Wednesday, September 30, 2009

Is Google a Common Carrier?

The ongoing saga of whether Google Voice service (formerly Grandcentral) is a common carrier offering, and therefore subject to common carrier regulations, raises the question of just what constitutes a common carrier. But first, let's get the preliminaries out of the way. Is Google a common carrier? This is not a matter of opinion since it is a question subject to US federal and state law and regulation. The answer is most decidedly: NO.

Use of the present tense is vital since this could change. What it comes down to is whether Google Voice ought to be licensed and regulated as a telecommunications carrier, and if so, what aspects of the service are subject to federal and state jurisdiction. As an analogy, let's say you organize a large social event at which you serve liquor. You can of course do this, though it is possible you're breaking the law. Depending on local laws you may have passed the threshold for requiring a liquor license. If you don't have that license and you get caught, you are in trouble. Similarly, Google can offer its Google Voice service without a license, but if it's found that they've crossed the threshold used to determine whether this is a telecommunications service, they could come in for some difficulties. Google can argue otherwise, but they are not the ones to make the decision.

The regulators, both state (public utilities commissions) and federal (FCC), make the determination, and become involved when they choose to do so. Their determinations can be challenged in court after the fact, but let's put that future possibility aside. The FCC has a history of applying what might be called the duck test in this type of question: if it looks like a duck, walks like a duck and quacks like a duck ... it's a duck! This is how they eventually nabbed Vonage and their ilk, by deciding they were providing a telecommunications service, and they dispensed with the argument that, since under the hood there was VoIP involved for some of the technology, it was something different; telecommunications regulations in the US are mainly technology neutral, so such technology-oriented arguments often don't wash.

Once a company is found to be providing a telecommunications service, the regulator typically requires them to apply for the required licenses rather than putting them out of business. From there, the companies are required to follow all the rules for common carriers, including non-discriminatory access and inter-carrier termination. This is where freeconference.com comes in, since Google Voice and some other services block their subscribers from calling. AT&T and some other more conventional carriers tried the same trick and got slapped quite hard by the regulator, and with good justification: a carrier cannot avoid its legal obligations just because they do not like paying the high call termination fees charged by the conference service's local telephone company, which were approved by the regulator. While there is some moral force to the argument, it is a matter which must be dealt with separately from the determination of common carrier status.

Coming back to Google Voice, let's look at how it's constructed for some insight into how the current regulatory regime might be applied. Like Vonage, Google Voice relies on established common carriers -- their unnamed partners, though easy enough to determine -- to originate, carry and terminate subscribers calls. These carriers also have access to pools of telephone numbers for their partners' subscribers and process number porting requests; only licensed carriers can do these things. As an aside, this is another point of control and friction that can be used by incumbent carriers to impede the likes of Vonage and Google Voice: since they aren't obligated to honour interconnection and number porting requests from non-carriers, they have sometimes argued that the requests can be ignored since they have come from a non-carrier, despite the carrier partner's name on the paperwork.

The "shell" approach described above is somewhat akin to web mail, where an IMAP server has a web (HTML/Javascript) front-end as the user interface, and may also support some functions beyond that of the underlying server. The Google Voice smart phone app is the user interface shell that dials into the partner's network to set the Caller Id, and also uses the partner to redirect incoming calls to the desired user device (number). The carrier partner has a billing arrangement with Google, not the Google Voice user. Vonage is a slightly different since it provides the local "dial tone" over a SIP/VoIP connection to their own servers, then terminates all calls to their partner carrier (which has interconnection agreements with other carriers) and redirects incoming calls to Vonage for VoIP termination to the user.

When Google Voice blocks outgoing calls to select numbers to avoid high regulator-approved termination fees (that their carrier partner will pass on to them), this action is happening in the Google Voice shell functionality, not within their partner's network. The carrier cannot legally block these calls. Google wants to avoid having Google Voice being labelled as a telecommunications service for this reason, among others.

The question the regulators (both federal and state regulators for different aspects of the service) will have to answer is whether the Google Voice shell functionality meets the legal criteria for meeting the definition of a telecommunications service. As a comparison, VoIP providers like Vonage were judged to be above that threshold, and therefore must be licensed as common carriers. It's a fine but important distinction. It is also about fairness, power and money: regulators and the governments to which they are beholden want to establish that they have authority over all new telecommunications services, regardless of the technology or structure, to replace or even increase falling tax and USF (universal service fund) revenue from legacy services. That can motivate regulators to wear special glasses that make everything they look at appear to be ducks. The politics of this issue are unavoidable.

Google's technology-based arguments are likely to fall flat especially with the state regulators, which often don't understand the technology, or much care about it. I cannot see that there is a certain outcome, but if I had to bet I would place my money on Google losing this battle. That will have an impact on Google Voice's price (free) unless Google chooses to eat the cost or establish a premium service tier similar to what they've done for Google Apps.

Monday, September 28, 2009

Election Apathy

There were a couple of excellent articles in the Globe and Mail recently on the topic of federal political leadership that I believe hit the bull's eye. One was by Rick Mercer on the three main party leaders, and the other by Rex Murphy on Ignatieff. I refer you to those articles -- both are enjoyable reads -- rather than repeat their messages here. It suffices for my purpose in this post to say that we have a problem with the party leaders: the angry guy, the smiling man, and the empty suit.

What I do want to discuss is why it is that the parties elected these men to be their leaders. Cynicism should not distract us since by and large the power brokers in all these parties -- the NDP, Liberals and Conservatives -- are intelligent and thoughtful. Yet the leaders these parties chose are mostly lacking good leadership qualities.

While founded on political ideals, political parties are keenly aware that the path to power is to get elected (duh!). That means they must appeal to a large swath of the electorate (that's us), or at least the ones who bother to go to the polls; those who don't take the trouble to vote can be safely ignored by the party election machines. Since the media and the electorate focus almost exclusively on the leaders, not the local candidates, the parties first and foremost choose leaders they believe can bring in the vote. This is a natural result of our celebrity adoring culture. Besides, we all know that when it comes to political decision time in Parliament, MPs are little more than robot slaves who vote exactly as the leader orders. This only reinforces the focus on the party leaders.

Thus we have a political culture where marketing to the masses takes precedence over policies. The leaders are embodiments of their parties' advertising campaigns, just as with colourful corporate logos, jingles and product hype ("new and improved!"; "whiter teeth!"; "enjoy the cool taste!"). We should be offended by how we're being pandered to, but we're not. Yes, if someone asks, you're sure to claim you're tired of politics and politicians, you wish they'd focus on the important issues of the day, or that, no, you are not swayed by attack ads. Yet our votes are too often driven by party advertising and the image of the leader. Careful polling shows that we respond positively to lies and innuendo and negatively to someone who fidgits and sweats a bit too much in the heat and glare of camera lighting, or simply has a strong accent in one of the official languages. So then, just where is the problem: them or us?

We can try to weasel out of this charge by claiming that we often must choose from among the sorry lot the parties give us. When we do accidentally get a leader who is honest (Kim Campbell) or has a radical vision (Stephane Dion) they are eviscerated. The parties don't like losing, so they learn from their "mistakes" and give us what we seem to want. That's why we have Harper, Layton and Ignatieff, and in the next election that's the group we'll have to choose from for our next Prime Minister. I am not looking forward to it.

Wednesday, September 16, 2009

Price Comparisons Among Mobile Services

The matter of the CRTC's cancellation of their mobile service comparison calculator is still alive. As this more recent article states, if Oftel, the UK regulator, can produce a working and useful calculator, why not the CRTC? As I stated in an earlier post, I think little of this since this should not be a role played by the CRTC; they need to focus on promoting competitive options in the market and not get into this consumer issue. I also believe there's a conflict of interest with a politically-influenced government agency becoming deeply involved with a consumer tool that inherently must favour one or several of the businesses that they regulate.

In this article I want to make what I believe to be an important point about comparison calculators and service pricing. That will come towards the end. First let's look more closely at the subject of calculators and their limitations.

Much has also been made of the CRTC calculator's limitations -- lack of data plans, bundling discounts, phone subsidies, SMS, and various coverage and roaming nuances -- although all of these could be included without much difficulty. For example, if a phone comes for free with a 2-year contract and is $100 with a 1-year contract, then for the 1-year contract you can amortize the price over that period to arrive at a $8.50/mo. charge. For bundling, just plug in the companies you subscribe to for wired phone, broadband and TV, and the calculator figures out which bundles apply. The free calculator that received media coverage has similar limitations, and also suffers from many other problems, as I discovered when I played around with it. I will forgo a detailed review of that calculator by simply stating that I found it to be dreadful. However, it is being used (perhaps because there are no alternatives), and by using it I was able to refine my thoughts on why any such calculator is likely to have poor utility.
  • The calculator asks you to provide detailed calling patterns by day, time, incoming vs. outgoing, local vs. toll, call duration and quantity, proportion of calls to popular numbers, and so forth. Try this experiment: fill in these fields of the calculator by mentally estimating all this detailed data. Afterward, go and look at the call details in your most recent few account statements. It is most probable that you got it wrong, and by a wide margin. Further, the variance in these measurements from month to month will be large. So what's the value of going to the bother of providing all of this detail?
  • There is little indication of whether geographic coverage is adequate to your needs, what phone they will saddle you with, after-sales customer service quality, billing accuracy, and a thousand other important details. In other words, are you likely to sign up with a service provider you've never heard of (they always seem to be the cheapest!), that no one you know has heard of, and whose reputation is pretty much unknown to you?
  • Tying is not explored. An example of this is smart phones: just try to get a smart phone (iPhone, Blackberry, etc.) from a carrier without a data plan. Let me explain why this class of tying is much more than a detail. One big purpose of tying is to get you to try services you would not otherwise select. Yes, you may not be paying extra for it, but most likely you eventually will. You now have a smart phone and you have a data plan, and you will undoubtedly use them, perhaps just a little at first, but over time you will be hooked. The same goes for SMS. At some point you will exceed your subscription limits of, say, 500 MB or 100 SMS per month, and you will be charged overage and, if you are really hooked, you'll then upgrade to a better data or SMS package for a higher price. This is like giving free cigarettes to teenagers -- many will become addicted and drive revenue growth. It is also why feature phones have always come with web access and SMS enabled: it's there, you try it, they charge an exorbitant fee, and you feel motivated to upgrade your service.
If you've read this far, you may very well be thinking that calculators are either useless or that a useful calculator would be pointless due to the vagaries of human nature and the rapidly evolving marketplace. I claim there is a good reason why this complexity exists and is unlikely to go away in the foreseeable future. It is that the service providers derive significant benefit from not only great complexity and optionality in their pricing models, but also in doing so in a way that each tries to be different from its competitors in arbitrary and unfathomable ways. They want to make it as difficult as possible for you to do price comparisons. Let's look at why this is.

Mobile services are inherently commodities, and devices like the iPhone are focused on the manufacturers, not the carriers which distribute them. All of the major carriers have similar geographic coverage and terrible customer service, so those are not differentiators. Commodities like wheat and copper have always been sold on price alone, and that is just what the carriers want to avoid, while consumers want exactly that. Making the price and price comparisons as opaque as possible allows service providers to compete on the quality of their marketing, not pricing, thus making it difficult for the market to perceive and purchase mobile service as a commodity.

That's it -- it's no more complex than that one final message. I hope this issue is now just a little bit clearer to you than it was before.

Monday, September 14, 2009

Deceptive Retailing: Bagels

For a bit of a change, this is a post about an ordinary consumer item: the lowly bagel. It is motivated by what I consider an underhanded marketing tactic. Since everything is clearly labelled, there is no deception involved, nor is it in any way illegal, but it does highlight an important issue in the relationship between consumers and businesses.

The product is Country Harvest bagels, manufactured by Weston Bakeries, a large Canadian food products corporation. Their regular price at Loblaws is $3.29 for a half-dozen of these popular baked goods. Something changed recently, and it wasn't only the format of the plastic package.

The bagels got smaller. Instead of 672 grams per package of 6 bagels, you now get 540 grams worth of 6 bagels. That's a 20% decrease in quantity for the same price. This is a unit increase in price, except that it has been accomplished by a reduction of the product quantity rather than a price hike.

Price increases are not unexpected since many agricultural commodities have seen sustained price rises in the past couple of years, which is good for our farmers. However, how the input costs are dealt with does matter: do it wrong and credibility is risked, along with consumer trust. Most companies will loudly trumpet on their packaging when they provide more product for the same price ("same low price, 15% more!"). Price and unit-price increases are announced the same way that heavy-metal content is promoted in bottled water plastic packaging -- silently.

A slightly different package (to fit the smaller product), a single number changed on the packaging, and the same price. Most people would consider this deceptive, and I am among them. If they had instead kept the product unchanged and increased the price, I would have respected their position, even had I then considered alternative products.

Now I am unhappy that they have pocketed a 25% price hike (the reciprocal affect of a 20% quantity reduction) with exceptional stealth. How much of this money goes to Weston and how much to Loblaws? I don't know, so both companies are sullied by this action. The proper way to build customer loyalty is through respect. It's only a bagel, but it can cause long-term damage to their businesses. After all, tactics like this are not isolated; they add up in the public consciousness.

Friday, September 11, 2009

Smart Phone VoIP Applications

Despite the headlines, VoIP on mobile smart phones do not signal the imminent demise of the cell phone carriers. Apart from the interference tactics being used, such as banning or slowing the introduction of these apps, and using DPI to block VoIP on cellular data networks, the technology isn't quite yet ready for prime time. Journalists, however, do like the scare quotes, as can be found within the referenced article:
“The implications are clearly very negative for the carriers,” said Dvai Ghose, telecom analyst at Genuity Capital Markets. “Some of the biggest parts of your bill come from long-distance and roaming charges.”

The app holds the potential to allow Skype users to avoid voice plans altogether.
To be fair, the article does leaven this sort of doom talk by indicating that the transition will be slow. But the reason given, the need for higher-speed mobile data, is wrong, although high data charge by Canadian carriers could discourage VoIP usage, the technical reasons for VoIP's difficulties are quite different. I covered this topic quite some time ago. Let's briefly review the points from the SMS article it referenced:
  • VoIP operates on the smart phone application processor, not the dedicated radio chip-sets, and is therefore is a massive drain on the battery. This can only be optimized with new hardware, not in the software.
  • VoIP requires keeping a data connection open to an external server, which requires that the application processor remains awake. This, too, is a dreadful drain on the battery. SMS and GSM/CDMA voice do not have this constraint since they have been optimized with hardware and network protocols to maximize standby battery life while still being instantly responsive to incoming IM and telephone calls.
These are entirely solvable problems, and will occur when there is an business incentive to act. At the moment there is little interest in getting it done since the business interests of the carriers, and therefore the handset and device makers, remain in protecting their existing service and billing arrangements. This is also why there has been tension in regards to Skype, Vonage and other VoIP applications being allowed (or not) into some app stores, and when they are approved, they are restricted to operating on WiFi or other non-cellular data networks.

At least this is the case with app stores that put applications through a vetting process, such as for Apple's iPhone, but not for Android apps. Many SIP and VoIP applications are showing up on Android, but even they cannot escape they present technical constraints of the networks and handsets, and are therefore also value only where WiFi is available. Since WiFi is pretty ubiquitous in the home and office, that could create some pressure on the carriers as Android continues its market advance and VoIP applications become popular. Services like Google Voice (formerly Grandcentral) will help by unifying these disparate voice services onto a single number, thus making VoIP more transparent and therefore acceptable to a majority of users.

Change can be expected to continue incrementally, and not by an overnight revolution.

Wednesday, September 9, 2009

Floods, Sewers and Runoff Management

The story of the so-called 100-year floods that strike Glencairn periodically is well known by now by everyone living in Ottawa. The response to date has been almost entirely bureaucratic and political by city staff and council, respectively, which is regrettably predictable. It is also not unique to Ottawa; this type of response seems all too typical of city governments. While the blame game goes on, affected residents are entirely on their own, in many cases with a lack of sufficient insurance since the insurance companies know a bad risk when they see it, even when those in authority do not or refuse to admit what they already knew about the risk.

I was once caught in a similar situation, though one that was less critical. It was in Nepean, in the time before amalgamation. The Glencairn storyline is eerily familiar to me. Let me walk through what I learned from that process, that in the end worked out in my favour. First, a bit of background.

The past several decades have been a period of tremendous change in our cities. It is not only population growth and suburban expansion, but an increasing awareness of the environment and desirable living spaces. These factors often mixed poorly with respect to outcomes such as managing the flow of water. Everyone should of course know that water runs downhill, yet the continuing evolution of zoning, land use and environmental regulations by multiple layers of government often failed to take this into account. You can't win against water: it is a force that over the Earth's long history has leveled mountains, carved massive canyons and infiltrated every void in the ground below our feet. The best we can do (like in many martial arts) is redirect its strength to our benefit. This includes irrigation and sanitation. When we can't use it, we hide it: massive volumes of water that flowed over and through the prehistoric landscape still flows beneath our cities, mostly channeled in a manner that is hopefully benign. Urban inhabitants rarely notice the culverts, level spans and boxed-in streams that pepper the landscape. Out of sight, out of mind, it seems.

Now, back to my story. My neighbourhood suffered from the above difficulties. In particular, the low soil cover over bedrock produced an incentive over the years to raise grade levels, both to accommodate full basements and to meet provincial (Ministry of Environment) regulations for the septic systems we had. This resulted in more and more properties becoming higher than others. There is another provincial requirement, which is that every property owner is responsible for managing their own water, in particular by ensuring that water from their property, both runoff and effluent does not negatively impact neighbouring properties and waterways (note that I am horribly simplifying the legal requirements). Each city ensures that building permits are only issued when these provincial regulations are satisfied. That's the theory.

The reality can vary quite a lot. Not all property owners get building permits for work on their land, and even when they do, especially years back, cities were not overly strict in enforcing another government's regulations if the city's works themselves are not impacted. Regulations also went through a series of rapid changes, which could be difficult to track and enforce. If you've ever dealt with city staff, they can be negotiated with, within reasonable bounds of course; they see one of their primary jobs as helping you through the permitting process, especially when they're asked to do another government's enforcement work. For larger developments, less savoury factors enter into the equation since cities are increasingly hungry for revenue from development and permit fees as a substitute for politically-sensitive property tax hikes to fund operations.

None of us likes to take the blame for what happened before we came on the scene. When you move into a new job are you happy to get complaints about the poor performance of your predecessor? Politicians and bureaucrats feel the same, and can be far more defensive because past institutional failures can become very public. The blame can even occur when previous public and private works complied with all regulations at the time they were done, but do not comply with those currently in place; it can be very difficult to disentangle the weave of past works and changing regulations, and the more complex it gets, the less those affected want to be bothered -- they want a fix for problems, now, while the city wants to escape undue blame. Thus, we have conflict.

When I did work on my property, Nepean wanted me to solve all the water problems of surrounding properties that had been earlier approved to raise theirs and have their water run off onto mine. There was some (official) negotiation and we reached a compromise to everyone's satisfaction. Around the same time, the city improved the storm sewer system to manage the runoff problems in the neighbourhood due to all those piecemeal property changes that were approved over the decades. However, this was small potatoes compared to the effort that is required to fix the disaster that is Glencairn and to also deal with new development nearby in the Carp River basin.

We can expect the blame game to go on for a while in Glencairn. As more information comes to light, as it already has, both Council and staff will feel increasingly exposed to potential litigation since there is some evidence of negligence on their part. On a smaller scale, our neighbourhood went through the same thing with Nepean, where Council and staff tried to wash their hands of any responsibility. The individuals involved were not responsible, since they weren't there at the time those works were done, but the institution did have potential liability, even if it was only of the political variety. They acted, just as it is likely that Ottawa will act in the case of Glencairn. However, they may have to wait a few years, during which residents must keep up the pressure.

Friday, September 4, 2009

Wireless Code of Conduct

I am one of those not too impressed by the voluntary code of conduct recently adopted by most members of the Canadian Wireless Telecommunications Association (CWTA). It is true that if the carriers comply with the code in good faith there are benefits to consumers. That should at the very least lower the heat due to shoddy customer service and billing disputes. In turn, this would lessen the likelihood of CRTC intervention with stricter regulation and enforcement, which is of benefit to the service providers.

What it won't do is lower your bill. Let's recognize that these companies are businesses answerable to shareholders, and therefore they will closely watch the bottom line. Absent a drop in operating costs and capital expenditures, current margins, and therefore revenues, must be preserved to protect their profits and share prices. How and what you pay for may change, but the ARPU (average revenue per user) isn't likely to drop. An example of this is high data volume pricing to compensate for loss of walled-garden services: since we want the internet but not the carrier's own services, we will still end up paying a similar amount (when averaged over the user base). In other words, you will still get screwed, but your service provider will very nicely explain to you exactly how they are screwing you.

Operating costs and capital expenditures are not expected to drop since there is little leeway in the carriers' budgets for the present. The carriers must invest in their networks to remain competitive, and that is what they are doing. Reducing operating costs without major changes in operating procedures would only worsen customer service, which is unlikely to be contemplated in the current climate. The only force strong enough to reduce prices and service provider margins is competition. That is on the way, albeit more slowly than most of us would prefer.

In this light it is interesting that the CRTC has withdrawn its nascent tool for enabling consumers to conveniently compare prices between wireless service packages. When I first heard of this I was not shocked that alleged lobbying had caused them to shelve the project, but rather I was astonished that the CRTC was involved in producing this tool at all. I don't see how this can be a legitimate role for the regulator; it is a job for consumers themselves.

The consumer activists that are complaining about the tool's withdrawal should be producing one of their own. Certainly they know how to do it, since they were closely involved in the CRTC-sponsored focus groups and got to play with the tool. Its sources are publicly-available data from the service providers, so there is no secret sauce recipe that the CRTC is hiding. While helpful, it isn't even necessary for the CRTC to release the code for the tool, as Geist suggests. If it's a good idea, just do it and stop complaining.

Thursday, September 3, 2009

Volatility Squeeze

Bollinger Bands are a great way to identify volatility squeezes. Most charting programs support this option, and I recommend looking into it if you are unfamiliar with this popular indicator. One thing Bollinger Bands are good for is identifying volatility squeezes. The following example exemplifies this technical reading (note: I have hidden the stock's identity, including the price scale, since I own it and prefer not to deal with disclosure).


When price becomes range-bound, the bands tighten in around the price. The longer the duration, the tighter the bands. This leaves little room for price movement within the bands. When the price does move outside the bands, which it must do eventually, it is a pretty reliable indicator of the start of a new trend. That trend could be either up or down. The pictured stock is now in a very tight volatility squeeze, where there is almost no room for price volatility within the Bollinger Bands.

There was a less-prominent squeeze in this stock earlier in the year, and it broke out in spectacular fashion in early May. Over time the stock price did decline, but still kept well above the range of that squeeze.

It is impossible to tell when the next breakout will occur, but considering how tight the squeeze is this time, the move could be even more substantial. While I currently hold this stock, the better way to play a volatility squeeze is to wait for the price to move above or below the Bollinger Bands and then go long or short, respectively. This strategy is not guaranteed to work so you ought to protect yourself with stop losses. You might also want to confirm that the move isn't likely to reverse by waiting a day or two, or at least for a closing quote that is beyond the range. Waiting does remove a portion of the potential profit, but the insurance it provides may be worth it. Just don't wait too long to jump in or you risk missing the move entirely.

Wednesday, September 2, 2009

Sense of Entitlement

Most people in this province and elsewhere must be wondering just what the heck is going on in Queen's Park. The corruption (yes, corruption) problems at eHealth were not isolated to that one government agency. We now see what may be a very similar situation at the OLG (Ontario Lottery and Gaming). Now the questions everyone is asking are, is this endemic to all provincial agencies, and if so, if it is due to either negligence or malfeasance of the current government? There is much noise from the usual partisan bickering, although I suspect that most people simply want answers, and an end to this theft of their money.

Democratically-elected governments are, unfortunately, not immune to this type of corruption. The job of organizing a political party and then gaining and holding power requires many hands. Much of the work is done without remuneration by either partisans or those explicitly looking to create future obligations by contributing their time and skills, or monetary donations. A party that comes to power inevitably finds itself with a long list of favours that it must return or they will lose that necessary support.

That is one powerful reason why so many government appointments are used to repay those favours: it is one of the few means a government has to do so. To the annoyance of citizens it means we see important positions awarded not on the basis of merit, but as a means to reduce the governing party's list of obligations. For the appointees, even those who are qualified for their positions, they too often take those positions with a sense of entitlement: this is payback for years of unpaid and unrewarded effort. The prestige and remuneration of the position may not satisfy them since those may be little different from their situation before the appointment. No, they are looking for a little something extra. Even those appointees with high moral standards find that the laxity of spending procedures in those arm's-length agencies can be sorely tempting.

How to solve this problem? Well, it isn't easy. On the one hand we have those lists of party obligations that need to be paid, and on the other hand there are good reasons to keep agencies like the OLG and OPG at some distance from the politicos. The Ontario government's reactionary decision to subject those agencies to additional approval and oversight, to the level of scrutiny that applies to government ministries, is a poor one in my opinion.

As occurred in the fallout from the sponsorship scandal of the Chretien government, and in other similar instances, additional processes and approvals are imposed throughout the public service. This increases the cost of government (which we pay for) and penalizes the majority of the work force that are diligent and honest about their expenses and procurements. Not surprisingly it is also demoralizing in that it treats well-intentioned adults like wayward children or common criminals. Yet some degree of scrutiny is required for the public service since it is not subject to the self-correcting practices of private businesses that are ultimately ruled by the balance sheet.

What we need, as citizens, are governments that award these important positions to individuals with the skills and character appropriate to the responsibilities they take on. Do this and there will be far less need for the heavy burden of process and oversight. Somehow we need to take patronage out of the equation so that the unqualified are excluded, along with their sense of entitlement to the public purse as compensation for their political activities.

Wouldn't it be nice if people were satisfied to work for political parties purely out of a sense of public service and a desire to see their party's policies implemented when the party wins power? In this Utopian vision there would be no long list of obligations, and the government could proceed to fill appointments on merit and a commitment to implement the government's policies. I suppose I can dream.