Analysis: Is the wireless industry paranoid?

Two months ago the federal telecom regulator set off an explosion in the wireless industry by announcing a review into the basic services telecommunications carriers have to offer subscribers.

In doing so the Canadian Radio-television and Telecommunications Commission (CRTC) said it will look into its forbearance – a legal term meaning ‘keeping its hands off’ – of regulating wireless data.

In theory, the commission is doing what it’s supposed to do – taking a fresh look at what it’s doing.

But the protests from some members of the wireless industry are still echoing weeks later. In fact the industry is doing its best to take a chunk of the agenda away from the commission. As recently as Wednesday it sent another letter to the commission urging the forbearance issue be dropped.

There are two questions raised about this ruckus: Did the commission inadvertently cause confusion in setting out the terms of the hearing? Or is the industry paranoid, as commissioner chair Konrad von Finckenstein told one newspaper.

The issue is hot for one reason: Wireless data revenues are boosting the industry. Regulation is not what it wants.

Some background:

In its Jan. 28 notice of consultation the commission called for a hearing in October to review the basic telecommunications services carriers have had to offer wireline and wireless voice subscribers since 2000. These services include a number of things, including dial-up internet service. For remote areas that are expensive to serve, there’s a subsidy paid to local carriers to offset the cost.

Amongst other things, telecom carriers are obliged under the Telecommunications Act to not “unduly” discriminate against any person. But the commission ruled some time ago that the non-discrimination clause doesn’t apply to wireless data.

As part of the October hearing, the notice says, the commission wants to look at that again.

Sound reasonable. If I can parse what the commission is saying, it would go like this: “We’re looking at what a basic service is, and maybe in these days of accelerating broadband demand, wireless data should be a basic service. So we’re going to look at it, too.”

Except that wasn’t the first time the commission said it wanted to take another look at wireless forbearance. Last year, the commission was dealing with the sticky problem of traffic management BCE Inc.’s Bell Canada was imposing on Internet service providers. After a big hearing, it issued a lengthy judgment in October saying traffic management, or traffic shaping – slowing packets to certain heavy users for the benefit of all subscribers – is OK for wireline providers under certain conditions. It also decided that hearing was not the right place to look into whether it should get into regulating traffic management for wireless data networks.

However, it added that considering the increasingly important role traffic management is playing, and to ensure there’s neutral regulation related to traffic management, the commission intends to review, at a future date, the appropriateness of reapplying the non-discrimination parts of the Telecommunications Act to mobile wireless data services.

Well, what the heck did that mean? Was the commission signaling that it wants to regulate wireless data? The industry’s hackles were raised.

For a few months, the issue lay dormant, until the Jan. 28 “basic services” hearing notice was released. Some found it curious the way the commission added wireless to the mix. It said:

“This proceeding will also re-examine the local competition and wireless number portability frameworks in the territories of the small incumbent local exchange carriers. In addition, the commission will re-examine the appropriateness of the existing forbearance framework for mobile wireless data services.”

If you’re paranoid, it sort of looks like wireless was dropped in as an afterthought. So what’s on the minds of the commission? A wide-open look at wireless data, or just whether it belongs as a basic service?

On Feb. 1, Telus Corp. and the wireless industry’s lobbyist, the Canadian Wireless Telecommunications Association, fired off a letters to the CRTC asking that the wireless issue be hived off the basic services hearing and held separately, and then limited only to traffic management. On Feb. 10 the commission wrote back and politely told them to take a hike.

However, the next day the commission did it again. As part of another notice of an upcoming policy hearing, this time into the impact the convergence of voice, data, audio and video on public networks is having on regulators, it dropped the w-word again:

Over time, the commission’s hands-off approach to wireless may come under pressure as it becomes a more important platform tool to access all forms of communications and the distribution of Canadian content.”

That set off another burst of industry protest. So a few days later commission chair Von Finckenstein told The Globe and Mail that the regulator doesn’t want to regulate wireless. Rather, it quoted him as saying, the October hearing will be focus only on whether the commission should protect against wireless service discrimination.

Apparently not satisfied, the CWTA sent off a letter March 10th in which again tried to steer the commission in what it feels is the right direction. The industry agrees the non-discrimination section of the Telecommunications Act should apply to wireless data, it said, so drop the issue so all “can be spared a potentially enormous amount of unnecessary work.” So far the commission hasn’t responded.

Telecom analyst Mark Goldberg  agrees the issue should be dropped. What the CRTC outlined in the Jan. 28 hearing notice is “incredibly broad,” he said in an interview. “The commission needs to make their public notices clear on what are the areas they’re trying to get input on. And if they want it to be a full review of all of the aspects of forbearance, including rate regulation, then they should say it … Whatever it is they want to review, make it clear.”

Perhaps next month it will. Interested parties have until April 12 to submit written arguments on what the limits of the hearing should be.

The hearing itself start in Timmins, Ont. on Oct. 28 before moving to Gatineau, Que., Nov.1.

The latest development: The commission has re-named this hearing “Obligation to serve and other matters,” rather than “access to basic services.”

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