CRTC Decision on UBB?

[rageking]

http://finance.yahoo.com/news/BCE-re...44251.html?x=0



So to recap: despite last year's price increases and implementation of UBB for Bell customers, Bell's "wireline" business continues to lose ground despite an aggressive program of hacking and slashing expenses.

Expect Bell to ask the CRTC for additional rate increases clearly the rates are not set high enough to offset the shift away from so-called "legacy revenues" (ie: LD, and even local phone lines), despite herculean efforts to introduce new services such as "Fibe" TV.

Low profitability in this segment certainly doesn't support a lot of additional investment either, especially in FTTH loops. Customers of firms like Teksavvy may have won the battle before the CRTC, but they may very well have set back the implementation of FTTH significantly as Bell's resources and business case for new investment is diminished.

On many levels what you said makes no sense. The internet is not going to go away - Bell is experiencing the same thing as other telecom companies around the world. To expect that suddenly people will sign up in droves for a landline would be a heroin-fueled dream. Even if the internet were to go away, people still arent going to sign up for landlines because they are going to stick with cellphones, which is experiencing growth with significant margins for Bell.

You claim because internet-related services arent very profitable and that bell will be forced to ask for a hike in rates. I will agree they will ask for hike even if they were doing well.

To claim that bell has no incentive to invest in internet-related infrastructure is naive as hell. I hope you didnt talk this way in front of big clients because that would make you look really stupid. To say it your way is to imply there is no future in internet-related businesses and that's flatly false. So the business model of milking landlines is dead - bell's dealing with it. Why assume that bell is going to shoot their own foot by killing off their internet-related infrastructure for their other lines of business? If they were to do what you implied, then they would have less business.

[daverobev]

News from the UK:

Ofcom, the telecoms regulator there, plans to get British Telecom (Bell equivalent) to reduce the price it charges internet wholesalers to provide connection into a customer's house. From what I understand this is the same as the dry loop fee here.

They want to change it from currently 15 pounds ($25) to about 12 pounds ($19).

PER YEAR.

PER.

YEAR.

Just got DSL from NCF in Ottawa - dry loop is $9.

PER MONTH.

PER.

MONTH.

Internet in Canada is astonishingly expensive. Sh**bag protectionist monopoly-protecting anticompetitive rubbish.

[i6s1]

News from the UK:

Ofcom, the telecoms regulator there, plans to get British Telecom (Bell equivalent) to reduce the price it charges internet wholesalers to provide connection into a customer's house. From what I understand this is the same as the dry loop fee here.

They want to change it from currently 15 pounds ($25) to about 12 pounds ($19).

PER YEAR.

PER.

YEAR.

Just got DSL from NCF in Ottawa - dry loop is $9.

PER MONTH.

PER.

MONTH.

Internet in Canada is astonishingly expensive. Sh**bag protectionist monopoly-protecting anticompetitive rubbish.

What's your source on this?

Correct me if I'm wrong, but a Wholesale Line Rental (WLR) is £103.68 at the moment.

http://media.ofcom.org.uk/analysts/regulated-prices/

[daverobev]

What's your source on this?

Correct me if I'm wrong, but a Wholesale Line Rental (WLR) is £103.68 at the moment.

http://media.ofcom.org.uk/analysts/regulated-prices/

http://www.bbc.co.uk/news/technology-16905703

Perhaps I misunderstand what is being talked about here...

*Edit* WLR is with the phone line, I think, not just "dry". Could be misunderstanding.

[Mr. Robo]

I thought Bell wasn't allow to throttle anymore.

[johnnydoe1894]

I thought Bell wasn't allow to throttle anymore.

Au contraire, Bell grabs everyone by the throat and throttles you until all the change in your wallet, and bank account, falls out. There will never be enough money coming out of your pocket to satisfy Bell. Never. A nasty nasty company that should have been broken up years ago.

[zod]

And there's your problem in thinking -- they are not seperable issues. Bell/Rogers/Telus'/Shaw's networks are always in a constant state of being upgraded, often to meet demand that has been placed upon them by Teksavvy. In many cases, Bell has been forced to spend millions on upgrades, throttling, and open access facilities, to serve firms such as Teksavvy and their highly prolific Internet users.

Except out west there really isn't a need for a teksavvy service because Telus doesn't throttle and they don't enforce caps. So Telus is profitible but has put way more into network upgrades then bell.

I think bell is slow to rollout upgrades in an effort to maximize profits. They easily make enough money, that they could make a killer network and still turn a big profit. When you compare bell (even rogers) agaist their counterparts in western Canada and everything they say just doesn't add up.

[i6s1]

http://www.bbc.co.uk/news/technology-16905703

Perhaps I misunderstand what is being talked about here...

*Edit* WLR is with the phone line, I think, not just "dry". Could be misunderstanding.

Yes, you're misunderstanding. If a wholesaler wants to use only the copper (dry loop) to deliver a service to a customer without other services from the ILEC, the wholesaler will pay with WLR. This is considerably more in the UK than in Canada, despite the UK having slightly shorter average loop lengths. (Average loop length is the most important factor in determining loop rental costs.)

If a customer already has a phone line with the ILEC then they're essentially already paying for the use of the copper in the price of the phone line. So in Canada, a customer is then free to add DSL service with a wholesaler without paying a second time for the rental of the copper. In the UK, if the customer already has a BT phone line, then the wholesaler doesn't have to pay the WLR, he has to pay the far-lower SMPF Rental, £14.70. 2 competitors running 2 services over the same loop does add slightly to the complexity and therefore to the cost. As far as I know, there is no such charge in Canada. Again, advantage Canada.


However, I'm sure that confirmation bias will enter at this point, and the vast majority of people in this thread will simply ignore the fact that the prices that BT earns on loops are far greater than what Bell earns. You clearly considered it a huge deal that BT's dry loop fees were lower than Bells, do you also consider it a huge deal that BT's fees are approximately 50% more than Bell's? Does this improve your opinion of the situation in Canada?

[i6s1]

Except out west there really isn't a need for a teksavvy service because Telus doesn't throttle and they don't enforce caps. So Telus is profitible but has put way more into network upgrades then bell.

I think bell is slow to rollout upgrades in an effort to maximize profits. They easily make enough money, that they could make a killer network and still turn a big profit. When you compare bell (even rogers) agaist their counterparts in western Canada and everything they say just doesn't add up.

There is a difference. Resellers targeted the GTA/Montreal/SW Ont because it was densest and the most profitable. This was long before Telus stopped enforcing caps and long before Bell started throttling. The greater the number of customers are on resellers, the less money there is for network upgrades. But people don't recognize that, so as Bell's network is falling further and further behind, the average person is calling for more and more regulations, which just take even more money away from capital projects.

Artifical competition was fine when phone lines were only offered by one company, but HSIA is already competitive because phone companies and cable companies can compete. And now that the cable companies can offer landlines, the only thing that resellers do is divert revenue from capital projects to inefficient waste.

Bell is not simply a greedy company in country full of altruistic phone companies. Telus/MTS/Sasktel/Alliant/Northwestel/etc are all looking for a profit as well, but they can afford to invest in fiber/etc because they aren't burdened with resellers and regulation to anywhere near the same extent as Bell.

[Tijuana]

There is a difference. Resellers targeted the GTA/Montreal/SW Ont because it was densest and the most profitable. This was long before Telus stopped enforcing caps and long before Bell started throttling. The greater the number of customers are on resellers, the less money there is for network upgrades. But people don't recognize that, so as Bell's network is falling further and further behind, the average person is calling for more and more regulations, which just take even more money away from capital projects.

Artifical competition was fine when phone lines were only offered by one company, but HSIA is already competitive because phone companies and cable companies can compete. And now that the cable companies can offer landlines, the only thing that resellers do is divert revenue from capital projects to inefficient waste.

Bell is not simply a greedy company in country full of altruistic phone companies. Telus/MTS/Sasktel/Alliant/Northwestel/etc are all looking for a profit as well, but they can afford to invest in fiber/etc because they aren't burdened with resellers and regulation to anywhere near the same extent as Bell.

Don't blame Teksavvy for the consumers not getting upgrades. If Teksavvy can be profitable at the rates they charge.. then guess what.. so can Rogers.

[Mark77]

Don't blame Teksavvy for the consumers not getting upgrades. If Teksavvy can be profitable at the rates they charge.. then guess what.. so can Rogers.

Not quite. Teksavvy doesn't have to build/maintain infrastructure that it doesn't use. Rogers/Bell/etc., of course, are forced, by rule of the CRTC, to provide access to their infrastructure, profitable or not.

Teksavvy, with very little capital investment, can pull out of a market very quickly. Rogers/Bell physically have to dig in the ground if they want to serve new areas.

[i6s1]

Don't blame Teksavvy for the consumers not getting upgrades. If Teksavvy can be profitable at the rates they charge.. then guess what.. so can Rogers.

Not really. Bell, Rogers, and Teksavvy can all be profitable with the current infrastructure. The problem is the future. People in here are blasting Bell for its network upgrades, (or lack theroff) but Teksavvy doesn't build any significant infastructure, and in fact, diverts money from Bell's network.

There is no free lunch. Teksavvy's existence reduces the economies of scale, and increases the regulatory burden on ILECs. Artificial competition unquestionably adds to the overall expense of the industry. Who pays these costs? Ultimately, consumers will.

Bell's shareholders, like any shareholders, won't support unprofitable investments. So when any force reduces the profitability of an investment, it reduces the scale or likelyhood of that investment actually happening.

Take GPON, for instance. It's already being widely rolled out in BC, Alberta, Manitoba, and Atlantic Canada. But not in Ontario. Why?

Companies have a minimum IRR for a project before they that project gets green-lit. If GPON is right on the threshold of that minimum IRR, but it's predicted that resellers will add 10% to the cost (or take 10% of the revenue) then Bell will won't invest in GPON until some other force reduces the cost 10%, back to the threshold IRR. For example, waiting on equipment prices to fall, or waiting until enough customers are going to pay for premium services.

As soon as GPON is the most profitable thing that Bell can spend it's money on (highest IRR) then Bell will roll it out, resellers or not. But it will take longer. Meanwhile, consumers won't realize that the medicine is the cause of the sickness, and will demand more regulations and artificial competition.

Really, you guys in Bell territory are in a tough spot, as TS probably offers better overall value, but the more people go them, the further behind you're going to fall.

[daverobev]

Yes, you're misunderstanding. If a wholesaler wants to use only the copper (dry loop) to deliver a service to a customer without other services from the ILEC, the wholesaler will pay with WLR. This is considerably more in the UK than in Canada, despite the UK having slightly shorter average loop lengths. (Average loop length is the most important factor in determining loop rental costs.)

If a customer already has a phone line with the ILEC then they're essentially already paying for the use of the copper in the price of the phone line. So in Canada, a customer is then free to add DSL service with a wholesaler without paying a second time for the rental of the copper. In the UK, if the customer already has a BT phone line, then the wholesaler doesn't have to pay the WLR, he has to pay the far-lower SMPF Rental, £14.70. 2 competitors running 2 services over the same loop does add slightly to the complexity and therefore to the cost. As far as I know, there is no such charge in Canada. Again, advantage Canada.


However, I'm sure that confirmation bias will enter at this point, and the vast majority of people in this thread will simply ignore the fact that the prices that BT earns on loops are far greater than what Bell earns. You clearly considered it a huge deal that BT's dry loop fees were lower than Bells, do you also consider it a huge deal that BT's fees are approximately 50% more than Bell's? Does this improve your opinion of the situation in Canada?

Fair enough - I take it back then. Looks like I was paying about 32 pounds per quarter to BT for line rental, and 18 pounds per month for internet, back in 2008.

So actually... not half as bad as I thought.

[nauru]

how come I can't see the last two pages of this thread...