually be the beginning of democratized premium health care.

The upper crust has always had access to preferred, private health care. They are happy to jet to US or other foreign clinics to access the best care money can buy. The arrival of private clinics in Canada means that more of us can get the same level of service, at a cost premium but within the reach of far more.

At the same time, there is no harm being done to the public system. If anything, there is a reduction in demand for public health care, so there is a net benefit to everyone.

How does this relate to Net Neutrality? Having premiums paid by content providers in order to gain preferred access to their customers is similar in many ways. Maclean’s talks about the way that health insurance companies have negotiated arrangements with hospitals and certain clinics. The concern is that there be degraded service to the rest of the public internet. If content providers are satisfied with the current level of service, then they can continue as today on a permissive basis, with no quality of service guarantees.

Don’t confuse tiered service with discrimination. As Dave Greenfield wrote last month, “Is it fair that Business Class customers get better treatment than Economy class? You bet.” That means you (or your content provider) may have to pay a premium, if you both want delivery with a premium grade of service.

That isn’t discrimination.

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