Telecom Update #475, April 1, 2005

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TELECOM UPDATE

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published weekly by Angus TeleManagement Group

Number 475: April 1, 2005

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IN THIS ISSUE:

** Bell Begins IP Telephony Rollout

** Telus Says Shaw Breaks Local Phone Rules

** Telecom Review Members Selected?

** Nortel Hires New Technology Officer

** Entourage Technicians on Strike

** Satellite Carrier Distributes OneConnect VoIP

** Call-Net Wants Database Charges Slashed

** Yak Joins Peering Alliance

** Telus Wants Winback Ban Lifted

** CRTC Toughens Rules for Telco Service to Competitors

** Qwest Still Trying to Buy MCI

** Financial Results

Cygnal Technologies

SR Telecom

WaveRider

** Report -- Cablecos to Get 11% of Home Phones

** CRTC Sets New Rules for 900 and 976

** New IXPL Routes Deregulated

** One-Day Conference to Examine WiMAX

** CIRA to Hold Annual Meeting

BELL BEGINS IP TELEPHONY ROLLOUT: Following several months of technical trials, Bell Canada's broadband IP telephone service, Digital Voice, is now available to consumers in Quebec City, Trois-Rivieres, and Sherbrooke. Pricing depends on which unlimited long distance plan the customer selects: $38 for province-wide, $40 for Canada-wide, and $45 for Canada-U.S. There is no contract or activation fee, and the first month is free.

** The CRTC is expected to rule this spring on whether=20 incumbent telcos must file tariffs for this type of=20 service.

TELUS SAYS SHAW BREAKS LOCAL PHONE RULES: Telus says Shaw is not complying with its obligations as a local phone service carrier, as set out in Decision 97-8. The telco wants the CRTC to order Shaw to stop offering local phone service until it can show it has met all requirements.

** Telus says Shaw deliberately launched local phone service in Calgary before it could provide equal access to all long distance carriers and comply with industry arrangements for transferring customers.

TELECOM REVIEW MEMBERS SELECTED? Today's Toronto Star reports industry speculation that the members of the panel to review Canadian telecom policy will be: Gerri Sinclair, former head of Microsoft's MSN.ca; Hank Intven, former Executive Director telecom at the CRTC, now a partner at McCarthy Tetrault; and Andre Tremblay, former CEO of Microcell Telecommunications. (see Telecom Update #470)

NORTEL HIRES NEW TECHNOLOGY OFFICER: Gary Kunis, who was Cisco's Chief Science Officer until 2002, has been named Chief Technology Officer of Nortel Networks. Nortel's current CTO, Brian McFadden, has been appointed Chief Research Officer. Both appointments are effective Monday, April 4.

** Nortel will hold a combined 2004/2005 annual shareholders meeting in Toronto June 29.

ENTOURAGE TECHNICIANS ON STRIKE: 1,400 technicians employed by Entourage Technology Solutions, the company that does residential repair and installation for Bell Canada, went on strike March 24. An Ontario provincial mediator has invited Bell and the Communications Energy and Paperworkers Union to return to negotiations on April 4.

** Bell Canada recently announced plans to buy the 57% of Entourage it doesn't own, and operate it as a wholly owned subsidiary. (See Telecom Update #470)

SATELLITE CARRIER DISTRIBUTES ONECONNECT VoIP: RamTelecom, an Ottawa-based satellite services provider, has begun offering OneConnect's hosted IP telephony service across Canada, using its LinkStar platform.

CALL-NET WANTS DATABASE CHARGES SLASHED: Call-Net says Bell Canada charges competitors exorbitant fees to update its database when customers request blocking of collect or bill-to-third-party calls. The current fee was set in 2000: Call-Net argues costs have plummeted since then, and only a 15% margin should be charged.

** Furthermore, Bell automatically charges this fee when numbers are ported to Call-Net, even though no additional database change is necessary. This accounts for 2/3 of the fees Bell has charged Call-Net for the service, amounting to "millions of dollars ... over the past six years."

YAK JOINS PEERING ALLIANCE: Yak Communications, a VoIP provider in Canada, is among the six initial members of XConnect, a new international VoIP peering alliance that offers IP-based interconnection and VoIP phone number lookup services.

TELUS WANTS WINBACK BAN LIFTED: Telus has asked the CRTC to eliminate, in Calgary and anywhere else Shaw offers phone service, the current rules preventing ILECs from attempting to win back local customers for 12 months after they choose a competitor's service.

** In Telus' view, "cable entry changes everything" and the reasons for the current rules no longer apply.

CRTC TOUGHENS RULES FOR TELCO SERVICE TO COMPETITORS: CRTC Decision

2005-20 sets 14 Quality of Service indicators that the major incumbent telcos must meet for services they provide to competitors, such as clearing service repair calls. If any indicator is missed, the ILEC must pay a rebate, up to a maximum of 5% of the competitor's payments for the period if all indicators are missed.

** The Commission says that the indicators are a minimum acceptable level of service, and that smaller penalties have proven to be insufficient to motivate the ILECs to meet required standards.

QWEST STILL TRYING TO BUY MCI: The Verizon-MCI-Qwest saga continues. Despite repeated decisions by MCI's Board to accept a buyout offer from Verizon, Qwest is still pitching, and MCI agreed to meet with it again after the Denver-based telco has raised its offer to US$8.9 billion, $1.4 billion more than Verizon's.

FINANCIAL RESULTS: The following results are for 2004:

** Cygnal Technologies reports revenues of $140 million, down 5% from 2003. EBITDA was nil, and the net loss of $0.8 million was slightly less than in 2003.

** SR Telecom had revenues of $124 million, down 3% from 2003, but fourth-quarter sales were down 40% from a year earlier. The net loss for 2004 doubled to $86 million. The company says it is experiencing "uncertainty associated with...refinancing issues."

** WaveRider Communications had revenues of $9.5 million, down 27% from 2003. The net loss of $6.3 million was up 24%.

REPORT -- CABLECOS TO GET 11% OF HOME PHONES: The latest Convergence Consulting Group report on "The Battle for the North American Couch Potato" predicts that Canadian cable TV companies will capture 11% of the residential telephone market by the end of 2007.

CRTC SETS NEW RULES FOR 900 AND 976: CRTC Telecom Decision 2005-19 establishes new consumer safeguards for 1-900 and 1-976 services. Content providers must disclose all charges at the beginning of the call, and cannot link toll-free calls to billable 900 services. Telcos must offer 900 call-blocking with no initial set-up charge, and must waive all reasonably disputed charges for first-time disputes.

NEW IXPL ROUTES DEREGULATED: The CRTC has added several new interexchange private line routes to those on which the incumbent telcos no longer need to file tariffs, because competitors also serve those routes.

ONE-DAY CONFERENCE TO EXAMINE WiMAX: The Canadian Wireless Telecommunications Association's will hold a one-day conference on WiMAX technology in Toronto on April 13. Conference program details are available at:

CIRA TO HOLD ANNUAL MEETING: The Canadian Internet Registration Authority will hold its 2005 annual general meeting in Toronto and online on April 28, 2005, noon to 3pm. To pre-register, visit

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