"Pretty soon, who needs cable?"

Washington Post article on the rise of Netflix and the impending battle with cable companies and internet providers.

Atrix 4G hands on

Infoworld has a nice hands-on article about the Motorola Atrix 4G. The conclusion is about what you would expect, a nice try but not yet a replacement for the desktop.

According to the article, the Atrix 4G fails to meet my criteria as the ultimate mobile device because it becomes a different device when docked. Apparently the docking station is running Linux with Firefox in one window and then just mirroring the Atrix screen in another.

Sadly this makes it sounds like the Atrix is more of a “hack”, not really a fully dockable portable device.

Never the less, the device has created quite a bit of interest so other handset makers should be motivated to continue down this path.

The “ultimate mobile device” can’t be more than a couple years away.

How wireless spectrum auctions fail consumers

As the next big Canadian wireless spectrum auction draws near, the wireless companies are squabbling over who should be allowed to bid.

Regardless of how the auction is done it will be  just another example of short term gain for long term pain and a tragedy for Canadian tax payers.

The auction process fails consumers because no matter what price companies pay up-front for spectrum, it get sold back to Canadians at a rate many times higher than the original purchase price. The higher the cost, the less likely the purchaser will be able to offer competitive cell phone plans and with so much money tied up in the initial spectrum purchase, new entrants will only be able to offer service in the most densely populated areas.

In short, the auction process promotes high prices and poor coverage.

Far from promoting competition in the wireless industry, spectrum auctions favor incumbents even when they aren’t allowed to bid by driving up spectrum costs and thereby constraining the new entrant’s ability to compete. The multi-billion dollar cheque the government gets from the sale of the spectrum pales in comparison to the long term cost to consumers.

Any way you slice it it equals a massive net loss for Canadians.

A better option? How about a reverse auction? Why don’t we give the spectrum (yes for free!) to the bidder who commits to massive, Canada-wide coverage and to selling the spectrum back to Canadians at the lowest price? To ensure that Canadians continue to get the best prices, the spectrum license would have to be renewed every 5 years.

The beauty of this plan is that it doesn’t require any restrictions on who can bid. Regardless of whether or not it’s a new entrant or an incumbent, Canadians are guaranteed the lowest price.

Of course it’s a dream. There is no way that Tony Clement will be able to resist the big payday the auction will bring. Like most governments, they will choose short term gain despite the long term pain.

Telcom Roundup

мебели от чамLinks to stories making the rounds today:

Under CRTC ruling, Canada would become a digital backwater (Montreal Gazette)

Telecom needs a dose of foreign money (Globe & Mail)

Conservative Government telecom mess continues…

Back when the Government was pondering what to do about the CRTC decision to block Globealive from entering the Canadian wireless market on the grounds that it was under foreign ownership, I predicted that if the Government were to over-rule the CRTC it would face a lawsuit that it would lose.

On February 4th, the federal court ruled that the government decision was based “on errors of law and must be quashed“. Of course they are planning on appealing but if they lose again it’s going to cost tax payers a fortune.

Globealive could be forced to shut down and presumably Canada would have to give back the money from the spectrum auction ($442-million). And with potential losses in the billions one can only assume they would sue the government to recover their loses.

In addition, the rest of the participants in the auction could also sue arguing that the prices were artificially inflated by allowing an illegible participant to bid. The court might even rule that the auction should be done over again!

The Conservatives have managed to create one mess after another in Telecom.

Second-guessing the CRTC comes at a price

The Globe & Mail has a very good opinion piece from Richard French on the larger implications around over-ruling the CRTC. The article pretty much speaks for itself but it echoes concerns I raised way back when the Conservatives first over-ruled the CRTC.

Forgotten in the fury over usage based billing, is just how badly the Conservatives have damaged the integrity of the CRTC. Now that the Conservatives have demonstrated that they are more than willing to overrule the CRTC at a moments notice, they have now turned the CRTC into nothing more than yield sign on the regulatory highway, next stop, cabinet.

Aside from gutting the authority of the CRTC, they’ve also opening themselves up to a big political liability. Canadian’s “hate” the CRTC, but traditionally the ruling party has always been able to claim that it wasn’t responsible for it’s unpopular decisions. No longer. The Conservatives will now be in the direct line of fire for every unpopular decision the CRTC has to make. And trust me, that is a lot of unpopular decisions.

Conservatives reverse CRTC UBB decision

Can the Conservatives turn Canadian Telecom into any more of  a farce?

Having ordered the CRTC to rely on market forces, the Conservatives are now outraged that the CRTC has done just that.

What exactly did the Conservatives think would happen when the ordered the CRTC to rely on “market forces” in a market that is effectively a duopoly? That competition would improve? Have any of those guys ever taken a introduction to economics course?

On the up-side, maybe this will be the tipping point that forces the government to rescind it’s policy directive and let the CRTC do it’s job? Probably not. Sadly I honestly don’t think they even understand the implications of what they’ve done. They’ll probably just fire the head of the CRTC and let him take the blame.

National Post readers not happy with it's position on Usage Based Billing

Hot on the heals of an editorial in the Vancouver Sun which showed an amazing lack of understanding of  the Internet, the National Post has also decided to extol the virtues of charging astronomical rates for internet usage. The great thing about this editorial are the comments from readers, of which nearly 100% point out that the National Post has no clue what it’s talking about.

The Post also makes the same mistake of comparing the Internet to something else, in this case electricity, “[Internet is important] But so is electricity, and no one is suggesting that meters be ripped from homes so that heavy users can get a break.”

I love when opponents of something inadvertently destroy their own argument. This analogy fails spectacularly in just about every way.

First, the infrastructure for the electrical grid costs orders of magnitudes more than the Internet “grid”. In fact, the “Internet” is so much cheaper that when Hydro companies are running new transmission lines they also typically run fiber-optic cables at the same time because the incremental cost of doing so is effectively zero.

Second, electricity is not being marked up 10,000%. As one commenter correctly points out, under the internet caps, it’s actually cheaper to copy data to physical storage, send it in the mail then throw the storage away than it is to transmit data over the internet.

Finally, electricity is provided by government owned crown corporations that are heavily regulated! When proponents of usage based billing start making that comparison, then I say I’m all for it! Lets build a public internet infrastructure just like the electrical grid and charge users a small markup to use it.

Funny how their comparison to the electrical grid stops short of that?

And one other suspicious thing, the National Post is owned by Postmedia Network which also owns The Vancouver Sun. Is there a corporate directive to support the cable and telco companies? I’m wondering what the links are between the papers and the big internet providers?

Bell explains why it should(n't) be allowed to buy CTV

While defending itself from accusations leveled by Telus that it’s hording content, Bell manages to explain quite nicely why it shouldn’t be allowed to buy CTV.

“Bell defended its bid in front of the CRTC Tuesday on the grounds that the majority of its major competitors now own broadcast assets integrated with television, Internet and wireless systems”

In other words, it’s not anti-competitive to own the entire stack of services from content on down to Internet access because the only other competitors (the cable providers), are doing the same thing.

That’s all well and good as long as Canada never intends to have any more than 2 competitors (Cable & Telco).  It’s already effectively impossible for competitors to enter the Canadian market in any of segments, telecom, cable, internet, mobile, etc. Once the telcos and cable companies own the entire stack, there will be no chance. Say goodby to over-the-top services like Netfix who are already on life support given the recent lowering of caps on internet usage and inability to secure original content.

It’s too late of course. Rogers & Shaw are already deep into owning the entire stack so denying Bell the right to purchase CTV won’t happen. Besides, if the CRTC did block the sale it would be suicide. For one thing it would directly contravene the idiotic “market forces” directive from the Conservative Government and we already know the Conservatives are more than willing to overrule anything the CRTC does that they don’t like.

Apple, the new big brother

In the now famous Apple ad from the 1984 launch of the Mac (directed by Riddly Scott), Apple took a swipe at the established computer makers by invoking images of Orwel’s 1984. The not so subtle point was to break free from the PC (and buy an Apple instead).

Ironic then that many now see Apple as today’s big brother with its closed architecture. Motorola decided to take a swipe at them in this new ad that will run during the U.S. version of the Superbowl (In Canada the ads are preempted).