Mark Goldberg


www.mhgoldberg.com





Fox Group Dispatch

Toward a rural broadband strategy

Among Monday’s changes to Cabinet, Prime Minister Trudeau named Bernadette Jordan as Minister of Rural Economic Development.

As Minister of Rural Economic Development, Minister Jordan will oversee the creation of a rural development strategy to spur economic growth and create good, middle class jobs in rural Canada. She will also take action to bring high-speed internet to more rural households and businesses …

So now, we have yet another Minister and department that will “take action to bring high-speed internet to more rural households and businesses”, presumably supplementing the actions being taken by the CRTC and other agencies at federal, provincial and regional levels of government.

Among the most significant findings of the Auditor General’s report last fall was the lack of a comprehensive strategy. The Auditor General’s report indicates that Innovation, Science and Economic Development (ISED) agreed with its recommendation:

1.37 Recommendation. Innovation, Science and Economic Development Canada should develop a strategy that

  • defines the minimum level of reliable and high-quality Internet service to be made available to Canadians;
  • sets clear timelines for achieving this level of service;
  • estimates proper resourcing, including financial and technical resources, as well as analysis of technologies and preferred options for improving broadband deployment cost-effectively; and
  • monitors whether the improved access leads to the adoption of those Internet services.

The Department’s response. Agreed. Innovation, Science and Economic Development Canada will develop a strategy, particularly in light of the following:

  • the Canadian Radio-television and Telecommunications Commission’s decision in December 2016 declaring broadband as a basic service; and
  • the June 2018 announcement in which the government committed to reviewing Canada’s communications legislation, including the legislative tools needed to promote universal access.

Innovation, Science and Economic Development Canada already has comprehensive work under way.

The Auditor General also found that ISED did not implement its
broadband improvement program in a way that ensured the maximum broadband expansion for the public money spent. The “Connectivity Funding” section of the Auditor General’s report has important information that is relevant to the implementation of broadband subsidy programs, including the CRTC.

As a new department of rural economic development arrives on the scene, expected to “take action to bring high-speed internet to more rural households and businesses”, will we first see the kind of comprehensive strategy sought by the Auditor General? Will that strategy be primed by ISED or the new department?

How will we ensure “the maximum broadband expansion for the public money spent”?

Early bird registration on now for #CTS19

Registration is now open for The 2019 Canadian Telecom Summit, taking place June 3-5 in Toronto. Early Bird discounts are in effect until February 28.

Join your colleagues in listening to and participating in executive presentations from those who have the greatest influence on the direction of Canadian telecommunications, broadcasting and information technology. Hear from global leaders and local trend-setters. Meet with your suppliers, customers and partners. Challenge your competition.

For three full days, The 2019 Canadian Telecom Summit will again deliver thought-provoking insights from the prime movers of the industry. The Canadian Telecom Summit gives you the chance to hear from and talk with them in both a structured atmosphere of frank discussion and high-octane idea exchange and schmooze in a more relaxed social setting of genial conversation over espresso or cocktails.

The Canadian Telecom Summit reviews where we have been as an industry, provides an understanding of the dynamics that propel it and forecasts future trends and expected developments. Attendance is a must for telecom, broadcast and IT industry professionals – corporate users, carriers, content providers and manufacturers – financial analysts, policy makers, consultants and investors.

Attracting the senior-most professionals from around the globe, The Canadian Telecom Summit is the forum for the broad cross-section of stakeholders to meet, exchange views, share ideas, challenge assumptions and plan for the future.

Be sure to take advantage of early bird pricing; save up to $700 when you register by February 28.

Top 5 from 2018

Which posts attracted the most attention in 2018?

Looking at the analytics, these 5 blog posts had the most individual page views:

  1. Blatantly, overwhelmingly, or structurally engaged in piracy” [January 29, 2018]
  2. Unplug the digital classroom?” [October 7, 2012]
  3. The Inside Wire: CRTC rules on telecom carrier access to buildings” [July 1, 2003]
  4. What does it mean to support ‘the concept of net neutrality’?” [January 4, 2018]
  5. Launching The 2018 Canadian Telecom Summit” [December 4, 2017]

Some of the posts from the past were apparently being used as reference materials. I am happy to see that my archives are providing some value, in some cases more than 15 years after being written.

Here are some of my other favourite posts from the past year:

Thank you for following me here on this blog (and on Twitter) and engaging over the past year. Let me extend to you the very best wishes for health, happiness and peace in the year ahead.

Happy new year!

So the years spin by…

Another year is about to come to a close.

Over the past couple of months, a lot of things have been going on – some good, some not so much – that have given me time to quietly reflect while doing some long distance driving. A year-end post is an appropriate time to share some of those thoughts.

This year, I realized that I have been consulting a fair bit longer than the amount of time that I had a ‘real job’ (as my dad would call it). The past 38 years in the telecommunications sector (22 years of consulting) have produced more than 2750 blog posts, although I will acknowledge that the past year continued to witness a decline in production. With just under 70 posts over the past year, I blame the amount of time I spend expounding in 280 character bursts on Twitter (although there are also a couple little boys who continue to provide welcome distractions from my desktop).

The past year brought us the national launch of Connecting Families, an initiative that has been on my year-end wish list for about 10 years, as my frequent readers know all too well. As a country, the traditional focus for government programs has been to spend money stimulating the construction of broadband facilities. A much tougher job has been to examine the factors that have limited broadband adoption by various segments of the population. There is more than just a rural/urban split in Canada’s digital divide. Connecting Families is an important step in the right direction, following the private sector leadership from TELUS and Rogers. Last week, ISED Deputy Minister John Knubley informed Parliament’s Standing Committee on Public Accounts that 3000 households had signed up for Connecting Families in the first 2 weeks of the program. That means that at least 3000 homes with kids will be able to start the next school term with a connected computer, enabling those kids to do their homework and socialize the ways most kids do. Connecting Families was a long time in the making, but it is still only a start. We should not be satisfied until every school-aged kid has access to a connected computer at home.

At this time last year, I wrote:

I can’t help but wonder what kinds of innovative pricing plans are being inhibited because Canada’s more restrictive regulations on internet access compared with the light touch approach approved last week by the FCC. Canadians have been denied the choice of plans with innovative pricing structures offering mobile TV from one service provider and another carrier offering mobile music. As predicted, the CRTC’s intervention resulted in no customers seeing lower prices while thousands ended up paying more.

Industry Minister Bains recently said “An open internet is critical to our economy and our democracy.” I agree. We need an open internet.

But, I don’t believe that an open internet has been called into question by the FCC. The real question is the level and type of government intervention required to achieve an open internet, while still preserving an environment that fosters innovation and investment.

I’m not convinced Canadian consumers benefit from the CRTC having extended net neutrality rules beyond the elements that were recommended by the Telecom Policy Review Panel. I don’t share the view of some others that the US will lose its status as the innovation leader, and I suspect US consumers will find that they benefit from the framework south of the border.

I continue to question the increasing level of government intervention that already exists for Canada’s internet services. The CRTC’s “Proceeding to establish a mandatory code for Internet services” [Internet Code] continues down the recent path by the Commission to intervene in retail markets it has previously found to be competitive. 

Starbucks recently announced it is going to block porn on its public WiFi network. McDonalds already filters content on its WiFi access network. Of course these companies should be able to decide what services are provided to customers. But from a regulatory standpoint, I wonder if there is a clear enough line that defines when a provider of internet access formally becomes an Internet Service Provider. At many hotels and airports, there are charges for internet services – in some cases for basic service; in other cases, charges apply for premium speeds. I’m not suggesting the CRTC should regulate every hotel and restaurant WiFi operator. If anything, it may show why extending retail internet regulation can lead to rules that are imbalanced, inconsistent, and potentially unnecessary.

A recent editorial in the Globe and Mail examined the section in Finance Minister Bill Morneau’s fall economic update [pdf] calling for a focus on smarter government regulations to improve the efficiency and productivity of the Canadian economy.

Preserving the environment, ensuring health and protecting consumers are all core functions of government. At issue is not the what of regulation, but the how. It’s about making sure government rules are getting the most regulatory bang while costing the economy the least actual bucks.

This is, unfortunately, just about the least sexy area of economic policy. It involves no multibillion-dollar infrastructure announcements, no ribbon cuttings and no canapés at black-tie galas. Instead, it demands lots of hard thinking and careful accounting, leading to many small rule changes adding up to potentially large benefits for the overall economy.

These kinds of mental exercises have made it so that I have enjoyed facing the work day for the past 38 years. New challenges, new technologies and new issues arise every day.

A final observation. The first decade of my career didn’t involve any regulatory work. When I first started to prepare for sworn testimony and cross examination (as we did in the olden days in front of the CRTC), I envisioned an adversarial relationship with opposing counsel. I was on the witness stand for a week and when I finished, I was surprised when one of the top lawyers from “the other side” came up to me at the break, shook my hand and that of my lawyer and said with complete sincerity that I had done a great job. I was shocked. An hour earlier, he was looking for any way to discredit my evidence, and here he was, congratulating me, sharing stories about nothing important, and wishing me a safe trip back home. From that point on, I began to understand the collegiality that existed between the parties involved in regulatory proceedings. Like Sam Sheepdog and Ralph Wolf in the old cartoon.

One of the first blog posts I wrote (12 years ago) was “4 degrees of impersonal communications” that spoke of an indifference to social norms associated with the relative anonymity of the internet. Perhaps the polarizing nature of social media interactions has contributed to a general deterioration in the atmosphere, with venomous personal attacks on those expressing opposing viewpoints; decisions going the wrong way are met with attacks on the regulator. 

I can’t offer a solution to this phenomenon, but we should all be concerned about the quality of civil discourse among the participants, and demand better from thought leaders. 

Over the break, please take time to look at the program for The 2019 Canadian Telecom Summit (June 3-5, Toronto), which will be looking at “Converging networks: a foundation for innovation leadership.” Registrations are now open, in case you want to use up some 2018 budget and save money at the same time. I hope to see you there.

Most importantly, and I mean this with complete sincerity to all my colleagues (even those of you who disagree with me), I hope you and your families have a happy, healthy, safe and peaceful holiday season. I look forward to engaging with you in the New Year.

The economics of Canadian telecom

Earlier this week, Cartt.ca wrote “All I want for Christmas is a telecommunications price comparison report.” Over the next couple of weeks before the Christmas holidays, we expect to see 3 indicators of communications services pricing: the CRTC’s Telecommunications Monitoring Report, the OECD’s Digital Economy Outlook Data and ISED’s annual international pricing benchmark study.

As such, it is especially timely to see a report released this morning by the School of Public Policy at the University of Calgary, entitled “The Economics of Telecommunications in Canada: a backgrounder.” The report, by authors G. Kent Fellows and Mukesh Khanal, “examines the role of the telecommunications sector in Canada’s economy, including the role of investment in the sector, related labour statistics, how the telecom sector supports the activities of other sectors and the services telecom provides directly to individual households.”

The report sets important context for the pricing studies that will be released over the next two weeks, observing that, while expenditures on telecom services exceeds $50B annually, the underlying value to consumers is significantly higher than that. Further, the telecom sector is among the top 5 sectors for investing in its infrastructure, responsible for 5% of private sector industrial capital expenditures in Canada. 

When it comes to the very things that policy-makers do seem more likely to show interest in, namely the prices, service and value that telecom companies provide to Canadian households, there in fact seems far less cause for concern. Consumers continue to find significant value in the internet and mobile services they are buying and are increasingly choosing higher quality services that involve higher costs and prices.

In summary, the services that the telecom sector provides are not only important for Canadian households, but are also critical for every other Canadian industry. One often overlooked fact is that virtually every other Canadian sector employs a significant value of telecom products as an input, thus making telecom a critical keystone of the Canadian economy.

The service providers are investing in upgrading technologies, delivering faster networks and services, and Canadian consumers are making the choice to buy those higher priced services.

As the report notes, telecommunications services are not only important for Canadian households, but are also critical for every other Canadian industry. “One often overlooked fact is that virtually every other Canadian sector employs a significant value of telecom products as an input, thus making telecom a critical keystone of the Canadian economy.”