Telecom Update #542, August 18, 2006

************************************************************ TELECOM UPDATE ************************************************************

published weekly by Angus TeleManagement Group

Number 542: August 18, 2006

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IN THIS ISSUE:

** Internet Use Up but Digital Divides Remain ** Nortel Class Action Settlements Proposed ** MTS Objects to Cabinet's Proposed CRTC Order ** Telus Gives Wireless Service Level Guarantee ** MTS Sells Its Directory Business ** Shaw to Buy Whistler Cable ** Rogers May Appeal 'Comma' Ruling ** Rogers Expands Cablephone Coverage ** Mitec Names New CEO ** Videotron Expands the Broadband Wars ** Boeing Gives Up on Airborne Broadband ** Judge Orders Halt to Bush Wiretaps ** IIC Canada Meeting Set for December

INTERNET USE UP BUT DIGITAL DIVIDES REMAIN: Statistics Canada's latest Internet Use Survey concludes that 18.8 million adult Canadians accessed the Internet for personal non-business purposes in 2005, and that two-thirds of home users logged on every day. The study also found significant disparities in Internet usage between specific population groups.

** Urban: 68%. Rural: 58%. ** Household income over $86,000: 88%. Under $86,000: 61%. ** Some secondary education: 88%. High school or less: 49%. ** Adult use in households with children: 81%. Without children: 61%. ** Age 18 to 44: 85%. Age 45 or older: 50%.

NORTEL CLASS ACTION SETTLEMENTS PROPOSED: Plaintiffs in U.S. and Canadian class actions, alleging that Nortel misled investors about earnings, have agreed to a settlement totaling US$808 million in cash, and other benefits. The settlement still requires court and regulatory approvals. Details (including claim forms and deadlines) are available at

** The proposal affects investors who bought Nortel shares or options during two periods: October 24, 2000, through February 15, 2001, and April 24, 2003, through April 27, 2004.

MTS OBJECTS TO CABINET'S PROPOSED CRTC ORDER: MTS Allstream, commenting on Cabinet's proposed policy direction to the CRTC (see Telecom Update #534) says it "agrees wholeheartedly" with the goals expressed, but objects that the section on wholesale services will be anticompetitive if implemented as drafted.

TELUS GIVES WIRELESS SERVICE LEVEL GUARANTEE: Telus Mobility says it will provide credits on customer accounts if it fails to provide a dropped-call ratio lower than 1% or "fast" response to customer service calls.

MTS SELLS ITS DIRECTORY BUSINESS: Manitoba Telecom has agreed to sell its directories business to Yellow Pages Group for $281 million.

SHAW TO BUY WHISTLER CABLE: Shaw Communications has agreed to buy Whistler Cable, which provides TV and Internet access services to the B.C. resort town, for an undisclosed sum. (See Telecom Update #541)

ROGERS MAY APPEAL 'COMMA' RULING: The Globe and Mail reports that Rogers Communications is "strongly considering" appealing a CRTC ruling that, based on the placement of a single comma in an Aliant-Rogers contract, allowed Aliant to end the agreement early. The ruling results in Rogers paying significantly higher rates for access to N.B. Power poles.

ROGERS EXPANDS CABLEPHONE COVERAGE: Rogers Cable says it is extending residential cablephone service to several small cities in Ontario, including Belleville, Chatham, Milton, Trenton, and Welland.

MITEC NAMES NEW CEO: Mitec Telecom has named former Ericsson VP Daniel Piergentili as President and CEO, replacing Keith Findlay. Findlay had held the post since October 2005, when Mitec undertook a review of "strategic alternatives." (See Telecom Update #502)

VIDEOTRON EXPANDS THE BROADBAND WARS: On September 7, Videotron will start upgrading its High-Speed Internet Service from 5.1 Mbps to 7 Mbps. (See Telecom Update #541)

BOEING GIVES UP ON AIRBORNE BROADBAND: The Boeing Company is abandoning its six-year effort to convince airlines to install a system that provides satellite-based Internet access to passengers during flights. The company will close down Connexion by Boeing this year and take a US$320 million charge.

JUDGE ORDERS HALT TO BUSH WIRETAPS: A U.S. court has ruled that the warrantless wiretaps run by the U.S. National Security Agency are unconstitutional, and ordered them halted immediately. Implementation of the injunction has been stayed pending an appeal by the Justice department.

** This ruling may affect a related lawsuit against telephone companies for cooperating with the NSA. (see Telecom Update #540, 541)

IIC CANADA MEETING SET FOR DECEMBER: The Canadian Chapter of the International Institute of Communications will hold its annual conference in Ottawa, December 4-5, under the theme "Communications in

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