Six years ago today, my daughter moved overseas. She got married, has kids… and Air Canada is doing quite well from our frequent travel back and forth.
In between visits, we talk by phone, frequently a few times a day, using video apps or just ordinary phone calls. Sometimes it’s just for me to keep one of the kids company while he eats a snack.
Long distance wasn’t always like that.
I remember Sunday afternoon phone calls to my grandfather in New Brunswick. We would gather around the kitchen phone, handing it off from one sibling to the next to say a quick hello. It would take about an hour’s work to earn enough to pay for a 10-minute call. Statistics Canada shows the average telephone had less than one long distance call per week. When I went to school, we would wait until we saw the start of the news at night before making a call home; the cheap rates started at 11 pm.
Overseas calls were prohibitively expensive in those days, in the order of an hour’s pay per minute. Nobody that I knew would pick up the phone to make an overseas call just to say “hi”.
And now, it isn’t anything special when one of my kids is driving 100 kmph on a highway in Alberta, talking to his sister on a train 9 time zones away. My long distance bill last month was 44 cents.
When I moved back to Canada in 1989, it was to help drive those changes, introducing network-based competition to the telecommunications industry. This coming June, we will mark the 25th anniversary of the CRTC’s approval of our application, launching what it called “Consumer Friendly Competition.” [The cover for the CRTC’s media package featured stylish, designed in Canada, Northern Telecom Contempra phones.]
It marked the end of an era of fathers shouting to their kids to hurry up and get the phone: “it’s long distance!”
I smile when I think of the part I had to play in creating the framework that enables the innovations we have seen over the past quarter century. I continue to be excited by the opportunities over the next 25 years. What will be my kids’ nostalgic anecdotes that cause their kids to roll their eyes, thinking “here we go again with that old story”?
The 2017 Canadian Telecom Summit [June 5-7, Toronto] will look at “Competition, Investment and Innovation: Driving Canada’s Digital Future.” For the past two months, each day I have been tweeting an innovation that came from the telecom sector [collected here].
What innovations will drive Canada’s digital future? I hope you’ll be part of the discussions at The 2017 Canadian Telecom Summit.
Early Bird savings for conference registrations are in effect until the end of February. Register now and save.
Through the weekend, a couple articles appeared about innovation:
According to the Global Competitiveness Index from the World Economic Forum (WEF) [pdf, 12.2MB], Canada’s ranking dropped in the past year from 13th to 15th place. According to the WEF, Canada’s level of innovation and business sophistication have deteriorated and could be slowing down productivity improvements. This has occurred despite the government having placed special emphasis on Innovation by transforming the Industry portfolio to Innovation, Science and Economic Development (ISED).
While the Star article correctly observes that Canada’s overall 15th place ranking is being dragged down by a 24th place standing under the Innovation and Business Sophistication Pillar, Canada’s worst score is actually a 41st place finish under the banner of “Macroeconomic environment.”
How are these rankings developed? For macroeconomic environment, the WEF examines:
- General government budget balance as a percentage of GDP
- Gross national savings as a percentage of GDP
- Annual percent change in consumer price index (year average)
- Gross general government debt as a percentage of GDP
- Institutional Investor’s Country Credit Ratings
For the Business Sophistication Pillar, WEF examines its executive survey, asking about: Local supplier quantity; Local supplier quality; State of cluster development; Nature of competitive advantage; Value chain breadth; Control of international distribution; Production process sophistication; Extent of marketing; and, Willingness to delegate authority.
For the Innovation Pillar, WEF again uses its Executive Opinion Survey, asking about: Capacity for innovation; Quality of scientific research institutions; Company spending on R&D; University-industry collaboration in R&D; Government procurement of advanced technology products; Availability of scientists and engineers; and, Patent Cooperation Treaty patent applications.
The connection between the two newspaper articles comes from a quote in the Star, taken from the WEF report: “To be truly innovative, a country should not only file patents and support research and development in science and technology, but should also provide a networked, connected environment that promotes creativity and entrepreneurship, fosters collaboration, and rewards individuals who are open-minded and embrace new ways to perform tasks.”
How do we encourage the development of “a networked, connected environment that promotes creativity and entrepreneurship”? The Globe and Mail article builds on the December NEXT Canada release of a McKinsey report, Tech North: Building Canada’s first technology supercluster [pdf, 2.2MB]. The report sets out a “proposed blueprint with catalyzing ideas to help kickstart a Toronto-Waterloo technology supercluster.”
We believe initiatives such as global talent visas, innovation procurement by governments, student and startup passports to incubators and university faculties within the corridor, risk-capital matching funds, new transport linkages and others can kick-start a virtuous dynamic circle within the corridor.
The Tech North report targets a number of the points in the Innovation Pillar of the WEF Competitiveness Index. Keep in mind that there are a number of competing regions across the country that are each seeking to reinforce their standing as an innovation corridor. The high cost of electricity and housing aren’t helping the case for the Toronto-Waterloo corridor.
Last week, ISED Minister Bains made a number of funding announcements to colleges and universities [Georgian, Waterloo, UQAT, Laurier, Windsor], and to Canadian operations of Japanese and Mexican automotive manufacturers [Honda, Nemak].
The press releases for the university announcements each spoke of the “historic investment by the Government of Canada is a down payment on the government’s vision to position Canada as a global centre for innovation.” The automotive funding was through the government’s Automotive Supplier Innovation Program and the Automotive Innovation Fund.
Still, I suspect that we need to ensure that the overall environment supports entrepreneurs to emerge and execute their plans in Canada, rather than providing targeted subsidies to a handful of companies.
In order to build a more globally competitive economy, Canada will need to consider more than the Innovation pillar in the WEF Index. We need to improve the macro-economic conditions and address the shortcomings in what the WEF calls business sophistication. That could mean taking steps to get the government’s house in order for balancing budgets and controlling government debt. Tax policy needs to encourage entrepreneurs to succeed in Canada, rather than relocate to other jurisdictions. The innovation agenda needs to be a consideration across all departments, not just ISED.
Laying the groundwork to create the right conditions that enable winners to succeed may not make for a photo opportunity, but that is the kind of truly historic investment needed to position Canada as a global centre for innovation.
[Update: January 18, 2017]
Bloomberg has released its 2017 ranking of the World’s Most Innovative Economies
. In that article, Canada fell from 19th to 20th place.
The 2017 Canadian Telecom Summit [June 5-7, Toronto] will look at “Competition, Investment and Innovation: Driving Canada’s Digital Future“. Early Bird savings for conference registrations are in effect until the end of February.
I hate getting robo-calls as much as anyone. With all the phone lines I have, I can sometimes get bombarded by calls from “credit card services”, duct cleaners, Mexican resorts or agencies purporting to repair the viruses they detected on my computer. I have filed more than my fair share of Do Not Call List complaints (perhaps explaining why Ontario’s 61,000 filings represent nearly half of the DNCL complaint reports to the CRTC).
Last year, the CRTC spent more than $3M on the Do Not Call List, over and above the $2M spent on the database itself. The complaints continue to pour in (more than 130,000 last year), but enforcement resulted in just 5 warning letters, 8 citations and 20 notices of violations.
The current regulatory approach appears to be unable to make a dent. The CRTC and other jurisdictions have been considering technology-based solutions. Earlier this week, the Commission issued a public notice to “examine the development and implementation of technical solutions to (i) prevent spoofing of caller identification information, and (ii) trace and identify the source of a call.”
Some may ask why caller ID spoofing is even allowed in the standards. There are good reasons for the capability, such as enabling people to work from home but display their office number. Indeed, the CRTC’s unsolicited call rules leverage the ability for telemarketers to provide call number display of an alternate number where they can be reached.
As indicated in the Notice of Consultation, in the wake of a report from what the CRTC calls a “US telecommunications industry Robocall Strike Force” (the group actually included non-US service providers British Telecom and Rogers as well as global suppliers such as Blackberry, Nokia and Ericsson) some proposals have been put forward to authenticate the telephone number being presented as the caller ID, but these have not yet been adopted:
- The telecommunications industries in the United States (U.S.) and the United Kingdom (U.K.) have developed approaches and mechanisms to improve the accuracy and authenticity of caller ID information that could be introduced by TSPs in Canada and elsewhere to reduce caller ID spoofing.
- In this proceeding, the Commission is seeking information and comments on
- the implementation, use, and effectiveness of technical solutions to authenticate caller ID information for wireline, wireless, and voice over Internet Protocol (VoIP) networks in Canada;
- the implementation, use, and effectiveness of mechanisms to trace and identify the source of a call;
- any barriers to implementation that would need to be addressed to facilitate these solutions and mechanisms; and
- what regulatory measures, if any, should be established to ensure that Canadians have confidence in the caller ID information displayed.
That last bullet is key: “what regulatory measures, if any, should be established.”
Each time a regulatory measure is introduced, there are limits imposed on the degrees of freedom for innovation. It is not clear that the proposed caller ID authentication schemes would have permitted many of the innovative services that led to the precipitous collapse of prices for long distance calls globally. Early VoIP companies relied upon permission-less innovation and interconnection that circumvented traditional settlement schemes.
Regulators around the world examining proposals might ask if companies like Delta Three, Vonage or Skype could have or would have passed the authentication processes. Will regulatory measures inhibit innovation?
As frequent readers know, I think Canadians should get more comfortable with just hanging up.
Which articles resonated the most with my readers this year?
Looking at the analytics, these 5 blog posts had the most individual page views:
- “Putting customers first” [March 7]
- “Unrepresentative survey” [March 31]
- “Taking aim at an old canard” [February 16]
- “Should broadband be part of “basic service”” [January 21]
- “Driving costs higher” [August 12]
Honourable mention goes to a post from way back in 2006, “Knock-down versus knock-out,” which talked about challenges chasing illegal content off the internet. And there was a lot of interest in “Taking the first step” from May 25, speaking about government officials finally acknowledging the need to increase broadband adoption among low income households, although 2016 marked another year that government stood on the sidelines watching the private sector develop solutions to try to tackle the challenges of getting computers and connectivity to bridge the “#HomeworkGap”.
It is also worth recognizing the popularity of “Gaming the system” and “The tragedy of the commons,” written late in the year.
Thank you for following and engaging over the past year and as I wrote last week, let me extend to you the very best wishes for health, happiness and peace in the year ahead.
In an interview with the Financial Post, Commission Chair JP Blais had hinted his next big ruling — a decision on basic Internet service — will be his most disruptive yet. Earlier today, the CRTC issued Telecom Regulatory Policy CRTC 2016-496 “Modern telecommunications services – The path forward for Canada’s digital economy” [TRP 2016-496] and it is difficult to see the level of disruption.
The financial markets expressed relief with the decision, Barclays calling it ‘benign’ and Scotiabank saying ‘logic actually prevailed… the absence of retail price regulation renders this decision a “non-event” from the capital market’s perspective.’ From a consumer perspective, describing broadband as a basic service without imposing an obligation to serve creates a high likelihood that the basic service objective will not be much more than a score card bound to disappoint. The Regulatory Policy describes the former obligation as “The obligation to serve requires the incumbent local exchange carriers (ILECs) to provide telephone service to (i) existing customers, (ii) new customers requesting service where the ILECs have facilities, and (iii) new customers requesting service beyond the limits of the ILECs’ facilities.” [paragraph 3, TRP 2016-496]
Later, at paragraph 180, the obligation to serve is credited by the CRTC as having led to successful fulfillment of the voice basic service objective:
As stated earlier, there is currently near-ubiquitous access in Canada to the level of service set out in the basic service objective. As a result, the intended goal of the basic service objective has been achieved.
But, rather than impose an obligation to serve on this aggressive broadband objective, the obligation is largely being eliminated. The obligation is being replaced by financial incentive programs, an industry-funded $750M pot, starting at some undefined point in the future. This is nothing new. More than 10 years ago, the Report of the Telecom Policy Review Panel recommended “that affordable and reliable broadband services should be available in all regions of Canada by 2010.” An entire chapter of the report was dedicated to “Connectivity: Completing the Job.” Chapter 8 recalls “In 2000, the federal government set a policy goal of ensuring that broadband networks and services would be available to businesses and residents in every Canadian community.”
As a key part of its national ICT strategy, the federal government should
- ensure that Canada remains a global leader in the deployment of broadband networks, and
- immediately commence a program to ensure that affordable and reliable broadband services are available in all regions of Canada, including urban, rural and remote areas, by 2010 at the latest.
That recommendation was made more than 10 years ago. There have been hundreds of millions of dollars spent since then by successive federal and provincial programs. The CRTC got into the rural broadband subsidy business once before when it set up its Deferral Account.
A week after ISED Minister Bains announced a $500 million broadband program (“Connect to Innovate”), today’s CRTC decision sets up yet another funding program. These are taking place ten years after the report of the Telecom Policy Review Panel, 16 years after the government first set its policy goal.
The most disruptive ruling yet? Kindly excuse my cynicism. What is disruptive here?
In the hours before the policy was released, I prepared a series of Tweets on what I might consider to be disruptive regulation. They are reproduced below for your consideration over the holidays. Perhaps we’ll see more innovation in the New Year.