Fitting a square peg…

The CRTC is bent on regulating VoIP offerings by the Canadian incumbents, whether it needs to or not.

In its Decision today, a number of glaring inconsistencies continue to emerge from the way VoIP is regulated in Canada.

From the beginning, the CRTC has taken the position that it is regulating VoIP because VoIP is a new technology for an old service. Since local phone service is regulated, VoIP-based local service will be regulated. If it walks like a duck, and quacks like a duck…

New services shouldn’t have to match plain old phone service in order to fit a regulatory model. Unless the telcos are forcing people to give up their old services, phone companies should be able to offer new services that they think will sell – not be forced to perform contortions in order to artificially fulfill objectives for which the new service was never designed.

By this logic, iPods would need to be modified to play vinyl records (kids – ask your parents about those black dinner plate sized things in the basement). Digital Satellite Radio would need to conform exactly to the same regulations as AM and FM.

In today’s decision, the CRTC acknowledges that Bell’s access independent VoIP service doesn’t really quack the same or waddle the same as plain old phone service. For some reason, they are refusing to acknowledge that access independent VoIP might really be some other kind of bird.

Shining light on the dark side

Internet service providers in Israel will have to reveal the identities of people posting anonymous “talkback” responses on Web sites. The ruling applies if a court determines that the comments raise a concern of criminal libel with malicious intent.

Nimrod Kozlovsky, an expert on Internet law with Israel’s Ministry of Justice, said that the ruling shows that the Internet cannot be construed as a space beyond the law.

From the surfers’ perspective, talkbacks are considered an area in which the rules of the game don’t apply. If until today we related to talkbacks as a protected space where no one could chase us, the court came and said – here too, there are rules of the game.

A variety of courts around the world have held that publishing information on a website has much in common with publishing in print media.

A session at The 2006 Canadian Telecom Summit will look at two specific types of illegal content on the internet, hate and child exploitation, and discuss issues surrounding the enforcement of laws.

A tale of two cities

My friend Ed Antecol sent me a note about the WiFi project in Philadelphia.

A week ago, Philadelphia released information about the terms they negotiated with Earthlink in awarding the contract to build their pioneering WiFi umbrella over the city. It is significant because the Philadelphia approach is to gain the benefits at no cost or risk to the taxpayers.

The contracts call for EarthLink to rent space on 4,000 city light posts for its equipment, and pay the city $74 annually per light post – for a total of nearly $300,000 a year.

EarthLink will give Wireless Philadelphia 5% of its access revenue to be used to provide 10,000 computers and training to children and low-income households. EarthLink will also provide Internet access for up to 25,000 low-income households at $9.95 a month, and give the city government free or discounted access.

Earthlink is also providing free hotspots in 22 sites designated as tourist zones.

Contrast that deal with Toronto Hydro’s WiFi announcement yesterday, which targets the downtown business core, with no special attention on the disadvantaged segment of the community.

With budget shortfalls in so many Ontario cities, we can learn how to truly develop private-public partnerships from our neighbours to the south.

Consolidation Collateral Damage

A report in the Financial Times suggests that equipment makers will bear the brunt of the impact of the AT&T; / Bell South acquisition.

Analysts point out that previous mergers in the US telecoms industry have generally been justified on the basis of cost savings and an overall reduction in capital spending, with a knock-on effect for the equipment makers. “In our view, carrier consolidation is a net negative for equipment vendors,” says Tal Liani, an analyst with Merrill Lynch.

I’m not convinced this generalization applies to this particular instance, nor for that matter, to the Bell Canada / Aliant transaction.

In the case of AT&T; / Bell South, the companies did not really compete against each other. Bell South was a supplier of access services to AT&T; and was a shareholder in Cingular with AT&T.; Bell South had adjacent territory to that held by the SBC component of AT&T.; The transaction will result in better focus for Cingular, driven by a single management vision. Contrast that to uncertainty at the Board level brought by competing viewpoints from the SBC versus Bell South representatives.

Improved focus may permit the integrated company to improve its decision making – releasing more capital faster. It also improves the ability for AT&T; to rollout newer backbone services, knowing that it controls the advanced access capabilities in 33 of its operating states.

Similarly, the Bell transaction should result in increased wireless spending in Atlantic Canada.

Don’t blame reductions in capital spending on these deals!

Competing outside the box

The Toronto Tourism and Economic Development folks must be happy today. Toronto Hydro Telecom announced that it plans to build a WiFi umbrella over the downtown core of Toronto. Toronto joins an elite club of major world cities, including San Francisco, Philadelphia, London, Ottawa and Whistler.

There are lots of questions that can be asked about this project:

  • Should the city be competing against the private sector? Since Bell and Rogers pay municipal taxes and both have lots of employees in Toronto paying taxes, do you really want to have the city own a company that will compete against these corporate citizens?
  • Who are the beneficiaries of this service? This service isn’t targetting the Toronto Housing Projects or disenfranchised youths at Jane and Finch; it is blanketing the downtown core, including the bank towers. Is this trying to help make it easier for already rich to make those new car payments?
  • What about advanced services? Like competitive Voice over WiFi IP to compete against high cellular rates? Things like smart meter reading? Is there going to be an announcement from the electricity side of Toronto Hydro that they have a plan to leverage this new capability to allow time of day incentives for energy conservation?

But there are some very important answers:

  • The high speed market isn’t competitive enough. Both Rogers and Bell have recently announced price increases. Toronto Hydro may help to discipline the pricing from the current duopoly.
  • Other cities are building these networks. That isn’t a good enough reason on its own (just like your mother used to say “and if your friends were jumping off a bridge would you do that too?”). But, the market is pretty fierce for convention recruiting, high tech jobs and other drivers of municipal economic development. A city WiFi network is the kind of ‘amenity’ that people will come to expect. It doesn’t hurt for Toronto to be a leader, not a follower, in offering this kind of service. Premium soap and shampoo used to be amenities reserved for upgraded rooms in superior hotels. Now we have come to expect hair dryers, plush bathrobes and ironing boards in anything above Red Roof Inns. If WiFi helps land one giant convention per year, it will pay for itself many times over.

As Industry Canada has said, consolidation has left the Canadian Telecom industry feeling a little too comfortable. It may take some municipal activity like Toronto Hydro Telecom’s WiFi Zone to shake things up.

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