Monday, June 4, 2007

Cozy oligopoly, or risk taking innovators?

by alec on June 4, 2007

In Just how cozy is Canadian Wireless, Mark Goldberg sides with Canadian wireless carriers who assert that the market is competitive. Mark writes "I have a colleague who likes to say that price discounting is a lazy approach to marketing", and he goes on to repeat the position of the carriers that the new services they are bringing to market is evidence of a competitive market place.

To be sure, investing in product innovation is costly, and has been the traditional defence offered by network operators when confronted with apparently rich pricing plans. Another viewpoint worth considering is that the Canadian Wireless market may, in fact, be a cozy oligopoly, and the services and network enhancements being touted have already been pioneered in other markets. When others blaze the trail the risk is not born by the local carrier, but rather a carrier in a foreign market. Whether it's video telephony, navigation, or new phones, these are hardly high risk service offerings.

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Court says VoIP companies must pay USF

by alec on June 4, 2007

Did anyone not expect that the USF would be imposed upon VoIP? Vonage challenged the FCC 64.9% "safe harbor" estimate handed down last year, noting that traditional telcos pay just 11.7% of their long distance revenue into the USF. The FCC reasoned that VoIP was more like cellular service, which pays 37.1%. Vonage disagreed. As for the court?

"Because VoIP's functionality and customer profile differ from those of other technologies, reasoning by analogy in this way invites some inevitable imprecision," the court ruled. "We agree with Vonage that this difference in capabilities renders the VoIP/wireline toll service analogy imperfect. Perfection, however, is not what the law requires."

The price of VoIP calling edges ever closer to ordinary phone service.

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