Dialing for digital dollars: inside the Cancon sausage factory

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A little sympathy for Mélanie Joly, please.

melanie-jolyImagine if your job was to save the purveyors of Canadian content from the ravishes of American cultural imperialists, cord-cutters, cord-shavers, cord-nevers, millennials in general, digerati, incumbent ISPs, Reed Hastings, VPN developers, Jeff Bezos, Chicken Little, Hulu, cloud computing vendors, Henny Penny and Reed Hastings. It’s harder than it looks.

Contrary to popular belief, Ms Joly is doing exactly what the Minister of Canadian Heritage should be doing these days: looking for money to put into the pockets of Canada’s network content providers so they can make bigger and better Webisodes for the digital age. Yet her ideas for accomplishing this daunting task have drawn vociferous criticism. Many criticisms have focused on issues outside the Minister’s mandate and are based on little appreciation of how things actually work in her department.

So let’s head on over to the sausage factory where the sausage mandarins have been cooking up our Cancon policy for the last half-century.

We’ll start with Minister Joly’s least popular trial balloon: slapping an “Internet tax” on everyone’s ISP bill. My friends at OpenMedia have been pointing out with alarm that such a tax would only serve to raise the price of Internet access, when Canadians already pay high prices for mediocre service (you can sign their petition here).

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OpenMedia: Joly’s tax would make us as bad as Hungary

Could there be anything worse than this tax “on the Internet”? Yes! A tax on Netflix, an idea that just won’t die, thanks to Joly’s alleged plan to bring the streaming giant “into the system” – Ottawa code for we’re gonna tax the daylights outta Netflix.  Continue reading

Rogers loses a sub: a study in price gouging & lousy service

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The point of this street-level story is to show how Canada’s broadband oligopoly works in practice, especially the incumbents’ freedom to collect economic rents as ISPs – i.e. charge prices they would never get away with in a competitive market.

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Rogers drives a furious customer into the waiting arms of TekSavvy

I’ve known Jacky and Jimmy* for many years (*not their real names). They’re a happy, successful couple raising a terrific teenage daughter. But after months of terrible service as Rogers subscribers, they were anything but happy. In due course I got a phone call from Jimmy, who was beside himself, wanting to be rescued from their ISP hell. And btw, would I still recommend TekSavvy? Continue reading

Intervening in support of Ben Klass complaint on Bell Mobile TV

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Last Wednesday was the deadline for followup comments on Ben’s Part 1 application, more accurately described as a complaint. In the text below you’ll find the main body of my intervention, minus the top and tail. I wrote about Ben’s original filing back in November: Ben Klass asks CRTC to stop Bell’s deliquency on Mobile TV. As of today, Ben’s current filing hasn’t yet shown up on the Commission’s site: I’ve uploaded it here. Of the other interventions filed this past week, two were especially critical of what Bell is being allowed to get away with. Teresa Murphy starts her comments by suggesting that Bell’s whole argument is founded on a phony distinction (para 2: her pdf is uploaded here):

It makes no sense whatsoever to treat competing services differently when the underlying technology and distribution method is the same. This is allowing vertically integrated companies to behave by one set of rules, and allowing them to treat their competitors differently, and frankly unfairly.

Continue reading

Court vacates FCC’s Open Internet Order, echoing Klass vs Bell

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[Correction added on AT&T sponsored data]

It’s shaping up to be a tough year for network neutrailty.

verizon-faceIn its disposition of Verizon v FCC, the U.S. Court of Appeals for the District of Columbia ruled yesterday that the FCC’s Open Internet Order is mostly null and void. Not because of the substance of the debate – that end-users need to be protected from the incumbent ISPs – but because of a jurisdictional flaw. The case was brought by Verizon, which now that they’ve more or less won, is saying they actually support an open Internet. When you read the policy blog post in question (“Verizon reiterates its commitment to the open Internet“), you have to marvel at Verizon’s capacity for managing self-contradiction. Continue reading

Ben Klass asks CRTC to stop Bell’s deliquency on Mobile TV

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Detail from roof of Brighton train station (rotated) – Aug 2013

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Bell welcomes any competitor, but they should compete on a level playing field.” — George Cope, BCE/Bell Canada, August 2013

“I provide evidence [below] in support of the assertion that Bell gives itself undue preference. It does so by applying an application-specific economic Internet traffic management practice (ITMP) to its Mobile TV service, causing unreasonable disadvantage to competitors and harming consumer choice.” — Ben Klass, CRTC Part 1 Application, November 20, 2013 

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November 25: I’ve added a number of edits and corrections to the running text below. My thanks to Ben Klass, J-F Mezei and Juris Silkans for their helpful suggestions.

Nov.25 – update #2. A formal request has come in already asking the Commission to transform Ben’s application into a full-blown public proceeding that would include a review of ITMPs put in place by both Rogers and Vidéotron, which apparently have the same idea as Bell about what’s meant by a “level” playing field. The request is from PIAC, the Public Interest Advocacy Centre. I’ve uploaded a zipped folder with both PIAC’s letter and Ben’s reply here.

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This post is divided into two main parts (which may not be obvious to the untrained eye). Down to but not including Key elements of Ben’s complaint, you’ll find 3 sections: a) discussion of Ben’s application in general terms; b) an analogy based on the metered taxi cab as a familiar way to illustrate why Bell can’t treat different kinds of traffic differently to give itself a commercial advantage over competitors; and c) a bemoaning of the sad truth that very few people can bring themselves to care about this wonkish stuff, mostly because it’s so freaking hard to understand.

The second half – Key elements of Ben’s complaint – looks at his filing from the perspective of four underlying regulatory concepts. I have a dual purpose here: to clarify some of the muddier aspects of this process; and to talk a little about some of the past history and how we got to this juncture. The four concepts are:

  • a Part 1 Application
  • a new media broadcasting undertaking (NMBU)
  • data (or bit) caps
  • Internet traffic management practices (ITMPs)

These are all mentioned on the first page of Ben’s document. If you don’t know what he means by an “application-specific economic Internet traffic management practice,” you may find a glossary helpful.

Ben Klass is back and this time he means it

ben-klass-nov21-3Last August, Ben grabbed some well-deserved attention with the open letter he addressed to Bell CEO George Cope. In his “I am Canadian” piece, Ben debunked point after absurd point in Cope’s post, which ran on the Bell site under the title “An open letter to all Canadians.” Cope was delivering another salvo in the incumbents’ wacky wireless war against the Harper government and its outrageous idea they should let Verizon enter our market to compete with the Big Three.

For all its merits, Ben’s open letter was an irritant Cope could afford to ignore with impunity (I don’t imagine folks in Bell’s C-suite have been working on their sense of irony since August; and funny how whenever an incumbent CEO insists on a level playing field, you can be darn sure he means exactly the opposite). But that was then, this is now, and Ben has turned up the heat on Bell, way up. Continue reading

The CRTC’s annual report is out: the good, the bad, the weird (3)

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Bricks and mortar with window, Spitalfields, London E1, August 2013

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How can the CRTC do a better job?

As I argued in the previous two posts, the CMR doesn’t have a life of its own; it reflects the CRTC’s larger priorities. The big one here is research and evidence-based policymaking. A close second is the Commission’s still awkward fashion of trying to reach out to the little people – i.e. anybody besides the inner circle. Here are my suggestions for how it can do what it apparently wants to do, only better:

1 – Stop wasting money on online consultations. Redeploy it for real consumer research. Online consultations aren’t just a waste of money; they can also be highly misleading. One reason for their being unrepresentative is that online “surveys” of the public can’t reach Canadians who aren’t online to begin with. Unfortunately, the Commission isn’t going to find any new money for research, not as long as it sticks to the current Expenditure Profile. As shown in the graph below, the Commission’s spending is pretty much flat from 2009 to 2016, especially if these figures were converted to constant dollars…

crtc-budget-2009-16Source: CRTC Departmental Spending Trend

Continue reading

Must-carry TV (4): Ottawa disconnects from the video revolution

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As I’ve noted earlier in this series, the Americans have their own version of Canada’s anti-consumer, mandatory-carriage policy. But with this difference: the US is also seeing the rise of a video revolution that’s opening up new vistas for a more curious, engaged and demanding audience. The old guard, who got rich and complacent on top-down, linear TV, are fighting the upstarts tooth and nail. The courts in both countries have been alive with the sounds of the old guard squawking about their right to keep making gobs of money – up to and including threats to take their over-the-air networks off the air and make them cable-only (says Fox COO Chase Carey, among others).

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Must-carry isn’t Ottawa’s only anti-consumer, anti-Internet policy failure

Let’s consider one regulatory development in Canada first of all, in order to put the current must-carry proceeding into context. That context draws from the same old story: the CRTC has never felt bashful about making consumers pay to keep broadcasters thriving. In other words, the must-carry proceeding is not an aberration; it’s business as usual for Ottawa’s costing of “cultural” initiatives. Continue reading

CRTC as consumer advocate: 4 reasons not to celebrate (part 2)

Don’t break out the Veuve Clicquot just yet

I think the CRTC’s decision to get the incumbents’ financials out of the closet is very positive – another demonstration of Chairman Blais’s public-spirited philosophy. But even Chairman Blais has a corporate history to live with, and that’s not going to be a cakewalk. So before we start counting our chickens, let me outline four factors working against consumer-friendly broadband in this country:

  • Canada’s market share failure
  • misgivings about switching providers
  • the unfulfilled goals of the Telecommunications Act
  • the 2006 Direction to the CRTC on market forces.

1 – Market share failure. The long-standing failure of Canada’s broadband competition policy is summed up in the time series above, which I concocted from data in the CRTC’s latest Communications Monitoring Report (pdf uploaded here; see Table 5.3.2, p.150). The graph contrasts total market share for the independent ISPs, in blue, with that of the incumbents, in green (both exclude business services and dialup). For all the pontificating over the years from the von Finckenstein CRTC and Tory politicians about how super-duper competitive everything is in Canadian telecoms, the data tell a very different story. Continue reading