Industry Canada approved Bell Canada Enterprises’ buyout by the Ontario Teachers Pension Plan consortium, with conditions, Bell Canada said Wednesday. Bell Canada now has all needed regulatory sign-offs, but bondholders’ appeal of the Quebec Superior Court’s approval is still pending. After the appeal, to be heard April 28, financing will be the deal’s last hurdle. BCE still expects the deal to be completed in the second quarter. Industry Canada Minister Jim Prentice said conditions keep Canadians in control of BCE. “The conditions aren’t onerous,” said SeaBoard Group analyst Iain Grant. BCE and Industry Canada agreed Canadians must be in the majority on the board, executive committee and compensation committee. Those Canadians must be “independent” from non-Canadian shareholders, Industry said. At all shareholders’ meetings, Canadians must represent the majority of voting shares. Also, Industry Canada said the veto threshold for major decisions must be raised to C$150 million ($153 million). The Canadian Radio-TV and Telecommunications Commission forced similar conditions when it approved the buyout last month (CD March 31 p5).
Adam Bender
Adam Bender, Senior Editor, is the state and local telecommunications reporter for Communications Daily, where he also has covered Congress and the Federal Communications Commission. He has won awards for his Warren Communications News reporting from the Society of Professional Journalists, Specialized Information Publishers Association and the Society for Advancing Business Editing and Writing. Bender studied print journalism at American University and is the author of dystopian science-fiction novels. You can follow Bender at WatchAdam.blog and @WatchAdam on Twitter.
FCC approval of an AT&T forbearance request due April 24 may hinge on commissioners’ reading of a condition in an August order letting Bells combine local and long distance divisions (CD Sept 4 p1), agency sources said. FCC Chairman Kevin Martin has circulated two alternate orders, one approving and one denying, we're told. The orders combine related petitions by AT&T and BellSouth seeking relief from accounting rules (CD Jan 9 p9).
U.S. telecom companies face barriers competing in China, Germany, Australia, El Salvador, Guatemala, Jamaica, Mexico, Oman and Singapore, U.S. Trade Representative Susan Schwab said Tuesday, announcing results of a 2008 annual review of telecom trade agreements. In China, U.S. companies face impediments accessing the telecom market due to high capitalization requirements and limits on joint venture partnerships, the report said. U.S. companies face difficulty accessing the Telstra network in Australia, elements of Deutsche Telekom’s network in Germany, and leased lines in Singapore, it said. There are problems interconnecting with CTE in El Salvador and Telgua in Guatemala, and delays licensing basic telecom service in Oman, said the report. It also raised concerns about Jamaica’s universal service program and Mexico telecom equipment testing requirements. Non-country-specific concerns include regulatory frameworks that hinder telecom competition, elevated mobile termination rates, continued barriers to VoIP use and conformity assessment requirements related to telecom and information technology equipment. The USTR said it’s seen some progress on concerns from previous reviews. For example, Columbia “drastically reduced its high licensing fee for long distance service,” while India killed its Access Deficit Charge, a fee that increased costs to U.S. carriers sending telecom traffic to India, it said. German competitive carrier association VATM is “glad” the USTR picked up the Deutsche Telekom issue, said Axel Spies, the Washington, D.C., representative for VATM. But USTR should also look into “vexing” issues concerning DT’s use of bundled offers and long-term contracts, and a German policy known as “regulatory holidays,” which exempt incumbents from regulation if they invest in infrastructure such as glass fiber networks, he said. A case on regulatory holidays is ongoing in the European Court of Justice, he said.
No opposition has been detected to a Qwest forbearance petition seeking relief from incumbent local exchange carrier regulation in Terry, Mont., FCC and industry sources told us. The “facts are compelling,” an FCC source said. The commission circulated a draft order last week after getting no comments opposing forbearance. It must rule by April 21. Competitive telcos, which historically oppose Bell forbearance requests, haven’t fought the Terry, Mont., petition. That’s because it’s a “purple cow,” an exceptional circumstance that won’t set precedent for forbearance petitions that have riled competitors, a competitive local exchange carrier source told us. The commission previously declared Qwest rival Mid-Rivers Telecom an incumbent LEC in the Terry exchange after finding it had replaced Qwest as the area’s dominant carrier.
The FCC has circulated a draft order denying Cablevision LightPath forbearance from Title II and Computer Inquiry rules for broadband services, an FCC source told us. It was unclear what relief Cablevision sought, or even what relief it needed, and the petition didn’t make an adequate showing for Section 10 forbearance action, the source said. FCC commissioners must vote on the order before April 15, or the Cablevision petition will be deemed granted.
Municipal broadband goals can be accomplished despite setbacks, but probably not via Wi-Fi, panelists said Thursday at the National Association of Telecommunications Officers and Advisors conference. Muni Wi-Fi networks largely were “launched on hype,” said lawyer James Baller. WiMAX and other next-gen wireless technologies could make muni viable, other panelists said. On a larger scale, to compete globally the U.S. needs a national broadband strategy, Baller said.
It’s a “safe bet” competitive telcos loathe Verizon’s latest forbearance request for Virginia Beach (CD April 1 p8), a CLEC lawyer told us. Monday, Verizon filed a petition seeking relief from loop and transport unbundling requirements in parts of Virginia Beach where Cox is the incumbent cable operator. The request is “exactly the same type of petition” as a pending Verizon forbearance petition for the Rhode Island market, the lawyer said. Both amount to a “regurgitation” of a Verizon petition the FCC denied in December (CD Dec 5 p1), the attorney said. In that petition, Verizon sought relief in Virginia Beach, Providence and four other East Coast markets. An FCC public notice on Virginia Beach forbearance setting a 30-day deadline for comments is expected soon, the lawyer said. But CLECs are expected to mention Virginia Beach when they comment April 7 on a CLEC motion to dismiss Verizon’s Rhode Island request.
Regulators should “embrace” and “empower” the end users of phone systems, not AT&T and other incumbents using old public switched telephone network technologies, said Feature Group IP CEO Lowell Feldman at a Federal Communications Bar Association lunch Wednesday. Feature Group, which runs a backbone Internet Protocol network in Texas for VoIP companies like Skype, has a forbearance petition before the FCC seeking a ruling that IP providers need not pay access charges to interconnect with PSTN carriers (CD March 17 p7). Regulators who want to be pro-competitive should “let technologies take their natural cycles,” Feldman said, comparing traditional switched phone networks to Polaroid cameras. Polaroid was a “fantastic technology” that people have a “romantic fascination” with, but Polaroid is dead because a better technology has made it obsolete, he said. Holding back innovation is “not American” and hurts the economy, he said. “I'm not talking Democrat or Republican. It’s just wrong.” Incumbent PSTN technology still dictates how the phone system is regulated, Feldman said. Incumbents force all phone companies, regardless of technology, to use phone numbers and be part of the same billing scheme, he said. “If you don’t, you're doing something literally fraudulent,” he said. AT&T and other incumbents can’t trace calls from the Feature Group network back to a human, which is why a cellphone will identify a Skype call as an “unavailable” number, he said. But though the call is from a real person, AT&T fines Feature Group for fraud, said Feldman. AT&T has rebuked Feature Group’s attempts to set up an interconnection agreement that would fix the problem, and Texas courts and regulators have pointed Feature Group to the FCC’s door, he said.
Policymakers should promote broadband deployment to help reduce global carbon emissions, industry officials said on a Freedom to Connect conference panel Tuesday. Broadband at very fast speeds reduces business travel and promotes e- commerce, they said. “We are not going to reach the kind of efficiencies I believe we can reach without high-speed broadband networks that are hooked up to our homes and communities,” said Kathy Brown, a Verizon senior vice president.
Network congestion is “a worry” in Japan, said Adam Peake in a panel at the F2C conference. Peake is an executive research fellow at the Center for Global Communications of the International University of Japan. Some U.S. net neutrality advocates argue that building network capacity would relieve ISP congestion woes. Japan has the world’s fastest, least expensive broadband, Peake said. But those benefits encourage users to “pump out a lot of traffic,” he said. About two-thirds of ISP backbone traffic is residential, he noted. Japan has implemented net neutrality principles similar to proposed FCC rules, but ISPs increasingly use packet-shaping to target P2P and manage traffic, he said.