All things come to an end, and now it is time for this blog to end. I surprised myself by lasting for 2-1/2 years, which was never my intent, but as long as the ideas came and I was willing to spend the time to rattle away on the keyboard, it just kept humming along. Mind you, I did not sustain the rapid rate of articles as in those first months when I had more enthusiasm for this small venture.
The reason why I am ending it is very much is resonance with why I started this blog. Like many people I saw that I had some things to say and a blog is a good outlet for that sort of thing. I had (and have) no illusions about getting a large readership, nor was that my objective. I do not promote this blog in any way and the lack of ads shows that it isn't for the money!
Which brings me to the question of why I blogged at all. It's a question I never really touched on in any article. It's a modest reason: to improve my writing skills and to practice communicating insights, even minor ones that I have on topics of the day that tweak my interest in some way. I have, for the most part, shied away from topics I know little about, which explains the predominance of articles about telecommunications and technology, which are topics I know quite well.
I made a conscious decision to not focus solely on subjects I know a lot about. This was to exercise my ability to think thoroughly on topics on which I am not an expert but that interest me in some special way. Another, subtler reason was that to focus too much on topics I know well would inevitably, over time, peel away at my anonymity. Many is the time that I've avoided interesting and timely topics since to write about them effectively would provide a glimpse under my disguise for anyone who knows me or my work. While regrettable, I always chose the path that preserved my anonymity.
But why be anonymous? No, I am not anyone particularly noteworthy with a reputation to protect, although I am known by many people in my domains of expertise here in Ottawa and elsewhere. Identifying myself would not bring undue attention or cause me any harm, and it would have freed me to write more about subjects with which I am closely connected. I also have avoided using anonymity as a shield from behind which I could rant to my heart's content or to smear any individual. I have spoken harshly of some people in the public eye from time to time, but only regarding their actions and positions, and not as an attack on the person (no ad hominems here). My true reason for staying anonymous is a dull one: I like to compartmentalize the separate roles I play in life, whether it be family, business, social, or...as a blogger. It's a quirk, though one that matters a great deal to me.
I end this blog with a long list of untouched topics for which I intended to eventually write articles. Except that I no longer particularly care to do so. With respect to the reason why I started this blog, the 80-20 rule has come into play since I have achieved the 80% of the benefit that comes from 20% of the effort. I have reached the point of rapidly diminishing returns. Taking time for this blog is not the relevant thing here since, as the truism goes, time is something you make, not something you have; that is, you always have the time if you set your priorities accordingly. This is always true except when physically impeded by some external force. The many responsibilities of any adult member of society are not a straight-jacket that fate has wrapped around us; they are ones that we choose not to abandon, although we could do so at any time.
And so I have chosen to allocate my time elsewhere. For those of you who have been reading for some or all of the past couple of years, or even just popped in here from a link or from a search, thanks for stopping by. Your numbers aren't huge but more than I at one time would have expected.
This site will stay up with its full complement of over 370 searchable articles. I imagine that over the months that the traffic will decline as the material gets increasingly stale. That's merely the way of all things, and that includes every one of us, so there is no cause for regret.
Take care and so long.
Monday, January 31, 2011
Thursday, January 27, 2011
The 15% Solution
Every time the CRTC's decision on usage-based billing (UBB) comes up you see the usual talking points from the usual parties. This week's revision to the decision was no exception. What you get is a lot of faux outrage from the ISP community, consumers ranting about evil, money-grubbing corporations, and the incumbents trying to convince everyone how badly the CRTC is hurting them, and the jobs of hard-working Canadians. The media makes sure to give all of them a few lines in the inevitable follow-on articles, giving a bit of free distribution to their public relations departments.
The thing is that this 15% fee reduction by the CRTC changes not much at all. The decision still holds, as does the March 1 implementation date. There was no possibility for a reconsideration of the decision at all, and implying that there was is nothing more than a talking point by those who wish to shift blame onto the CRTC by claiming they've blown another so-called opportunity to do the right thing, where the right thing is whatever it is that most benefits whichever side is speaking.
From all the media coverage I've seen, that appears to have been successful since the CRTC is pretty much without any supporters on this matter. However, I don't see that they've failed at their task at all; they are doggedly, if somewhat clumsily, going about implementing policy, which is pushing the industry toward facilities-based competition. They are trying to make it sound attractive to those paying the price today, although that attempt seems futile.
As to the specifics of that 15% wholesale price reduction, the media generally gets it wrong, as in this Globe and Mail article:
Now we come back again to that 15% figure and how the CRTC arrived at it. As referenced above, to some it is a compromise between the ISPs' request for 50% reduction and the incumbents' desire for 0% or, better, a price increase. Let's now look at how the CRTC arrived at 15%.
So get ready to pay these fees starting 5 weeks from now. According to my calculations in that last article, I calculated the overage fees for going beyond 25 GB starts at $2/GB (it declines at higher volumes). I am assuming that the retail pricing stays as is since that 15% discount will not be passed on to consumers. If the ISPs were to do so they would be seen as having been dishonest in their CRTC submissions where they claimed to need an even greater discount to break even on UBB.
Now compare this to the woes south of the border where the dispute between Level 3 and Comcast continues to rage, leading Netflix to say in a financial disclosure document:
In the US the carriers and service providers also have, and frequently make use of, the ability to take the FCC to court. This is now beginning with Verizon and at least one other company on the closely-related topic of the new network neutrality rules. In Canada the options are more limited.
The thing is that this 15% fee reduction by the CRTC changes not much at all. The decision still holds, as does the March 1 implementation date. There was no possibility for a reconsideration of the decision at all, and implying that there was is nothing more than a talking point by those who wish to shift blame onto the CRTC by claiming they've blown another so-called opportunity to do the right thing, where the right thing is whatever it is that most benefits whichever side is speaking.
From all the media coverage I've seen, that appears to have been successful since the CRTC is pretty much without any supporters on this matter. However, I don't see that they've failed at their task at all; they are doggedly, if somewhat clumsily, going about implementing policy, which is pushing the industry toward facilities-based competition. They are trying to make it sound attractive to those paying the price today, although that attempt seems futile.
As to the specifics of that 15% wholesale price reduction, the media generally gets it wrong, as in this Globe and Mail article:
The regulator, as it usually does, has attempted to find middle ground.No, that's not it. Let's read what the CRTC itself has to say about that 15%:
7. The competitors and MTS Allstream submitted that wholesale UBB rates should be discounted relative to comparable retail UBB rates. The competitors generally submitted that discounted wholesale rates would provide a margin from which competitors can recover additional costs associated with wholesale UBB, including activities related to customer inquiries and potential discrepancies between carrier usage bills and competitor records. The competitors also generally noted that, because retail UBB charges are not prepaid, there is a risk that customers will not pay them. In general, the competitors submitted that the financial risk is more significant for competitors than for carriers because unlike carriers, whose retail UBB rates are not cost-based, competitors must pay wholesale UBB rates to carriers as a direct cost.This is interesting since you might almost expect that the GAS-dependent ISPs would pass the price straight through onto their customers' bills without any value added, much as they might with government taxes such as the hated HST. I find it funny that they'd argue that suddenly these fees would add such a burden to their cost of operations. While I'm sure there could be some tense moments when a few high-usage customers open their April bills and have an attack of sticker shock, the real impact almost certainly will be less than 15%.
8. The competitors also generally submitted that discounted wholesale UBB rates would permit continued retail service differentiation. They argued further that allowing a discount would reduce what they characterized as an anti-competitive cross-subsidy from competitors to carriers that results from wholesale UBB rates not being cost-based. The competitors generally submitted that GAS and TPIA services are one input among others they use to provide retail Internet services, that these wholesale services are not resale versions of the carriers’ retail Internet services, and therefore that symmetrical wholesale UBB charges are not appropriate. The Canadian Network Operators Consortium (CNOC) proposed that wholesale UBB rates be discounted by a minimum of 50 percent relative to retail rates, to redress various disadvantages faced by competitors relative to carriers.I'm not surprised that a request for this 50% reduction was rejected by the CRTC since they made it quite clear in their decision and stated policy that the CRTC is not particularly interested in forcing differentiated pricing for the ISPs use of incumbent facilities since they want to promote facilities-based competition. At the bottom of my last article on UBB I noted that the ISPs were finally accepting this point.
Now we come back again to that 15% figure and how the CRTC arrived at it. As referenced above, to some it is a compromise between the ISPs' request for 50% reduction and the incumbents' desire for 0% or, better, a price increase. Let's now look at how the CRTC arrived at 15%.
10. However, the Commission considers that, for competitors, carriers’ wholesale UBB rates are an additional, direct, and unavoidable cost that competitors will need to recover from rates paid by their retail customers. The Commission also considers that wholesale UBB charges will result in additional customer care costs for competitors, including a review of the relevant carrier’s wholesale usage records and associated UBB charges.Somehow I strongly suspect that no one at the CRTC sweated for weeks over detailed spreadsheet financial models in an attempt to calculate or forecast the true costs to the ISPs of passing through UBB fees or the true network costs of the incumbents. Unlike what I said up above, it may actually be that 15% really is a compromise of sorts, since it certainly isn't based on any real analysis of costs. I can just imagine them talking among themselves, concluding with something like:
...
13. Regarding the amount of the wholesale UBB discount, the Commission considers that if it is too large, the effectiveness of UBB as an economic ITMP will be reduced, while if it is too small, competitors’ capacity to recover costs will be undermined.
14. The Commission concludes that a discount of 15 percent for carriers’ wholesale UBB rates relative to their retail UBB rates recognizes these considerations appropriately.
[Hmm, 25% is half way between 0% and 50%, but for policy reasons we want to dissuade use of incumbents' network. So lets swing the value a little bit in the incumbents' favour.]Although I've completely made up this conversational snippet it sure seems to be closer to the truth than anything else I've heard in the past day or two.
So get ready to pay these fees starting 5 weeks from now. According to my calculations in that last article, I calculated the overage fees for going beyond 25 GB starts at $2/GB (it declines at higher volumes). I am assuming that the retail pricing stays as is since that 15% discount will not be passed on to consumers. If the ISPs were to do so they would be seen as having been dishonest in their CRTC submissions where they claimed to need an even greater discount to break even on UBB.
Now compare this to the woes south of the border where the dispute between Level 3 and Comcast continues to rage, leading Netflix to say in a financial disclosure document:
...at $1 per gigabyte over wired networks, it would be grossly overpriced.Keep in mind that Comcast customers pay UBB after 250 GB, not 25 GB, so that half-price deal looks particularly appealing in comparison to the situation here.
In the US the carriers and service providers also have, and frequently make use of, the ability to take the FCC to court. This is now beginning with Verizon and at least one other company on the closely-related topic of the new network neutrality rules. In Canada the options are more limited.
Tuesday’s ruling is being considered the regulator’s final say on the matter. So any service providers who remain unsatisfied with the new pricing model will likely now have to take their concerns directly to Parliament.Well, Parliament might care, but the government most certainly will not. They, too, have taken actions in the past to promote facilities-based competition, and despite having little love for the CRTC no one should expect that Stephen Harper is about to jump into this shark tank. This is too minor an issue for them to take the risk in what may be an election year. Besides, I suspect they would far rather be silent to ensure that all of the criticism falls on the Commissioners' heads.
Wednesday, January 19, 2011
It Takes a Lawyer to Shop at Canadian Tire
If the title of this post makes you think that you're about to read a rant against Canadian Tire, right up front I'll say that this isn't the case. Actually this is about something that happened that caused me to laugh and wonder about the marketing smarts of this retail giant and, for that matter, some of their competitors. Let's begin with a bit of make-believe.
Imagine that your favourite retailer tells you that it has opened a new store. This one is closer, offers a wider selection and promises a convenient shopping experience. Enthusiastic about this welcome development, you make your way over to this new store to check it out.
When you arrive at the store you see a confused mass of people near the entrance which is blocked by a line of burly security guards. You move closer, curious about what's is going on. On the wall above the guards is a large billboard display with a lot of text in small typeface. Most of the faces are looking up at it with looks that range from bewilderment and boredom to anger. You sensibly pay no attention to all of this and move through the small crowd. A guard blocks your path and hands you a slip of paper.
He tells you that you must sign the piece of paper before entering the store. His demeanour brooks no argument. You soon see that the paper contains the same text that is up on the billboard, and it contains a lengthy legal agreement. Skimming the text you see a lot of legalistic language about what you are and are not allowed to do in the store, various privileges that you grant to the store over you and your private information, and so forth.
It's all a bit much to read and to understand, and especially not now that you are here at the store and ready to spend your money. You are a long-standing customer of this retailer so you have some loyalty but you also are annoyed at this encumbrance. So what do you do: toss the paper on the ground and leave or sign it without really reading it and go about exploring the store? You notice that most people in the crowd make their decisions quite quickly, by signing the paper and walking through the entrance.
This story is just a bit bizarre, yet it is exactly what happens when you attempt to use the Canadian Tire app on the Android Market. If you don't accept the enormous legal agreement and all of its terms and conditions, the app exits and denies you the opportunity to shop at Canadian Tire. This is a peculiar way of doing business for a retailer, especially since the market is very competitive, and is about to become even more competitive now that Target, the US retail giant, is moving into Canada. It's astounding to me just how oddly many companies behave on the web or in the newer mobile app world; they either have a terribly low opinion of their customers or they value internal corporate processes more than reaching out to their customers.
Speaking of Target, I decided to check out their app and that of a few other large retailers to see if they were any better. Target does not force you to agree to terms and conditions when you enter the app; they are available to view at your convenience. Well, almost but not quite. When I attempted to do so the app froze during the download. It did this every time I tried. So much for quality.
Best Buy did better, being more welcoming and not misbehaving, but they scored poorly on geographical awareness. It was funny how they successfully used my location to correctly determine my postal code, but when it tried to find the nearest store it choked because it only understood US zip codes. This is clearly only intended for the US market. That's fine if that's their intention, although they should have considered putting a geographical restriction of the app in the Android Market -- which is supported -- to avoid consumers a substantial number of potential customers.
I don't use mobile phone apps for shopping so all of these inconveniences don't impact me. I downloaded the Canadian Tire app to do some research on smart phone apps for my own business reason. That reason was enough to get me to finally agree to their conditions; the research requirement was of greater importance than worrying about the terms and conditions. Although I got what I came for, I am still left shaking my head at Canadian Tire's clumsy entrance into the mobile app world.
Imagine that your favourite retailer tells you that it has opened a new store. This one is closer, offers a wider selection and promises a convenient shopping experience. Enthusiastic about this welcome development, you make your way over to this new store to check it out.
When you arrive at the store you see a confused mass of people near the entrance which is blocked by a line of burly security guards. You move closer, curious about what's is going on. On the wall above the guards is a large billboard display with a lot of text in small typeface. Most of the faces are looking up at it with looks that range from bewilderment and boredom to anger. You sensibly pay no attention to all of this and move through the small crowd. A guard blocks your path and hands you a slip of paper.
He tells you that you must sign the piece of paper before entering the store. His demeanour brooks no argument. You soon see that the paper contains the same text that is up on the billboard, and it contains a lengthy legal agreement. Skimming the text you see a lot of legalistic language about what you are and are not allowed to do in the store, various privileges that you grant to the store over you and your private information, and so forth.
It's all a bit much to read and to understand, and especially not now that you are here at the store and ready to spend your money. You are a long-standing customer of this retailer so you have some loyalty but you also are annoyed at this encumbrance. So what do you do: toss the paper on the ground and leave or sign it without really reading it and go about exploring the store? You notice that most people in the crowd make their decisions quite quickly, by signing the paper and walking through the entrance.
This story is just a bit bizarre, yet it is exactly what happens when you attempt to use the Canadian Tire app on the Android Market. If you don't accept the enormous legal agreement and all of its terms and conditions, the app exits and denies you the opportunity to shop at Canadian Tire. This is a peculiar way of doing business for a retailer, especially since the market is very competitive, and is about to become even more competitive now that Target, the US retail giant, is moving into Canada. It's astounding to me just how oddly many companies behave on the web or in the newer mobile app world; they either have a terribly low opinion of their customers or they value internal corporate processes more than reaching out to their customers.
Speaking of Target, I decided to check out their app and that of a few other large retailers to see if they were any better. Target does not force you to agree to terms and conditions when you enter the app; they are available to view at your convenience. Well, almost but not quite. When I attempted to do so the app froze during the download. It did this every time I tried. So much for quality.
Best Buy did better, being more welcoming and not misbehaving, but they scored poorly on geographical awareness. It was funny how they successfully used my location to correctly determine my postal code, but when it tried to find the nearest store it choked because it only understood US zip codes. This is clearly only intended for the US market. That's fine if that's their intention, although they should have considered putting a geographical restriction of the app in the Android Market -- which is supported -- to avoid consumers a substantial number of potential customers.
I don't use mobile phone apps for shopping so all of these inconveniences don't impact me. I downloaded the Canadian Tire app to do some research on smart phone apps for my own business reason. That reason was enough to get me to finally agree to their conditions; the research requirement was of greater importance than worrying about the terms and conditions. Although I got what I came for, I am still left shaking my head at Canadian Tire's clumsy entrance into the mobile app world.
Thursday, January 13, 2011
Usage-Based Billing as Distribution Fee
The internet has been a-buzz this week with the news that the CRTC-approved usage-based billing tariff has been approved and is slated for introduction on February 1. I won't repeat what was said (and re-said again and again) elsewhere so that I can focus on a perspective that is being incompletely reported elsewhere. This is the idea that UBB is going to be used as a content distribution fee by the ISP. This is not unlike the stratification that we are seeing in other household utilities (electricity and natural gas) where the delivery fee is scaled to, but separate from, the content (kWh and m3, respectively).
In the case of natural gas, Enbridge has exclusive rights to delivery while competing with others on the content (and on gas-powered appliances). In a similar fashion, Bell Canada has rights, but not exclusive rights, to deliver internet broadband service, competes with other ISPs on a range of connectivity services layered on that basic service (Sympatico), and, in competition with companies world-wide, content. Unlike Enbridge, Bell Canada does not have exclusive rights on broadband service since they compete with Rogers and others for both wired and wireless broadband. The difference is important since they are not a monopoly and that is, apparently, sufficient for looser, or at least more permissive regulation. Thus, UBB.
Putting aside for the moment the Bell Canada's true costs and their justification for their rates, let's look at what they are in effect charging for content distribution. However, we should first not that there is a type of exemption for what are purportedly the majority of broadband DSL users, those whose usage is below the threshold for UBB.
Therefore let's assume that all Netflix usage is subject to UBB fees. As shown above, Primus will pass along a charge of $2/GB, which translates to $2/hour of Netflix. Since the fee is capped at $60/month, this is 30 hours of content, or one hour per day. If you consume more than 8 hours, and provided you stay under 300 GB/month, the hourly rate will therefore decline in proportion to hours of content. For example, watch 2 hours/day and the effective UBB fee is $1/hour of content. Nevertheless, for that $8/month Netflix subscription you can easily pay far more, $60/month, to the distributor, Bell Canada. Nice, eh?
As a private company Bell Canada certainly has a right to run a profitable business that provides a financial return to their investors while offering a legal set of services that customers value and will pay for. Since they are not a monopoly the regulator is justified in avoiding micro-management of their business, or those of their competitors. However, as we all know too well, competition is limited and is not enough to drive costs down to those of comparable companies in other markets. With effective competition not only would prices come down but customer service would improve and they would use every business and technology trick-of-the-trade to drive down costs even further so that they can lower prices further.
As matters stand, their profits are not outrageous but they are misleading since they have limited incentive to lower costs through increased productivity. For those of us outside of Bell Canada (and even for most within the company!) getting a true picture of costs, and of costs that can be well-correlated with any one or several specific services, is nigh impossible. Yet that doesn't stop many commentators from declaring that Bell's costs are really much lower than they are saying, even though Bell doesn't break this out in their financial reports (and probably couldn't do so if they wanted). The CRTC does see some detailed service costing information, which is kept confidential for good reason, but this is almost certainly massaged to Bell's best advantage while still appearing credible. The CRTC's ability to challenge those figures is limited, even though they are sometimes foolish enough to think they should.
This brings us to CRTC telecommunications policy, a subject I've covered many times in the past, which is focused on promoting facilities-based competition, not retail competition layered on incumbents' networks, as the appropriate way to achieve true competition and market-driven pricing. Interestingly, this point is finally striking its mark, just as the CRTC (and the government for that matter) have intended.
In the case of natural gas, Enbridge has exclusive rights to delivery while competing with others on the content (and on gas-powered appliances). In a similar fashion, Bell Canada has rights, but not exclusive rights, to deliver internet broadband service, competes with other ISPs on a range of connectivity services layered on that basic service (Sympatico), and, in competition with companies world-wide, content. Unlike Enbridge, Bell Canada does not have exclusive rights on broadband service since they compete with Rogers and others for both wired and wireless broadband. The difference is important since they are not a monopoly and that is, apparently, sufficient for looser, or at least more permissive regulation. Thus, UBB.
Putting aside for the moment the Bell Canada's true costs and their justification for their rates, let's look at what they are in effect charging for content distribution. However, we should first not that there is a type of exemption for what are purportedly the majority of broadband DSL users, those whose usage is below the threshold for UBB.
Currently, only a small percentage of users download enough data to hit these new caps. But many fear these fees will soon apply to everyone as the internet becomes more video based.Since I am a customer of Primus I directly received the widely-reported email that they sent to their customers to outline the new fee schedule, partly to inform us but also I believe to add some fire to the brewing public relations battle. Here is their description of the new fee schedule
Of course most people have at best a vague understanding of the relationship between traffic volume and content, and until now they haven't had to give it much thought. That is, although video streaming has a large impact on traffic volume, far more so than for voice and music, outside of Canada, even in the US, the caps tend to be much higher than 25 GB.
- Your existing High Speed Internet plan will now have 25GB of monthly usage included
- For the minority of customers who exceed this amount, additional usage up to 300GB will be charged at $2.00/GB to a maximum of $60.00/month. Usage in excess of 300GB per month will be charged an additional $1.10/GB
- Additional Usage Plans can be purchased starting at $5/month for an additional 40GB
The service [Netflix] launched here in September, offering movies and TV shows streamed over the Web for a monthly subscription fee of about $8...This seems to agree with what I've heard first-hand from Netflix users that one hour of video content is about 1 GB: 1 GB x 8 hours x 30 days = 250 GB. Therefore to stay under the 25 GB cap here in Canada limits Netflix users to under one hour per day. Of course this is misleading since other uses of broadband would already be eating up a substantial amount of that 25 GB. This is especially true in households with several people, including children, where their current usage may already be enough to incur UBB fees.
...
Video streaming eats up a lot of bandwidth. This isn’t a problem for Netflix in the U.S., where one of the strictest plans is Comcast Corp.’s, which limits users to 250 gigabytes per month. That’s still enough to watch eight hours of Netflix per day. In Canada, Internet providers have capped bandwidth use much more aggressively.
Therefore let's assume that all Netflix usage is subject to UBB fees. As shown above, Primus will pass along a charge of $2/GB, which translates to $2/hour of Netflix. Since the fee is capped at $60/month, this is 30 hours of content, or one hour per day. If you consume more than 8 hours, and provided you stay under 300 GB/month, the hourly rate will therefore decline in proportion to hours of content. For example, watch 2 hours/day and the effective UBB fee is $1/hour of content. Nevertheless, for that $8/month Netflix subscription you can easily pay far more, $60/month, to the distributor, Bell Canada. Nice, eh?
As a private company Bell Canada certainly has a right to run a profitable business that provides a financial return to their investors while offering a legal set of services that customers value and will pay for. Since they are not a monopoly the regulator is justified in avoiding micro-management of their business, or those of their competitors. However, as we all know too well, competition is limited and is not enough to drive costs down to those of comparable companies in other markets. With effective competition not only would prices come down but customer service would improve and they would use every business and technology trick-of-the-trade to drive down costs even further so that they can lower prices further.
As matters stand, their profits are not outrageous but they are misleading since they have limited incentive to lower costs through increased productivity. For those of us outside of Bell Canada (and even for most within the company!) getting a true picture of costs, and of costs that can be well-correlated with any one or several specific services, is nigh impossible. Yet that doesn't stop many commentators from declaring that Bell's costs are really much lower than they are saying, even though Bell doesn't break this out in their financial reports (and probably couldn't do so if they wanted). The CRTC does see some detailed service costing information, which is kept confidential for good reason, but this is almost certainly massaged to Bell's best advantage while still appearing credible. The CRTC's ability to challenge those figures is limited, even though they are sometimes foolish enough to think they should.
This brings us to CRTC telecommunications policy, a subject I've covered many times in the past, which is focused on promoting facilities-based competition, not retail competition layered on incumbents' networks, as the appropriate way to achieve true competition and market-driven pricing. Interestingly, this point is finally striking its mark, just as the CRTC (and the government for that matter) have intended.
Andrew Day, the chief executive officer of Primus Telecommunications Canada Inc., says that, taken together, the CRTC’s recent decisions provide a clear view of the future, including what it would cost to own and compete over more of its own facilities; in short, becoming what is known in the industry as a “facilities-based” competitor that owns its own network, such as Bell or Rogers Communications Inc. “It gives clarity to competitors on how to make investments going forward,” says Mr. Day. “You now have perfect information to put forward a facilities-based business case.”Unfortunately, as I've also said before, facilities-based competition is neither quick nor cheap, so don't hold your breath. Wireless competition will help but only in part. We'll have to wait to see if CRTC's policy will truly create effective alternatives across the country, even if only in some urban centres. Everyone will benefit, including Bell Canada and the other incumbents in the long term as they adjust their cost structures to industry norms.
Monday, January 10, 2011
Congestion, Content Buffering and Complexity
Just as a chain is only as strong as its weakest link, a network connection can only be as fast as its slowest link. An IP network is comprised of many connections and routers, and the path that each packet takes can be change during the duration of a connection (such as downloading a web page). Depending on congestion and routing the effective transfer rate can greatly vary during a connection. Usually the weakest link for many users is the speed of their ISP access service, and is therefore where congestion is most likely.
I was reminded of this when I read this article in Ars Technica about buffering. There are a few things that bother me about this article, although it is generally pretty good, since it blends together topics such as congestion, buffering, latency and caching as if they were the same rather than the closely linked but separate items that they are. I don't want to dwell on the article too closely except to, I hope, add some clarity with the following observations:
Unfortunately all this efficiency has its own costs. Grocers have to do manage employee numbers and schedules against predicted -- never certain -- customer demand, just as network operators have to manage choice and placement of caches against predicted demand for that content. That complexity isn't free and therefore must be carefully assessed in every situation. All these systems add complexity to the network and create a need for specialized skills to manage the complexity. This is not only costly but also creates more failure modes. There have to be compelling cost reductions before taking on the risk of going down that path.
Against that complexity is the relative simplicity of adding more network capacity. This is a less-risky choice since it means doing more of the same thing: equipment, staff and processes. In addition, the costs are more predictable if, possibly, higher. Oftentimes throwing more capacity at the problem of both short-term and long-term congestion is the superior solution, at least until the pain of doing so becomes financially unacceptable.
If you want to come up against this first hand, try to sell a network operator on installing a new type of equipment into their network to solve the congestion problem. Should you succeed, congratulate yourself on achieving a monumentally difficult objective. More often you will fail but rarely turned away cold; the person you are selling to may know the potential benefit of what you're selling but will also know the risk to them (both personal and to their employer) of choosing unwisely. It is tempting to instead call up the Cisco sales rep and order a few more blades for those routers that are already running the network just fine.
User-transparent caching (or buffering, if you prefer) sounds good in theory but can be very costly in practice. Beware discussions of this topic that fail to mention complexity, cost versus alternatives, and reliability.
[As an aside there is also a lot going on under the hood, so to speak, to make internet data communication work, and can also bear on congestion. The ISPs and carriers employ many network design and operations staff, automated and manual network management, and all the hardware and software (and real estate) to keep things flowing smoothly. Data transport below the IP layer -- which can include, among other things, DSLAMs, multiplexors, ATM and MPLS -- and applications above the IP layer -- HTTP, SIP, RTSP,etc. -- are unconcerned with all of this network-layer stuff, and so I will ignore it all in this article.]Congestion is a large topic which I will not attempt to cover in this article. What I do want to discuss is one aspect of congestion management, and that is network content caching. This is, in brief, the technique of reducing network congestion by placing content closer to the user. This is accomplished with a cache of files or other popular content that the network will redirect to when requests are received. Sometimes it is explicity accomplished with mirror sites, which you have likely encountered in the past, or implicitly in a manner that is transparent to the user.
I was reminded of this when I read this article in Ars Technica about buffering. There are a few things that bother me about this article, although it is generally pretty good, since it blends together topics such as congestion, buffering, latency and caching as if they were the same rather than the closely linked but separate items that they are. I don't want to dwell on the article too closely except to, I hope, add some clarity with the following observations:
- Bit-km as the network loading metric: The object of mirror and cache sites is, in large part, to reduce the overall load on the internet across all of its component networks. If we exclude data compression -- the largest downloads are media files, which are already compressed -- we can only reduce network load by reduced the distance between the user and the content. If you are in Ottawa and you want to download a movie, the bit-km is lower if the content is cached, say, in Toronto rather than Los Angeles. The content is transferred to each cache once, and each local user doesn't tie up transcontinental network capacity.
- Congestion has a time-frame: Imagine you are at the supermarket and you are looking for a cashier. If there is one free you would rush over there, avoid congestion for your transaction. If they're all busy, with other customers queued up at every cashier, you encounter congestion. Come back a few minutes later and you may find there is, again, a free cashier. This is an example of periodically high short-term congestion but low long-term congestion. The grocer's challenge is to engineer an acceptable amount of short-term congestion (long-term congestion is almost always bad) to optimize their economic outcome by balancing their costs and your continued patronage. Networks are similar, where there is some tolerance for short-term congestion as long as long-term congestion is kept under control.
Unfortunately all this efficiency has its own costs. Grocers have to do manage employee numbers and schedules against predicted -- never certain -- customer demand, just as network operators have to manage choice and placement of caches against predicted demand for that content. That complexity isn't free and therefore must be carefully assessed in every situation. All these systems add complexity to the network and create a need for specialized skills to manage the complexity. This is not only costly but also creates more failure modes. There have to be compelling cost reductions before taking on the risk of going down that path.
Against that complexity is the relative simplicity of adding more network capacity. This is a less-risky choice since it means doing more of the same thing: equipment, staff and processes. In addition, the costs are more predictable if, possibly, higher. Oftentimes throwing more capacity at the problem of both short-term and long-term congestion is the superior solution, at least until the pain of doing so becomes financially unacceptable.
If you want to come up against this first hand, try to sell a network operator on installing a new type of equipment into their network to solve the congestion problem. Should you succeed, congratulate yourself on achieving a monumentally difficult objective. More often you will fail but rarely turned away cold; the person you are selling to may know the potential benefit of what you're selling but will also know the risk to them (both personal and to their employer) of choosing unwisely. It is tempting to instead call up the Cisco sales rep and order a few more blades for those routers that are already running the network just fine.
User-transparent caching (or buffering, if you prefer) sounds good in theory but can be very costly in practice. Beware discussions of this topic that fail to mention complexity, cost versus alternatives, and reliability.
Friday, January 7, 2011
New Year Market Reversions
Thursday was a peculiar day for me on the stock markets because pretty much my entire portfolio went up, and in some cases by a ridiculous amount. In one case the stock price climbed after an earnings warning. This is all very nice, but nothing to get excited about since there have also been days when the reverse happened. It did however get me thinking once more of some of the pricing peculiarities that can happen in the days before and after the turning of the calendar.
You may be familiar with tax-loss selling, where you sell shares of stocks before year-end to capture the loss to offset current or future capital gains. This effect can drive the price of a stock down further in December when it is already in a marked downtrend. If only one could reliably know that a stock price is being artificially depressed by tax loss selling there is an opportunity to make a quick profit in January. The theory being that the stock will rise once more when the selling pressure ends at December 31 (minus 3 market days to account for trade settlement). I have seen a few losers in my portfolio rise substantially this week, but I have no idea if this is the reason.
The other new year effect is selling winners in early January. These are the stocks that have had a good run and investors want to realize some of their profit. You would choose to sell now because the gains are realized in the new year, and therefore capital gains taxes are (usually, but not always, depending on how closely CRA is watching you) paid in the subsequent years. In this case, 2012. Therefore we expect a tendency for stocks in an uptrend to suffer a setback in January and recover thereafter. Again, I have seen examples of this in my portfolio but I cannot claim that this is the reason.
For example, gold has just suffered a persistent decline all this week (as have the gold miners) after reaching new records in December. Perhaps this is a case of selling winners or perhaps people are truly bullish on the economy and no longer see an advantage of holding too much gold.
In my case I sold about half my holdings in a gold miner just before the new year, thus violating the January rule I outlined above. Here we see another effect that acts as a counterweight: RRSP. Since the gains (income, really) of stocks in an RRSP account are not realized until deregistered (explicitly or mandated subsequent to retirement) there is no advantage to watching the calendar too closely to make those buys and sells. Except, that is, to capture the benefit of others trading to their capital gains and losses: buying winners that dip in January or buying losers that dip further in December.
My own sale of that gold miner stock was done to capture the uptrend in advance of what I believe is an ongoing bull market in stocks and a corresponding decline in gold later in 2011, not about capital gains or losses.
Of course this discussion is not terribly useful now because most of the new year pricing impacts have already taken place. It is still useful to keep in mind eleven months from now. What you can do now, however, is review the past few weeks of price movements in your favourite stocks and see if you can spot examples of new year reversions, both losers and winners. It could be very educational.
Disclosure: I prefer to avoid mentioning specific stocks in my portfolio even though I highly doubt that would ever affect the stock mentioned. Therefore, no companies are named in this post.
You may be familiar with tax-loss selling, where you sell shares of stocks before year-end to capture the loss to offset current or future capital gains. This effect can drive the price of a stock down further in December when it is already in a marked downtrend. If only one could reliably know that a stock price is being artificially depressed by tax loss selling there is an opportunity to make a quick profit in January. The theory being that the stock will rise once more when the selling pressure ends at December 31 (minus 3 market days to account for trade settlement). I have seen a few losers in my portfolio rise substantially this week, but I have no idea if this is the reason.
The other new year effect is selling winners in early January. These are the stocks that have had a good run and investors want to realize some of their profit. You would choose to sell now because the gains are realized in the new year, and therefore capital gains taxes are (usually, but not always, depending on how closely CRA is watching you) paid in the subsequent years. In this case, 2012. Therefore we expect a tendency for stocks in an uptrend to suffer a setback in January and recover thereafter. Again, I have seen examples of this in my portfolio but I cannot claim that this is the reason.
For example, gold has just suffered a persistent decline all this week (as have the gold miners) after reaching new records in December. Perhaps this is a case of selling winners or perhaps people are truly bullish on the economy and no longer see an advantage of holding too much gold.
In my case I sold about half my holdings in a gold miner just before the new year, thus violating the January rule I outlined above. Here we see another effect that acts as a counterweight: RRSP. Since the gains (income, really) of stocks in an RRSP account are not realized until deregistered (explicitly or mandated subsequent to retirement) there is no advantage to watching the calendar too closely to make those buys and sells. Except, that is, to capture the benefit of others trading to their capital gains and losses: buying winners that dip in January or buying losers that dip further in December.
My own sale of that gold miner stock was done to capture the uptrend in advance of what I believe is an ongoing bull market in stocks and a corresponding decline in gold later in 2011, not about capital gains or losses.
Of course this discussion is not terribly useful now because most of the new year pricing impacts have already taken place. It is still useful to keep in mind eleven months from now. What you can do now, however, is review the past few weeks of price movements in your favourite stocks and see if you can spot examples of new year reversions, both losers and winners. It could be very educational.
Disclosure: I prefer to avoid mentioning specific stocks in my portfolio even though I highly doubt that would ever affect the stock mentioned. Therefore, no companies are named in this post.
Wednesday, January 5, 2011
Skype Outage Changes Nothing
Skype suffered a wide-scale outage recently and it doesn't matter one bit since it will keep being used, will keep adding new features and will in fact keep growing. Does this seem counter-intuitive? If it does, it may be because of falling into the trap of comparing Skype (or similar services) to wire telephony service where reliability remains a key metric. The media, even the technology trade media, has largely fallen into that very trap. This is the wrong way to assess Skype's episodic woes.
A good indication of what I see going on is by comparing the Skype outage to this week's woes of the iPhone and its new year alarm glitch. Even though Apple at first responded in the same negligent manner as they did when their antenna problems came to light earlier last year -- by saying that the problem would self correct in a couple of days, which it reportedly did not -- I would imagine that no one expects that iPhone users are about to jump ship and buy Android phones. It just won't happen, nor should it.
Skype, like the iPhone, has a tremendous amount of consumer acceptance -- an emotional attachment -- that is very tolerant of occasional failures or even persistent problems. In their eyes, the benefits are so overwhelming that the negatives do nothing to change their views. Indeed, they will even rush to defend their favourite product or service when it comes under attack during these inevitable screw-ups.
One bit of link bait I read (which I won't link to!) claimed that Skype's outage could irreparably harm its increasing acceptance among business users. I and many of the people I work with are Skype users and although the outage was annoying I heard not one peep from my Skype contacts about how angered and upset they were about it. In fact no one said much of anything. The media, too, has gone quiet, or at least they merely moved on to the iPhone alarm problem as the next great headline fodder.
No one seriously compares Skype to their wired phone from Bell Canada or other telephone companies. They are instead seen as complementary, and also complementary in some respects to mobile phones. The reason is that Skype is really good at doing some important things that the humble and oh-so-reliable telephone cannot:
Conversely, Skype and its ilk are not about to render the phone company obsolete, or at least not so fast that the carrier industry can't adapt. They did it with wireless and the internet, and they could do it again, despite the distraction of cord cutters. However this is not to say that there is not a real threat that causes concern in some quarters.
A good indication of what I see going on is by comparing the Skype outage to this week's woes of the iPhone and its new year alarm glitch. Even though Apple at first responded in the same negligent manner as they did when their antenna problems came to light earlier last year -- by saying that the problem would self correct in a couple of days, which it reportedly did not -- I would imagine that no one expects that iPhone users are about to jump ship and buy Android phones. It just won't happen, nor should it.
Skype, like the iPhone, has a tremendous amount of consumer acceptance -- an emotional attachment -- that is very tolerant of occasional failures or even persistent problems. In their eyes, the benefits are so overwhelming that the negatives do nothing to change their views. Indeed, they will even rush to defend their favourite product or service when it comes under attack during these inevitable screw-ups.
One bit of link bait I read (which I won't link to!) claimed that Skype's outage could irreparably harm its increasing acceptance among business users. I and many of the people I work with are Skype users and although the outage was annoying I heard not one peep from my Skype contacts about how angered and upset they were about it. In fact no one said much of anything. The media, too, has gone quiet, or at least they merely moved on to the iPhone alarm problem as the next great headline fodder.
No one seriously compares Skype to their wired phone from Bell Canada or other telephone companies. They are instead seen as complementary, and also complementary in some respects to mobile phones. The reason is that Skype is really good at doing some important things that the humble and oh-so-reliable telephone cannot:
- Cheap: I can make long international calls (which I do for business) at zero cost.
- Features: Conference calls are a breeze to set up and manage, I can check on a person's availability at either a glance or with a quick text message, the audio quality is good, there's video and more features that I are nice to have even if I don't use them much or at all.
- Convenience: It works like a good-quality speakerphone or I can attach a headset to the PC for even better quality.
Conversely, Skype and its ilk are not about to render the phone company obsolete, or at least not so fast that the carrier industry can't adapt. They did it with wireless and the internet, and they could do it again, despite the distraction of cord cutters. However this is not to say that there is not a real threat that causes concern in some quarters.
Experts say companies like Skype operate in a legal grey area and that the notice is a warning to them not to grow too big or to challenge the state-owned telecoms...“This notice is actually protecting the telecoms' traditional voice services,” said Mr. Kan, [a director of China VoIP & Digital Telecom Inc., a company that has offered Internet phone services] who is also a professor at the Beijing University of Post and Telecommunications.This is also why Skype and Google Voice had to scale back their mobile phone apps on carrier-locked smart phones, achieving an uneasy and unstable compromise between keeping users connected and protecting (to a degree) carrier voice revenue. It is unstable because the marginal cost of voice minutes is very low, and getting lower, and more people are realizing that simple truth.
Ofcom also found that cost, more than anything, determined how long people talk for and whether they prefer a landline or a mobile call.For the present, Skype will continue to grow, as too will Apple and Google, among others. They will do so despite episodic glitches and outages since their perceived value is high. The carriers will continue to generate profits for their shareholders, but without the same enormous growth or even any growth at all. Of course the landscape could change sooner rather than later since it is a market ripe for massive disruption by the persistent march of technology.
...
Less talking does not necessarily mean less phone use. According to Nielsen the number of paid texts per subscriber has grown rapidly over the same period, recently surpassing 700 per month.
...
Skype, the internet phone service, is growing rapidly. In the first half of 2010 users racked up 95 billion minutes in voice and video calls.
Friday, December 31, 2010
On Reading Orders by Telecommunications Regulators
Going by this site's web statistics, the most popular of my posts are those regarding CRTC rulings and orders. I suspect this is because of the relatively scarcity of in-depth discussion (from what I've found) on the web of actions of the Canadian telecommunications regulator. This is in contrast to the FCC in the US where every slightest movement on their part is analyzed -- whether rigourously or superficially -- by hordes of bloggers and more-mainstream media outlets. I wish there were more attention paid to the CRTC.
For the public, or at least those that pay more than the most casual and passive attention to regulator actions, there is a dilemma: to get beyond superficial, and sometimes misleading, reporting it is necessary to go the source and read the orders and rules that they publish. It seems that not many do this, other than the companies directly subject to those orders and rules. These companies -- typically telecommunications carriers and service providers, but sometimes their major suppliers and customers -- not only read what the regulators publish but are deeply involved in the process and have many specialists and contracters that understand the process and the network of people to influence to achieve their business objectives.
One big reason that few among the public get involved or even just read the material is that it is time-consuming. It is somewhat surprising that there is more of this avoidance in Canada since, in comparison to FCC orders, those by the CRTC are not difficult to digest. The reason is that the CRTC has more latitude than the FCC to both set policy and establish regulations. The US telecommunications regulation process is more politicized and by dint of the governing statutes there are many avenues to take the FCC to court to dispute the legality of their regulations; Congress writes telecom laws that go into an unusual level of technical detail regarding what the FCC is required and permitted to do. This is why the FCC is replete with staff lawyers and far more lawyers are employed by the industry.
A good case in point is the recent FCC Report and Order on network neutrality: FCC 10-201. This is a big document weighing in at 194 pages. It is far easier for the public to wait and read the summaries and analyses in the media and on the web. Unfortunately a number of these analyses are less than ideal since the writer may have an agenda, whether to influence the public or to stir up controversy in an effort to gain readers (aka link bait) and without some knowledge it can be difficult to know whom to trust. (Whether I am trustworthy on that score is moot since, because I see little in the Report and Order I want to comment on, I will not be providing any analysis of it.)
Beyond the mere page count, the core content of the FCC document where staff analyzes the issues and assessing the balance between their objectives, the law and the positions of intervening parties, is full of detailed legal references and written in a manner that is meant to withstand the gauntlet of the justice system. On the positive side, the core content of the document is far less than those 194 pages. That is fairly typical of FCC Reports and Orders. Here's my page count of the various parts of the network neutrality document:
In fact the really interesting stuff isn't actually the rules themselves but the main body of discussion regarding how the FCC reached its determinations. While this is still 83 pages, a very rough guess on my part is that close to 40% of that is footnotes. For the casual (!) reader it is fairly safe to skip those, which leaves about 50 pages of text. This is a less-daunting chore since we have managed to exclude almost 3/4 of the document. A deeper reading of the document, unfortunately, will require reading some of those footnotes, but only the ones that provide background and not those that are legalese that are intended to buttress the FCC's legal position. That isn't so bad.
Although it is possible clear the clutter to reduce the quantity of reading one must do, it does help to understand the unwritten rules of the regulatory and political games underlying the proceeding, and a bit of history regarding how these things tend to unfold. That is one advantage I have since, although years ago, I once participated in these types of US regulatory proceedings. Even so, my guess is that a careful and intelligent reader who is not prone to irrationally clinging to preconceived notions will get a lot more out of the network neutrality debate, or any other contentious regulatory issue, by going to the source and reading the material published by the regulator rather than relying on others; these others may have biases or filters of convenience that distort their reporting or analysis.
The downside is the modest time and effort required to read these documents. My experience tells me that the learning curve isn't steep, so after the first one or two it gets much easier -- there is even a sort of primer in the case of the network neutrality order in the form of a 5 page press release. If you care deeply about network neutrality, usage-based billing or one of the many other current issues being considered by US and Canadian telecom regulators, reading the core content of these publications can be time well spent.
For the public, or at least those that pay more than the most casual and passive attention to regulator actions, there is a dilemma: to get beyond superficial, and sometimes misleading, reporting it is necessary to go the source and read the orders and rules that they publish. It seems that not many do this, other than the companies directly subject to those orders and rules. These companies -- typically telecommunications carriers and service providers, but sometimes their major suppliers and customers -- not only read what the regulators publish but are deeply involved in the process and have many specialists and contracters that understand the process and the network of people to influence to achieve their business objectives.
One big reason that few among the public get involved or even just read the material is that it is time-consuming. It is somewhat surprising that there is more of this avoidance in Canada since, in comparison to FCC orders, those by the CRTC are not difficult to digest. The reason is that the CRTC has more latitude than the FCC to both set policy and establish regulations. The US telecommunications regulation process is more politicized and by dint of the governing statutes there are many avenues to take the FCC to court to dispute the legality of their regulations; Congress writes telecom laws that go into an unusual level of technical detail regarding what the FCC is required and permitted to do. This is why the FCC is replete with staff lawyers and far more lawyers are employed by the industry.
A good case in point is the recent FCC Report and Order on network neutrality: FCC 10-201. This is a big document weighing in at 194 pages. It is far easier for the public to wait and read the summaries and analyses in the media and on the web. Unfortunately a number of these analyses are less than ideal since the writer may have an agenda, whether to influence the public or to stir up controversy in an effort to gain readers (aka link bait) and without some knowledge it can be difficult to know whom to trust. (Whether I am trustworthy on that score is moot since, because I see little in the Report and Order I want to comment on, I will not be providing any analysis of it.)
Beyond the mere page count, the core content of the FCC document where staff analyzes the issues and assessing the balance between their objectives, the law and the positions of intervening parties, is full of detailed legal references and written in a manner that is meant to withstand the gauntlet of the justice system. On the positive side, the core content of the document is far less than those 194 pages. That is fairly typical of FCC Reports and Orders. Here's my page count of the various parts of the network neutrality document:
- Table of contents: 1 page
- Discussion and determinations (the core of the document): 83 pages
- Procedural matters: 2 pages
- Rules: 9 pages
- List of commenting parties: 16 pages
- More discussion: 22 pages
- Statements of Commissioners: 60 pages
In fact the really interesting stuff isn't actually the rules themselves but the main body of discussion regarding how the FCC reached its determinations. While this is still 83 pages, a very rough guess on my part is that close to 40% of that is footnotes. For the casual (!) reader it is fairly safe to skip those, which leaves about 50 pages of text. This is a less-daunting chore since we have managed to exclude almost 3/4 of the document. A deeper reading of the document, unfortunately, will require reading some of those footnotes, but only the ones that provide background and not those that are legalese that are intended to buttress the FCC's legal position. That isn't so bad.
Although it is possible clear the clutter to reduce the quantity of reading one must do, it does help to understand the unwritten rules of the regulatory and political games underlying the proceeding, and a bit of history regarding how these things tend to unfold. That is one advantage I have since, although years ago, I once participated in these types of US regulatory proceedings. Even so, my guess is that a careful and intelligent reader who is not prone to irrationally clinging to preconceived notions will get a lot more out of the network neutrality debate, or any other contentious regulatory issue, by going to the source and reading the material published by the regulator rather than relying on others; these others may have biases or filters of convenience that distort their reporting or analysis.
The downside is the modest time and effort required to read these documents. My experience tells me that the learning curve isn't steep, so after the first one or two it gets much easier -- there is even a sort of primer in the case of the network neutrality order in the form of a 5 page press release. If you care deeply about network neutrality, usage-based billing or one of the many other current issues being considered by US and Canadian telecom regulators, reading the core content of these publications can be time well spent.
Wednesday, December 22, 2010
Plausible Deniability in Telemarketing
By now I'm sure that everyone has heard about the fines levied by the CRTC for do-not-call registry violations by Bell Canada, Telus and various firms that they contracted. The only real surprise to me in this matter is that the CRTC took enforcement action of any significant degree.
Although the CRTC claims that these fines -- $1.3M in the case of Bell Canada -- will hurt these firms, it really does not. Not only are these amounts very small relative to their overall business, considering the degree and duration of these violations it is also quite possible they made a net revenue gain after paying the fines. The only company that may have been hurt badly is Xentel, which was fined $500,000 since it is a far smaller company.
The style of enforcement is interesting since it resembles the actions taken in the US by the FCC when they began enforcement of their DNC regulations. First, they targetted large companies, including carriers like AT&T, and also DBS (direct broadcast satellite) providers, and they timed and bundled enforcement actions to maximum media impact. This is an effective tactic to combat public unhappiness with ongoing DNC violations. Going after the biggest companies, especially those that are dominant in their sectors, also works well since there is always an undercurrent of distrust and dislike of these companies that we are often unable to avoiding giving our business. The CRTC might therefore have adopted their own tactics in hopes of achieving the same positive public relations impact.
There is also the simple fact that large companies, if only because of the size of their businesses, are going to show up in the list of top offenders.
It also has a further advantage of giving them plausible deniability when the CRTC comes knocking. This allows them to claim that the contracted companies were renegades that (plausibly) violated the DNC regulations without explicit direction from themselves.
Although the CRTC claims that these fines -- $1.3M in the case of Bell Canada -- will hurt these firms, it really does not. Not only are these amounts very small relative to their overall business, considering the degree and duration of these violations it is also quite possible they made a net revenue gain after paying the fines. The only company that may have been hurt badly is Xentel, which was fined $500,000 since it is a far smaller company.
The style of enforcement is interesting since it resembles the actions taken in the US by the FCC when they began enforcement of their DNC regulations. First, they targetted large companies, including carriers like AT&T, and also DBS (direct broadcast satellite) providers, and they timed and bundled enforcement actions to maximum media impact. This is an effective tactic to combat public unhappiness with ongoing DNC violations. Going after the biggest companies, especially those that are dominant in their sectors, also works well since there is always an undercurrent of distrust and dislike of these companies that we are often unable to avoiding giving our business. The CRTC might therefore have adopted their own tactics in hopes of achieving the same positive public relations impact.
There is also the simple fact that large companies, if only because of the size of their businesses, are going to show up in the list of top offenders.
...the wireless sector had the distinction of taking the top three spots with Rogers and Telus ranking second and third respectively. There were also hundreds of complaints against Canada's top financial institutions and retailers including RBC, CIBC, Scotiabank, TD Canada Trust, and Sears.Regarding the companies themselves, it is not unusual for companies like Bell Canada and Telus to outsource what they would consider non-core functions. It allows them to maintain business flexibility by contracting services as needed without building up an in-house telemarketing operation -- including the bad optics of then laying them off.
It also has a further advantage of giving them plausible deniability when the CRTC comes knocking. This allows them to claim that the contracted companies were renegades that (plausibly) violated the DNC regulations without explicit direction from themselves.
On Monday, Bell said it had terminated contracts with two telemarketing companies and suspended “several others” as a result of the investigation. Like Telus, Bell pledged to stiffen guidelines for telemarketing practices.The deniability is plausible, but I simply do not believe that they did not know of or contribute to the violations by the contracted companies. I am not implying that they gave their contractors explicit directions to ignore the DNC registry, only that I can easily imagine there was a bit of "nudge, nudge, wink, wink" going on in parallel with the more formal instructions. Consider these points:
- The duration of the violations.
- The reputation of some of these firms is not always the best. They are often known to be aggressive in their methods for their other customers, such as charities. They would also have known which numbers were most likely to get a positive response from their historical database, although I of course don't know if they used that data in their contracts with the telcos. I can only suspect the possibility.
- Many of the numbers from which the telemarketers won business for the telcos must have been on the DNC list, and telcos should have known it. I'll bet they were careful not to cross-check the two lists.
- Worse, many of those numbers must have also been on the companies' own opt-out lists of people that explicitly requested that they not be contacted. The CRTC mentioned this point, though not quite in the same context.
Tuesday, December 21, 2010
Lunar Eclipse and Overwrought Coincidences
Lunar eclipses are delightful to watch. I've witnessed the more awesome spectacle of a solar eclipse, but lunar eclipses win in the long run because they're more frequent, are visible to half the planet, last a long time and are pretty and safe for viewing.
This one is being aggressively promoted in the media as special because it coincides almost exactly with the solstice. Since the advance of the lunar nodes (the azimuth of where the Moon crosses the ecliptic) is not in resonance with Earth's orbit around the sun, this particular coincidence is no more or less probable, or interesting, than an eclipse falling on any chosen calendar date. All this coincidence really tells us is that we can finally look forward to increasing hours of daylight and solar insolation (although the weather doesn't start warming up until February).
One coincidence that isn't a coincidence is that this eclipse occurs at a full moon. This "insight" comes from an interview with some new-agey sort of person that I heard on the radio. Well, duh! I suppose we can also add the, um, coincidence that we see the eclipse occuring at night. These facts are about as coincidental as a flipped coin that lands head's-up showing an impression of Her Royal Highness. It is also why this eclipse will not be visible from anywhere in Antarctica -- the explanation of which I'll leave as an easily-solved puzzle for the geometrically inclined.
Apart from the obvious things about lunar eclipses, there are a couple of items that are less widely considered. The first is that when we see a lunar eclipse, if someone is on the moon (anywhere on the hemisphere facing Earth) they will be simultaneously viewing a solar eclipse.
However, there are no "terran" eclipses when the Earth is full (Moon between the Earth and sun) since the Moon's shadow never covers more than a small area on Earth's surface. That occurs when we on Earth see a solar eclipse.
The second interesting thing about lunar eclipses I want to mention refers back to an earlier post of mine that talked about why the full moon always passes high overhead during the winter months at higher latitudes, like here in Ottawa (also at high southern altitudes such as southern Chile); however that, too, is no coincidence. What this means is that the best lunar eclipses are those that occur around the winter solstice, just like the one this week, because the Moon will pass high overhead for optimal viewing.
Unfortunately this is also what I have always hated about lunar eclipses, because the best ones occur when you have to endure cold winter nights if you want to watch them properly. They're never quite so nice when seen through a window, which in any case will be difficult since in many houses the Moon will be so high as to be blocked by the eaves of the roof. In other words, to stay warm while watching this eclipse you'll probably have to deal with window-glass distortion and an uncomfortable viewing angle.
Despite having said all this, my plan (I am actually writing this the night before) is to stay warm and in bed and pass on the joy and the cold. Anticipation for this event by people here in Ottawa may be for naught in any case since it now looks as if clouds are going to spoil the event. Well, there's always the internet so I'm sure there will be lots of photos making the rounds on astronomy blogs Tuesday morning.
This one is being aggressively promoted in the media as special because it coincides almost exactly with the solstice. Since the advance of the lunar nodes (the azimuth of where the Moon crosses the ecliptic) is not in resonance with Earth's orbit around the sun, this particular coincidence is no more or less probable, or interesting, than an eclipse falling on any chosen calendar date. All this coincidence really tells us is that we can finally look forward to increasing hours of daylight and solar insolation (although the weather doesn't start warming up until February).
One coincidence that isn't a coincidence is that this eclipse occurs at a full moon. This "insight" comes from an interview with some new-agey sort of person that I heard on the radio. Well, duh! I suppose we can also add the, um, coincidence that we see the eclipse occuring at night. These facts are about as coincidental as a flipped coin that lands head's-up showing an impression of Her Royal Highness. It is also why this eclipse will not be visible from anywhere in Antarctica -- the explanation of which I'll leave as an easily-solved puzzle for the geometrically inclined.
Apart from the obvious things about lunar eclipses, there are a couple of items that are less widely considered. The first is that when we see a lunar eclipse, if someone is on the moon (anywhere on the hemisphere facing Earth) they will be simultaneously viewing a solar eclipse.
...the view from the moon during the eclipse, with the Earth in front of the sun, would be a spectacular red ring in the black sky.It should be no surprise that the colour of the scattered sunlight from the Earth's atmosphere (from its visible circumference) is brownish-red (or copper) since that is the tint the moon takes on during the lunar eclipse. In similar fashion, the frequency of solar eclipses for Moon dwellers is the same as lunar eclipses for Earth dwellers. From the Moon, the apparent diameter of the Earth is quite a bit larger than the Moon appears from Earth and so is more likely to cover the sun.
However, there are no "terran" eclipses when the Earth is full (Moon between the Earth and sun) since the Moon's shadow never covers more than a small area on Earth's surface. That occurs when we on Earth see a solar eclipse.
The second interesting thing about lunar eclipses I want to mention refers back to an earlier post of mine that talked about why the full moon always passes high overhead during the winter months at higher latitudes, like here in Ottawa (also at high southern altitudes such as southern Chile); however that, too, is no coincidence. What this means is that the best lunar eclipses are those that occur around the winter solstice, just like the one this week, because the Moon will pass high overhead for optimal viewing.
Unfortunately this is also what I have always hated about lunar eclipses, because the best ones occur when you have to endure cold winter nights if you want to watch them properly. They're never quite so nice when seen through a window, which in any case will be difficult since in many houses the Moon will be so high as to be blocked by the eaves of the roof. In other words, to stay warm while watching this eclipse you'll probably have to deal with window-glass distortion and an uncomfortable viewing angle.
Despite having said all this, my plan (I am actually writing this the night before) is to stay warm and in bed and pass on the joy and the cold. Anticipation for this event by people here in Ottawa may be for naught in any case since it now looks as if clouds are going to spoil the event. Well, there's always the internet so I'm sure there will be lots of photos making the rounds on astronomy blogs Tuesday morning.
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