Infrastructure Cross–Ownership Conflict of Interest

Submission

Here is the current situation…

• Incumbent cablecos and telcos are first and foremost BDUs (Broadcast Distribution Undertakings). Bell is a satellite and IPTV/VDSL provider, while Rogers/Cogeco/Videotron/etc. are cable TV providers.
• They make much more money from their BDU activities than from residential internet. As long as the internet was a totally separate sideline, the extra income was welcomed by the BDUs. Email, including snapshots of the kids sent to grandma was not a problem.
• The BDUs make their billions by selling "the 500–channel–universe" to consumers. Very few customers really want more than a dozen or so specific channels. As a matter of fact, most customers actually want several specific programs, which happen to be scattered over a small number of channels. The BDUs know this. They bundle all sorts of pay–TV channels in "basic service", and go out of their way to avoid "a–la–carte" channel subscriptions. The most popular channels are deliberately split up over multiple different packages and "tiers", forcing people to subscribe to the most expensive group of packages in order to get the channels carrying the programs that they really want.
• The major BDUs also own cellular carriers. They see VOIP as another area that allows consumers to do something without the cellcos extracting their pound of flesh.
• The BDUs/cellcos will do anything and everything to protect their revenues and eliminate their non–BDU/non–cellco competition.
• First, they successfully lobbied to have grey market satellite subscriptions to US providers outlawed, even when honest subscribers were paying subscriptions to American satellite companies.
• Then people started downloading TV shows via P2P file–sharing. As I pointed out above, many BDU subscribers subscribe only because of some shows. If they could get those few shows over the internet, they would cancel their BDU subscriptions. Bell/etc. responded by throttling P2P into uselessness.
• Then Canadian networks started streaming many of their programs. As of early June, 2010 sites like CBC Player and CTV and Global TV allow Canadians to view individual program episodes. Again, BDUs saw this as a threat to their "500 channel universe bundle" business model. I.e. customers could drop expensive cable/satellie/IPTV subscriptions and view their few favourite shows over the internet. In the case of P2P, the BDUs had a pretense to high moral ground. I.e. they claimed to be stopping illegal file–sharing. However, all pretense of do–gooding was dropped when people began to watch *LEGAL* video streams offered by Canadian rightsholders. A bare–knuckled "because we can" attitude took over.

Rogers dropped the monthly usage cap on their their Ultra–Lite service from unlimited to 60 gigabytes, and later followed that with another drop to 2 (yes, TWO!!!) gigabytes per month. Back in the old days of dialup, I would routinely connect at 50,666 bps. At that download speed, you can break 2 gigabytes with 3 hours of downloading per day for a month *ON DIALUP*. Bell also has a 2–gigabyte limit on their low–end service, and wants to force that limit not merely on its own customers, but also on the customers of its resellers.

Given the above background, I will now answer the questions posed at Idea Forum

1. What speeds and other service characteristics are needed by users (e.g., consumers, businesses, public sector bodies and communities) and how should Canada set goals for next generation networks?
   
   For many people, download *AMOUNT* (i.e. gigabytes per month) is more important than *SPEED* megabits per second. Nowadays, system updates for operating systems (Apple/Linux/Windows) can be in the multi–100 megabyte plus range. Also, there is what is colloquially known as "internet background radiation", i.e. random port scans by bad guys looking for machines with unpatched vulnerabilities. Then there is actual discretionary internet usage, i.e. email, streaming audio/video, etc. As the other factors encroach on the monthly data quota (bandwidth cap), the amount of discretionary usage decreases. I'm OK with 640 kbits *SPEED*, but I am afraid of Bell's plans to reduce my monthly usage cap to 2 gigabytes. To summarize, 1 megabit *SPEED* should be enough for most people, but we should also have a reasonable minimum *AMOUNT*. In the USA, Comcast allows 250 gigabytes/month. I suggest that as the target for cable and ADSL, while recognizing that cellphone/satellite internet technology is much more limited.
2. What steps must be taken to meet these goals? Are the current regulatory and legislative frameworks conducive to motivating investment and competition? What are the appropriate roles of stakeholders in the public and private sectors?
   
   The setting of monthly base bandwidth levels for cable and ADSL internet must be regulated by a body with teeth. The CRTC is a creature of the Broadcast Act, and that Act is 100% concerned with the financial health of the broadcast industry, and if consumers get shafted that's not the CRTC's problem. The CRTC is not the right body for this task.
3. What steps should be taken to ensure there is sufficient radio spectrum available to support advanced infrastructure development?
   
   As I mentioned previously, BDUs are concerned solely with their BDU business, and will do *ANYTHING* legal to protect/increase it. Free OTA (Over the Air) TV is the last legal competitor to cable/satellite that hasn't been outlawed or throttled. The cynical side of me would not be surprised to see the BDUs (who also happen to be big cellular operators) suggest a major reduction in the number of TV channels, or indeed, the outright abolition of free over–the–air TV, and re–purposing of those frequencies. The better to boost their BDU revenues.
   
   We have to step back and ask ourselves "sufficient radio spectrum for what?". 6 mhz of frequency space will allow a stunning high–definition ATSC signal to serve hundreds of thousands, and even millions of people. That same 6 mhz will allow a cellular carrier to stream a low–resolution picture to the dinky little handsets of maybe several dozen cellphone customers. That is an insane waste of frequency space and bandwidth.
   
   Another waste of bandwidth is the attempt to emulate Windows Outlook on smartphones. Since there is no physical wire connecting the smartphone to the mail server, the emulation is done by having the smartphone poll the mailserver every 60 seconds or so, using cellular frequency space. Several million cellphones constantly asking the mail server "any email for me? any email for me?" unnecessarily clogs up cell networks. But since this increases bandwidth consumption, the cellphone carriers have no incentive to use more reasonable settings. I should also point out that this irrational constant polling by smartphones is the underlying root cause of those horror stories about people who take their smartphones with them on vacation overseas or to the US, never make or receive a call, yet come home to a multi–thousand dollar phone bill. That's because their smartphone has been talking to home base every minute of their vacations, 24×7. This traffic is billed at US and overseas roaming rates. At home, I pull down email once a day. For most people, that should be sufficient. Consumers should be informed about this behaviour of smartphones, and be allowed to turn it off. Any self–important executive who thinks he's important enough that he *MUST* be constantly reachable is probably making enough money to pay for the bandwidth.
   
   Notice how many carriers insist on only their own, crippled, phones on their network, with VOIP over Wifi disabled, even if the handset can do it? Again, this is greed on the part of cellcos. It gives an immediate boost to profits, and also unnecessarily clogs networks, giving cellcos a "reason" to demand the re–purposing of TV frequencies. Cellcos should not be allowed to disable Wifi communication ability of handsets. And they should be required to accept any conforming cellphone on their network.
4. How best can we ensure that rural and remote communities are not left behind in terms of access to advanced networks and what are the priority areas for attention in these regions?
   
   Again, the cynical side of me foresees the BDU–owning cellcos using this opportunity to call for the shutdown of free over–the–air TV channels to make room for cellular broadband. I suggest, instead, building microwave links and using regular cellphone frequency space.
5. Should we set targets for our made–in–Canada digital strategy? And if so, what should those targets be?
   
   Monthly usage capacity on wire–based services should be mandated to at least 75 gigabytes, and move higher as time goes on. As mentioned previously, Comcast in the USA currently allows 250 gigabytes per month. I recognize that cellular and satellite services have limited bandwidth. So their requirements should be lower.
6. What should the timelines be to reach these targets? 75 gigabytes/month now for wire–based internet, and higher as usage expands. I don't claim to be able to forecast the future. Bandwidth needs need to be reviewed on an ongoing basis.