The role of Cabinet in Telecom

There is a decision coming out in the next two weeks to settle the telephone companies’ appeal to cabinet of the CRTC’s VoIP Decision from last year. We have a new Minister, a recent report from the Telecom Policy Review Panel and recent Decision by the CRTC to set in place the framework for liberalization of the local telecom service market in general – not just VoIP. Keep in mind that the TPR panel said that cabinet appeals should be removed from the Telecom Act. That channel lacks transparency and results in battles of special interest lobby groups.

What does it all add up to? If we believe that the Minister will be moving forward with the reforms recommended in the TPR report (specifically, look at Recommendation 9-5) then you should expect cabinet to refuse to overturn the CRTC decision and reject the appeal. At most, they may choose to give policy direction to the CRTC – another recommendation of the TPR report (Recommendation 9-1) – and send the decision back to the CRTC for further review under the terms of that policty guidance.

The phone companies have been actively lobbying for the TPR reforms to be adopted quickly – it has been a while since we have seen such active representation from this sector in the OpEd pages. While they may have wanted a ‘pre-existing appeals’ exception to apply, it is more likely that they may just have to live with losing the VoIP appeal as collateral damage as part of the movement towards a new umbrella framework.

If it works out that Cabinet turns down the appeal, I’d call it losing the VoIP battle, but a step toward winning the overall war creating a new regulatory framework.

Logical progression

We’re going to take a break from Net Neutrality – soon. I suspect the ‘Save the Net‘ will be an issue worth exploring at The Canadian Telecom Summit in June – although the regulatory blockbuster panel has the Telecom Policy Review, Local Forbearance, the upcoming VoIP appeal [to be released in May] and a host of other things to keep the battle engaged.

Before I leave this issue, at least for a few days, we should mention the logical progression that starts with the structure of the internet itself. Because communications are peer-to-peer, content providers and content consumers are both customers of ISPs, purchasing appropriate levels of connectivity.

Some content providers [ie. all the major ones], host their content in multiple sites, buy very big access pipes connecting to one or more ISPs, etc. Some choose to move their content into colocated server farms, or telecom hotels, in order to provider enhanced security, managed service. Because this is a fiercely competitive business, the ISPs aggressively pursue this business, making various offers of additional enhanced services. Some content providers do co-branding deals with the ISPs (Rogers Yahoo, Sympatico MSN). In some cases, ISPs provide content themselves (eg. AOL/Time Warner).

Eventually, the discussion between the service provider and its customer gets around to quality of service through the network. An ISP might offer guarantees (called a Service Level Agreement) to one of its customers.

Why is it, just because that customer is called a content provider, that the world is turned upside down with a movement to stop the greedy broadband monopolists? We’ll discuss this more at The Canadian Telecom Summit.

Filtering the Internet

It started with a comment I left a few days ago in response to a Mark Evans post, where Mark was questioning the future of the newspaper industry. Then I read a quote from Joshua Micah Marshall that seemed to echo my thoughts, but I don’t think that was his intention. He is saying:

Think of [the Internet] like Cable TV. Anybody can start a cable channel. But if you can’t get on TimeWarner Cable here in Manhattan, for me you might as well not even exist. The Internet could work like that.

He goes on to say that the risk of a non-neutral internet is that all of the alternative voices won’t be heard.

Then I read Matthew Ingram’s posting on Web 2.0 – followed by Nicholas Carr’s Numbskull Factor, and that is how I ended up here. As an aside, I think the power of hyperlinking is underappreciated.

Exploring alternate scenarios. Isn’t it possible that all voices can be distributed the same way they are today, but within the same pipe of a commercial mainstream? You would still have a democratized global distribution network – like having an infinite number of community access channels on cable – to ensure that no voices are silenced (see my usual caveat that it is ok for nations to define some content as illegal).

The Web provides a platform for all – a global Speakers’ Corner – regardless of how off-beat their message might be. As Nick wrote:

No matter how vast, a community of mediocrities will never be able to produce anything better than mediocre work. Indeed, I would argue that the talent of the contributors is in the end far more important to quality than is the number of contributors. Put 5,000 smart people to work on a wiki, and they’ll come up with something better than a wiki created by a million numbskulls.

To get back to the future of newspapers: the challenge in a fully democratized publishing universe, with no barriers to entry enabled by a global broadband distribution network, is for the voices of trust, authority and depth of knowledge to not only float to the top, but to be recognized and valued.

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.

Life after VoIP for LD

TelehopMy partner in running The Canadian Telecom Summit, Michael Sone, likes to point out that there are still profitable niches to be found in the Canadian long distance business.

Telehop released its numbers this morning and proved that Michael is right. Volume of calls and minutes are up, and so are their revenues and net income. Looking at the numbers, you can see that the company is transforming the traffic mix, growing the number of customers despite the popular view that international traffic would all migrate to ‘free’ calling like Skype.

In the meantime, Telehop has grown revenues by more than a third year-over-year to more than $20M. Nice to see some folks are still making money from long distance.

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