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Verizon on the horizon?

With some of the most expensive cell phone and wireless rates in the world, the federal government and CRTC are justifiably concerned that Canada will fall behind in the high-tech economy.
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With some of the most expensive cell phone and wireless rates in the world, the federal government and CRTC are justifiably concerned that Canada will fall behind in the high-tech economy. Hence the decision five years ago to licence a chunk of the wireless spectrum to start-up companies like Wind Mobile and Mobilicity to create more competition in the marketplace and drive prices down.

The idea has worked for the most part — Wind Mobile is hugely successful in a few urban areas like Toronto — but after five years both those companies are looking to sell and the big three, Telus, Bell and Rogers are looking to buy them, reconcentrating the market in the hands of a few key players.

The government believes you need at least four options in every market to have real competition, and when the next round of wireless spectrum goes on sale next year (delayed from this fall) we could very well wind up with a fourth company.

While the government was preventing the sale of Mobilicity to Telus, American giant Verizon has actively joined the bidding to buy Wind Mobile. Verizon is also expected to enter the spectrum bidding process next year, creating a permanent beachhead for the company in Canada.

The big three are concerned. Not only does Verizon have more resources than they do — all three companies combined are smaller — Verizon would also have an advantage with things like offering customers U.S. roaming, bulk rates discounts on headset purchases and buying power when it comes to things like advertising and branding.

Would it reduce wireless costs? Probably a little bit, although Verizon is a high-end company in the U.S. and is usually not the discount option in most markets there.

I hate to say it, but I do side with the big three on this one. They can't compete with Verizon on a level playing field and Canada's future ambitions won't be well served by yet another big corporation funnelling profits out-of-country.

And the federal government's claim that four companies are needed is somewhat ridiculous. In the U.S. the competition between the American big three — AT&T, Verizon and Sprint — has kept prices low and service levels high. The real question isn't how many companies it takes to create real market competition, but rather how you make the companies you already have compete.

I don't want to imply that the our big three are colluding or price fixing, or have reached some kind of backroom agreement where they agree to only lower rates so much in the name of competition, but it certainly feels that way.

Adding Verizon or another player to the mix could certainly help, but I'd rather our existing companies started asking themselves "how little can we charge to win marketshare and still turn a profit," rather than "how much can we charge before the federal government gets involved and breaks up our monopolies?"

Xbox One: silent but deadly?

In a comparison of last generation consoles, one area that the PS3 had the Xbox 360 beat was noise. The PS3 succeeded in being smaller and quieter, and no heavy power brick with its own fan was required to power it up. Conversely, the first Xbox 360 models were unbearably loud and even the smaller "elite" versions released about four years later were only slightly quieter.

But the Xbox One, according to a report by Eurogamer (www.eurogamer.net), will be a completely different machine.

One of the criticisms of the Xbox One from the start has been the console's bulky size compared to the sleek PS4 — why so big for a system that's actually slightly less powerful than the competition? It turns out that the design was actually optimized that way to create a cooler, quieter console.

It makes sense. The Xbox 360 was also famous for the "red ring of death," essentially overheating from heavy use and shutting down permanently — something that cost the company a lot of respect and a lot of money to fix. The Xbox One, we're being told, has been designed to last 10 years with a much smaller failure rate.

Pulling the lid off an Xbox One reveals a massive fan with large blades. The fan will remain off in standby mode and will only turn on during gaming or other operations where the demand on the processor and graphics card increases.

Large fans aren't necessarily louder. A lot of the sound you heard from your consoles, computers and other gadgets is related to the speed that the fans are turning, and smaller fans need to turn pretty fast sometimes to keep a console cool.

The Xbox One also comes with built-in thermal controller that monitors the heat and adjusts fan speed accordingly, rather than just turning a loud, single-speed fan on or off.

Word also has it that Microsoft was also upset that some of the positive innovations in Xbox One didn't come across in their two miserable launch events — including technology that stores active games memory to allow for almost instant, load-screen free gaming.

Not much has been said about the PS4's architecture or noise output, but given that the hardware is pretty much the same in a smaller case there's a good chance it might be the louder of the two consoles his generation. Although for $100 less I think most people can live with a little fan noise.