Laurence is the ex-CEO of Vodafone.

The new chief executive of one of Canada’s largest telecommunications companies has declared the country can’t support a fourth national wireless competitor because it will simply cost too much to build and maintain.

Guy Laurence has been very vocal about Canadian telecommunications policies since taking over for Nadir Mohamed who retired last year.

This week Laurence announced a reboot of Rogers Communications he dubbed v3.0, designed to face the “hard truth” that most Canadians despise the cable and wireless company.

“Every day I marvel at what an amazing company Ted [Rogers] built, Laurence said, referring to the company’s founder. “The mix of assets, the culture of innovation and depth of employee pride is extraordinary. But we’ve neglected our customers, and we’ve let our legacy of growth and innovation slip. The plan I’ve laid out will significantly improve the experience for our customers and re-establish our growth by better leveraging our assets and consistently executing as One Rogers.”

Most of the changes Laurence plans relate to its poorly-rated customer service. Laurence has insisted that all customer service functions, including call centers, customer service, service technicians and marketing will be combined into a single unit that will report directly to him.

But Laurence said nothing about improving service plans, dropping usage caps, or lowering prices.

Several long time Rogers executives are out the door, either voluntarily or quietly pushed out.

“When you remove overlap and reduce bureaucracy, and you create agility, then it takes less people in management. So there will be job losses at the management level. No doubt of this,” Laurence said. “But because this is not a cost story, I don’t have a dollar value or a number of people. I don’t even have the vaguest idea in my head what that might be.”

Like many American cable companies, Rogers has lost video customers although it is still growing its broadband business by picking up ex-DSL customers. With overall growth flat during 2013, the new CEO wants to maximize shareholder value by limiting the number of costly new projects launched. Instead, Laurence promised “fewer, more impactful initiatives” under Rogers 3.0.

Rogers will continue to depend heavily on its profitable wireless division, which competes against Bell and Telus.

Although Canadian government officials have repeatedly sought a fourth national competitor willing to break with tradition in the wireless market, Laurence says the government is engaged in wishful thinking if it believed a fourth carrier would shake things up in Canada.

“I’m not saying the government is wrong. I’m not saying that they should change their policy. My personal view is that it is difficult to see a scenario where a fourth carrier will be successful,” Laurence said. “What you saw in Europe was a number of different countries who pursued the four-carrier option for a period of five to seven years. It was politically very popularist and they were happy to follow that. What you clearly see now, and I cite Germany and France, is that they’ve started to realize that given the capital complexity involved in these companies, it is very difficult to support a fourth carrier.”

Canadian wireless companies have recently embraced a study by the Montreal Economic Institute that declared the presence of a fourth national carrier would be “wasteful.”

“It may be preferable for financial resources … to be concentrated in the hands of a few strong players willing to invest in new technologies and services rather than scattered among several small and feeble competitors trying to survive by selling at prices barely above marginal costs,” the report said.

The Montreal Economic Institute won’t reveal its donor list of corporations that pay for its research.

The Montreal Economic Institute is “funded by the voluntary donations of individuals, businesses and foundations that support its mission.” The MEI does not disclose the specifics of its donors, however, for fears that “organizations similar to the MEI” would have an opportunity to solicit funds. The foundation of the MEI’s mission statement is couched in basic free market ideology, such as the Randian conception that “people who make money are creating wealth.”

Despite asking repeatedly, MEI will not disclose whether its telecom-related studies were funded by the telecommunications companies named in their reports. But there is little doubt of MEI’s economic philosophy.

Michel Kelly-Gagnon, the president and CEO of MEI, has written a number of opinion pieces that further illuminate the mission of the organization, notes The Telecom Blog. Included among them are articles that suggest “true entrepreneurs… deserve our gratitude” and pieces decrying a “tax the rich” mentality. There’s even a bit about the “dangers” of so-called “Soviet imagery,” citing the “intellectual and moral recklessness” in a pair of teens audacious enough to wear red T-shirts featuring USSR emblems.

Canada’s Competition Bureau, less concerned with Soviet nostalgia, found different results from increased competition – at least $1 billion in savings as competing carriers are forced to increase the wireless penetration rate while working to lower prices.

Laurence said the only way a four-carrier government policy could work in Canada is if the federal government put up taxpayer money to build, update, and run a “modern communications network” across the country. If that happens, Rogers and other companies will only be too happy to use it to offer expanded service and competition, with no commitment it will cost any less.

[flv]http://www.phillipdampier.com/video/MEI – The State of Competition in Canada’s Telecommunications Industry – Paul Beaudry IEDM.flv[/flv]

Paul Beaudry, associate researcher at the Montreal Economic Institute offers the amazing conclusion that more wireless competition in Canada is bad for consumers! (4:16)

AT&T’s solution for rural Americans without access to broadband service arrived this week with the introduction of an $80/month plan bundling a mandatory wireless home landline with a 10GB usage-capped Internet plan.

AT&T Wireless Home Phone and Internet has undergone market testing in selected northeastern areas (largely outside of AT&T’s landline service territory). This week the service became available nationwide and is marketed to customers disconnected (or soon will be if regulators approve) from AT&T’s traditional landline service. AT&T is petitioning to dismantle its rural and outer suburban wired landline network and transfer customers to wireless service. But AT&T’s wireless replacement is both expensive and usage capped with an allowance that is just a fraction of what AT&T DSL offers:

• Customers start with a $20/month wireless landline phone replacement, powered by AT&T’s wireless network. Customers will keep their current phone number and home phones and will be sent a “Home Base” device that will interface between AT&T’s wireless network and up to two telephones. AT&T does not permit its device to be connected to your existing home phone wiring, so it strongly urges customers to buy cordless phones. The device is portable so it can be taken with you when traveling. The standalone service offers unlimited nationwide calling, Voicemail, caller ID and call waiting;
• Those interested in also purchasing broadband can add one of three different data plans: $60 for 10GB, $90 for 20GB and $120 for 30GB. AT&T charges a $10 overlimit fee for each extra gigabyte. You cannot buy broadband service unless you also subscribe to AT&T’s wireless landline product. That means the lowest possible price for rural broadband is $80 a month for up to 10GB of usage. Access may be over AT&T’s 4G LTE network (5-12Mbps maximum speeds) or their much-slower, but more common 3G network. In contrast, AT&T sells DSL for as little as $15 a month with a 150GB usage allowance included.

[flv]http://www.phillipdampier.com/video/ATT Wireless Home Phone Internet Intro 5-2014.flv[/flv]

AT&T introduces its new solution for rural America — wireless home phone and Internet service, at a price much higher than what urban customers pay. (1:42)

AT&T’s Home Base

AT&T’s Wireless Home Phone and Internet includes plenty of fine print and disclaimers:

• A two-year service commitment is required to avoid a $199 charge for the Home Base device;
• 911 service is not guaranteed and you will be required to give your physical location to the 911 operator so they can send help to the proper address;
• A backup battery powers the Home Base allowing up to 1.5 hours of talk time and 18 hours of standby time. However, a standard corded phone that does not need electric power to operate is required to place or receive calls (including 911) during a power outage;
• Not compatible with wireless messaging services/text messaging, home security systems, fax machines, medical alert & monitoring systems, credit card machines, IP/PBX Phone systems, or dial-up Internet service. May not be compatible with DVR/Satellite systems;
• Call quality, wireless coverage, and service reliability are not guaranteed;
• Well-qualified credit approval required;
• An activation fee (undisclosed) also applies.

There are many surcharges that also may apply, including a $35 restocking fee, federal, state, and local taxes and the universal service fee. Customers must also pay AT&T-originated fees kept by AT&T, including a $1.25 “cost recovery charge,” a gross receipts surcharge, administrative fees and any government-originated assessments that AT&T passes on to customers in various states.

[flv]http://www.phillipdampier.com/video/ATT Wireless Home Phone Internet Setup 5-2014.flv[/flv]

AT&T explains how to set up and configure its Home Base to receive phone and broadband service wirelessly. (3:16)

Cricket has relaunched its website with a new logo and service plans as new owner AT&T merges its value-conscious Aio prepaid offering under the acquired Cricket brand name.

Targeting the credit-challenged, Cricket’s new service plans are not groundbreaking, basically copying Aio’s recent offers. Swept away are the low-cost “pay when you use” plans that only levy charges on the days you actually use the phone. Instead, Cricket is looking for a longer, committed relationship with month-long service plans and loyalty discounts:

The relaunch of Cricket will bring changes for existing customers as AT&T begins to decommission Cricket’s freestanding CDMA 3G network in March 2015 in favor of AT&T’s GSM 4G LTE service. That means customers with current Cricket phones will need to eventually switch to a newer handset, a process being made easier with $50 rebates that can make some of Cricket’s smartphones available for free. Enroll in Cricket’s rewards program, stay with them a year, make your payments on time and you will also get a $50 device credit which can be used towards an upgrade next year.

Cricket’s data plans do not carry automatic overlimit charges. Instead, your data connection is throttled to 128kbps until your billing period resets. Customers can buy an extra gigabyte of data at any time for $10.

There are several other changes that probably won’t affect the majority of Cricket customers:

• There is a $5 discount for every month you are enrolled in Auto Pay to keep your phone active;
• A family plan discount provides $10 off the monthly service charge of a second line, $20 off the third line, and $30 off the fourth and fifth line, for a maximum discount of $90 a month;
• While you remain on your current Cricket service (on the CDMA network) you may keep paper billing. When you transition to the new Cricket (the 4G GSM network with nationwide coverage), you will no longer receive a paper bill;
• Customers participating in the 5 for $100 promotion can continue with this rate plan only while on the Cricket CDMA network;
• Cricket no longer offers military or friends & family discounts;
• Cricket will transition out of the wireless Lifeline program. Current Lifeline customers can use Cricket’s CDMA network until it is shut down, after which they must choose a different provider;

[flv]http://www.phillipdampier.com/video/Cricket Home New Cricket Merger Info.mp4[/flv]

AT&T keeps its name and brand completely off the relaunched Cricket and Aio combined website. This introductory video explains the merger of the two wireless brands and what customers can expect. (1:44)

Alcatel-Lucent reported this month next generation DSL technology is a success for the company, with more than five million customers outside of North America now getting speeds up to 100Mbps over ordinary copper telephone lines.

VDSL2 line vectoring delivers more than twice the speed of AT&T’s fiber to the neighborhood U-verse service, and has proved reliable for simultaneous television, broadband, and telephone usage. It will even support 4K video streaming of ultra high-definition video.

Vectoring employs sophisticated noise cancelling to cut “crosstalk” interference to boost broadband performance. Testing has shown VDSL2 line vectoring can offer 100/30Mbps service with copper lengths as long as 1,600 feet. Most VDSL2 services are delivered over telephone networks that replace at least some copper wiring with fiber.

Alcatel-Lucent has shipped enough VDSL2 vectoring equipment to provide service to five million customers, surpassing non-vectored VDSL2. But practically none of the equipment is headed to North American ISPs. Instead, companies including Belgium’s Belgacom, Israel’s Bezeq, KPN in the Netherlands, Telecom Argentina, Telecom Italia, TE Data in Egypt and NBN Co. in Australia have launched vectoring technology, offering service to customers at speeds topping out at 70-100Mbps.

Most customers switched to VDSL2 vectoring see their speeds double, usually from 30Mbps to 70Mbps or more. Providers like Belgacom have been careful to only promise speeds the company can actually deliver. Belgacom’s own tests found 100Mbps service was only completely reliable when the amount of copper between the customer and the company’s fiber connection was kept less than 650 feet, so it has capped customer speeds at 70Mbps for now.

“The prime goal in DSL must be signal quality, integrity, robustness and stability for perfect video grade services,” says the Belgian ISP.

Vectoring technology has been on the drawing board for a decade and is only now achieving success in the market.

Many ISPs are choosing to deploy vectoring because it is less costly than a fiber upgrade and can still meet the speed goals demanded by government regulators. The technology has proven robust even where copper wire networks have degraded. In several European countries, homes are still serviced by indoor copper wiring insulated with paper sheaths.

Alcaltel-Lucent believes even after vectoring is widely deployed, it won’t be a dead-end for DSL service.

The company is working on its next generation “Phantom Mode” technology that combines VDSL2 bonding and VDSL2 vectoring with a traditional voice technology called “phantom transmission.” This combination adds a virtual channel to create three channels over 2 pairs of phone wiring.

In Phantom Mode tests, the company achieved 300Mbps over 2 pairs at 400 meters and 1Gbps (up and down-stream combined) over 4 pairs.

[flv]http://www.phillipdampier.com/video/Alcatel Lucent DSL Vectoring 5-2014.flv[/flv]

Alcatel-Lucent produced this video explaining vectoring technology. (A “CPE” means customer-premises equipment, in this case the DSL modem.) (3:09)

[flv]http://www.phillipdampier.com/video/WSJ ATT Buys DirecTV 5-19-14.flv[/flv]

For $48.5 billion, AT&T will vault itself into second place among the nation’s largest pay television providers with the acquisition of DirecTV. The Wall Street Journal reports the executives at AT&T have been looking to for a giant deal for several years. Most executives earn special bonuses and other incentives worth millions for successfully completing these kinds of transactions. (3:03)

AT&T plans to spend $48.5 billion to acquire the nation’s biggest satellite television provider, allowing AT&T to become the second largest pay television company, behind a merged Comcast and Time Warner Cable.

The deal, finalized on Sunday, pays $95 per DirecTV share in a combination of stock and cash, about a 10% premium over DirecTV’s closing price on Friday. Including debt, the acquisition is AT&T’s third-largest deal on record, behind the purchase of BellSouth for $83 billion in 2006 and the deal for Ameritech Corp., which closed in 1999, according to data compiled by Bloomberg.

“This is a unique opportunity that will redefine the video entertainment industry and create a company able to offer new bundles and deliver content to consumers across multiple screens – mobile devices, TVs, laptops, cars and even airplanes. At the same time, it creates immediate and long-term value for our shareholders,” said Randall Stephenson, AT&T chairman and CEO. “DirecTV is the best option for us because they have the premier brand in pay TV, the best content relationships, and a fast-growing Latin American business. DirecTV is a great fit with AT&T and together we’ll be able to enhance innovation and provide customers new competitive choices for what they want in mobile, video and broadband services. We look forward to welcoming DirecTV’s talented people to the AT&T family.”

The announced acquisition has left some on Wall Street scratching their heads.

“Like any merger born of necessity rather than opportunity, the combination of AT&T and DirecTV calls to mind images of lifeboats and rescues at sea,” telecommunications analyst Craig Moffett of MoffettNathanson Research wrote this week. AT&T, Moffett wrote, is in “dire need of a cash producer to sustain their dividend.”

[flv]http://www.phillipdampier.com/video/Bloomberg ATT DirecTV Deal a Head Scratcher 5-19-14.flv[/flv]

Craig Moffett, founder of MoffettNathanson LLC, talks about AT&T Inc.’s plan to buy DirecTV for $48.5 billion. Moffett speaks with Tom Keene, Scarlet Fu, William Cohan, and Adam Johnson on Bloomberg Television’s “Surveillance.” StockTwits founder Howard Lindzon also speaks. (5:12)

The deal would combine AT&T’s wireless, U-verse, and broadband networks with DirecTV’s television service, creating bundling opportunities for some satellite customers. As broadband becomes the most important component of a package including phone, television, and Internet access, not being able to offer broadband has left satellite TV companies at a competitive disadvantage. AT&T’s U-verse platform – a fiber to the neighborhood network – has given AT&T customers an incremental broadband speed upgrade, but not one that can necessarily compete against fiber to the home or cable broadband.

Some analysts are speculating AT&T will eventually shut down its U-verse television service and dedicate its bandwidth towards a more robust broadband offering. Existing television customers would be offered DirecTV instead.

But deal critics contend AT&T is spending a lot of money to buy its competitors instead of investing enough in network upgrades.

“The amount of cash alone AT&T is spending on this deal — $14.55 billion — is as much as it cost Verizon for its entire FiOS deployment, which reaches more than 17 million homes,” Free Press’ Derek Turner tells Stop the Cap! “Add in the $33 billion in AT&T stock and $18.6 billion in debt, and you can see just how wasteful this merger is.”

In effect, AT&T is spending nearly $50 billion to buy DirecTV’s customer relationships, its satellite platform, and its agreements with programmers, all while removing one competitor from the market. Cable has 54 percent of the pay TV market, satellite has 34 percent, and AT&T and Verizon share 11 percent. AT&T’s U-verse has 5.7 million TV customers. DirecTV has 20.3 million. Combining the two gives AT&T 26 million television customers, second only to Comcast/Time Warner Cable.

Rural Americans will effectively see their choice in competitors drop by one-third, giving them the option of the phone company or Dish Network.

AT&T intends to persuade regulators to approve the deal despite its antitrust implications by offering several commitments the company says are in the public interest and protect consumers:

• 15 Million Customer Locations Get More High Speed Broadband Competition. AT&T will use the merger synergies to expand its plans to build and enhance high-speed broadband service to 15 million customer locations, mostly in rural areas where AT&T does not provide high-speed broadband service today, utilizing a combination of technologies including fiber to the premises and fixed wireless local loop capabilities. This new commitment, to be completed within four years after close, is on top of the fiber and Project VIP broadband expansion plans AT&T has already announced. Customers will be able to buy broadband service stand-alone or as part of a bundle with other AT&T services.
• Stand-Alone Broadband. For customers who only want a broadband service and may choose to consume video through an over-the-top (OTT) service like Netflix or Hulu, the combined company will offer stand-alone wireline broadband service at speeds of at least 6Mbps (where feasible) in areas where AT&T offers wireline IP broadband service today at guaranteed prices for three years after closing.
• Nationwide Package Pricing on DIRECTV. DIRECTV’s TV service will continue to be available on a stand-alone basis at nationwide package prices that are the same for all customers, no matter where they live, for at least three years after closing.
• Net Neutrality Commitment. Continued commitment for three years after closing to the FCC’s Open Internet protections established in 2010, irrespective of whether the FCC re-establishes such protections for other industry participants following the DC Circuit Court of Appeals vacating those rules.
• Spectrum Auction. The transaction does not alter AT&T’s plans to meaningfully participate in the FCC’s planned spectrum auctions later this year and in 2015. AT&T intends to bid at least $9 billion in connection with the 2015 incentive auction provided there is sufficient spectrum available in the auction to provide AT&T a viable path to at least a 2×10 MHz nationwide spectrum footprint.

[flv]http://www.phillipdampier.com/video/CNN ATT DirecTV Merger 5-19-14.flv[/flv]

CNN says AT&T’s buyout of DirecTV is about getting video programming to customers using all types of technology, but public interest groups suspect it’s about reducing competition. (1:17)

A closer look at AT&T’s commitments exposes several loopholes, however.

AT&T U-verse and DirecTV compete head-on in these areas.

• AT&T’s “commitment” to expand broadband to 15 million new locations is in addition to their Project VIP U-verse expansion now underway. However, AT&T does not say how many rural customers will see wired U-verse service finally become available vs. how many will lose their landlines permanently and have to rely on AT&T’s wireless landline replacement and expensive, usage-capped wireless broadband;
• AT&T’s speed commitment is largely unenforceable and falls apart with language like, “where feasible.” Anywhere they don’t deliver 6Mbps DSL speed can easily be explained away as “unfeasible.” AT&T also only commits to providing DSL where it already offers DSL, so no expansion there;
• The FCC’s Net Neutrality protections never covered wireless and three years is a very short time to commit to the “light touch” approach the FCC had with Net Neutrality back in 2010;
• AT&T’s wireless auction commitment comes with loopholes like “meaningfully,” “provided there,” and “a viable path to at least.”

“You can’t justify AT&T buying DirecTV by pointing at Comcast’s grab for Time Warner, because neither one is a good deal for consumers,” said Delara Derakhshani, policy counsel for Consumers Union, the advocacy arm of Consumer Reports. “On the heels of Comcast’s bid for Time Warner Cable, AT&T is going to try to pull off a mega-merger of its own. These could be the start of a wave of mergers that should put federal regulators on high alert.  AT&T’s takeover of DirecTV is just the latest attempt at consolidation in a marketplace where consumers are already saddled with lousy service and price hikes. The rush is on for some of the biggest industry players to get even bigger, with consumers left on the losing end.”

“The captains of our communications industry have clearly run out of ideas,” said Craig Aaron, president of Free Press. “Instead of innovating and investing in their networks, companies like AT&T and Comcast are simply buying up the competition. These takeovers are expensive, and consumers end up footing the bill for merger mania. AT&T is willing to pay $48.5 billion and take on an additional $19 billion in debt to buy DirecTV. That’s a fortune to spend on a satellite-only company at a time when the pay-TV industry is stagnating and broadband is growing. For the amount of money and debt AT&T and Comcast are collectively shelling out for their respective mega-deals, they could deploy super-fast gigabit-fiber broadband service to every single home in America.”

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Sen. Al Franken (D-Minn.) appeared on CNN’s New Day this morning to express his skepticism about the consumer benefits of a merger between AT&T and DirecTV. “We need more competition, not less.” (2:40)