Mark Goldberg


www.mhgoldberg.com





The Canadian Telecom Summit
2014 ISP Summit
Nov 3-5, 2014
Toronto
2014 ISP Summit

Fox Group Dispatch
Digitcom

An intelligence economy

Namir Anani, President and CEO of Canada’s Information and Communications Technology Council (ICTC), wrote a thoughtful piece last week about the Internet of Things (IoT): “IoT, The Impending Intelligence Economy.”

As Namir writes, there are already more internet connections than there are people on the planet.

As more devices get connected to the Internet from health sensors, home heating and lighting systems, to large-scale manufacturing and smart cities—the sum of data offered by such a connected world is growing exponentially. Cisco Systems estimates that approximately 12.1 billion Internet-connected devices were in use during April 2014, and that figure is expected to grow to above 50 billion by 2020.

ICTC will be conducting forward looking research to explore key policy enablers for Canada to lead in deriving benefits from an intelligence based economy.

Businesses are increasingly relying on intelligence to offer new products and services and increase their scope and scale. To out-compete in this global economy businesses need to out-compute. The confluence and integration of cloud, big data, social collaboration, mobile and apps is rapidly reshaping our digital economy to an intelligence economy.

What opportunities will emerge for Canadian businesses, governments, communities and consumers? Will there be sufficient spectrum? Can we increase access to skilled talent? What enhancements are needed to ensure privacy and security? How do we create the right conditions for continued investment in next generation networks?

Over the past few years, The Canadian Telecom Summit has explored some of the issues associated with more and more devices being brought on-line for machine and sensor connectivity. We will be working with ICTC to build a panel for The 2015 Canadian Telecom Summit to examine Canada’s intelligence economy.

What other issues / angles would you like to see us cover?

Be sure to mark the dates on your calendar: June 1-3, 2015 in Toronto.

The consultative process works

This past August, Industry Canada launched its “Consultation on Policy Changes in the 3500 MHz Band (3475-3650 MHz) and a New Licensing Process in Rural Areas“. At the time, Industry Minister James Moore said:

Our government committed to putting unused spectrum licences to use, and today we are following through on that pledge. Today’s announcement also means that rural communities will benefit from enhanced access to high-speed Internet services. We will continue to put the interests of consumers first to ensure that Canadians have more choice and better services from their wireless service providers.

While there were good intentions to improve Internet service in rural communities through the proposed new rules, in fact, something went awry. There were sections in the consultation that appeared to be taking spectrum being used by rural ISPs and re-purposing the frequencies from fixed wireless to mobile. The potential impact would be to turn off high-speed fixed wireless internet service to large swaths of rural Canada.

Canada’s rural broadband service providers were taken by surprise. Xplornet, Canada’s largest rural internet service provider, was quick to point out a “fundamental disconnect” between the Minister’s statement and the proposal:

Under the proposal, Industry Canada would take away from rural Internet service providers, like Xplornet, the spectrum that is already in use today for the benefit of Canadians, and give it to the cell phone providers who are sitting on stock piles of un-deployed spectrum in these areas.

As the implications started to sink in, rural providers warned that hundreds of thousands of rural Canadians – rural voters – could have their internet disconnected, and could be forced back onto dial-up.

In the past, Minister Moore has communicated his desire for a “use it or lose it” policy when it comes to spectrum. Such a policy takes back spectrum that is not being deployed by the licensee. The current consultation however, contained provisions that meant rural internet service providers could effectively “use it AND lose it”.

How?

Because significant stretches of rural areas were being re-designated as “urban” under the proposed policy and a subsequent re-allocation of spectrum would mean rural ISPs that bought and paid for newly re-designated “urban” spectrum would lose it in order for mobile providers to have more spectrum for “future use”. Remember, this was spectrum that was originally designated as Fixed Wireless Access, specifically for uses like high-speed broadband, not mobile.

Comments in response to the consultation were due October 8. I have heard from a number of ISPs and a large number of rural communities and municipal associations in areas affected by the proposed policy, that they submitted comments urging Industry Canada not to take back the spectrum being used to deliver much needed fixed wireless broadband to thousands of rural constituents. Many of those communities most affected are in the heartlands of traditional federal Conservative support.

On October 9, Minister Moore issued a statement:

On August 19, 2014, Industry Canada launched a consultation asking Canadians for their views on how best to use the 3500 MHz band of spectrum, which is the spectrum band that represents the most affordable wireless high-speed Internet access for many rural Canadians.

Since then, I have received thoughtful feedback from local municipalities, Internet service providers and individual Canadians. Regrettably, some have falsely suggested that this consultation will somehow result in rural Canadians losing broadband services.

These suggestions are completely false. Under no circumstances will our government take spectrum licences away from any local Internet service provider that is providing Internet service to rural Canadians.

The decisions resulting from this consultation will ensure that the 3500 MHz spectrum band is deployed in the best interests of Canadian consumers, especially those living in rural areas.

Without this statement, the potential for rural Canadians to lose broadband was very real. The reclassification of many Tier 4 areas as “urban” (per Section 6 and Annex A of the consultation), despite a preponderance of rural Canadians in these areas, meant the spectrum being used for internet service was at risk of being taken away from that use. Rural Canadians might have been disconnected from the digital world.

The Minister’s statement provides a welcome clarification: “Under no circumstances will our government take spectrum licences away from any local Internet service provider that is providing Internet service to rural Canadians.”

It was a quick response, assuring communities that rural broadband subscribers will not be sacrificed to feed the insatiable hunger for mobile spectrum.

Most importantly, the Minister’s statement demonstrates that the consultation process works. Minister Moore clearly heard the comments from regions across Canada, and took the important step of acknowledging and responding positively to their concerns.

It was the right thing to do to reassure Canadians.

Still, the devil is in the details.

In the final policy and licensing framework, how will Industry Canada reconcile the Minister’s words from his October 9th statement, with the clear wording that was contained in the August consultation document?

Will Industry Canada re-write the proposals to grandfather spectrum holdings to ISPs that have deployed service already?

Broadband service for hundreds of thousands of rural Canadians is at stake. In responding to the consultation, the affected rural communities have shown that they can be mobilized over this issue.

How will the final policy and licensing framework reflect the Minister’s commitment to continuity of fixed wireless broadband service?

The Internet Association on Canada’s digital economy

The Internet Association, a Washington based lobby group representing “America’s leading Internet companies” (such as Google, Netflix and Amazon), released a paper today called “Canada’s Internet Economy is Primed for Takeoff.”

The Canadian Press report on the story blames businesses’ slow uptake of digital technology for Canada “losing its international edge on the Internet”. The report calls for the government to introduce a Digital Renovation Tax Credit to encourage Small and Medium sized businesses to improve their online presence.

I noted that the report includes one of the main messages from Google and Netflix that were expunged from the record of the CRTC’s Talk TV consultation when Internet Association members Google and Netflix refused to provide information sought during their oral presentations.

The challenge for the Government is that the nature of “broadcasting” is changing rapidly. Over the past few years, entirely new platforms have emerged for the delivery of content online.

extending conventional broadcast regulations to the Internet would be highly detrimental.

There are a number of other highlights that should be considered by policy makers. The paper has concerns about Canadian intellectual property and privacy laws as well as rules from some provincial governments requiring certain public sector data to be stored locally.

In addition, the report echos concerns raised in my blog that some government policies are having unintended consequences of being harmful to the adoption of e-commerce in Canada, saying “Canada has unnecessary complexity in its rules governing the digital economy.”

Similarly, when considering consumer protection measures, government must be extremely careful not to unintentionally introduce new barriers to digital commerce.

industry remains very concerned that broad application of CASL to all forms of electronic messaging and software, the inflexible requirements and the potential for significant liability will have a negative impact on the growth of electronic commerce in Canada that outweighs the benefits.

The whitepaper concludes that the current competitiveness gap between Canada’s digital economy and those of other G20 nations can be closed with smart public policy, listing 7 specific recommendations, including: “Ensure a strong commercial logic in the development and application of electronic commerce laws, including privacy laws.” It says the standard for evaluating new rules should be to foster world-leading adoption and development of technology and do not impede investment.

After the Google / Netflix dust-up with the CRTC, it is fascinating that the whitepaper acknowledges, as a positive attribute, that Canada has “a Government that generally leans toward evidence-based policy making.” There are 5 pages of references supplementing the 21-page whitepaper.

It is worth a read. The Association’s members should also give consideration to the section discussing evidence-based policy making, to help with participation in future proceedings.

Hyper-connectivity: Shaping digital relationships

Will you meet me in Toronto, June 1 – 3, 2015?

Make plans now to be at The 2015 Canadian Telecom Summit in Toronto, the largest and most important gathering of the leading stakeholders in Canada’s information and communications technology sector.

Planning is just getting started, so be sure to get in touch with speaker proposals. We will be exploring “Hyper Connectivity: Shaping Personal & Business Digital Relationships.

Registrations are already open.

Mark the dates in your calendar: June 1 – 3, 2015.

Hold the Date Postcard

To everything, there is a season

Yom Kippur, the Jewish Day of Atonement, took place this past Friday evening and Saturday. It is a solemn day of fasting and reflection, asking forgiveness for transgressions over the past year and an opportunity to seek spiritual guidance for doing better in the coming year.

Afflicting ourselves, denying ourselves food, water and other forms of pleasure helps focus ourselves on the importance of the day. The holiday of Sukkot, the Feast of Tabernacles, begins this Wednesday and among its observances is reading King Solomon’s Book of Ecclesiastes, the inspiration for Pete Seeger’s song: “Turn, Turn, Turn“. At its core, I see a message of balance in the lyrics: “To everything there is a season, and a time to every purpose under heaven.”

In an era of being online all the time, with our societal norm of immediate gratification, the pause for such times with family provides me with a chance to reset some semblance of balance in my life.

I sometimes think that such days would be helpful for the secular community. Pausing and reflecting seriously about issues that can have a lasting impact.

Balance is often missing from public discussion about the CRTC. It is too easy to take cheap shots about our institutions. It is much tougher to apply a critical eye, to explore issues with more than a superficial swipe of the hands. As I have written before, we need to explore the digital economy with the thinking of a chess master, looking beyond the next move.

Almost ironically, on Yom Kippur, I had an opportunity to read an article by Simon Houpt in Saturday’s Globe and Mail, that brought some critical intelligence and balance to otherwise imbalanced reporting.

Much of media coverage of Netflix’ showdown with the CRTC has been largely one-sided, unfair and even bizarrely self-perpetuating.

The CBC was perhaps the biggest offender, leading its online coverage with a headline saying “Netflix refuses CRTC demand to hand over subscriber data”. As was apparent from comments on the story, many casual readers thought the CRTC was trying to get personal information about Netflix subscribers (such as the shows you watch), rather than the actual CRTC request: how many customers does Netflix have in Canada and how much is Netflix investing in Canadian programming.

CBC then had the audacity to have a follow-up story, saying “CBC News readers side with Netflix in spat with CRTC”. Given the misinformation in the initial CBC story, it wasn’t surprising that CBC readers sided with Netflix. The CBC coverage of this broadcast hearing was not one of the prouder moments for our national broadcaster.

Whatever you think of the idea of taxing or otherwise regulating Netflix, Google or other internet broadcasters, it’s important to distinguish the act of regulating from the act of information gathering. As a quasi-judicial body, the CRTC is required to base its decisions on evidence gathered during public proceedings, not simply on the basis of which party put on the best dramatic performance.

CRTC Chairman Jean-Pierre Blais had every right to ask for the information to help the CRTC understand the state of the streaming video market. That Netflix changed its position on providing the information from “we are concerned about our confidential information” to “you have no authority over us” undermines its position as a new media leader helping to shape digital policy in Canada. Yet nowhere did we see this distinction raised in media.

Could Netflix have offered proxies for the information sought to satisfy their confidentiality needs? For example, analysts have estimated that Netflix is in about 25% of Canadian households. Netflix might have responded that it is comfortable with those estimates, providing helpful guidance to the CRTC while preserving its corporate secrets.

Can you imagine the outrage if a Canadian company showed up in Washington and treated any American regulator with the same approach?

There were a few bright spots, to be sure, including Terry Pedwell’s Canadian Press story on the inappropriate political interference by the Prime Minister’s Office in the Let’s Talk TV hearings, which was unfortunately picked up by only a few regional media outlets.

… by inappropriately interfering in the CRTC hearings, the Harper Conservatives may have already rendered the regulator toothless, said Opposition heritage critic Pierre Nantel. “It is simply scandalous,” Nantel said.

Simon Houpt’s excellent piece in The Globe and Mail, appropriately published on Yom Kippur, “It’s time to be honest: Netflix is parasitic”, forcefully expressed what I can only hope others in the media have at least considered:

But please, at least be honest with yourself and recognize that Netflix … is a parasitic enterprise …. At least, we believe that’s the case; we don’t know, because Netflix won’t share any of its data with the CRTC, since it says it is worried the information won’t be kept confidential. (This is a company whose business depends on millions of people trusting it to keep their credit-card data safe …)

The article continues:

… we have a Prime Minister who has now sided with an economically and culturally parasitic foreign entity, one that doesn’t even remit taxes in this country, over one of his own government agencies.

Take the time to read the complete article, not just the headline. It is an important message to balance against other perspectives that have dominated our airwaves. To everything, there is a season.

The CRTC and its Chair, JP Blais deserved fairness and balance from our government and the Prime Minister’s Office. Canadians deserve better analysis and reporting from our news media.