Telecom Trends

It seems that problems with busy period engineering affects the government as well as the private sector.

Canada Revenue Agency has had to extend the deadline for e-filing tax returns because its servers have had trouble keeping up with traffic loads this week. It is a scene reminiscent of Boxing Day blues for some Canadian retailers.

An announcement showed up on the CRA website yesterday, announcing an extension to May 6 - for e-Filers only (I am linking to a CBC News page because CRA's home page is so bogged down, we don't need to contribute to their trouble).

I was doing some business research on CRA's website yesterday and noticed painfully slow response times. I'm waiting for someone to comment that CRA should blame their ISP for traffic shaping.

It certainly raises questions about CRA's web architecture when even information pages can't be reached.

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Canada Revenue Agency

The subject of net neutrality came up in a meeting I had yesterday and the conversation turned to current affairs in Canada and various hearings in the US.

Our discussion included an examination of the vocabulary being used in the discourse and one of the meeting participants spoke of network fairness associated with the intelligent management of traffic.

Some would have the network treat all bits as they come - first come, first serve without any triage even in times of peak network loading. Such people say that the carriers just need to pry additional capital from their wretched fingers: invest in more network assets and then there will be no congestion.

I read lots of comments from people who believe we just need the government to nationalize the access networks - that will fix things. That camp believes that a benevolent government will pour whatever capital resources are required to provide limitless capacity.

Hospitals, a public resource in this country at least, experience times that emergency rooms are crowded and other times that there is no waiting time. We don't expect hospitals to take patients on a first come, first served basis. We expect the emergency room to prioritize patients based on their condition - their tolerance of latency.

There are off peak periods - increasingly rare - where even sore throats get seen without delay. But during the rest of the day, we still consider it to be fair to apply intelligent emergency room management.

Is network fairness a more important goal than an unachievable network neutrality?

We'll be looking at all aspects of net neutrality at a special session at The 2008 Canadian Telecom Summit on June 18.

Technorati Tags:
net neutrality, Canada, network fairness

In a statement released this morning about the iPhone, Rogers has announced that it has reached an agreement with Apple to launch later this year.

Ted Rogers is quoted in the very brief statement, saying:

We're thrilled to announce that we have a deal with Apple to bring the iPhone to Canada later this year. We can't tell you any more about it right now, but stay tuned.

As I wrote recently, there appears to be imminent plans to release an upgrade to the current iPhone.

Wouldn't it be great for Canada to be part of the launch of iPhone 2.0?

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Apple, Rogers, iPhone

On a superficial level, if you asked someone on the street if they want their internet service provider to interfere with the content being delivered, I suspect most would immediately answer "No."

Would the results be the same if the questioner started off by saying: "some ISPs will block spam and viruses from reaching your computer at no extra charge. Is that a valuable service?"

It is pretty clear that there is some content that we want ISPs to block.

Is there other content that should be required to be blocked?

Does the law even permit ISPs to transport or cache child exploitation images? Canada's major ISPs are blocking identified illegal content; should the smaller ISPs be required to?

Does the CRTC have to pre-authorize such blocking under S.36 of the Telecom Act?

There will be a public consultation on New Media later this year. These content issues and others should be part of the discussion.

Technorati Tags:
CRTC, new media, blocking, Cleanfeed

I am going to guess that every one of us has thought of saying something to a customs or immigration official and then held back, because we figured we could wait until our next doctor's appointment for the response that might ensue.

Last Wednesday was an interesting day at the BDU hearings, with Shaw in the morning and a panel in the afternoon that included Channel Zero, The Fight Network, High Fidelity HDTV and Maple Leaf Sports & Entertainment.

When preparing their comments, the folks at High Fidelity HDTV acknowledged that their written comments were written in a stream of consciousness.

Sometimes the mood in which you write depositions like this is not the mood in which you deliver it.

While they cleaned up some of the language from their prepared written version, they didn't stop to think about how a series of lines like the following would be received, especially when the Commissioners were reading along with the original version in front of them:

We think there are many areas in which the Commission is remarkably in the dark...

The CRTC chair listened patiently and finally responded:

Each time you make a submission to us, it is more abrasive and more offensive. To be called shamefully in the dark, woefully ‑‑ I'm failing to understand, et cetera.

You can obviously say that, but in my hearing and that of the Commission, our willingness to accede to your arguments does not increase with the level of attacks that we receive from you. I have no problem with you saying that we are wrong, et cetera, but I think that kind of language is uncalled for.

I think our mothers tried to teach us to remember our manners. It is reasonable advice for all of us who participate in public proceedings. Read it over again in the morning and stop to think about how the message will be received.

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CRTC

The Canadian Association of Internet Providers (CAIP) has filed its reply to Bell's answer to its application to the CRTC asking for Bell Canada to be ordered to provide their customers with un-managed internet access service.

Michael Geist suggests that the reply pulls no punches and adds a few "new allegations."

I am not going to get into the merits of one set of arguments versus the other. Read the file with a critical eye.

There was a better approach to resolve a technical interconnection issue in an expedited fashion. But, the process is now what it is.

We'll be looking at all aspects of net neutrality at a special session at The 2008 Canadian Telecom Summit on June 18.

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Bell, CRTC, CAIP, Canadian Telecom Summit

This is blog posting number 1000 for me. One thousand pieces of my mind in just over two years.

Back in February 2006, I launched this blog with a piece entitled "It's a start".

I quickly followed up with a posting about the newly released Decision from the CRTC on the Deferral Account and another posting later that evening that described the public notice on the telemarketing Do Not Call List. Who would have thought that two years later, both of those proceedings continue to provide fodder for this site - DNCL scheduled to be implemented later this year and the recent Commission, court and cabinet appeals for the deferral account's followup Decision 2008-1.

Thank you for your loyal readership, your comments, your calls and email messages. Thank you to itWorld for recognizing this site as one of Canada's top 10 technology blogs.

Thanks as well for visiting the advertisers and thereby supporting my caffeine addiction. The cheques from Google buy me a bag of good espresso beans each month.

I hope I can continue to provoke you to come back for perspectives, musings and every so often, a little entertainment.

One thousand pieces. Not a bad start.

I have been troubled by the allegation that the use of deep packet inspection for network management purposes by Internet Service Providers is an invasion of privacy. The issue arises in the dispute over traffic shaping of customers of one of Bell's wholesale shared internet access products.

One commentator says that CAIP "rightly" notes that a privacy violation arises since there is no contractual relationship between Bell and the customers of the independent ISPs. CAIP's application said:

By examining the packet data and packet header information of GAS customer traffic, Bell can identify, inter alia, the type of data being transferred, the ISP upon whose network the data is being transferred, an end-user’s intention to acquire certain types of Internet content and the IP address and, hence, the identity of the end-user customer who is sending/receiving the data. The collection and use of such information by Bell, which in this case would have clearly been done without the prior consent of the end-user customers so affected, violates the privacy of such individuals.

It seems to me that the privacy complaint is predicated on carriers actually collecting and using individual information. But all of the statements seem to indicate that carriers don't actually use any personal information. The DPI technology looks at packets and treat all packets associated with certain applications equally. The network management is non-discriminatory on an individual level.

Isn't this precisely why traffic shaping has impacted both legitimate and inappropriate file transfers without differentiation?

Is this any different from compression technologies that were historically used in long distance telephone networks? Such technologies looked at the nature of the traffic and applied appropriate compression algorithms based on whether the call was fax, voice, dial-up data, broadcast audio, etc.

Think of enforcement of high occupancy vehicle lanes during peak traffic periods. The police can quickly look in the windows to see if there are 2 or more passengers in the car without pulling over the car, determining where the people are from, where they are going, who is in the car, the purpose of the trip, etc.

We can have an intellectual discussion about the rights of service providers to manage their networks and the methods that may or may not be appropriate. But, the invasion of privacy claim set out by CAIP makes little sense and serves to create noise that interferes with being able to hear a more fundamental, focussed discussion on internet access policy.

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privacy, CAIP, Bell, traffic shaping, net neutrality, Canada

Last November, Bell Aliant launched a series of residential internet support services under the banner of Aliant Expert. The service was brought to my attention this morning by a reporter who was following up on it.

When the service was launched, Aliant was the first telco in North America to offer such services. For many consumers, setting up home networks, connecting digital entertainment is a non-trivial task.

It seems to makes sense for a telco to try to build upon or re-establish the trust relationship with its customers. These services leverage the fleet of service vehicles and human resources that communications companies have deployed throughout their service territory - a greater presence than any chain of electronics retailers.

Will we see more carriers following Aliant's example in the consumer space?

The theme of The 2008 Canadian Telecom Summit, taking place June 16-18, is Maintaining Relevance for the Customer.

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Bell Aliant

A recent article on CNET reports that AT&T is warning that the internet will hit full capacity by 2010. It is an attention grabbing headline.

Of course, there is a catch.

When you get into the body of the article you see that Jim Cicconi, vice president of legislative affairs for AT&T, warned that at least $55 billion is needed in new infrastructure investment in the next three years in the U.S. on top of $75B needed worldwide.

Before you go running for cover, Cicconi said that AT&T is doing its part, with plans to spend $19B on its network infrastructure. Some audience members asked if the hidden motivation behind Cicconi's speech was AT&T's position on net neutrality. He responded by saying he believed government intervention in the Internet was fundamentally wrong.

There is nothing magic or ethereal about the Internet--it is no more ethereal than the highway system. It is not created by an act of God, but upgraded and maintained by private investors.

The CNET story includes a quote from the US Department of Justice that merits reproducing, especially given my post from Monday on the NDP perspectives on government interference in network management:

However well-intentioned, regulatory restraints can inefficiently skew investment, delay innovation, and diminish consumer welfare, and there is reason to believe that the kinds of broad marketplace restrictions proposed in the name of 'neutrality' would do just that, with respect to the Internet.

William Archer, CMO of AT&T Business will deliver the luncheon keynote address on June 16 and Eric Loeb, AT&T's VP International External and Regulatory Affairs will be speaking on Network Neutrality at The 2008 Canadian Telecom Summit on June 18.

Have you registered yet?

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AT&T, Jim Cicconi, William Archer, Eric Loeb, Canadian Telecom Summit

A little more than a year ago, I wrote that no additional laws are needed to protect the internet from discriminatory practices by internet access service providers.

Today, Federal Communications Commission Chairman Kevin Martin told the US Senate Commerce, Science and Transportation Committee that his agency has all the authority it needs and that new legislation is unnecessary. He was speaking at a hearing on the future of the Internet.

He reiterated the FCC's Internet policy principles and included a comment on the application of network management:

To encourage broadband deployment and preserve and promote the open and interconnected nature of the public Internet,

• Consumers are entitled to access the lawful Internet content of their choice;
• Consumers are entitled to run applications and use services of their choice, subject to the needs of law enforcement;
• Consumers are entitled to connect their choice of legal devices that do not harm the network;
• Consumers are entitled to competition among network providers, application and service providers, and content providers.

The Commission explicitly noted that these principles were subject to reasonable network management.

The full text of his statement can be found here.

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FCC, net neutrality

The last few weeks have featured a who's who in Canadian broadcast parading past the CRTC as part of the BDU hearings.

It should be interesting on Wednesday with Jim Shaw due up at 9:00.

Last week, he launched a preemptive strike (possibly preparing for a for a future cabinet appeal?) with a letter to the Prime Minister that said:

Instead of focusing on meeting customer preferences for open access to programming, cutting subsidies that reward broadcasters for the wrong behaviour, removing restrictions on programming and cutting onerous bureaucratic rules that limit customer choice – all of which are realistic and reasonable doorways to the future, we are forced again to look backwards to the past.

The CRTC review does not mark a movement toward a light at the end of the tunnel, but rather a fumbling toward deepening darkness.
...
The CRTC`s historic approach to cable as a mere instrument to promote Canadian content is outdated. Cable, in competition with the telcos, is building Canada`s information superhighway and our telecom and broadcasting policies should encourage not hinder this development.

What is really needed are not more subsidies and micro-regulation by the CRTC, but rather a made-in-Canada broadband policy.

This is the final week scheduled for presentations. Wednesday morning's appearance by Shaw should be especially entertaining. You can watch the hearings on CPAC on-line or listen to an audio feed by clicking here .

---

Update [April 23, 9:30 am]
Jim Shaw was a no-show at the hearing on Wednesday, sending Shaw Communications president Peter Bissonnette to head up what the CRTC chair called a "B-team", reminiscent of Shaw's critique during the Canadian TV Fund proceeding.

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Shaw, CRTC

Charlie Angus issued a statement last week that says the Conservatives have ignored recommendations on net neutrality. The statement was issued in response to Industry Minister Prentice's comments on April 2 in the House where he refused to wade in with government interference on the CAIP / Bell competitive dispute.

Angus' statement

says Prentice should accept the recommendations of the Telecommunications Review Panel that laid out a practical guide for CRTC involvement on maintaining fair and open access of the internet. The panel stated: "open access is of such overriding importance that its protection justifies giving the regulator the power to review cases involving blocking access to applications and content and significant, deliberate degradation of service."

Unlike many on the left who misquote the Telecom Policy Review Panel recommendation, I will credit Angus with recognizing that the TPRP acknowledged the technical, efficiency and legal constraints that may be used to impede internet traffic flow.

He cites the entirety of recommendation 6-5 in his letter. Many other observers of the TPRP consistently neglect to quote the full text, so kudos to him for that part of his letter. However, Angus falls into the same trap as most who are not familiar with the entire report.

The reality is that the CRTC already has all of the tools it needs to discipline bad behaviour in internet traffic management. The TPRP created its tight recommendation on internet traffic (6-5), because it felt that the existing anti-competitive provisions (Section 27(2)) are "much too general and rely too greatly on the regulator's discretion." So recommendation 3-13 was to replace 27(2) with tighter, more specific measures.

We wouldn't want ministerial interference in a court proceeding. Why are we looking for the Minister to intervene in a regulatory complaint?

The net neutrality panel at The 2008 Canadian Telecom Summit will be taking place on June 18. Have you registered yet?

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Charlie Angus, CRTC, TPRP, Canadian Telecom Summit

I wrote last week about the expected release of the CRTC's agenda for dealing with social and other non-economic regulatory measures in light of the Minister's Policy Direction.

Yesterday, the CRTC issued its most current view of the action plan to address these areas. You can find the timetable in the Appendix to the decision.

The Commission rejected a somewhat bizarre call from the consumer groups to delay an examination of privacy issues until the government revises the national privacy law:

The Commission considers that delaying its review of privacy measures pending the federal review and tabling of amendments to PIPEDA would unnecessarily postpone consideration of an important matter that many parties consider to be a priority.

The priorities coming up in the next year:

• Retail quality of service indicators, standards, reporting, and rate adjustment plan Mandatory disclosures in directories (e.g. terms of service, statement of consumer rights), billing inserts, and websites
• Statement of consumer rights
• Process for disconnection, late payment charge, dishonoured payment charge, deposit policies and toll restrict
• Privacy safeguards and obligations

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CRTC

Last December, Yak filed two applications with the CRTC to "protect Canadians against consumer gouging." Today, the CRTC ruled on those applications.

At issue was a new network access fee that TELUS introduced for those local customers that had TELUS as their primary long distance carrier but had not subscribed to a calling plan. Yak characterized the fee as a fee associated with local service, since it applied whether or not long distance calls were made. The CRTC agreed and has ordered TELUS to refund the fee to any subscriber that did not make calls over the TELUS network during a billing period.

The CRTC noted that the definition of local service

consists of the provision of service and equipment necessary for telephone communication between customers in the same exchange and between such customers and the message toll office or facilities for that exchange. On that basis, the Commission finds that access to the long distance network is included in [TELUS]'s local exchange service

It is the first time that the CRTC has come down on system access fees. At issue in this instance was the fact that the fee was applied to non-forborne areas as well as forborne. In the case or areas where local rates are still regulated, the CRTC has to approve any change in local rates. In the rest of the territory, there is a price cap in effect that was likely exceeded.

The CRTC made a pledge last year to watch out for consumers in a forborne environment. Today's decision affirms the CRTC's commitment to that promise.

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Yak, TELUS

A little over a week ago, CAIP filed its Part VII complaint on Bell traffic shaping. The CRTC gave Bell until this past Tuesday to respond with its answer. CAIP has a few days left to submit its reply - the final word before the file goes into the Commission's hands.

Bell has explained its actions, not just to the CRTC but to the public in an interview with the Montreal Gazette and with CBC Radio.

In my post last week ("CAIP's application"), I described the 3-pronged test that will be applied by the CRTC in assessing whether to grant interim relief. Bell's answer asserts that CAIP has failed to clear any of the 3 hurdles, all of which are necessary in order to have interim relief granted.

Bell also suggests a lot of mis-information has been circulated. Bell puts forward ^{[para 46]} its clarification of what the ISPs have been reselling:

for many ISPs, GAS is the cheapest and thus the most economical solution. It is the most economical solution because it is designed to take advantage of the Bell retail network infrastructure (in contrast to the more expensive HSA service) by co-mingling its traffic with that of the Bell retail network. For this reason, ISPs cannot expect their traffic to be subject to preferential treatment on the shared network.

Will the CRTC will grant interim relief? The ball is now in CAIP's court.

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CAIP, Bell, CRTC

On March 14, Yak filed a Part VII application asking for the incumbent phone companies to file updated cost studies for their billing and collection services. Recall that 2 years ago, Yak first raised the issue of excessive profits being reaped by the ILECs for billing and collection services back in late 2006.

At the time, the ILECs asked the CRTC to delay hearing the case until the essential services proceeding finished. Their position was that billing and collection wasn't essential, so it would be a waste of time to review the rate structure.

Fast forward to March 3, when I noted that the CRTC sided with Yak. So, a week and a half later, Yak asked again for the telcos to be ordered to file new cost studies.

Bell waited until 31 days later - a day late - to say that the dog ate their homework. TELUS didn't write in until a day later, possibly having realized that oops, it too missed the deadline and said it agrees with everything those other ILECs said.

My favourite line from the extension letter:

The Companies are writing without prejudice to their rights to file substantive comments should that be necessary, to request that the Commission defer consideration of the Application at this time.

What rights? Under the rules, you have the right to reply within 30 days. Translate that sentence into layman's terms: I know that my term paper is late, so please grant me an extension and if you disagree, then I don't want the fact that I asked for an extension to be held against me when I finally get around to submitting the paper.

Both groups asked for an extension because they said that they plan to appeal the CRTC's ruling about a month from now. Bell said:

Deferring consideration of Yak's Application is consistent with the principles of efficient, informed and timely regulation enshrined in section 1(c) of the Policy Direction.

It would have made a far more credible argument for "timely regulation" if Bell and TELUS hadn't waited until after their term paper was due to ask the teacher for an extension.

Efficient, informed, and timely regulation would call for timetables to be adhered to. If and when the ILECs get around to filing their appeals, they can make their case to stay the process.

If they were in school, their professor would give them a zero. Maybe the CRTC should take the opportunity to send a clear message about efficient, informed and timely regulation. Why not immediately make the current billing and collection rates interim and rule immediately in Yak's favour - order the new cost studies to be done within 30 days. Now that would be efficient and timely.

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CRTC, Yak, Bell, TELUS

Shane Schick of IT World has produced a list of Canada's top 10 technology bloggers and I am proud to see that this site was included in that list.

Joining me are:

• Mark Evans
• Rob Hyndman
• Maggie Fox
• Stephan Ibaraki
• Michael Geist
• Alec Saunders
• Kate Trgovac
• Jevon McDonald
• IT World's blogs

Thanks for the recognition. Check out the others on the list. We may not always agree with each other - indeed we are often on opposite sides of issues - but it is always helpful to understand other perspectives, especially when presented in such fora.

Keep those cards and letters coming!

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itWorld

There was a story in Monday's Financial Post about some new behavioral advertising technology from a company called NebuAd, based in Redwood City. In the article, NebuAd co-founder Bob Dykes said the company is testing its hardware with a number of Canadian ISPs.

We simply map what people are interested in and then sell advertising which is more relevant to their person than previously could be done.

Bob Dykes, NebuAd's co-founder and CEO, will be speaking at The 2008 Canadian Telecom Summit on June 16 on a panel looking at Consumers in a Multi-screen World.

Have you registered yet?

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NebuAd, Bob Dykes, Canadian Telecom Summit

The price for 8Gb iPhones has fallen to £169 in the UK, a drop of £100 making it cheaper than US prices. Purchasers over the past month who paid the full £269 price will be receiving a refund for the difference.

The iPhone may be the only consumer electronics device that is cheaper in the UK than the US.

I find that even good whisky is more expensive in the UK than on this side of the pond.

Cellular News is speculating that this clearance sale, combined with a reported shortage of iPhones in the US, are indications that preparations are being made to launch an upgraded device.

According to the story:

Piper's Munster reminded his clients in the research note that when Apple products disappear from stores, an update of that same product often follows in a few days. Given that history, Munster sees an 80% chance that Apple will soon introduce an iPhone for 3G networks.

What other stars need to align for iPhone to make sense for a launch in Canada? Will a carrier need access to a national WiFi network?

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iPhone

For some people, success comes from recognizing what you do well and sticking to it.

For some reason, listening to the testimony of Cogeco CEO Louis Audet at the BDU hearings brought to mind a line by John Kruk of the Philadelphia Phillies, when he was being admonished by a woman for his unkempt appearance during the World Series.

She said that as an athlete, he should think about being a better role model.

He responded, "I'm not an athlete. I'm a professional baseball player."

Audet pointed out during his appearance that, unique among the major cable companies, Cogeco doesn't have any specialty broadcast stations in its stable. Cogeco sticks to doing what it does best - running a cable company.

Looking through the list of qualified bidders for the AWS spectrum auction, we can see a lot of cable companies: Eastlink, Videotron, Shaw, Rogers - even small Manitoba cable company, Westman - but no Cogeco.

Cogeco isn't sitting idly watching the world go by. It also has a voice product and offers high speed internet and it has expanded by investing off-shore in Portugal.

A different approach.

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Cogeco

The Tyee, an independent on-line magazine based in BC wrote a story about net neutrality more than a year ago, noting that most Canadians are sleeping through the debate.

They followed up again last week.

Despite what is called a "perfect storm of events that may crystallize the issue for consumers, businesses, politicians, and regulators," there hasn't been an overwhelming outcry, despite extensive press coverage of the most recent network activities.

There are a number of voices who present a conspiracy theory on traffic shaping in Canada. They promote an Oliver Stone-type narrative trying to have you believe that traffic shaping is intended to help stop the unauthorized distribution of copyright material.

Canadians aren't buying it.

Why?

I think it is simple. Traffic shaping is consumer friendly.

Network management protects customer service. For the vast majority of consumers, traffic shaping protects the overall quality of their internet experience.

Traffic shaping is designed to make sure that the most latency-demanding applications work properly. Voice over IP and network gaming - these applications just won't work if the network is congested. If all bits are treated equally, then all applications get equally degraded when the network is jammed.

Traffic management is designed to make sure that there is capacity for the bits that absolutely, positively need to be delivered right away.

As to the conspiracy theory? Traffic shaping doesn't care if file sharing traffic is legal content; that traffic is made to be a lower priority because it is, well, lower priority. Contrary to the ridiculous assertions to the contrary, there is no loss of utility of the file if it takes longer to download it. Once it is transfered, you have it and you view it locally in full living colour.

Rather than threaten the distribution of video content using streaming media, traffic shaping allows ISPs to protect capacity for such latency-demanding applications.

Some users want to load massive files onto their hard drives; perfectly legitimate, but lower priority traffic. Such traffic isn't blocked, but during peak periods, it is capacity restricted to prevent it from tying up all of the network capacity. Why is it unreasonable to shift file transfers to off-peak times so that the majority of internet users can continue to play networked Xbox games or place their VoIP calls?

Maybe Canadians are sleeping through the net neutrality rhetoric because network traffic management is designed to benefit the majority of users. It's democratic.

Freud said that sometimes a cigar is just a cigar - there is no hidden motivation. Traffic shaping isn't a nefarious first step toward blocking content; maybe Canadians understand that network management is simply to manage traffic - there is no hidden intent.

Net neutrality will be the theme of a special session at The 2008 Canadian Telecom Summit on June 18.

Technorati Tags:
CRTC, net neutrality, Canadian Telecom Summit, Canada

John Roese's blog is one that I enjoy checking. There is generally an interesting perspective to be found there.

This week was no exception, with a guest posting from Andrew Lippman of the MIT Media Lab. Of particular note was his comment about the pace of societal evolution.

Disruption is not the disruptor, its rapidity is.

How do companies respond? How do you anticipate change? Create disruptive forces? How do service providers and suppliers learn how to shift their product set and adjust the way they do business?

The post talks about one of Nortel's approaches:

They are not just listening to kids, they are hiring them -- close to 500 new engineers in the last 15 months alone. Inside the company, they call them "new-grads," and they are simultaneously trained and sincerely listened to.

My kids are just finishing their exams; many of their friends are entering the workforce in the next few weeks.

There are lots of changes underway in the telecom sector these days. Some companies are restructuring while others are preparing to launch new wireless businesses. Hopefully all of the service providers and suppliers have been actively recruiting on campus.

When working with these new grads, be prepared for the training to flow both ways. I suspect we'll find that we have a lot to learn from them.

Nortel's President and CEO, Mike Zafirovski will be speaking at The 2008 Canadian Telecom Summit in June. Have you registered yet?

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Nortel, Mike Zafirovski, Andrew Lippman, Canadian Telecom Summit

Yesterday, in his presentation to the BDU hearings, Gary Smith, the president of Bell Video Group mentioned that DTH has added 1.7M net new subscribers to the broadcast distribution system. That is 1.7M subscribers who did not previously subscribe to cable service.

Satellite is an integral part of providing advanced video service to much of Canada - it provides a competitive choice in urban markets and it brings advanced digital video to those Canadians who live beyond the economic reach of terrestrial cable or IPTV facilities.

Satellite appears to be the only economic means to provide broadband internet to a measurable part of the country. As I mentioned a couple weeks ago, armed with government ownership and success in connecting every community over 200 people, Sasktel still can't reach almost 15% of the population of Saskatchewan, even with fixed wireless as part of its arsenal of solutions.

In the next election, broadband access should find its way onto the party platforms. Satellite-based service will need to be part of the solution.

Technorati Tags:
Bell, broadband, Barrett Xplore

The action at the CRTC is focussed on the future of broadcast distribution as the Commission has filled the rest of this month with its hearings that run through April 28. Those hearings may determine the level of consumer choice and the costs that might be incurred in offering a tailored delivery service.

At the end of the month, the CRTC will be releasing its multi-year plan for its review of social and other non-economic regulatory measures for the telecom side of the house, subsequent to the timetable that was part of its first public notice of the year.

Last year, the CRTC released an action plan for a review of its regulatory measures in the wake of the Minister's policy direction.

Some of the items were dependent on the establishment of the Telecommunications Consumer Agency:

In Telecom Decision 2007-51, the Commission stated that certain social regulatory measures (for example, privacy safeguards and obligations, retail quality of service rate rebate plan and standards, and Consumer Bill of Rights) would be prioritized for review subsequent to the establishment of a telecommunications consumer agency.

Which social obligations would you put first on the CRTC's agenda?

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CRTC

The internet is a shared resource. Different access providers begin mixing traffic at different places, but sooner or later, my internet gets mixed into yours.

The CAIP application to the CRTC seems to acknowledge this shared nature with its reference (at paragraph 50 of its application) to the description of the Gateway Access Service its members resell, a description complete with a graphic of a cloud - a sign that the resource is being shared.

Cloud, network, virtual channel. All of these are distinct from terms like private, dedicated or other ways to denote an unblocking and congestion-free connection. A private circuit is expensive but can be more susceptible to network failures; shared, switched or virtual circuits are more affordable and can often allow for routing around blockages.

In CAIP's application to the CRTC, I noticed that it couldn't resist the common fallacy of misquoting from the Report of the Telecom Policy Review Panel. [I pointed out this common problem in a blog posting more than a year ago.]

The CAIP application (paragraph 91) quoted the report as recommending that the Telecom Act should be amended

to confirm the right of Canadian consumers to access publicly available Internet applications and content of their choice by means of all public telecommunications networks providing access to the Internet.

But CAIP neglected to complete that passage, which was in fact one of the formal recommendations from the TPRP. Recommendation 6-5 continues with

This amendment should

(a) authorize the CRTC to administer and enforce these consumer access rights,
(b) take into account any reasonable technical constraints and efficiency considerations related to providing such access, and
(c) be subject to legal constraints on such access, such as those established in criminal, copyright and broadcasting laws.

Part (b) seems to be designed to take into account the technical realities of the internet as a shared network resource - even for the Gateway Access Service used by CAIP members to resell Bell internet.

Different applications place different demands on network capacity. Some have no tolerance for latency (delay) in delivery of messages. Two-way interactive applications like voice and gaming are examples of applications that need low latency. Others, like streaming video or music, use buffering to self-manage a certain amount of latency: the application can stockpile the next few seconds of media content in order to absorb the effects of some of the latency in the delivery from the source. For other applications, such as file transfer and email, latency can cause frustration but not loss of functionality because the data transfer requirements are not real-time in nature.

If customers want to be able to make VoIP phone calls, play network games, watch streaming video, listen to internet radio and capacity is running short, what do you do? Do we think the balance of convenience should put these applications at risk in order to shave some time off bulk file transfers?

Treating all bits the same means that real-time applications will become non-functional in times of peak traffic.

What kinds of technical constraints are reasonable in managing shared resources?

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A commenter asked if The 2008 Canadian Telecom Summit will explore the use of P2P technology for legitimate and productive purposes. We have a panel planned for June 16 examining Entertainment and Content over Broadband, including speakers from CBC, the NHL, MTV and Bell Sympatico. Given the events of the past few weeks, it should be an interesting discussion.

Technorati Tags:
Bell, GAS, CAIP, Canadian Telecom Summit

The Canadian Association of Internet Providers (CAIP) filed an application to the CRTC asking for Bell Canada to be ordered to provide their customers with preferential service at wholesale rates.

Why do I say that? Well, the application acknowledges that Bell had already begun to apply network management controls on its own customers. Why then would CAIP say that Bell is being discriminatory when it seeks to treat all traffic the same way?

The CAIP application covers a lot of ground. It is somewhat surprising that CAIP has asked for Bell to reply in just four days when so much material needs to be covered.

We will soon see what timetable the CRTC sets for the response.

As part of the regulatory training you have come to expect on these pages, let me provide a primer on how to file and answer a general complaint.

The CRTC's telecom rules of procedure, has a number of Parts. Part I is General; II is for tariff filings; III is for general rate applications (anyone remember those days?); etc. Part VII covers everything else that isn't covered under the other parts.

CAIP filed its complaint under Part VII. Normally, a company has 30 days to answer a Part VII application. CAIP has asked for an answer in 4 days and has asked for interim relief - for Bell to immediately cease its network management of wholesale traffic.

There is a three-part test (established by a couple Supreme Court legal precedents) in order to grant interim relief:

1. there is a serious issue to be determined;
2. the applicant would suffer irreparable harm if relief is not granted; and,
3. the balance of convenience, taking into account the public interest, favours granting the relief.
   

I'd suggest that all of us can accept the first part. It is not so obvious that either of the other parts hold water under serious scrutiny. Lifting network management controls will result in a degradation of service quality for all ISP customers. CAIP's application fails to consider an alternative scenario for managing a finite resource.

The CRTC has set service standards for dealing with applications. This one appears to fit as a Type 2 Part VII application, one that raises significant policy issues. It would therefore call for a fairly lengthy decision period by the CRTC and as such, one must again question why it is appropriate to have an abbreviated process. CAIP itself sent a legislative alert by email earlier today that points to the importance of this issue:

The "throttling" reduces speeds by as much as 90 percent - and marks an important milestone since the outcome will provide a clear answer on whether Canadian law currently protects net neutrality or if legislative reform is needed.

While we might like shared networks to be non-blocking with infinite capacity, that simply isn't possible. The traffic being managed represents a significant and growing share of network capacity, as attendees at The Canadian Telecom Summit heard last year in a presentation from Sandvine.

What kinds of technical constraints are reasonable in managing shared resources? Should operators take steps to protect the integrity of streaming video and music, voice and gaming, even if it means delays applications that are less sensitive to latency?

We'll be looking at all aspects of net neutrality at a special session at The 2008 Canadian Telecom Summit on June 18.

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Update [May 14, 12:10 pm]
The CRTC issued its ruling on the interim relief issue, agreeing with the assessment in this blog posting - that there is a serious issue to be tried but that CAIP did not demonstrate irreparable harm. It did not assess the third branch of the criteria (balance of convenience) because the second test had failed.

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Bell, CRTC, CAIP, Canadian Telecom Summit

A reader sent me a link last week to a piece that doesn't speak highly of net neutrality. Clyde Wayne Crews wrote an article called "Dumb Pipes, a Dumb Idea: Net Neutrality as 21st Century Socialism" that calls for legislators to reject "nut" neutrality.

Elevating the principle of mandatory net neutrality above the principle of investor ownership and wealth creation in pipes and spectrum deflects market forces away from the infrastructure development that we need. And we do need it: recent news notes potential bottlenecks on the Internet caused, not by anyone’s blockage, but by escalating data and video.

Did anyone else see a touch of irony in a letter to the editor in the National Post last week? The writer said if ISPs are so concerned with traffic shaping to improve customer satisfaction then they should block the scourge of spam.

My ISPs offer some pretty effective spam filters that can be turned off and on and one of the ISPs lets me apply some pretty good tuning. If your ISP doesn't offer spam filtering, you may want to shop around. Market forces have been effective on that front.

I guess some people would say that the government should mandate dumb pipes, except for spam, viruses and the rest of the stuff we haven't created yet.

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net neutrality

The evolution of communications regulation has been at issue recently - for telecom, broadcasting and new media. There is a camp that continues to believe that government should preserve its historical role of managing the marketplace, regardless of the availability of diverse choices in the delivery of services.

When asked about net neutrality by Charlie Angus of the NDP in the House of Commons, Industry Minister Jim Prentice replied that the government does not regulate the internet. The supplemental question asked:

Mr. Speaker, the minister's hands-off approach to hands-on interference is bad news for the development of a Canadian innovation agenda. Net neutrality is the cornerstone of an innovative economy, because it is the consumer and the innovator who need to be in the driver's seat, not Ma Bell, not Rogers, not Vidéotron. They have no business deciding what information is in the fast lane or what information is in the slow lane.

Will the minister come out of the Gestetner age and take action on the issue of net throttling?

To which the Minister replied:

Mr. Speaker, I think virtually all members of the House could agree that if anyone inhabits the Gestetner age, it is the New Democratic Party. Members of that party would carry our country into the economic backwater that they propose.

We have a well advanced Internet system in this country. It is not publicly regulated. At this point in time we will continue to leave the matter between consumers on the one hand and Internet service providers on the other.

It appears to be clear that that the government's policy for telecommunications regulation is to continue with its preference to rely on market forces to regulate. Can this be applied to broadcasting?

In a CRTC decision yesterday denying John Bitove's proposal for a new national HDTV network, there was a dissenting opinion appended from the Commission's Vice-Chair of Telecom, Len Katz. The dissent appears to call for the broadcast side of the Commission to prepare for the kinds of regulatory reform that are being experienced on the telecom side:

I question the role of the Commission in assessing the likelihood of success of a new entrant. I believe the Commission’s mandate does not include the responsibility of managing markets. New entrants bring with them different business models. Who is to say which model will be more successful? I would prefer to leave it to the marketplace. We must not confuse the Broadcasting Act’s objectives of protecting Canadian culture and identity with protecting Canadian markets… particularly where it relates to Canadian companies, built by Canadians for Canadians.

Will HDTV Networks appeal to a Cabinet that favours a reliance on market forces in place of government regulation?

Technorati Tags:
CRTC, net neutrality, John Bitove, HDTV Networks, Charlie Angus, Jim Prentice

Mark Evans wrote last week complaining about what is taking so long for iPhone to come to Canada. Alec Saunders jumps in with his review of an iPhone and he points to a new consultant study that claims iPhone has been worth billions for AT&T.

I am certain that AT&T has no regrets about launching the world's coolest phone and indeed, AT&T's results are what they are in no small measure thanks to iPhone contributing to the bottom line.

But I had a look at the full report and there are a number of questions that I have with its data.

The study starts with an unusual measure of its expected error, using 90% confidence intervals, not the more commonly used 95% - this allows the authors to claim a tighter margin on its estimates, despite only interviewing 460 US based iPhone users. Let's skip by that factoid to get to some more important numbers.

Their study group shows an average monthly bill of $97, up from $78 before iPhone. It is a great ARPU lift, but it seems to be on a base that was already pretty high. According to its most recent results, AT&T's ARPU is around $50, so these are extraordinary customers. The numbers should be examined relative to the iPhone rate plans.

According to the study, a third of their surveyed iPhone users have a second phone. That is also a number that seems high; do a third of the bills include charges for more than one phone.

Also, 13% of the iPhone users said that their phone was unlocked. It seems to me that this means one in 8 of the iPhone users interviewed are on a carrier other than AT&T. So if 1 in 8 respondents is not using AT&T as their carrier, is their phone bill skewing the study results because they are on a non-iPhone kind of plan?

The study raises lots more questions and fodder for lots of discussion.

Our family is planning to get its first iPhone toward the end of the summer when one of my kids heads south for grad school. I'm not planning to pay $97 per month.

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Apple, AT&T, iPhone

Leading up to Industry Canada's release of the list of qualified bidders on Monday evening, there had been considerable speculation about which applicants had the support of global players. Some were certain that AT&T or T-Mobile were behind certain bids. Other names were circulated as documented in Peter Nowak's story on CBC.

As the dust settled Monday, there is certainly foreign capital getting involved in the auction, but no evidence yet of major brands lending their marketing experience, buying power or names to any of bidders.

The equity markets breathed a big sigh of relief with incumbents Rogers and Telus seeing nice gains on their stock prices.

The reality is that it may not be smart for a serious partner to declare their intentions, yet. The Industry Canada rules for the auction may make it more advantageous for carriers to be sitting back at this stage. There is plenty of time to pounce later.

For now, there are a number of possible new national carriers to emerge, plus a collection of regional or niche players. At least 6 bidders have sufficient bid points to try to acquire 20 MHz coast to coast, including Globalive, Shaw, MTS Allstream, Videotron, DAVE Wireless and 6934579.

It seems to me that last company, 6934579, a partnership to be funded by Novacap Technologies, is going to need a better name or alternatively, will they adapt the song Jenny by Tommy Tutone for their ads?

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Industry Canada, AWS Auction

As you know, Rogers has announced caps, called "usage allowances," on downloading for its range of internet access products: 95GB for Extreme and Extreme Plus; 60 GB for Express; 25 GB for Lite; and, 2 GB for Ultra-Lite. Considerable discussion has taken place on a number of blogs and newspaper articles.

It seems to me that these caps are a necessary step in aligning revenues with costs, which will ultimately alleviate much of the need to arbitrarily apply network management to applications. But it is just the first of a number of steps.

I compared my recent downloading to some friends and neighbours and an trend emerged: many of the heavy downloaders report a marked reduction in January and February from previous months. Why? When asking their kids what is going on, the answer is uniformly: writers' strike. There haven't been new TV shows to download.

A caution to parents that when TV production gets back to normal, almost coinciding with real charges for exceeding download caps, you may want to watch the 'bit-meter' or risk some hefty charges.

It will be interesting to see the impact of the price increases for people exceeding their usage allowance. Paying for higher consumption may result in some people changing their patterns of usage; it will also lead to an appropriate alignment of revenue to capital drivers.

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Rogers, download caps