Telecom Trends

Covering the uncovered

2009-11-20T06:40:00.003-05:00

Recent press releases and advertisements speak about the high percentage of Canada's population that has access to new advanced mobile wireless services.

I think it is remarkable that such a substantial majority of Canadians, close to 95% of us, fall within the HSPA and HSPA+ coverage. Looking at the competing network maps, we can see that most Canadians are already able to choose between multiple carriers for mobile voice and data services offering speeds that rival and often beat wireline access.

But a closer examination of the maps shows that, while the majority of the population is covered by mobile wireless networks, there is a vast part of the country that is beyond the reach of terrestrial towers.

About 2M Canadians live and work outside the coverage, and many other Canadians sometimes venture out of their urban and suburban comfort zones to go play.

On September 11, 2009, Rick Stephens and his hunting partner, Trent Bossence, were 7 days into a 12-day hunting trip in the Coast Mountain Range of Northern British Columbia. They were 85 miles from the nearest town, Dease Lake and four miles from their base camp, when Rick's hunting knife slipped and he cut his leg just below the knee, severing a tendon.

We tried to treat my injury and prepare for what we thought would be a long cold night on the mountain. But I happened to have a SPOT Satellite Personal Tracker so Trent was able to instantly send a 9-1-1 message and our GPS location coordinates.

Within 2½ hours of the signal being sent, the rescue team located Stephens and his partner and airlifted them off the mountain. Since it was introduced, the SPOT Satellite Personal Tracker has initiated more than 450 rescues and sent over 10 million check-in and tracking messages around the world.

I have written before about satellite as an important part of the solution for universal broadband service for Canadians in their homes and offices to Canadians who are beyond the reach of terrestrial networks.

Similarly, Globalstar's SPOT tracker enables a mobile lifeline for people who venture off the beaten track. The device itself is affordable and its service subscription is only $100 per year.

With Christmas a month away, this look like a perfect gift for camping, hunting and hiking enthusiasts. I suspect that those who have boats in cottage country might consider this as part of our on-board safety equipment.

Canada & Israel improve telecom trade

2009-11-19T06:48:00.000-05:00

Industry Minister Tony Clement and his Israeli counterpart, Binyamin Ben-Eliezer, have committed to negotiate a Mutual Recognition Agreement (MRA) to ease the importing and exporting of telecommunications equipment between Canada and Israel.

Such agreements are already in place with the European Community, the European Free Trade Area countries, Switzerland, members of the Organization of American States and members of the Asia-Pacific Economic Cooperation forum.

An MRA will broaden trade opportunities for Canada's telecommunications industry and provide access to Israel's latest communications technology for Canadian industry and consumers. I look forward to having Canadian and Israeli officials meet to begin negotiating the MRA for telecommunications equipment.

Industry Canada officials are expected to travel to Israel early in 2010 to begin negotiating the MRA.

For the past two years, Israeli telecommunications firms have been actively participating in The Canadian Telecom Summit and a number of these firms are already actively working with Canadian service providers and manufacturers.

The 2010 Canadian Telecom Summit will take place June 7-9, 2010 in Toronto. Planning has already started and registrations are open.

Mark the dates in your calendar and be there!

Calvin-ball

2009-11-18T06:10:00.004-05:00

Industry Minister Tony Clement gave parties until today to submit comments on the CRTC's finding last month that Globalive does not comply with Canadian ownership requirements under the Telecom Act.

Why do I keep thinking of Calvin-ball when I read about the continuing twists and turns regarding the rules for the licensees from our last mobile spectrum auction?

Here is how Wikipedia describes the game, which was introduced about 20 years ago in the comic strip Calvin and Hobbes:

The only consistent rule is that Calvinball may never be played with the same rules twice. Scoring is also arbitrary, with Hobbes reporting scores of "Q to 12" and "oogy to boogy." The only recognizable sports Calvinball is similar to are the ones that it emulates (i.e., a cross between croquet, polo, badminton, capture the flag, and volleyball.) Equipment includes a volleyball (the eponymous "Calvinball"), a soccer ball, a croquet set, a badminton set, assorted flags, bags, signs, and a hobby horse. Other things are included as needed, such as a bucket of ice-cold water, a water balloon, and various songs and poetry. Players also wear masks that resemble blindfolds with holes for the eyes. When Rosalyn asked Calvin what the reason for the requirement was, Calvin responded, "Sorry, no one's allowed to question the masks."

When asked how to play, creator Bill Watterson said, "It's pretty simple: you make up the rules as you go."

Calvin-ball is not the kind of game that the investment community will want to play. The government agencies (CRTC and Industry Canada) can't be seen making up the rules as we go. That is why I told the Canadian Press that I don't think the CRTC decision will be overturned.

Still, there is one aspect that the CRTC left a door open for policy guidance in its decision, as I suggested last month. There was an ambiguity in Paragraph 118 of the Decision in respect of the allowable amount of debt that could be held by a non-Canadian company.

The Industry Minister might pronounce on this particular point - providing clarity and flexibility - without tearing apart the integrity of foreign ownership restrictions.

Globalive is one of a number of new mobile spectrum license holders. Industry Canada needs to ensure that the rules are clear for all of the industry participants so that we can get on with the game.

Un-ring the bell

2009-11-17T06:27:00.003-05:00

Putting thoughts on the internet can sometimes lead to a life of being sorry.

The global village means that your tweets or random musings on a blog get broadcast around the world. Most of the time, you can't un-ring the bell.

Employees need to be mindful of this when ranting against their employers. It is one thing to kvetch to your spouse over dinner. It is quite a different matter to go viral with it.

We have heard this before and we try to warn our kids to practice safe texting, but this is not just a problem for the young and naive among the citizen media corps.

Mainstream media organizations have challenges dealing with errors on internet news sites. Print versions of newspapers and magazines can issue corrections that reach most of the readers of the original story. How does a correction get distributed fairly in new media?

It is much tougher to counter false impressions left by factual errors in an internet environment. Although corrections may be added to a revised version of the original story, most readers don't return.

A variety of degrees of a common problem - how do you retract what you wish you had not said?

How do you un-ring the bell?

3G and Highway 407

2009-11-16T06:15:00.004-05:00

My home is very close to Highway 407, the toll road that runs north of the greater Toronto area.

When it was first opened in 1997, the road was available toll free for people to try out. It was a delight to drive on a state-of-the-art multi-lane highway with no traffic.

Imagine two cars starting off in Mississauga in the west-end. They decide to race to Canada's Wonderland in the middle of the work week. One car would use Highway 401 to 400 and the other would use the (as yet) unopened Highway 407. Both agree to keep their speed to the maximum allowed by law. Which car would win?

How is this tale relevant to Canadian telecom?

I have been reading some of the ads for the new HSPA+ networks. One of the carriers claims to have the fastest network in Canada. Apparently, they ran tests of their own data speed performance versus their primary competitor back in September 2009. But there is a problem with this boast. The new network didn't open for business until two weeks ago.

Let's face it, under those conditions, if they didn't win the race on an empty network, well, that would have been an indicator of a serious problem. It will be interesting to see what those same tests look like next September, after close to a year of real operating experience.

As we see in car races, it takes an excellent driver and a disciplined pit crew to win consistently when all the teams are racing with the same machines.

The shift to real time

2009-11-13T06:22:00.001-05:00

Sandvine has released its annual study of global internet traffic [ pdf, 535KB].

They have found a shift in consumer behavior towards real-time applications, away from bulk "experience later" traffic. Real-time entertainment traffic (such as streaming media, Flash video, etc.) accounts for more than a quarter of all traffic in 2009, doubling its proportion from 2008. This demonstrably highlights the rapidly shifting nature of internet traffic, especially since network volumes have also continued to grow.

Adding to the challenges for network operators, the Sandvine research found that the top one percent of subscribers account for 25 percent of total traffic. However, the top users during a given peak hour are largely distinct from the peak users of the preceding month.

Among other findings, a more broad-based adoption of applications is driving peak utilization. According to Sandvine, peak-time total usage was only slightly influenced by the top users, suggesting that usage management and network congestion management are distinct objectives.

Sandvine's 10 page executive summary is a very readable source of interesting statistical data and analysis about the state of internet traffic. Plenty of interesting observations; plenty of fascinating implications for networks and policy makers.

Peace, prosperity from telecom

2009-11-12T06:28:00.001-05:00

Beirut is supposed to be nice this time of year, although it doesn't quite make my list of top 10 vacation destinations. The ITU has been holding its Global Symposium for Regulators and Global Industry Leaders Forum in Beirut for the past few days. The theme of the event, Hands-on or Hands-off? Stimulating growth through effective ICT regulation, seems to target the intellectual conflict that arises in evolving regulation in competitive telecommunications markets.

On the opening day, FCC Chair Julius Genachowski spoke, delivering a message that increasing adoption of communications services like broadband & mobile will contribute to advancing the goals of delivering peace, prosperity, education and health.

It is an optimistic vision. The text of the speech is below.
FCC DOC-294594A1

Incentives to innovate

2009-11-11T06:13:00.001-05:00

I received a note from a researcher in the UK over the weekend who offered an interesting observation about open access initiatives.

The researcher was dismayed with the "lack of objectivity" in recent university branded reports on the state of telecommunications. In the case of the Harvard report commissioned by the FCC, the bias is evident that the report was to endorse an open network agenda.

Unbundling might have been an effective strategy to maximise consumer benefits from the existing copper infrastructure, but it is a positive hurdle to next-generation investment, unless one can set the access pricing formula correctly. And that's the whole trouble because one can't.

In the pharmaceutical sector, once a new drug has been developed, it would be better for consumers if the government took that drug off-patent immediately, and allow generics to compete with it. But if the government did that, then it would need to consider the effect on the pharmaceutical sector's incentives to invest in R&D.

The warning from abroad: opening next generation networks to mandated sharing could yield short term consumer dividends without appropriate incentives for innovation in the future.

Policy makers may choose to follow that route, but they should do so based on sound economic evidence, not by fiddling with the numbers.

Increasing demand for broadband

2009-11-10T06:10:00.002-05:00

The Information Technology & Innovation Foundation released a report [ pdf, 330KB] last week called Policies to Increase Broadband Adoption at Home. That policy paper follows a study [ pdf, 600KB] conducted by Janice Hauge of the University of North Texas and James Prieger of Pepperdine University that examined Demand-Side Programs to Stimulate Adoption of Broadband: What Works?

The impetus for these reports was a statistic that should ring a familiar tone for us in Canada: between 92 to 94 percent of U.S. households can subscribe to broadband but only approximately 65 percent subscribe. Why?

We have asked that question a number of times over the past year or more in respect of Canadian broadband adoption and most recently, we raised the issue in our October report [ pdf, 944KB], Lagging or Leading. The ITIF report suggests that there are a variety of reasons why people choose not to subscribe to broadband. The three factors cited in the ITIF report are:

affordability (e.g., of the service or a PC),
usability (e.g., lack of digital literacy skills, physical handicaps), and
lack of relevance or perceived value (e.g., consider Internet a waste of time).

The report finds variability in the relative importance of these factors based on the type of individual. For example, among higher income, older Americans a lack of interest may be a more important factor than the cost; for lower-income, younger households, cost may be more of a deterrent.

If the United States is to achieve near universal broadband adoption—on the order of telephone adoption rates—at least in the near to moderate term, the federal government will have to develop and implement policies designed to spur broadband adoption.

The North Texas / Pepperdine study examined the evidence available on the degree to which demand-side programs have fulfilled their purpose of stimulating broadband adoption.

On the spectrum from national to local programs:
Nationally funded programs with inadequate oversight can lead to waste, fraud, and abuse.
Local programs have more complete knowledge of the barriers to adoption in the community.
Local efforts can better ensure that programs are utilized by the intended recipients.
Local efforts may have limited capability to collect and evaluate data.
National efforts may have more capability to collect and evaluate data.

We need to ensure that our national broadband strategies provide incentives for continued investment in advanced infrastructure, a topic to be picked up further at another time.

But, we also need to emphasize the demand component of broadband adoption. Both of these reports reports are worthwhile reading - adding to the knowledge base as Canada continues to develop our national digital strategy.

Shifting R&D spending

2009-11-09T06:44:00.005-05:00

Last week, a report was released about Canada's top performing research companies and sectors.

According to RE$EARCH Infosource, Canada's telecommunications sector again leads the pack, with 2008 research spending on telecom products and services representing 40% of total industrial R&D. Of the top 100 R&D performers, 15 were from the telecom sector, including number 1 ranked Nortel at $1.7B and number 2 BCE at just under $1B.

In 2008, Nortel spent more on R&D than Bell and number 3 Magna combined. There are serious implications for Canada's knowledge economy. Next year's report will likely see the pharmaceutical sector replace telecom products as the leading performer of R&D in Canada.

The analysis [ pdf, 111KB] from RE$EARCH Infosource is worth reviewing.

The full effect of the deteriorating world economy will be reflected in next year’s Fiscal 2009 corporate R&D spending results. It is hard to envisage better overall performance than in 2008. For one thing, it appears that Canada’s perpetual R&D spending leader (Nortel Networks) will be absent from the list in 2009. In consequence, total corporate R&D spending will undoubtedly be affected – in a downward direction.

There is little doubt that total corporate R&D spending will be dropping in the 2009 report, but there may be a more fundamental shift at play as well.

What is happening to the Nortel people and their jobs?

Although many of the researchers from Nortel may find employment with the acquiring companies [such as Ericsson's expected doubling of its R&D efforts], others have started their own firms or found a home with a smaller company.

There is a lot of R&D activity among home-based entrepreneurs, some of whom have little knowledge of or interest in government SRED tax credits.

RE$EARCH Infosource offers a dozen recommendations to boost research and innovation. I'm not sure I agree with all of them, but this is an important issue to be more prominent on the national agenda.

More than just tax credits and grant programs, we need to invest in the development of multi-disciplinary education programs.

We should make sure that ICT education includes opportunities to develop skills associated with entrepreneurship, understanding enough about safeguarding intellectual property rights, business, accounting and export literacy, among other areas.

It seems to me that we need to be concerned with more than just incubating the next Nortel or Newbridge or RIM. How do we ensure that we have the right environment to foster hundreds of small, nimble innovators?

Compost from garbage

2009-11-06T06:18:00.001-05:00

A recent commentary was written by Angel Gurría, the Secretary General of the OECD, citing a need for statistics to give a more accurate picture of society and the economy.

As Mr. Gurría wrote in European Voice:

We need tools to measure what is going on in our society – where we are progressing, where we are failing and what are the consequences of our actions. There is nothing wrong with the quality of the indicators, but some of them are not looking at what matters.
...
Statistics are not an end in themselves. Their importance lies in the policy discussions they stimulate as much as the evidence they provide.

I agree. We have to get the numbers right to empower intelligent policy discussions.

In last month, we saw university logos applied to papers, statements and ideological manifestos, giving credence to data analysis that would have trouble holding up to serious scrutiny in peer-reviewed journals of academic research.

A jewel from a recent broadband study would raise the eyebrows of any reasonable statistician reviewer:

Speedtest data is not perfect, but it offers an enormous database of actual tests, which provide insight into the speeds users experience on their computers. The dataset we analyzed included about 41 million actual tests from the OECD countries, from the fourth quarter of 2008.

Translation? Even though the source data smells funny, there's so much of it that maybe we can find something useful. Perhaps. But we're not convinced that the correct conclusions were drawn.

There is much more wrong with these reports, as Suzanne Blackwell and others wrote a few weeks ago. The Harvard study penalized Canada for OECD sampling errors (that I walked you through), such as ignoring Quebec as being part of the country. And as I wrote a couple weeks ago, the folks at Harvard tell us on one page that Canada had no 35 Mbps services and then 3 pages later, oops - they discovered one! Just not in time to use in their rankings. A rebuttal published on Wednesday by the study author did not address this mistake that resulted in erroneously ranking Canada as 30th for these very high speed services. Since the Harvard study also used flawed OECD sampling, this error was doubled in unfairly scoring Canada.

No matter how many studies adopt flawed speed and pricing survey data, the source just won't smell any better. By wrapping it up with impressive academic logos, the data might have taken on a better appearance - just don't get too close and be sure to wash your hands after touching it.

Northern lessons for FCC

2009-11-05T06:25:00.005-05:00

On Monday, a remarkable letter [ pdf, 71KB] was filed with the FCC.

Of particular note was the signature line - 6 leading academics who describe themselves as "professors of law who have spent many years devoted to research on the architecture of the Internet and its related policies."

Jack Balkin, Yale
John Blevins, South Texas College of Law
Jim Chen, University of Louisville
Larry Lessig, Harvard
Barbara van Schewick, Stanford
Tim Wu, Columbia

In their letter, the authors note that several have testified or filed comments with the FCC, and they have published widely on the topic of Network Neutrality and related internet issues. Why did they collaborate on this special letter?

We submit this extraordinary early letter only to flag what we believe are two ambiguities in the Notice that we hope can be addressed early to provide a clearer foundation for comments.

The ambiguities are "Defining Non-Discrimination" and "Reasonable Network Management."

Regarding the second point, these distinguished professors of law ask if the FCC is asking for comment on what the standard should be, or proposing no clear standard at all? The letter suggests that the FCC should consider the distinction used by the CRTC in defining certain tests for an acceptable internet traffic management practice.

These US law professors seem to be squarely at odds with the statement by the NDP's critic, Charlie Angus:

South of the border, the FCC has taken clear steps toward the establishment of internet neutrality on U.S. networks.

The professors say that the FCC's statement is ambiguous and they point north of the border for clarity. Who should we believe?

A CAIP press release issued last Friday tries to compare the CRTC's ITMP decision with the FCC's initial Notice of Proposed Rulemaking:

Nowhere in the FCC draft principles will one find the suggestion that higher prices for Internet access is an acceptable method of network management. By contrast, Canada’s regulator, through its policy statement, has further eroded Canada’s standing in international Internet metrics.

On Monday, the same day that the academics cited the CRTC's approach, CAIP issued another press release that said:

Despite putting in place proceedings that appear like they are progressive thinkers, the Commission has been issuing regressive decisions related to competitive issues.

Both press releases from CAIP play loosely with language, saying that the CRTC's approach was calling for "higher prices for Internet services" to deal with growing demand.

The letter to the FCC from the US internet law professors seems to contradict CAIP's assertions that the CRTC's decisions are regressive.

We stand by our observation that Canada is a leader in setting out the world's first clearly defined framework for managing internet traffic.

Fibre and productivity

2009-11-04T06:24:00.001-05:00

A study [ pdf, 368KB] by a New Zealand policy research firm is calling into question billions of dollars of government stimulus for upgrading broadband connections to fibre.

In a paper called The Need for Speed: Impacts of Internet Connectivity on Firm Productivity, researchers at Motu Economic and Policy Research claim to provide the first firm-level estimates of the degree of productivity gains sourced from upgraded internet access.

We use a large New Zealand micro-survey of firms linked to unit record firm financial data to determine the impact that differing types of internet access have on firm productivity. ... Having matched firms, we examine the productivity impacts that arise when a firm adopts different types (speeds) of internet connectivity. Broadband adoption is found to boost productivity but we find no productivity differences across broadband type.

Translation? The study finds a productivity benefit associated with a firm being connected to an 'always on' internet connection, but it could not show a benefit associated with higher speeds.

The implication? Billions of dollars are being spent by some governments on a belief that upgraded infrastructure is necessary to improve national economic productivity. Some governments, perhaps impatient with the pace of natural evolution of network development, are imposing structural separation or even nationalization of access infrastructure.

This study appears to affirm the benefit of ensuring universal access to a broadband connection; the challenge is in demonstrating a benefit from government intervention in broadband network upgrades.

If the Motu study is really the first to study the impact of broadband upgrades, one would hope that a fraction of the billions of tax dollars being spent around the world will fund econometric research to make sure that it is a worthwhile investment.

Regulatory symmetry

2009-11-03T06:04:00.001-05:00

The Globalive ownership Decision from the CRTC may have an error.

Frequently, the expression 'regulatory symmetry' refers to the even handed application of regulations across various technologies or industries.

In today's context, I use the expression in its literary sense.

Last Thursday's CRTC Decision that reviewed Globalive's ownership was complex: 119 paragraphs, organized under about a dozen level 1 headings and a few of those sections had sub-sections.

It is a well organized and readable piece - and for those who are willing to take the time, the decision lays out the difficult arguments and issues that were considered by the Commission in reaching its conclusion.

The literary symmetry that I want to refer to is in paragraph 115 of the Decision. The language in the decision reads:

Globalive has made numerous significant changes to its corporate structure and documents in order to address many of the Commission's concerns. In this decision, the Commission has identified additional changes that are necessary to address certain remaining concerns with respect to Orascom's influence over Globalive. These changes relate to the composition of the boards of directors, liquidity rights, and the threshold for veto rights.

However, if you look through the body of the Decision, you will see that the term "should" shows up in paragraphs 45, 64 and 72. These are the final paragraphs in sub-sections titled: "Composition of the boards of directors"; "Eligible Purchasers"; and, "Veto rights".

Contrast these three items with the last sentence in paragraph 115. That paragraph, quoted above, indeed refers to 3 changes being necessary, but the second item listed in paragraph 115 says "liquidity rights", not "eligible purchasers".

In fact, there is a section called "liquidity rights", but paragraph 59 in that section simply observes that this is an "an indication of Orascom's influence" without suggesting that a remedy is required (such as the use of the word "should" which appears in the other paragraphs). As such, the last sentence in paragraph 115 appears to have had a literary asymmetry - a dissonance that doesn't align the concluding paragraphs with the body of the decision.

This is what leads me to believe that an erratum is needed to clarifies the summary and restores a kind of talmudic balance.

Like straightening out a painting on a wall - did that dissonance bother anyone else?

More importantly, does that dissonance lead to confusion on what is required of Globalive to cure the CRTC's foreign control concerns?

Collecting more & better data

2009-11-02T06:36:00.001-05:00

Each year, the CRTC conducts an extensive data collection exercise, working together with Industry Canada, Statistics Canada, BBM Canada and BBM Nielsen Media Research, BBM Analytics for Media Technology Monitor, comScore, and Mediastats.

Despite this collaborative effort, it is quite possible that the Communications Monitoring Report undercounts business internet accesses in Canada.

The issue is partly due to definitions used in the data collection process.

The CRTC's Form 253 is the primary source of information for internet subscriptions.

That form asks for information about internet subscriptions, not internet connections, broken out by residential, business and wholesale.

Look at a business with 5 locations each having internet access. How does Form 253 count this customer? Is it one subscription or is it 5 connections? Note that "subscription" is defined by the CRTC as:

Internet access subscriptions are measured by the number of unique IP addresses which may be used simultaneously by different parties.

Is the term "subscription" an adequate way to determine internet connections?

Note that Form 253 may also not consider internet connectivity enabled over integrated communications services access. The form asks about internet subscriptions.

Consider a business that buys a hosted telephone solution. In this case, the internet connection comes for "free" with integrated data pipe that connects the business to the service provider. For Form 253, is the internet connection for that business scored at all?

A further enhancement to the data collection process might be to identify fibre connectivity for businesses and residences. Already, the forms [252 and 253] seek to distinguish 'fibre' from DSL and other technologies, but this may not be sufficient resolution to enable meaningful international comparisons.

For example, if there is a fibre connection to an apartment building and then DSL or cable modem connections from the utility closet to the customer, should fibre to the premise accesses be captured separately?

More fibre to more premises

2009-10-30T06:06:00.001-04:00

Cogeco Data Services has announced a 10 year deal with the City of Toronto to expand the fibre network that already connects all schools and school board buildings (as we wrote about in March), under separate deals with the Toronto District School Board and Toronto Catholic District School Board.

Under the terms of the deal with the City announced earlier this week, Cogeco Data Services will provide a fibre optic-based wide area network to various departments, agencies, boards, and commissions, serving a majority of the City's 50,000 employees.

The new sites will be installed over a three year period with the first coming on-line later this year. Cogeco Data Services expects 95 per cent of construction completed by 2011.

There is a lot of fibre being deployed in a variety of communities by telephone companies, cable companies and alternate providers such as Atria and Cogeco Data Services. Businesses and residences are being served with fibre to the premises solutions, often with multiple suppliers in a building.

How do we improve statistical data collection to improve our understanding of the state of advanced networks in Canada? We'll at this question some more on Monday.

What's next for Globalive?

2009-10-29T21:17:00.005-04:00

The CRTC issued its decision in the review of Globalive's ownership. Reading some of the re-tweets and comments on various news sites and blogs, I see the distain for our regulator that might be expected from those who don't have an understanding of Canada's structural framework.

As Michael Geist wrote:

It is tempting to blame the CRTC or the incumbent telecom providers (who filed the complaint over the Globalive structure) for this mess, but the real culprit lies with outdated legislation that prioritizes Canadian ownership over a competitive Canadian marketplace.

I agree with that assessment. Last month, I wrote about the Telecom Policy Review Panel's views on liberalization of foreign ownership.

One of the Globalive lawyers, Hank Intven, was a member of that panel that delivered its report three and a half years ago. Shortly thereafter, Hank was commissioned to develop a book detailing the specific legislative changes required to implement the recommendations of the report.

The Panel was created by the last Liberal Government and its response was delivered to a the new Conservative Minister of Industry. I remember asking a local Liberal MP if the bipartisan origins of the TPRP would permit a more constructive legislative approach to speed discussion and passage of the package of reforms.

Silly me.

So here we are. Where do we go from here? To those who wonder how Industry Canada could approve the ownership and then watch the CRTC deny approval, there are a number of reasons that we can discuss.

The CRTC set out the remedies required to gain approval in its decision. The fastest and most certain course would be for Globalive to bring its structure into conformance and receive authorization from the Commission.

Alternatively, Globalive can appeal to Cabinet, but with such a process, the Telecom Act has prescribed timetables to allow consultations with the provinces and the public. This would not be fast and I'll ask lawyers to consult on whether Cabinet has the legal authority to simply ignore the foreign ownership restrictions entirely. It is possible that the path of least resistance would be for Globalive to ask Cabinet to order the CRTC to delete paragraph 118 of the Decision - the one dealing with Orascom holding the debt - perhaps using a justification of the exceptional circumstances of the current economic situation.

Alternatively, Globalive could sit on the spectrum asset, waiting for legislation to remove the foreign ownership restrictions. I'm not holding my breath.

One way or another, there will be new players in the Canadian mobile space. Public Mobile, DAVE Wireless and Videotron are also building networks.

At the end of the day, Globalive entered the spectrum auction fully aware of the ownership regulations and precedents for previously approved corporate structures. It acquired new entrant spectrum that had been set aside to enable smaller start-ups to offer increased wireless choices to Canadians and it outbid the others perhaps hoping that it could push the envelop a little further.

All along, Globalive has been in control of the timetable for approval. The next move is up them as well.

Enforcing indirect regulations

2009-10-29T06:17:00.001-04:00

The issue of indirect regulation came up again in last week's internet traffic management decision.

The issue: how does the CRTC impose regulations on service providers that aren't carriers? So, the CRTC created two new definitions to distinguish between "secondary ISPs" (defined as service providers that don't own their own facilities and therefore aren't regulated as carriers; and, "primary ISPs" that own transmission facilities and are therefore more easily brought before the CRTC as carriers under the Telecom Act.

The CRTC assumed that "secondary ISPs" must get access to their customers by dealing with at least one "primary ISP" and so the Commission ordered all "primary ISPs" to include a contractual obligation for their wholesale clients (ie. "secondary ISPs") to agree to abide by the rules.

This is problematic on a number of levels.

First, as I described last week, the requirement doesn't capture secondary ISPs that don't deal with a primary ISP. It is quite possible for an ISP to do all of its wholesale buying through another secondary ISP. Alternatively, there may be colocation companies that are carriers, but not ISPs. The latter can be dealt with by simple rewording of the order; let's face it, the use of the term "primary ISP" instead of "carrier" was to appease the "secondary ISPs" who may have found the term "reseller" to be pejorative. It isn't as simple to go after second tier "secondary ISPs" (should they be called "tertiary ISPs"?).

More fundamentally, what happens if a secondary ISP is in breach of its contractual obligation? How does this get enforced?

In the absence of meaningful regulatory oversight, will an industry association enforce a code of conduct to provide assurance to Canadians? Still, the CRTC didn't believe a voluntary code offers sufficient consumer protections. Don't customers of secondary ISPs deserve the same protections?

Building rural capacity

2009-10-28T08:46:00.002-04:00

Hughes Network Systems has announced that Canada's largest rural broadband provider, Barrett Xplore has committed to acquire and operate over 10 Gbps of capacity on Jupiter, a next-generation, high-throughput satellite. Jupiter is scheduled for launch in 2012.

With Jupiter, Barrett Xplore expects to offer a range of broadband packages up to 10 Mbps for residential service and up to 25 Mbps for business, with performance and pricing comparable to that in terrestrial broadband markets.

John Maduri, CEO at Barrett Xplore said:

Jupiter will enable Barrett Xplore to provide significantly enhanced service offerings to our current customers, and offer additional capacity to serve hundreds of thousands of rural Canadian households. This considerable investment in satellite capacity demonstrates Barrett's ongoing commitment to rural broadband and strengthens our ability to reach all rural Canadian households with cost-effective, high-speed Internet.

The agreement is valued in excess of U.S. $100 million.

Giving broadband the time of day

2009-10-28T06:26:00.000-04:00

My electric utility came to the house on Wednesday and installed my new smart meter. Earlier this year, we installed the Peaksaver thermostat.

The idea behind the smart electric meter is to enable the utility to charge differential prices based on the time-of-day or day-of-week when we consume power.

The Peaksaver thermostat not only enables some very cool programming and remote internet access, but also permits the utility to kill the air conditioner for a brief period (hopefully not noticeable) during the hottest, most power intensive days of the summer.

I wonder if the concepts behind these capabilities might find application by a creative ISP.

For example, internet services don't really have a monthly capacity constraint; monthly download caps are a convenient measure of total consumption for proportionate allocation of resources, but the pipes are really provisioned for peak load. For real-time applications, like voice calls and streaming content, ISPs need to make sure there is sufficient capacity to handle everyone's aggregate requirements. Less sensitive applications can be delayed slightly without any impact.

Outside of the peak, it doesn't matter as much if an individual user is consuming a little or a lot; the network capacity is sitting available.

It seems to me that an ISP might want to create a service offering that provides user incentives to shift loads out of the peak - for example, offering software utilities to make sure those routine software updates are scheduled to downloaded during slower network loads, and perhaps exempting such behaviour from contributing to the download caps.

What about another product that permits interruptible service? Rather than degrade all bandwidth intensive traffic, would some consumers be interested in a service that cuts certain bandwidth intensive applications at peak times - like killing the air conditioner on peak electrical days.

Of course, these kinds of network based developments require network operators to have the flexibility to deploy and use technologies like DPI interfacing to various billing and management systems - and to advise customers on what is going on.

Would such services help preserve flat rate internet for some users, while providing effective economic internet traffic management?

Offering a clear choice

2009-10-27T10:01:00.002-04:00

Yesterday, I wrote about TELUS launching the iPhone and its HSPA network on November 5.

Today, TELUS announced simpler pricing, called Clear Choice with Clear and Simple Pricing.

TELUS is also simplifying the number of rate plan options.

Beginning November 5, TELUS will offer clear and simple pricing, with no System Access Fee (SAF) or carrier 911 fee, across business and consumer wireless rate plans.

Existing TELUS clients can continue to renew on their existing rate plans or have the option to switch to the new rate plans at launch.

It's beginning to look like Christmas

2009-10-27T06:17:00.000-04:00

Nokia has announced its Christmas line-up of phones and accessories.

Bluetooth earpieces, headphones and speaker phones figure prominently on their website.

The current version of the Nokia Holiday Gifts website only shows phones for the Rogers network. Nokia plans to update the site frequently - possibly showcasing more devices and choices after some of the competitive HSPA networks launch later this year. For example, the Nokia website shows the E71 in grey and white for the Rogers network, but Mobile Syrup is saying that TELUS will offer that device in black and red.

An preliminary version of the site showed the Nokia N86 incorporating an 8-megapixel camera including Carl Zeiss optics. The phone can be bought from on-line sources in Canada, but it isn't being promoted by a carrier, yet.

Will it be available through one of the major service providers before Christmas?

HSPA competition starts next week

2009-10-26T08:57:00.002-04:00

November 5 is the date that TELUS will be activating its HSPA network, with speeds of up to 21 Mbps over what is being called the largest 3G+ network in Canada.

Pricing for the iPhone is now being advertised.

Consumers will now have more choices for suppliers of some of the world's top selling devices. As TELUS President & CEO Darren Entwistle said in the press release:

Our new wireless network enables advanced speeds and services for more than 30 million Canadians based on the most innovative wireless technology available today. More importantly, it offers Canadians more choice and timely access to almost all major mobile devices in the world across TELUS' three leading wireless networks.

Let the games begin.

Projecting urban values

2009-10-26T06:34:00.001-04:00

A long time reader wrote me a note that is worth sharing.

Normally, I use a smaller font size for quotations, but to ease your reading, I'll keep the size normal:

Have followed with interest your comments on the need to analyze the demand side for broadband before reaching any conclusions about penetration rates.

I agree.

However, we might learn something in this regard from our long experience with narrow band penetration rates. Generally, narrow band i.e. old fashioned local exchange voice service, has been almost universally available, due to cross-subsidies, and penetration rates have been very high (over 90%) in most parts of Canada. (I am leaving aside the more recent replacement of wireline service by wireless).

But there are exceptions. In many communities North of 60, penetration rates for traditional narrow band voice service have been much lower, often in the 60-80% range. From a national policy perspective, some might conclude that our telecom policy "failed" these communities. But, there is another point of view.

The low penetration rates, in spite of massive subsidies, are only a "failure" if one assumes that residents of such communities ought to exhibit demand and consumption patterns that mirror those of the urban south.

Clearly, this reflects a projection of our urban technophile values on all others and an assumption that those who do not adopt such values are wrong or have been left behind. In fact, the residents of many such Northern communities have made an entirely rational economic calculation of cost and value and determined that, for them, telephone service is not worthwhile. If there is any "failure", it is that of urban policy makers who assume that their own demand and consumption patterns are right for everyone.

We must, of course, recognize, that broadband offers a different (i.e. much wider) suite of capabilities to end users. Nevertheless, in developing a broadband strategy, we should not fall into the trap of assuming that only one set of consumption patterns is right for all.

There will almost certainly be some user groups, including some in urban Canada, who will decline to adopt broadband in spite of any subsidies. Our many years of experience with narrow band subsidy programs has already demonstrated this.

A few years ago, I remarked that it seems patronizing to assume that all rural and remote users require a subsidy for broadband. In our recent report, we observed that some big ticket items like housing are often less expensive in rural areas. We need to understand inhibitors on the demand side - price is only one factor.

Your comments are invited.

Bell virtual Olympic torch

2009-10-23T09:05:00.002-04:00

Bell is getting into the Olympic spirit and hopes to get all Canadians thinking about the Games (which are less than 4 months away).

As the Olympic Torch relay gets under way, why not carry a virtual torch with you? Bell has created an animated torch that can be used as a mobile phone wallpaper or screensaver. Visit http://bellvirtualtorch.mobi for the mobile download. (Bell Mobility customers can text "torch" to 2044 - standard text and data charges apply.)

Or for that matter, you can get a screensaver for your computer here.

You can follow the live torch relay here.

Be sure to check out the new Vancouver 2010 website. My favourite Olympic event? Short track relay.