WordsByNowak

One thing that part-time commentators on the telecommunications market - or what I like to call Telecom Tourists - often forget when defending the industry is that it’s not just cranky teenagers sitting in their parents’ basements who are angry about the state of things. Small businesses and entrepreneurs, the people who aren’t being represented at this week’s Telecom Summit, are also hopping mad. They just don’t say so in public as much because they fear repercussions from their service providers.

The Canadian government considers the video game industry to be one of the bright spots of the country’s nascent knowledge-based economy - so much so that it unveiled its most recent attempt at copyright legislation at Electronic Arts Montreal last year. As such, you have to believe politicians take the industry’s views seriously.

In that vein, Denis Dyack has some pointed advice. Dyack is the oustpoken president of St. Catharines, Ont.-based Silicon Knights, a medium-sized studio that has worked on such games as Metal Gear Solid: The Twin Snakes and Eternal Darkness: Sanity’s Requiem (considered to be one of the best Canadian-produced games of all time). I spoke with him last week for a story I’m working on and here’s what he had to say about Canada’s telecom situation:

I’ll come out and say it now: The CRTC should be completely dissolved. They are not helping our knowledge-based economy, I don’t see how they’re helping the consumer. It’s completely the opposite. I was so happy before with where they were going with the [usage-based] billing getting overturned. We’re going to make a concerted effort to start putting the light of day to some of the things that they’re doing because it’s not consumer friendly. It’s really holding us back, it’s holding our knowledge-based industries back from going as fast as they should be. It’s very bad, I’m very, very disappointed with the direction they’ve been going.

All those things about internet [usage-based] billing, we believe it was all about Netflix, nothing else. People worry about how much we’re using Netflix, which is now accounting for 33 per cent of the bandwidth, I think, on the internet. It’s becoming very successful… The bottom line is I really question how Canada is being protected culturally, I’d argue we’re being held back culturally because of these issues. We have the worst rates in the world. It’s only because we’re Canadian that we don’t kick up a stink enough. We’re willing to put up with the pain tolerance of this but we need to start standing up and saying, ‘This is wrong.’ We’re in Niagara, [so] people at Silicon Knights get cellphones from the U.S. because it’s cheaper, even with international rates. That’s terrible.

Needless to say, I don’t think Dyack will ever be invited to speak at the Telecom Summit.

It’s amazing what a difference a few days can make. Last week, the annual Mesh web conference took place here in Toronto and, by all accounts, attendees were quite satisfied.

The biggest problem, if there was one, was that some great panels overlapped each other. I really wanted to see Jesse Brown’s “How to Unsuck Canada’s Internet” discussion, for example, but it unfortunately took place at the same time as our adult entertainment panel. I’m told the event’s organizers couldn’t video record the sessions because of some crazy union rules at the venue, so alas, it will fall to the attendees and speakers to dribble out what may have been discussed. Jesse, for one, has promised a podcast on his talk. The Huffington Post Canada had a wrap-up of our porn session as did Financial Post tech reporter Matt Hartley with a story and podcast interview with yours truly.

This week, the annual Canadian Telecom Summit kicks off here in Toronto. I heard a few people discussing the upcoming event at Mesh and it’s probably safe to say it’ll attract a very different crowd. Asking Mesh attendees whether they were planning to go generally elicited guffaws.

This year’s Telecom Summit will boast speeches and discussions with big wigs from the likes of Bell, Rogers, Telus, Microsoft, the CRTC and even new Industry Minister Christian Paradis, and there’ll be panels on everything from the future of cloud computing to “delivering broadband to all.” However, almost completely missing from the slate: anyone representing consumer interests or companies that sometimes find themselves at odds with telecom companies.

John Lawford, a lawyer with the Public Interest Advocacy Centre, will be sitting in on the “regulatory blockbuster” as usual, but beyond that there doesn’t appear to be anyone scheduled to speak on behalf of those interests for all three days of the event. No one from Google or Netflix and certainly no one from Open Media.

Covering the event, which I’ve done a few times, is thus a real yawner. Watching a bunch of industry executives back-slapping and high-fiving each other is hardly interesting - it tends to only be half a conversation, which is a stark contrast from Mesh where people who actually use and depend on telecommunications services get together and have lively discussions and debates.

Judging by the speakers and the rather big difference in admission prices - found in the headline above (guess which is which) - it’s pretty clear the Telecom Summit isn’t for actual users of telecom services.

Shaw has written the next chapter in the ongoing usage-based internet billing saga - and it sure is an intriguing one.

The company announced new internet plans Wednesday night in conjunction with a follow-up consultation with customers. This, of course, follows on the hearings it had with customers a few months back after UBB exploded into a big political issue.

On the surface of it, Shaw’s plans look like a step towards reason - the company will be offering higher speeds and considerably bigger usage limits. For example, current customers on 7.5 mbps speed plans get 60GB of usage, but that will more than double to 125GB, with the same standalone price of $49 (or $39 in a bundle).

Things get more interesting the faster the speeds get. Shaw, which offers internet service in Western Canada, will roll out these new higher-speed packages over the summer. Its top-end plan will be a blazingly fast 250 mbps service with unlimited usage for $119 if bundled with so-called “legacy TV.” That’s still expensive compared to what places like Japan had even a few years ago, but at least the prices on these super-fast services is starting to come down.

Indeed, as observers like Michael Geist point out, Shaw’s plans are going to make other Canadian ISPs look bad. Rogers’ most comparable plan to Shaw’s 7.5 mbps service, for example, allows only 60GB of usage. The biggest effect will be on Shaw’s direct competitor Telus, which will have to offer similar plans or watch its customers defect. Shaw doesn’t offer service in eastern Canada, but Bell and Rogers will soon face pressure from their own customers. It’s probably really only a question of how long they can hold out with their comparatively uncompetitive plans before customers get really angry.

So, on the plus side, Shaw’s new plans look like an attempt at a reasonable compromise, as opposed to the blatant cash grab some of the other big ISPs are engaging in with usage-based billing.

The really interesting part of Shaw’s plans, however, is the apparent pinning of those higher-speed offerings to TV services. As several attendees to Wednesday night’s meeting pointed out, it doesn’t look like the company is planning on offering them on a standalone basis. That’s curious because it sure looks like tied-selling, which the Competition Bureau says “exists when a supplier, as a condition of supplying a particular product, requires or induces a customer to buy a second product.”

It’s hard to see how requiring someone to take a service they don’t want (TV) in order to get the one they do want (higher-speed internet) wouldn’t qualify as tied-selling. Of course, the Competition Bureau has been letting wireless companies get away with tied-selling for years. A customer can buy a cellphone outright from a provider but, with some exceptions, the carrier won’t unlock the device, thereby forcing the customer to buy monthly service from them as well. That’s tied-selling in a nutshell.

From Shaw’s perspective, it’s no surprise the company wants to lock customers into a service they don’t want. Like most other ISPs, the cable company is running scared of Netflix and other so-called over-the-top video providers, so this sort of tied-selling is a sneaky move. After all, does the company really care how well Netflix and other online video providers do, or how much data internet customers use when they’re still paying up for that TV service? Of course not. Shaw still gets the same revenue from the customer.

First, the big ISPs tried throttling, then they tried UBB. Neither worked, so now they’re collectively trying to slow Netflix et al with regulation. Unless Canadian regulators are a bunch of loonies (and the jury is out on that), that too won’t work. Tied-selling, where customers have to pay cable companies for video whether they want to or not, may be their final kick at the can.

Over to you, Competition Bureau.

It’s going to be a really short post today as I spent most of the day yesterday at the Mesh web conference. The other day a Googler made me aware of the video below, starring Matt Cutts - Google’s search engine optimization master - explaining why porn sites generally don’t do well in its page rankings. Hint: it’s all about how many other websites link to them, which is generally not many. Check it out, it’s illuminating.

I’ll be back tomorrow with a regularly scheduled post.

The Mesh web conference kicks off in Toronto on Wednesday and yours truly will be taking part in a panel discussion titled “How Adult Entertainment is Reshaping the Internet – and vice versa.” The discussion will be moderated by Mark Evans, who I’ve had the pleasure of working with both at The Globe and Mail and the National Post, while fellow panelists will be Patchen Barss and Allison Vivas. I’ve talked about Patchen and his book The Erotic Engine before while Allison is president of Pink Visual, an adult entertainment company I’ve grown quite fond of (I’ve never actually seen any of their content, but I like the people who run the company).

It’s funny because I’ve been thinking lately about the changes that the profession of writing is currently undergoing. From journalism to book writing, things are very much in a state of flux thanks to the internet. The old ways of making money are rapidly disappearing, while the new ways - if there ever will be such a thing - are not yet completely apparent. In that way, the businesses of writing and pornography are not all that different.

I’ve jokingly compared journalists and porn stars before - we both deal in inches and we both screw people for money - but there is actually a serious side to it. As the media industry-watching folks at Poynter have suggested, both industries are currently plagued by the notion of “free” - people have become accustomed to getting both their news and their porn for free, which is really messing with the economics of how to supply either.

I documented the porn industry’s problems in a lengthy piece for AskMen.com earlier this year. In the writing business, this is having some really bizarre effects - some of which I’ve directly experienced in the six months since going freelance. Generally speaking, the news outlets with the biggest audiences and largest reach tend to pay the worst. Indeed, the Huffington Post - one of the biggest news sites around - has achieved some notoriety for achieving its status on the backs of bloggers who worked for free, some of whom are angry that the site was sold to AOL for hundreds of millions. Print publications, meanwhile, tend to pay better even though their readership isn’t at the same level as these larger sites. That seems pretty skewed, although it’s probably still reflective of the fact that while advertising is migrating to online, a good chunk of it still resides in print.

In light of that weird fact, I’ve started to wonder about whether writing isn’t where writers are ultimately going to make their money. Regardless of whether they’re suing the Huffington Post or not, a good many people wrote for - and continue to write for - that site and others like it for little or no pay. They do it for other reasons; some like writing for fun while others like the exposure that such a giant site gets them. In that vein, writing is almost a form of advertising for the individual that - hopefully - leads to income coming from other sources.

Over the past few months, I’ve been invited to take part in some workshops and speaking engagements, all of which have called on my expertise - real or alleged - on certain subjects. Some of them were paying gigs that actually paid better than a lot of the writing jobs I’ve taken. And indeed - by earning income from these sources, I’m freed up to write more of what I want, which means I can take on jobs that pay less, if anything. Most importantly, I’m freed up to embark on entrepreneurial writing, which is sort of how I describe writing books these days.

I’ve blogged before about the revolution the book business is going through and it seems to me the changes there are a little clearer to predict than in the journalism world. Under the old system, authors would get paid in advance of writing a book, which supported their effort. Under the emergent self-publishing system, that dichotomy is flipped - authors earn their money after they write the book. It’s clearly a higher risk, but it holds the promise of a much better payout, as a piece in the New York Times recently spelled out.

Book writing is necessarily becoming more entrepreneurial, which is both good and bad. Ultimately, writers are earning far more freedoms and opportunities, but the downside is they’re having to become more than just writers. Some may hate that, but I quite like it.

Perhaps the answers for the porn business are similar. Here’s a crazy suggestion: what if porn stars were to accept that the sex they have on video is done for free, with their income coming from other places? For example, let’s say a gal starts her own site where she posts videos of herself having sex for free. It’s not hard to imagine that such a site would become successful, making the proprietor a star pretty quickly. The gal could then use her fame to book herself into well-paid appearances at strip clubs across the land. In other words, she’d be a highly paid stripper - the porn is just the advertising vehicle. It’s the “freemium” idea taken to its extreme.

The effects of such a scenario would be similar to the book business: the entrepreneur (porn star/author) would keep most of their earned income while the distributor (porn company/publisher) would be cut out of the equation. I know a lot of authors like the idea. I wonder what porn stars might think?