Update: I’ve just read Dwayne Winseck’s superb critique of the CRTC’s vertical integration and UBB decisions, posted on his blog last Thursday (Nov 29). This is a must-read for anyone who wants to understand, as Dwayne puts it, not what the Commission has done in these proceedings, but what it has failed to do – and the opportunities it has thrown away as a result.
(I’ve also added an item at the end to illustrate why cybersecurity is a non-issue compared to obliging ISPs to explain their terms in plain English.)
Checked against delivery
In my previous post I wrote a critique of the speech that Len Katz, CRTC vice-chair, gave to the ISP summit the day of the wholesale pricing decision (Nov 15). I wasn’t in the room at the time. I’m therefore back on this issue briefly after hearing from some folks who were present for the unkind words and rubber chicken. (I’m coming at this kinda late after flu-related postponements.)
My sources confirm two things. First, Katz gave the speech pretty much according to the published speaking notes – so I wasn’t making it up. Second, I’m told many people in the room were very upset to hear Katz talk about the indie ISPs in such a disdainful way. (For example: “I sat through that dinner and listened to Katz and my blood was boiling listening to him.”)
I talked in the post about one big real-world issue: Katz’s suggestion, reflecting Commission-wide thinking, that wireless and satellite broadband will soon become substitutes for high-bandwidth wireline access in the residential market. (“The reactions I was hearing were along the lines of – Wireless? Where are we supposed to get the money for that?” — Another source.) I also got feedback that punched a big hole in Katz’s lecture about how the indies had better pull up their socks on cybersecurity…
Cyber security is another area in which I believe ISPs can, and must, do more to grow in relevance to their consumers, suppliers and partners.
My reaction was skeptical:
“First of all, does Katz really believe that the indies are slouches here compared to the incumbents? I have no idea what a provider like TekSavvy is actually doing to combat malware, but I imagine their owners are just as concerned about the problem as Katz.”
That cautious take prompted a late-night email from the CEO of TekSavvy, Marc Gaudrault (who as many will know is something of a folk hero in the pro-Internet community). The idea that an operation like TekSavvy would be functioning with crummy or non-existent technology to protect its subscribers from malware is quite a stretch. Marc was happy to put that silliness to rest:
We have anti-spam and anti-virus scanning on our mail servers – world class. The product is called IronPort – Cisco purchased them a few years back. Still the best AFAIK.
That screen shot up top is from the Cisco site that promotes IronPort. As you can see, here’s a world-class consulting firm, Gartner, putting a world-class gearmaker – Cisco – in the leaders’ quandrant for the quality of their Web security. If this is confusing, here’s a picture (upper right is best):
So the world’s best cybersecurity isn’t good enough for our regulator? A cynic might respond that even if the Katz speechwriter had done her research, the scolding about cybersecurity would have stayed. Why? Because these comments were a rhetorical flourish designed to divert attention from unmentionables like whether the new wholesale rates are likely to encourage sustainable competition.
Burn rate: your online time is up, sucker!
Canadians who do not feel secure online may limit their Internet usage. and be less likely to purchase products from Web retailers, both of which would be detrimental to our digital economy. — Katz speech
What limits Canadians’ time online is the CRTC’s very own economic ITMP “solution”
Even if poor cybersecurity were a genuine problem, malware and other undesirable packets are not what keeps Canadians from limiting their Internet usage.
The incumbents started getting into data caps a decade ago, and mainstreamers naturally blame their ISPs for the extra charges that appear on their bills. What I assume very few of them know is that it was the regulator that sanctioned and institutionalized the use of data caps as part of its ill-conceived plan to help the incumbent ISPs manage “congestion” on their networks.
This regulatory strategy was lurking behind what appeared to be price-gouging on the part of the incumbents. Especially after OpenMedia and others began revealing that data caps were completely, totally not cost-based – an “overuse” gig costing the ISP a few pennies is charged to hapless subs at $2 and up.
But the bad news is not that the CRTC’s refusal to regulate retail rates allows any markup your ISP feels is good for business. Instead, the ISPs chose to apply huge markups on their data caps because without doing so they would be unable to achieve the Commission-supported goal of discouraging Canadians from being online “too much.”
In other words, Katz is blaming the independent ISPs for creating an alleged problem that was an explicit goal of his own Internet access framework.
For a brief moment this summer, it looked as though the Commission might have come to its senses after seeing through some of Bell’s congestion bullshit. Back in July, Michael Geist wrote a post containing the following observation:
The CRTC commissioners appear to have recognized that proposals based on limiting the volume of Internet use are not only bad policy – discouraging Internet use benefits no one – but are ineffective in dealing with network congestion. The reason is that the amount of data consumed has very little to do with whether the network is congested [my emphasis].
At the risk of repeating myself, let’s recall how enthusiastic the Commission was about the use of economic ITMPs – financial punishments by another name – and how terrific they would prove to be for consumers, as noted in the first few lines of the 2009 decision (Telecom Regulatory Policy CRTC 2009-657):
Economic practices are the most transparent ITMPs. They match consumer usage with willingness to pay, thus putting users in control and allowing market forces to work.
Casting out the beam before the mote
The next time a CRTC vice-chair plans to excoriate a roomful of independent ISPs for not making themselves “relevant,” might I suggest a couple of things. First, give major decisions more than five hours before pulling the rug out from under it. Second, think about a) why the indie market share is still 6%, and b) why Canada is still the only country in the OECD with data caps on everything. And third, do some fact-checking.
The spinoff benefit: some Canadians might actually start to look at the CRTC as relevant.
PS: Here’s one of my favorite pieces of incumbent gobbledygook about extra charges on Internet bills, and how they are calculated. This gem from Rogers website has stumped dozens of my 4th-year students, even those few who know how to distinguish decimal gigabytes from binary gigabytes…