Canadian Telecom Deals - Trends and Pitfalls


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A presentation on the current trends and pitfalls of Canadian telecom deals from a legal perspective. This presentation was given by David Crane, a partner at McCarthy Tetrault LLP, at McCarthy Tetrault's 2012 Technology Law Summit in Toronto, Ontario.

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Canadian Telecom Deals - Trends and Pitfalls

  1. 1. McCarthy Tétrault Advance™Building Capabilities for GrowthTechnology Law SummitJanuary 18, 2012 McCarthy Tétrault LLP / / January 2012 / #tls12 /
  2. 2. Telecom Deals: Trends and Pitfalls David Crane, McCarthy Tétrault LLPMcCarthy Tétrault LLP / / January 2012 / #tls12 /
  3. 3. Technology Law Summit 3Unique Aspects of Telecom Deals¬ Telecom networks are becoming increasingly critical to business success¬ Regulated industry¬ Mix of custom and commodity services in the marketplace¬ Greater choice of providers¬ Telecom-related technology and services are quickly involving and changingMcCarthy Tétrault LLP / / January 2012 / #tls12 /
  4. 4. Technology Law Summit 4Potential Pitfalls¬ Using telecom provider standard form contracts or not sufficiently negotiating provider standard terms¬ Signing up for services on an ad-hoc basis with new providers or for additional services with existing providers in a manner that can inadvertently result in: ¬ staggered terms ¬ higher pricing ¬ incompatibility ¬ inefficiency¬ Not negotiating sufficient flexibility to address change (in particular, changes to technology and customer business requirements)McCarthy Tétrault LLP / / January 2012 / #tls12 /
  5. 5. Technology Law Summit 5Trends¬ Develop a telecom plan ¬ take into account the current state of available telecom products and your needs at least five years down the line ¬ map the plan to anticipated business changes¬ Contract for services on a consolidated basis (across the entire corporate group) to create additional negotiating leverage and obtain better pricing¬ Use a competitive procurement process to select providers¬ Select providers based on their ability to be a strategic partner¬ Consider using a “qualifying bundle” approach for deals involving both tariffed and forborne servicesMcCarthy Tétrault LLP / / January 2012 / #tls12 /
  6. 6. Technology Law Summit 6Trends (con’t)¬ Telecom contracts best practices: ¬ a clearly defined scope of services ¬ service-quality levels and associated failed performance remedies to ensure performance standards ¬ specific flexibility mechanisms to allow for changes to the deal, so that you can take advantage of technological advances and react to changes in your business ¬ pricing protection provisions to provide cost certainty and ensure pricing remains competitive ¬ appropriate exit mechanismsMcCarthy Tétrault LLP / / January 2012 / #tls12 /
  7. 7. Technology Law Summit 7Trends (con’t)¬ Some terms to review in particular: ¬ Inapplicable consumer terms ¬ Service descriptions and specifications ¬ Purchase/revenue and exclusivity commitments and related termination charges ¬ Service levels ¬ Remedy clauses ¬ Billing and payment terms ¬ Compliance with provider acceptable use policies ¬ Force majeure clauses ¬ Confidentiality and security requirements ¬ Limitation of liability clausesMcCarthy Tétrault LLP / / January 2012 / #tls12 /
  8. 8. Technology Law Summit 8Questions?McCarthy Tétrault LLP / / January 2012 / #tls12 /
  9. 9. VANCOUVER MONTRÉALSuite 1300, 777 Dunsmuir Street Suite 2500P.O. Box 10424, Pacific Centre 1000 De La Gauchetière Street WestVancouver BC V7Y 1K2 Montréal QC H3B 0A2Tel: 604-643-7100 Tel: 514-397-4100Fax: 604-643-7900 Fax: 514-875-6246Toll-Free: 1-877-244-7711 Toll-Free: 1-877-244-7711CALGARY QUÉBECSuite 3300, 421 7th Avenue SW Le Complexe St-AmableCalgary AB T2P 4K9 1150, rue de Claire-Fontaine, 7e étageTel: 403-260-3500 Québec QC G1R 5G4Fax: 403-260-3501 Tel: 418-521-3000Toll-Free: 1-877-244-7711 Fax: 418-521-3099 Toll-Free: 1-877-244-7711TORONTOBox 48, Suite 5300 UNITED KINGDOM & EUROPEToronto Dominion Bank Tower 125 Old Broad Street, 26th FloorToronto ON M5K 1E6 London EC2N 1ARTel: 416-362-1812 UNITED KINGDOMFax: 416-868-0673 Tel: +44 (0)20 7489 5700Toll-Free: 1-877-244-7711 Fax: +44 (0)20 7489 5777Information on our National Technology GroupMcCarthy Tétrault LLP / / January 2012 / #tls12 /