Mark Goldberg


www.mhgoldberg.com





The Canadian Telecom Summit

Fox Group Dispatch

Taking the first step

As my regular readers know, for eight years, since my opening remarks at The 2008 Canadian Telecom Summit, I have been highlighting the need to develop programs to increase broadband adoption by targeting affordability, looking beyond the traditional geographic based subsidies. In a speech at the Empire Club in late April, Innovation, Science and Economic Development Minister Navdeep Bains Minister Bains acknowledged that “social factors still mean that in many of our largest urban centres, including Toronto, low-income people are left out of the digital economy.”

The Minister’s speech was delivered just a week and a half after CRTC Chair JP Blais delivered his unusual mid-hearing address [beginning at line 7559 of the transcript].

Chairman Blais also made reference to “Economic access to broadband connectivity, including, in its most extreme form, issues of unaffordability.” It took a while, but at long last, the message got through. Every day that went by meant Canadians who are socially and economically vulnerable, continue to be profoundly disadvantaged.

Those were his own words, from the Chair’s mid-hearing call to use the basic services proceeding as “the last best chance to get [a national broadband strategy] right.” Yes, the CRTC Chair was correct in saying that Digital Canada 150 was more like a promotional brochure than a digital strategy.

But 11 days later, Minister Bains told the Empire Club “we don’t need any more studies!”

We understand the challenges. Now it’s clear we need to take some bold steps. That’s what the Prime Minister has challenged me to do. That’s what I’m going to do.

The Minister gets it. It’s time for bold steps.

Two years ago, I said it has been “too easy for the government to focus on programs to stimulate the supply of internet”; we need programs that increase computer ownership and broadband adoption among low income households, especially in homes with school aged children.

In the past month or so, both the Minister and CRTC chair have publicly acknowledged we have a problem.

That is the first step.

Where do we go from here?

Consistent, predictable regulation

In 2003, Britain’s Better Regulation Task Force issued a document describing “Principles of Good Regulation“.

It is worth a fresh look.

Back in 1997, the Task Force suggested that policy intervention and enforcement, should meet these five principles:

  • Proportionality
  • Accountability
  • Consistency
  • Transparency
  • Targeting

The 2003 document reminded policy makers that they have a wide range of options available for implementing their policy objectives, and encouraged the leaders to “consider them all, rather than automatically assume prescriptive regulation is
required.”

  • Do nothing
  • Advertising campaigns and education
  • Using the market
  • Financial incentives
  • Self-regulation and voluntary codes of practice
  • Prescriptive regulation

Although some suggest that markets aren’t working, the Task Force suggested that regulation is not necessarily the cure.

Government can remove problems preventing markets from working effectively or can introduce a market where none exists.

Often markets do not function effectively if participants do not have all the information necessary to make an informed decision. Industries can adopt codes of practice, regulating the provision of information themselves or Government can require producers of goods or services to provide relevant information or provide the information itself.

On the subject of prescriptive regulation, the Task Force warns:

There are areas where this is the best means of achieving a policy objective. However, prescriptive regulation, like many other means of government intervention, may have unintended consequences… It will often be less flexible and less sympathetic to the way markets work than other tools.

What characteristics do Canadians expect from its regulatory authorities?

The 2003 document from Britain’s Task Force includes a section entitled: “Tests of good regulation, and pitfalls to be avoided”. In it, the Task Force states “Regulations must: Be balanced and avoid knee-jerk reactions; Seek to reconcile contradictory policy objectives; Balance risks, costs and benefits; Avoid unintended consequences; Be easy to understand; Have broad public support; Be enforceable; Identify accountability; Be relevant to current conditions.”

Using the Task Force tests, how would Canadian regulators and regulations be scored?

Something to discuss at The 2016 Canadian Telecom Summit, coming up in less than 2 weeks. Have you registered yet?

Counting down: just 3 weeks to go

Some of the most influential leaders of the Canadian & International ICT industry will gather in Toronto, June 6-8, at The 2016 Canadian Telecom Summit.

No other event matches The 2016 Canadian Telecom Summit for the depth and breadth of topics covered and issues debated.

No other event presents a complete picture of current and expected trends & developments.

You will see why The Canadian Telecom Summit has become the only must-attend conference.

With more opportunities than ever to learn, network and do business, if you are involved with or impacted by Canadian telecommunications, broadcasting and information technology, you need to be at The 2015 Canadian Telecom Summit.

Join your colleagues for 3 days of spirited discussion and networking, including our Monday evening Cocktail Reception sponsored this year by Rogers.

Download the latest look at the complete conference brochure.

Register today for The 2016 Canadian Telecom Summit.

Balancing privacy and security

There is a tension between individual’s rights to privacy and our collective rights to security. Technology has enabled unprecedented challenges to both, which is why these areas will be among the key topics to be explored at The 2016 Canadian Telecom Summit taking place June 6-8 in Toronto.

Canada’s Privacy Commissioner, Daniel Therrien will be delivering a keynote address on Tuesdady, June 7. IT World’s Howard Solomon quoted him saying “It is no longer entirely clear who is processing our data and for what purposes – creating challenges for meaningful consent.” Do customers provide informed consent to how businesses are using their data? Do consumers have any idea how their personal information is being shared and correlated with other data points?

The Canadian Telecom Summit will also look at cyber security and defense against data threats. Nathan Shuchami, Check Point’s Head of Advanced Threat Prevention and Christine Gauthier, the head of Check Point Canada will speak on Monday June 6. A full panel on cyber security will take place on Tuesday, June 7, moderated by Scott Jones, the assistant deputy minister for IT security for Canada’s Communications Security Establishment. On Wednesday, June 8, the panel looking at Big data and Analytics will also include consideration of these aspects of the issue, aided by the participation by Pamela Snively, the Chief Data and Trust Officer for TELUS.

Have you registered yet?

FTTH business isn’t binary

Approving a business case for building fibre to the home (FTTH) isn’t a binary choice: yes or no. Some parts of a city are easy to justify; other parts are more challenging.

We have seen this with a number of new fibre builds. In Kansas City, Google says “You can only get Fiber if enough people in your fiberhood sign up.”

It is important to keep this in mind when considering the statement by Minister Navdeep Bains in rejecting Bell’s appeal of the CRTC’s wholesale decision on FTTH.

Recall that Bell and TELUS had plans for significant, multi-billion dollar FTTH investments in some of their largest cities, like Edmonton, Calgary, Vancouver and Toronto.

Each of these projects were in the order of $1B. That is a billion dollars for each of the cities. Keep in mind, that this isn’t a matter of making a decision and writing a single cheque to enable the buildout of fibre. Each block, each neighbourhood might be a different project, with different work teams, different authorizations to go ahead. To proceed, presumably the engineering groups will have to show a positive business case to justify spending money for each of these piece parts.

There will be areas or even specific buildings that have strong, solid positive business cases and other areas that are still positive, still in the black so to speak, but less solid, more like shades of grey, driven perhaps by higher costs per household, or perhaps softer demand for fibre-based services.

A business case looks at the potential revenues and balances that stream against the costs. That is basic engineering economics. The business cases with mandated fibre resale will look different from business cases without such a mandate. The capital investment for a neighbourhood may be constant, but the revenue and expense lines will be different. In densely populated areas, the overall business case for FTTH will likely remain positive, but will it cover the same geography? What happens to the fringe areas?

There can be little doubt that lower retail revenues will shrink the areas the areas that are solid black and make the business cases more challenging for more households. How many homes are in neighbourhoods that no longer have a sufficiently positive business case? In places like Ottawa, where the city boundaries include large areas of low population density, mandated wholesale access to fibre will most likely lead to fewer homes getting upgraded fibre facilities.

We still don’t know what the wholesale rate will be for independent ISPs to access telco fibre. As such, it may be premature to start reworking the business cases for these multi-billion dollar builds. It may be close to a year before those wholesale rates are set.

In his press release denying the Bell appeal, Minister Bains stated “we will continue to foster a strong investment environment for telecommunications services to keep Canada at the leading edge of the digital economy. We are encouraged by the many recent private sector announcements about investing in fibre in Canadian cities”.

Clearly, the Minister was thinking about the billions of dollars of fibre to the home construction announced last summer. How will the business plans change? What will be the impact on construction programs for fibre in some of Canada’s biggest cities?

These questions and more are certain to be explored and discussed at The 2016 Canadian Telecom Summit, taking place June 6-8 in Toronto. Have you registered yet?