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Politics and regulation

With a number of interventions by cabinet over the past year, we have seen Industry Minister Bernier taking steps to implement some of the recommendations of the Telecom Policy Review panel.

One of the easy to overlook recommendations of the report is the streamlining of the policy direction process, coupled with the removal of the cabinet appeal process. Recommendation 9-5 says:

The policy direction power should be transferred into a more effective policy-making instrument by … (c) repealing the Cabinet power to review individual CRTC telecommunications decisions.

An article in the Wall Street Journal yesterday said that the Communication and Technology sector was the leading spender of lobbyist dollars in the US in the first half of 2006, ahead of healthcare, finance and energy sectors. Telecom lobbying is obviously not just a Canadian phenomenon. Over the holidays, a Canadian Press article expresses concerns about the nature of backroom dealings associated with the appeals processes. It is worth reading.

Former CRTC commissioner Andrew Cardozo said:

If you do your job properly as CRTC chair or member, at some point or another you will have ticked off every member of the industry, and you will have ticked off the government too. You’ve just got to go in there and do what you believe is the right thing to do, and you want to keep clear of the lobbyists.

Ian Angus was quoted in the CP article:

I would wonder whose self-respect would be so low that they’d be willing to be CRTC chair?

Why would you want to be chair of an independent regulatory body when the government has made it clear it will override you when it disagrees.

Still, policy is an important component of an evolving regulatory framework. Shouldn’t policy be set by government? So, you need a CRTC chair who agrees at least with the direction that the government wants to take with communications. For telecom, the roadmap for change has been laid out with the report of the Telecom Policy Review panel. The world of broadcasting is less clear.

Is this what is delaying the appointment of a new CRTC Chair?

Happy New Year

By every measure, today, New Year’s Eve day, is an incredibly light traffic day. Traffic is less than 15% of a normal Sunday. I hope that explains why I didn’t put a new posting up earlier.

I do want to extend my best wishes for a happy, healthy and peaceful New Year to all my readers.

I hope that I can continue to provide some insights and stimulate some debate and discussion about important telecommunications issues in the coming year.

I started blogging in February of 2006, inspired by the blog that my daughter kept as a record of her year abroad. She used the public diary to keep a record of her experiences, set out her political views and as a means to keep in touch with family and friends around the world. That power of the medium is what interests me most about blogging and I hope you will join in the discussion.

All the best. I’ll be back with substance to read while you enjoy your New Year’s Day bowl games.

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Cellular complaints rank 9th

This is a peak shopping season for all sorts of consumer goods. Cellular phones are no exception. As we have written before, there are lots of new handsets on the market this season which should help carriers lock in customers to multi-year contracts in advance of the wireless number portability implementation coming in March.

Are customers concerned about multi-year agreements? Cellular phones were one of the leading sources of consumer complaints in Ontario last year, according to the Ministry of Government Services.

 

Top 10 Consumer Complaints and Inquiries in 2005
Collection agencies 4,533
Home renovations 2,577
New & used vehicle purchases 1,880
Motor vehicle repairs 1,485
Home furnishings 1,267
Fitness & health clubs 1,067
Credit reporting 1,038
Personal items 1,007
Cell phones 842
Timeshares 688

 

Perhaps last week’s introduction of legislation to explicitly put forborne services under the Competition Act signals that we should be looking beyond the CRTC to discipline wireless services.

So, what is the best strategy for consumers choosing a cel phone plan and provider? I would say, look as carefully at the cancellation fees as you look at the monthly rates. A 3-year contract will get you the greatest discount off your new phone, but not all 3-year deals are the same.

Look at the penalties for early termination. If you lose or break your phone, you may be better off cancelling your plan, rather than paying full price for a replacement device. Each of the major carriers charges $20 per month remaining in the agreement but Rogers has a maximum $200 penalty to get out of your contract. Bell tops out at $400 while TELUS has $100 minimum and no upper limit.

The added benefit with Rogers, if you cancel early, is the ability to get your phone unlocked at many retailers. That will then make it easier for you to travel to the US or overseas and make use of a local pay-as-you-go SIM card. Unless, of course, you enjoy paying a zillion dollars per minute for roaming.

Or, you could just file a complaint. That would help cell phones move up the charts from number 9 on Ontario’s Top Ten Countdown. Will provinces intervene?

Generation @

Andreas Bernhardt, a member of the Group Executive at Siemens spoke toward the end of day 2 of The Canadian Telecom Summit.

He spoke of Generation X, the post-boomers who roughly cover those born in the 70’s, comfortable and generally raised with computers and technology. But more significantly, he spoke of Generation @: kids with a presumptive knowledge and expectation of the impact and capabilities of information and communications.

Siemens, as an enormous global power, active in a wide array of sectors: healthcare, electronic and automation control, telecom, power, transportation. Among the kinds of things this level of diversity allows is active involvement in machine to machine communications. Understanding the implications of intelligent homes.

I found it interesting that a number of the international speakers, including Sebastiano Tevarotto of HP, and Andreas Bernhardt, spoke of radical simplicity: enabling users to access radically innovative services, without a hint of the enabling complexity facing the end user.

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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