Smartphones, CRTC and Foreign Ownership

This weekend there was an interesting article in the Globe and Mail about smartphones driving Canadian wireless data usage. The article then dove into the black hole of spectrum auctions in 2012.

The article was speculative, but laid out various tidbits related to the 700 Mhz auction planned in the coming months to increase wireless data capabilitities. 

As innocuous as the article was, there were two pages of comments from the great unwashed masses complaining about the Canadian wireless industry and urging the government action a handfull of idiotic activities to *support the Canadian public*. It never ceases to amaze me how uninformed and short sighted the general public is. (I can’t even read comments on the CBC site any more)

Foreign Ownership: Yes, a little foreign ownership is good, and the CRTC has made some innovative recommendations regarding the opening up of ownership regulations. The expectation is that if a Canadian company has less than 10% marketshare, they may be capable of obtaining foreign ownership greater than 50% . This would apply to all the new wireless startups, Allstream, (mostly) regionalized players like Cogeco, Distributel, Primus Canada, and Xplorenet to name a few….

Foreign ownership of the Big 3 is a BAD thing. I’ve said it before and I’ll say it again. The Canadian Telecom industry now employs over half a million Canadians. 

Canada’s telecommunications industry makes up 3.3 per cent of the country’s gross domestic product, generating $40-billion of revenue annually.

It doesn’t take a rocket scientist to realize all that great Canadian goodness will disappear in a heartbeat if the Canadian government opens the flood gates for foreign ownership, with no terms and conditions. 

People want unlimited voice and data plans for less than $40/month. My question to that: is it worth that much to you, that the end result is 2-3 friends and family members being laid off because their job is now redundant to someone working for (insert US/Global Carrier Name here) in a call centre around the world? 

Of the two pages of commentary, there were 2 intelligent posts: 

• Discussion of reasonable and worthwhile changes to the current offers (per second billing is a smart suggestion)
• The idea of a nationalized network backbone is creative (but I don’t know if Canada is smart enough to organize an initiative of that magnitude, we can’t even really figure out how to reasonably use the Deferral Account)

The rest of the garbage made my head hurt thinking that these people somehow survived their adolescence and are now pro-creating.

I’m looking forward to the next few years and the evolution of the Canadian Wireless/Communications Industry:

• deeper national penetration of services and providers
• new handsets that allow for more ubiquitous applications
• Canadian innovations

What do you want for the future of Canadian telecommunications?

Usage Based Billing Complaints aka: "I want to have my cake and eat it too"

It’s been two weeks of incessant blathering about “unlimited” broadband as a basic human right. Two weeks of grassroots attemps to scare the people, scare the governement and make the little baby Jesus cry.

I don’t want unlimited broadband. I want Amazing Quality broadband. I want network innovation. I want Universal Broadband. Why aren’t people rallying around those concepts?

Two weeks ago, the CRTC made a relatively reasonable decision as to what and how wholesale service providers sell internet service to their downstream customers. “The CRTC ruled in January that internet service providers such as Bell could charge wholesale customers based on the same usage-based caps that they charge retail customers. (Read more: http://www.cbc.ca/technology/story/2011/02/01/internet-usage-based-billing-clement.html#ixzz1DC5IBgoh)

The CRTC, despite its slow and deterministic processes, decided that what was good for the goose was good for the gander when it comes to internet usage. Blame the CRTC for doing the right thing. The right thing is not always the popular thing.

Usage based billing means paying for what you use. Not a new concept, really. Water, heat, gas, groceries are all usage based services. Why should internet access be treated any differently? If my neighbour waters his lawn 7 days a week, and washes his car on Sunday, and I only water my lawn twice a week and forgo the weekend carwash, why should our bills be the same? The shouldn’t. Full stop. Provided that the pricing per Gb is fair and equitable (and transparent), this should be a no-brainer.

“Consumer and internet advocates have been lobbying hard against the decision, which they said was leading to higher prices and snuffing out competition among ISPs. They also argued it would prevent consumers from taking advantage of new services such as Netflix, which allows users to stream high-definition movies and TV episodes over the internet to their television for a monthly flat rate.”

Are monthly prices going to increase? Only if you’re a heavy user (+75GB/month of data transfer). According to the CRTC, your pricing still isn’t going to increase until every last grandfathered Bell residential customer who still has unlimited service is migrated off that plan and onto a usage based plan. Teksavvy (and other smaller ISPs) jumped the gun and increased their rates prematurely to further whip their customers into a UBB frenzy.

I think that the biggest scare tactic is that the general population and Canadian Politicans have NO IDEA about how much bandwidth they use. That fact has allowed various grass roots movements to take advantage of *popular opinion* and scare the bejesus out of Canadians with phrases like “higher pricers”, “stifling innovation”, and “limiting usage”.

How much can you do with 60 GB of monthly usage?

• 400 hours of surfing
• 4000 emails
• 2000 pictures shared
• 600 songs downloaded
• 26 movies downloaded (standard definition)

ALL of this activity will net you 60 GB of bandwidth usage. 60 GB is about $50/month, depending on your service provider. That $50 monthly charge is broken up into Customer Service, network infrastructure capital, carrier payouts and marketing and advertising….

125 GB is going to cost you more ($70), but here’s what you can do:

• download 40 HD movies
• Watch over 300 hours of YouTube
• download over 26000 songs.

 Supporters of *unlimited” or *flat rate* internet services are folks who have been using 150 GB of download capacity, and only getting charged $50/month for the pleasure of that. It looks like the free ride may soon be over. Even Mandarin has limits on their all-you-can-eat buffet :-D

Open Media is the biggest driver of the fear, yet their website is simply rhetoric with NO meat. Not even a tool is provided to support their arguements, so that Canadians can actually gauge how much internet they use. I’ve found a very effective litle bandwidth calculator - and it’s independant of ANY Canadian providers. Go ahead and see what your bandwidth appetite is like. Over 200,000 Canadians have signed their petitiion, and I’l bet that only 20% of them know what their bandwidth usage is, and these are the folks who are 150 GB+ users. 

Why do I want usage based billing? It’s simple, really…..

1. I want there to be financial resources available for network technology improvements.
2. I want to eventually get to a place where we can manage our own bandwidth on demand, and be able to control that via a dashboard. Those services can only be provided by service providers who have a network that allows for this kind of functionality.
3. I want to have a fantastic internet experience that’s not impacted by Joe Schmoe downloading 500 Gigs of anime cartoons off of his torrent stream, (unless he’s paying for it).
4. I want UNIVERSAL broadband, and no service provider is going to be able to do that effectively and successfully if they have to offer an unlimited service.

Usage based billing doesn’t stifle creativity, it channels creativity into projects that are going to be productive and profitable.

During a hearing with Commons industry committee of February 4th, Konrad von Finckenstein, chairman of the Canadian Radio-television and Telecommunications Commission (CRTC), defended his agency’s new UBB rules.

“I would like to reiterate the Commission’s view that usage-based billing is a legitimate principle for pricing Internet services,” he said. “We are convinced that Internet services are no different than other public utilities, and the vast majority of Internet users should not be asked to subsidize a small minority of heavy users,” he said. “For us, it is a question of fundamental fairness. Let me restate: ordinary users should not be forced to subsidize heavy users.”

In times of CRTC confusion, the Voice of Reason, Mark Goldberg can always be counted on to add clarity to the situation….

 Tony Clement, in an effort to appear less-like-a-loser and more like a cool kid jumped into the UBB conversation via Twitter, simply to stir the pot and garner more public support for the next election. I’m not entirely sure, but I’ve got a feeling that good ole’ Tony wouldn’t know a tweet if it bit him in the toot! He’s got people for that.

The next time you hear someone chirp about UBB, ask them how much internet capacity they use on a monthly basis…. and then ask them if they want to pay for my water usage next summer. I’m thinking of making a bigger garden ;-)

Will Google Kill Telecom?

Thanks Mashable!

This is Part 1 of a two part series on Google Voice in Canada. Part 2 will theorize on what the impacts will be on Canadian Telecom when Google offers Canadian phone numbers.

This week’s announcement of Google Voice integration with Gmail, with free calling and free long distance is perhaps one of the most controversial moves yet by an Internet company to change the telecom industry. Free computer to computer calling (a la Skype) isn’t problematic, it’s when free extends to long distance and calls to to the PSTN (public switched telephone network) that the Google service gets spooky.

Telecommunications companies around the world continue to invest billions of dollars into *the last mile*, that’s the distance from your house back to their closest switching office. Folks with a regular telephone (as opposed to a VoIP phone) rely on that last mile to make and receive telephone calls. Despite pushes to move everything to the Internet, that last mile is going to be important for a long time to come. 

If Google is offering free calls to the last mile (this is called call termination), you know they aren’t paying [hardly] anything to the carrier who is actually providing that last mile call termination. They’ve managed to strong arm someone into offering it at no charge, perhaps in exchange for some other service.  Where it gets very spooky is with Long Distance Termination. Again - free over Google, but there is a real and true cost to terminate a call to a standard telephone in Canada and the United States.  If no one is paying for that call, then the local carrier is losing money, and has less revenue to be able to maintain their local telephone network.

:-(

Let’s look at an example:  I called my PRIMUS phone from Gmail. The call routed from Google, through Verizon, up to Allstream, and then down to Primus. All for free to me. Perhaps Google did indeed pay Verizon something, who had to then pay Allstream, and lastly Primus. And this is the call flow for a VoIP call, where most of the routing bypasses the local mile of infrastructure, since my Primus phone is layered on top of my Rogers Broadband connection. Confused yet?

If I call my Bell phone line from Gmail [yup, 2 carriers in this house - diversity and redundancy is important with 2 teleworkers under the same roof], the call still starts in the US, at Google’s data centre, heads off to Verizon, up to Bell Canada, and then down my little copper wires from the Richmond Hill Bell wire centre. If there’s no costs to the user [me], then there are no revenues flowing to Verizon to maintain their interconnection with Bell, and no revenues to make sure my little copper wires from the Bell wire centre stay nice and healthy, or get upgrades when needed. At some point, in the not-too-distant future, there won’t be any money left to manage, maintain and upgrade the public telephone network.  That’s all well and good if EVERYONE in the world has migrated to VoIP service over Broadband Internet, but not so good if you are a carrier who has to maintain 2 networks, one for VoIP and one for the public telephone network. It’s certainly bad news if you have to rely on the public telephone network for your phone services.

At some point, carriers will realize that getting into bed with Google is going to destroy the telecom industry. Everything will be free, for a while. Then everything will be bad, very bad.  Right now, Google can only offer outbound free dialling from Gmail. Just wait until Google gets its hands on Canadian phone numbers. I can only hope that it won’t be a free service too.

Slamming Canadian Telecom: Canada's Second Favourite Pastime

We are a whiney bunch. Full stop.

If it’s not the weather, how rotten our sports teams are or how miserable our government is, we’re bashing the hell out of any and all Canadian telecommunications companies for their crimes, real or imagined.

It’s so very ingrained in us, I’m not even sure Canadian consumers know exactly why they’re whining and complaining any more. It’s just a habit now.

• If you were in London, UK, you’d be paying ~$60/month for average broadband internet. (40 Gb of data transfer and up to 20 Mbps of download speed)
• If you have an unlimited cell phone plan in France, that’s going to cost you $135/month, and that doesn’t include a data plan.
• If you’re in the US, and want to go with Verizon, you’re going to pay $115/month for 900 minutes of talk time, unlimited texting and a data plan.

All these prices have been converted to Canadian dollars.

You want to gripe about choices and competitive options?

Almost anywhere in Canada, you have upwards of 6 or more choices on who you’d like to have take care of your communications services. Big guys, small guys, and middle size guys are in the communications business.

Wireless carriers in the US? AT&T, Verizon, T-Mobile, Sprint and and a handful of others. The trick is that they may not all be national, and a few of them I’d never heard of before. The other popular trick —- smaller guys launching a wireless service that’s overlayed on top of one of the BIG 2. Optical illusions :-D

I’ve been with 3 different wireless carriers, never had a billing problem yet.

Same for Internet Service Providers and TV service providers. Sure, the odd call into customer service, swap out a PVR because it’s gone wonky. Bing, bang, boom. Problem solved.

We are a very hard bunch to satisfy. We’re demanding, mean, threatening and fickle. Maybe we should be fired as customers instead?

Holy Cats! OTTAWA takes the Leash off Telcos for Local Voice Services

Good Monday News!  The CRTC has been overruled by Ottawa yet again. Last month it was deregulation of Voice over IP services, now it’s the deregulation of local voice services, one of the last, locked down, traditional components of the major incumbents. Industry Misister Maxime Bernier has given BELL, TELUS and the rest of the incumbents the power to set their own prices, as long as there is sufficient competition in the local area.  Hmmm…. I don’t see a definition for “sufficient competition” yet. (Updated: Mark Goldberg’s got the definition, and it’s EASY!)  It used to be required that 25% of the local services had to be held by a competitive carrier in an area, before BELL could change their pricing. This could change the face of local voice services, which can only be good news for the Canadian consumer.  Mark Evans has more details.

Monday’s move throws out the old CRTC threshold policy and furtherreinforces Bernier’s reputation as a minister who favours free-marketsolutions to telecom issues.

Ottawa overrules CRTC; to accelerate deregulation of local phone service

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Overruling the CRTC on VoIP Services

Ottawa to block CRTC on Internet phone regulation
SIMON TUCK
From Wednesday’s Globe and Mail
OTTAWA — The Harper government will announce Wednesday its intention to rewrite the CRTC’s key ruling on Internet-based telephone services, a highly unusual move that could mark a big step toward a more open and consumer-friendly sector.Industry Minister Maxime Bernier will say in a speech in Toronto that the Conservative government will again block the CRTC’s repeated efforts to regulate phone services that run over the Internet.

globeandmail.com: Ottawa to block CRTC on Internet phone regulation

Holy Cats! What are the implications of the Harper government overruling the CRTC? Likely it’s a good thing, changing the rules of how digital voice services are treated, but the implications of the government getting involved in CRTC policy making are wide reaching. First VoIP, then the world? This first forray into the CRTC domain is positive, but what if the conservatives what to delve into something and change it for the worse? Does the CRTC have any recourse?

Mark, you probably know more of the answers - what do you think?

technorati tags:CRTC, Harper, Canada, Telecom