Canadian Telecom Policy Review - For Whom The Bell Tolls

Yesterday, Bell Canada issued its press release on their view of how telecom policy should unfold going forward.

Only in Canada can an incumbent put forward such a detailed, comprehensive proposal about how things should be done to modernize telecom rules and regs! The full submission weighs in at an astounding 1000 pages, and the summary alone is 64 pages. I don't know about you, but that's not a document I'm in any hurry to get into. That's what the lawyers are paid for, right?

To be fair, Telus - our other major incumbent - is of the same view, but they're not making nearly as much noise about it. This is understandable given that Telus is embroiled in a messy headline-grabbing labor dispute - mainly in its home turf in Western Canada - and can't devote as much bandwidth to matters in far-away Ottawa. So, this isn't entirely a Bell undertaking - but it sure looks that way.

True to form, Bell made sure the word was heard today during a 2 hour presentation here in Toronto, led by their uber regulatory advocate, Lawson Hunter. You have to give credit where credit is due - Bell does a great job of creating an accessible forum to hear their story, and engage the analyst community in dialog.


I'll leave it to the regulatory experts to dive deep into what this all means, but here are the key takeaways for me.


First, as per an earlier posting, this initiative strikes me as an end run around the CRTC. Bell is masterful at this, and is proactively trying to change the frame of reference by making telecom an issue about policy rather than the regs to enforce it. So, they're taking it to a higher plane of being strategic instead of tactical. To impart some local flavor, this is akin to the gay marriage debate. I believe the main reason why Canada now supports gay marriage is that those on the pro side were able to re-frame the issue from one of morality to one of legality. You can't legislate morality, but once gay marriage fell into the legal realm, the battle was over. In this context, the issue was reduced to a simple matter of human rights, something which Canada enshrines to an absurd degree. Game, set, match. Enough on that - back to Bell...


1. To make telecom a strategic issue, Bell has based their submission on the "productivity gap" argument, maintaining that we're falling further behind our G7 colleagues because we don't invest enough in information and communications technologies (ICT). There's definitely some credence to this, and they've backed it up with references to all kinds of studies quantifying our shortcomings. So, once you get the Federal government to buy into this, the scope broadens well beyond telecom and it then becomes an issue of economic policy. In Bell's view, ICT would become nothing less than a "national priority", under the direct leadership of the Prime Minister. The CRTC might as well pack up and go home.

2. Not only should ICT become a "national priority", but the government - oops, taxpayers - would be leading the charge to invest in ICT. Government, health care and education - all with but a few exceptions are 100% publicly-funded - are among our largest employers. What better place to start to whittle down the "productivity gap"? No doubt, the spirit of the message is noble - stimulate R&D in ICT, and putting our public institutions at the leading edge of efficiency. What forward-thinking government wouldn't want that?

Not only that, but they'll also be handing out generous tax credits and write-offs to suppport private sector ICT investment.

Don't get me wrong - it would be great to see all this happen. Just strikes me that our government is doing all the heavy lifting here. And Bell leads the way with all the wonderful technology and solutions to restore us to our rightful place as high tech world beaters. After all, it's their vision. And a good one at that - so long as there's room for everyone.

3. A regulatory framework driven by the magic of "market forces" instead of the need to ensure competition and choice for consumers. In this world, regulators would be reduced to policemen, merely monitoring and adjudicating misuses of market power. The CRTC would no longer make the rules - they'd just enforce them. And of course, looking after those lofty social issues like ensuring access of services to the disabled. Or taking care of messy things like interconnection. Bell is advocating that the big picture stuff be handled where it belongs - authorities like the Commissioner of Competition, and the Competition Tribunal, according to the Backgrounder brief they prepared.

4. These issues are simply too big for the CRTC now. Bell wants an "integrated" approach to telecom, with "consistent" rules for all the players. In principal, they are totally correct. We do need an overhaul of things here. Bell has carefully outlined its 7 "guidelines" for achieving this - all we have to do is sign on the dotted line and our troubles will be over. These guidelines all merit discussion, but not here. I just wanted to say they address the various shortcomings that all the incumbents saw in the May 12 ruling, and it's perfectly understandable from their point of view. The cablecos, of course, won't agree, and that's another conversation. Something tells me this story still has a few chapters to be written.

5. Finally, for the coup de grace, Bell has to show that the world is on their side. They went to great lengths to cite findings from a recent study showing that most consumers believe they have "adequate choice" for local phone service. Bell's argument for most of these issues is based on the premise that their market power is not absolute, and does not by default transfer to the VoIP world. So, research like this is a key benchmark to validate their position.

Not only that, but they also pointed out that consumer perceptions about choice are far more favorable for local phone service - 66% - than for cable service - 38%. Did I hear Ted Rogers say ouch? If I was Bell and had this data, I'd be using it this way too. After all, fair is fair, and we have to compete with whatever tools are available.

The saga no doubt will continue...

It's Official - the Internet Rules

Great piece of research cited in the Globe & Mail yesterday showing how Canadians now spend more time online than any other form of media. It's something we all knew would happen, and it's nice to finally see some numbers to prove it. Of course, we're talking about the sweet spot for advertisers - the coveted 18 - 34 demographic. They're spending just under 15 hours a week online, compared to roughly 12 hours each for radio and television. The scary one for me is newspapers - only 2.5 hours a week. Gee - for every hour people spend reading the paper, they're spending 6 hours on the web. Must be all those bloggers out there sucking away newspaper readers.....

I'd love to see what those numbers looked like 10 years ago when the Internet started to happen, but TV and newspapers were no doubt much higher in terms of mindshare. Sure will be interesting to see how IP TV impacts this mix.

Seek and Ye Shall Find - Bell's GPS Wireless Service

Well, you can't say Bell Canada is all stodgy and safe. Bell Mobility has just launched Seek & Find - a GPS service to help parents sleep easier at night. This mobile LBS allows parents to track the whereabouts of their kids via their cellphones. They can even pretend they're at NASA Mission Control by monitoring them on the Internet.

Ok, sure it's a great safety feature to make sure the kids arrive at school or soccer, but you can certainly dream up all kinds of other uses that can really compromise privacy. No doubt suspicious spouses will find ways to use this to track wayward partners, and kids will find ingenious ways to confound their parent's efforts to put this electronic leash on them.

This sounds like one of those ideas that worked well in the focus groups, but am not sure it will turn out that way in real life. Having conducted countless focus groups over the years, I know how this plays out in the confines of a research setting, but I just see more potential for misuse than good use. Time will tell.

Huawei going after Marconi?

Quick post - this is an interesting story worth following. Building on their recent success with British Telecom, Huawei looks to be staking deeper roots outside its home market in a bid to become a major global IP player. I suspect they will ultimately be successful, and Marconi could turn out to be an important piece of the puzzle for them.

Bloggers Making News

Wanted to share some nice extended pieces that a couple of leading IP bloggers have had recently, namely Andy Abramson and Erik Lagerway.


Erik has been getting some nice recognition for an interview he recently conducted with Cisco's Cullen Jennings about SIP. There's a lot here, but the main idea is how peer to peer SIP is gaining momentum, especially within the IETF. This really helps build the case for SIP being the driver for open standards and enabling end-to-end IP on a scale to match and perhaps surpass Skype.

This raises another important point from the interview - as good as Skype is, it is still a closed system. Of course, the definition of "closed" when you talk about Skype is a matter of debate, but clearly, P2P SIP can reach a far wider community once all the stars line up.

Erik has posted the full-length interview with Cullen on his blog, which you can download as an MP3. It's a terrific listen, and Erik is a fine interviewer! The Reader's Digest version is also posted there in the form of a well-written article by Carolyn Schuk of Voxilla.

Andy is flying high these days. He was just featured in the in flight magazine of Southwest Airlines. Andy gets to talk about how VoIP fits into his digital lifestyle - it's a great way to get the IP story out to the broader population. Great going Andy! And don't forget, Andy is chairing the blogger's roundtable at Fall VON in Boston next month - definitely a must-see session.

Oakley's RZRWIRE - Shape of Things to Come - Right, Chief!

I'm not a gadget guy, but you gotta love this one from Oakley. The RZRWIRE integates Bluetooth wireless access to your cell phone into a cool pair of shades. Talk about lifestyle technology! I'll admit it's pretty geeky, but I have no doubt that the Sonys and Panasonics of the world will soon take this a few steps further and integrate communications technologies into all kinds of mainstream devices or appliances. IP for all seasons will soon become blase.

For those of you who remember Get Smart, the shoe phone was probably the most ingenious idea ever from a TV show, and the RZRWIRE isn't too far removed. Now if you really like Get Smart, you'll no doubt remember the "Laser Blazer". Just had to throw that in since it sounds like the RZRWIRE. C'mon - only Mel Brooks and Buck Henry would dream something like that up - the button on the blazer doubles as a high intensity laser that blows holes through buildings with a single push of the button. Boy, these guys were way ahead of Star Wars. I'll bet if you go back to some of these obscure episodes, you just might come up with the IP killer app we've all been waiting for.

Aastra Rocks

On July 15, I posted about Aastra, and noted they're a company to watch, esp since there aren't that many public Canadian VoIP players.

Yesterday they announced their Q2 results, and the numbers are great - 94% increase in sales, and 21% growth in profits. Their share price has risen almost 50% in the past week, and zoomed over 20% alone yesterday.

Definitely a hot company to watch, esp if you follow the PBX space. And remember where you heard it first!