Telecom Update #559, December 15, 2006

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published weekly by Angus TeleManagement Group

Number 559: December 15, 2006

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IN THIS ISSUE:

** Our Next Issue ** Ottawa to Overturn CRTC on Local Deregulation ** Cableos Split on Bernier Action ** BCE Drops Plan for Trust ** MTS Decides Against Shakeup ** CRTC Expands Ottawa Free-Calling Area ** Persona to Provide IP Telephony ** Primus Expands Wireless Coverage ** MTS Cellphones Offer Radio, TV ** Parkes to Head Selectcore Board ** Unlimited LD for $17.50 a Year ** Ottawa Offers Cellphone Buying Guide ** Wireless Innovation Contest Open Now ** ITU to Showcase 'Fully Networked Car' ** Com Dev Sales, Profits Rise ** Correction

OUR NEXT ISSUE: For the convenience of readers leaving early for a holiday break, next week's Telecom Update will be published on Thursday, December 21.

OTTAWA TO OVERTURN CRTC ON LOCAL DEREGULATION: In a sweeping rejection of the CRTC's approach to deregulating local phone service, the federal government plans to rewrite key sections of CRTC Telecom Decision

2006-15 (see Telecom Update #524). Changes proposed by Industry Minister Maxime Bernier include:

** The geographic market for deregulation will be either a local interconnection region (roughly, a local calling area) or a local exchange -- not the larger Local Forbearance Regions defined by the CRTC.

** Instead of requiring a 25% market share loss, business service deregulation can take place if there are two independent, facilities-based wireline providers. Residential deregulation will require three providers, but the additional one can be wireless.

** The telcos will still have to show that they are meeting QoS standards on services they provide to competitors, but on a smaller number of standards and showing only "average" compliance, not a six-month consistent record.

** Restrictions on the telcos' local promotions and winbacks will be removed as soon as the new rules take effect.

** Telcos will be invited to file forbearance applications for Vancouver, Calgary, Edmonton, Winnipeg, Hamilton, London, Toronto, Ottawa-Gatineau, Montreal, and Quebec City. In each case the CRTC will have 120 days to issue a decision.

The government's proposal will be published in the Canada Gazette on December 16, with a 30-day public comment period.

CABLEOS SPLIT ON BERNIER ACTION: Not surprisingly, the incumbent telcos were very pleased by the Industry Minister's announcement -- but the cable industry was divided.

** Shaw Communications said that it "supported the Minister's decision" and urged the government to make similar changes to cable and satellite regulation. Quebecor, owner of Videotron, issued a similar statement.

** In contrast, Cogeco Cable said Bernier's announcement is "contrary to sound public interest policy and practice for deregulating the telecommunications sector, and it ignores the relevant recommendations of the Telecommunications Policy Review Panel issued earlier this year."

BCE DROPS PLAN FOR TRUST: At its December 12 business conference, BCE confirmed that it will not become an income trust but will eliminate its holding company structure. BCE, to be renamed Bell Canada, will have two operating companies: Bell Inc. (the former Bell Canada) and Bell Aliant Regional Communications. (See Telecom Update #550, 557)

** Bell Globemedia, now 15% owned by BCE, is changing its name to CTVglobemedia, effective January 1.

MTS DECIDES AGAINST SHAKEUP: After an 11-month-long "comprehensive review" of its business, MTS Allstream has decided against selling off assets or other major changes. The telco plans to cut costs by another $40 million to $50 million in 2007 while focusing on "growth services." (See Telecom Update #515)

CRTC EXPANDS OTTAWA FREE-CALLING AREA: CRTC Telecom Order 2006-340 gives interim approval to Bell Canada's application to eliminate long-distance charges within the City of Ottawa, and between Ottawa and surrounding communities including Arnprior, Kemptville, Merrickville, and Smiths Falls. The change, to be effective June 18, will be financed by three-year bill surcharges of 50 cents (residential lines) and 39 cents (business lines).

** The City of Ottawa has been lobbying for this change for more than five years. (see Telecom Update #287)

PERSONA TO PROVIDE IP TELEPHONY: Persona Communications, which has about 200,000 cable subscribers, plans to offer Digital Phone service in a number of Canadian cities in 2007. The underlying provider will be MTS Allstream.

PRIMUS EXPANDS WIRELESS COVERAGE: Primus Canada now offers wireless service using Rogers' GSM/GPRS network, which covers 93% of Canadian residents. Until November 18, Primus cellphones used the more limited Fido network.

MTS CELLPHONES OFFER RADIO, TV: MTS Mobility subscribers can now access TV clips and 24-hour commercial-free radio. Streaming Radio and Streaming TV cost $7/month each plus usage charges.

PARKES TO HEAD SELECTCORE BOARD: David Parkes, former President and CEO of Sprint Canada, has been named Chairman of Selectcore, a Tecumseh, Ontario-based company that offers prepaid telecom services to "the ever-growing credit-challenged/sub-prime consumer market."

UNLIMITED LD FOR $17.50 A YEAR: Skype's Unlimited Calling Plan, announced this week, offers unlimited VoIP-based long distance calls to any phone within Canada and the U.S. for C$35/year. Customers who sign up by January 31, 2007, will pay half-price ($17.50/year) and receive 100 minutes of free worldwide calls.

OTTAWA OFFERS CELLPHONE BUYING GUIDE: "Get a Grip on Your Cellphone Costs," a 28-page pamphlet published by Industry Canada's Office of Consumer Affairs, is available online at

It can be downloaded in PDF format at .

WIRELESS INNOVATION CONTEST OPEN NOW: The Wireless Innovation Network of B.C. is now accepting entries for its fourth annual Wireless Innovation Contest. The entry deadline is January 29; winners will be announced at CTIA Wireless Orlando, March 27-29. See

for details.

ITU TO SHOWCASE 'FULLY NETWORKED CAR': The International Telecommunications Union will hold a workshop and showcase exhibit on "The Fully Networked Car: Information and Communication Technologies in Motor Vehicles," at the Geneva Motor Show in Switzerland, March 2-12,

2007.

COM DEV SALES, PROFITS RISE: Com Dev International, which makes satellite components, had revenue of $154 million for the year ended October 31, 24% more than the previous year. Net income was $21.2 million, compared to $5.2 million the previous year.

CORRECTION: Contrary to Telecom Update #558, the founder and Chairman Emeritus of Cogeco is Henri Audet, not Louis, his son and Cogeco's CEO. We apologize for the error.

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