The first one said “Sony Ericsson plans to be top Android-handset maker“; the second was “Windows Phone 7 released to manufacturers.” Finally, there was news of the launch of Samsung and Toshiba tablet devices, released with Android 2.2.

The next 4 months are a [...]]]> There were a few headlines dealing with mobile operating systems that caught my eye yesterday.

The first one said “Sony Ericsson plans to be top Android-handset maker“; the second was “Windows Phone 7 released to manufacturers.” Finally, there was news of the launch of Samsung and Toshiba tablet devices, released with Android 2.2.

The next 4 months are a very busy period for the mobile industry. With many high school and university students signing up for services, followed by the Christmas season, this is “showtime” for the mobile industry. So part of the common thread between these articles, the subtext, was preparing for the fourth quarter selling crunch.

But the other common thread I noticed was that Sony Ericsson is in both camps: Android and Windows Phone 7. In fact, there are a number of device manufacturers that offer both operating systems.

The consumer electronics firms are offering consumers a choice of operating systems; and, it works in the other direction as well: the operating system developers are empowering competitive creativity among the manufacturers.

The consumer electronics business can be fickle – some people are more concerned about the colour than the functionality, the polish, the shape, keys on the dial pad or keyboard. The consumer electronics business is subjected to all sorts of twists that may seem completely irrational to the people who focus on more technical characteristics.

Having multiple hardware platform developers is an interesting hedging strategy for the operating system companies, and in the case of a number of hardware companies, there is a hedging of operating systems as well.

Contrast this approach with the Apple and RIM closed environment.

Benefits and handicaps of each?

The account was a concept established in 2002, with the creation of Canada’s transitional Price Cap regulatory regime. At the time, the idea was that the CRTC was concerned that embyonic competitors wouldn’t provide sufficient discipline for phone rates and, seemingly in contradiction, the [...]]]> Yesterday, the CRTC issued 4 decisions that try to close out the final chapter on the much maligned deferral account.

The account was a concept established in 2002, with the creation of Canada’s transitional Price Cap regulatory regime. At the time, the idea was that the CRTC was concerned that embyonic competitors wouldn’t provide sufficient discipline for phone rates and, seemingly in contradiction, the CRTC did not want consumer prices to fall to a point that would discourage these new competitors from entering the fledgling local phone business.

So prices in urban areas were kept artificially high and the ‘extra’ money was put in an account – the deferral account – to be used for projects to be defined later. Over time, the accounts became pretty sizable and in 2006, the CRTC decided that it would freeze the plan and use the accumulated money to expand broadband, improve access for Canadians with disabilities, and refund what ever was left over (see the introductory paragraphs of Decision 2006-9 for a description of the history of the plan).

That was 4 and a half years ago. There have been court challenges and cabinet appeals and yesterday, the CRTC made its final determinations – ordering Bell to abandon a proposal to use mobile wireless technology and revert to DSL while generally approving the proposed plans from MTS Allstream and TELUS (that first had an adjustment approved for funding its service improvement plan).

The Commission’s rejection of Bell’s HSPA proposal is not surprising; I have alluded to signals a number of times over the past month or so, foreshadowing that the CRTC was not prepared to accept mobile wireless as a full substitute for urban grade broadband internet access.

What was surprising was the language that was used in paragraph 35 of 2010-637:

the Commission directs the Bell companies to provide broadband services using DSL technology to implement their broadband proposal. The variety of services provided must be comparable to those offered in urban areas, using the same DSL technology, in terms of their rates and terms and conditions.

This has no flexibility. Despite current provisioning in urban centres that has DSL among the tools used for broadband deployment – alongside fibre or other technologies – Bell has been ordered to used DSL as the only technology choice for the $300M to be spent over the next 4 years.

Contrast this order with the flexibility acknowledged to be considered for TELUS, in permitting them to select its own fibre backbone, despite the availability of Alberta SuperNet (paragraphs 25-26 of 2010-639):

The Commission has reviewed the costs provided by TCC and Axia, and concludes that there are some communities where it would be less costly for TCC to use SuperNet facilities than to build its own. However, the Commission considers that, for these communities, if TCC withdraws from its deferral accounts only the amount of the cost to use the SuperNet network, the company would withdraw the same amount as if it had chosen the least-cost option.

The Commission notes that the service provided to subscribers will be the same regardless of which facilities TCC uses, and will be equivalent to TCC’s broadband services provided in urban areas, thereby satisfying the Commission’s determination in the deferral account decisions. Further, while the Commission considers that it would be beneficial to avoid the duplication of facilities in certain approved communities, it concludes that the benefits associated with TCC having greater control over its end-to-end broadband network are significant.

Why wasn’t Bell given the same discretion? The CRTC could have denied the use of HSPA as a solution, but ordered Bell to provide a specific grade of service with a maximum level of funding from the deferral account without limiting the engineering degrees of freedom.

That was what is behind the dissenting opinion by Vice Chair Len Katz, filed with the Bell decision.

I submit that once the Commission has established the appropriate allocation of funding from the deferral accounts, the ILECs should be free to deploy new and innovative technologies as long as they meet the price, quality, reliability, service and access conditions imposed by the Commission.

Unfortunately, there will likely be yet another appeal, based on the lack of flexibility to allow Bell to use the technology that it chooses.

Just over 60,000 households will gain access to broadband over the next 4 years, from this $300M investment sourced from urban consumers being overcharged for local phone service. The funding works out to $5000 per household that gains the ability to connect (not signing up) – it is a remarkable level of subsidy compared to other broadband stimulus programs. If broadband adoption reaches levels seen in the rest of the country, it will work out to around $6000 per new subscriber.

It gets worse. Because of the lengthy process, smaller internet service providers already stepped into some of these markets, and 60% of the so-called unserved homes already have access to broadband service. So that means there are really just 20-25,000 homes getting access to broadband for our $300M.

For nearly five years, the deferral account has been promising broadband to some communities; the rollout plan (assuming no further procedural delays) will have some people waiting 4 more years for implementation.

That’s nearly 10 years from the time the CRTC first spoke of using our money to promote broadband expansion and refund the rest. Yesterday saw more than $300M dollars of our money committed by the CRTC to order Bell to expand broadband access to a fraction of a percent of Canadian households.

Do you think you got your money’s worth?

Telecom Regulatory Policy CRTC 2010-632: Wholesale high-speed access services proceeding, is designed to preserve a delicate balance that ensures “that the retail Internet service market is sufficiently competitive to protect the interests of users.”

In effect, [...]]]> Yesterday’s decision from the CRTC provides fast temporary relief for the smaller ISPs; it may still leave the bigger telcos with indigestion.

Telecom Regulatory Policy CRTC 2010-632: Wholesale high-speed access services proceeding, is designed to preserve a delicate balance that ensures “that the retail Internet service market is sufficiently competitive to protect the interests of users.”

In effect, the CRTC has found that the current retail marketplace is enhanced by the presence of the smaller players, providing price competition and service innovation beyond that of the major telephone companies and cable companies. That has been the situation to date that has allowed retail internet services to avoid price regulation. The decision was predicated on the view that two facilities-based service providers, the phone company and cable company, are not sufficient; the CRTC was not persuaded that mobile wireless companies and satellite services are yet able to serve to discipline the marketplace.

The Commission notes, for example, that current prices for wireless- and satellite-based retail Internet services generally significantly exceed wireline retail Internet service prices for comparable service and that speed issues can occur as those systems’ capacities are approached.

But make no mistake, this is not going to be the long term situation. The CRTC is not setting the mandated wholesale regime in place for all time:

The Commission notes, however, that it expects that as technologies and retail Internet service markets evolve, retail Internet services provisioned using wireless and satellite facilities are likely to become substitutes for those provisioned using wireline facilities.

This is likely a 5-year lifeline to the smaller ISPs, because the alternative technologies will need to establish a measurable share of the market (say, 5-10%), followed by a proceeding that provides a CRTC endorsement of the proposition that these facilities-based competitors are able to provide sufficient discipline to ensure consumer benefits.

In the meantime, competitors will be compensating the phone companies with an additional 10% margin, an amount found by the CRTC to be sufficient to satisfy the increased shareholder risks associated with deploying fibre infrastructure.

The dissenting view of Commissioner Denton says that the CRTC should have gone further, a sentiment captured in the official reaction from Teksavvy. However, aspects of the Policy Direction, specifically the requirement to rely on market forces to the maximum extent feasible, would likely not have survived a challenge on this point - appeals mean delays.

For smaller ISPs, that would prevent the fast, temporary relief associated with this decision. The heartburn medication for smaller ISPs may be giving stomach upset to others. Ask your doctor.

At 4:00 pm (following the close of the the Toronto Stock Exchange), on Monday, August 30, the CRTC will be releasing its Regulatory Policy regarding wholesale high-speed access services – the long awaited outcome from Telecom Notice of Consultation CRTC 2009-261). [...]]]> The CRTC gave advance notice that next week will be busy for observers of the Canadian communications sector.

At 4:00 pm (following the close of the the Toronto Stock Exchange), on Monday, August 30, the CRTC will be releasing its Regulatory Policy regarding wholesale high-speed access services – the long awaited outcome from Telecom Notice of Consultation CRTC 2009-261). This will determine whether the smaller ISPs will gain access to matching the highest available broadband speeds when connecting via the telephone companies’ Gateway Access Service (GAS); the extent of permitted levels of mark-ups on GAS; and, whether the competitors can access telephone company next generation networks when there is co-location at the individual central offices.

The following day, on Tuesday, August 31 (again, when the markets close at 4pm), the CRTC will be issuing its decisions related to the disposal of the funds remaining in Bell Canada, Bell Aliant, Telus and MTS Allstream’s deferral accounts – the follow-up filings arising Telecom Decision CRTC 2008-1.

For more than two and a half years, the deferral account proceedings have been overhanging the rural broadband marketplace. While the intent had been to accelerate the roll-out of broadband service in rural Canada, the effect of the process has served to inhibit investment by smaller ISPs that have not known whether the major telcos would be entering some markets using public funding subsidies.

The biggest question is how the CRTC will deal with Bell Canada’s proposal to use HSPA mobile technology as its subsidized rural broadband solution. As I wrote exactly one month ago, the CRTC has just asked the public to comment on whether “wireless services (e.g. Wi-Fi, 3G networks or satellite) can be substitutes for landline services to connect to the Internet.” If the CRTC approves Bell’s proposal, then it seems to be pre-determining the outcome of its current consultation (which is scheduled to close on Friday).

The summer will be winding down with a flurry of activity from the CRTC – be sure to visit this site next week for our perspectives.

Perhaps my privacy radar is hyper-sensitive, driven in part by Sarah Schmidt’s article today about Facebook.

So let’s assume that Google allows its users to opt in or out of having their calling patterns tracked. What about the people being called? Do they [...]]]> Google has announced placing calls from inside GMail and I have a bunch of questions.

Perhaps my privacy radar is hyper-sensitive, driven in part by Sarah Schmidt’s article today about Facebook.

So let’s assume that Google allows its users to opt in or out of having their calling patterns tracked. What about the people being called? Do they have privacy rights from this service?

Let’s say that I am not a GMail user. Can Google track information about who calls me? The location that people are seated when they call me? Can Google sell that information to an advertiser who can then match up data about my home – maybe even what websites I visit in my home, the people who call me and where they are calling from?

Will I suddenly get ads from airlines that offer flights to visit LA if Google notices that a phone number registered to my household is receiving calls from a GMail client using a California university IP address? Maybe Google would offer a qualified Direct Mail address list that gets around do-not-call and anti-spam legislation.

Further, the CRTC’s privacy rules likely won’t be able to be applied. Google isn’t a telecom carrier. Although the CRTC may think that it can apply its regulations indirectly, there may not be a Canadian carrier that has any relationship with Google for voice services – Google can purchase all of its Canadian terminations from US service providers that have correspondent relationships.

How will Canada apply its standards of behaviour on this service?

Interestingly, the CRTC will likely have insights into the scale of Google’s operations in Canada. Google’s voice service will not qualify for the computer-to-computer voice exemption for contribution. As such, it appears that Google will be a Telecommunications Service Provider since its service is connected to the Canadian public switched telephone network. Although its non-voice revenues will be exempted from contribution to the universal services subsidy pool, the CRTC may get interesting insights into the scale of Google’s operations in Canada.

More to come later.

The piece argued (and was entitled) ‘Net Neutrality is Akin to Socialism’. Long time followers of this blog will recall that I spoke along similar lines more than 4 years ago in a piece called “Soviet styled monopoly“.

There was an opinion piece in The [...]]]> There was an opinion piece on network neutrality published yesterday on The Street.

The piece argued (and was entitled) ‘Net Neutrality is Akin to Socialism’. Long time followers of this blog will recall that I spoke along similar lines more than 4 years ago in a piece called “Soviet styled monopoly“.

There was an opinion piece in The Australian last week saying that its National Broadband Network (NBN) is welfare for tech-heads.

I just wonder if the common folks on the street understand the issue or find any realistic likelihood in the possibilities of the doomsday scenarios being painted by some.

Some will pipe in and say that a problem already arose – and they will bring up the TELUS blocking incident.

Indeed, that incident proves that no new laws are required – just like new laws won’t keep my neighbours from rolling through stop signs.

Are people getting engaged with the thought of government getting more actively involved in the internet? Are we more willing to wait until a problem actually arises and deal with the issue at that time? Is it time for Canadian net neutrality advocates to find a new cause?

One of them came from a Mark Evans blog posting, wondering aloud if the government should get into the business of regulating porn, presumably using a new Porn Control Board of Ontario to raise revenues for the provincial treasury. After all, now that [...]]]> Over the weekend, there were a couple separate calls for the government to regulate the internet.

One of them came from a Mark Evans blog posting, wondering aloud if the government should get into the business of regulating porn, presumably using a new Porn Control Board of Ontario to raise revenues for the provincial treasury. After all, now that Ontario has decided to join British Columbia in the world of on-line gambling, he asks if we could have provincial regulation and control over another fund-raising vice.

The other call came from an opinion piece in the Washington Post. which dealt with the Google-Verizon proposal for network management rules. The main theme of that piece is that it disagrees with wireless being given an exemption from the rules.

The biggest reason to apply net-neutrality regulations to wired and wireless alike is basic economics. Anytime the government applies one set of rules to some competitors in a market but not others, it distorts that market.

And although wireless broadband hasn’t always been a real alternative to land-based cable, DSL or fiber connections, faster 4G services make it a more viable option.

The Washington Post says that net-neutrality rules do not require “surrendering to anarchy” on Internet connections; they support Internet providers managing their networks in ways that don’t discriminate between legitimate sites or services.

So if your Internet provider’s connection gets clogged because some users are hitting one site, it couldn’t cut off access to that site. But it could, after providing fair warning, throttle back those users’ download speeds, cap their bandwidth or charge them extra. Straightforward usage limits would have the added benefit of being understandable to customers and companies alike — unlike a lot of federal regulations and corporate terms-of-service documents.

In other words, the Washington Post is suggesting that the US adopt the Canadian approach.

Is it time for Canada’s net neutrality groups to acknowledge that the CRTC may have gotten it right?

The Technical Paper [2.82 MB, pdf] “analyzes residential consumer usage of broadband and the performance of fixed broadband connections in the U.S.”

This paper is organized into three sections: the first looks at how residential consumers use their internet access service and classifies consumers into four user [...]]]> The FCC has released new data about American consumer internet use.

The Technical Paper [2.82 MB, pdf] “analyzes residential consumer usage of broadband and the performance of fixed broadband connections in the U.S.”

This paper is organized into three sections: the first looks at how residential consumers use their internet access service and classifies consumers into four user profiles; the second looks at the performance of U.S. consumers’ broadband connections; and, the third explains how the data led to the FCC’s National Broadband Plan target of 4 Mbps download and 1 Mbps up.

Although the data is from the U.S., there are many points that are likely highly portable to Canada. Much has been made of download caps from the internet service providers. The FCC found that that the median user consumed 1.7 GB/month, while the average (mean) U.S. Internet user consumed 9.2 GB/month. The extreme between the mean and median was explained by the FCC as principally due to a relatively small number of users who consume very large amounts of data each month – sometimes as high as terabytes per month.

The most data-intensive 1% of residential consumers appear to account for roughly 25% of all traffic, the top 3% consume 40%, the top 10% consume 70%, and the top 20% of users consume 80% of all data. While half of all users consume less than 2 GB per month, the last 6% of users consume more than 15 GB each month.

These results are from a country that already has streaming TV services like Hulu and Netflix.

Important quantitative data that can hopefully contribute to the dialog on broadband services evolution on both sides of the border.

This question continues to trouble me.

I received mail at my cottage last week – advertising that was addressed to me. I don’t have a mail box. All of my utility bills, tax notices etc. are sent to my home. But the post office delivered [...]]]> Why would we censor electronic communications that are completely legal in paper form?

This question continues to trouble me.

I received mail at my cottage last week – advertising that was addressed to me. I don’t have a mail box. All of my utility bills, tax notices etc. are sent to my home. But the post office delivered the mail to my neighbour who handed the junk mail to me.

So, some company bought a mailing list and sent me an addressed letter advertising specials that I might be interested in. Sure, it is junk mail. But there is nothing fraudulent about it. The advertiser is a real company. I didn’t ask to be on their mailing list, but I opened the letter and even thought about whether I might be interested in their product.

The direct mail piece was completely legal.

But if Canada’s Electronic Commerce Protection Act [an Orwellian named bill] gets re-introduced and passed, I find it bizarre that we will have a class of otherwise legal communications forbidden – censored - just because it is in electronic form.

It isn’t spam: this isn’t a case of mail that is trying to hide the identity of the sender; or, trying to sell illegal goods; or, misrepresent the product. All electronic communications that aren’t specifically requested will be banned. So much for encouraging businesses to lower their costs through an electronic equivalent of direct mail.

We have so many people who argue that we should not censor electronic communications that are illegal in paper form. Where do they stand on the issue of bannishing electronic transmission of legal communications?

I continue to wonder how this provision of the Electronic Commerce Protection Act is really going to encourage electronic commerce.