Mark Goldberg


www.mhgoldberg.com




Fox Group Dispatch
Digitcom

Canada’s digital future

Facebook CEO Mark Zuckerberg recently wrote in the Wall Street Journal that connecting everyone on the planet to the web can create opportunity and reduce poverty. It sets out a noble vision and it is an article worth reading.

Sometimes, I am left with a feeling of concern for Canada’s ability to lead in the digital economy.

It has nothing to do with our abilities to be creative, innovative, entrepreneurial, faster-to-market or any other characteristic.

It isn’t even a matter of government incentives. Indeed, if anything, my concern is that our government may sometimes be too eager to intrude.

Digital Canada 150 – Canada’s national digital strategy – is the product of three years of examination of thousands of pages of feedback following an extensive consultation process. The consultation sought input on 26 issues caught under 6 broad headings. Of the 26 pages in the pdf version of Digital Canada 150, 5 pages are the cover, printer notes, table of contents and letters from the Prime Minister and Industry Minister.

Europe released a digital scorecard looking at where it stands on targets in its digital agenda. What does Canada’s scorecard look like?

In the past week or so, the government announced it was moving forward on its Connecting Canadians program to spend nearly a third of a billion dollars to try to stimulate investment by ISPs to enable uninspiring broadband speeds to be available to rural and remote communities:

Over 99 percent of Canadian households currently have access to basic Internet with speeds of 1.5 Mbps, but newer online technologies typically require faster speeds and higher data transfer rates. Through Connecting Canadians, the government will boost speeds to 5 Mbps for up to 98 percent of Canadians.

Earlier today, Xplornet announced that it will beat those targets, offering 5 times the speed to all Canadian households:

CRTC and Industry Canada have forged a vision and an action plan to ensure all Canadians have equal access to high speed broadband. Xplornet has embraced this vision and is executing a plan to provide customers outside big cities with the most attractive Internet experience that technology can provide. Xplornet has started rolling out a new Long Term Evolution (LTE) fixed-wireless network this year and will activate two state of the art next generation satellites in 2016 with the aim of making 25 Mbps broadband service available at affordable prices to 100% of Canadian homes and businesses outside of the big urban cities.

Over the past year, I have written a number of pieces (such as “Measuring success” and “Inconsistent messages; predictable turmoil” and “Building a digital economy dashboard“) that call for the government to provide clear, measurable objectives for our digital policy agenda.

Two of the questions in the Digital Economy Strategy consultation asked by the government itself were directly related to this:

Improving Canada’s Digital Advantage

  • Should we set targets for our made-in-Canada digital strategy? And if so, what should those targets be?
  • What should the timelines be to reach these targets?

I have said it a number of times. “Set clear objectives. Align activities with the achievement of those objectives. Stop doing things that are contrary to the objectives.”

It is encouraging to see the Connecting Canadians program begin with a data gathering process. To get where you want to go, it helps to know where you are starting from.

Last week, the CRTC recognized the wide disparity in internet adoption rates based on income among Canadians:

The use of the Internet by individuals in households in the lowest income quartile continues to lag, at 62%, compared with 95% of individuals living in households in the highest income quartile.

It has been too easy for the government to focus on programs to stimulate the supply of internet. We need to examine programs that look at demand – increasing computer ownership and broadband adoption among low income households, especially in homes with school aged children.

Canada’s digital future depends on such inclusiveness and opportunity for all.

Like a bridge over troubled waters

I have written before about the way communications today keeps us so much better connected than in the past.

When I spent a summer in Israel nearly 40 years ago, overseas long distance calls were prohibitively expensive. I kept my family informed using aerograms, a kind of paper that folded up into a postage prepaid overseas envelop made out of tissue paper. Two weeks later, my family would find out that I was doing just fine, thank you.

Technology has provided a wide range of choices to keep in touch with our kids around the world. Phone calls are cheap enough to enable us to speak to our kids around the world any time we want. Sure, calls sometimes drop, but let’s keep in mind that both ends of the call are travelling at 100 kmph, using mobile devices across a trans-oceanic long distance network. I still marvel at the technology.

Last week, my son returned to Israel to continue work on his post-doctoral research. He told us (via Facebook) earlier this week that he felt a little bit like a one-man Iron Dome missile defense system.

arrive in Tel Aviv, sirens in Rehovot.
go to work in Rehovot, sirens in Tel Aviv
get back home to Tel Aviv, sirens in Rehovot.

coincidence?

I have to admit that these aren’t messages that most parents would find completely comforting, but we have been through this before.

Yes, I would prefer that he was spending more time in Muskoka, where the biggest risk factor is reacting to elevated numbers of mosquitoes this year.

Our anxiety levels are elevated when we learned that his cell phone turned into a brick following a failed repair job. He is using an old phone in the interim (Israel’s mobile services are inexpensive; on the other hand, devices are outrageously expensive). Although connectivity may not keep him safer, somehow it helps us sleep better.

That brings us back to the choices we now have at hand. Skype, Facebook, Twitter supplement old fashioned phone calls. We stay connected via applications on a wide variety of screens, over almost as diverse a variety of networks.

Communications services and technologies help to bring some comfort – kind of a bridge over over troubled waters – helping us feel 6000 miles closer.

Opposing resale competition?

One of the most interesting sessions at The 2014 Canadian Telecom Summit was a panel featuring 5 of North America’s top telecommunications economists discussing the state of competition in the industry.

A video replay of the session is available from CPAC on demand.

A month before the panel appeared at The Canadian Telecom Summit, Canada’s Competition Bureau filed comments in the CRTC’s proceeding looking at wholesale mobile services (Telecom Notice of Consultation 2014-76). These comments were press released, highlighting the conclusion:

The Bureau has submitted to the CRTC that Canada’s largest wireless companies have retail market power, which provides them with the ability to profitably maintain prices above competitive levels for a significant period of time. These companies compete in both wholesale and retail markets for mobile wireless services; furthermore, they may benefit from charging high prices to rivals for the wholesale mobile services their rivals need to serve their customers. High wholesale costs may force rivals to increase their retail prices, resulting in some of their customers either leaving the market or switching to the large mobile wireless companies.

As a result, the higher rates charged by mobile wireless companies for wholesale mobile wireless services may hurt competition in retail markets. The Bureau estimates that increased retail competition from an additional nationwide mobile wireless carrier could result in gains of approximately $1 billion per year to the Canadian economy in the form of better product choices, price reductions and other benefits for consumers.

The Bureau is therefore recommending that the CRTC adopt measures to address the incentives Canada’s largest mobile wireless companies may have to raise their competitors’ wholesale prices as these increases may be passed on to consumers.

A couple weeks after The Canadian Telecom Summit, the Competition Bureau filed less publicized comments in the second round of the CRTC’s Review of wholesale services proceeding (Telecom Notice of Consultation 2013-551). On June 27, the Bureau’s filing in the CRTC’s Let’s Talk TV proceeding merited a press release, but no publicity was associated with the Bureau’s comments in the wholesale services proceeding.

The wholesale services comments may be newsworthy.

In reaching its conclusion that mandated access to unbundled local loops should be withdrawn, the Bureau said:

The vast majority of Canadian residences, as well as many businesses, are now served by two facilities-based competitors, and competition between ILECs and cable companies is generally vigorous.

Two competitors are sufficient for internet services, but 3 are considered insufficient for wireless services.

Why?

CASL and new technolologies

Will Canada’s anti-spam law (CASL) inhibit adoption of new technologies? Will it limit the participation of Canadian firms in exploring innovative new services and business models?

These were real questions that emerged from an exchange on Twitter earlier today.

As described by Wikipedia, iBeacon is the trademark for an indoor proximity system that Apple calls “a new class of low-powered, low-cost transmitters that can notify nearby iOS 7 devices of their presence.

That led to a real question:

Will Canadian development or adoption of beacon (or other technologies) be limited by the broad nature of the restrictions inherent in CASL?

CASL is indefensible

Barry Sookman has an excellent blog post that strongly refutes the weak defense of Canada’s Anti-Spam Law that has been put forward as a desperate response to an outpouring of criticism of the “ludicrous regulatory overkill.”

For 8 years, I have been writing about the problem of legislation dealing with our right to be rude:

In a democratic society, I think you have the right to be stupid, you have the right to be rude and we should try to teach telephone etiquette, not legislate it.

A week later, still in May 2006, I wrote more directly about the hidden cost of spam, saying “I think that a democracy gives you the right to be merely offensive and annoying – otherwise, my brother would say that I should have been put behind bars years ago.”

In 2008, I warned “Worst case will see us get it wrong and introduce costs on legitimate businesses while doing nothing to stem the flow of the real garbage filling our inboxes.”

In 2010, I wrote, “the bill would be better titled the Electronic Commerce Restrictions Act: it discourages many efficiencies that should be available to businesses of all sizes in reaching out to new customers.”

As CASL was proceeding a year and a half ago, I cautioned, “we strayed too far from trying to target fraud. In doing so, Canada is going to cause harm to the adoption of digital technologies and electronic commerce.” At the end of the day, this translates into higher costs for consumers.

As Barry Sookman concluded in his post:

The Government should promptly suspend CASL’s operation until a Parliamentary Committee or special committee can review it and make recommendations on whether to kill it permanently or how to fix it. The Government could instead refer it to the Supreme Court of Canada for an opinion on CASL’s constitutionality. Either way, Canadians of all stripes would be put out of the collective misery of dealing with CASL.